Our Businesses

REGULATED UTILITY

Minnesota Power, an operating division of ALLETE serving customers since 1906, generates, transmits and distributes electricity in a 26,000-square-mile region of northern Minnesota rich with mineral deposits and timber.

Power Supply

Our energy supply in Minnesota is a mix of company generation and purchased power. Our generation sources are primarily coal-fired, but also include 112 megawatts of hydroelectric power generated from ten hydro stations in Minnesota and 25 MWs of wind generation. We purchase power from Square Butte Electric Cooperative in North Dakota, from two wind facilities totaling 98 megawatts in Oliver County, N.D. operated by NextEra Energy Resources, and from other energy suppliers.

Large Industrial Customers

Minnesota Power sells a high percentage of its electric power to large industrial facilities. Ten of our customers require 10 megawatts or more of generating capacity. Among these are five taconite producing facilities, one iron nugget plant and four paper and pulp mills. Taconite is an iron-bearing rock important as a source of raw material for steel.

New Industrial Projects Will Need Electricity

Several natural resource-based companies are developing new projects in northeastern Minnesota. These potential customers of Minnesota Power could require up to 400 megawatts of new electric service if the projects are completed. These include the Polymet Mining and Essar Steel Ltd. projects.

Major Emission-Reduction Effort Completed

At the end of 2009, Minnesota Power completed a $240 million upgrade at Boswell Energy Center's Unit 3 that dramatically reduced emissions of mercury, particulates, sulfur dioxide and nitrogen oxide. Current cost recovery from retail customers through billing adjustments was used to pay for, and earn a return on, construction costs for these retrofits. Work on Boswell 3 followed emission control upgrades at the Laskin and Taconite harbor Energy Centers.

More Renewable Energy

A 50-megawatt wind energy facility, built in 2006 by NextEra Energy Resources near Center, N.D., was augmented by an adjacent 48-megawatt wind farm constructed in 2007 to provide Minnesota Power a long-term source of renewable purchased power. Another wind generation facility of 25 megawatts was built in 2008 by Minnesota Power in Mountain Iron, Minn. on property owned by U.S. Steel, a major customer.

Strategic Wind Initiative Progresses

An agreement was signed in September, 2008 to purchase a 250-kilovolt direct current (D.C.) transmission line between Center, N.D. and Hermantown, Minn. and phase out a long-term contract to buy coal-generated electricity now transmitted over the line. As part of a deal closed Dec. 31, 2009, Minnesota Power will gradually replace the coal-based electricity now transported by the 465-mile line with renewable energy to be generated by wind turbines that will be constructed by Minnesota Power near Center. Construction on the first phase of the company's 76-MW Bison Wind 1 installation began with a ribbon-cutting in June of 2010 in New Salem, N.D. attended by landowners and Gov. John Hoeven.

American Transmission Company

ALLETE has an ownership interest of about eight percent in ATC, a public utility based in Wisconsin that owns and maintains electric transmission assets in four states. ALLETE’s investment in ATC was about $88 million at the beginning of 2010.

OTHER ALLETE INVESTMENTS

ALLETE Properties owns real estate in several Florida locations. Most of the land now held by ALLETE Properties is located in three mixed-use projects in Flagler and Volusia Counties in northeast Florida: Town Center, Palm Coast Park and Ormond Crossings.

BNI Coal operates a lignite mine in Center, N.D., producing about four million tons annually. Two electric generating cooperatives, Minnkota Power and Square Butte, consume virtually all of BNI Coal’s lignite production under agreements extending through 2026. The mining process disturbs and reclaims approximately 200 acres per year.