Minnesota Center for Environmental Advocacy v. Minnesota Public Utilities Commission

The Minnesota Court of Appeals affirmed the Minnesota Public Utilities Commission’s approval of a utility’s affiliated-interest agreements related to the utility’s stake in a new natural gas-fired power plant in Wisconsin. In a previous decision, the Court of Appeals found that the Commission erred by approving the agreements without complying with the Minnesota Environmental Policy Act. The Minnesota Supreme Court reversed this ruling. On remand from the Supreme Court, the Court of Appeals addressed the remaining issues of whether substantial evidence supported the Commission’s determinations that the power plant was needed and that the power plant would serve the public interest better than a renewable-resource alternative. The Court of Appeals found that substantial evidence supported the Commission’s determinations that the power plant was needed as a low-cost source of energy and because its dispatchable capacity provided a hedge against market pricing. The Court of Appeals also rejected the argument that the Commission’s conclusion that the power plant’s impact on overall system costs would be less than the comprehensive costs of wind or solar alternatives was not supported with sufficient detail and evidence.

The Minnesota Court of Appeals found that the Minnesota Public Utilities Commission had erred by approving “affiliated-interest agreements” associated with construction and operation of the Nemadji Trail Energy Center (NTEC)—a proposed 525 megawatt natural gas power plant in Wisconsin—without complying with the Minnesota Environmental Policy Act (MEPA). The court concluded that MEPA applied to affiliated-interest agreements and that the Commission had jurisdiction to order the preparation of an environmental assessment worksheet (EAW) under MEPA for a project in another state to determine whether an environmental impact statement should be prepared. The court noted that the affiliated-interest agreements contemplated a utility’s undertaking of the physical activities of constructing and operating NTEC, which the court described as “definite, site-specific actions that will affect not only the plant’s immediate location but also its surrounding environment, most notably through the large quantities of carbon dioxide that the plant will emit.” The court said “[t]he impact of such emissions on air quality is precisely the type of environmental effect that MEPA addresses.” The court directed the Commission to determine whether NTEC might have significant environmental effects, and if so, to prepare an EAW before reassessing whether to approve the agreements.

Environmental groups petitioned the Minnesota Court of Appeals for review of the Minnesota Public Utilities Commission’s (MPUC’s) approval of agreements that gave a utility a 50% stake in a new gas-fired power plant (the Nemadji Trail Energy Center) to be constructed in Wisconsin. The environmental groups asserted that the MPUC had made its decision without satisfying the requirements of the Minnesota Environmental Policy Act and that the MPUC had ignored an administrative law judge’s conclusion that the utility agreements would not be in the public interest.