While Congress looks at cuts to renewable energy tax credits, some say the impact in South Dakota is more than meets the eye.

Republicans are targeting tax credits for renewable energy in the Inflation Reduction Act Green New Deal policy.

Some advocates say, climate change politics aside, removing those credits could hurt South Dakota’s renewable energy sector’s ability to grow from a business standpoint.

According to the US Energy and Information Administration, in 2023 over ¾ of the state’s energy comes from non-fossil fuel sources.

Kory Rawstern works for the South Dakota State Federation of Labor. The federation works with the renewable energy field and others associated with it. He said renewable energy tax credits shouldn’t be a “political tool or weapon,” because it’s good for everyone.

“If the tax credits continue, South Dakota could become the energy production facility not only for North America, or you know, the United States. If we had powerlines going east, west or south. We have hydrogen opportunities, we already have solar, we already wind, we already have hydro, we already have coal, we could have nuclear opportunities in the state,” Rawstern said. “With that, we should be able to help our people within the state of South Dakota. If we can produce that much power, let’s face it: it’s a lot of parts of the country they don’t understand our utilities cost in the Midwest. Peat isn’t an option up here, it’s a necessity.”

He added for those reasons, tax and cost breaks for producing power for the entire country is a value for everyone.

Rawstern said although he loves coal, most won’t argue it burns dirty.

“Then let’s look at something else, and let’s look at something that’s viable. And sometimes it takes these tax credits to get the investors to look at things, so they make more money,” Rawstern said. “You know, there’s easier roads somedays and sometimes it’s better to take the harder road traveled.”

Rawstern pointed to a National Economic Research Associates study that estimates the cuts would cause a 7-10% increase for utility costs in the Midwest, among the highest regions in the country.

“South Dakota just can’t keep paying these 7% and 10% increases everytime we turn around” Rawstern said. 

These prospective cuts are tied to the reconciliation bill, which still faces an uncertain future in Congress.