MINNEAPOLIS (AP) — A federal appeals court has affirmed a lower court ruling that bars Minnesota from enforcing key sections of a 2007 state law that restricted new power generation from coal.

A three-judge panel of the 8th U.S. Circuit Court of Appeals on Wednesday sided with North Dakota utilities and other interests that argued that Minnesota's Next Generation Energy Act illegally regulates out-of-state utilities. The law banned importation of power that would result in higher carbon dioxide emissions.

But the appeals panel upheld a district court ruling that the prohibition would have prevented out-of-state utilities from adding coal-power capacity to the regional power grid without approval from Minnesota regulators. The panel says Minnesota can't do that without approval from Congress.

Minnesota had argued that the law didn't interfere with the power grid.