Investment in Generation and Transmission

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Tim McCarthy
Sioux Valley Energy 
General Manager/
Chief Executive Officer

The Sioux Valley Energy Board of Directors recently approved an overall average rate increase of 9.1% to the membership. This number is the average of all rates so some members will see higher increases, and some will see less. The main driver of this increase is higher power supply costs. Click on the link below to learn more about the reasons for those increased power supply costs.

Reasons for increasing power supply costs

While I would like to say this will be the last rate increase for a while; unfortunately, that is not the case. We anticipate another fairly significant rate hike from our power suppliers in 2027 with the possibility of adjustments in subsequent years as well. This pattern of higher rates is connected to a significant build out of electric generation and transmission assets – to the tune of $11 billion dollars. 

Ultimately, we need more electric generation and transmission facilities to support increasing demand from legacy members throughout the region. Legacy members are defined as current and future cooperative members that are traditionally categorized as residential, farm, general service, commercial, and industrial. As an example, Sioux Valley Energy is forecasting that both the number of members and its corresponding electric load will essentially double in the next 20 years. To put that in perspective, it took over 80 years to get to get to 30,000 members.

While hyperscale large loads such as data centers, crypto-mining, and AI are a hot topic across the nation, they are not behind Sioux Valley Energy’s 2026 rate increase. In fact, if a hyperscale large load were to locate within the Cooperative’s service territory, it would be required to pay its fair share of costs, insulating legacy members from the investment and ongoing expenses of serving electricity to these large projects.

The $11 billion investment is being used to build and strengthen Basin Electric’s infrastructure and to update technologies to meet the needs of our legacy members. A few of Basin’s recent and future projects include:

Pioneer Generation Station Phase 4: This project will add approximately 580 megawatts (MW) in new natural gas-fired generation. The facility went into commercial operation in August and is enough electricity to power up to 500,000 homes.

The second project I’d like to highlight is the Leland Olds Station to Tande transmission project: This 345-kilovolt transmission line is necessary to ensure system reliability. Stretching roughly 160 miles, this transmission project is expected to be complete in 2026.

And finally, the Bison Generation Station: This new power plant will add approximately 1,490 Megawatts in new natural gas-fired generation. This is one of the largest electric generation projects in Basin Electric’s history and is projected to be completed in 2030. This will generate enough electricity to power up to 1.25 million homes.

We know that some of our members are struggling to make ends meet and that any increase to electric rates can have an impact on your monthly budget. While we can’t change the need for a rate adjustment, we do have resources available to help our members save energy. Please visit our dedicated rate adjustment webpage to find a rate calculator; learn how to save electricity around your home; and identify energy assistance programs. 

In the end, our goal is to ‘Serve Our Members. Always’. It’s what we do; It’s how we live.

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