|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$37,690||21st highest|
|Gasoline Price, per gallon||$2.84||17th highest|
|Electricity Price, per kWh||7.35¢||13th lowest|
South Dakota enjoys affordable electricity prices (26 percent below the national average), in part because the state’s electricity is primarily generated from coal and hydroelectricity, which are some of the most inexpensive sources of energy. Coal generates about 40 percent of South Dakota’s electricity, while hydroelectric provides more than half. Wind generates about five percent of the state’s electricity demand.
The majority of electricity produced in South Dakota comes from hydroelectric power on the Missouri River with three of its five largest electric plants being hydroelectric. South Dakota imports coal from Wyoming to satisfy its coal demand. As a major corn producer, the state is one of the Nation’s leading producers of ethanol. With few fossil fuel reserves, South Dakota gets its natural gas by pipeline from Canada and Texas.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, or coal, or dramatically increase their prices.
Below are some facts about South Dakota’s regulatory environment that are likely to affect the cost of energy or the cost of using energy. South Dakota has thus far avoided many of the costly energy policies other states are implementing.
- South Dakota does not cap greenhouse gas emissions.
- South Dakota is an observer of the Midwestern Regional Greenhouse Gas Reduction Accord, a regional agreement among six American governors and one Canadian premier to target greenhouse gas reductions. The central component of this agreement is the eventual enactment of a cap-and-trade scheme, perhaps supported by low-carbon fuel standards and other supplemental policies. As an observer of the Accord, South Dakota would not be bound to agreements made by Accord members.
- South Dakota does not require utilities to generate from renewable sources a certain percentage of that electricity that they sell but it has a non-binding renewable portfolio goal to generate 10 percent of retail electricity sales from renewable energy and recycled energy by 2015.[i]
- South Dakota does not require gasoline to be mixed with renewable fuels.
- South Dakota does not impose automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from new vehicles.
- South Dakota does not require new residential and commercial buildings to meet energy efficiency standards. But Senate Bill 188, enacted in 2008, requires new state construction and renovation, costing more than $500,000 or including more than 5,000 square feet of space, to meet the silver LEED standard or an equivalent standard.[ii] The silver LEED standard is one level of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.
- South Dakota does not impose state-based appliance efficiency standards.
- South Dakota does not allow utilities to “decouple” revenue from the sale of electricity and natural gas. Some states decouple revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[i] Lawrence Berkeley National Laboratory, Renewables Portfolio Standards in the United States, http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf.
[ii] Building Codes Assistance Project, Code Status: South Dakota, http://bcap-energy.org/node/94.