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In re Minnesota Power's Petition for Approval of Energy Forward Resource Package

Court of Appeals of Minnesota

December 23, 2019

In the Matter of Minnesota Power's Petition for Approval of the Energy Forward Resource Package.

          Public Utilities Commission File No. E-015/AI-17-568

          Evan J. Mulholland, Kevin P. Lee, Minnesota Center for Environmental Advocacy, St. Paul, Minnesota (for relators Minnesota Center for Environmental Advocacy, Union of Concerned Scientists, and Sierra Club)

          Paul C. Blackburn, Honor the Earth, Callaway, Minnesota; and Frank Bibeau, Deer River, Minnesota (for relator Honor the Earth)

          Keith Ellison, Attorney General, Ian Dobson, Assistant Attorney General, St. Paul, Minnesota (for respondent Minnesota Public Utilities Commission)

          Michael C, Krikava, Elizabeth M. Brama, Briggs and Morgan, P.A., Minneapolis, Minnesota; and David R. Moeller, Minnesota Power, Duluth, Minnesota (for respondent Minnesota Power)

          Christine Hottinger, Minneapolis, Minnesota (for amicus curiae Friends of the Climate)

          Considered and decided by Bjorkman, Presiding Judge; Hooten, Judge; and Klaphake, Judge. [*]

         SYLLABUS

         The Minnesota Public Utilities Commission (commission) shall prepare an environmental assessment worksheet (EAW) before approving an affiliated-interest agreement if a petition under Minn. Stat. § 116D.04, subd. 2a(e) (2018), demonstrates that, because of the nature or location of the action proposed in the agreement, there may be potential for significant environmental effects.

          OPINION

          BJORKMAN, Judge

         In these consolidated appeals, relators challenge an order by the commission denying a petition for an EAW and approving respondent-utility's affiliated-interest agreements related to a proposed natural-gas power plant in Wisconsin. Relators argue that (1) the commission erred by concluding that the Minnesota Environmental Policy Act (MEPA), Minn. Stat. §§ 116D.01-.11 (2018), does not apply to the agreements and (2) the decision to approve the agreements is arbitrary and not supported by substantial evidence. Because the commission erred by denying the EAW petition, we reverse and remand.

         FACTS

         In July 2017, respondent Minnesota Power petitioned the commission for approval of its EnergyForward Resource Package, including the proposed natural-gas resource that is the focus of this appeal-a 525 megawatt natural-gas combined-cycle power plant in Superior, Wisconsin, known as the Nemadji Trail Energy Center (NTEC). Minnesota Power seeks to (1) construct, (2) operate, and (3) purchase approximately half the capacity of NTEC, through three agreements with its Wisconsin affiliate, South Shore Energy LLC.[1]Affiliated-interest agreements are not effective unless the commission approves them as "reasonable and consistent with the public interest." Minn. Stat. § 216B.48, subd. 3 (2018).

         The commission referred the issue of whether "the proposed gas plant resource" is necessary and reasonable for a contested-case proceeding before an administrative law judge (ALJ). The ALJ received public comments, extensive testimony and documentary evidence, and multiple rounds of argument from the parties, including various "clean energy organizations" that intervened in the contested case to oppose Minnesota Power's petition. Based on that record, the ALJ concluded that Minnesota Power failed to demonstrate a need for NTEC, making the affiliated-interest agreements not reasonable and consistent with the public interest, and recommended that the commission not approve the agreements. The ALJ also noted that relator Honor the Earth (HTE) submitted public comment requesting an environmental impact statement (EIS) but declined to rule on the need for an EIS as outside the scope of the contested-case proceeding.

         HTE then filed a petition with the Minnesota Environmental Quality Board (EQB) requesting that an EAW be prepared with respect to the proposed project. The EQB forwarded the petition to the commission.

         Consequently, the commission was presented with two issues: (1) whether to grant the petition for an EAW and, if not, (2) whether to approve the affiliated-interest agreements. The commission denied the EAW petition, reasoning that MEPA does not apply to the affiliated-interest agreements and it lacks jurisdiction to order an EAW for a power plant outside of Minnesota. And the commission approved the affiliated-interest agreements with conditions.

         Relators Minnesota Center for Environmental Advocacy, Union of Concerned Scientists, and Sierra Club (collectively MCEA) appealed by writ of certiorari. HTE filed a separate ...


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