If you've gone looking for a cheaper electricity plan in South Dakota, you've probably come up empty. That's not a broken search — it's the system working as designed. South Dakota is a regulated electricity state, and it has never adopted retail competition. Here's why there's no provider to choose, what your rate actually reflects, and what a homeowner can do instead of shopping around.
The straight answer
No, you cannot choose your electricity provider in South Dakota. Whichever utility serves your address — an investor-owned utility such as Xcel Energy, Black Hills Energy, or Montana-Dakota Utilities, a municipal utility, or a local rural electric cooperative — is your only option. There is no Power to Choose-style marketplace, no list of competing suppliers, and no plan comparison to run, because South Dakota does not allow retail electricity competition.
Unlike states that tried deregulation and later scaled it back, South Dakota never had that chapter to begin with. The state has stayed a traditional regulated monopoly system throughout: one utility, municipal system, or cooperative per territory, full stop. There's no repeal history here because there was never a competitive structure to repeal.
That's not automatically bad news. Regulated monopoly service means your utility can't lose you as a customer to a cheaper competitor, but it also means it can't raise your rate unilaterally — every rate change has to survive a public case in front of the South Dakota Public Utilities Commission, or in a co-op's or municipal's case, scrutiny from the members or council that oversee it. The trade is stability for choice. The rest of this guide is about what a homeowner can actually control inside that trade.
What power costs in South Dakota
South Dakota's average residential electricity rate was 13.4 cents per kWh in 2025, per EIA's preliminary data. That's up 72 percent since 2005, and the pace over just the last decade has run about 1.9 percent a year — not a spike, but a steady, compounding climb. The chart below shows the full federal price history for South Dakota, with a dashed projection of where the rate goes if the last decade's pace simply continues. Drag across it, or compare South Dakota against another state.
Full South Dakota electricity price data (1990–2025)
| Year | South Dakota (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 7.0 | 7.8 |
| 1991 | 6.9 | 8.0 |
| 1992 | 7.1 | 8.2 |
| 1993 | 7.0 | 8.3 |
| 1994 | 7.1 | 8.4 |
| 1995 | 7.1 | 8.4 |
| 1996 | 7.0 | 8.4 |
| 1997 | 7.1 | 8.4 |
| 1998 | 7.3 | 8.3 |
| 1999 | 7.4 | 8.2 |
| 2000 | 7.4 | 8.2 |
| 2001 | 7.4 | 8.6 |
| 2002 | 7.4 | 8.4 |
| 2003 | 7.5 | 8.7 |
| 2004 | 7.7 | 9.0 |
| 2005 | 7.8 | 9.5 |
| 2006 | 7.8 | 10.4 |
| 2007 | 8.1 | 10.7 |
| 2008 | 8.3 | 11.3 |
| 2009 | 8.5 | 11.5 |
| 2010 | 9.0 | 11.5 |
| 2011 | 9.4 | 11.7 |
| 2012 | 10.1 | 11.9 |
| 2013 | 10.3 | 12.1 |
| 2014 | 10.5 | 12.5 |
| 2015 | 11.1 | 12.7 |
| 2016 | 11.5 | 12.6 |
| 2017 | 11.8 | 12.9 |
| 2018 | 11.6 | 12.9 |
| 2019 | 11.6 | 13.0 |
| 2020 | 11.8 | 13.2 |
| 2021 | 12.2 | 13.7 |
| 2022 | 12.1 | 15.0 |
| 2023 | 12.3 | 16.0 |
| 2024 | 12.9 | 16.5 |
| 2025 * | 13.4 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Read that 72 percent honestly: it isn't one bad year, it's two decades of rate cases each nudging the number up a little. A household paying $120 a month in 2005 dollars, adjusted only for that rate increase, is paying roughly $206 today for the same usage — before accounting for the fact that a growing Sioux Falls or Rapid City subdivision, or a farmhouse running more electronics and cooling than it used to, has likely pushed usage up too. That combination — a rate that reliably climbs and a state with real heating and cooling seasons on both ends of the year — is exactly why the "what can I control" section below matters more in South Dakota than in a mild climate with a flat rate.
Why your rate is set this way
In a regulated state, your rate isn't a market price — it's the output of a legal process called a rate case. Your utility periodically files a request with its regulator (the South Dakota Public Utilities Commission for investor-owned utilities; a city council for municipal utilities; a member-elected board of directors for rural electric cooperatives, which are a different kind of entity entirely) laying out its costs: fuel and purchased power, grid maintenance and upgrades, and a regulator-approved return on its infrastructure investment. Consumer advocates, large customers, and the public can weigh in. Regulators then approve, trim, or reject the request, and the resulting rate applies to every residential customer in that utility's territory equally.
Two things drive the number up over time. First, fuel and purchased-power costs move with natural gas and coal prices and the broader regional energy market — South Dakota's generation mix leans on a mix of coal, natural gas, hydro, and a fast-growing share of wind. Second, grid investment is real and ongoing: transmission upgrades, substation work, and reliability improvements across a large, sparsely populated service territory all get folded into future rate cases. None of this is something an individual homeowner can negotiate — the rate case is public, but it isn't personal.
How to actually lower the bill
Since you can't shop for a cheaper provider, everything that moves the needle in South Dakota happens on your side of the meter or inside your rate plan's structure — not by switching companies.
Efficiency first. South Dakota runs both a heating season and a cooling season, so the building envelope matters year-round. A programmable or smart thermostat, sealed and insulated attics and walls, weatherstripped doors and windows, and a properly sized and maintained furnace, heat pump, or air conditioner do more for a South Dakota bill than anything else on this list. If your home was built before modern insulation codes, an attic top-up is often the single highest-return fix in the state.
Rate structure, where it's offered. Some South Dakota utilities and cooperatives offer time-of-use plans alongside their standard flat rate, and many co-ops and municipals run off-peak or load-management programs for things like electric water heaters and irrigation. Ask your provider directly what's available — offerings vary more here than in states with a handful of big investor-owned utilities, since a large share of South Dakota is served by member cooperatives and municipal systems that each set their own optional rate structures.
Budget billing for volatility. If the problem isn't the annual total but the swing between a low spring or fall bill and a high summer or winter one, ask your utility or co-op about budget or levelized billing. It averages your estimated annual cost into equal monthly payments with a periodic true-up, which doesn't lower your total cost but makes it predictable — useful for anyone on a fixed monthly budget through a South Dakota year.
Solar, weighed honestly. A rate that's climbed 72 percent since 2005 with no sign of flattening does help the economics of generating your own power, since every future rate increase is a cost you avoid on the portion of usage you generate yourself. South Dakota gets decent annual sun for a northern-tier state, but winter months still cut into production, so the payback period runs longer than in a year-round sun state. The actual number depends heavily on your specific utility's or cooperative's net metering terms, which differ by provider — work through the specifics in our solar panels guide before committing.
The practical checklist
- Confirm your utility, municipal system, or cooperative and rate plan. Find your provider and your current rate plan on your last bill — you can't compare options until you know your baseline.
- Ask about optional rate plans or load-management programs. Request a usage-based comparison from your utility or co-op using your actual billing history, not a generic estimate.
- Fix the building envelope first. Insulation, air sealing, and a smart thermostat typically outperform any rate-plan switch in dollar terms.
- Consider budget billing if your goal is a predictable monthly payment rather than a lower annual total.
- Check your home's broader electrical health. Our electrical guide covers panel capacity and wiring issues that can also affect efficiency and safety.
- Run the solar numbers against your actual utility's terms before committing — net metering rules vary by provider in South Dakota and materially change the payback period.
Sources
- U.S. Energy Information Administration — South Dakota average residential electricity rate (13.4 cents per kWh, 2025 preliminary) and the 1990-2025 historical price series shown in the chart.