Black Hills Energy protects customers while supporting blockchain development through new tariff
Black Hills Energy is pleased to have worked with the South Dakota Public Utilities Commission to address the unique energy needs of blockchain businesses, while protecting reliability and costs for existing customers. This process resulted in the new Blockchain Interruptible Service Tariff, approved by the South Dakota PUC in January 2026 after months of review.
“Maintaining a safe and reliable electric system for customers is our top priority,” said Wes Ashton, vice president of South Dakota and Wyoming Utilities. “As approved by the PUC, the Blockchain Interruptible Service Tariff allows Black Hills Energy to serve the interruptible loads of potential blockchain businesses without causing cost or reliability impacts to our existing customers.”
Serving the energy needs of emergency services, hospitals, schools, businesses and homes during severe weather, winter storms and extreme cold remains Black Hills Energy's primary focus. Blockchain operations are smaller in size, use no water and do not require continuous access to energy. They typically operate only when surplus energy is available and market conditions are favorable. Energy used by blockchain customers can be interrupted as needed to prioritize existing customers.
The unique tariff allows Black Hills Energy to leverage blockchain businesses to the direct benefit of current customers. In addition to increased sales and property tax revenue, Black Hills Energy customers also receive financial benefit from blockchain customers in the form of a credit to the energy cost adjustment and offsetting costs of future transmission investments.
“Similar to other rate structures, blockchain customers pay their entire share of transmission and distribution upgrade costs, while also offsetting costs of future infrastructure investments,” Ashton said. “In addition, blockchain customers will receive their electricity from excess energy on the market, which means they will not take away energy from generation sources that could serve our existing customers.”
“We appreciate the work that went into establishing an innovative tariff to support the blockchain industry,” said Mike Bockorny, CEO of the Economic Development Professionals Association. “The tariff will help foster a new industry bringing jobs, sales tax and property tax revenue into South Dakota. Blockchain customers also bring economic benefits to the state through incremental sales tax revenue, additional permanent work force increasing regionalized spending, and additional marketing opportunities to attract other customers and investors to South Dakota.”
Black Hills Energy’s current rate review, under consideration by the South Dakota PUC, is unrelated to the blockchain tariff. The current rate review is a separate regulatory proceeding that is seeking cost recovery of investments made over the past 12 years to support the safety and reliability of the electric system.
Any customers served under this tariff would require an application and contract from the utility and customer, be reviewed and approved by the South Dakota Public Utilities Commission and comply with all state and local permitting processes.
Frequently asked questions
Is the Blockchain Interruptible Service Tariff designed to serve data centers?
No. Data centers require continuous energy, or firm capacity with high reliability requirements.
Will this tariff increase rates?
No. Any customer served under this tariff will not impact customer rates.
Is Black Hills Energy building the new Lange II generating facility to serve new blockchain and data center businesses?
No. Our Lange II power facility, now under construction in Rapid City, is being constructed to replace capacity that we will lose due to the retirement of our aged Ben French generation units. The Ben French natural gas generators that have faithfully served the Black Hills region for more than 50 years are scheduled for decommissioning in 2027. Lange II will serve as a critical system resource to cost-effectively serve our existing customers while enhancing resiliency and reliability.
Why did you ask the PUC to keep your contract with a blockchain customer confidential?
It is not uncommon for business-related filings to have confidential aspects that protect proprietary or customer information. Often, businesses establishing or growing in our region ask to remain confidential until they are ready to make the announcement themselves. However, all businesses must still adhere to any state and local permitting processes required for development and construction. Black Hills Energy values the accountability and transparency brought forth through the regulatory process. We pride ourselves on presenting thorough and accurate information in all of our filings.