South Dakota PUC Hopefuls Clash Over AI Data Center Moratorium
A Democratic candidate for the South Dakota Public Utilities Commission (PUC) is proposing a one-year moratorium on new artificial intelligence data centers, citing concerns about electrical infrastructure and ratepayer costs. His Republican opponent criticizes the proposal, stating that recently enacted state laws are sufficient for regulating the industry. The debate highlights differing approaches to data center development in the state.
Democratic Public Utilities Commission (PUC) candidate Frank Kloucek has proposed a one-year moratorium on new artificial intelligence data centers in South Dakota. Kloucek, a former state lawmaker, argues that large data centers necessitate significant investments in electrical infrastructure and that South Dakotans should not face higher energy bills to subsidize their development. He advocates for a pause to gather more information and protect ratepayers.
His Republican opponent, Don Haggar, a former legislator from Sioux Falls, has labeled Kloucek's proposal "reckless and pandering." Haggar contends that new state laws, which he helped pass earlier this year, provide a sufficient framework for regulating the industry on a case-by-case basis. These laws allow the PUC to charge data center companies for regulatory review costs, require local water providers to assess compatibility with local supplies for large data centers, and mandate electrical providers to establish separate terms and seek reimbursement for costs attributable to data centers. Crucially, one law also prohibits the state from overriding local ordinances that regulate data centers.
While state lawmakers rejected earlier proposals for data center incentives and moratoriums, the newly enacted bipartisan laws focus on regulatory oversight. Kloucek, however, believes these laws "lack any teeth" due to the absence of penalties for violations and calls for the moratorium to allow further study before major projects proceed. The debate comes as South Dakota, currently without hyper-scale data centers, weighs the potential economic benefits against environmental and infrastructural concerns.