## Facts

- Minnesota enacted the Next Generation Energy Act (NGEA), including provisions barring (1) importing or committing to import electricity from certain new large out-of-state facilities if it would contribute to Minnesota power-sector CO₂ emissions, and (2) entering new long-term power purchase agreements that would increase such emissions.
- North Dakota and several coal and electric-power entities sued Minnesota officials, alleging the provisions were unconstitutional, including under the Dormant Commerce Clause.
- The regional electricity market was operated through a multi-state grid managed by the Midcontinent Independent System Operator (MISO), which controlled dispatch decisions once power entered the grid.
- Because electricity placed on the regional grid mixes into an interstate pool, preventing particular out-of-state generated electricity from reaching Minnesota consumers was not feasible without effectively restricting those generators’ participation in the regional system.
- The district court granted summary judgment to plaintiffs and permanently enjoined enforcement of the challenged NGEA provisions; Minnesota appealed and plaintiffs cross-appealed.

## Issues

1. Whether Minnesota’s restrictions on importing power and entering long-term power purchase agreements constitute impermissible extraterritorial regulation and a per se violation of the Dormant Commerce Clause.
2. Whether, given the integrated operation of the regional grid and MISO’s dispatch authority, the statute effectively controls electricity generation and transactions occurring outside Minnesota.

## Decision

- The Eighth Circuit affirmed the district court’s judgment and permanent injunction against enforcing Minn. Stat. § 216H.03, subd. 3(2)–(3).
- The panel agreed the challenged provisions violated the Dormant Commerce Clause because they functioned as impermissible extraterritorial regulation of interstate commerce.
- Although the court issued no single majority opinion on the full rationale, the judges were unanimous as to the result: the provisions could not be enforced.

## Legal Principles

- Under the Dormant Commerce Clause, a state law is per se invalid if it directly controls commerce occurring wholly outside the state’s borders, even if the law is aimed at in-state effects.
- In a regional electricity market where power is dispatched through a multi-state grid operator, state restrictions that can be implemented only by constraining out-of-state generators’ market participation or grid access may operate as unconstitutional extraterritorial regulation.
- State police powers over energy and environmental concerns do not permit direct regulation of out-of-state generation or interstate transactions through conditions tied to participation in an integrated interstate market.

## Conclusion

The Eighth Circuit held that Minnesota’s NGEA provisions restricting certain out-of-state electricity imports and long-term power purchase agreements were unconstitutional because, in the context of an integrated regional grid, they effectively regulated out-of-state generation and interstate transactions in violation of the Dormant Commerce Clause, and it affirmed a permanent injunction barring enforcement.


State of North Dakota v. Heydinger, 825 F.3d 912 (8th Cir. 2016)