Energy interests pile on to N.D.-Minn. coal lawsuit

Powerful energy and business interests have become allies of North Dakota in that state's two-year legal fight against a 2007 Minnesota clean energy law.

Mining and electric utility trade associations are among the 11 partisan interests opposed to Minnesota in a case that experts say could help define the power of states to regulate carbon-free electrical generation.

The clash is happening in Minnesota's appeal of a federal judge's ruling in April invalidating a part of the state's Next Generation Energy Act. The ruling threw out ­Minnesota's broad ban against utilities ­signing deals to import coal-generated electricity on grounds that it's a trade barrier under the U.S. Constitution's Interstate Commerce Clause.

"This is what the Founding Fathers were trying to prevent," said William Perry Pendley, chief executive of the Mountain States Legal Foundation, a Colorado-based free enterprise advocacy group that filed one of three friend-of-the-court-briefs in the appeal last week. "The issue of the degree to which states can erect barriers to commerce is important."

The arrival of free market and ­fossil fuel interests as "friends" of the Minnesota-North Dakota litigation comes three months after nine environmental and renewable energy groups did the same thing on Minnesota's behalf. Those groups, including trade associations for the U.S. solar and wind industries, fear that clean energy policies in 29 states could be undermined if the April ruling is upheld.

James Coleman, an assistant law professor who focuses on energy regulation at the University of Calgary's Faculty of Law and Haskayne School of Business, said the case raises legitimate questions about whether Minnesota's law — which was designed to regulate in-state utilities — might unfairly apply to large multistate power companies.

"It is a huge case," said Coleman, a Minnesota native who is not involved in the litigation. "I am not surprised to see the national interest in it."

"If their holding is phrased in a particular way, then the people who are against renewable energy standards … will take that language to other courts around the country and say, 'Look, states can't do this sort of thing under the Commerce Clause,' and try to extend the logic," Peskoe said in an interview. "That is what people are really concerned about."

North Dakota's other allies include the National Mining Association, the U.S. Chamber of Commerce, National Rural Electric Cooperative Association and the American Fuel and Petrochemical Manufacturers. One concern is that if Minnesota's law stands, other states might restrict coal-based electricity imports.

"It could ultimately have an impact on potential coal customers," said Bud Clinch, executive director of Montana Coal Council, which filed a brief in the Minnesota-North Dakota case

In an interview, Clinch said the council, representing coal mining and affiliated companies, isn't trying to broadly undermine clean energy, but "we should be operating in a free-market system."

One of the main features of Minnesota's 2007 Next Generation Energy Act — a requirement that electric utilities get 25 percent to 30 percent of their electricity from renewable sources like wind farms — is not being challenged in the case. Peskoe said Colorado's renewable energy requirements have been challenged, so far unsuccessfully. That case also is on appeal.

Judges are seeing more such friends. Two attorneys in the Washington law firm Arnold & Porter found that "friend" filings at the U.S. Supreme Court jumped from nine per case in 2010 to 14 in 2012, according to their analysis in the National Law Journal.

In the Minnesota-North Dakota appeal, 37 attorneys now are listed as participants, mostly representing outside interests. "It is the trend in the legal world," Ben Wogsland, a spokesman for the Minnesota attorney general's office, which represents Minnesota in the case.