N.D. has $4 million fund to sue Minnesota over energy law, Burgum says

North Dakota Gov. Doug Burgum (R) said Thursday his state has a multi-million-dollar legal fund ready to take Minnesota to court over its new law requiring 100% carbon-free energy production by 2040.

“We appropriated $4 million of legal fees, and we’ll be back at it again,” Burgum said. “We won the last time, and we think we’ll win this time.”

North Dakota last sued Minnesota in 2007 over a provision in Minnesota’s Next Generation Energy Act that sought to block the importation of power generated by new coal-fired power plants. A federal judge in Minnesota ruled in 2016 that the provision violated the commerce clause. Minnesota did not appeal the ruling.

Speaking at an event hosted by Politico, which coincided with the National Governors Association’s winter meeting in Washington, D.C., Burgum said the cases are similar enough that the court would rule again in North Dakota’s favor. But no suit has yet been filed.

Burgum said the new law essentially seeks to regulate electricity producers in North Dakota, which violates the U.S. Constitution’s commerce clause.

He said he shared his concern with Gov. Tim Walz (D) and members of the Minnesota legislature to try to have language inserted that stipulated that the law would only apply to electricity generated in Minnesota. But they did not make the change, so a court date is likely the only remedy.

“If your legislature changes one word to ‘generated’ versus ‘sold’ … great, have at it,” Burgum said he told Walz. “But as soon as you start saying ‘produced’ then they’re jumping into a bunch of law that goes back to the earliest parts of the Constitution, which is one state and our republic can’t limit the legal and economic activity of another state.”

North Dakota is rich in lignite, a type of coal that it uses to generate most of the power in the state. It also exports more than half of what it generates into the regional grid, much of which ends up in Minnesota.

Burgum said political dynamics are unique in every state and that Walz might have felt pressure from his fellow Democrats to sign the measure after the bill passed with only Democratic votes.

Walz also spoke at the event and, as did Burgum, stressed that the two states have a good and valued relationship. He said he had been pushing for the measure for years and that, in addition to tackling climate change, it will help create jobs.

“The economic future lies [in] tackling this,” Walz said of the law.

Walz also said there would be no hard feelings if North Dakota were to sue, noting that North Dakota is only looking out for its economic interests — though it is a short-term interest, he said.

“I think you all know North Dakota is rich in fossil fuels,” Walz said. “So, I don’t blame them if that’s where things are going.”

He also hinted at the argument made by Minnesota environmentalists that contend the new law is similar to a renewable energy standard, which has been tested in court and won. The standard requires utility companies to source a certain amount of the energy they generate or sell from renewable sources such as wind and solar.

More than half of all U.S. states have some renewable energy standard or goal, including Minnesota, which enacted its standard in 2007. That law requires that eligible renewable energy sources make up at least 25% of the power generated and sold in the state by utilities.

“This is a bill I’ve had out there for a long time,” Walz said. “It’s been vetted. It stood up in courts before. I think we’ll win this.”