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Minnesota utilities looking at more renewable energy projects

Two Minnesota power companies said Friday they are considering spending more than $250 million on renewable energy projects.

Minnesota Power, the Duluth-based utility that supplies electricity to the Iron Range, said it may accelerate development of a planned North Dakota wind farm, possibly beginning construction this year instead of in 2016 or 2017 to take advantage of a federal tax credit. The project’s estimated price tag is $226 million.

Separately, Xcel Energy Inc. of Minneapolis, the state’s largest power company, said up to $30 million now is available from its Renewable Development Fund in the fourth round of such grantmaking. Earlier grants by the state-mandated fund helped build three of the state’s largest solar-electric projects and one of the nation’s largest grid batteries to store wind power.

It is the first time since 2007 that Xcel has solicited proposals to fund new research and development projects. The program is administered by Xcel with help from an advisory group. The money comes from Xcel’s ratepayers.

“The fund’s objective is to remove barriers to the entry of new renewable energy technologies by funding research on emerging technologies and supporting development of renewable energy projects that benefit our customers,” Judy Poferl, CEO of Xcel’s operations in Minnesota, North Dakota and South Dakota, said in a statement.

Minnesota Power, which long relied almost exclusively on coal-fired generation, discussed speeding up wind power development during a conference call with investment analysts. In January, Congress temporarily extended the federal wind production tax credit (PTC), which is paid over 10 years and covers about 30 percent of building costs. Projects must begin construction this year to be eligible.

“We have land under lease, we have the transmission and we are very well-positioned to take advantage of this PTC extension,” CEO Al Hodnik said.

The project, known as Bison 4, would be built about 12 miles northwest of New Salem, N.D., with output of 100 to 200 megawatts, executives said. The utility has completed three other Bison wind projects in North Dakota. In December, 70 turbines went online. A 465-mile transmission line brings the power to Minnesota.

Last week, Xcel also announced that it might accelerate its wind power investments, and asked developers to propose an additional 200 megawatts in Minnesota and other states in the Upper Midwest.

The $30 million in renewable development funds is separate from Xcel’s wind power investments. Proposals are due by April 1, and details are at www.xcelenergy.com/rdf.

The fund was created in 1994 by the Legislature in a compromise that allows Xcel to store radioactive waste in dry casks at its nuclear power plants. Past grants helped fund the state’s largest solar power array in Slayton, Minn., and other solar projects at the Minneapolis Convention Center and St. John’s University in Collegeville, Minn.