The proposed bill aims to regulate the costs and risks associated with electricity use by data centers in South Dakota, particularly focusing on large data centers with a peak electricity demand of twenty megawatts or greater. It introduces new definitions and requirements for electric utilities when establishing rates for data centers, ensuring that these facilities cover the full costs of their electric service without transferring financial burdens to other retail customers. Additionally, large data centers are required to submit proposals for meeting their load demand through private electric supplier agreements or self-generation, and they must file annual reports detailing various operational and financial aspects, including energy efficiency measures and decommissioning plans.

Furthermore, the bill imposes a moratorium on the construction or expansion of large data centers until June 30, 2027, which includes any data center that could become classified as large through expansion. This moratorium is intended to mitigate potential risks and costs associated with stranded assets and to ensure that existing customers are not financially impacted by the operations of large data centers. The legislation emphasizes accountability and transparency by mandating that large data centers bear all decommissioning costs and comply with any decommissioning requirements set by the relevant authorities.