PIERRE – As they left the room together, a group representing Scout Clean Energy received advice Tuesday from Gary Hanson.
“Don’t be playing in the dirt,” Hanson cautioned them, “until you get a permit.”
Those words carried the weight of 15 years that Hanson been elected to the South Dakota Public Utilities Commission.
Scout Clean Energy is a Boulder, Colorado-based developer of projects that use turbines to turn wind into electricity.
The company moved dirt at several sites in Hand County during 2016, and did other work there too, all without the state energy-conversion permit required by South Dakota law.
The other two members of the state commission, chairwoman Kristie Fiegen and Chris Nelson, said they wanted time to think about what to do next.
Nelson admitted he was “incredulous” about how the matter has unfolded.
Amanda Reiss, one of the commission’s staff attorneys, said she “has concerns” about construction activities occurring without a state permit.
Reiss said a violation “likely occurred” and would be subject to class-one misdemeanor penalties of up to one year in jail and up to $2,000 of fine.
But Reiss noted the law says the commission can “recover” the penalty rather than directly levy it. She said the wording suggests the commission must seek the penalty in a civil court and deferred to the commission for whether it wanted to pursue a case.
Matt Heck, the company’s director of development, and Mollie M. Smith, a lawyer from the Minneapolis office of Fredrickson and Byron, took the witness chairs and confessed to the three state commissioners that the company made a mistake last year.
No one with the Sweetland project in Hand County had worked in South Dakota before, Heck said, and therefore nobody in the company knew the state laws until this fall when Smith told them what was necessary.
Michael Rucker, president of Scout Clean Energy, sent the state commission a letter Sept. 26 reporting the oversight. (The letter can be viewed here or downloaded from this page)
Rucker said the December activities were to qualify the project for a 2016 production tax credit from the federal government.
Fiegen asked Heck on Tuesday whether the company needed to comply with all laws to qualify for the tax credit. Heck replied, “I don’t believe the legislation is that specific.”
Smith, the outside attorney, told the state commissioners that “lots of discussions” occurred between company officials and the Hand County board of commissioners.
Smith said company officials also had been talking with U.S. Fish and Wildlife Service representatives.
Company officials now are waiting for the Hand County board to finish a zoning ordinance that would allow the 200-megawatt project to proceed across the 13,000 acres leased from rural landowners, Smith said.
The company likely would apply for a state permit after the county paperwork is done, according to Smith.
Commissioner Hanson asked Smith whether, as an officer of the court, she had informed the company that a South Dakota permit was needed. Smith said yes.
“I have not seen any indication they knew and intentionally violated,” Smith said.
Hanson turned to Reiss, the lawyer for the commission’s staff. “All we are aware of,” Reiss responded, “is what was reported to us.”
Heck told commissioner Nelson “we probably should have” applied for a state permit at the end of 2016. Heck added, “I think we made a mistake in that regard.”
Nelson said he needed “to ponder” the matter. “Obviously this is new territory for us and I’d like some time,” he said.
Hanson for the moment somewhat defended the company. “I don’t have a problem with this. I don’t see any intent,” Hanson said.
Feigen, the chairwoman, concluded the discussion. “It’s always nice to know different states do different things.”
In other action Tuesday, the commission:
Set $120,000 as the cap on commission expenses for processing the application from Crowned Ridge Wind for a 34-mile line tying two wind farms planned by the parent company, NextEra Energy, and the Big Stone South substation owned by Otter Tail Power Co.; and
Approved South Dakota Telecommunications Association’s petition to intervene in a docket regarding responsibility for delivering 9-1-1 emergency calls to public service answering points outside the territories of rural telephone providers.
State government’s Department of Public Safety, acting on behalf of its 9-1-1 Coordination Board, seeks a declaratory ruling from the commission on who’s responsible.