ALLETE Clean Energy, a subsidiary of ALLETE Inc., has signed an acquisition agreement to purchase wind farms in Minnesota, Iowa and Oregon from The AES Corp. in early 2014. In addition, the two companies have signed an option agreement for ALLETE to acquire a fourth wind farm 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, Iowa, and Condon, Ore., with a total output of 231 MW for $27 million. All three wind farms to be acquired have power purchase agreements (PPAs) in place for their entire electric output.
Pursuant to the option agreement, ALLETE Clean Energy will have an option to acquire the 101 MW Armenia Mountain, Pa., wind farm. That project became operational in 2009 and has two long-term PPAs in place.
"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," says Alan R. Hodnik, chairman, president and CEO of ALLETE. According to Hodnik, "By 2015, ALLETE and its business subsidiaries may have nearly 850 MW of installed wind generation."
The acquisition is subject to customary closing conditions and is expected to close in early 2014. Morgan Stanley is acting as financial advisor to ALLETE Clean Energy for the transaction.