As a follow up to our post here, the Minnesota Court of Appeals issued a decision on August 23 affirming the MPUC’s decisions related to the Nemadji Trail Energy Center natural gas plant (NTEC) that will be constructed in Superior, Wisconsin. Applying a deferential standard of review, the Court analyzed the appeal (on remand from the Minnesota Supreme Court) and evidence under the MPUC’s novel standard for addressing affiliated interest agreements related to power plant construction outside of Minnesota.
Specifically, the Court analyzed whether the record before the MPUC demonstrates both (i) a need for NTEC and (ii) that a fossil fueled generating resource is more appropriate on Minnesota Power’s system than a renewable generating resource.
The Court determined that, viewed in its entirety, there was substantial record evidence supporting Minnesota Power’s need for NTEC, including testimony and extensive modeling from Minnesota Power and the Minnesota Department of Commerce – Division of Energy Resources (DOC-DER). The Court found that the record as a whole “reveals ample evidence” that NTEC is a reasonable choice to meet forecasted demand, is cost effective (even when considering environmental costs under Minn. Stat. § 216B.2422 subd. 3), and is better than various renewable sources that could expose Minnesota Power’s ratepayers to market price fluctuations.
Leveraging its findings on market price risk, the Court went on to find that the renewable preference in Minn. Stat. § 216B.2422 subd. 4 was overcome by testimony from Minnesota Power and the DOC-DER “showing that the transition away from coal and toward intermittent renewable resources impairs reliability and could increase reliance on energy markets, thereby increasing costs.” In so doing, the Court summarized the MPUC’s application of the public interest standard in Minn. Stat. 216B.2422 subd. 4 on the basis of cost—finding “a wind or solar alternative is not in the public interest because the comprehensive costs for such resources are higher than those associated with NTEC.”
More to certainly come on this front in Minnesota, as the state wrestles with the best timing for meeting the 80% reduction by 2050 goal set forth in Minn. Stat. § 216H.02 and other energy policy provisions applicable to the MPUC and rate setting processes.
