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Law restricting out-of-state electricity purchases struck down

A federal judge recently ruled that the state of Minnesota cannot block utilities from entering into agreements for additional power from either new or existing coals plants and selling the electricity in Minnesota.

U.S. District Court Judge Susan Richard Nelson of St. Paul ruled that Minnesota’s Next Generation Energy Act, passed in 2007, violated the commerce clause of the U.S. Constitution. She said the law was a “classic example of extraterritorial regulation.”

The state of North Dakota filed suit against Minnesota state officials in 2011 and was joined by several energy industry entities including Missouri River Energy Services (MRES). Alexandria Light and Power Utilities is a member of MRES.

MRES CEO Tom Heller noted that, while much of the discussion regarding this case has centered around how the Minnesota law placed restrictions on building new power plants, there is another provision to the ruling that concerns existing power plants.

The law also restricted agreements between Minnesota utilities and others regarding the term of such agreements and the amount of power Minnesota utilities could purchase from existing out-of-state coal-fired facilities.

“Being able to consider purchase power agreements of longer than five years and for more than 50 megawatts of power from existing plants is an option that can be cost-effective while having no negative impact on present day air quality for anyone,” Heller said.

MRES has 61 member communities in Iowa, Minnesota, North Dakota and South Dakota. Each member owns and operates a municipal electric distribution system and purchases wholesale electricity and energy services from MRES.

“While our current member generation mix already includes more than 40 percent renewables, MRES continues to study and add renewable resources to our electric generation portfolio,” said Heller.

Forty-six percent of the electricity used in Minnesota during 2013 came from western coal-fired power plants, according to the U.S. Energy Information Administration.