Major northern Minnesota power line wins approval from state regulators

Canadian hydropower is getting a new pathway into Minnesota — a 225-mile-long, high-voltage power line that promises to assist rather than compete with Midwest wind farms.

Minnesota regulators on Friday approved the Great Northern Transmission Line route through five northern counties. It is the last major regulatory hurdle for the 500-kilovolt line, which is expected to cost $560 million to $710 million and take three years to build.

More than 30 other transmission lines cross the two nations' border, but this one is intended to be more than a highway for Canadian power exports. Duluth-based Minnesota Power, the majority owner of the line, says it will address the intermittent nature of wind power.

When the utility's U.S. wind farms are running, imported hydropower would be dialed back, and some wind power could even be sent north. In idle winds, Manitoba Hydro, a 49 percent partner in the transmission project, will release stored water from dams to generate additional electricity for Minnesota Power.

"Now we will have the opportunity to utilize the battery system that those big hydroelectric operations can provide," said Dave McMillan, executive vice president for Minnesota Power. "There is nothing else like it until we perfect large-scale battery technology. This is really, really good."

The Minnesota Public Utilities Commission approved a route permit for the Great Northern project, although Minnesota Power still needs to finalize some alignment details with another state agency and must get final border-crossing approval from the U.S. State Department. About 200 workers are expected to be employed on the project when construction begins later this year or in 2017.

It will be the second 500-kilovolt line in Minnesota. The only other power line of that size was finished in 1980 by Xcel Energy, and runs from Canada to the Twin Cities. The new line will run parallel to that line and a smaller transmission line for about 40 miles in Itasca County.

With 190 hydropower stations, Canada has long been a net exporter of power, especially to New England and the Midwest. Minnesota's two largest utilities, Xcel and Great River Energy, have long-term power purchase agreements with Manitoba Hydro, a Winnipeg-based government corporation with 1.9 billion Canadian dollars in annual revenue from domestic and exported electricity sales.

"Canada is very unusual because more than 60 percent of its electricity comes from hydropower," said Jean-Thomas Bernard, a visiting economics professor at the University of Ottawa. "Around the world it is about 8 percent."

U.S. utilities typically need electricity in the summer, while Canadian utilities experience peak demand in winter for electric heating, when U.S. demand drops.

Bernard, an expert on the nation's power supply, said Canadian utilities increasingly are selling power in regional power pools, rather through than long-term contracts. That allows Canadians to time the market, buying U.S. power and storing hydro when prices are low — and doing the reverse when prices are higher.

Dan Woynillowicz, policy director of the Clean Energy Canada think tank, said the Minnesota Power-Manitoba Hydro deal is the first he's seen where a U.S. utility is using Canadian hydropower to back up its wind energy.

"There have been some fears on the part of U.S. states that Canadian hydro imports could push out opportunity for domestic renewables, predominantly wind," he added. "What this illustrates and what I think we'll likely see going forward is that it's not actually direct competition, it's something that can enable renewables to play a bigger role in the U.S. power system than they might otherwise."

Overall, Minnesota Power expects to be a net importer of Canadian power, having contracted for 383 megawatts.

The utility serves Iron Range mines and 144,000 other customers in northern Minnesota, and once relied almost entirely on coal to generate power. In its shift to cleaner energy, it has built four North Dakota wind farms and repurposed a power line to carry the electricity to Minnesota.

Some of its imported hydro will come from the $6.5 billion Keeyask Hydroelectric Station now under construction by Manitoba Hydro in partnership with four First Nations, or aboriginal governments, in northern Manitoba. The site is 671 miles north of Duluth.

David Shaffer • 612-673-7090 • @ShafferStrib