Fate of Minn. renewable energy law in judge's hands

A federal judge could soon decide the fate of Minnesota's six-year-old renewable energy law, which North Dakota officials say is an unconstitutional overreach.

North Dakota filed a lawsuit two years ago challenging Minnesota's Next Generation Energy Act, which the Legislature passed and former Gov. Tim Pawlenty signed in 2007. Besides mandating energy conservation measures and setting a goal that 25 percent of energy used in the state should come from renewable sources by 2025, the law prohibits utilities serving Minnesota from importing additional power unless any additional carbon dioxide emissions are somehow offset.

North Dakota officials have argued that part of the law violates the Commerce Clause of the U.S. Constitution by attempting to regulate interstate commerce. They also say only the federal government can regulate the wholesale energy market. Utilities in North Dakota generate electricity for thousands of Minnesota customers.

While listening to oral arguments in court on Thursday, U.S. District Judge Susan Richard Nelson at first called the law "difficult to understand" and said electricity — the product being used in Minnesota — isn't harmful in the way other products regulated by states are harmful.

"It's not like fuel emissions or tainted food or flammable clothing," Nelson said. Nobody disputes that we have a problem with coal plants in this country. This statute offends the Constitution to the extent that it reaches entities in other states."

But Minnesota officials argued that coal-generated electricity is harmful to its citizens. For one it's a "risky commodity" that could pose a financial burden in the future, argued Assistant Minnesota Attorney General Gary Cunningham. Also, carbon dioxide emissions don't stay within a state's borders, and Minnesota has reason to promote renewable energy, he said.

Those arguments didn't seem to sway the judge, but she appeared to listen intently when two environmental lawyers appeared as friends of the court. Environmental Defense Fund attorney Sean Donohue cautioned Nelson against striking down the law outright, saying many other states have similar renewable energy standards and that states have traditionally had a say in what type of energy is used within their borders.

Donohue also rejected North Dakota's argument that Minnesota's law discriminates against North Dakota utilities. "A requirement to use clean power wherever it's generated is not discriminatory," he said.

Sierra Club attorney Joanne Spalding said North Dakota's claims are premature because the Minnesota Public Utilities Commission has not yet interpreted the state's law in a way that is harming North Dakota.

Therefore, the judge should instruct the two sides to go to the PUC for guidance, Spalding said. "The only harm in this case is uncertainty, which is really no harm at all," she said.

Thomas Boyd, an attorney representing North Dakota, said the difference between Minnesota's renewable energy law and laws in other states is that the other laws talk about diversifying electricity sources. "This statute requires elimination of a resource," he said.

The judge praised both sides for their arguments and said she found the issue "fascinating." She could rule in either Minnesota or North Dakota's favor or decide the dispute should proceed to trial.