Electricity is an indispensable commodity, inseparable from modern-day life. Americans in particular account for around one-sixth of energy consumption worldwide. And yet, while we cannot live without it, electricity obtained from nonrenewable sources plays a major role in the deterioration of our environment. In fact, around thirty percent of the United States’ carbon dioxide emissions and greenhouse gas emissions stem from the electricity sector. The majority of electricity used within the United States is created by fossil fuels. Carbon dioxide—a type of greenhouse gas—is released from the burning of fossil fuels. To mitigate the electrical sector’s negative environmental impacts, many states have implemented renewable portfolio standards (“RPS”) that require electrical utilities to obtain or generate a certain percentage of their electrical sales from state-specified sources of renewable energy.
Minnesota has been at the forefront of clean energy legislation, adopting its first renewable energy policy in 2001. This policy encouraged electrical utilities to “make a ‘good faith effort’” to generate or obtain ten percent of their electrical sales from renewable energy sources by 2015. Minnesota later passed an RPS law in 2007 called the Next Generation Energy Act (“NGEA”), which in part implemented a policy goal that “[twenty-five] percent of the total energy used in the state be derived from renewable energy resources by the year 2025.” However, Minnesota’s ambitious law fell flat because of a challenge to the NGEA’s constitutionality.
The Eighth Circuit Court of Appeals struck down a portion of the NGEA under the so-called Dormant Commerce Clause, holding in North Dakota v. Heydinger that the NGEA had an unconstitutional extraterritorial impact as it regulated “activit[ies] and transactions taking place wholly outside of Minnesota.” However, undeterred by the loss in Heydinger, Minnesota passed a new clean energy law in February of 2023 (the “2023 Renewable Energy Law”) that consists of minimum RPS and a carbon-free energy standard. The 2023 Renewable Energy Law’s similarities to the NGEA calls into question whether Minnesota is destined to lose yet again in its defense of clean energy legislation. Already, North Dakota seems to be gearing up for litigation. In January of 2023, shortly after the 2023 Renewable Energy Law was introduced, North Dakota Governor Doug Burgum sent a letter to Minnesota Governor Tim Walz. In the letter, Burgum asked Walz to limit the law’s applicability to electricity generated within the State of Minnesota to avoid extraterritorial impacts in North Dakota. Governor Walz, in response, expressed confidence in the 2023 Renewable Energy Law’s ability to stand up against constitutional scrutiny, stating, “I trust that this bill is solid[.] . . . I trust that it will stand up because it was written to do exactly that.”
While Minnesota lost the battle for clean energy legislation in Heydinger, it is likely to win the war and defeat North Dakota’s extraterritoriality arguments should the dispute make it to court. This drastic change in the likely outcome surprisingly stems from a recent U.S. Supreme Court case about pork regulations.
In National Pork Producers Council v. Ross, the Court effectively limited the extraterritoriality principle of the Dormant Commerce Clause, stating that the doctrine should only be used to strike down protectionist “price control or price affirmation statutes.” Therefore, the crux of North Dakota’s argument in Heydinger—that the NGEA was unconstitutional under the Dormant Commerce Clause due to its extraterritorial effects on out-of-state energy producers—will be inapplicable in any future litigation North Dakota may bring against the 2023 Renewable Energy Law as the new law does not aim to control energy prices.