State regulators will allow Minnesota Power to buy carbon-free hydroelectricity for 15 years from Manitoba Hydro. The contract will begin in 2020.
The 250 megawatt power purchase will support Minnesota Power resource planning goals of more efficiency, flexibility and diversity while lessening its dependence on coal and lowering emissions from its generation fleet, the division of ALLETE Inc. said in a news release.
The Minnesota Public Utilities Commission’s endorsement “demonstrates that cooperation in energy supply and transmission planning can cross state and national boundaries in the interest of meeting a changing North American energy landscape,” said ALLETE Chairman, President and CEO Al Hodnik.
Manitoba Hydro is a Crown Corporation based in Winnipeg. It produces most of its power from hydroelectric stations in the northern part of the province, and this agreement facilitates the construction of the Keeyask Generating Station. The 695-megawatt facility will be developed through a partnership with the Keeyask Cree Nations.
The power purchase agreement will require additional new transmission capacity between Manitoba and the U.S. The two companies have been evaluating transmission options.
“The transmission build required to deliver this carbon-free energy to Minnesota Power’s service territory presents ALLETE with yet another significant capital investment opportunity as we execute our multi-faceted, multi-year growth strategy,” Hodnik said.
The agreement allows Minnesota Power to “store” wind energy generated in North Dakota in Manitoba Hydro’s hydroelectric system. Through a provision in the agreement, Minnesota Power will be able to deliver electric energy northward from its wind farms in North Dakota when wind production is high and electric loads are low, thereby maximizing the value of its wind resources.