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# IIIWS For Release: January30, 2013 Embargoed until1pm Contact: Amy Rutledge ManagerCorporate Communications Minnesota Power/ALLETE 218-723-7 400 arutledge@mnpower.com



# Minnesota Poweroutlines its EnergyForwardresource strategy A better-balancedpowersupplyforfuture generations. Duluth, Minn.- Minnesota Power, a division of

### ALLETE (NYSE:ALE), todayoutlined next steps in its 

### resource strategy to meet the energy needs 

### ofits customers with a balanced energy mixthat preserves reliability, protects affordability and further improves environmental performance. "Minnesota Power's EnergyForwanl

### resource strategy is our road map to a cleanerenergyfuture," said ALLETE Chairman, President and CEO AI Hodnlk. ·ourplan keeps pace with a dynamic energy landscape in a sensible and sustainable manner. EnergyFotwanl

### builds upon renewable energy investments already completed. Itfurther diversifies ourgeneration mix, balancing coal, renewables and natural gas and builds upon significant emission reductions atourexisting power plants, all while preserving the reliable and affordable power Minnesota Power's customers expect." Components 

### ofMinnesota Power's Energy.Fotwanlresource strategy:



### • Renewable energy investments • Sustained energy conservation programs • Construction 

### ofa majortransmission line tofacilitate delivery of

### carbon free hydropower • Investments to reduce emissions atexisting facilities and improve efficiencies • Fleettransition of

### small coal units • Addition 

### ofnatural gas resources "The resource decisions we are announcing today are the result 

### ofchanging energy policy, technology developments, economicfactors and inputfrom many stakeholdergroups, and our

### own commitmenttoward a competitive, environmentally compliant, socially responsible regional power supply," Hodniksaid. Significant renewable carbon free energy Investments 

### Nowthat it's completed three phases 

### ofthe Bison Wind Project in North Dakota, Minnesota Power is delivering more than 400 megawatts of

### clean, renewable wind energyto customers. With the recent extension of

### thefederal production

## tax credit on wind generation equipment, the company is analyzing adding more wind to its 

### energy mix. Minnesota Power will further leverage its renewable resources through a power purchase agreementwith Manitoba Hydro for 250 megawatts of hydropower beginning in 2020. The company is proposing to deliverthe carbon free energyon a new 500-kilovolt 1ransmission line stretching from the canadian border to northeastern Minnesota, expected to be

### completed by 2020. "Our plan builds on the tremendous progress we've made to achieve a more balanced and sustainable energy mix in a cost competitive manner," Hodnik said. nour North Dakota windoperations have more than tripled the amount of renewable energy on oursystem in a short time, moving our power supplyfrom 5 percent renewable energy in 2005, to 20 percent this year." 

### As part of its 

### EnergyForwardplan, Minnesota Powerwill upgrade the largest hydroelectric system in the state, by increasing efficiencies at its Thomson and Fond duLac hydroelectric stations. At the same time, the company will continue its leading-edge 

### PowerofOne©conservation program which has exceeded state conservation goals by providing customers with tools to lower their energy usage. 

### Reducing emissions and improving efficiencies through technology investments Minnesota Power plans to invest approximately $350 million in additional environmental upgrades at its largest electric generator, Boswell Energy Center Unit4, to comply with the EPA MercuryAir Taxies Standard (MATS) and the Minnesota Mercury Emission Reduction Act, resulting in at least a 90 percent reduction in mercury emissions. These upgrades, combined with otheremission reduction investments made since 2006, will result In system-wide emission reductions of more than 85 percent by2016. Boswell4 in 2010 made major nitrogen oxide emission reductions and increased its operating efficiency with newturbine rotor investments. 

### Fleettransition Over the lastyear, the company explored alternatives for its small coal units including retrofitting, refueling and retirement against the backdrop 

### ofenvironmental regulations and historically low natural gas prices. Careful consideration 

### of power supply options led tothe decision to refuel or remove from service one-third of its coal energy conversion units. These plans include:

• Investing $15 million to convertthe company's 110-megawatt (MW) Laskin Energy Center in Hoyt Lakes to a natural gas peaking facility in 2015, therebytransforming Laskin into the company's first all-natural gas fueled facility.

• Retire one ofthree coal-fired units at Minnesota Power's 225-MW Taconite Harbor facility in Schroederwhile maintaining Units 1 and 2, which both comply with current and pending environmental regulations. "We believe re-fueling Laskin and retiring one generating unit at our Taconite Harborfacility are the most cost effective solutions for oursmall coal units to comply with state and federal regulations," said Minnesota Power Vice President 

### ofStrategy and Planning AI Rudeck. "The Laskin and Taconite Harborfacilities have provided reliable service and proven their value for customers over many decades, operated by talented and dedicated employees, "Hodnik said. "Like many employers in our region, Minnesota Power is experiencing a significant workforce transition now and for several years ahead," Hodnik said. "Every effortwill be made to redeploy skilled employees from affected facilities across oursystem, as 

### EnergyForwardevolves." 

### Natural gas additions As part of its 

### EnergyForwardplan, the company expects to add natural gas to its long-term power supply beyond the Laskin conversion to natural gas fuel. ''We expect this next resource addition to occur sometime in 2020 or beyond," Rudeck said. He said Minnesota Power's energy mix in the future would consist 

### ofapproximately one-third renewable energy, one-third natural gas and onethird coal-fired generation. Page 2 of3 Minnesota Power• 30 West SuperiorStreet, Duluth, Minnesota 55802 www.mnpowsr.com"For more than a century, Minnesota Power has been called upon to make the critical decisions that power our region's communities, businesses and industry reliably and economically," Hodnik said. "We recognize our responsibility to this region's security, comfort and qualityof life and that commitment will continue under our EnergyForward plan." Minnesota Power's energy resource decisions and ongoing plans forfleet transition are subject to review and approval by the Minnesota Public Utilities Commission. 

### As part of its EnergyForward plan, Minnesota Power will file its next Integrated Resource Plan (IRP) with the Minnesota Public Utilities Commission on March 1. The MPUC is anticipated to make a decision on the IRP byyear end. To learn more about Minnesota Power's EnergyFoward Plan click here to view an interview with ALLETE Chairman, President and CEO, AI Hodnik. Orvisit ourwebsite at mnpower.com. Minnesota Power, a division ofALLETE, Inc., supplies electric service to 144,000 residents, 16 municipalities and some of the largest industrial customers in the United States. The statements contained in this release andstatements thatALLETEmaymake orallyin connection with this release thatare nothistorical facts, are forward-looking statements. Actual results maydiffermateriallyfrom those projectedin the forward-looking statements. These forwardlooking statements involve risks and uncertainties andinvestors are directedto the risks discussed in documents filed byALLETE with the Securities and Exchange Commission.

Page 3 of3 Minnesota Power• 30 West SuperiorStreet, Duluth, Minnesota 55802 www.mnoower.com