ALLETE Focuses on Renewable Assets - Analyst Blog
March 04 2013 - 1:30PM
Zacks
ALLETE Inc.’s (ALE) unit Minnesota Power has
submitted its full-year 2013 Resource Plan to the Minnesota Public
Utilities Commission (“MPUC”). This plan is part of the company’s
EnergyForward initiative and its commencement is subject to
government approvals. The Commission is expected to take action on
the plan in 2013.
Under the EnergyForward initiative, ALLETE concentrates on an
approach to provide safe and reliable services to its customers at
the cheapest probable price while protecting and enhancing the
local standard of living. The company continues to transform its
generation fleets to those that emit less carbon, and are varied
and flexible.
In the time period from 2013 to 2017, ALLETE plans to add new wind
resources in its portfolio under the EnergyForward initiative. In
addition, the company is taking several steps to diversify its
portfolio. These include saving competitive base load generating
resources along with lesser emissions, execution of least expensive
demand-side resources, decreasing dependence on coal fired
generation, diminishing carbon usage on the system, and adding
renewable energy and transmission infrastructure.
In the long run, ALLETE plans to rebalance its generation
portfolio. Renewable resources, coal and natural gas or other
sources will contribute one-third each to the company’s total power
generation.
Globally, the demand for renewable energy is rising primarily due
to its clean nature and growing awareness among the masses
regarding its benefits. This factor influences the utility
providers to shift their mode of power generation to wind, solar
and water from coal.
In Aug 2005, the U.S Environmental Protection Agency circulated a
regulation that each of the federal agencies will consume renewable
energy in amounts of not less than 7.5% in 2013 and afterward.
To meet the environmental legislations, apart from Minnesota Power,
other utility providers including Wisconsin Energy
Corporation (WEC), Sempra Energy (SRE)
and Northeast Utilities (NU) also invest
substantial amounts to develop and upgrade their renewable
emission-free utility assets.
It is evident from past transactions that ALLETE is also jumping on
this bandwagon. The company continues to convert its existing
generation bases into cost-effective units, which will subsequently
improve its forthcoming earnings.
Recently, Minnesota Power completed the operational and
commissioning process of its 210-megawatt Bison 2 and 3 projects of
its Bison Wind Energy Center. With the installation of these
projects, the share of renewable generation in ALLETE’s total
electricity portfolio will increase to 20%. This will subsequently
enable the company to meet the state’s renewable energy goals.
ALLETE expects energy demand in the region to increase in the near
term primarily due to the commencement of the several large-scale
industrial projects. We believe the enhancement and diversification
of the generation capacity will enable the company to meet demand
growth, and subsequently improve its future performance.
Minnesota-based ALLETE Inc. is a multi-service provider and has
operations in Florida, North Dakota and Wisconsin. It has a wide
array of businesses, starting from the supply of electricity and
water utility to automobile auction. The company currently has a
Zacks Rank #2 (Buy).
ALLETE INC (ALE): Free Stock Analysis Report
NORTHEAST UTIL (NU): Free Stock Analysis Report
SEMPRA ENERGY (SRE): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis Report
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