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Duluth, Minn.-based Minnesota Power, an ALLETE company, has signed an agreement to purchase an interstate transmission line and phase out a long-term contract to buy coal-generated electricity.

The utility announced its intent to buy the transmission line in May as part of its strategy to develop wind energy in order to meet a state mandate requiring a 25% renewable energy supply by 2025.

Under the agreement, Minnesota Power will purchase a direct current (DC) transmission line from Square Butte Electric Cooperative for approximately $80 million. The 465-mile line currently transports coal-generated energy from the Milton R. Young generating station in Center, N.D. to a Minnesota Power substation in Hermantown, Minn. As part of the deal, Minnesota Power will gradually phase out the power it purchases from the Young station and replace it with wind-generated electricity. The transaction is subject to regulatory approvals and is anticipated to close in 2009.

"We want to be out in front in wind development," says ALLETE CEO Don Shippar. "We are committed to meeting the state mandate to deliver more renewable energy while, at the same time, investing in utility projects that make sense."

The utility's wind development plans include adding several hundred megawatts of new generation near Center, N.D., with plans to install the first wind turbines by 2010, and using the existing DC line to deliver this renewable energy to its customers.

SOURCE: Minnesota Power



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