Appeals court orders further review for Minnesota Power natural gas plant

DULUTH – Minnesota regulators need to take another look at the environmental effect of a natural gas plant Minnesota Power wants to build in Wisconsin, the state Court of Appeals ruled Monday in a setback for the $700 million project.

Though the plant would be built in Superior, Judge Louise Dovre Bjorkman held that Minnesota Power is subject to the jurisdiction of the Minnesota Public Utilities Commission and the state's environmental laws.

Last year the PUC narrowly approved Minnesota Power's stake in the project without requiring an environmental review. Environmental groups appealed the decision.

The judge ordered the PUC to determine whether the plant "may have the potential for significant environmental effects and, if so, to prepare [a review] before reassessing whether to approve the affiliated-interest agreements."

The Nemadji Trail Energy Center would generate 525 to 625 megawatts of power. Construction costs, and the power generated, would be split between Minnesota Power and Wisconsin's Dairyland Power Cooperative.

Monday's ruling was a victory for environmental activists who said investing in more fossil fuel infrastructure is unnecessary and unwise.

"This ruling sends the strong message that Minnesota utilities can't ignore or sidestep the environmental and public health risks of burning fossil fuels," said Jessica Tritsch with the Beyond Coal to Clean Energy Campaign. "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 rather than dirty, risky gas."

Minnesota Power said it has expanded its renewable-energy options in recent years and expects to get half of its energy from renewable sources by 2021. The Duluth-based utility, which has 145,000 customers across northeastern and central Minnesota, maintains it needs the natural gas plant to provide power when the sun isn't shining and the wind isn't blowing.

"We are disappointed in this unprecedented decision because a Minnesota environmental review has never been applied to a facility outside the state of Minnesota," the company said in a statement. Minnesota Power vice president of strategy and planning Julie Pierce said they are reviewing the decision and "considering all of our options."

It will be up to the PUC whether to appeal the ruling or comply with the judge's order. "The commission is reviewing today's decision and has not yet made a decision on whether the commission will appeal," said PUC Chairwoman Katie Sieben.

The ruling could have implications that reach beyond this project, said Evan Mulholland, an attorney for the environmental groups who brought the appeal.

"Because of this decision, the PUC will be looking at environmental impacts more than ever," he said. The Nemadji Trail Energy Center would be the largest private investment in Superior's history and would provide 260 construction jobs and 25 permanent positions at the facility, according to the city. The preferred site is near the Enbridge terminal and Husky Energy refinery.

Wisconsin regulators are still reviewing the project. Minnesota Power and Dairyland hoped to have the plant in operation by 2025.

Brooks Johnson • 218-491-6496