Frank Kloucek Calls for One-Year AI Data-Center Ban in South Dakota PUC Race
Kloucek says utility and water risks justify a pause; Haggar says rules passed this year already protect ratepayers and give projects individual review.
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Kloucek says utility and water risks justify a pause; Haggar says rules passed this year already protect ratepayers and give projects individual review.
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South Dakota’s Public Utilities Commission race now includes a direct fight over AI infrastructure policy. Democrat Frank Kloucek wants a one-year halt on new AI data centers, arguing the state needs time to assess impacts on electricity, natural-gas and water customers. Republican Don Haggar supports case-by-case reviews under two 2026 laws requiring cost reimbursement, water-supply assessments and separate utility terms.
South Dakota lawmakers rejected both proposed data-center incentives and separate moratoriums earlier in 2026.
The new rules let regulators charge companies for project reviews and require utilities to recover fairly attributed costs.
Water providers must assess cooling demand; annual water-use reporting and local approval also apply.
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.
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.
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