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Legal Memorandum: Retirement of Long-Lived Assets in SD

Issue: Legal Obligations for the Retirement of Long-Lived Assets for Public Utility Operators in South Dakota.

Area of Law: Administrative Law, Administrative Law & Regulation (Federal and State), Environmental Law
Keywords: Retirement or abandonment of long-lived assets; Public utility operators; Legal obligations
Jurisdiction: South Dakota
Cited Cases: None
Cited Statutes: S.D. Codified Laws § 49-41B-4; S.D. Admin. R. 20:10:22:33; S.D. Codified Laws § 49-34B-3; 49 C.F.R. § 192.727(b); § 192.727(e), § 192.727(g); S.D. Admin. R. 74:10:10:03; S.D. Codified Laws §§ 49-7A-1, -2; S.D. Admin. R. 20:25:03:01
Date: 11/01/2004

Prior to construction of any facility, a utility must obtain a permit from the Public Utilities Commission.  S.D. Codified Laws § 49-41B-4 (2004).  Each application for a permit must contain, among other things, “a plan or policy statement on action to be taken at the end of the energy conversion facility’s on-line life.”  S.D. Admin. R. 20:10:22:33 (2004).  Estimates of monetary costs, site condition after decommissioning, and the environmental impact of the plant are to be included in the plan or policy statement.  Id.

With respect to pipelines, South Dakota has expressly adopted the federal safety standards relevant to pipelines as the state’s minimum safety standards.  S.D. Codified Laws § 49-34B-3 (2004).  Under federal regulations, each abandoned pipeline must be disconnected from all sources and supplies of gas and purged of gas unless the volume of gas is so small as to pose no potential hazard.  49 C.F.R. § 192.727(b) (2004).  If air is used for purging, the utility must insure that no combustible mixture exists after purging.  Id. § 192.727(e).  Additionally, if any abandoned pipeline crosses over, under, or through any commercially navigable water, the utility must file a report upon abandonment of that facility with the National Pipeline Mapping System.  Id. § 192.727(g).  The Secretary of the South Dakota Department of Environment and Natural Resources also requires annual filings of pipeline maps indicating the location, size, extensions, and any portions of abandoned or unused pipe within the state.  S.D. Admin. R. 74:10:10:03 (2004).

Finally, South Dakota requires all operators of […]

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