Minnesota Power produces energy at a low cost. According to statistics compiled by the Edison Electric Institute (EEI), Minnesota Power’s average retail rates for several years have been among the lowest in EEI’s West North Central Region, which includes Iowa, Kansas, Minnesota, Missouri, North Dakota and South Dakota.
Coal-fired steam plants account for about 55 percent of Minnesota Power’s generation (figures based on year-end 2009 statistics). Purchased power accounts for approximately 40 percent of the electric requirements, the largest purchase being a long term contract to buy output from a North Dakota generator operated by the Square Butte Cooperative in North Dakota. This generating station buys its fuel from an ALLETE subsidiary, BNI Coal. Ten hydropower stations provide about four percent of Minnesota Power’s electricity. The latest data show Minnesota Power with a net winter capability of 1,436 MW.
Minnesota Power’s northern location and high percentage of industrial customers who operate around-the-clock make Minnesota Power a winter-peaking utility. In 2009, our industrial customers represented 37 percent of total regulated utility sales. This contributes to a high load factor, which means that our power supply fluctuates less than most other generators. These factors contribute to the low-cost structure of Minnesota Power.
Minnesota Power’s industrial customers are primarily in the taconite, paper, pulp, wood products and pipeline industries. Taconite producers mine and process the iron-bearing rock that underlies the Mesabi Iron Range roughly 70 miles northwest of Duluth. Approximately 60 percent of the ore consumed by integrated steel facilities in the U.S. originates from the taconite customers of Minnesota Power. Taconite processing requires large quantities of electric power.
In December of 2006, Minnesota Power began purchasing all the energy generated from the new 50-MW Oliver Wind I Energy Center built by NextEra Resources near Center, N.D. In 2007, Minnesota Power entered into a second 25-year wind power purchase agreement with NextEra. A 48-MW facility was built adjacent to the initial Oliver County wind farm, and the new generators began commercial operation in November of 2007.
Taconite Ridge, a 25 MW wind farm near Virginia, Minn. became operational in June of 2008. Built by Minnesota Power on property owned by the company's largest power customer, U.S. Steel, Taconite Ridge was the first commercial wind energy facility in northern Minnesota.
Construction began in 2010 on the 76-MW Bison Wind I Energy Center near New Salem, N.D. Bison I represents the first wave of Minnesota Power-constructed wind farms that will be built in south central North Dakota and linked to Minnesota. by way of a 465-mile direct current (DC) transmission line. ALLETE finalized an agreement Jan. 1, 2010 to purchase a 250-kilovolt DC line between Center, N.D. and Hermantown, Minn. (near ALLETE headquarters in Duluth) and phase out a long-term contract to buy coal-generated electricity now transmitted over the line.