Minnesota regulators do not need to prepare an environmental review for Minnesota Power's proposed $700 million natural gas power plant planned for Superior, the Minnesota Supreme Court decided Wednesday, reversing a lower court's 2019 decision.

Writing for the majority, Justice Anne K. McKeig said the Minnesota Court of Appeals erred in its December 2019 decision that said the Minnesota Public Utilities Commission should have considered the potential impacts Minnesota Power's proposed Nemadji Trail Energy Center, or NTEC, could have on air, water, land and other natural resources even though it is proposed for Wisconsin.

McKeig wrote that since NTEC will be built in another state, its construction and environmental effects are outside the PUC's authority. In a dissenting opinion, Justice Margaret H. Chutich wrote the Court of Appeal's decision requiring an environmental review should be upheld.

Minnesota Power is planning to build NTEC, a 525-625-megawatt power plant, with La Crosse-based Dairyland Power Cooperative in Superior, just 2 miles away from the Minnesota-Wisconsin border on a plot of land near Enbridge Energy's Superior terminal and the Nemadji River.

Environmental groups had argued the PUC should have ordered an environmental review for the project under the Minnesota Environmental Policy Act, or MEPA, because it would be built by a regulated Minnesota company for Minnesota customers and is so close to the state line.

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But on Wednesday, the Supreme Court sided with Minnesota Power, which had argued the earlier Court of Appeals decision had overstated the PUC's regulatory role. While the company agreed the PUC regulates the companies' financial arrangements, it said the PUC could not regulate the construction and operation of a project on sites outside the state border.

"We conclude that because the (PUC) does not have the authority to permit the construction and operation of NTEC, and NTEC can be — and according to Minnesota Power will be — built and run without the Commission’s approval, the Commission’s decision on the affiliated-interest agreements between Minnesota Power and South Shore is not a project and does not cause environmental effects. MEPA review therefore does not apply to that decision," McKeig wrote.

In a news release Wednesday, Minnesota Power said it was "pleased with the Minnesota Supreme Court's decision."

"Today’s decision by the Minnesota Supreme Court affirms that Minnesota Power has followed the appropriate regulatory steps for the Nemadji Trail Energy Center, seeking approval from the Minnesota Public Utilities Commission for those issues that require Minnesota review," the company said, adding that it has worked through, and continues to work through, the necessary approvals in Wisconsin.

In a joint statement, environmental groups opposed to the power plant — Sierra Club, Minnesota Center for Environmental Advocacy, Honor the Earth and Union of Concerned Scientists — said they were disappointed in the Supreme Court's decision and urged Minnesota Power not to adopt a new fossil fuel-burning project as it's trying to reduce emissions.

"The disappointing decision does not change the glaring problems with a $700 million investment in a fracked gas-fueled power plant, which not only flies in the face of Minnesota’s critical climate reduction goals but furthermore is unnecessary to meet future energy demands," the groups said.

In January, Minnesota Power announced plans to go coal-free in 2035 and carbon-free by 2050. To do so, it will retire its remaining coal-fired plants at Boswell Energy Center in Cohasset in 2030 and 2035. NTEC is designed to help transition the company away from coal and maintain reliable back-up for wind and solar power.

While burning natural gas emits less carbon dioxide than coal to produce the same amount of energy, it also produces methane, a potent greenhouse gas.

The company hopes to bring NTEC online by 2025. Since the burning of natural gas emits carbon dioxide, the company intends to convert the plant by 2050 when it goes carbon free.

Environmental groups maintain that is too long to keep emitting greenhouse gases as climate change worsens.

Chutich wrote in her dissenting opinion that the plant would have "significant impact" on Minnesota residents: "The court’s holding today violates that legislative directive and, in doing so, deprives the public and state agencies of the information necessary to fully consider and appreciate the environmental impacts of the decision by the Public Utilities Commission here.

"Because the plain language of MEPA encompasses the commission’s approval of the affiliated-interest agreements by Minnesota Power to finance and to construct a large power plant only 2.5 miles from Minnesota, an action having a significant impact on Minnesotans and their natural environment, I respectfully dissent."