DULUTH – Minnesota Power parent company Allete Inc. is selling a 30% stake in its proposed $700 million natural gas plant, bringing a third utility into the controversial project.

North Dakota-based electricity wholesaler Basin Electric Power Cooperative will pay $20 million for the share, according to Tuesday's announcement. That leaves Allete as a 20% owner of the Nemadji Trail Energy Center (NTEC), which would be built in Superior, Wis., and generate about 600 megawatts of electricity.

Wisconsin's Dairyland Power Cooperative has the final half and now has the largest stake in the plant. However, Minnesota Power will continue to lead construction and operation, the company said.

The Duluth-based utility expects it will spend a total of $140 million on the project and contract for less power from the plant than originally planned.

"We're constantly optimizing our power supply and the best way to continue our long-term path to carbon-free energy," said Julie Pierce, vice president of strategy and planning for Minnesota Power. "[NTEC] is an important contributor to the success of the region, and to the success of the energy system of the region."

The $20 million payment for Allete's share in the plant covers the company's costs to date, Pierce said. Any impact on customer bills would come after the plant opens.

Environmental and ratepayer groups have opposed the plant since it was first proposed in 2018, saying the threat of climate change is too great to build new fossil-fuel infrastructure and the plant is not needed.

"Minnesota Power said they needed this plant, but now we know that's not entirely true," said Evan Mulholland, supervising attorney at the Minnesota Center for Environmental Advocacy, which has been leading litigation against the proposed plant. "As we've said all along, we simply cannot continue to build new fossil-fuel infrastructure in the middle of a climate crisis, especially when we know clean wind and solar energy can supply affordable, reliable electricity to northeastern Minnesota."

Minnesota Power, which aims to be coal-free by 2035 and carbon-free by 2050, said it sees natural gas as a "renewable-enabling" power source.

"Renewable sources such as wind and solar are not able to fulfill all of our customers' energy needs on demand around the clock," Chief Operating Officer Josh Skelton said in a statement. "We need reliable, modern energy sources such as NTEC to provide sustainable energy for our region and economy."

The utilities hope to have the plant constructed by 2025 and are awaiting permits from Wisconsin regulators to begin construction, Pierce said.

In August the Minnesota Court of Appeals found the project "serves the public interest better than a renewable-resource alternative." That decision has not been appealed to the state Supreme Court.

Some approvals are being litigated in Wisconsin state courts, and project opponents have raised issues with Dairyland receiving a federal loan to help build the plant.

The Minnesota Public Utilities Commission will soon take up Minnesota Power's resource plan, which could also cause a bottleneck for the project.

Brooks Johnson • 218-491-6496