ALLETE Clean Energy, a subsidiary of ALLETE, is acquiring wind farms in Minnesota, Iowa and Oregon from The AES Corporation in early 2014.
The company has also signed an option agreement to acquire a fourth wind energy facility in Pennsylvania in mid-2015.
Under the acquisition agreement, ALLETE Clean Energy would acquire AES’ position in operating wind energy projects in Lake Benton, Minn., Storm Lake, Ia., and Condon, Ore. with a total output of 231 Megawatts (MW) for $27 million.
ALLETE Clean Energy was established to acquire or develop capital projects to create energy solutions by way of wind, solar, biomass, hydro, natural gas, shale resources, clean coal technology and other emerging energy innovations.
All three wind farms to be acquired have power purchase agreements in place for their entire electric output. The project sites enjoy favorable wind resources in their respective areas, are strongly supported by local communities, and are currently staffed by approximately 40 skilled technicians.
Under this agreement, ALLETE Clean Energy will have an option to acquire the 101MW Armenia Mountain, Penn. wind farm. That project became operational in 2009 and has two long-term power purchase agreements in place. It is located in the PJM electricity market area near the Pennsylvania-New York border.
ALLETE Clean Energy president Eric Norberg said the transaction will deliver incremental cash flows and the potential for long-term earnings growth while positioning ALLETE Clean Energy in new markets. “We plan to leverage these initial acquisitions as the business of renewable energy matures to the next level,” Norberg added.
“This acquisition is right in line with our strategy of growing energy-centric earnings streams that expand our customer base and complement our traditional utility operations,” said Alan R. Hodnik, chairman, president and CEO of ALLETE.
“It also supports our belief that cleaner energy sources will become increasingly valuable as we participate in our nation’s energy evolution,” Hodnik added. “By 2015, ALLETE and its business subsidiaries may have nearly 850MW of installed wind generation.”