Basin Electric says Minnesota didn’t appeal court loss for anti-coal law

Basin Electric Power Cooperative on Aug. 30 released a brief statement applauding the fact that the state of Minnesota has chosen not to appeal a court’s ruling on the state’s anti-coal Next Generation Energy Act (NGEA).

In June, Minnesota Gov. Mark Dayton vowed to appeal a decision by the U.S. Eighth Circuit Court of Appeals to uphold a federal district court’s decision to overrule parts of the NGEA. The NGEA prohibited the interstate movement of electricity from new coal-based facilities outside of Minnesota, which had detrimental impacts on power generators across the Midwest, Basin noted.

“The court’s decision confirms that it was unlawful to single out a reliable and increasingly clean source of energy based on individual state preferences,” said Casey Jacobson, Basin Electric senior staff counsel. “The state’s decision not to appeal resolves the matter.”

A three-judge panel at the U.S. Eighth Circuit Court of Appeals on June 15 had ruled against the Minnesota law that attempted to control power plant CO2 emissions through limits imposed on a power grid that spans a multi-state area. The 2007 Minnesota statute provides that “no person shall…import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions; or (3) enter into a new long-term power purchase agreement that would increase statewide power sector carbon dioxide emissions.”

The State of North Dakota, which has power plants fueled by locally-produced lignite that export power out of state, three non-profit cooperative entities that provide electric power to rural and municipal utilities in Minnesota, and others brought this action against the commissioners of the Minnesota Public Utilities Commission (MPUC) and the Minnesota Department of Commerce (MDOC), citing the law as a violation of the Commerce Clause of the U.S Constitution. The district court granted the plaintiffs summary judgment and a permanent injunction, concluding that the above-quoted provisions are “impermissible extraterritorial legislation” and therefore “a per se violation of the dormant Commerce Clause.” Said the June 15 appeals court decision: “The State appeals. We affirm.”

Three cooperative entities were a principal focus in this case: Basin Electric, Minnkota Power Cooperative and Missouri River Energy Services (MRES).

In early 2012, Basin notified the state that it was transmitting electricity from Dry Forks, a Wyoming coal-fired plant, to meet increased demand in the booming North Dakota “oil patch,” which brought electric power into the Eastern Interconnection and subject to MISO’s control. MDOC asked Basin for analysis of whether that provision of power to MISO was a violation of the Minnesota law. After Basin responded, neither MPUC nor MDOC answered Basin’s request for confirmation whether this transmission violated the law. Plaintiffs submitted declarations by Basin officers that Basin is apprehensive about entering into long-term power purchase agreements to serve non-Minnesota load due to the law, which interferes with Basin’s ability to make investment decisions such as its planned development of a coal-fired plant in Selby, South Dakota.

Minnkota has increasing surplus capacity from its partially-owned, coal-fired plant in North Dakota. Concerned that this will trigger NGEA enforcement, two of its members in Minnesota have declined to enter into long-term purchase agreements with Minnkota.

MRES declined to purchase capacity from a coal-fired facility in Wisconsin after determining the transaction would be viewed by Minnesota as violating the NGEA.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.