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Serving Northern St. Louis County, Minnesota

Minnesota Power

Company is making huge strides in its transition to cleaner energy

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The transition away from coal burning to lower carbon sources of energy presents a major challenge to electric utilities as they seek to invest in new power supplies while maintaining competitive rates and shareholder value. While some critics of this country’s ongoing energy transition have argued that it’s a challenge that many utilities can’t possibly meet, our region’s own Minnesota Power is proving exactly the opposite.

As we report this week, Minnesota Power, a subsidiary of ALLETE, has made remarkable strides in just the past several years in converting a utility that once relied almost exclusively on coal to supply its electric customers, to one that has already exceeded state renewable energy standards and is poised to reach nearly 40-percent production from renewable sources within just four years. It’s done so without a rate increase in six years, while continuing to increase dividends to shareholders.

For those who don’t know, Minnesota Power provides electric service to the region’s major industrial plants as well as thousands of commercial and residential customers in Tower-Soudan and parts of Lake Vermilion. It also provides power under contract to the Ely Public Utilities Commission. Customers in these areas can feel good that their utility is making the transition to cleaner energy, improving air quality and reducing carbon emissions that are forcing climate change. And it’s doing so years ahead of targets set in state law here in Minnesota.

While some utilities have fought hard against the increasing demands from customers and government for low- or no-carbon sources of power, Minnesota Power has embraced the challenge and made the transition look easy. Of course, northern Minnesota is well positioned to tap into renewable sources of energy. It sits on the border of North Dakota, one of the windiest places in North America, as well as Manitoba, with its rich hydropower resources. Minnesota Power has invested heavily in its Bison wind farm near New Salem, North Dakota and it’s expanding its relationship with Manitoba Hydro, which will be providing the company with the backup power it needs when the wind doesn’t blow.

It’s all part of the company’s Energy Forward strategy, which set the road map for a phased, yet aggressive, shift away from coal. It’s worth noting how far the company has come in just the past few years. As we report this week, the company was producing 95 percent of its electrical power from coal plants as recently as 2005. Today, it’s less than 70 percent and it will be no more than a third within a few more years. The road map, when first announced in 2013, called for Minnesota Power to produce one-third of its energy from renewable sources, one-third from natural gas-fired power plants, and one-third from coal. If anything, the company will soon exceed its own aggressive target for renewable energy, potentially reducing the company’s need for coal or natural gas-fueled production.

This is one reason that the company recently received a green light from the Minnesota Public Utilities Commission to further implement what’s known officially as its Integrated Resource Plan. The commission saw plenty to like even as it urged the company to consider additional investments in wind, something the company is considering.

At the same time, the company has invested hundreds of millions of dollars to upgrade its existing coal-burning infrastructure to meet strict pollution standards. Its investments at its Boswell 4 coal plant are reducing mercury emissions by 90 percent and emissions of nitrous oxides, sulfur, and fine particulates by 70 percent. While it still contributes to climate change, it’s one of the cleanest-burning coal plants in the country.

There’s no doubt that the hand of government played a role in pushing Minnesota Power and other utilities to adopt most of these measures. Regardless, the company deserves credit for putting its efforts into making the transition, rather than fighting the inevitable as some power producers have sought to do.

In the process, Minnesota Power has demonstrated a commitment to environmental stewardship and a responsible approach to its business. Minnesota Power is evidence that a clean energy future is not only possible, but can be achieved all while maintaining some of the most competitive rates in the country and still returning real value to shareholders.