North Dakota wants to block Minnesota power lines in fight over clean energy

North Dakota, Montana and three Southern states want to block a $22 billion plan for power lines across the Midwest that Minnesota says it needs to transition to carbon-free energy.

The states argue that the federal government should stop the grid upgrade to keep their customers from paying higher rates to subsidize clean energy projects in other states.

Xcel Energy, Minnesota’s largest electric utility, called the North Dakota complaint “utterly meritless.” Xcel and other Minnesota utilities argue the transmission projects are needed for a reliable grid as coal plants are retired and new AI data centers, electric vehicles and appliances cause a surge in demand.

The fight is the latest example of how basic grid infrastructure has become a partisan battleground at a pivotal moment for the U.S. energy system. As local energy priorities diverge, it’s straining the cooperation that’s essential for a regional grid that connects 15 states and Canada’s Manitoba province.

The intervention of Louisiana, Mississippi and Arkansas in the case particularly irked Minnesota’s top energy regulators.

“I don’t get involved in how they regulate in their states,” said Joe Sullivan, a Democrat who is vice chair of the Minnesota Public Utilities Commission. “Because it doesn’t affect me. Why are they messing around with our economic future?”

If the complaint led by North Dakota is successful, Minnesota “will be poorer and less economically vibrant,” Sullivan said. “It’s an economic attack on Minnesota.”

Earlier this month in Becker, Great River Energy and Minnesota Power broke ground on the first project in a package approved by MISO in 2022. Workers poured concrete for the foundation of a utility pole, part of the “Northland Reliability” transmission line. It will eventually carry electricity generated by wind, solar and other sources more than 180 miles from central Minnesota to a substation near Grand Rapids.

“It is all about keeping the lights on and keeping the grid stable and safe,” said Priti Patel, who oversees transmission for Great River, which supplies energy to rural electric cooperatives throughout the state. “Especially during the coldest days in the winter.”

These projects improve the grid’s ability to share electricity, which helps if, for example, the wind is blowing in one part of the country but not another. It’s also crucial when demand for energy spikes in one part of the grid because of extreme weather, said Hwikwon Ham, a political independent on Minnesota’s PUC.

Xcel described the projects as “effectively creating the Eisenhower Interstate System for electricity for the region” in a letter to federal regulators.

North Dakota, Montana, Mississippi, Louisiana and Arkansas lodged their complaint in July with the Federal Energy Regulatory Commission (FERC). The states argued that MISO’s calculations of benefits from the projects are overblown, and as a result, the cost paid by local utility customers would be unreasonable.

“If a state chooses to pursue ambitious decarbonization targets, it should also bear the financial responsibility for the infrastructure required to meet those goals,” said Sheri Haugen-Hoffart, a member of the North Dakota Public Service Commission, in an August statement.

North Dakota’s three members of Congress said in a letter to FERC that the benefits of the transmission lines largely flow to states with clean energy policies “but the costs are spread to everyone.”

“If a state can socialize the expense of distant generation hookups, it has less incentive to consider cheaper or more reliable solutions closer to home,” the letter says.

The North Dakota commission declined to comment beyond its written statements.

MISO declined to make anyone available for an interview, but the organization says its research shows that for every dollar spent on the 24 projects, the new transmission will provide $1.80 to $3.50 in benefits. The plan was developed over years after more than 300 meetings.

North Dakotans and Montanans will “significantly benefit” for this round of transmission projects and help pay a “very small percentage of the costs,” according to MISO. Utility customers in Louisiana, Arkansas and Mississippi will pay nothing because the projects aren’t in their region.

Ham said he believes regulators in Southern states are trying to block the grid upgrades in the Midwest because their utilities want to earn higher profits by building their own plants instead of sharing electricity.

The three Southern state commissions did not respond to a request for comment.

Republicans hold a majority on the FERC panel after the U.S. Senate earlier this month confirmed two new commissioners appointed by President Donald Trump to fill vacancies on the five-member panel.

However, not all Republicans oppose the $22 billion transmission package.

“In Iowa alone, more than 7 [gigawatts] of proposed energy generation projects would be stalled by months to even years if the Commission decides to delay its implementation,” wrote Iowa’s Republican Gov. Kim Reynolds, in a letter to FERC.

In letters to FERC, Xcel, MISO and others appealed to Trump’s support for construction of data centers to support artificial intelligence, his stated goal of “energy dominance” and economic competition with China.