State of North Dakota v. Heydinger

In 2007, the State of Minnesota enacted the Next Generation Energy Act to reduce carbon emissions. Section 216H.03, subd. 3 prohibited the importation of electricity from new, large out-of-state power generators that would contribute to Minnesota’s statewide power-sector carbon-dioxide emissions and barred the execution of long-term power-purchase agreements that would increase such emissions. However, preventing the transmission of electricity (i.e., the physical electrons) from certain power generators to consumers within Minnesota was technically impossible once electricity entered the grid managed by the Midwest Independent System Operator (MISO). MISO operated the regional electricity grid that spanned 15 states including Minnesota. MISO did not own transmission facilities, but it operated the transmission lines owned by its member organizations and played the central role in organizing the electricity market in its region. Once generators committed their electricity to be sold to the MISO market, MISO, not consumers or individual states, had the authority to control which generators operated at a given time. To comply with Minnesota’s statute, MISO’s authority to select which generators operated at any time would be usurped. Put differently, the only way to ensure electricity from new generators that contributed to carbon emissions did not reach Minnesota was to disconnect those out-of-state generators from MISO. The State of North Dakota and three electric cooperative entities (plaintiffs) that operated outside of Minnesota and provided electricity to utilities in Minnesota, among others, brought an action against the Minnesota Public Utilities Commission and the Minnesota Department of Commerce (defendants). North Dakota and the cooperatives claimed that the prohibitions on new out-of-state generators that contributed to carbon-dioxide emissions were a per se violation of the Dormant Commerce Clause of the United States Constitution as impermissible extraterritorial legislation. The district court granted summary judgment and a permanent injunction in favor of North Dakota and the cooperatives. Minnesota appealed.