Retail Unbundling - South Dakota

Status: Some residential customers in the state have access to unbundled service.

Overview: Unbundled natural gas service is available for some residential customers, but the lack of marketer participation in South Dakota makes it generally impractical for most. Transportation service, with no minimum volume requirements, has been available to all customers of two of South Dakota's three major local distribution companies (LDCs) since the mid-1990s. However, of the dozen or so marketers active in South Dakota, few, if any, have found it economic to enter the residential market. Also few, if any, residential customers have arranged for separate transportation service because of the difficulties involved, such as telemetering costs and nomination requirements. The two distributors that offer transportation service with no minimum volume requirements are MidAmerican Energy Company and NorthWestern Public Service. Montana-Dakota Utilities also offers transportation service, but the minimum requirement of 2.5 million Btu per hour makes it impractical for residential and other small-volume customers.

EIA State Data: In 2002, South Dakota had 147,356 residential and 19,794 commercial customers. They consumed 13 and 10 billion cubic feet of natural gas, respectively. The average prices paid for natural gas purchased from LDCs by residential and commercial customers were $6.93 and $5.26 per thousand cubic feet, respectively.

Local Distribution Company	Number of Customers (All Sectors)	Number of Transportation Customers (All Sectors)
MidAmerican Energy Company	74,699	132
Montana-Dakota Utilities	47,695	38
NorthWestern Public Service	41,329	157
Total	163,723	327

Summary: The South Dakota Public Utilities Commission (PUC) approved transportation tariffs in the mid-1990s for two LDCs operating in the state. In 1996, at the urging of some marketers, the PUC decided to consider adopting standards of conduct for LDCs and their affiliates. The PUC staff promulgated such rules in 1997, but after a hearing, the rules were rejected because there had not been any complaints as to abuse of affiliate relations.

Legislation	3/96	Flexible Rates, SB144. Authorizes PUC to permit flexible and competitive rates on a case-by-case basis. Utilities could charge a "business development rate" if the PUC finds it in the public interest.
	2/96	Incentive Rates, Senate Bill 143. Authorizes PUC to allow utilities to use incentive rates to encourage efficiency.
Regulatory Action	10/02	MidAmerican Energy’s Incentive Procurement Program (IGSPP) Re-Approved (NG02-007). PUC approved continuation of MidAmerican Energy’s Incentive Gas Supply Procurement Program for another 3 years effective 11/01/02.
	8/99	Incentive Gas Supply Procurement Program (IGSPP) Approved, Final Decision and Order NG98-010. PUC approved continuation of MidAmerican Energy Company's IGSPP for another 3 years, or until its purchased gas adjustment is eliminated, whichever comes first.
	10/97	Order Rejecting Proposed Standard of Conduct Rules, RM97-002. The PUC voted to reject proposed rules governing standards of conduct for LDCs and their affiliated marketing entities after determining that there had been no complaints regarding conduct of LDCs and their affiliates.
	8/96	Proposed Standards of Conduct. Staff directed to formulate LDC/Affiliate Standards of Conduct Rules. In March 1996, the PUC denied PAM Natural Gas' (PNG) request to adopt emergency rules governing LDCs, their agency business and affiliated marketing entities. Instead, the PUC opened docket NG96-011 to investigate establishing standards of conduct rules. Comments were solicited as to whether to adopt any rules and if so what rules should be considered.