City of Colman initiates partnership with Sioux Valley Energy

A new partnership is in the works to intentionally benefit City of Colman residents with both improved service and a more cost-effective approach to electric rates.
The City of Colman took initial steps recently to form an electrical utility partnership with Sioux Valley Energy. Official action was taken at a city council meeting Tuesday, August 19, 2025, to declare intent to transfer the citys municipally owned electrical assets to Sioux Valley Energy.
In July, the council also voted to deliver notice of contract termination with the citys current power supplier once that contract expires in December 2055.
Discussions about the future of Colmans 75-plus-year-old electric system began more than a year ago, after the council learned that the cost of necessary infrastructure upgrades could reach between $2.6 million and $3 million. Early estimates indicated those expenses could potentially double or triple electric rates for Colman residents, in addition to any effects of rising power costs.
After recognizing the potential burden, the city began discussions with Sioux Valley Energy.
If approved, this partnership with Sioux Valley Energy will benefit the residents of Colman, said Colman Mayor Mike Preheim.
Sioux Valley Energy already provides maintenance on our electrical system so the transfer would be seamless. We would also see improved service through their online energy management system and various programs as well as access to 24/7 local dispatch services and emergency restoration.
As a not-for-profit cooperative, Sioux Valley Energy can re-invest in and more efficiently upgrade the Colman electrical system over a period of time. This is a win-win for everyone, said Tim McCarthy, Sioux Valley Energy General Manager and CEO.
Readings of the proposed resolution will take place at Colmans September and October city council meetings.