Wind, solar and natural gas package will increase company’s renewable
mix, reduce carbon and preserve reliability for customers
Minnesota Power, a utility division of ALLETE (NYSE:ALE), today
announced the next step in its EnergyForward strategy for
ensuring a safe, reliable and competitive energy supply for customers
and the region. If approved by regulators, the resource package coupled
with the company’s existing renewable resources will result in renewable
resources providing 44 percent of the company’s energy supply by 2025,
further reducing carbon emissions while keeping rates affordable.
In an upcoming filing with the Minnesota Public Utilities Commission
(MPUC), Minnesota Power will request the addition of 250 megawatts of
wind power capacity, an additional 10 megawatts of solar power and 250
megawatts of combined-cycle natural gas generation to meet customer
demand for power, which is projected to grow throughout the region. The
new resources will increase the company’s already robust wind portfolio
of 620 megawatts and double its solar generation.
“For the past four years, EnergyForward has been exceeding
expectations for how an energy company can transform the way it produces
and delivers energy,” said Brad Oachs, president of Regulated
Operations. “We look forward to working with our customers and
regulators to continue down the path toward a safe, reliable, cleaner
and affordable energy future.”
With approval of the proposed resource package by the MPUC, renewable
energy resources— including wind, Canadian hydro, solar and biomass—will
account for 44 percent of the utility’s energy supply portfolio,
exceeding the initial EnergyForward goal of one-third
renewable power. Minnesota Power’s long-term goal is an energy mix of
two-thirds renewable energy and flexible, renewable-enabling natural gas
and one-third environmentally compliant baseload coal.
Natural gas is an essential component of the resource package to be
filed with regulators. Without this plant, Minnesota Power would be
reliant on fluctuating wholesale market prices when sun and wind
resources aren’t available, increasing overall costs over the long-run.
“Through a unique partnership with Dairyland Power Cooperative and
access to a competitive natural gas supply, this approximately $350
million investment will further balance Minnesota Power’s energy mix
while contributing meaningful growth for ALLETE’s shareholders,” said
ALLETE Chairman, President and CEO Al Hodnik. “Minnesota Power’s EnergyForward
investments and industrial load prospects complement nicely the nexus of
energy and water growth initiatives already announced and additional
opportunities being pursued by ALLETE Clean Energy and U.S. Water. The
ALLETE of today is a stronger and much more balanced company, with each
of its businesses providing attractive growth and diversity consistent
with our overall growth thesis.”
Minnesota Power will file later this summer with the MPUC requesting
approval of the resource package. After filing, state regulators will
open a formal review process to consider Minnesota Power’s request.
After input from stakeholders and the public, a final determination is
expected in the latter half of 2018.
The details of Minnesota Power’s proposal include:
-
Natural gas. Minnesota Power is proposing
a joint ownership structure with Dairyland Power Cooperative to build
a state-of-the-art 525- to 550-megawatt combined-cycle natural gas
power plant in Superior, Wisconsin. Minnesota Power would purchase
approximately 50 percent of the plant’s output (250 megawatts) from an
ALLETE subsidiary starting in 2025 to serve customer load, stabilizing
energy supply for times when renewable energy capability is lower. The
project will create an estimated 260 construction jobs and employ
approximately 25 full-time workers.
-
Wind. Minnesota Power conducted a robust
competitive process as part of its 2015 Integrated Resource Plan. An
independent, third-party evaluator reviewed the bids and recommended a
250-megawatt, 20-year purchase power agreement (PPA) with independent
power producer Tenaska, to be located in southwestern Minnesota. In
addition to providing the lowest overall cost among the wind farm
bids, Tenaska’s Nobles 2 Power Partners wind farm will offer greater
geographic diversity among Minnesota Power’s wind resources and a
highly efficient wind resource. Minnesota Power has an option to
purchase the wind farm after 10 years of production.
-
Solar. To achieve the state’s solar
requirements, the Minnesota Power package proposes to add 10 megawatts
of solar power by 2020 through a 25-year PPA with Cypress Creek
Renewables. The addition will complement the current 10-megawatt Camp
Ripley project that was completed last year and will be placed within
Minnesota Power’s distribution system near Royalton in central
Minnesota. The agreement includes an option for Minnesota Power to
purchase the array.
Minnesota Power already is meeting or exceeding state standards for
renewable power, energy conservation and carbon emission reduction
through fleet transition of smaller coal units and the addition of
renewable energy. The company has already achieved a 25 percent
renewable energy mix well ahead of Minnesota’s goal of 25 percent by
2025. Minnesota Power expects to reduce carbon emissions on its system
by about 40 percent by 2030 compared with 2005 levels.
“We believe this resource package is the best way to meet changing
customer expectations for clean energy while preserving safe, affordable
and reliable supplies of energy for the customers who depend on us to
power homes, schools, hospitals and the natural resource based industry
that fuels our region’s economy," Oachs said.
Minnesota Power provides electric service within a 26,000-square-mile
area in Northeastern Minnesota, supporting comfort, security and quality
of life for 145,000 customers, 16 municipalities and some of the largest
industrial customers in the United States. More information is available
at www.mnpower.com.
ALE-CORP
The statements contained in this release, and statements that ALLETE
may make orally in connection with this release that are not historical
facts, are forward-looking statements. Actual results may differ
materially from those projected in the forward-looking statements. These
forward-looking statements involve risks and uncertainties and investors
are directed to the risks discussed in documents filed by ALLETE with
the Securities and Exchange Commission.
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