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American, Canadian utilities forge power purchase agreement

DULUTH, Minn. 1/30/12 (PennWell) -- The Minnesota Public Utilities Commission has unanimously approved a 15-year, 250-MW power purchase agreement with Canadian provincial utility Manitoba Hydro.

Manitoba Hydro produces most of its power from hydroelectric stations, and this agreement facilitates the construction of the 695-MW Keeyask Generating Station, which is being developed through a partnership with the Keeyask Cree Nations. Manitoba Hydro reached a similar deal with Wisconsin Public Service in May 2011 in which the Candadian utility will provide 100-MW annually from 2012-2027.

Manitoba Hydro's agreement with Minnesota Power will begin in 2020. In the meantime, the two companies are evaluating power transmission options as the agreement will require additional new transmission capacity between Manitoba and the U.S.

Under the agreement, Minnesota Power will also have the ability to store excess wind energy generated in North Dakota in Manitoba Hydro’s hydroelectric system, thus maximizing the value of the wind resource. The company purchases, operates and is developing wind energy centers that will represent more than 400 MW of capacity by the end of 2012.

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