Interest in energy generation builds in the West

Key Takeaways

While energy demands are increasing nationwide, pushed in some part by the proliferation of data centers and expansion of artificial intelligence, many longtime power plants are due to go offline in the coming years. At the same time, new sources of energy production are finding their footing.

Many will find that footing in Western public lands counties.

“Your role in that, at least in South Dakota, comes down to zoning and permitting,” said Chris Nelson, South Dakota’s public utilities commissioner. Nelson spoke on a panel with other energy development and management experts during the 2025 Western Interstate Region Conference in Pennington County, S.D.

“And I can look across South Dakota, where there are counties that literally have no zoning regulations as relates to new generation sources. You can go out there, you can build wind farming, and they don’t have to really do much. Then, there are places in South Dakota where the county ordinances essentially have precluded any type of new generation source. “When you talk about the cost, there’s a trade-off between costs and the level of your ordinances in what they allow.”

Nelson said that a carbon dioxide pipeline developer requested that the Public Utilities Commission completely preempt county ordinances related to the pipeline. 

“And our commission unanimously said no, we are not going to preempt what the counties have done,” he said.

Counties will continue to play a role in regulating energy infrastructure development.

“There’s an infinite amount of interest in electricity and a finite amount to go around,” said Steve Barnett, general manager of the South Dakota Rural Electric Association.

Although costs and regulations have driven a disinvestment in coal-fired power plants, they likely will remain a part of the energy mix because reliability and capacity are backstops of the industry, driving many states to take an “all of the above” approach to energy 

“The reality is, to keep the lights on, we do need to continue to utilize fossil fuels moving forward, you know, it’s technology advances,” Barnett said. “I don't know how that pendulum is going to swing, but our goal, when we wake up every morning and we go to bed every night, is to ensure that the lights stay on.”

Some of that complication, according to Matt Brunner, chief marketing officer for Rushmore Electric Power Cooperative, is that energy producers have to overbuild to meet capacity needs to allow for reserve margins, driving up construction costs.

“If you build a thousand-megawatt plant, you can only run that at 70% or 64% capacity during the winter months because you have to hold off and keep that 36% in case of [storms],” he said. 

Michael Pogany, general manager of Electric Operations for South Dakota for Black Hills Energy, said that counties can best encourage energy development by being predictable — having prescribed planning processes and open public meetings about their rulemaking processes.

“Everybody wants to keep rates low and how we can do that is through clear and transparent communication,” he said. 

Greg Brophy. Colorado director of the Western Way, boasted to the WIR Board meeting attendees about the outcomes from renewable energy generation in Eastern Colorado — 6.1 gigawatts with $10 million in annual tax revenue. 

“Roughly 40% or 45% of Kit Carson County’s general fund budget comes from property taxes from wind power,” he said. “Lincoln County is well over 50%. There are 50 jobs in Lincoln County alone from renewable energy.”

He addressed the conflict between solar field development and the agricultural sector, noting that production has doubled on agricultural land since 1950 and that the amount of agricultural land lost to solar fields is less than the total acreage of golf courses.