XML 54 R33.htm IDEA: XBRL DOCUMENT v3.20.4
Commitments, Guarantees and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Estimated Minimum Annual Payments for Certain Long-Term Commitments [Table Text Block]
The following table details the estimated minimum payments for certain long-term commitments:
As of December 31, 2020
Millions20212022202320242025Thereafter
Capital Purchase Obligations$235.0 — — — — — 
Easements (a)
$5.8 $6.0 $6.1 $6.1 $6.2 $175.9 
PPAs (b)
$130.8 $143.7 $143.8 $136.7 $134.6 $1,215.6 
Other Purchase Obligations (c)
$40.1 — — — — — 
(a)Easement obligations represent the minimum payments for our land easement agreements at our wind energy facilities.
(b)Does not include the agreement with Manitoba Hydro expiring in 2022, as this contract is for surplus energy only; or the Oliver Wind I, Oliver Wind II or Nobles 2 PPAs, as Minnesota Power only pays for energy as it is delivered. (See Power Purchase Agreements.)
(c)Consists of long-term service agreements for wind energy facilities and minimum purchase commitments under coal and rail contracts.
Minnesota Power has also entered into the following long-term PPAs for the purchase of capacity and energy as of December 31, 2020:
CounterpartyQuantityProductCommencementExpirationPricing
PPAs
Calpine Corporation25 MWCapacityJune 2019May 2026Fixed
Manitoba Hydro
PPA 1 (a)EnergyMay 2011April 2022Forward Market Prices
PPA 2250 MWCapacity / EnergyJune 2020May 2035(b)
PPA 3133 MWEnergyJune 2020June 2040Forward Market Prices
Nobles 2250 MWCapacity / EnergyDecember 2020December 2040Fixed
Oliver Wind I (c)EnergyDecember 2006December 2040Fixed
Oliver Wind II (c)EnergyDecember 2007December 2040Fixed
(a)The energy purchased consists primarily of surplus hydro energy on Manitoba Hydro's system and is delivered on a non-firm basis. Minnesota Power will purchase at least one million MWh of energy over the contract term.
(b)The capacity price was adjusted annually until 2020 by the change in a governmental inflationary index. The energy price is based on a formula that includes an annual fixed component adjusted for the change in a governmental inflationary index and a natural gas index, as well as market prices.
(c)The PPAs provide for the purchase of all output from the 50 MW Oliver Wind I and 48 MW Oliver Wind II wind energy facilities.

Minnesota Power has also entered into the following long-term PSAs for the sale of capacity and energy as of December 31, 2020:
CounterpartyQuantityProductCommencementExpirationPricing
PSAs
Basin
PSA 1(a)CapacityJune 2022May 2025Fixed
PSA 2100 MWCapacityJune 2025May 2028Fixed
Great River Energy100 MWCapacityJune 2022May 2025Fixed
Minnkota Power(b)Capacity / EnergyJune 2014December 2026(b)
Oconto Electric Cooperative25 MWCapacity / EnergyJanuary 2019May 2026Fixed
Silver Bay Power (c)EnergyJanuary 2017December 2031(d)
(a)The agreement provides for 75 MW of capacity from June 1, 2022, through May 31, 2023, and increases to 125 MW of capacity from June 1, 2023, through May 31, 2025.
(b)Minnesota Power is selling a portion of its entitlement from Square Butte to Minnkota Power, resulting in Minnkota Power’s net entitlement increasing and Minnesota Power’s net entitlement decreasing until Minnesota Power’s share is eliminated at the end of 2025. Of Minnesota Power’s 50 percent output entitlement, it sold to Minnkota Power approximately 28 percent in 2020 (28 percent in 2019 and in 2018). (See Square Butte PPA.)
(c)Silver Bay Power supplies approximately 90 MW of load to Northshore Mining, an affiliate of Silver Bay Power, which has been served predominately through self-generation by Silver Bay Power. Minnesota Power supplied Silver Bay Power with at least 50 MW of energy and Silver Bay Power had the option to purchase additional energy from Minnesota Power as it transitioned away from self-generation. In the third quarter of 2019, Silver Bay Power ceased self-generation and Minnesota Power began supplying the full energy requirements for Silver Bay Power.
(d)The energy pricing escalates at a fixed rate annually and is adjusted for changes in a natural gas index.