Otter Tail Power Company, a wholly-owned subsidiary of Otter Tail Corporation (Nasdaq: OTTR), has taken significant steps towards expanding its energy generation capacity by incorporating more solar power into its energy mix. On December 9, 2024, the company submitted a request to the Minnesota Public Utilities Commission (PUC) to confirm that the costs associated with two new solar projects—Solway Solar and Abercrombie Solar—are eligible for cost recovery. This move is part of Otter Tail Power’s broader effort to meet the growing energy needs of its customers while keeping energy prices stable and sustainable.
These economic solar facilities align with our recently approved Minnesota Integrated Resource Plan, said Tim Rogelstad, President of Otter Tail Power. They will complement our existing low-cost energy resources, allowing us to continue providing reliable, affordable electricity to our customers for years to come.
Solway Solar: 50 MW of Clean Energy in Minnesota
Solway Solar is set to be a 50-megawatt (MW) solar facility located in Lammers Township, near Solway, Minnesota. The facility is part of Otter Tail Power’s strategy to enhance its solar energy production and contribute to Minnesota’s renewable energy goals. The company expects that the project will be operational by 2026, depending on the approval process.
“By situating Solway Solar in a location with existing transmission interconnection facilities, we can minimize costs, ensuring that this project remains affordable for our customers,” Rogelstad explained. This strategic positioning also helps reduce the need for new infrastructure, making the project more efficient.
The construction of Solway Solar is anticipated to bring significant local benefits, including an estimated $4.2 million in tax revenue over the 35-year lifespan of the project. In addition, the construction phase is expected to create approximately 70 jobs, providing a temporary but valuable boost to the local economy during its nine-month build-out.
Abercrombie Solar: 295 MW Solar Facility in North Dakota
Abercrombie Solar, also known as the Flickertail Solar Project, is a much larger solar development planned in Abercrombie Township, located northwest of Wahpeton, North Dakota. Once completed, this facility will add 295 MW of solar generation capacity to Otter Tail Power’s portfolio. The project is still under development, and the company has reached an agreement to acquire the development assets from Flickertail Solar Project, LLC, with the intention to move forward with construction once the necessary permits and regulatory approvals are secured.
“We are excited to add this sizable and cost-effective energy resource to our generation mix,” said Rogelstad. The Abercrombie Solar project is expected to reach completion by 2028, providing an estimated $23.8 million in tax revenue over its 35-year operational life. In addition to the long-term economic impact, the construction phase is expected to create about 300 jobs, further benefiting the local community.
A Forward-Looking Vision for Clean Energy
These solar projects are part of Otter Tail Power’s broader Integrated Resource Plan, which outlines the company’s roadmap for meeting future energy needs while transitioning to renewable energy sources. By 2030, the company projects that 57 percent of its energy generation will come from renewable resources, a significant shift towards cleaner energy.
“We are committed to ensuring that our electric service remains safe, reliable, and economical as we transition to a more sustainable energy mix,” said Rogelstad. The company is currently following the necessary regulatory steps in both Minnesota and North Dakota to finalize the details of each project, including determining the final size of the facilities, capital investment requirements, and how the costs and benefits will be distributed to customers.
Optimizing Renewable Energy and Economic Growth
Otter Tail Power is not only focused on increasing renewable energy generation but also on driving economic growth within the communities where these projects are developed. By investing in solar energy, the company is helping to create jobs, generate tax revenue, and improve local infrastructure, all while reducing its carbon footprint and reliance on fossil fuels.
The company’s ongoing efforts align with its long-term sustainability goals, ensuring that it can continue to meet the energy needs of its customers in a way that supports both environmental and economic well-being.
Certain statements in this release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which include projections regarding future earnings, investments, renewable energy goals, and regulatory approvals, involve risks and uncertainties that could cause actual results to differ materially from those forecasted. For a more detailed discussion of these risks, please refer to the company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K. The company disclaims any obligation to update forward-looking statements made in this release.
