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It allows Minneapolis-based Xcel Energy to import power from Manitoba Hydro, despite the objections of aboriginal groups.
The 500-megawatt, 10-year deal was given the go-ahead.
It's an extension of an existing deal and will allow power to be exported until 2015.
Approval by Canada's National Energy Board is pending.
The Minnesota decision is a blow to the Pimicikamak Cree Nation of Cross Lake, Manitoba. They had asked the commission to first call a formal hearing into the social and economic impact of historic hydro development on their homeland.
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