ALLETE Concludes Midstream Work - Analyst Blog
April 03 2013 - 12:40PM
Zacks
ALLETE Inc.’s
(ALE) business ancillary Minnesota Power concluded installation
work on a handful of midstream and electric infrastructure assets
in Nashwauk County, Minn. These include new substations and
transmission lines that will meet the lofty power demands of Essar
Steel Minnesota’s taconite mine and processing facility.
The 230 Kilovolt ("KV") program was
completed on Mar 8, 2013 while the remaining job on the 115 KV line
will be wrapped up in two weeks.
In Feb last year, ALLETE signed a
long-term contract to deliver power to Nashwauk County till Jun 30,
2024. Later, Nashwauk County officials entered into a deal with
Essar to fulfill the company’s electric needs for the taconite
facility. The county also agreed to provide power services to
accommodate future growth.
Per the agreement, ALLETE will
build three 230 KV transmission lines which include a five-mile
segment of double circuit 230 KV and 115 KV lines. The company
constructed and installed the first key transmission assets in the
Iron Range region. It took two years for ALLETE to finish the job
on the $35 million transmission infrastructure. Overall, it
constructed 28 miles of lines and re-routed or detached 21
miles.
Essar is currently building a mine,
concentrator and a taconite production complex which has a maximum
output capacity of 7 million metric tons. Essar’s electric demand
is expected to reach 110 megawatts when the facility goes into full
production and might increase further given its plans to expand
production of other by-products.
Meanwhile, the substations –
McCarthy Lake and Calumet – recently completed will together offer
services to the mine. Both ALLETE and Nashwauk County share the
ownership and costs associated with these facilities.
ALLETE has been aggressively
investing its resources for the development of its utility-scale
assets. Minnesota Power earlier disclosed its strategic Energy
Forward plan which will focus on offering clean, sustainable,
affordable and reliable energy services to the residents of
Minnesota.
To achieve a balanced mix in its
asset basket, the company has been seeking options to enlarge its
renewable business. This will prove favorable with the gradual rise
in renewable consumption in the U.S. going forward.
We believe these broad initiatives
will encourage customer retention in Minnesota and attract
non-ALLETE customers as well. Presently, ALLETE retains a Zacks
Rank #2 (Buy).
Other utility stocks that are worth
a look include Zacks Ranked #1 (Strong Buy) Brookfield
Infrastructures Partners L.P. (BIP), Pike Electric
Corporation (PIKE) and Edison
International (EIX).
Based in Duluth, Minn., ALLETE
along with its subsidiaries engages in the generation,
transmission, and distribution of coal-fired, hydro, wind, and
biomass co-fired power in the United States.
ALLETE INC (ALE): Free Stock Analysis Report
BROOKFIELD INFR (BIP): Free Stock Analysis Report
EDISON INTL (EIX): Free Stock Analysis Report
PIKE ELECTRIC (PIKE): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Allete (NYSE:ALE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Allete (NYSE:ALE)
Historical Stock Chart
From Jul 2023 to Jul 2024