ST. PAUL — Minnesota's watchdog agency criticized the state's utility regulators in a new report released Monday, July 27, saying they stifled public input on several matters including the controversial Line 3 oil pipeline replacement project.

Noting the already complex nature of Minnesota Public Utilities Commission proceedings, the state Office of the Legislative Auditor called in its report for the agency to provide greater oversight of public outreach efforts, many of which are actually delegated to other state agencies. The auditor's office also called for more uniformity in public input opportunities, which it said can vary greatly between matters under review.

"(The PUC's) public participation processes are complex and have been implemented inconsistently. PUC has not done a good job helping the public understand how to participate in those processes. We make a number of recommendations for improvements," the auditor's office said in a statement accompanying the report.

The report focused on the level of public participation in the PUC's permitting processes for energy facilities. The five-member commission and its staff also regulate telecommunications, electric and natural gas utilities.

Hampering the public's participation in the permitting process is the involvement of other state agencies that, by law, handle certain outreach efforts. The state Department of Commerce solicits input for the environmental reviews that accompany projects under permit review, for example, while the Office of Administrative Hearings is responsible for administering public meetings.

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But the PUC provides little guidance for its staff members on how to coordinate with their counterparts at partnering agencies, according to the report, resulting in confusion and "unnecessary variation" between projects. In some cases, the PUC and commerce department let the very entities whose projects they were reviewing handle the logistics for public input events, such as reserving and renting venues for meetings or hearings.

Throughout the permitting process for the Line 3 project, meanwhile, the auditor's office said the PUC opted not to hold most of its meetings where members made regulatory decisions

Also inappropriate, according to the report, was the PUC's decision to hold voting meetings on the Canadian energy company Enbridge's Line 3 project at the normal commission meeting space in St. Paul instead of choosing a larger venue. The project, which will see an aging and potentially hazardous oil pipeline in northern Minnesota replaced with a newer and purportedly safer one following a slightly different route, has attracted widespread attention from environmental groups and Minnesota tribal governments whose constituents live by its intended path.

Entry to those meetings hinged on a ticketing system that the report said "did not offer equal numbers of reserved tickets to each party in the case, made decisions about which party representatives could have access to the reserved tickets, and made inconsistent exceptions to its ticketing procedures." Staff at some meetings also prevented some attendants from attending the meeting for allegedly violating ticketing procedures, including some who belonged to parties intervening in the pipeline project's case before the PUC.

Special rules were also implemented for some of the meetings that required PUC staff members to take on duties outside of their normal roles but for which no training was provided, according to the report, such as searching bags.

Permits for the project were approved by the PUC in May.

Environmental groups opposed to the pipeline sounded off on Monday following the release of the auditor's report. The Minnesota Environmental Partnership went so far as to say in a statement that the report's findings are severe enough to warrant the project's reconsideration.

In a separate statement Monday, the Sierra Club was similarly critical, saying the findings are illustrative of a flawed regulatory process. The group's North Star chapter director Margaret Levin said it was "just further evidence that this pipeline never should have been approved, and it is critical that Governor (Tim) Walz do everything in his power to stop it once and for all."

Reached for comment Monday, Enbridge chief communications officer Mike Fernandez said "questioning the PUC’s accessibility even through the COVID-19 period seems misplaced.

"The regulatory and permitting process associated with Enbridge’s Line 3 upgraded pipeline has taken more than six years and included 70 public comment meetings, dozens of responsive route modifications made by Enbridge, court review and reaffirmation of a 13,500-page Environmental Impact Statement, and multiple reviews and approvals by the Minnesota PUC of the project’s certificate of need and route permit with public input at every step of the process," Fernandez said.

Fernandez also noted that Native American tribes in Minnesota consulted for the project helped to produce an agreement on the pipeline's intended path, and that a survey on the project organized by the Fond du Lac Band of Lake Superior Chippewa and Army Corps of Engineers garnered responses from more than 30 tribes.

His comments touched on another target of criticism included in the report: interactions between the agency and tribal governments. The PUC did not adopt a formal policy on consulting tribal governments until 2019 and by law is not always required to notify them of projects that could affect them.

Vague information as to how members of the public can involve themselves as parties in facility permitting cases was also criticized in the report.

In a written response to the report, the PUC said it is working on a new website that will address some of the report's concerns. The agency is also working with the state commerce department to revamp its online docketing system for PUC cases, according to its statement, and has added new positions geared toward public outreach.

The agency's response noted "that PUC provided numerous opportunities for public participation" in the Line 3 case. PUC leadership, according to the statement, "has committed to providing more oversight of public participation in general, and particularly for cases that have a significant level of public interest."

"Improved public engagement is a priority for the new leadership team, and this report provides some important recommendations to incorporate into our ongoing efforts," a statement attributed to PUC leadership said.