EXHIBIT 10-N-3


                            SEVERANCE AGREEMENT


     This Agreement is made as of the ________ day of  ____________________,
between Otter Tail Power Company, a Minnesota corporation, with its
principal offices at 215 South Cascade Street, P.O. Box 496, Fergus Falls,
Minnesota 56538-0496 (the "Company") and _____________________ ("Employee"),
residing at __________________________________.


                       W I T N E S S E T H  T H A T:

     WHEREAS, this Agreement is intended to specify the financial
arrangements that the Company will provide to Employee upon Employee's
separation from employment with the Company under any of the circumstances
described herein; and

     WHEREAS, this Agreement is entered into by the Company in the belief
that it is in the best interests of the Company and its shareholders to
provide stable conditions of employment for Employee notwithstanding the
possibility, threat or occurrence of certain types of change in control,
thereby enhancing the Company's ability to attract and retain highly
qualified people.

     NOW, THEREFORE, to assure the Company that it will have the continued
dedication of Employee notwithstanding the possibility, threat or occurrence
of a bid to take over control of the Company, and to induce Employee to
remain in the employ of the Company, and for other good and valuable
consideration, the Company and Employee agree as follows:

     1.    Term of Agreement.  The term of this Agreement shall commence on
the date hereof as first written above and shall continue through April 1,
2001; provided that commencing on March 31, 2001 and each March 31
thereafter, the term of this Agreement shall automatically be extended for
one additional year unless not later than December 31 of the preceding year,
the Company shall have given notice that it does not wish to extend this
Agreement; and provided, further, that notwithstanding any such notice by
the Company not to extend, this Agreement shall continue in effect for a
period of 24 months beyond the term provided herein if a Change in Control
(as defined in Section 3(i) hereof) shall have occurred during such term.

     2.     Termination of Employment.
            --------------------------

     (i)    Prior to a Change in Control.  Employee's rights upon
termination of employment prior to a Change in Control (as defined in
Section 3(i) hereof) shall be governed by the Company's standard employment
termination policy applicable to Employee in effect at the time of
termination.

     (ii)    After a Change in Control.

             (a)    From and after the date of a Change in Control (as
defined in Section 3(i) hereof) during the term of this Agreement, the
Company shall not terminate Employee from employment with the Company except
as provided in this Section 2(ii) or as a result of Employee's Disability
(as defined in Section 3(iv) hereof) or death.

             (b)    From and after the date of a Change in Control (as
defined in Section 3(i) hereof) during the term of this Agreement, the
Company shall have the right to terminate Employee from employment with the
Company at any time during the term of this Agreement for Cause (as defined
in Section 3(iii) hereof), by written notice to Employee, specifying the
particulars of the conduct of Employee forming the basis for such
termination.

             (c)    From and after the date of a Change in Control (as
defined in Section 3(i) hereof) during the term of this Agreement: (x) the
Company shall have the right to terminate Employee's employment without
Cause (as defined in Section 3(iii) hereof), at any time; and (y) Employee
shall, upon the occurrence of such a termination by the Company without
Cause, or upon the voluntary termination of Employee's employment by
Employee for Good Reason (as defined in Section 3(ii) hereof), be entitled
to receive the benefits provided in Section 4 hereof.  Employee shall
evidence a voluntary termination for Good Reason by written notice to the
Company given within 60 days after the date of the occurrence of any event
that Employee knows or should reasonably have known constitutes Good Reason
for voluntary termination.  Such notice need only identify Employee and set
forth in reasonable detail the facts and circumstances claimed by Employee
to constitute Good Reason.

     Any notice given by Employee pursuant to this Section 2 shall be
effective five business days after the date it is given by Employee.

     3.    Definitions
           -----------

     (i)    A "Change in Control" shall mean:

           (a)    a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or successor provision thereto, whether or not the Company
is then subject to such reporting requirement;

           (b)    any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly,
of securities of the Company representing 35% or more of the combined voting
power of the Company's then outstanding securities;

           (c)    the Continuing Directors (as defined in Section 3(v)
hereof) cease to constitute a majority of the Company's Board of Directors;
provided that such change is the direct or indirect result of a proxy fight
and contested election or elections for positions on the Board of Directors;
or

           (d)    the majority of the Continuing Directors (as defined in
Section 3(v) hereof) determine in their sole and absolute discretion that
there has been a change in control of the Company.

     (ii)   "Good Reason" shall mean the occurrence of any of the following
events, except for the occurrence of such an event in connection with the
termination or reassignment of Employee's employment by the Company for
Cause (as defined in Section 3(iii) hereof), for Disability (as defined in
Section 3(iv) hereof) or for death:

            (a)    the assignment to Employee of employment responsibilities
which are not of comparable responsibility and status as the employment
responsibilities held by Employee immediately prior to a Change in Control;

            (b)    a reduction by the Company in Employee's base salary as
in effect immediately prior to a Change in Control;

            (c)    an amendment or modification of the Company's incentive
compensation program (except as may be required by applicable law) which
affects the terms or administration of the program in a manner adverse to
the interest of Employee as compared to the terms and administration of such
program immediately prior to a Change in Control;

            (d)    the Company's requiring Employee to be based anywhere
other than within 50 miles of Employee's office location immediately prior
to a Change in Control, except for requirements of temporary travel on the
Company's business to an extent substantially consistent with Employee's
business travel obligations immediately prior to a Change in Control;

            (e)    except to the extent otherwise required by applicable
law, the failure by the Company to continue in effect any benefit or
compensation plan, stock ownership plan, stock purchase plan, stock
incentive plan, bonus plan, life insurance plan, health-and-accident plan,
or disability plan in which Employee is participating immediately prior to a
Change in Control (or plans providing Employee with substantially similar
benefits), the taking of any action by the Company which would adversely
affect Employee's participation in, or materially reduce Employee's benefits
under, any of such plans or deprive Employee of any material fringe benefit
enjoyed by Employee immediately prior to such Change in Control, or the
failure by the Company to provide Employee with the number of paid vacation
days to which Employee is entitled immediately prior to such Change in
Control in accordance with the Company's vacation policy as then in effect;
or

            (f)    the failure by the Company to obtain, as specified in
Section 6(i) hereof, an assumption of the obligations of the Company to
perform this Agreement by any successor to the Company.

     (iii)   "Cause" shall mean termination by the Company of Employee's
employment based upon (a) the willful and continued failure by Employee
substantially to perform Employee's duties and obligations (other than any
such failure resulting from Employee's incapacity due to physical or mental
illness or any such actual or anticipated failure resulting from Employee's
termination for Good Reason) or (b) the willful engaging by Employee in
misconduct which is materially injurious to the Company, monetarily or
otherwise.  For purposes of this Section 3(iii), no action or failure to act
on Employee's part shall be considered "willful" unless done, or omitted to
be done, by Employee in bad faith and without reasonable belief that such
action or omission was in the best interests of the Company.

     (iv)    "Disability" shall mean any physical or mental condition which
would qualify Employee for a disability benefit under the Company's long-
term disability plan.

      (v)    "Continuing Director" shall mean any person who is a member of
the Board of Directors of the Company, while such person is a member of the
Board of Directors, who is not an Acquiring Person (as hereinafter defined)
or an Affiliate or Associate (as hereinafter defined) of an Acquiring
Person, or a representative of an Acquiring Person or of any such Affiliate
or Associate, and who (a) was a member of the Board of Directors on the date
of this Agreement as first written above or (b) subsequently becomes a
member of the Board of Directors, if such person's nomination for election
or initial election to the Board of Directors is recommended or approved by
a majority of the Continuing Directors.  For purposes of this Section 3(v):
"Acquiring Person" shall mean any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) who or which, together with all
Affiliates and Associates of such person, is the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
the shares of Common Stock of the Company then outstanding, but shall not
include the Company, any subsidiary of the Company or any employee benefit
plan of the Company or of any subsidiary of the Company or any entity
holding shares of Common Stock organized, appointed or established for, or
pursuant to the terms of, any such plan; and "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act.

     4.     Benefits upon Termination under Section 2(ii)(c)
            ------------------------------------------------

     (i)    Upon the termination (voluntary or involuntary) of the
employment of Employee pursuant to Section 2(ii)(c) hereof, Employee shall
be entitled to receive the benefits specified in this Section 4.  The
amounts due to Employee under subparagraph (a) of this Section 4(i) shall be
paid to Employee, at Employee's election as specified in a written notice
delivered by Employee to the Company on the date of this Agreement and which
is attached hereto as Exhibit A and made a part hereof, either (a) in a lump
sum not later than one business day prior to the date that the termination
of Employee's employment becomes effective or (b) in 36 equal installments
payable monthly, on the last business day of the month, for 36 consecutive
months following the date that the termination of Employee's employment
becomes effective.  The amounts due to Employee under subparagraphs (b), (c)
and (d) of this Section 4(i) shall be paid to Employee not later than one
business day prior to the date that the termination of Employee's employment
becomes effective.  Subject to the provisions of Section 4(ii) hereof, all
benefits to Employee pursuant to this Section 4(i) shall be subject to any
applicable payroll or other taxes required by law to be withheld.

            (a)    The Company shall pay as severance pay to Employee an
amount equal to three times the sum of (1) Employee's highest annual rate of
salary from the Company in effect at any time during the 36 months preceding
the date that the termination of Employee's employment became effective and
(2) the average of the annual bonus paid or to be paid to Employee in
respect of each of the three fiscal years preceding the fiscal year when the
termination of Employee's employment became effective.

            (b)    For a period of 36 months following the date that the
termination of Employee's employment became effective or until Employee
reaches age 65 or dies, whichever is the shorter period, the Company shall
continue for Employee, at the Company's expense, the health, disability and
life insurance coverage in effect for Employee immediately prior to the date
that the termination of Employee's employment became effective under the
plans provided by the Company for its executive personnel generally or, if
such coverage cannot by the terms of such plans be provided thereunder, then
the Company shall provide equivalent insurance coverage for Employee for
such period under specially obtained policies of insurance.

             (c)    The Company shall pay to Employee (1) any amount earned
by Employee as a bonus with respect to the fiscal year of the Company
preceding the termination of Employee's employment if such bonus has not
theretofore been paid to Employee, and (2) an amount representing credit for
any vacation earned or accrued by him but not taken.

             (d)    The Company shall also pay to Employee all legal fees
and expenses incurred by Employee as a result of such termination of
employment (including all fees and expenses, if any, incurred by Employee in
seeking to obtain or enforce any right or benefit provided to Employee by
this Agreement whether by arbitration or otherwise); and

             (e)    Any and all contracts, agreements or arrangements
between the Company and Employee prohibiting or restricting Employee from
owning, operating, participating in, or providing employment or consulting
services to, any business or company competitive with the Company at any
time or during any period after the date the termination of Employee's
employment becomes effective, shall be deemed terminated and of no further
force or effect as of the date the termination of Employee's employment
becomes effective, to the extent, but only to the extent, such contracts,
agreements or arrangements so prohibit or restrict Employee; provided that
the foregoing provision shall not constitute a license or right to use any
proprietary information of the Company and shall in no way affect any such
contracts, agreements or arrangements insofar as they relate to
nondisclosure and nonuse of proprietary information of the Company
notwithstanding the fact that such nondisclosure and nonuse may prohibit or
restrict Employee in certain competitive activities.

     (ii)    In the event that any payment or benefit received or to be
received by Employee in connection with a Change in Control of the Company
or termination of Employee's employment (whether payable pursuant to the
terms of this Agreement or any other plan, contract, agreement or
arrangement with the Company, with any person whose actions result in a
Change in Control of the Company or with any person constituting a member of
an "affiliated group" as defined in Section 280G(d)(5) of the Internal
Revenue Code of 1986, as amended (the "Code"), with the Company or with any
person whose actions result in a Change in Control of the Company
(collectively, the "Total Payments")) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest, penalties or additions
to tax with respect to such excise tax (such excise tax, together with any
such interest, penalties or additions to tax, are collectively referred to
as the "Excise Tax"), then Employee shall be entitled to receive  from the
Company an additional cash payment (a "Gross-Up Payment") within thirty
business days of such determination in an amount such that after payment by
Employee of all taxes (including any interest, penalties or additions to tax
imposed with respect to such taxes), including any Excise Tax, imposed upon
the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Total Payments.  All determinations
required to be made under this Section 4(ii), including whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, shall be made
by the independent accounting firm retained by the Company on the date of
the Change in Control (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and Employee within 15 business
days of the date that the termination of Employee's employment becomes
effective, or such earlier time as is requested by the Company.  If the
Accounting Firm determines that no Excise Tax is payable by Employee, it
shall furnish Employee with an opinion that Employee has substantial
authority not to report any Excise Tax on Employee's federal income tax
return.

     Any uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder shall be
resolved in favor of Employee.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that at a
later time there will be a determination that the Gross-Up Payments made by
the Company were less than the Gross-Up Payments that should have been made
by the Company ("Underpayment"), consistent with the calculations required
to be made hereunder.  In the event that Employee is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment, if any, that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the benefit of Employee.  As a
result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it
is possible that at a later time there will be a determination that the
Gross-Up Payments made by the Company were more than the Gross-Up Payments
that should have been made by the Company ("Overpayment"), consistent with
the calculations required to be made hereunder.  Employee agrees to refund
to the Company the amount of any Overpayment that the Accounting Firm shall
determine has occurred hereunder.  Any determination by the Accounting firm
as to the amount of any Gross-Up Payment, including the amount of any
Underpayment or Overpayment, shall be binding upon the Company and Employee.

     (iii)   Any payment not made to Employee when due hereunder shall
thereafter, until paid in full, bear interest at the rate of interest equal
to the reference rate announced from time to time by U.S. Bank National
Association, plus two percent, with such interest to be paid to Employee
upon demand or monthly in the absence of a demand.

     (iv)    Employee shall not be required to mitigate the amount of any
payment provided for in this Section 4 by seeking other employment or
otherwise.  The amount of any payment or benefit provided in this Section 4
shall not be reduced by any compensation earned by Employee as a result of
any employment by another employer.

     5.     Employee's Agreements.
            ----------------------

            Employee agrees that:

     (i)    Without the consent of the Company, Employee will not terminate
employment with the Company without giving 60 days prior notice to the
Company, and during such 60-day period Employee will assist the Company, as
and to the extent reasonably requested by the Company, in training the
successor to Employee's position with the Company. The provisions of this
Section 5(i) shall not apply to any termination (voluntary or involuntary)
of the employment of Employee pursuant to Section 2(ii)(c) hereof.

     (ii)   Without the consent of the Company or except as may be required
by law, Employee will not at any time after termination of his employment
with the Company disclose to any person, corporation, firm, or other entity,
confidential information concerning the Company of which Employee has gained
knowledge during employment with the Company.

     (iii)  In the event that Employee has received any benefits from the
Company under Section 4 of this Agreement, then, during the period of 36
months following the date that the termination of Employee's employment
became effective, Employee, upon request by the Company:

            (a)    Will consult with one or more of the executive officers
concerning the business and affairs of the Company for not to exceed four
hours in any month at times and places selected by Employee as being
convenient to him, all without compensation other than what is provided for
in Section 4 of this Agreement; and

            (b)    Will testify as a witness on behalf of the Company in any
legal proceedings involving the Company which arise out of events or
circumstances that occurred or existed prior to the date that the
termination of Employee's employment became effective (except for any such
proceedings relating to this Agreement), without compensation other than
what is provided for in Section 4 of this Agreement, provided that all out-
of-pocket expenses incurred by Employee in connection with serving as a
witness shall be paid by the Company.

     Employee shall not required to perform Employee's obligations under
this Section 5(iii) if and so long as the Company is in default with respect
to performance of any of its obligations under this Agreement.

     6.     Successors and Binding Agreement.
            ---------------------------------

     (i)    The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), by
agreement in form and substance satisfactory to Employee, to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place.  Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Employee to compensation from the Company in the
same amount and on the same terms as Employee would be entitled hereunder if
employee terminated employment after a Change in Control for Good Reason,
except that for purposes of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the date that the
termination of Employee's employment becomes effective.  As used in this
Agreement, "Company" shall mean the Company and any successor to its
business and/or assets which executes and delivers the agreement provided
for in this Section 6(i) or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.

     (ii)   This Agreement is personal to Employee, and Employee may not
assign or transfer any part of Employee's rights or duties hereunder, or any
compensation due to him hereunder, to any other person.  Notwithstanding the
foregoing, this Agreement shall inure to the benefit of and be enforceable
by Employee's personal or legal representatives, executors, administrators,
heirs, distributees, devisees, and legatees.

     7.     Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
in the Fergus Falls area, in accordance with the applicable rules of the
American Arbitration Association then in effect.  Judgment may be entered on
the arbitrator's award in any court having jurisdiction.

     8.     Modification; Waiver.  No provisions of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in a writing signed by Employee and such officer as
may be specifically designated by the Board of Directors of the Company.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time.

     9.     Notice.  All notices, requests, demands, and all other
communications required or permitted by either party to the other party by
this Agreement (including, without limitation, any notice of termination of
employment and any notice of an intention to arbitrate) shall be in writing
and shall be deemed to have been duly given when delivered personally or
received by certified or registered mail, return receipt requested, postage
prepaid, at the address of the other party, as first written above (directed
to the attention of the Board of Directors and Corporate Secretary in the
case of the Company).  Either party hereto may change its address for
purposes of this Section 9 by giving 15 days' prior notice to the other
party hereto.

    10.     Severability.  If any term or provision of this Agreement or the
application hereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.

    11.     Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

    12.     Governing Law.  This Agreement has been executed and delivered in
the State of Minnesota and shall, in all respects, be governed by, and
construed and enforced in accordance with, the laws of the State of
Minnesota, including all matters of construction, validity and performance.

    13.     Effect of Agreement; Entire Agreement.  The Company and Employee
understand and agree that this Agreement is intended to reflect their
agreement only with respect to payments and benefits upon termination in
certain cases and is not intended to create any obligation on the part of
either party to continue employment.  This Agreement supersedes any and all
other oral or written agreements or policies made relating to the subject
matter hereof and constitutes the entire agreement of the parties relating
to the subject matter hereof; provided that this Agreement shall not
supersede or limit in any way Employee's rights under any benefit plan,
program or arrangements in accordance with their terms.

    14.     ERISA.  For purposes of the Employee Retirement Income Security
Act of 1974, this Agreement is intended to be a severance pay employee
welfare benefit plan, and not an employee pension benefit plan, and shall be
construed and administered with that intention.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its name by a duly authorized director and officer, and Employee
has hereunto set his or her hand, all as of the date first written above.


                                                 OTTER TAIL POWER COMPANY


                                                 By
                                                   ------------------------
                                                   Its
                                                      ---------------------


                                                 EMPLOYEE


                                                 ---------------------------




                                                                 EXHIBIT A



                                 NOTICE



The undersigned ("Employee") does hereby notify Otter Tail Power Company
(the "Company") pursuant to Section 4(i) of that certain Severance Agreement
dated as of the date hereof between the Company and Employee (the
"Agreement") that Employee has elected to be paid any amounts which become
payable under Section 4(i)(a) of the Agreement as follows:


      (check one)

       ______     in a lump sum not later than one business day prior to the
date that the termination of Employee's employment becomes effective.

       ______     in 36 equal installments payable monthly, on the last
business day of the month, for 36 consecutive months following the date that
the termination of Employee's employment becomes effective.


Dated:
       -------------------------


                                             --------------------------------
                                                        Employee