South Dakota Lawmakers Propose Bill to Make Data Centers Cover Utility Costs

The bill would require large data centers to pay for the actual costs they incur on public utilities.

Mar. 6, 2026 at 5:53pm

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South Dakota lawmakers are considering a House bill that would force data centers with a peak demand of 10 megawatts or more to cover the utility costs they incur, rather than passing those costs on to ratepayers. The bill passed the House by a vote of 60-5 and is now heading to the Senate.

Why it matters

This proposed legislation aims to ensure that the costs associated with the high energy demands of large data centers are not unfairly shifted onto the general public through higher utility rates. As data centers become more prevalent, policymakers are grappling with how to balance the needs of these energy-intensive facilities with the interests of residential and commercial ratepayers.

The details

The bill would allow the South Dakota Public Utilities Commission to determine the actual costs incurred by public utilities due to data centers with a peak demand of 10 megawatts or more. These large data centers would then be required to cover those costs directly, rather than having them passed on to other ratepayers.

  • The House bill passed with a 60-5 vote and is now heading to the South Dakota Senate.

The players

South Dakota Public Utilities Commission

The state regulatory agency that oversees public utilities and would be tasked with determining the actual costs incurred by large data centers under the proposed legislation.

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What’s next

If passed by the Senate, the bill would go to the governor for signature into law.

The takeaway

This proposed legislation aims to ensure that the substantial energy demands of large data centers are not subsidized by the general public, but rather paid for directly by the data center operators themselves.