ALLETE Clean Energy Announces $80 Million Turbine Refurbishment Initiative
August 02 2017 - 2:00PM
Business Wire
Project will enhance turbine performance and
reliability, generate tax credits
ALLETE Clean Energy, a wholly-owned subsidiary of ALLETE Inc.
(NYSE: ALE), today announced a strategic initiative to refurbish
385 wind turbines at three wind farms in Minnesota and Iowa.
The project includes replacing select blades, gearboxes and
generators on turbines at the Lake Benton wind site in Lincoln
County, Minnesota, and the Storm Lake I and II wind sites in Buena
Vista and Cherokee counties, Iowa. The project will improve turbine
performance and reliability, generate federal production tax
credits at each site and support the renewal of power sale
agreements at the Storm Lake sites.
“As a central part of ALLETE Clean Energy’s multifaceted growth
strategy, this $80 million reinvestment will contribute to future
earnings growth,” said Allan S. Rudeck Jr., president of ALLETE
Clean Energy. “Revenue from our existing wind sites such as Lake
Benton and Storm Lake is the foundation for ALLETE Clean Energy’s
momentum and growth. Neighboring communities also benefit by
keeping these older sites viable and valuable, which maintains jobs
and landowner lease payments.”
The refurbishment will be staged from 2017 through 2020 to
minimize turbine downtime and maximize safe energy production at
each site. In total, the sites produce approximately 700,000
megawatt hours of energy per year, representing about 50 percent of
ALLETE Clean Energy’s current electricity sales.
In addition to the turbine refurbishments, the project includes
installing new communications infrastructure at the sites to better
integrate them into ALLETE Clean Energy’s corporate operations
structure. New fiber optic connections, servers, and data
acquisition and management systems will improve the operation of
each site and secure the best performance.
Energy from the Lake Benton site is fully contracted through
2028, and approximately 8 megawatts of Storm Lake I production is
contracted through 2032. ALLETE Clean Energy is working to
recontract the balance of the Storm Lake I and II power sale
agreements which expire in 2019.
The turbine refurbishment project follows ALLETE Clean Energy’s
December 2016 $100 million investment in wind turbine components
that meet the standards for the production tax credit “safe harbor”
provision. The investment in safe harbor turbines allows ALLETE
Clean Energy to pursue a three-pronged production tax credit
strategy before the 2020 federal production tax credit phase-out.
The strategy includes building and operating new wind farms based
on long-term power sale agreements, building wind farms for other
companies for a development fee, and refurbishing its existing wind
farms while extending power sale agreements.
As part of that strategy, ALLETE Clean Energy announced in March
its plan to build, own and operate a 100-megawatt wind farm in
Morton and Mercer counties in North Dakota that will supply
electricity to Xcel Energy under a signed 20-year power sale
agreement. Construction is expected to begin in 2018 and be
complete in 2019.
The company also announced an agreement with Montana-Dakota
Utilities (MDU) in January to expand the Thunder Spirit wind farm
in Hettinger, North Dakota. MDU signed a 25-year power sale
agreement with ALLETE Clean Energy to purchase energy from the
expansion. Under the agreement, MDU also has an option to buy as it
did with the first phase of Thunder Spirit.
ALLETE Chairman, President and CEO Al Hodnik said ALLETE Clean
Energy has grown to be the company’s second-largest source of net
income, and is helping ALLETE do its part to answer the call to
transform the nation’s energy and water landscape.
“ALLETE Clean Energy is consistently building shareholder value
as it executes a thoughtful growth strategy,” Hodnik said.
“Maintaining and enhancing the Lake Benton and Storm Lake sites,
along with extending power sales agreements, provide a
cost-effective platform for the strategy that is already bearing
fruit as the safe harbor turbines connect ALLETE Clean Energy with
new industry partners nationwide.”
ALLETE Clean Energy was established in 2011 to acquire or
develop capital projects to create energy solutions by way of wind,
solar, biomass, hydro, natural gas, shale resources, clean coal
technology and other emerging innovations.
ALLETE Inc. is an energy company with headquarters in Duluth,
Minnesota. In addition to its electric utilities, Minnesota Power
and Superior Water, Light and Power of Wisconsin, ALLETE owns
ALLETE Clean Energy, based in Duluth; BNI Energy in Bismarck, North
Dakota; U.S. Water Services in St. Michael, Minnesota; and has an 8
percent equity interest in the American Transmission Co. More
information about ALLETE is available at www.allete.com.
ALE-CORP
The statements contained in this release and statements that
ALLETE may make orally in connection with this release that are not
historical facts, are forward-looking statements. These
forward-looking statements involve risks and uncertainties and
investors are directed to the risks discussed in documents filed by
ALLETE with the Securities and Exchange Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20170802006106/en/
ALLETE Inc.Amy Rutledge, 218-723-7400Manager - Corporate
Communicationsarutledge@allete.com
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