Minn. Law Can’t Govern Multistate Electric Grids

(CN) — Minnesota cannot impose its own emissions standards on electric grids that cross state borders, the Eighth Circuit ruled.

It is difficult for utilities to provide electricity efficiently and in a cost effective manner to rural areas. To address this problem, small local utilities in many states have formed cooperatives to raise sufficient capital to build generation facilities and maintain an integrated power grid.

In the northern Midwestern states of North Dakota, South Dakota and Minnesota, these cooperatives often cross state lines. But that can cause conflict when states have different environmental regulations.

A 2007 Minnesota law provides that no person may import power from out-of-state that would contribute to statewide power sector carbon dioxide emissions.

North Dakota and three energy cooperatives that are members of the Midcontinent Independent Transmission System Operator, or MISO, challenged the law in Federal Court, and the Eighth Circuit affirmed Wednesday that the law violates the Commerce Clause of the U.S. Constitution.

"Not only do the challenged prohibitions apply to non-Minnesota utilities, they regulate activity and transactions taking place wholly outside of Minnesota," Judge James Loken said, writing for a three-judge panel. (Emphasis in original.)

Given the integration of the electric grids, "electrons flow freely without regard to state borders," and the cooperatives cannot ensure that a non-Minnesota generating facility will not flow to homes in Minnesota, according to Wednesday's ruling.

"The challenged statute will impose that policy on neighboring states by preventing MISO members from adding capacity from prohibited sources anywhere in the grid, absent Minnesota regulatory approval or the dismantling of the federally encouraged and approved MISO transmission system. This Minnesota may not do without the approval of Congress," Loken wrote.

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