More than eight years after first proposing an electric transmission line to carry power from a new hydro facility in northern Manitoba to the U.S. Midwest, development partners Manitoba Hydro and Minnesota Power Inc. on June 1 officially placed the line into operation.

Energizing the 500-kV Manitoba-Minnesota Transmission Project, which once it crosses the border into the U.S. is known as the Great Northern Transmission Line, means province-owned Manitoba Hydro can finally reap export revenue from the final step in an ambitious plan to revamp the province's transmission network and bring on new power generation resources from a large hydroelectric dam in a remote northern region. Those projects, which were dogged by cost overruns and construction delays, moved the province-owned utility to an executive management purge, threatened credit downgrades, massive front-line job cuts, and increased electricity rates to customers who had previously enjoyed some of the lowest costs in North America.

While lines on both side of the border are complete and at the end of the commissioning process, a key piece of Manitoba's plan to capitalize on power exports — the 695-MW Keeyask Generating Station (Gull) hydroelectric project — remains under construction. After years of delays, the most recent coming as First Nations groups blockaded the project, the last estimate for the project, in 2017, had jumped C$2.2 billion to C$8.7 billion and its in-service date had been pushed back more than a year. Keeyask's setbacks will not affect the power purchase agreements with ALLETE Inc.-owned Minnesota Power that underpin the Great Northern line's construction.

"Manitoba Hydro's agreements with Minnesota Power are still in place, have not changed, and will commence June 1, 2020," spokesman Bruce Owen said May 28. "The electricity supplied to Minnesota Power is existing system power available from our entire generating system. When Keeyask does begin producing power later this year — it's anticipated to begin producing first power this fall — that power will be added to our system."

Even though the power is not immediately needed, Keeyask remains an important resource for Manitoba Hydro to meet its commitments. "Without the additional power that will be available from Keeyask, Manitoba Hydro could not have contracted with Minnesota Power for a long-term power supply arrangement," Owen said.

Minnesota Power moves to renewables

The opening of the transmission project comes at a time when Minnesota Power and its parent company, ALLETE, have embarked on ambitious programs to shift their generation fleets to low- or zero-carbon sources of energy.

"The Great Northern Transmission line is a critical component of Minnesota Power's EnergyForward strategy to diversify its energy mix and reduce carbon emissions," said Amy Rutledge, a spokesperson for the utility. "We have added a significant amount of wind to our system in recent years, have closed 7 of our 9 coal plants and the [Great Northern Transmission Line], which will deliver 250 megawatts of hydropower to customers beginning in June, will help us achieve our goal of 50% renewable energy by 2021."

The power purchase agreement for the 250 MW was approved in 2012, the same year the two transmission lines were first proposed.

Minnesota Power is also one of the utilities participating in the $2 billion CapX2020 initiative, aimed at upgrading and expanding the regional electric transmission grid. Completed in 2017, CapX2020 added 800 miles of new transmission infrastructure, including four 345-kV lines and a 230-kV line, mostly in Minnesota but also in neighboring states. The group released a report in March arguing that additional transmission capacity is needed to keep the electric grid safe, reliable and affordable as traditional, dispatchable power plants retire and more intermittent renewable energy resources come online.

"More transmission system infrastructure will be needed in the upper Midwest to accommodate the transition of resources," the report concluded. At the same time, "Non-dispatchable resources" — such as wind and solar power — "alone will be incapable of meeting all consumer energy requirements at all times," and so dispatchable resources, specifically natural gas-fired plants, will continue to be necessary.

ALLETE plans to deploy $2 billion in new capital investment over the next five years, Senior Vice President and CFO Robert Adams said Feb. 13 on the company's fourth-quarter 2019 earnings call, the majority of that in "clean energy" assets.

Despite suspending its 2020 guidance, ALLETE is moving ahead with its construction of new power generation assets, executives said on the company's first-quarter 2020 earnings call on May 6.

Still, Minnesota Power faces resistance to its plan to build a new 625-MW gas plant in northern Wisconsin. The Nemadji Trail Energy Center, a combined-cycle natural gas plant proposed in Superior, Wis., will enable the addition of more renewable energy resources to the grid, among other benefits, Minnesota Power and its project development partner, Dairyland Power Cooperative, say.

The Minnesota Court of Appeals in December 2019 overturned the state Public Utilities Commission's approval of the project, saying that the commission's decision to deny a petition for an environmental assessment worksheet for the project was flawed. In March, the Minnesota Supreme Court said it will review the lower court's ruling.

For Manitoba, export enhancement

The Canadian portion of the line boosts Manitoba Hydro's export capacity by 885 MW to 3,185 MW. The 132-mile leg, which is officially known as the Dorsey Interprovincial Power Line, will run from a station northwest of Winnipeg to the U.S. border near Piney, Minn. The U.S. leg runs another 224 miles to a substation near Grand Rapids, Minn.

In Manitoba, the line connects with Manitoba Hydro's C$5 billion Bipole III high-voltage, direct-current transmission line, which was completed in 2018 and stretches nearly 870 miles from Keeyask to Winnipeg.

Keeyask, which is near York Factory on Hudson Bay, is a venture between Manitoba Hydro and First Nations in the region. It is expected to provide a sizable bump to Manitoba Hydro's export capability. The company received about C$430 million in export sales in the fiscal year that ended March 31, 2019, amounting to about 20% of the company's C$2.16 billion revenue. Its business plan for the 2019-2020 year called for C$418 million in export revenue. The company estimates exports accounted for about 22% of revenue between 2010 and 2019, or about C$3.9 billion. The company has not provided a forecast for sales increases related to the new export project.

"Manitoba Hydro is currently experiencing favorable water conditions, and is forecast to achieve its export revenue targets," Owen said.