Dive Brief:

• The Minnesota Public Utilities Commission (PUC) must go back and consider the environmental impacts of a gas-fired power plant it approved in 2018, the Minnesota Court of Appeals ruled on Monday.
• Regulators did not consider the 500 MW Nemadji Trail Energy Center's (NTEC) climate impacts because the plant is proposed for Wisconsin. The court ruled there is no restriction on such a review, however.
• Minnesota Power and Dairyland Power Cooperative are developing the $700 million project to serve customers in both states. Wisconsin regulators are currently considering the project.

Dive Insight:

Minnesota Power officials say they are still reviewing the court's decision, but expect the Wisconsin review to "adequately address any environmental concerns and the steps we are taking to mitigate any environmental impact."

"We are disappointed in this unprecedented decision because Minnesota environmental review has never been applied to a facility outside the state of Minnesota just as other state's policies shouldn't apply to Minnesota's environmental review," the utility said in a statement.

Regulators, in declining to complete an environmental review of the facility, said the Minnesota Environmental Policy Act precluded reviewing a facility in another state. The court, however, said regulators did have authority over the affiliate agreements they approved which are necessary for Minnesota Power to distribute electricity from the facility.

"The commission's express authority to regulate construction of power plants in Minnesota, and to order environmental review before approving their construction, does not negate its authority to approve or reject Minnesota Power's agreements with its Wisconsin affiliate regarding the construction, operation, and output of NTEC," the court found.

"We are reviewing the decision and considering all of our options," Minnesota Power Vice President of Strategy and Planning Julie Pierce said in a statement. She said natural generation "is a critical part" of the utility's strategy to provide power while cutting back on coal and adding more renewables.

The utility says it is on a track to reach 50% renewable energy by 2021.

The court's decision means Minnesota regulators must assess NTEC's impact over a forty-year lifespan, including greenhouse gas emissions, air and water pollution and other impacts.

"This ruling sends the strong message that Minnesota utilities can't ignore or sidestep the environmental and public health risks of burning fossil fuels," Jessica Tritsch, a Sierra Club senior campaign representative, said in a statement. "We hope Minnesota Power will take this signal from the court and develop a new plan that meets our state's energy needs with clean, renewable energy."