Trump administration restores $50 million Minnesota Power grid grant

St. Louis County’s biggest payoff from the restored $50 million federal grant is straightforward: Minnesota Power can keep moving ahead on a major transmission overhaul tied to Hermantown, with reliability upgrades, grid modernization and rate relief efforts now back on track for homes and businesses across the region.

The money supports Minnesota Power’s HVDC Terminal Expansion Capability Project, part of a broader transmission modernization effort now estimated to cost up to $940 million. The utility said the work is aimed at replacing aging critical infrastructure on its 465-mile high-voltage direct-current line that runs from Center, North Dakota, to Hermantown, and at improving reliability, resiliency and bi-directional power flow across the Upper Midwest grid.

For St. Louis County customers, the practical stakes are in the timing and the cost. Minnesota Power said the project could begin construction in 2024 and enter service between 2028 and 2030, a window that matters for a region that depends on steady electricity service for industrial loads, winter heating and future growth around Duluth, Hermantown and the Iron Range. The company also said the federal grant was meant to help blunt the rate impact on customers.

The project had already cleared a major state hurdle when the Minnesota Public Utilities Commission approved its Certificate of Need and Route Permit on Aug. 1, 2024. Minnesota Power said it had also lined up $15 million in state funding and another $10 million from the state competitiveness fund to satisfy the grant’s cost-share requirements, showing how closely the federal money was tied to the rest of the financing package.

The grant had been terminated in October 2025, when the U.S. Department of Energy canceled about $7.5 billion in grants across more than 300 awards. Minnesota Power said then that the $50 million award was a relatively small piece of the overall project cost, but the loss still threatened to slow a project meant to modernize the backbone of the regional power system.

Local and congressional reaction focused on what the funding fight meant for northern Minnesota, not just Washington. Rep. Pete Johnson of Duluth said the cut looked more like retribution than policy. Sen. Amy Klobuchar said canceling the grant would hurt Minnesotans by undermining transmission upgrades in northern Minnesota. Rep. Pete Stauber said his office contacted the Department of Energy immediately and would keep monitoring the matter.

The reversal leaves Minnesota Power, part of ALLETE Inc., with a key piece of its financing restored at a moment when the utility is trying to keep a long-planned grid project on schedule. For St. Louis County, that means the payoff is less about abstract federal policy than about whether the region’s power system is ready for the next decade.