South Dakota Lawmakers Advance Bill to Limit Utility Wildfire Liability

Supporters say utilities need relief from rising costs, but opponents worry about shifting burdens onto fire victims.

Jan. 28, 2026 at 11:15am

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South Dakota lawmakers have advanced a bill that would give utilities legal protections if a wildfire is blamed on them, in exchange for filing a wildfire mitigation plan. The bill would bar courts from applying 'strict liability' to qualified utilities in wildfire-damage lawsuits and limit noneconomic and punitive damages. Supporters argue the bill would reduce wildfire risk and utilities' financial exposure, while opponents say it would shift the cost of wildfire losses from utilities onto property owners and their insurers.

Why it matters

This bill is significant as it aims to provide legal protections for utilities in South Dakota, which have faced rising costs and challenges related to wildfires. However, critics argue that the bill could unfairly burden wildfire victims by limiting their ability to recover damages. The outcome of this legislation could have broader implications for how utilities and communities address wildfire risks and liabilities.

The details

The bill would require utilities to submit wildfire mitigation plans to regulators, and in exchange, would bar courts from applying 'strict liability' to qualified utilities in wildfire-damage lawsuits. This would make it more difficult for plaintiffs to recover damages, as they would have to prove the utility failed to 'substantially comply' with an 'essential element' of the mitigation plan. The bill also limits noneconomic and punitive damages, and caps property damages at the lesser of restoration cost or change in fair market value.

  • The Senate Commerce and Energy Committee voted 6-3 to send the bill to the full South Dakota Senate on January 28, 2026.

The players

Sen. Steve Kolbeck

The bill's sponsor, who works as a director of business affairs at Xcel Energy, an investor-owned utility with over 100,000 customers in South Dakota.

Xcel Energy

An investor-owned utility with over 100,000 customers in South Dakota.

South Dakota Public Utilities Commission

The regulatory body that would oversee the utility wildfire mitigation plans under the proposed legislation.

South Dakota Trial Lawyers Association

A group that opposes the bill, arguing it would give utilities special legal protections and shift the cost of wildfire losses onto property owners and their insurers.

Insurance industry representatives

Opponents of the bill who argue it would effectively replace a stricter liability standard with a negligence-based framework that could leave victims undercompensated.

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What they’re saying

“We want to make people whole. We just don't want to make them rich.”

— Sen. Steve Kolbeck, Bill sponsor

“Fire victims may not recover non-economic damages unless the plaintiff suffers death or visible body injury in the form of a burn. No smoke inhalation, burned lungs. I'd like to know, what is the definition of 'visible bodily injury'? Is that with the naked eye? Does that include an MRI scan or a CT scan?”

— Steve Siegel, Representing the South Dakota Trial Lawyers Association

What’s next

The bill will now move to the full South Dakota Senate for consideration.

The takeaway

This legislation highlights the ongoing tensions between utilities, wildfire victims, and policymakers in addressing the growing risks and liabilities associated with wildfires. The outcome could set an important precedent for how other states balance the interests of utilities, property owners, and public safety when it comes to wildfire mitigation and liability.