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Bill

SB 235

protect residents from increased utility costs and utility shortages caused by data centers, to clarify authority to regulate data centers, and to modify provisions pertaining to the purchasing of goods and services by a data center.

2026 Regular Session Introduced by Casey Crabtree

SB 235 restricts data center operations to prevent utility rate spikes and shortages while clarifying state regulatory authority and modifying procurement rules for data center purchases.

State Affairs Deferred to the 41st legislative day , Passed, YEAS 5, NAYS 4 S.J. 27
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WeVote Research Nonpartisan
Bill Summary · SB 235

Legislative bill overview

SB 235 aims to shield South Dakota residents from utility cost increases and service disruptions caused by data center operations. The bill clarifies state regulatory authority over data centers and modifies procurement requirements for data center purchases of goods and services.

Why is this important

Data centers consume substantial amounts of electricity and water, potentially driving up utility costs for residential and commercial customers while straining local infrastructure. As data center development accelerates nationally, states are grappling with how to balance economic development benefits against community protection and resource sustainability concerns.

Potential points of contention

  • Economic development vs. regulation trade-off: Stricter regulations may deter data center investment and associated tax revenue and job creation that South Dakota seeks to attract
  • Cost allocation uncertainty: Unclear whether utilities or data centers will bear increased infrastructure costs, potentially affecting business competitiveness or consumer rates
  • Procurement restrictions scope: Requirements limiting data center purchasing could increase operational costs for facilities while potentially harming local suppliers or creating unintended market distortions
  • Implementation authority: The bill's passage with a 4-5 vote in committee and subsequent deferrals suggest significant disagreement about appropriate regulatory boundaries and enforcement mechanisms

Compiled from official sources — confirm details with the bill’s official record.

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