Huge sighs of relief after state agrees to cover money owed to Enbridge

Mike Christopherson

Polk County officials and other impacted city, school district and township officials are likely breathing a huge sigh of relief after Minnesota Senate Republican leaders and Minnesota House Democratic leaders, during down-to-the-wire negotiations as the clock ticked toward a state government shutdown, approved just under $30 million to cover money owed by Polk County and other local governments to Enbridge Energy along its pipeline routes.

The agreement to cover the cost share owed by various local governments comes after Enbridge almost a decade ago said the State of Minnesota had overvalued its pipeline property. The claim left 13 counties, several cities, townships and school districts on the hook for millions of dollars, and led to countless numerous discussions about where the money would come from or how it would have to be generated if it was ever determined that the local government entities would have to, in fact, come up with the cash. In some of the most extreme cases, the amount of money potentially owed was larger than entire annual revenues produced by local government entities, which spurred talk of actual bankruptcies. 

In 2018, Enbridge prevailed in its first litigation relating to taxes on its northern Minnesota pipeline routes from 2012 to 2014. Two years ago, Enbridge won a similar case regarding its 2015 and 2016 taxes.

The Times reached out to Polk County Commissioner Warren Strandell, who has written several times in his periodic “The County Line” column about the dire consequences of Polk County having to come up with big bucks to pay Enbridge – the county’s biggest property tax payer – for his reaction to the legislation, but hadn’t heard from him as of press time for this edition of the Times. In a recent column, published in May, Strandell said the county’s total potential responsibility, which doesn’t cover the entirety of the disputed tax years and only goes up to 2017, was $1.755 million. Other local government entities would have been liable for part of that total, he wrote, adding that the county’s share would be around $608,000.

Enbridge spokesperson Julie Kellner, in an email to the Times, said the company is pleased with the resolution. She said the total settlement amounts to just under $47 million, of which $29 million would have been the local government share, had state lawmakers not come up with their legislation.

“From the beginning we have acknowledged that counties were caught in the middle of this tax valuation issue, and have been committed to working with them to ensure undue hardship does not result,” Kellner said. “In coming to this agreement Enbridge did make concessions for taxes in 2017 and 2018 and forgave interest for those years.  We are pleased to have come to an equitable conclusion to this issue.”