Governor vows to fight on after court blow to clean energy law

Source: Daniel Cusick, E&E reporter • Posted: Tuesday, June 21, 2016

Minnesota Gov. Mark Dayton (D) says his pursuit of policies “to protect the quality of air that our citizens breathe” will not be undone by a recent federal court ruling that struck down key elements of the state’s landmark clean energy law.

The nearly 10-year-old law, called the Next Generation Energy Act, suffered a second strike last week as the 8th U.S. Circuit Court of Appeals in St. Louis affirmed a lower court ruling that the law involves “extraterritorial regulation” of energy markets in neighboring North Dakota.

The law has been under fire since its passage in 2007 by a Democratic Legislature with support from then-Republican Gov. Tim Pawlenty. Among its more controversial elements is a provision prohibiting Minnesota utilities from purchasing new coal-fired power from outside the state unless measures are taken to offset the pollution associated with the new coal generation.

North Dakota has long maintained that the provision violates the Commerce Clause of the U.S. Constitution and filed a lawsuit in 2011 to have the measure struck down. In April 2014, a federal judge in St. Paul enjoined Minnesota regulators from enforcing elements of the law, including the provision on coal-fired power imports.

Minnesota appealed, but a three-judge panel of the 8th Circuit affirmed the finding, effectively handing North Dakota its second legal victory.

In a statement, Dayton said he would review the 8th Circuit ruling with Minnesota Attorney General Lori Swanson (D) “before further consideration of how to proceed.” A spokesman for the AG’s office said Friday that no appeal had been prepared and that further comments on the case would come from Dayton or other executive branch agencies.

North Dakota Attorney General Wayne Stenehjem, who on June 14 lost a bid to become the Republican candidate to succeed incumbent Republican Gov. Jack Dalrymple this fall, said he was “extremely pleased … that North Dakota has once again prevailed in its lawsuit against Minnesota’s overreaching regulations.”

Stenehjem was the lead plaintiff in North Dakota’s challenge of the Minnesota energy law, with backing from coal-fired utilities and the state’s lignite coal industry. Among other things, the 8th Circuit judges ruled that Minnesota must pay more than $1 million in legal fees incurred by North Dakota and co-plaintiffs to make their case.

Had Minnesota’s law been upheld, opponents say it would have prevented North Dakota utilities from selling power into the Midcontinent Independent System Operator (MISO) market — “hurting businesses and customers in both Minnesota and North Dakota.”

But Dayton rejected such claims. “The state statute does not prevent anyone from building and operating a new power-generating facility whose emissions will affect Minnesota’s air quality,” he said. “It only requires that those new emissions must be offset by the same or greater reduction in emissions from other plants.

“In other words,” he said, “Minnesota’s law encourages the replacement of older, more polluting power plants with more efficient, cleaner facilities.”