PIERRE | Members of the state Public Utilities Commission and several of their lawyers discussed Tuesday whether a wind-energy developer who began work last year and still hasn’t applied for a permit should be referred for criminal prosecution.

Scout Clean Energy gained a two-year advantage over competitors that would be worth “tens of millions of dollars” in tax benefits after the Boulder, Colo.-based company moved dirt at several wind-turbine sites in Hand County, commissioner Chris Nelson said.

Commissioner Gary Hanson acknowledged the company made “an elementary mistake” but said Nelson’s number was “argumentative.”

“There’s absolutely no proof of it whatsoever,” Hanson said about whether anyone in the company knew a state permit was needed. “I don’t seek any fruit in going to that particular tree.”

State law designates commencing on a wind project without a permit as a class one misdemeanor punishable by up to one year in jail and a $2,000 fine.

Mollie Smith, a lawyer recently hired by the company, said company president Michael Rucker in a sworn statement told the commission that the company didn’t know a permit was needed.

The company did the work in Hand County last December to begin qualifying for a federal tax credit, according to Matt Heck, the company’s director of development.

Heck told Nelson there isn’t actually an application. The value of the credit would come in 2020 through the financing of the project, according to Heck. He said the company likely wouldn’t apply to the commission for the construction permit until late in 2019.

Nelson said the company website touts permitting experience. “I’m just baffled by how this unfolded,” he said.

State law doesn’t adequately address the situation, according to Nelson. “But it’s what the Legislature has given us,” he said.

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Commission chairwoman Kristie Fiegen said the situation was disappointing. “The playing field is now different for your competitors,” she told Heck and Smith.

Fiegen said the state commission can send information to the federal government so authorities there know what happened and can judge whether the project qualified for its tax credit in 2016 or 2019.

As for the misdemeanor, Fiegen said a state judge would have to decide whether the company violated South Dakota law.

Fiegen said the commission’s staff could send the information to either the Hand County state’s attorney office or the state attorney-general office.

Adam de Hueck, one of the commission’s lawyers, said the situation was like seeing someone outside breaking into a car. He said the person seeing the crime needs to call the police.

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