Attorney General Wayne Stenehjem said North Dakota is likely to file a legal challenge to Minnesota's efforts to make it costlier for utilities to use coal-generated electricity produced in western North Dakota.

North Dakota officials have tried for months to change or soften the rules, which say power sources that generate carbon dioxide should include $9 to $34 in extra costs per ton of gas produced. The rules are intended to encourage utilities to use alternative energy sources for supplying electricity to their customers.

"The bottom line is ... their legislation will result in much higher electricity costs in Minnesota, with no appreciable improvement in the amount of carbon dioxide that's emitted," he said.

Stenehjem argued the rules would violate the U.S. Constitution's restrictions on states regulating each other's businesses.

Minnesota's Public Utilities Commission has rejected North Dakota's arguments. A spokesman for the agency, Burl Haar, declined comment Tuesday about a possible North Dakota lawsuit.

Stenehjem, Gov. John Hoeven and Agriculture Commissioner Doug Goehring are members of the North Dakota Industrial Commission, which oversees a state coal research fund.

The state Legislature has authorized the commission to spend up to $2 million on possible litigation in the Minnesota dispute. Stenehjem said Tuesday no decisions have been made on when a lawsuit will be filed, or whether it would be brought in state or federal court.

Western North Dakota's lignite fields supply nearby power plants that provide electricity for Minnesota customers.

Great River Energy, of Maple Grove, Minn., owns power plants near the western North Dakota communities of Underwood and Stanton that are capable of generating almost 1,300 megawatts of power. Great River supplies electricity to 28 rural Minnesota cooperatives.

Otter Tail Power Co., based in Fergus Falls, Minn., supplies communities in western Minnesota and manages the 427-megawatt Coyote station south of Beulah, N.D.

The regulatory dispute dates to the mid-1990s, when the Minnesota PUC considered proposals to assess environmental costs of electricity generated by North Dakota coal plants. The commission ultimately exempted the plants from its proposed rules.

Two years ago, the Minnesota Legislature approved a law that ordered the agency to estimate carbon dioxide regulation's effects on electricity costs, and to use the figures in forecasting customers' electricity costs.