McPherson County

Moratoriums and bans

1. July 1, 2025 McPherson County: Zoning ordinance. Ordinance 2025-1 makes data processing centers (including crypto mining) a conditional use in the agricultural district, with a one-mile buffer from homes, churches and schools, noise caps of 55 dBA by day and 45 dBA at night, and decommissioning rules; an unadopted draft amendment (Ordinance 2026-1) adding study, emergency-planning and other requirements circulated in 2026. (McPherson County, July 1, 2025; McPherson County, Feb. 24, 2026)

Updates, newest first

1. Sept. 9, 2026 Leola Data Center · SDPB reported that the PUC unanimously approved the settlement and noted the commission has no authority to permit the data center itself. (SDPB, Sept. 9, 2026)
2. Sept. 7, 2026 Leola Data Center · The Dakota Scout reported that the county planning and zoning board deferred the conditional use permit until agreements securing the company's pledges are in place. (The Dakota Scout, Sept. 7, 2026)
3. Sept. 1, 2026 Leola Data Center · PUC staff recommended approval of a settlement under which MDU would serve the data center while protecting FEM's territory. (South Dakota Public Utilities Commission, Sept. 1, 2026)
4. July 1, 2025 Leola Data Center · McPherson County commissioners adopted Ordinance 2025-1, making data processing centers a conditional use in the agricultural district. (McPherson County, July 1, 2025)
5. July 1, 2025 McPherson County: Zoning ordinance · Ordinance 2025-1 makes data processing centers (including crypto mining) a conditional use in the agricultural district, with a one-mile buffer from homes, churches and schools, noise caps of 55 dBA by day and 45 dBA at night, and decommissioning rules; an unadopted draft amendment (Ordinance 2026-1) adding study, emergency-planning and other requirements circulated in 2026. (McPherson County, July 1, 2025; McPherson County, Feb. 24, 2026)
6. Dec. 7, 2024 Leola Data Center · South Dakota Searchlight described the Leola plan as the largest data center then proposed in the state. (South Dakota Searchlight, Dec. 7, 2024)
7. Nov. 7, 2024 Leola Data Center · Supplemental material for a McPherson County conditional use permit described a 50 MW data center on about 20 acres beside MDU's Leola substation, roughly five miles southwest of town. (South Dakota Public Utilities Commission (filed in EL24-027), Nov. 7, 2024)
8. Aug. 5, 2024 Leola Data Center · Leola Data Center, LLC petitioned the PUC (docket EL24-027) to have Montana-Dakota Utilities assigned as its electric supplier instead of FEM Electric. (South Dakota Public Utilities Commission, Aug. 5, 2024; South Dakota Public Utilities Commission, Sept. 1, 2026)

Statewide

SB 135 (2026), the 'Data Center Bill of Rights for Citizens': signed by Gov. Rhoden in March 2026 and effective July 1; for data centers with peak demand of 10 MW or more it requires utilities to set separate service terms so costs are not shifted to other customers, adds water-use notice and reporting rules, and bars the state from preempting local data center regulation (codified at SDCL 49-50). A ban on state tax incentives was stripped before passage. (KELOLAND News, March 24, 2026; LegiScan, March 30, 2026; South Dakota Legislative Research Council, June 2026) HB 1038 (2026): signed; lets the PUC bill the actual cost of reviewing an electric service contract for a data center of 10 MW or more (SDCL 49-34A-56.1). (KELOLAND News, March 24, 2026; South Dakota Legislative Research Council, June 2026) South Dakota has no data center sales tax exemption: 2025 SB 177 (sales tax refund on data center equipment) failed 17-18 in the Senate, and 2026 HB 1005 (50-year sales and use tax exemption) died 9-3 in House State Affairs on Feb. 4, 2026. (South Dakota Legislature, 2025; South Dakota Searchlight, June 16, 2025; SDPB, Feb. 4, 2026) SB 239 (2026), which would have opened a separate reinvestment payment (tax rebate) track for large projects such as data centers, died when a Senate motion to reconsider failed 16-17 on Feb. 24, 2026. (LegiScan, Feb. 24, 2026; South Dakota Searchlight, Feb. 18, 2026) HB 1301 (2026), a statewide moratorium on new data center construction through June 2027, was killed 10-2 in House State Affairs (Feb. 19, 2026). (SDPB, Feb. 19, 2026) HB 1198 (2026), requiring facilities using 20 MW or more within a mile of another city or county to get that jurisdiction's conditional use permit, failed 21-41 on the House floor (Feb. 12, 2026). (KELOLAND News, Feb. 13, 2026) HB 1246 (2026), barring confidentiality agreements between governments and data center developers, failed 30-37 on the House floor (Feb. 20, 2026). (FastDemocracy (legislative journal summary), Feb. 20, 2026; South Dakota Searchlight, Feb. 18, 2026) PUC docket EL24-027: Leola Data Center's request for Montana-Dakota Utilities service in FEM Electric territory under SDCL 49-34A-56; settlement approved in September 2026. (South Dakota Public Utilities Commission, Sept. 1, 2026; SDPB, Sept. 9, 2026) PUC docket EL26-008: Black Hills Energy's request (filed March 19, 2026) for approval of a blockchain interruptible electric service agreement with an unnamed customer; pending, amended contract filed Aug. 19, 2026. (South Dakota Public Utilities Commission, March 19, 2026) PUC docket EL26-021: Otter Tail Power petition (filed July 27, 2026) for a new rate class and schedule for very large customers. (South Dakota Public Utilities Commission, Oct. 27, 2026) South Dakota data centers →