2009-2010 Community Investment Report

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Dear Friends, These are interesting and challenging times. Everyone who lives and works in the Northland has been touched by the recession, personally or through someone they know. As one of the region’s largest corporate citizens, Minnesota Power, an ALLETE company, is eager to help lead recovery. We don’t believe in standing still. Energy in Motion—Minnesota Power’s 2009-2010 Community Investment Report details steps we are taking as a company and as committed individuals to move communities forward to a bright future. These include: • Major investments in emission-reduction technologies, new and expanded wind and biomass developments, and transmission upgrades to ensure a robust, reliable and environmentally responsible power supply—while creating hundreds of well-paying construction jobs • Responsible land management, thoughtful use of natural resources, and a commitment to help customers make choices that conserve energy and save money in their homes, businesses and communities • Innovative conservation programs that encourage greater understanding of energy usage and provide practical tools to help customers use energy more efficiently—saving energy, offsetting rising costs, and benefitting the environment • Workforce development partnerships that connect the region’s industries and educators, plus scholarships to reward college students for pursuing fields that match regional workforce needs • Leadership in economic development efforts that stimulate sustainable business growth and expansion • Charitable giving through the Minnesota Power Foundation that preserves the environment, advances education, supports health and human services, encourages community involvement, and promotes arts and culture • Employee volunteerism, civic engagement and participation in the United Way and other campaigns to help those in need • Health, wellness and safety programs that ensure the wellbeing of our employees and their families, contractor training for injury-free worksites, energy education in area schools, and teacher workshops that promote energy safety and conservation Please join me in thanking all of Minnesota Power’s employees, customers, shareholders and partners who live their values every day and put their energy toward making our region the best it can be.

Jeff Frey & Associates

Sincerely,

Don Shippar, Chairman and CEO, ALLETE

Cover: Photo of runner courtesy of Jeff Frey & Associates


values Energy

in motion

reliability stewardship conservation oppor tunity safety prosperity philanthropy


“People need power to ensure their quality of life. Customers have a certain expectation. When it is not there, they rely on us to get out and return it as quickly as we can.” John Muehlbauer, Line Operations Superintendent, “Minnesota Values”

reliability

Meeting Future Demand S h a p i n g Re s p o n s i b l e E n e r g y Po l i c y


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lectricity is more than an essential commodity. It provides comfort, security, convenience and a high quality of life. It brightens homes and offices, warms

living spaces, powers appliances, drives industry and delivers information. People in the Northland depend on electricity—and they depend on Minnesota Power to deliver it. Minnesota Power and its affiliated Wisconsin utility, Superior Water, Light & Power, generate and transmit reliable, competitively priced electric power to 155,000 retail customers and 16 municipalities in northern Minnesota and Douglas County, Wisconsin. Customers include hundreds of businesses and several large industrial operations, including taconite producers, paper mills and pipeline companies. Reliability is crucial to keep businesses operating smoothly and residential customers satisfied. Minnesota Power continually works to monitor, understand and improve reliability in a cost-effective way and is proud of its performance. “We are committed to reliability and spend time and money efficiently to meet the expectations of our customers,” said Steve Benoit, director of distribution, Minnesota Power. One recent effort has focused on integrating Minnesota Power’s interactive voice response and outage management systems. This allows the utility to collect and understand outages faster so it can respond and restore service quickly. Speed and efficiency depend on customers using the automated voice system or Web site to report outages. Smart meters also are being tested for residential and commercial use. This new technology will provide unprecedented communication between Minnesota Power and its customers, improving reliability while helping customers better understand and manage the way they use electricity.


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lectric power is a key component of mining, papermaking and pipeline industries— some of Minnesota Power’s largest key customers. Major industrial projects in

various stages of planning and development promise well-paying jobs and a boost to the region’s economy. These include the new Mesabi Nugget plant in Hoyt Lakes, Essar Steel Minnesota’s proposed integrated steel mill, and an Enbridge pipeline expansion that will link Alberta, Canada, with Murphy Oil Refinery’s growing operations in Superior, Wisconsin. Minnesota Power is prepared to meet the energy needs of these resourcebased industries and customers of all sizes for decades to come. Over the past three years, Minnesota Power has invested nearly one billion dollars in its electric system to ensure safe, reliable service and meet mandates for lower emissions and increased renewable energy. It remains competitive by managing costs, adhering to its values, and investing for the long term. Minnesota Power has joined a consortium of Upper Midwest utilities in an initiative called CapX2020 to upgrade the region’s transmission grid. The acronym stands for capacity expansion needed by 2020. CapX2020 utilities are spearheading one of the largest multi-state transmission grid upgrades in the country. It includes four projects that will be “shovel ready” in 2010. These expansions will add 700 miles of transmission line in Minnesota and Wisconsin and create thousands of manufacturing, construction and engineering jobs. The utility group is working closely with local governments and landowners to communicate the need and minimize impacts on the environment. Although rate increases have been necessary to offset rising costs of producing and delivering energy, Minnesota Power customers still enjoy some of the most competitively priced electricity in the country.

Meeting Future Demand


S h a p i n g Re s p o n s i b l e E n e r g y Po l i c y

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nergy policy is being debated at all levels of government. Minnesota Power’s legislative team works to ensure that federal, state and local lawmakers understand the full

impacts of proposed laws and regulations on the company and the region it serves. “The overarching goal is to make sure elected public officials have solid information so they can make informed decisions when it comes to energy and environmental policy matters,” said Bill Libro, director of federal affairs, ALLETE/Minnesota Power. Being involved in national organizations, such as the Lignite Energy Council (LEC), helps Minnesota Power leverage resources and educate policymakers. Minnesota Power owns BNI Coal, a lignite mine in North Dakota. Most electricity produced in North Dakota is exported, primarily to Minnesota. Federal climate change initiatives to reduce carbon emissions from power plants were main topics at the LEC’s 2009 annual meeting. Libro provided industry perspective as a panelist with other energy experts and government officials. In 2009, Minnesota Power hosted numerous lawmakers at its northern Minnesota facilities, including U. S. Senator Al Franken, U. S. Senator Amy Klobuchar and the LegislativeCitizen Commission on Minnesota Resources (LCCMR). The LCCMR is made up of 10 state legislators and seven private citizens. Members and their staffs toured Minnesota Power’s Fond du Lac Dam and participated in an Iron Range visit that highlighted Taconite Ridge Wind Energy Center. The experience helped lawmakers understand Minnesota Power’s progress toward meeting state renewable energy mandates and the costs associated with purchasing required technology and building necessary infrastructure.


“We think it is just good business to take care of the environment. It is not taken for granted. It is an expectation that environmental stewardship is a core value.” Mike Polzin, Renewable Fuels Coordinator, “Minnesota Values”

stewardship

Reducing Emissions Advancing Renewable Energy Managing Lands & Lakes E c o Te a m — L e a d i n g b y E x a m p l e


Reducing Emissions

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clean, healthy environment is important to everyone. Minnesota Power is committed to further reducing emissions at its coal-fired power

plants. Over the past few years, it has invested hundreds of millions of dollars in advance of governmental mandates to upgrade its generating facilities with state-of-the-art emission-control technology and equipment. This includes $300 million in retrofits at Boswell Energy Center in Cohasset to improve efficiency and reduce mercury, sulfur dioxide, nitrogen oxide (NOx) and particulate emissions by up to 90 percent on some units. The largest component was an overhaul of Boswell Unit 3. The mammoth project required eight stories of scaffolding inside a huge boiler and created approximately 1,000 construction jobs at the peak of activity. It was completed on schedule in November 2009 with minimal downtime and an outstanding safety record. “We were very pleased with the quality of work and the flexibility of the construction schedule,” said Josh Skelton, operations manager, Minnesota Power. “Well over one million hours of work were completed with virtually zero injuries.” With its new environmental controls, Boswell Unit 3 rivals any new coal-fired plant being built today at a far lower cost. Upgrades on Boswell Units 1, 2 and 4 also have been completed and will significantly reduce NOx emissions. A turbine replacement on Unit 4 will improve efficiency, generating an additional 60 MW of electricity with no net increase in emissions.


Minnesota Power was producing and distributing renewable energy long before it was cool to be “green.” It has operated the largest hydropower system in Minnesota for more than a century and continues to expand its renewable energy portfolio with major investments in wind power and biomass projects. Under Minnesota law, the state’s electric utilities must produce 25 percent of their energy from renewable sources by 2025. Minnesota Power is nearly halfway to achieving this ambitious goal and on track to meet it well ahead of schedule.

wind

North Dakota’s powerful winds are a rich source

of renewable energy. Minnesota Power plans to harness that potential with a new 75 MW commercial wind project near Center, North Dakota. The $180 million Bison I Wind Energy Center will be constructed over two years and completed in 2011. It will feature 33 enormous turbines with an annual energy output of 300,000 MWh—enough to power 25,000 homes per year. Blades, towers and nacelles for the project will be shipped through the Port of Duluth-Superior, providing jobs for port workers and ground transportation companies that specialize in oversized cargo. Minnesota Power has long-term agreements to purchase 98 MW of electric output from two other wind farms in Oliver County, North Dakota. It recently acquired a 465-mile, 250-kilovolt direct current transmission line to deliver this renewable wind energy from North Dakota to customers in Minnesota. Recycling an existing line rather than building new is a strategic move that will bring long-term cost savings for customers.

Advancing Renewable Energy


Meanwhile, Minnesota Power’s 25 MW Taconite Ridge Wind Energy Center is meeting expectations and generating renewable energy on the Iron Range. The facility is a model of sustainable design. Minnesota Power is seeking Leadership in Energy and Environmental Design (LEED) Gold Certification for the Taconite Ridge operations and maintenance building, which houses the wind turbine controls. The wind energy industry has potential to benefit northern Minnesota beyond providing “green” power. It could be a source of new jobs and manufacturing. A number of wind energy component manufacturers have visited the region, working with Minnesota Power and other members of the Area Partnership for Economic Expansion to explore opportunities for expansion or relocation. A reception held during the 2009 American Wind Energy Association meeting in Chicago introduced more than 100 industry representatives to the Northland’s strategic benefits. Minnesota Power played a key role in organizing that networking event and brought a credible electric utility perspective to the conversation.


wood

Northland forests present growing opportunities for biomass, or

renewable fuel made from organic matter. Fast growing tree species, forest residue and wood waste are viable sources of energy, and Minnesota Power is investing in projects that convert these products into electricity. In September 2009, the company purchased steam boilers and wood-handling facilities at the Hibbard Renewable Energy Center on Duluth’s waterfront from the City of Duluth. The Hibbard plant burns wood waste to produce steam for NewPage Corporation’s pulp and paper mill. Minnesota Power plans to invest $22 million in upgrading the facility. This will triple its biomass production capacity from 70,000 MWh to 210,000 MWh and supply renewable energy to both the paper mill and other Minnesota Power customers. Minnesota Power operates a similar biomass facility in Grand Rapids, providing steam and electricity to the UPM Blandin paper mill using wood waste from area loggers for fuel. Rapids Energy Center is stockpiling timber and brush being cleared for a major Enbridge pipeline expansion through northern Minnesota and will burn it to generate additional electricity. It illustrates how developing key partnerships can contribute to meeting environmental goals. Managing area forests to support a sustainable biomass industry is very important to Minnesota Power. Staff members recently traveled with a 30-member coalition to sites in Minnesota, Canada, Finland and Sweden as part of the Blandin Foundation’s Vital Forests Vital Communities initiative. This “Seeing the Forest AND the Trees” tour raised awareness of how other countries successfully manage forests and forest productivity. “We need to understand how to use our forest resources for the highest value,” said Steve Betzler, key account manager, Minnesota Power, who participated in the international forest productivity tour. “Finland has similar weather, trees and soil, but its forests are managed more extensively and are far more productive. Some of their strategies are transferable to our region.” Minnesota Power also is interested in the carbon implications of biomass. It has provided research funding to the University of Minnesota and the Minnesota Forest Resource Council to advance knowledge of carbon science as it relates to biomass and reforestation.

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water 

The power of moving water has been generating electricity

in the Northland for more than a century. Minnesota Power is the largest hydroelectric producer in Minnesota and owns and operates 11 hydropower facilities. It continually maintains and modernizes its system to ensure a steady flow of clean, renewable energy, while considering conservation, fish and wildlife habitat protection, recreational opportunities and other beneficial uses of rivers. Schools and community groups often schedule guided tours of the Thomson Hydroelectric Station in Jay Cooke State Park to learn more about this powerful resource. Other facilities, including the Little Falls Hydroelectric Station, are opened to the public on special occasions, such as the annual Little Falls Dam Festival. Along with generating its own hydroelectricity, Minnesota Power has long-term agreements to purchase supplies from Manitoba Hydro in Canada.

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Managing Lands & Lakes

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innesota Power is privileged to be one of the largest private property owners in northern Minnesota. Its hydroelectric system includes reservoir lakes that

feature some of the region’s most beautiful shorelines, islands and wildlife habitats. Much of the lakefront property is leased to Northland families for homes and cabins, maintained as public boat launches and recreation areas, and preserved for environmental education. Large tracts have been designated for conservation so these treasured resources are available to future generations. Stewardship is a core value at Minnesota Power. The company strives to balance a variety of uses, demands and expectations on its own property and encourages others to do the same with woodland management programs for landowners and logger education. The Boulder Lake Management Area, established in 1991, is an 8,250-acre outdoor classroom that demonstrates integrated management through interpretive trails, public programs and formal environmental education activities. The goal is to protect lands that have important natural resources while encouraging their responsible use for other public benefits.

Sprucing up Boswell  A team of 20 Minnesota Power employees joined local high school and college students for a special Arbor Day event at Boswell Energy Center. The group planted an additional 4,000 white spruce seedlings to a tree windbreak originally planted in 2008. The wall of trees will help prevent erosion and assist in managing blowing dust at the site. Tree planting also removes greenhouse gases from the atmosphere.

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nergy and resource efficiency begins at home. At Minnesota Power, an employeeled Eco Team continually looks for ways to consume less energy and minimize waste

by educating workers and families about energy efficiency, recycling, water conservation and other sustainability practices. “The Eco Team was formed by a group of concerned employees who wanted to make positive changes without spending a lot of money,” said Karen Virta, call center supervisor, who helps coordinate Eco Team activities at Herbert Service Center in Duluth. Herbert Service Center has a culture of conservation. There are traditional recycling bins at many locations, energy-efficient lights with occupancy sensors, an e-waste trailer for obsolete electronics, and collection sites for old office equipment, oil, cable, wire and wood pallets that could be recycled or reused. People turn off computers at the end of the day, dry their hands with super-efficient blowers, and print on two sides of a page instead of one. Fluorescent light bulbs are used and disposed of following Environmental Protection Agency and Minnesota Pollution Control Agency guidelines. Similar efforts are underway at Minnesota Power’s general office building and other facilities—customized by employees at each site. “Saving energy and reducing waste are really up to each individual,” Virta said. “A lot of small victories add up.”

E c o Te a m — L e a d i n g b y E x a m p l e

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“Conservation needs to be a personal choice. Each one of us has to make a decision to save energy and get the most out of our energy dollars. Minnesota Power’s role is to help you make a difference in your home, business and community.” George Agriesti, Senior Marketing Analyst, Conservation Improvement Program, “Minnesota Values”

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One Home One Business One Community


It may seem strange, but Minnesota Power wants customers to use less energy. Conservation is necessary to meet the region’s future energy needs. It saves money, offsets rising energy costs, and is good for the environment. It is also crucial to achieving government-mandated targets for renewable energy and greenhouse gas emissions. Every household, business and community has the power to make positive energy choices in their daily lives. Minnesota Power helps customers achieve their conservation goals by providing information and incentives that make energy-saving choices easy, affordable and comfortable.

One Home

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he first step toward using energy more efficiently is to understand how it currently is used. Your Home Energy Report is a new tool developed by Minnesota Power

to help residential customers save energy. Households that complete an online survey at www.mnpower.com/homeenergyreport receive a customized report with strategies for immediate and long-term home energy savings. The response may lead to a smart metering pilot program that would give homeowners even more control of their energy decisions. “In times of increasing energy costs, it is important to give customers information about how they use energy and advice to use it more efficiently,” said Tina Koecher, Conservation Improvement Program administrator, Minnesota Power. Another tool developed in 2009 and planned for broad implementation in 2010 is Home Performance, an expanded energy-audit program that includes sophisticated benchmarking tools and building diagnostics. Early results show many homeowners could reduce annual energy consumption (combined gas and electric) 20 to 30 percent by implementing costeffective measures. Collaborative efforts with Duluth and Park Rapids and the gas utilities serving these areas are underway. Both cities plan to establish low interest revolving loan funds for residential energy-efficiency improvements using federal stimulus dollars. This would complement current conservation program offerings and has the potential to remove hurdles to implementing efficiency improvements. Minnesota Power has a history of educating home construction professionals about energy efficiency and offering incentives for high performance housing. For 20 years, it has hosted the annual Energy Design Conference & Expo in Duluth, an event that draws nationally recognized presenters, dozens of vendors, and more than 1,000 attendees each year to learn about cutting-edge conservation topics involving construction products, systems and related issues. The utility’s Triple E New Construction Program provides rebates for homes that meet stringent standards for energy efficiency, including those set by ENERGY STAR® for new homes. In 2009, Minnesota Power was honored for these efforts with an ENERGY STAR® Leadership in Housing Award.

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n today’s economy, businesses of all sizes are looking for ways to save energy, improve productivity, lower costs and boost environmental

performance. Minnesota Power helps commercial customers accomplish these goals with resources and incentives for energy conservation improvements. It provides design review, energy auditing and PowerGrant rebates for energysaving projects, plus research grants to test innovative technology. First National Plaza in Cloquet, Minn., recently was renovated to include one of the most advanced heating, cooling and ventilation systems in the world. It uses variable refrigerant flow zoning (VRFZ) to capture heat from areas that are too warm and pipe it to zones where heat is needed. The technology is common in Asia, Europe and other parts of the world. A research grant through Minnesota Power’s conservation program helped fund the project to determine if energyefficient VRFZ is effective in northern Minnesota. Outdoor induction lighting is another energy-efficient technology being tested in the Northland. It was installed at the Minnesota Air National Guard base in Duluth. Base officials worked with Minnesota Power to reinvest PowerGrant rebates from other conservation projects to pay for the new lights—saving taxpayers thousands of dollars. The Duluth Entertainment Convention Center expansion is the subject of another Minnesota Power research study, on the energy-saving impact of commissioning and retro-commissioning. It will determine whether a systematic process of verifying and documenting that all building systems are installed properly and interact with each other as planned improves energy performance.

One Business

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One Community

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ommunities across the Northland are learning energy choices make a difference. One example is Crosby-Ironton School District. The district is

engaged in a pilot program that connects Schools for Energy Efficiency (SEE), an award-winning K-12 energy conservation program, with utility rebates for measurable, verifiable results. Minnesota Power and the district’s gas supplier are monitoring and comparing quarterly energy usage against baseline information. They are rebating energy savings, building an account the school district can use for additional energy-efficiency improvements. The partnership also includes Minnesota Power’s Learn & Earn, an energy education program that teaches students about home energy conservation and raises money for schools through the sale of energy-efficient lighting products. A similar tool is available for higher educational institutions. The University of Minnesota Duluth (UMD) and Minnesota Power have partnered on multiple “A Brighter UMD” energy events to promote energy-efficient lighting on campus and raise money for U-Pass, which allows students and employees to ride city buses for free. Linking energy education and conservation incentives to worthy community causes supports Minnesota Power’s role as a corporate citizen. Save & Benefit— Ending Homelessness in St. Louis County was a partnership between Minnesota Power, St. Louis County, the United Way and area congregations. The campaign challenged churches and synagogues to address social concerns of homelessness by conserving energy in their own homes. Minnesota Power provided rebates and incentives to encourage people to buy ENERGY-STAR®-rated light bulbs and appliances and to turn in old refrigerators and freezers for recycling. United Way organizations received donations for every item sold or collected. The effort raised $7,800 for programs that help the homeless in St. Louis County. An earlier Great Refrigerator Roundup partnership between Minnesota Power, St. Louis County and the Salvation Army raised $10,000 for HeatShare, a program that assists low income households pay winter heating bills. These two community events saved enough energy to power 49 homes for a year. The carbon equivalent would be taking 106 cars off the road. As worldrenowned anthropologist Margaret Meade once said, “Never doubt that a small group of committed citizens can change the world.”

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“We have a supportive work environment where employees are encouraged to believe in themselves and help one another learn and grow.� Deb Amberg, Senior Vice President, General Counsel and Secretary

P r o m o t i n g Pe e r Pow e r

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Inspiring Success Encouraging Civic Leadership Honoring Service C o n n e c t i n g Vo l u n t e e r s


P r o m o t i n g Pe e r Pow e r

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innesota Power is a large complex organization with many departments and multiple sites. An informal program called Peer Power helps

women of various ages and occupations in the company stay connected and build community. Inspired by a similar leadership circle started by Deb Amberg, senior vice president, general counsel and secretary, Bethany Owen, director of transmission regulatory compliance and business support, sponsors Peer Power to encourage and inspire women working outside the general office building who might be interested in leadership positions. The group meets to network, discuss formal leadership training, and learn from successful women in the company and community. “Peer Power is creating an encouraging environment for women of very diverse backgrounds and experiences,” Amberg said. “Participants in this and other leadership groups are excited about the culture of success at Minnesota Power.”

Inspiring Success

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innesota Power employees are talented, committed and dedicated. The company works hard to provide a safe, supportive, healthy work

environment where people thrive. Those with leadership potential and interest are given opportunities to advance. That explains why senior management at Minnesota Power and ALLETE tends to be “homegrown.” Offering employees experiences that help them grow and a framework of shared values create thoughtful, principled leaders who are confident in their abilities and responsibilities.

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ommunity involvement is a hallmark of true leadership. Minnesota Power and its parent company, ALLETE, encourage employees to share their leadership skills in ways that move communities

forward. Men and women at all levels of the company are sought after as volunteer members of nonprofit boards. Some serve in high profile roles with broad influence. For example, Dave McMillan, senior vice president of marketing, regulatory and public affairs, ALLETE, chairs the Minnesota Chamber of Commerce board of directors for 2009-2010. The board sets public policy priorities for the statewide business community, communicates business interests to state lawmakers, and develops strategies to ensure Minnesota businesses can grow and succeed. Inez Wildwood, manager of workforce and talent development, ALLETE, serves on the Minnesota Governor’s Workforce Development Council, the Minnesota Job Skills Partnership Board, and numerous other workforce-related initiatives. That tireless energy earned her a 2009 Trailblazer Exemplary Business Leadership Award from the Insight Center for Community Economic Development and the National Network of Sector Partners. The award recognized her as an outstanding force in building and promoting workforce initiatives and creating new opportunities for workers. Creating new opportunities for the entire region is the goal of Nancy Aronson Norr, manager of regional development, Minnesota Power. She serves in many capacities, including chair of the Duluth Airport Authority. She helped lead the board through multiple years of planning for a new $65 million terminal that broke ground in fall 2009. “This new terminal project will give our area an economic boost, both in the short term with the 200-plus construction jobs that it creates and also in the long term by supporting competitive air service and globally engaged businesses that sustain our community,� Aronson Norr said at the groundbreaking.

Encouraging Civic Leadership

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Honoring Service

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ilitary service is a proud tradition. Minnesota Power is honored to support employees and their family members who are engaged around the world

and at home in the armed forces. The North Dakota National Guard recently recognized BNI Coal, a Minnesota Power affiliate, as a patriotic employer. BNI General Manager Wade Boeshans also received an individual Freedom Team Salute Commendation from the U. S. Army, honoring his outstanding support and sacrifice as an Army employer. He was nominated by SPC Scott W. Becknell, one of three BNI employees serving tours in Kosovo.

C o n n e c t i n g Vo l u n t e e r s

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t feels good to volunteer. Minnesota Power employees get a lot of satisfaction from using their time and talents to help area nonprofits, schools, churches and

other organizations serving area needs. A new initiative called Community Connections makes it easier for employees to match their volunteer interests with the needs of nonprofits. One click on an Intranet link, and people can access a whole database of regional volunteer openings and opportunities.

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“Over the past few years, we have seen businesses throughout Minnesota put significant resources toward keeping their job sites and workplaces safe, but Minnesota Power leads the way.� Steve Sviggum, Commissioner, Minnesota Department of Labor and Industry

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Promoting Good Health Demanding Safety


Promoting Good Health

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ealth and wellness are part of the daily routine at Minnesota Power. Employees often spend early mornings, lunch hours or evenings exercising or enjoying fitness classes in onsite wellness centers. The company offers

flu shots, interest-free wellness loans, smoking cessation incentives and clubs dedicated to walking, running, skiing and other team sports to encourage healthy, active lifestyles. It is widely recognized as a leader for its exceptional health and wellness initiatives. “We invest in programs that keep our people active and involved,” said Glen Porter, vice president of human resources, ALLETE. “Healthy, engaged workers are happier and more productive.”

Demanding Safety

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afety is vital in the utility business. Minnesota Power’s outstanding safety record is no accident. Sending every person home unhurt at the end of the day takes total commitment. Management, union leaders and employees

cooperate to ensure a safe working environment. Safety improvement teams review and audit each site for safety, identify potential hazards, and make sure they are corrected. This vigilance has earned Minnesota Power the right to display MNSTAR flags at all of its 28 sites through 2013. MNSTAR is a certification program of the Minnesota Department of Labor and Industry. It recognizes excellence in safety and health management that exceeds OSHA standards. Minnesota Power has been a MNSTAR corporation since 2000. Superior Water, Light & Power, a Minnesota Power affiliate, also was honored for its safety performance in 2009. It was one of 17 Wisconsin companies to receive a Wisconsin Corporate Safety Award. Many Minnesota Power employees are so well trained in safety, they serve as first responders in their local communities. That high level of preparation saved a life in 2009, when a contractor working at Boswell Energy Center suffered a heart attack and an employee acted quickly to assist. The Boswell Unit 3 retrofit project had an outstanding safety record with more than one million work hours and virtually zero lost-time injuries. Contractors who work near power lines and in Minnesota Power facilities need to recognize the potential dangers of electricity and use precautions for their own safety and that of the community. Minnesota Power conducts extensive contractor training and emergency response exercises. It supports community emergency preparedness. In 2009, Minnesota Power Foundation awarded grants to support fire and ambulance services in two North Dakota counties and in Cohasset, areas in which company operations are expanding.

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“In challenging economic times, it is vitally important for a region to strengthen its core industries and cultivate new businesses with the potential for growth.� Nancy Aronson Norr, Manager, Regional Development

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Strengthening Industries Growing Businesses Celebrating Abilities D e v e l o p i n g Ta l e n t s


Strengthening Industries

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new era in Iron Range mining began in December 2009 when Mesabi Nugget began producing value-added iron nuggets at its new plant near Hoyt Lakes. The project,

located on the former site of LTV Steel, is a partnership between Steel Dynamics, Inc., and Kobe Steel. It has created around 70 permanent jobs. Mesabi Nugget requires robust, reliable power to operate its plant. Minnesota Power built a transmission line to the site and constructed a substation to meet the facility’s longterm energy needs. It also drew upon the expertise of Superior Water, Light & Power to help develop onsite infrastructure for natural gas. Minnesota Power has supported redeveloping the property since LTV Steel closed its plant in 2001, putting 1,400 people out of work. It was a key partner in the East Range Economic Response Team, formed to address the closure, and currently helps set strategy for the Range Readiness Initiative. Range Readiness is a coordinated regional response to meet the housing, workforce and infrastructure needs of Mesabi Nugget and other large industrial projects. Several of those projects are mining related, including PolyMet, which is poised to begin ©Dave Witt/www.aero-environmental.com

mining copper, nickel and other nonferrous metals on the Iron Range. In 2009, Minnesota Power joined the Minnesota Department of Employment and Economic Development, Minnesota Mining, the Iron Mining Association and Iron Range Resources to commission a new mining impact study, which will help decision makers understand the industry’s potential for the region. One benefit is its ability to attract vendors and service suppliers. Owners of Hydro-Klean, an Iowa-based company, announced their intent to open a satellite office in Duluth while in town for a Society of Mining Engineers event. The company provides hydro-blasting, power vacuuming and other services to industrial and municipal clients. Business owners researched the region through www.NorthlandConnection.com. Northland Connection staff helped them locate a site, and the Area Partnership for Economic Expansion (APEX ) provided resumes and workforce assistance. Hydro-Klean hopes to employ 25 to 30 workers in Duluth over the next few years. Minnesota Power is an active investor and founder of both APEX and Northland Connection.

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Growing Businesses

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ompanies of all sizes need money to grow. Minnesota Power connects commercial customers with regional resources, including loan funds,

equity capital and other gap financing. The Arrowhead Regional Development Commission’s Revolving Loan Fund is one of those resources. In 2009, Minnesota Power helped The Northspan Group write a grant to the U.S. Department of Commerce Economic Development Administration to recapitalize the fund with more than $2 million. This new funding will provide flexible low interest loans for businesses engaged in manufacturing, value-added products, tourism, back office operations and innovative technology. Minnesota Power’s economic development team also is actively recruiting investors for the Lake Superior Angel Network and supporting the Northland Foundation’s efforts to connect area businesses with Granite Equity, a new source of equity capital in the region. One of Granite Equity’s focus areas is business succession, an issue facing many Northland companies as the population ages. A succession strategies forum was held recently to educate regional business owners about options as they consider selling or transferring ownership to a new generation.

Celebrating Abilities

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eople with the drive and motivation to overcome obstacles make terrific workers. Disability Mentoring Day encourages employers to meet students

and job seekers with disabilities who are interested in exploring career opportunities. The event marked its tenth year with a national launch and career fair in Duluth. Minnesota Power was the lead local sponsor. Company representatives made presentations, held mock interviews with students, and staffed a booth where job seekers could learn more about the company and its workforce needs. “Individuals with disabilities bring many skills and talents to the workforce,” said Nicole Johnson, supervisor of human resources, ALLETE/Minnesota Power. “It is exciting to see the number of students interested in finding jobs and their wealth of self confidence and determination.” Several Minnesota Power employees have joined E-Connect, a new program through which they can mentor high school students with disabilities online and via e-mail.

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D e v e l o p i n g Ta l e n t s

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egional success depends on growing and developing a talented workforce, so young people have the right skills to find rewarding jobs in the Northland.

Minnesota Power works with area high schools and college outreach programs to help students assess their career options. Staff members attend job fairs, visit classrooms, make presentations and arrange career shadowing. Many jobs at Minnesota Power and other regional companies require specific technical skills that take time to develop. Minnesota Power invests in innovative educational programs that match the Northland’s current and future hiring needs. These include mobile engineering and wind technology labs that bring cutting-edge resources to colleges and work sites, creative degree programs and curriculum development. Iron Range Engineering is a first-of-its-kind program in Minnesota. It allows students who have finished two years of engineering prerequisites at state colleges in Northeast Minnesota to complete their third and fourth years of a bachelor’s degree by working with professional engineers at companies such as Minnesota Power. The program builds upon a successful engineering program at Itasca Community College. It is hosted by Mesabi Range Community & Technical College in Virginia, and four-year degrees are awarded through Minnesota State University-Mankato. Mesabi Range also has launched a new associate’s degree program called Energy Technical Specialist-Wind to support renewable energy development in the region. Minnesota Power personnel helped shape the curriculum and will provide internships and access to Taconite Ridge Wind Energy Center. Minnesota Power partnered with Itasca Community College to develop and launch a new associate in applied science degree in Industrial Energy—Power Generation, which prepares students to work in generating facilities across the region.

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“As a company, we are defined not only by the outstanding service and value we provide customers and stakeholders but by our commitment to being a responsible corporate citizen.�

Michael K. Anderson Photography

Peggy Hanson, Director, Minnesota Power Foundation

Stimulating Minds

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R a i s i n g E n e r g y Aw a r e n e s s Preserving History & Heritage Rewarding Student Achievement Building Healthy Communities


Michael K. Anderson Photography

C h a r i t a b l e  g i v i n g  i s  vitally  impor tant  in today’s economic climate. Minnesota Power has a long history of

supporting organizations and programs that help cities, neighborhoods and residents thrive. Through partnerships with the Salvation Army, Arrowhead Economic Opportunity Agency and other financial assistance programs, the company provides services to help low income customers meet their basic needs and pay their utility bills. Minnesota Power Foundation distributes hundreds of thousands of dollars each year to qualified nonprofits and institutions that advance education, the environment, community service, youth development, arts and culture, and health and human services. These contributions, along with corporate sponsorships, memberships and direct donations mirror the company’s values and the priorities of its employees and customers.

2009 Community Giving Arts & Community

$220,704

Education

$188,865

Environment Health & Human Services

youth development Arts & Community

$30,056 $138,184

United Way

$260,000

Youth Development

$123,557

$961,366

United way

iro env

Health & Human ServiceS

nm

ent

education

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Stimulating Minds

B

uilding radio-controlled airplanes and designing machines to sort marbles by color were among the cool activities students enjoyed

during the Itasca Community College (ICC) Summer Engineering Camps in 2009. The camps expose junior and senior high school students to the fun and exciting world of engineering, while improving their problem-solving skills and building teamwork. A grant from the Minnesota Power Foundation helped ICC purchase new laptops, robo controllers, radio controllers and other equipment for the camps. Meanwhile, budding engineers and urban planners from Cook County Middle School traveled to Washington, D.C. in 2009 to compete in the National Engineers Week Future City Competition®. The students designed Aquaterra, an eco-friendly city that incorporates vertical farming, fuelefficient transportation systems, water technologies, and wind and wave energy to generate power. The competition engages students in creating computer-generated and 3-D models of a city of the future. Minnesota Power Foundation provided a grant for the learning adventure. “Aquaterra was the ‘greenest looking’ future city at both the state and national competitions,” said Kaye Tavernier, teacher advisor. “The five-month project was a growing and learning experience for all.”

30


R a i s i n g E n e r g y Aw a r e n e s s

“T

he Electron” Energy Education Trailer is a popular attraction at Hartley Nature Center in Duluth. It is a fun, hands-on way for kids of all ages to

learn about alternative energy sources and conservation using musical instruments and gadgets powered by different energy sources. Minnesota Power helped fund “The Electron” to demonstrate solar, wind, biodiesel, hydro and human energy potential. Minnesota Power offers a full range of resources to educate customers about energy and its safe, responsible use. These include K-12 classroom materials, such as interactive games, experiments and activity books. A live, in-school safety education program featuring The National Theatre for Children and Louie the Lightning Bug will begin visiting area schools in 2010. Each summer, area teachers are invited to learn about the Upper Midwest’s lignite coal industry through a summer seminar called “Lignite: Our Regional Resource” at Bismarck State College in North Dakota. Minnesota Power pays tuition and ground transportation for 10 teachers to participate. The seminar includes a site visit to BNI Coal, a Minnesota Power subsidiary.

Preserving History & Heritage

H

ockey is a northern Minnesota tradition, and the U.S. Hockey Hall of Fame in Eveleth is a source of pride and major attraction for the region. A donation

from Minnesota Power has helped the facility take its show on the road. A colorful rolling museum trailer, painted with murals and filled with traveling exhibits, is now a common sight at area hockey games, tournaments and parades. “The U.S. Hockey Hall of Fame is a landmark in our service territory,” said Dale Sundin, share the history and passions of our region with others.”

Mesabi Daily News

regional account manager, Minnesota Power. “This exposure will draw new visitors and

31


Rewarding Student Achievement

P

aying for college becomes more challenging for families every year. Minnesota Power Foundation assists area students with two

scholarship programs. The Community Involvement Scholarship program provides 20 area high school students with $2,500 scholarships, based on their commitment to volunteerism and involvement in their communities. Over the years, it has helped hundreds of civic-minded youth achieve their higher education goals. The New Generation Scholarship program is designed to help current students at colleges in Minnesota Power’s service territory complete degrees that match regional workforce needs. It rewards committed individuals who are positioning themselves to find jobs and live in the Northland. The program provides $1,000 scholarships for students enrolled in twoyear associate degree programs and $2,500 for those enrolled in four-year bachelor degree programs. In 2010, New Generation Scholarship eligibility will extend into North Dakota, where BNI Coal is located and Minnesota Power is building the Bison I Wind Energy Center.

32


H

ealthy, sustainable communities are great places to live, work, do business and raise families. Neighborhoods across Duluth are

transforming themselves into vibrant communities of choice through At Home in Duluth, a collaboration headed by Duluth Local Initiatives Support Corporation (Duluth LISC). Many positive activities were highlighted during At Home in Duluth’s “Connecting the Dots” Neighborhood Showcase and Assembly in Michael K. Anderson Photography

September 2009. They included investments in housing, streetscapes, storefronts, homeowner education programs, workforce training and community safety initiatives. Five Neighborhood Heroes were honored, as well. Minnesota Power is a longtime supporter of Duluth LISC’s neighborhood revitalization efforts and was a key sponsor of “Connecting the Dots.” Central Minnesota communities also are taking a grassroots approach to planning and development. The Healthy Communities Partnership (HCP), a program of the Initiative Foundation in Little Falls, provides training and resources to engage citizens and all segments of a community in creating shared visions and action plans. Four to five communities can participate each year, and those that complete the process are eligible for grants to implement their ideas. Minnesota Power Foundation supports HCP and other programs of the Initiative Foundation, including Youth as Resources,

Building Healthy Communities

Jeff Frey & Associates

which involves young people in community change.

33


Yo u r

positive energy

sets great things in motion.

Thank you to each and every Minnesota Power employee, customer, partner and stakeholder for doing your part to move communities forward. For more information, please contact: Peggy Hanson | Community Relations & Minnesota Power Foundation Director (218) 355-3380 | mhanson@mnpower.com Visit our Web sites: www.mnpower.com | www.mnpowerfoundation.org

Centura Silk paper manufactured by NewPage Corporation was used for the 2009-2010 Minnesota Power Community Investment Report. Minnesota Power is proud to use the high quality product of a valued customer in this report. 10% total recovered fiber/all post-consumer fiber


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