The 2007 Legislature set aside $500,000 in case North Dakota would decide to sue Minnesota if the latter state were to follow through on imposing what some are calling a "carbon tax."

Call it tax or fine or fee, it would fall heavily onto the electric power generation industry in North Dakota. It would come in the short run as a per-ton assessment on the lignite used to fire power plants, but the real target is carbon dioxide and what it might take to meet stringent emissions standards.

There has to be a better approach than Minnesota taxing facilities in North Dakota or our state suing its neighbor.

The strange but true aspect of this is that two of the key players that would be on the receiving end of the fee are Great River Energy, owner of the Stanton and Coal Creek stations, and Otter Tail Power, one of the operators of the Coyote station. Both companies have headquarters in - yes, Minnesota.

The issue arises because the power generated here has consumers in Minnesota. That state figures to have a stake in the greenhouse gas from the power plants doing the generating. More than half the electric power generated in North Dakota is sent to Minnesota. The "Next Generation Energy Act" signed into law in May by Minnesota Gov. Tim Pawlenty calls for establishing an estimate of the costs of future carbon dioxide regulation. A figure of $9 on a ton of lignite is the amount being used at this point. That's just an estimate.

The North Dakota Industrial Commission has entered the picture. It has standing from its role of administering a lignite industry fund. The commission - Gov. John Hoeven, Attorney General Wayne Stenehjem and Agriculture Commissioner Roger Johnson - composed a formal letter, asking the Minnesota Public Utilities Commission to let things be. That is, the status quo should be preserved.

A 1997 decision and court appeal prevented the Minnesota commission from applying environmental cost values to resource planning located outside Minnesota. That makes sense.

The North Dakota Industrial Commission asserts that "nearly identical jurisdictional issues, conflict of law issues and interstate commerce issues" continue to exist. Those factors should stand as an impediment to the Minnesota plan.

The letter finishes by strongly pointing out the extent of carbon dioxide sequestration done or planned by the North Dakota industry.

The strongest argument for North Dakota and Minnesota working out the issues cooperatively is that the North Dakota power generation industry and the electricity consumers of Minnesota need and benefit each other. Minnesotans get relatively cheap electricity. The North Dakota plants depend on having customers.

If a carbon tax makes lignite an uneconomical fuel for electrical generation, then the choices are natural gas, hydroelectric facilities, nuclear, wind or other renewables. Switching from lignite use could end up costing consumers plenty and damage the North Dakota economy.