The Minnesota Public Utilities Commission must reconsider if an environmental review is needed for a $700-million, 525-MW natural gas plant proposed for construction in neighboring Wisconsin, a Minnesota appeals court said in a Dec. 23 decision.
Nemadji Trail Energy Center would be built and operated by Minnesota Power in Superior, Wis., about 2.5 miles from its neighboring state. The utility would purchase about half of the plant’s capacity through agreements with its Wisconsin affiliates. Wisconsin’s Dairyland Power Cooperative is a project partner and also would take half the output.
The commission denied a petition from environmental groups for the review, saying that Minnesota law does not apply to affiliate agreements and that it lacks jurisdiction to order the scrutiny for a plant outside the state.
The appeals court disagreed, saying that Minnesota law requires government agencies to consider environmental consequences when approving a project and that the affiliate agreement requires a review when constructing a plant that will affect the environment, “most notably through the large quantities of carbon dioxide that the plant will emit.”
The court added that “the impact of such emissions on air quality is precisely the type of environmental effect [state environmental law] addresses.” Judges said regulators must determine potential for major environmental effects and assess risks before approving the affiliate agreements.
Regulators argued that requiring a Wisconsin-constructed plant to meet Minnesota environmental requirements would violate the U.S. Constitution.
But the appeals court ruled it is simply a question of whether the affiliate agreements are reasonable and consistent with the public interest. That the plant would be outside the state does not prevent regulators from requiring a review.
“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,” Minnesota Power said in a statement. An appeal is possible by the company or the commission, a firm spokeswoman told ENR.
The project is under review by regulators in Wisconsin, who are considering wither it would have adverse effects on the environment. A decision is expected this year.