Northern States Power gets $8.1 million back as reinvestment return under GOED program
PIERRE — A Minnesota utility won approval Tuesday for one of the largest economic incentives ever made by a South Dakota state government agency.
The South Dakota Board of Economic Development awarded a reinvestment payment up to $8,187,266 to Northern States Power Company, also known as Xcel Energy.
The money comes from Building South Dakota. The Legislature created it in 2013.
The payment is for wind-farm development in Grant and Codington counties in the northeastern region.
Building South Dakota has a variety of separate programs intended to accelerate growth of businesses and communities.
One of the programs is the reinvestment payment.
The payment is available for projects that cost more than $20 million or more than $2 million for equipment.
The purpose is to offset some of the state sales tax, use tax and contractors excise tax paid for construction of a project.
State board members decided Tuesday that Northern States Power could receive up to 65 percent of sales and use taxes the company paid to South Dakota state government on the wind project.
The board met by teleconference, as it does most times each year. The members discussed various agenda items in an executive session closed to the public. They voted in open session but nobody made any substantial comments about the actions.
Building South Dakota came out of frustration by legislators in both political parties.
They argued that Republican Gov. Dennis Daugaard — and governors Mike Rounds and Bill Janklow before him — had kept too much information secret about several state programs intended to help economic development.
Then-Sen. Corey Brown, R-Gettysburg, led the charge for Building South Dakota. Lawmakers initially took millions of dollars in cash from the state treasurer's fund for unclaimed property.
Daugaard, who didn't support it, countered in the second year with a lump sum of $30 million that legislators accepted.
That money has been dwindling and some lawmakers, such as House Democratic Leader Spencer Hawley, of Brookings, tried without success in the 2016 session to get a new supply of cash.
Rep. Mark Mickelson, R-Sioux Falls, said during a meeting of the Legislature's Executive Board on Monday that the governor wants to make a straight payment in the 2017 session.
Mickelson, the House speaker, asked Hawley how much it would take. Hawley said $10 million.
Mickelson indicated that would be the upper limit. Mickelson turned to other legislators — all Republicans — around the table and asked for their numbers. No one spoke.
Hawley and Senate Democratic Leader Billie Sutton, of Burke, participated as non-voting members in the board meeting Tuesday. They are among four legislators who received non-voting seats on the board as part of the 2013 legislation.
The Legislature created the board in 1987 at the suggestion of then-Gov. George S. Mickelson along with a state low-interest program for business loans and a Future Fund program for research and development.
The late governor and seven other men died in the 1993 state-airplane crash. He was the father of Mark Mickelson.
Northern States Power applied for the reinvestment payment. The company provides electricity to various communities in eastern South Dakota including Sioux Falls.
In other action Tuesday, the state board approved:
• $1,300,000 in loans to Harvard Integrations, a Tea manufacturer of metal enclosures for power generation equipment;
• $426,500 in loans to Roto Mold, a Tea maker of one-piece doghouses; and
• Potentially $78,500 of reinvestment payment to Poet Biorefining in Mitchell for up to 50 percent of sales and use taxes paid.