Minnesota overstepped its authority in a 2007 law that restricts buying electricity from North Dakota coal-fired power plants, a federal appeals court ruled Wednesday.
The Next Generation Energy Act violates the U.S. Constitution’s provision allowing only Congress to regulate commerce among states, the 8th Circuit Court of Appeals ruled. Wednesday’s ruling supports a 2014 lower court decision.
Three-judge panel unanimously decided Minnesota does not have the authority to order North Dakota plants to make changes. “A statute that has the practical effect of exerting extraterritorial control over ‘commerce that takes place wholly outside of the state’s borders’ is likely to be invalid. …”
North Dakota Attorney General Wayne Stenehjem was happy with the victory, including the court order for Minnesota to repay more than $1 million in attorney fees in the case. More than half of the North Dakota cost comes from Stenehjem’s office, while other legal funding was provided by the state’s coal and power industry.
The news was especially sweet to Stenehjem, who lost his bid to become the Republican North Dakota governor candidate in Tuesday’s state primary.
The attorney general called Minnesota’s law “overreaching regulations.”
Stenehjem said that if the Minnesota law were left in place, it would have prevented North Dakota utilities from providing power to a regional distribution system that sells to Minnesota utilities.
The Minnesota law bans new coal power plants within the state, but also restricts purchase from other states’ coal plants.
Stenehjem said 800,000 Minnesotans’ electricity comes from North Dakota plants, which use locally mined lignite coal.
The appeals panel indicated that the Minnesota law affected all states that get North Dakota power.
“In the regional (electricity) transmission grid, a person who ‘imports’ electricity does not know the origin of the electrons it receives…” the judges wrote.
The Minnesota Public Utilities Commission had no comment other than it was reviewing options. However, Gov. Mark Dayton said he “strongly” disagrees with the appeals’ court ruling and he will review it with Attorney General Lori Swanson before deciding how to proceed.
“I will continue to defend the state of Minnesota’s right to protect the quality of the air our citizens breathe,” Dayton said. “The state statute does not prevent anyone from building and operating a new power-generating facility, whose emissions will affect Minnesota’s air quality. It only requires that those new emissions must be offset by the same or greater reduction in emissions from other plants. In other words, Minnesota’s law encourages the replacement of older, more-polluting power plants with more efficient, cleaner facilities.”
Stenehjem said that Minnesota’s options are limited: ask the entire appeals court to take up the issue, appeal to the U.S. Supreme Court or accept Wednesday’s ruling and pay North Dakota $1 million. The attorney general said the first two options are rarely accepted by the court system and he prefers the third.
“I think it is more of a roadblock than a speed bump,” Stenehjem said of the ruling.
After Minnesota lawmakers passed the law in 2007, Stenehjem visited then-Gov. Tim Pawlenty and others to convince them to overturn it. Lawmakers did that a few years later, but by then Dayton was in office and he vetoed the repeal.
Minnesota has tried since at least the 1990s to limit electricity imported from North Dakota power plants, with claims that lignite coal pollutes the air.
Stenehjem said North Dakota has spent hundreds of millions of dollars to fight pollution and has the country’s cleanest air.
The 2007 Minnesota law stifled North Dakota coal and power companies’ progress, Stenehjem said. “It hampers any effort for any further development because of a fear that we would run afoul of this Minnesota statute.”