Clean-energy interests on Monday jumped into a Minnesota-North Dakota appellate court battle, hoping to reverse a federal court ruling that tossed out a 2007 Minnesota ban on new coal-fired electricity generation.
Nine environmental and renewable energy groups and two energy experts filed four friend-of-the court briefs with the Eighth U.S. Circuit Court of Appeals challenging U.S. District Judge Susan Richard Nelson's decision to strike down part of the Next Generation Energy Act.
In April, the judge sided with North Dakota's attorney general and coal and utility interests to declare unconstitutional the law's restrictions on new imports of coal-generated power. She said Minnesota violated the U.S. Constitution's commerce clause by regulating business activities of out-of-state utilities.
Minnesota appealed, and has argued that the judge got it wrong, partly because regulators haven't applied the 2007 law to utilities, including those complaining from North Dakota, a coal-mining state that relies on that fuel for nearly 80 percent of its electricity.
Although Midwest environmental groups earlier took part in the two-year-old legal fray, the ruling and the appeal have attracted national organizations. The American Wind Energy Association and the Solar Energy Industries Association, both Washington, D.C.-based trade groups, jointly filed a brief taking Minnesota's side.
Ken Johnson, a spokesman for the solar industries group, said the ruling applied a part of the commerce clause in such a broad way that it could slow the development of clean energy and undermine state energy policies.
"This decision creates a lot of regulatory risk for energy markets and flies in the face of long-standing precedents of how energy markets are regulated and operate," Johnson said in an e-mail.
Federal ruling's effect
Scott Strand, an attorney for Minnesota Center for Environmental Advocacy, a St. Paul-based nonprofit law firm, said the legal issues in the case "do have some impact potentially across the country." He predicted increased litigation over state utility policies if the ruling is upheld.
His legal brief in support of Minnesota's position was filed on behalf of the center, the nonprofit advocacy group Fresh Energy and the Izaak Walton League.
Mark Templeton, an assistant law professor at the University of Chicago Law School, said the ruling, if upheld, could threaten a broad set of energy laws, including renewable energy portfolio standards that most states have enacted. Under such laws, utilities must get a certain percentage of electricity from renewable sources such as wind farms or solar projects.
Templeton said the utility industry is built on contracts to buy and sell power, a key issue raised in the Minnesota-North Dakota case. He said courts have long recognized states' powers to regulate such transactions. He filed court papers on behalf of two energy experts, including Steven Gaw, the former head of the Missouri Public Service Commission who is now a consultant.
"We feel this really was a significantly different take on pretty well established law," Templeton said in an interview.
"It could have a broad consequence or a narrow one, and we hope the court of appeals will overturn the ruling and uphold the law," added Sean Donahue, an attorney representing the Sierra Club and other environmental groups that filed another supportive brief.
In the litigation, North Dakota coal and utility interests, including Minnkota Power Cooperative, which serves local electric co-ops in Minnesota and North Dakota, and Basin Electric Power Cooperative of Bismarck, said electricity deals involving existing coal plants risked running afoul of the Minnesota law. Neither utility has proposed specific coal-based power sales to Minnesota power companies, however.
The North Dakota side has until early January to respond to Minnesota's appeal and the friend-of-the-court briefs. The North Dakota attorney general's office on Monday did not respond to a request to comment. The appeal process is expected to stretch well into 2015.