Allete Clean Energy, a unit of Allete (NYSE: ALE), has secured a contract to acquire wind farms in Minnesota, Iowa and Oregon from The AES Corp. Additionally, the company signed an option agreement to buy a fourth wind energy facility 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, Ia., and Condon, Ore. with a total output of 231 MW for $27 million. All three wind farms to be acquired have power purchase agreements in place for their entire electric output.
The project sites enjoy favorable wind energy resources in their respective areas, are strongly supported by local communities, and are currently staffed by about 40 skilled technicians.
Pursuant to the option agreement, Allete Clean Energy will have an option to acquire the 101 MW Armenia Mountain, Penn. wind farm. That project became operational in 2009 and has two long-term power purchase agreements in place. It is located in the PJM Interconnection electricity market area near the Pennsylvania-New York border.
The acquisition is subject to customary closing conditions including FERC approval. Morgan Stanley is acting as financial advisor to Allete Clean Energy for this transaction.
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