Judge strikes down Minnesota's anti-coal energy law

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: April 18, 2014 - 11:31 PM

A federal judge in St. Paul said it interferes with interstate commerce. State officials plan to appeal.

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A federal judge struck down part of a 2007 Minnesota law that bans new power generation from coal.Gov. Dayton vowed an appeal, but an environmentalist said the ruling will have little effect because the market is moving away from coal anyway.

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A federal judge on Friday struck down a landmark 2007 Minnesota law that bans new power generation from coal, saying it regulates business activities of out-of-state utilities in violation of the U.S. Constitution’s commerce clause.

U.S. District Judge Susan Richard Nelson enjoined the state from enforcing key sections of the law, which North Dakota coal and utility interests said hampered their ability to find buyers for power from existing coal-fired generating plants or to plan for new ones.

“It is a complete victory for us,” North Dakota Attorney General Wayne Stenehjem said in an interview.

Minnesota Gov. Mark Dayton said the state will appeal the ruling and “oppose North Dakota’s intentions with every means at our disposal.”

North Dakota, joined by utilities and coal companies, sued Minnesota two years ago, saying the state’s Next Generation Energy Act violated the U.S. Constitution by improperly restricting electricity sales by North Dakota power companies.

Under Nelson’s order, Minnesota can’t enforce state restrictions on electricity imports from new power plants that increase greenhouse gases. No Minnesota utility has announced plans to do that. But the order, if upheld, could open the door to Minnesota utilities buying more coal-generated power from other states.

Minnesota relied on western coal for 46 percent of its electricity in 2013, according to the U.S. Energy Information Administration. North Dakota got 79 percent of its power from coal, including lignite mined in that state.

The 2007 law effectively bars Minnesota utilities from importing new coal-based electricity or from building new coal power plants. North Dakota interests argued that the law blocked that state’s utilities from signing new coal-based power deals, even in other states.

“This statute overreaches,” wrote Nelson, who serves on the federal bench in St. Paul. She called the law a “classic example of extraterritorial regulation” and concluded that if every state had such laws “the current marketplace for electricity would come to a grinding halt.”

The commerce clause gives Congress the power to regulate interstate commerce.

‘Prevailing winds’

In a statement, Dayton said the law doesn’t prevent utilities from building new power plants as long as they offset the new emissions. He said the law encourages replacing older, more polluting plants with cleaner ones.

“In this case, North Dakota operators propose to build new, coal-fired power-generating plants without offsetting emission reductions,” Dayton said in a statement. “Prevailing winds will carry those toxic emissions directly into Minnesota. That shameful practice should not be permitted by either the state or federal government.”

‘Moving on from coal’

Michael Noble, executive director of Fresh Energy, a St. Paul clean energy advocacy group that filed a friend of the court brief in support of Minnesota, said the state law, and the judge’s ruling, may not matter anymore.

“They won their litigation, but the world is moving on from coal,” Noble said.

Federal rules imposed by the Obama administration already create a barrier to new coal-fired generation, and proposed rules to be issued in June will affect existing coal plants. Noble said renewable energy is the fastest-growing segment of the power industry, and consumers support it. North Dakota is a major source of wind energy, for example.

“The net effect of this decision is no effect on the energy industry,” he said.

  • WHO’S FIGHTING

    North Dakota’s legal battle against Minnesota over coal has 22 parties, including groups that filed friend-of-the-court briefs.

    Plaintiffs

    State of North Dakota

    Industrial Commission of North Dakota

    Lignite Energy Council

    Basin Electric Power Cooperative

    North American Coal Corp.

    Great Northern Properties

    Missouri River Basin Municipal Power Agency

    Minnkota Power Cooperative

    Plaintiffs’ friends of the court:

    Minnesota Chamber of Commerce

    National Mining Association

    American Public Power Association

    National Rural Electric Cooperative Association

    Defendants

    Minnesota Attorney General

    Minnesota Public Utilities Commission

    Minnesota Commerce Commissioner

    Defense friends of the court:

    Minnesota Center for Environmental Advocacy

    Environmental Defense Fund

    Sierra Club

    Natural Resources Defense Council

    Fresh Energy

    Izaak Walton League of America

    Environmental Law and Policy Center of the Midwest

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