Student Post: Minnesota Lawmakers Debating Continuing Restriction of North-Dakota Produced Electricity

The Next Generation Energy Act in Minnesota bans Minnesota utilities from importing power from new coal plants outside of the State of Minnesota, and raises the cost of future purchases of coal-based electricity by assigning environmental fees to the use of coal fuel. North Dakota's coal industry has been working for the repeal of the Minnesota law since lawmakers there approved it in 2007. Minnesota is a major customer of electricity produced in North Dakota from lignite coal mines. Utilities in North Dakota say it would cripple future development of the state's lignite industry, which produces more than 30 million tons of fuel annually for western North Dakota power plants that supply Minnesota customers with electricity. North Dakota’s lignite industry and its associated power plants employ more than 27,000 people, provide a $3 billion annual impact and generate more than $90 million in North Dakota taxes each year. The Lignite Energy Council states that two million Minnesotans get power from North Dakota’s seven power plants, and half of North Dakota’s electrical production goes to Minnesota.

North Dakota has sued Minnesota in federal court, asserting that a law that bars utilities from buying power from new plants that would raise carbon dioxide emissions illegally restricts business between states and encroaches on Congress' power to regulate interstate power sales and carbon dioxide emissions. Tom Trenbeath, North Dakota's deputy attorney general, said the state has spent just over $342,000 so far in preparing for the litigation. The figure includes expenses for lobbying the Minnesota Legislature to repeal the law, Trenbeath said. The utilities and coal companies were not required to pay a share of those costs. Basin Electric Power Cooperative, Minnkota Power Cooperative Inc., Great Northern Properties LP and North American Coal Corp. have agreed pay up to $100,000 each in legal expenses for the lawsuit filed in federal court in Minneapolis last month. Aside from the state of North Dakota, the lawsuit's plaintiffs include Basin Electric Power Cooperative, of Bismarck; the North American Coal Corp., of Plano, Texas; Great Northern Properties LP, of Houston; Missouri River Energy Services, of Sioux Falls, S.D.; the Lignite Energy Council, of Bismarck; and Minnkota Power Cooperative Inc., of Grand Forks, N.D. Basin, Minnkota and Missouri River Energy supply power to Minnesota utilities. North American Coal operates North Dakota coal mines that supply the state's power plants, while Great Northern owns vast coal reserves in western North Dakota. The Lignite Energy Council is a trade group that represents coal producers and electric utilities.

The lawsuit, filed in U.S. District Court in Minneapolis in early November 2011, contends the Minnesota law violates the U.S. Constitution. It imposes illegal restrictions on doing business between states, and infringes on Congress' power to regulate carbon dioxide pollution and interstate power sales, the lawsuit contends. The lawsuit was filed against Lori Swanson, Minnesota's attorney general; the five members of Minnesota's Public Utilities Commission; and Mike Rothman, the chief administrator of Minnesota's Department of Commerce. The suit asks a federal judge to declare the law unconstitutional and permanently enjoin it. Minnesota Attorney General Lori Swanson has asked the case's presiding judge, U.S. District Judge Susan Richard Nelson, to dismiss most of the lawsuit and remove her from its list of defendants. Nelson has scheduled an April 12, 2012 hearing in St. Paul.

Prospects for repeal of the law brightened when Republicans took control of the Minnesota House and Senate in 2011 elections. A bipartisan group of lawmakers approved removing the law's ban on importation of energy from new coal-fueled plants, but Minnesota's Democratic governor, Mark Dayton, vetoed the legislation. Since then, North Dakota filed suit in federal district court, while Minnesota lawmakers continue working to lift the law. Rep. Mike Beard, R-Shakopee, is currently pushing a bill to eliminate that restriction, saying Minnesota needs affordable electrical power from North Dakota plants fueled by lignite coal. It also would allow new coal-fired power plants in Minnesota, although companies wanting new plants still would need to receive state approval. Minnesota lawmakers held hearings on this issue in January. Democrats, with support of environmental groups, argued in favor of keeping current restrictions. The primary argument against repealing the restriction is that North Dakota lignite coal used to produce much of Minnesota’s imported electricity pollutes the air.

The Minnesota law was touted as an effort to cut carbon dioxide pollution and combat global warming, but the law made exceptions for Minnesota coal projects, which underscored inconsistency and arbitrariness of the law's policy aims, the lawsuit says. On the ‘environmental’ side of the fence, Wayde Schafer, a Bismarck-based spokesman for the Sierra Club, said the state could instead use its money "to advance the technology to provide cleaner energy, so both North Dakotans and Minnesotans would benefit." I tend to agree that a law that makes arbitrary distinctions on purchasing coal-based electricity from North Dakota seems arbitrary and unconstitutional. I also tend to believe that this lawsuit is unnecessary and that an answer lies in the middle road, with advanced technology and safety to utilize lignite coal for electricity production. Cleaner energy is the answer, not states suing one another in pursuit of affordable electricity and limited environmental impact.

Below are links to articles, if anyone would like further information:

http://capitolchat.areavoices.com/2011/01/27/86735/
http://www.businessweek.com/ap/financialnews/D9QP9M500.htm
http://www.huffingtonpost.com/2011/12/29/north-dakota-coal_n_1174425.html