8th Circuit affirms judgement in Dakota Energy, East River Electric lawsuit

On July 28, a three-judge panel of the Eighth Circuit Court of Appeals affirmed a federal judge’s decision in a lawsuit filed by Dakota Energy Cooperative against its wholesale power supplier East River Electric Power Cooperative, a Basin Electric Class A member headquartered in Madison, South Dakota, saying that the wholesale power contract between the two electric cooperatives is clear and that there is no provision for early termination of the contract.

“Dakota Energy’s member-owners are the real winners here,” said Bob Sahr, East River Electric’s CEO and general manager. “This case is about more than a contract – it’s about a bond and commitment to work together with your neighbors for the greater good. East River Electric’s members set the stage for our historical success when they formed us and our cooperative business model, and working together as a group will be the key to our future success. We look forward to serving Dakota Energy and the rest of our members for generations to come.”

The legal dispute started in November 2020 when Dakota Energy, an electric distribution cooperative based in Huron, South Dakota, filed a lawsuit seeking to exit its long-term wholesale power contract with East River Electric. Federal District Court Judge Lawrence Piersol granted summary judgement to East River Electric and its power supplier Basin Electric in April 2022, dismissing the case. Dakota Energy appealed to the 8^th Circuit Court of Appeals later that month. The 8^th Circuit Court of Appeals has now affirmed Judge Piersol’s ruling.

Dakota Energy had earlier signed a letter of intent with a for-profit energy broker, Guzman Energy, based in Denver, Colorado, to purchase wholesale power if their case was successful.

“A lot more goes into the electric utility business than just buying energy,” Sahr said. “East River Electric’s member cooperatives own us, and our dedicated workforce responds during storms, builds and maintains a reliable transmission network, and supports local economic development all at some of the lowest rates in the entire country. We’re here for the long haul and work only for the members at the end of the line.”

Mark Foss, Basin Electric general counsel, said, “The 8^th Circuit’s decision was a very big win for not only East River and Basin Electric, but for generation and transmission cooperatives across the country. The courts are saying you signed the contract and you’re bound by it until the date of expiration.”