Judge strikes down part of Minnesota energy law

MINNEAPOLIS (AP) -- A federal judge ruled Friday that part of a Minnesota law designed to promote the use of renewable energy is unconstitutional because it attempts to control business that takes place outside state borders — and she barred Minnesota officials from enforcing it.

The ruling was a victory for North Dakota officials and representatives of that state's coal industry, who sued Minnesota in 2011, claiming that the law unfairly blocked them from exporting electricity into its neighbor. Minnesota Gov. Mark Dayton said he strongly disagreed with the decision and the state will appeal.

"I will defend the state of Minnesota's right to protect the quality of the air our citizens breathe," Dayton said in a statement.

In a 48-page ruling, U.S. District Judge Susan Richard Nelson said part of Minnesota's Next Generation Energy Act of 2007 violates federal law by attempting to regulate interstate commerce.

Among other things, she found the law improperly requires non-Minnesota companies to seek approval from Minnesota authorities in order to do business in other states. She said because of that, the statute overreaches and if other states enacted similar laws, "it could lead to balkanization."

"If any or every state were to adopt similar legislation ... the current marketplace for electricity would come to a grinding halt," Nelson wrote.

Minnesota's law bars anyone from importing power from new, carbon dioxide-producing facilities in other states. It also bans long-term purchase agreements that would increase carbon dioxide emissions in Minnesota. Dayton said in his statement that the law doesn't prevent the construction of new power plants, but requires that any new emissions from those plants are offset by reductions in emissions from other plants.

"Prevailing winds will carry those toxic emissions directly into Minnesota. That shameful practice should not be permitted by either the state or federal government," Dayton said.

But Nelson wrote that because of the nature of the industry, and the way that electricity goes onto the grid, the North Dakota companies can't ensure that coal-generated electricity will stay in North Dakota and not flow into Minnesota.

"Like the transmission of information over the Internet, the transmission of electricity over the ... grid does not recognize state boundaries," she wrote. As a result, she said, in order to comply with the law, out-of-state businesses must not engage in any transactions that would contribute to Minnesota's power sector.

North Dakota Attorney General Wayne Stenehjem said the lawsuit was a victory.

"This is a vindication of everything that we had been saying," he said. "We always felt that businesses in North Dakota should not have to come, hat in hand, to Minnesota regulators to get permission to do business in other states." He said that holds true especially in the energy industry, where "you can't choose where an electron goes on a wire."

Stenehjem said North Dakota's power plants export most of the electricity they product to other states, including Minnesota. He said the Commerce Clause, the federal law that Nelson said the Minnesota statute violates, was enacted to prevent states from creating legislation that benefits their state and imposes a burden on others, "which is precisely what this Minnesota law did."

Sean H. Donahue, an attorney for the Environmental Defense Fund, which weighed in on the case, said the ruling was a disappointment.

"The problem that we are dealing with in controlling greenhouse gas emissions is so urgent and important that it's a great disappointment whenever we have a step back, even if it's something that I think we will be able to work out over time," he said.

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