Profile: ALLETE Inc (ALE)

ALE on New York Consolidated

54.96USD
19 Dec 2014
Price Change (% chg)

$0.40 (+0.73%)
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$54.56
Open
$54.48
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$55.42
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$54.36
Volume
799,871
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245,717
52-wk High
$56.63
52-wk Low
$44.19

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ALLETE, Inc. (ALLETE) is an energy company. Minnkota Power Cooperative, Inc.( Minnesota Power) is an operating division of the Company. ALLETE operates in two business segments: Regulated Operations and Investments and Other. Regulated Operations includes its regulated utilities, Minnesota Power and Superior Water, Light and Power Company (SWL&P), as well as its investment in American Transmission Company LLC (ATC), a Wisconsin-based regulated utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. Investments and Other is comprised primarily of BNI Coal, Ltd (BNI Coal), its coal mining operations in North Dakota; ALLETE Properties, LLC and its subsidiaries (ALLETE Properties), its Florida real estate investment, and ALLETE Clean Energy. In July 2011, the Company incorporated new company, ALLETE Clean Energy.

Regulated Operations

Minnesota Power provides regulated utility electric service in northeastern Minnesota to approximately 144,000 retail customers. Minnesota Power's non-affiliated municipal customers consist of 16 municipalities in Minnesota and one private utility in Wisconsin. SWL&P, a wholly owned subsidiary of ALLETE, is also a private utility in Wisconsin and a customer of Minnesota Power. SWL&P provides regulated electric, natural gas and water service in northwestern Wisconsin to approximately 15,000 electric customers, 12,000 natural gas customers and 10,000 water customers. Its industrial customers are primarily in the taconite, paper, pulp and wood products and pipeline industries. The customers consist of five taconite producing facilities (two of which are owned by one company and are served under a single contract), one iron nugget plant, and four paper and pulp mills. During the year ended December 2011, its residential and commercial customers represented 20% of total regulated utility kilowatt-hour sales. In 2011, its municipal customers represented 7% of total regulated utility kilowatt-hour sales. The Company also enters into off-system sales with Other Power Suppliers.

The Company’s generation is primarily coal-fired, but also includes approximately 102 megawatts of hydro generation from ten hydro stations in Minnesota, approximately 107 megawatts of wind generation, and 73 megawatts of biomass co-fired generation. Purchased power is made up of long-term coal, wind and hydro power purchase agreements and market purchases. As of December 31, 2011, Minnesota Power had a coal inventory of 0.9 million tons. Minnesota Power entered into two long-term wind Power Purchase Agreements (PPAs) with an affiliate of NextEra Energy, Inc. to purchase the output from Oliver Wind I (50 megawatts) and Oliver Wind II (48 megawatts), wind facilities located near Center, North Dakota. Each agreement is for 25 years and provides for the purchase of all output from the facilities at fixed prices. The Company has a PPA with Manitoba Hydro that expires in April 2015. Under this agreement, Minnesota Power is purchasing 50 megawatts of capacity and the energy associated with that capacity. Minnesota Power has a separate PPA with Manitoba Hydro to purchase surplus energy from May 2011 through April 2022.

On May 19, 2011, Minnesota Power and Manitoba Hydro signed a long-term PPA. The PPA calls for Manitoba Hydro to sell 250 megawatts of capacity and energy to Minnesota Power for 15 years beginning in 2020 and requires construction of additional transmission capacity between Manitoba and the United States. On January 26, 2012, the Minnesota Public Utilities Commission (MPUC) approved this PPA with Manitoba Hydro. The Company has electric transmission and distribution lines of 500 kilovolts (eight miles), 345 kilovolts (29 miles), 250 kilovolts (465 miles), 230 kilovolts (632 miles), 161 kilovolts (43 miles), 138 kilovolts (128 miles), 115 kilovolts (1,221 miles) and less than 115 kilovolts (6,216 miles). Thye Company owns and operates 164substations with a total capacity of 11,132 megavoltamperes. Some of its transmission and distribution lines interconnect with other utilities. Rainy River Energy, its wholly owned subsidiary, owns approximately 8% of American Transmission Company LLC (ATC), a Wisconsin-based utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. Hibbard is a 51 megttsa biomass/coal/natural gas facility located in Duluth, Minnesota. Minnesota Power holds franchises to construct and maintain an electric distribution and transmission system in 94 cities and towns located within its electric service territory. SWL&P holds 17 similar franchises for electric, natural gas and/or water systems in one city and 16 villages and towns within its service territory.

Investments and Other

BNI Coal is a supplier of lignite in North Dakota, producing about four million tons annually. Two electric generating cooperatives, Minnkota Power Cooperative, Inc. (Minnkota Power) and Square Butte Electric Cooperative (Square Butte), consumes virtually all of BNI Coal’s production of lignite under cost-plus, fixed fee coal supply agreements extending through 2026. The mining process disturbs and reclaims between 200 and 250 acres per year. ALLETE Properties represents its Florida real estate investment. Its two major development projects are Town Center and Palm Coast Park. Another major project, Ormond Crossings is in the design and permitting stage. ALLETE Properties occasionally provides seller financing to certain qualified buyers. In June 2011, the Company ALLETE Clean Energy, a wholly owned subsidiary of ALLETE. ALLETE Clean Energy intends to market to electric utilities, cooperatives, municipalities, independent power marketers and end-users across North America through long-term PPAs. ALLETE Clean Energy focuses on developing or acquiring capital projects that create energy solutions through wind, solar, biomass, hydro, natural gas/liquids, shale resources, clean coal and other clean energy. As of December 31, 2011, non-rate base generation consists of 31 megawatts of generation at Rapids Energy Center. In 2011, it sold 0.1 million Megawatt-hours of non-rate base generation. The Company has approximately 5,500 acres of land available-for-sale in Minnesota.

Company Address

ALLETE Inc

30 W SUPERIOR ST
DULUTH   MN   55802-2093
P: +1218.2795000

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