ALLETE seeks FERC approval for its end of Canada-Minnesota power line project

ALLETE Inc. and the Midcontinent Independent System Operator filed with the Federal Energy Regulatory Commission on Oct. 7 a “Transmission-to-Transmission Interconnection Agreement for the Dorsey-Iron Range International Power Line” between ALLETE and Manitoba Hydro.

The agreement, referred to by the acronym “TIA,” establishes ALLETE’s and Manitoba Hydro’s (MH) respective obligations to coordinate the design, construction and operation of the interconnected 500-kV Great Northern Transmission Line Project (GNTL) being developed by ALLETE and the 500-kV transmission line being developed by MH running from the Dorsey Substation in Manitoba to the Canada-U.S. international boundary.

The TIA must be filed with both FERC and the National Energy Board of Canada (NEBC). These filings will occur on different dates and will be subject to different notice/public comment periods, thereby raising the possibility of different regulatory approval dates. Therefore, ALLETE requesed that FERC set the effective date of the TIA as the “later of” the effective date set by the NEBC or the date of the commission’s acceptance of the TIA for filing.

ALLETE is an energy services company headquartered in Duluth, Minnesota. Through its operating division, Minnesota Power, ALLETE generates, transmits and distributes electricity in a 26,000-square-mile region of northern Minnesota, serving 143,000 retail customers and providing wholesale electric service to 16 municipalities.

Manitoba Hydro is a Canadian Crown corporation that engages in the generation, transmission and distribution of electricity to customers in the Province of Manitoba, Canada.

ALLETE and MH are in the process of developing the Dorsey-Iron Range International Power Line which will consist of separate United States and Canadian transmission projects (i.e., the GNTL and the Dorsey IPL, respectively), with an agreed-upon point of interconnection at the U.S.-Canadian border. The main purpose of this project is to develop the necessary transmission facilities to incorporate additional hydropower into ALLETE’s generation resource portfolio, consistent with ALLETE’s EnergyForward strategy.

EnergyForward is ALLETE’s resource strategy to reduce dependence on coal and fossil-based energy sources. By the end of this decade, ALLETE expects to have shifted its power supply from a predominantly coal-based energy mix to a balanced supply of approximately one-third renewable resources, one-third natural gas and one-third coal-fired generation. To advance this goal, ALLETE and MH have executed an innovative set of power supply agreements between them, pursuant to which MH will supply hydroelectric power to ALLETE and, in turn, ALLETE will supply wind power to MH.

  • The facilities on the U.S. side of the border (i.e., the GNTL), will include, among other elements, approximately 224 miles of 500-kV transmission line between a point on the Minnesota-Manitoba (Canada) border northwest of Roseau, Minnesota, and the Blackberry Substation, a substation owned by Minnesota Power and located near Grand Rapids.
  • The facilities on the Canadian side of the border (i.e., the Dorsey IPL) will consist of a 500-kV transmission line running approximately 213 kilometers from the Dorsey Converter Station located near Rosser, Manitoba, to a border crossing near Piney, Manitoba.

Together, the GNTL and the Dorsey IPL constitute the Dorsey-Iron Range International Power Line. The TIA governs the rates, terms and conditions of the design, construction, operation and maintenance of the facilities that will interconnect the GNTL and Dorsey IPL.

ALLETE and MH have entered into two sets of long-term power purchase agreements and exchange agreements that will both be implemented through the GNTL, the application noted.

  • The first set of agreements is the 250 MW Power Purchase Agreement and Energy Exchange Agreement between Minnesota Power and MH (collectively called the “250 MW Power Exchange Agreements”), which were approved by the Minnesota Public Utilities Commission (MPUC) in February 2012. In addition to providing needed capacity and energy to Minnesota Power, the 250 MW Power Exchange Agreements contain innovative wind storage provisions that leverage the flexible and responsive nature of hydropower to enhance the value of Minnesota Power’s significant wind energy investments.
  • The second set of agreements is the 133 MW Energy Sale Agreement and Energy Exchange Agreement (collectively the “133 MW Renewable Optimization Agreements”) between Minnesota Power and MH, which were approved by the MPUC in January 2015. The 133 MW Renewable Optimization Agreements provide additional needed energy and enable further wind storage.

Together, these two sets of agreements provide critical capacity and energy resources for ALLETE and its customers, while optimizing the value of ALLETE’s wind projects (and other wind resources), diversifying ALLETE’s energy portfolio, and lessening a reliance on coal-fired electricity. In fact, through the 250 MW Power Exchange Agreements and the 133 MW Renewable Optimization Agreements, ALLETE has procured a total of over 1.5 million megawatt hours (MWh) of hydropower annually, along with the ability annually to store 1 million MWh of wind power in MH’s system.

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.