DULUTH – The Minnesota Supreme Court on Wednesday overturned an Appeals Court ruling that would have required further environmental study on plans to build a $700 million natural gas plant in Superior, Wis., in a partial victory for Minnesota Power.

The Duluth-based utility received approval from state regulators in 2018 to draw power from the proposed plant, a decision that opponents said should have required a lengthy environmental review despite the plant being built in another state. In 2019 the Minnesota Court of Appeals ordered the Public Utilities Commission to study whether the project "may have the potential for significant environmental effects" and to conduct a formal environmental review if so.

The Supreme Court reversed that decision, writing that the commission "is not required to conduct review under the Minnesota Environmental Protection Act … before approving affiliated-interest agreements that govern construction and operation of a Wisconsin power plant by a Minnesota utility."

Minnesota Power hailed the ruling and said in a statement "a negative decision could have had a stifling effect on the business climate in Minnesota, with implications for all Minnesota companies building or contracting with facilities in other states. We are pleased with the Minnesota Supreme Court's decision."

The Appeals Court will get the chance to address whether the commission's decision to approve the utility's stake in the project "was supported by substantial evidence," the Supreme Court ruled in a decision written by Justice Anne McKeig.

Justice Margaret Chutich wrote in her dissent the commission's approval is "an action having a significant impact on Minnesotans and their natural environment," and should under state law trigger a full review.

Minnesota Power intends to split the cost and power generated from the Nemadji Trail Energy Center (NTEC) with Wisconsin's Dairyland Power Cooperative.

The plant would produce at least 525 megawatts of energy, and the utilities hoped to have it operational by the middle of the decade.

The Wisconsin Public Service Commission approved it in 2020, though that decision is being challenged in court.

"We are continuing to work with our partner, Dairyland Cooperative, on the remaining approvals required in Wisconsin," Minnesota Power's statement said.

Environmental groups that oppose the plant said no new fossil-fuel infrastructure should be built in the face of climate change — and while Minnesota Power has pledged to be carbon free by 2050 and 80% carbon free by 2035.

"Regardless of this decision, Minnesota Power needs to move much faster to 100% clean energy, and that means moving on from the NTEC proposal," Minnesota Center for Environmental Advocacy attorney Evan Mulholland said in a statement.

A coalition of environmental groups said in a news release: "Instead of putting customers on the hook for hundreds of millions of dollars for dirty fuel infrastructure, Minnesota Power should be investing in cheaper solar and wind power."

The utility said it needs a reliable source of energy while the sun isn't shining and wind isn't blowing as it moves to shutter or convert its remaining coal plants. Nemadji Trail Energy Center could be converted to cleaner fuels, such as hydrogen, in the future, the company said.

Minnesota Power parent company Allete saw its share price rise slightly following the ruling. The price closed up nearly 1% at $70.97 a share Wednesday, near the 52-week high of $72.60.

Brooks Johnson • 218-491-6496