Frank Kloucek Calls for One-Year AI Data-Center Ban in South Dakota PUC Race

Democratic Public Utilities Commission candidate Frank Kloucek is seeking a one-year ban on new AI data centers in South Dakota. Republican nominee Don Haggar calls the proposal “reckless and pandering” and says projects should be judged individually under laws passed earlier this year.

Kloucek says a pause would let the state study developments elsewhere and their possible effects on electricity, natural-gas and water customers. He argues that large data centers require major investment in power generation and transmission, and that South Dakotans should not subsidize those projects through higher energy bills.

Lawmakers passed two data-center bills earlier in 2026, and Republican Gov. Larry Rhoden signed them into law. Legislators rejected proposals for development incentives and separate moratoriums; a proposed incentive would have exempted data-center equipment and software purchases from sales tax.

One measure lets the commission charge data-center companies for project-related regulatory reviews. A second law requires water providers to assess whether a large facility’s cooling-water use fits local supply, while electric providers must establish separate terms and seek reimbursement for costs fairly attributed to data centers.

• The state cannot override local ordinances that limit, prohibit or otherwise regulate data centers.
• Haggar cites protections against shifting project costs to ratepayers, annual water-use reporting and local approval before a data center locates in a community.
• Kloucek says the new laws “lack any teeth”; the water-and-electricity law does not add penalties for violations.

South Dakota has small data centers but no hyperscale facilities. Development supporters told lawmakers that the state is missing potential high-paying jobs and millions of dollars in additional property-tax revenue, while Kloucek’s proposal centers the possible costs to utility customers before such a project moves forward.

Haggar and Kloucek are seeking one of the commission’s three seats. The election is Nov. 3, with advance voting beginning Sept. 18; the contest will determine which candidate fills the seat being vacated by Republican Commissioner Gary Hanson, who is not seeking reelection.