ALLETE wins FERC approval for wind farm buy in Minnesota

The Federal Energy Regulatory Commission on Feb. 19 approved a purchase by ALLETE Inc. (NYSE: ALE) of a power plant interest from EDF Renewable Energy.

On Jan. 14, Chanarambie Power Partners LLC and ALLETE Clean Energy (ACE) requested authorization for ACE Mid-West Holdings LLC (ACE Mid-West), an indirect wholly-owned subsidiary of ACE, to acquire from EDF Renewable Energy (EDF RE) 100% of the indirect membership interests in Northern Wind Energy LLC. Northern Wind directly wholly owns Chanarambie.

Chanarambie, an exempt wholesale generator with market-based rate authority, owns and operates an approximately 85.5-MW wind facility located in Murray County, Minnesota, within the Midcontinent Independent System Operator balancing authority area (MISO BAA). Output from the facility is sold under a long-term power purchase agreement.

Northern Wind also owns, indirectly, within the MISO BAA eight entities that own qualifying facilities (collectively, the QF Project Companies). The QF Project Companies have a total generation capacity of 12 MW. Applicants stated that the QF Project Companies are part of the proposed transaction, but are not subject to section 203(a)(1) of the Federal Power Act.

ACE, authorized to sell power at market-based rates, was formed to own or develop renewable generation projects throughout North America. ACE is a wholly-owned subsidiary of ALLETE Inc., a Minnesota corporation whose core business is energy and real estate. Through its regulated operating division, Minnesota Power, ALLETE generates, transmits, and distributes electricity in northern Minnesota.

Within the MISO BAA, Minnesota Power currently owns 2,552.3 MW of generation and has transferred operational control of its transmission system to MISO. ACE Mid-West currently owns 292 MW of generation within the MISO BAA.

Under the now-approved transaction, ACE-Mid-West will acquire from EDF-RE 100% of its indirect membership interests in Northern Wind. As part of the proposed transaction, but not subject to section 203(a)(1), ACE Mid-West will also acquire from EDF-RE its indirect interests in the QF Project Companies. The transaction will result in ACE Mid-West acquiring Northern Wind, and as a consequence, Chanarambie. The QF Project Companies will be indirect, wholly-owned subsidiaries of ACE.

Those eight QFs, which are technically not covered by commission authority, are: Buffalo Ridge Wind Farm LLCMoulton Heights Wind Power Project LLCMuncie Power Partners LLCNorth Ridge Wind Farm LLCVandy South Project LLCViking Wind Farm LLCVindy Power Partners LLC, and Wilson-West Wind Farm LLC. They each own QFs that are each 1.5 MW in size and located in Minnesota. All of these QFs are interconnected with Northern States Power (NSP) and the capacity from each is fully committed to NSP under long-term power purchase agreements. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.