ALLETE Inc. (NYSE: ALE) shareholders, gathered May 12 for the company’s annual meeting, heard about efforts to diversify the company’s power generation portfolio.
ALLETE Chairman, President and CEO Al Hodnik noted in his speech that ALLETE in 2014 increased net income 10% and operating revenue 12% compared to the year before. ALLETE’s total assets climbed to $4.4 billion and capital expenditures for 2014 were the highest ever at $600 million. Hodnik noted that ALLETE stock reached all-time highs in 2014, its dividend climbed 3.1% and subsidiary Minnesota Power’s peak electric load also set a record.
Hodnik pointed to completion of Minnesota Power’s Bison 4 wind project in North Dakota and ALLETE Clean Energy’s growth as examples of how the company’s renewable energy portfolio is expanding and supplanting fossil fuel. He also cited the conversion of the Laskin Energy Center from coal to natural gas and the major environmental retrofit at the company’s largest coal-fired generator, Boswell Unit 4, which will reduce mercury emissions by 90% and also reduce other emissions.
Hodnik talked about the agility symbolized by the rapid growth of ALLETE Clean Energy, which has expanded into southern Minnesota, Iowa, Oregon, North Dakota and Pennsylvania since its 2011 inception. He also explained ALLETE’s acquisition earlier this year of U.S. Water Services, a Minnesota-based company with customers across the U.S. specializing in water sustainability.
The ALLETE CEO told shareholders that Minnesota Power has been thoughtfully executing its EnergyForward resource strategy by diversifying its generation sources to a more even balance between renewable energy and fossil fuel.
“We are proud of what has been achieved to date,” he said. “Some, however – with a sole focus on environmental stewardship – wish we would move still faster.” He said Minnesota Power must focus on reliability and overall affordability along with stewardship.
“We recognize that electricity is but a single input into the production costs of our taconite and paper customers, but it is a very large input,” Hodnik said. Given the reality of challenges facing these industries and uncertainty about whether Minnesota will receive full credit from the EPA for environmental actions already taken, it is best for the state, and by extension Minnesota Power, to slow down a bit, he said.
“Let’s make sure that all Minnesota Power customers are able to digest rising energy costs from what has already been undertaken through 2015,” he said. “On the one hand, there is need for further progress on climate change as outlined by President Obama and Gov. [Mark] Dayton. On the other side of this equation is the need for our highly competitive mineral and forest product industries to remain an economic force within our region.”
ALLETE shareholders, voting by proxy, elected to new terms current directors Sidney W. Emery, Jr., George G. Goldfarb, James S. Haines Jr., Alan R. Hodnik, James J. Hoolihan, Heidi E. Jimmerson, Madeleine W. Ludlow, Douglas C. Neve and Leonard C. Rodman.
ALLETE is an energy company headquartered in Duluth, Minn. In addition to its electric utilities, Minnesota Power and Superior Water, Light and Power of Wisconsin, ALLETE owns BNI Coal in Center, N.D., ALLETE Clean Energy, based in Duluth, U.S. Water Services headquartered in St. Michael, Minn., and has an 8% equity interest in the American Transmission Co.