Even as the Northland's appetite for electricity intensifies, Minnesota Power aims to keep a firm lid on emissions in coming years.
"Our commitment to this region's communities and to the environment -- where we all live, work and play -- is to make actual reductions in the amount of greenhouse gases we emit," said Don Shippar, chairman, president and CEO of Allete Inc., Minnesota Power's Duluth-based parent company, at a shareholder meeting Tuesday.
"The time for partisan advocacy or arguing about the science of climate change has passed," Shippar said. "The time for commitment is here. We will reduce our greenhouse gas emissions -- period."
Minnesota Power is investing in improved emission controls at the coal-burning plants it operates. It will break ground today on a $200 million project at the Boswell Energy Center in Cohasset that's designed to cut emissions of mercury, nitrogen oxide, sulfur dioxide and particulates.
But unless the problem of carbon emissions can be addressed, Shippar said Minnesota Power won't expand its coal-burning operations. Instead, the company will focus on improved conservation, plus the development of renewable energy sources, such as wind and biomass, he said.
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A recently adopted state law requires Minnesota utilities to generate 25 percent of their power from renewable sources by 2020. To meet that goal, Minnesota Power will need to more than double its alternative energy capacity.
Minnesota Power is going to need additional power generation to meet the needs of existing customers and to handle several big industrial developments in the works:
- PolyMet Mining Corp. aims to develop a copper, nickel and precious-metals open-pit mine south of Babbitt and a processing facility on the site of the former LTV Steel Mining Co. by 2008. David McMillan, Allete's senior vice president of marketing, regulatory and public affairs said PolyMet probably would consume about 70 megawatts of power, making it one of Minnesota Power's 10 largest industrial customers.
- Franconia Minerals Corp. is looking at developing an underground mine near Babbitt's Birch Lake that would tap copper, nickel, cobalt, palladium and platinum reserves.
- Minnesota Steel has proposed a $1.6 billion plant near Nashwauk that would turn taconite pellets into steel slabs. McMillan said this facility potentially could become Minnesota Power's largest customer, consuming up to two times as much energy as Minntac.
Shippar said Allete is "very bullish" about the future of its real estate holdings in Florida. There, the company has installed infrastructure that has laid the groundwork for massive residential and commercial developments.
Allete continues to look for investment opportunities in other unrelated arenas, Shippar said.
"This has been a diversified company for well over 20 years now, and that's still something we're very much interested in as part of our strategy," he said.
Shippar said he remains confident Allete will finish 2007 with earnings between $2.95 and $3.05 per share -- in keeping with earlier guidance the company had provided to investors. Such performance would represent a 6.5 percent to 10.1 percent increase in profitability from 2006, when Allete earned $2.77 per share.
Meanwhile, Allete's board of directors also has increased the dividends it pays to shareholders. In 2007, investors can expect to receive dividend payments totaling $1.64 per share -- or 13 percent more than in 2006.
