It simplifies who can connect to the electric grid and how, and it allows electric customers to be producers as well by connecting clean energy systems such as solar panels and wind turbines to the grid.
"Right now, there's been a patchwork quilt across the state as far as connectivity issues, and there's been some confusion out there," said PUC Chairman Dusty Johnson. "When people complain, they complain about the hassle to connect to the grid rather than the price.
The little guys haven't had the expertise or leverage to manage a nonuniform system, and this helps."
Commissioners have been working on the Small Generation Interconnection Rules since 2007. After a legislative review hearing, the rules could go into effect June 9.
The interconnection rules would govern operations producing 10 megawatts of power or less.
South Dakota joins 30 other states with a uniform set of standards, said James Rose, a senior policy analyst with the Network for New Energy Choices.
"A few states have considered it and rejected it," Rose said. "And that's been unfortunate for renewable energy in some states."
As part of the Energy Policy Act of 2005, all public electric utilities are required to offer to their customers on request interconnection to the power grid. Having state PUCs streamline the process, with one set of rules, means more people have a chance to connect to the grid.
"Not everyone has $10 million to build a wind farm," said Steve Wegman, director of the South Dakota Wind Energy Association and a former analyst for the state PUC. "At my last count, there were 70 different energy companies in the state, each one with a different set of rules. Standards are always good."
The interconnection standards will allow for so-called distributed generation, where people with solar panels or a wind turbine can sell their excess power close to where they live, on existing transmission lines.
"I think going forward, we'll see large, central station power rates increase, for a variety of reasons," said PUC Chairman Johnson. "Ten years from now, I think we're going to see a whole lot more distributed generation. And we need rules in place now to see that happens."