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| Bison Wind Energy Project |
Another Minnesota utility is investing in wind power to take
advantage of its current low cost and an extended federal tax credit.
Minnesota Power, the Duluth-based utility that serves
143,000 customers including iron mining companies, said Thursday that it
plans to build a $345 million expansion of its Bison wind farm in North
Dakota.
The 200-megawatt project will increase the utility’s wind
power capacity by 50 percent. The additional capacity means the utility
will meet the Minnesota mandate to supply 25 percent of power from
renewable sources in 2015, or 10 years ahead of the 2025 deadline, the
company said.
“We’ve found a way to meet the state of Minnesota’s
renewable energy standard early and reduce costs at the same time,” Al
Hodnik, CEO of Minnesota Power’s parent company, said in a statement
Thursday.
He said the new wind farm offers “the lowest cost resource over time
by capturing the benefits of the extended production tax credit and a
competitive turbine market.”
The announcement, made on the same day the company
released financial results, comes two weeks after Xcel Energy Inc. said
it will increase its wind generation in Minnesota. The company said
prices of wind generation are so low that customers will save $180
million over 20 years.
In May, Otter Tail Power Co., based in Fergus Falls,
Minn., announced that it would purchase wind energy from the Ashtabula
III wind farm northeast of Valley City, N.D., owned by NextEra Energy
Resources, under a 25-year deal that includes an option to buy the farm.
With the new wind farm, renewable energy makes up 19 percent of Otter
Tail’s retail power sales, the company said.
Xcel CEO Ben Fowke, speaking to analysts in a separate
conference call, said the 30 percent increase in wind power purchased by
his company is priced so low that paying for it over 20 years is
cheaper than buying natural gas to burn in its own power plants over the
period.
“We are seeing phenomenal pricing on wind,” he said.
The competitive pricing is partly driven by the extension
through 2014 of the federal production tax credit, which is equivalent
to about 30 percent of a project’s cost, though it is paid over 10 years
on a per-kilowatt basis.
Minnesota Power already has 101 turbines at its Bison
wind farm near Salem, N.D. The additional 64 turbines should be running
by the end of 2014, generating enough power for 92,000 homes, the
company said. Minnesota Power owns a 465-mile transmission line that
carries North Dakota wind power to its northern Minnesota service area.
For the second quarter, Allete Inc., the parent company
of Minnesota Power, reported a 10 percent drop in per-share earnings to
35 cents compared to 39 cents during the same quarter last year. Net
income dropped to $14 million, compared with $14.4 million a year
earlier. Revenue was up for the quarter to $235.6 million compared with
$216.4 million a year ago.
David Shaffer • 612-673-7090
Twitter: @ShafferStrib
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