Construction on a transmission line that will allow Minnesota to tap Canada's hydropower resources is expected to begin in early 2017 after the project secured a Presidential Permit.
The 500-kV Northern Transmission Line is scheduled to start delivering 383 MW of hydropower bought from Manitoba Hydro to Minnesota Power's customers in 2020.
The Presidential Permit, issued by the US Department of Energy (DoE) on Wednesday, is the final major regulatory approval needed before the project can move to construction, Minnesota Power, a utility company of ALLETE Inc (NYSE:ALE), said. It is needed because the transmission line will cross the international border and connect with Manitoba Hydro's Manitoba-Minnesota Transmission Project.
Minnesota Power, which serves the northeastern part of the state, said the project will create synergy between its 500-MW wind farm in North Dakota and Manitoba Hydro's dams and reservoirs in Canada. Under the power purchase agreement (PPA), the Canadian company can adjust the flow of water through its hydro generators depending on wind conditions and output.
According to Minnesota Power estimates, the line will cost between USD 560 million (EUR 523m) and USD 710 million, with the company's share at USD 300 million-350 million. The project is part of Minnesota Power's EnergyForward strategy of achieving a "balanced" energy mix of one-third renewable energy, one-third natural gas and one-third coal.
The company has already exceeded Minnesota's 25% renewable standard, and is "well-positioned to meet future decreased carbon emissions goals," said ALLETE chairman, president and chief executive Al Hodnik.
"This is an important project for securing the availability of affordable, renewable electricity in northeastern Minnesota – especially for residential consumers, as well as our mining, manufacturing, timber and tourism industries," commented congressman Rick Nolan.