Northland Reliability Project provides sizable boost to state’s economy

Northland Reliability Project provides sizable boost to state’s economy Main Photo

27 Jun 2024

GRE, economic development

A significant economic boost is expected from the Northland Reliability Project with positive effects on jobs and wages as well as about $2 billion in total impacts to Minnesota’s economy according to the findings of a recent study.

Great River Energy and Minnesota Power are planning to build the 180-mile, double-circuit 345-kilovolt transmission line extending from northern to central Minnesota that will support continued reliable electric service in the state and Upper Midwest.

Researchers from the Bureau of Business and Economic Research at the University of Minnesota Duluth’s Labovitz School of Business and Economics, which conducted the study, estimate that by the time the high-voltage transmission line is completed in 2030, the companies will have invested more than $1.18 billion over the eight-year project before the impacts of inflation are included.

The study estimates the following economic impacts from the investment:

  • Statewide, the project is predicted to add $705 million in employee wages and benefits (labor income), more than $1 billion in value-added spending and nearly $2 billion in output to the state’s economy. These figures reflect the sum of direct, indirect and induced effects and are not to be summed themselves.
  • An average of 246 jobs will be directly supported by the project each year from 2023 to 2030.
  • The employment multiplier suggests that for every one job directly supported by the project, another 2.35 jobs may be added in other supporting industries.
  • It is estimated the project will contribute nearly $29 million in local and county taxes, over $65 million in state taxes and almost $135 million in federal taxes. 
  • The six-county region in which the project is taking place will also see a significant boost in employment, wages and spending during the project. In total, that region will see $366 million in increased employee wages and benefits, about $477 million in value-added spending and over $1 billion in output.

“There will be billions invested in the electric system over the next decade. In addition to the reliability and economic boost this project will provide to our local cooperative communities, investing in projects like the Northland Reliability Project will help keep electricity costs low for our member-owners,” said Great River Energy Vice President and Chief Transmission Officer Priti Patel.

Planning for the project began in 2022. Subject to regulatory approvals, the companies expect construction to begin on Segment 2 in late 2025 and Segment 1 in 2027, with the transmission line expected to be operational in 2030. Its route generally follows existing transmission corridors and runs through Aitkin, Benton, Crow Wing, Itasca, Morrison and Sherburne counties.

“This joint project to ensure the continued reliability and resiliency of the regional grid reflects our commitment to the communities and customers we serve,” said Dan Gunderson, vice president of transmission and distribution at Minnesota Power. “The study makes clear how this investment in transmission infrastructure to meet evolving energy needs also delivers economic benefits to local employers, contractors and suppliers.”

The report, “Northland Reliability Project Economic Impact Analysis,” can be found on the University of Minnesota’s Digital Conservancy website.