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The avoided-cost rate is particularly significant in South Dakota because utilities there for the most part do not offer net metering. That means that the small number of self-generating customers in South Dakota are paid the much lower avoided-cost rate for any excess production that they put onto the grid.
The bill would have closed the gaps among the rates now paid by various utilities across the state for distributed power.
The committee rejected the bill by a vote of 11 to two.