$1 billion upgrade approved for North Dakota-Minnesota transmission line
Duluth-based electric utility Minnesota Power (MP) announced this week they had received approval from the state’s Public Utilities Commission (MPUC) for a $1 billion upgrade of an existing interstate transmission line.
One billion dollars seems like a lot of money, given that the utility’s holding company (Allete, Inc., ticker symbol: ALE) sold for a total of $6.2 billion just a few months ago. But perhaps that’s the point as the Allete CEO (Bethany Owen) was quoted as saying:
“We’re looking at more than $4 billion of investments over just the next five years in the clean energy transition,” Owen said. “And these partners have that access to capital.”
MP’s press release notes:
Minnesota Power plans to replace aging critical infrastructure and modernize the terminal stations of its 465-mile HVDC (high-voltage, direct current) transmission line that runs from Center, North Dakota, to Hermantown, Minnesota.
“Aging”? That sounds a little mean, the power line dates from only 1977.
To grossly oversimplify the engineering and physics, the “direct current” (DC) designation (as opposed to the usual alternating current (AC) standard) means that the line is able to move electric power more efficiently, nonstop, between two points.
This map, included with MP’s original application filed last year, shows the existing power line route:
465 miles to the west lies the appropriately named Center, North Dakota, home of the Square Butte coal-fired unit of the Milton R. Young power plant. Square Butte is owned by a different utility based in Grand Forks, ND.
The original idea of this direct current line was to move power from sparsely populated western North Dakota coal plant to electric customers (mostly industrial) in northeast Minnesota.
The PUC explains a curious new feature to be included as part of the billion-dollar upgrade in its press release:
The project would also enable bi-directional line capability for flexible energy flow between the North Dakota and Minnesota terminals.
In its news account, the Minneapolis Star Tribune reports in the very last sentence of their article that:
The utility has an agreement to buy electricity from that coal plant, but the amount has ramped down over time and the deal expires in 2025.
As mentioned above, the transmission line project is part of MP’s ambitious plan to go carbon free. The company says:
The line was commissioned in 1977 and Minnesota Power acquired it in 2009 to reliably deliver more than 500 megawatts of wind energy from its North Dakota wind sites to its customers in Minnesota.
The Star Tribune adds:
With its importance in bringing wind energy to Minnesota, the line is a major part of the company’s shift away from coal to nearly 60% renewable power today and a planned 80% carbon-free system by 2030.
That timeline is even more aggressive than the state’s renewable energy mandates.
Perhaps MP’s new private owners have access to the billions of dollars needed for new investments, but it’s the monopoly’s captive customers who will pay in the end.