Minnesota Power Begins Preliminary Construction Work on Great Northern Transmission Line

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Presidential permit in hand, Minnesota Power (Duluth, Minnesota) has begun "preliminary work on construction" of the Great Northern Transmission Line (GNTL), Al Hodnik, chairman, president and chief executive at ALLETE Incorporated (NYSE:ALE) (Duluth, Minnesota), Minnesota Power's corporate parent, told investors last week in an earnings call.

Minnesota Power received a presidential permit from the U.S. Department of Energy (DoE) (Washington, D.C.) November 16, 2016. That permit is necessary because the line will cross international borders. In mid-January, the U.S. Fish and Wildlife Service (Washington, D.C.), a division of the Department of the Interior (DOI) (Washington, D.C.), granted a right-of-way permit to the project.

When operating in 2020, GNTL will be able to bring up to 383 megawatts (MW) of hydropower from Manitoba Hydro into Minnesota. The 220-mile, 500-kilovolt (kV) line will cost Minnesota Power between $300 million and $350 million to build, Hodnik told investors February 15. Minnesota Power is the 51% owner of that line. Manitoba Hydro, which owns the other 49% of the project, expects to invest an additional $200 million or so to build the project.

The GNTL project is a key component of Minnesota Power's "EnergyForward" program, which is designed to make the utility's power generation mix more sustainable and reliable while also keeping electricity prices affordable. Hodnik said, "EnergyForward balances stewardship, reliability, and affordability, while assuring fuel diversity within Minnesota Power's generation portfolio."

"Societal expectations, regulation and resource scarcity will increasingly require sustainable solutions," the ALLETE chief added.

As recently as 2005, coal accounted for about 95% of the electricity generated by Minnesota Power. But years of heavy investments in wind power and gas-fired generation, plus the transmission line, is expected to transform the utility energy portfolio to be about 33% renewable energy, 33% coal and 34% natural gas by 2020. The EnergyForward initiative aims to make Minnesota Power compliant with the federal Clean Power Plan (CPP), which is currently in litigation and seeks to lower carbon dioxide emissions from the Power sector. For more on this project, see March 18, 2016, article - Minnesota-Manitoba Transmission Line Awaits Presidential Import Permit and April 23, 2015, article - U.S. Transmission Project to Import Canadian Hydropower Moves Forward.

The transmission line also could send wind power from Minnesota Power's Bison Wind Farm up to Manitoba. The power purchase agreements Minnesota Power signed with Manitoba Hydro go into effect June 1, 2020, the planned in-service date of the GNTL project.

Minnesota Power provides electricity in a 26,000-square-mile electric service area in northeastern Minnesota. The utility has 144,000 retail electric customers and 16 wholesale electric customers.

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