The Associated Press November 3, 2011, 9:46AM ET

ND sues Minnesota over coal power restrictions

North Dakota and representatives of its coal industry sued the state of Minnesota on Wednesday, seeking to invalidate a law that restricts the ability of Minnesota utilities to buy electricity from western North Dakota's coal fields.

The lawsuit, filed in U.S. District Court in Minneapolis, 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.

Minnesota is a major customer for electricity produced in North Dakota, and Minnesota-based utilities operate power plants in west-central North Dakota's coal-producing region. The power stations are fueled by nearby lignite mines.

The law essentially bans Minnesota utilities from importing power from new coal plants outside the state, and raises the cost of future purchases of coal power by assigning environmental costs to use of the fuel.

Wayne Stenehjem, North Dakota's attorney general, said the law hampers the future development of the state's coal industry.

"A good portion of (Minnesota's) electricity comes from right here in North Dakota," Stenehjem said Wednesday. "They need it, and they are going to need it even more so in the future, because their energy demands are going to increase ... Their (law) will simply increase the price of electricity for their own citizens."

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.

Dan Wolf, the Minnesota Public Utilities Commission's assistant executive secretary, declined comment on the lawsuit. A spokesman for Rothman referred requests for comment to Swanson. A spokesman for Swanson could not be reached immediately for comment.

The lawsuit asks a federal judge to declare the law unconstitutional and permanently block it from being enforced.

North Dakota's coal industry has been working for the repeal of the Minnesota law, called the Next Generation Energy Act, since lawmakers there approved it in 2007.

It was touted as an effort to cut carbon dioxide pollution and combat global warming, but Stenehjem on Wednesday called it "a purely symbolic gesture." The law made exceptions for Minnesota coal projects, which underscored "the incoherence and arbitrariness of the (the law's) underlying policy aims," the lawsuit says.

The prospects for repeal brightened when Republicans took control of the Minnesota House and Senate in last year's 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.

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.

John Dwyer, president of the Lignite Energy Council, said the "future of the lignite industry is at stake" in the lawsuit.

"We cannot develop new projects with a law that basically says that they shall decide how many (carbon dioxide) emissions, and what form, and what technology should be used," Dwyer said. "It's going to chill any development of existing projects, and future projects, for the lignite industry."


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