## Facts

- Otter Tail Power Company, on behalf of the Big Stone II co-owners, applied to the South Dakota Public Utilities Commission (PUC) for an energy conversion facility permit to construct the Big Stone II coal-fired generating facility adjacent to an existing plant.
- Several nonprofit environmental organizations intervened, arguing that Big Stone II’s CO₂ emissions would contribute to global warming and therefore pose a “threat of serious injury to the environment” under SDCL ch. 49-41B.
- After evidentiary hearings, the PUC granted the permit, finding that although the facility would emit CO₂, the amount would not pose a threat of serious injury to the environment.
- In reaching that conclusion, the PUC noted that CO₂ was not then regulated by Congress or South Dakota and that the facility would increase national CO₂ emissions by approximately 0.07%.
- The PUC also considered energy need and alternatives, including findings that renewable options were not viable substitutes for the needed capacity.
- The circuit court affirmed the PUC’s decision, and the intervenors appealed to the South Dakota Supreme Court.

## Issues

1. Whether the PUC’s finding that Big Stone II would not pose a “threat of serious injury to the environment” due to CO₂ emissions was clearly erroneous under SDCL ch. 49-41B.
2. Whether the PUC adequately considered the environmental impacts of CO₂ and climate-change evidence, or improperly minimized them based on the absence of specific CO₂ regulation and the project’s small share of national emissions.
3. Whether the PUC’s evaluation of need and alternatives was supported by the record under the applicable standard of judicial review.

## Decision

- The South Dakota Supreme Court affirmed the circuit court and upheld the PUC’s issuance of the energy conversion facility permit.
- The court held that the PUC applied the governing statutory framework and that its factual findings, including the “no threat of serious injury” finding regarding CO₂ emissions, were not clearly erroneous.
- The court declined to reweigh competing expert testimony on climate impacts, emphasizing deference to the PUC’s technical fact-finding when supported by the evidentiary record.

## Legal Principles

- Under SDCL ch. 49-41B, permit approval requires a determination that the facility will not pose a threat of serious injury to the environment or to social and economic conditions in the siting area.
- Judicial review of PUC siting decisions is deferential; agency factual findings are upheld unless clearly erroneous and are given substantial weight due to the agency’s technical expertise.
- The PUC may consider climate-related evidence, including CO₂ emissions and global-warming impacts, within the existing statutory and regulatory framework; courts will not impose new regulatory thresholds absent legislative or regulatory direction.

## Conclusion

The court upheld the Big Stone II permit because the PUC considered CO₂ and climate-change evidence, addressed energy needs and alternatives, and reached findings supported by the record; those findings were entitled to deference and were not clearly erroneous under the siting statute.


In re Otter Tail Power Co. ex rel. Big Stone II, 744 N.W.2d 594 (S.D. 2008)