S.D. Codified Laws § 49-34A-43
The boundaries of each assigned service area, outside of incorporated municipalities, shall be a line equidistant between the electric lines of adjacent electric utilities as they existed on March 21, 1975, provided that these boundaries may be modified by the Public Utilities Commission to take account of natural and other physical barriers which would make service of electric power and energy beyond those barriers economically impractical and shall be modified to take account of the contracts provided for in this section, and provided further that said boundaries shall also be modified by the commission to take into account orders entered before July 1, 1975, by the electric mediation board.
Contracts between electric utilities, which are executed on or before July 1, 1976, designating service areas and customers to be served by the electric utilities approved by the commission shall be valid and enforceable and shall be incorporated into the appropriate assigned service areas. The commission shall approve a contract if it finds that the contract will eliminate or avoid unnecessary duplication of facilities, will provide adequate electric service to all areas and customers affected and will promote the efficient and economical use and development of the electric systems of the contracting electric utilities.
Where a single electric utility provided electric service within a municipality on March 21, 1975, that entire municipality shall constitute a part of the assigned service area of that electric utility. Nothing contained in this chapter shall modify existing rights of municipalities to establish an electric utility. Where two or more electric utilities provided electric service in a municipality on March 21, 1975, the boundaries of the assigned service areas within an incorporated municipality shall be assigned pursuant to the equal distance concept as applied to lines located only within the municipal boundaries.
SDCL 49-34A-43