Minnesota Angers North Dakota Over Energy Issues

Coal-powered electricity versus reduced carbon emissions.

In Minnesota in 2007, Republican Governor Tim Pawlenty passed the Next Generation Energy Act (NGEA) that put in place some of the nation’s most aggressive renewable-energy standards. The law called for carbon emissions pricing—a scheme whereby states can buy and sell carbon permits as part of a program to reduce carbon emissions. Back then, both of the major-party presidential candidates supported carbon emissions pricing strategies.

The bill helped cement Pawlenty’s national reputation, but it failed to win the hearts and minds of our neighbors in North Dakota and particularly those of their coal industry. North Dakota is a major supplier of energy to Minnesota, and almost all of it is produced by burning coal. Last year, the Republican-controlled Legislature changed its mind and passed a bill to repeal the NGEA and allow for more importation of coal-powered energy. Representative Mike Beard, who voted for the NGEA before he voted against it, authored the bill. Beard told the press that as the recession recedes, Minnesota will need more energy, and that he does not believe global warming is much of a problem at all.

Governor Mark Dayton vetoed the bill, and North Dakota pounced. Fortified with more than $1 million of coal- and power-producers’ money, the state sued Minnesota, claiming the NGEA violated the U.S. Constitution in a variety of ways. “But for the veto of the law[’s repeal] by their governor, we would not have had to take this step,” North Dakota Attorney General Wayne Stenehjem said.

The lawsuit is based on a few main contentions: that Minnesota is violating the Constitution by unfairly restricting interstate commerce; that the state has unfairly carved out exceptions to the law; and that Minnesota is attempting to regulate another state. The arguments can get legally arcane, but here’s a simplified look at what lawyers defending Minnesota’s positions told the U.S. District Court of Judge Susan Richard Nelson last April:

NORTH DAKOTA CLAIMS: The law allows no new coal-powered energy in Minnesota, but it unfairly discriminates by allowing some exceptions to that rule.

MINNESOTA RESPONDS: The only projects that were exempted were coal plant projects already in the regulatory pipeline, and not wanting to change the rules in the middle of the game, politicians gave them a pass. One of those given a pass was a plant ready to operate in North Dakota.

NORTH DAKOTA CLAIMS: Minnesota is violating the Commerce Clause by attempting to regulate areas considered the authority solely of the federal government.

MINNESOTA RESPONDS: Minnesota’s law is even-handed; laws that violate the interstate commerce clause expressly discriminate against out-of-state interests.

NORTH DAKOTA CLAIMS: Minnesota is violating the Constitution’s Supremacy Clause, which essentially establishes the U.S. Constitution and federal law as the ultimate law of the nation. Minnesota’s regulation of wholesale electric prices, they say, usurps the purview of the Federal Energy Regulation Commission.

MINNESOTA RESPONDS: Minnesota claims rights to such regulation as given it under the Clean Air Act.

Any decision in the case is probably more pleadings and years away.