Allete, Inc.'s (NYSE:ALE) division, Minnesota Power has inked an agreement with Nobles 2 Power Partners to purchase 250 megawatts (MW) of renewable power.
Terms of the Agreement
Per the terms of this 20 years power purchase agreement, Nobles 2 Power Partners will supply Minnesota Power with 250 MW of renewable power which will be produced from a wind project in southwest Minnesota. This renewable facility will have 125 wind turbines and is expected to start commercial operation from Dec 2019.
Focus on Renewable Power
Minnesota Power adopted the EnergyForward strategy to ensure a safe, reliable and competitive energy supply to its customers.
In addition to the 250 MW of wind power, the company also plans to file for 10 megawatts of solar power and 250 MW of combined-cycle natural gas generation to the Minnesota Public Utilities Commission (MPUC). Per the strategy, 44% of the electricity generated by Minnesota Power will come from renewable energy resources like wind, Canadian hydro, solar and biomass.
Why Wind Energy?
In the last few years, wind energy has gained great popularity in the renewable energy space. Though the initial setup cost is higher, windmills do not produce any pollutants or emissions during operation.
According to U.S. Energy Information Administration, the wind electricity generating capacity in U.S. at the end of Dec 2016 was 81 gigawatts (GW). It is expected to rise up to 88 GW by the end of 2017 and 102 GW by the end of 2018.
Major utility service providers have been making new investments in the wind power. Earlier in Apr this year, NextEra Energy (NYSE:NEE) and Westar Energy (NYSE:WR) jointly celebrated the commissioning of the Kingman and Ninnescah Wind Energy Centers in Kansas. The green energy generated from these projects will serve customers of Westar Energy and its wholesale partner Midwest Energy. (Read more: NextEra, Westar Energy Commission More Wind Power for Kansas)
Price Performance
In the last three months, shares of Allete have gained 13.5% outperforming Zacks categorized Utility-Electric Power industry’s gain of 2.4%.
The significant and stable foundation of regulated businesses complimented by the Energy Infrastructure and Related Services businesses has boosted the performance of the company.
Zacks Rank and Stocks to Consider
ALLETE currently has a Zacks Rank #3 (Hold). A better-ranked stock in the utility space is Avangrid, Inc. (NYSE:AGR) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Avangrid, Inc. delivered a positive earnings surprise of 7.35% in the first quarter. Its Zacks Consensus Estimate for 2017 moved up nearly 0.5% to $2.21 per share in the last 60 days.
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NextEra Energy, Inc. (NEE): Free Stock Analysis Report
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