Federal Judge Lawrence Piersol has dismissed a lawsuit filed by Dakota Energy Cooperative against its wholesale power supplier East River Electric Power Cooperative, saying that the contract between the two electric cooperatives is clear and does not allow Dakota Energy to terminate its contract early.
“The ruling from Judge Piersol is a major victory for all of the electric cooperative member-owners across the state of South Dakota,” said East River Electric General Manager and CEO Tom Boyko. “A contract is a contract and Judge Piersol’s ruling is clear that the contract does not allow for an early termination. It affirms what we’ve been saying all along, Dakota Energy can’t just walk away from the commitment it made to its neighboring cooperatives. It is our sincere hope that this will end spending member-owner money on an expensive ill-fated legal battle.”
In November 2020, Dakota Energy, an electric co-op headquartered in Huron which serves consumers in Beadle, Hand and Hyde counties, filed a lawsuit against East River Electric in an attempt to force East River Electric to give Dakota Energy a buyout number so they could terminate their contract long before the agreed upon date of Dec. 31, 2075. East River Electric and its power supplier Basin Electric Power Cooperative argued in court that the contract that was extended in 2015 and signed by Dakota Energy did not allow for an early buyout. Judge Piersol agreed with East River and Basin Electric and granted their motions for summary judgement, dismissing the case.
Dakota Energy had earlier signed a letter of intent with a for-profit energy broker, Guzman Energy, based in Denver, to receive wholesale power if their case was successful.
“This ruling ensures that Dakota Energy member-owners will continue to have access to reliable and affordable power from East River Electric, their South Dakota-based wholesale electric cooperative, for years to come and they won’t be forced into buying power from a for-profit company,” Boyko said. “Not-for-profit electric cooperatives have always worked together to provide affordable power to their members and this ruling ensures that a for-profit company like Guzman Energy can’t come into South Dakota and profit off of co-op consumers.”
This year marks the fourth year in a row that East River’s rates have been flat or have gone down. East River also returned more than $17 million in capital credits and bill credits to its members between May 2021 and February 2022. About $840,000 of that amount went directly to Dakota Energy.
East River Electric is a wholesale power cooperative headquartered in Madison which is owned by and serves 24 electric co-ops and one municipal electric system in eastern South Dakota and western Minnesota. It has long-term power supply contracts with its member systems to ensure long-term reliability and cost control.