|      | For      Release:  | October      31, 2008 |
|-----------|-------------------------|-----------------------|
| Investor: | Tim      Thorp          |
| Contact:  | 218-723-3953            |
|      | tthorp@allete.com       |
|      |
| NEWS      |                    |                  |

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|                                                  |                           |                                                                                            | Quarter      Ended                                  | Year      to Date                                                       |
|-------------------------------------------------------|--------------------------------|-------------------------------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------------------------------------------|
|                                                  |                           |                                                                                            | 2008                                                | 2007                                                                    | 2008 | 2007 |
| Operating      Revenue                                | $201.7                         | $200.8                                                                                          | $604.9                                              | $629.4                                                                  |
| Operating      Expenses                               |                           |                                                                                            |                                                |                                                                    |
|                                                  | Fuel      and Purchased Power  | 81.0                                                                                            | 91.8                                                | 242.3                                                                   | 262.4 |
|                                                  | Operating      and Maintenance | 73.4                                                                                            | 72.1                                                | 239.6                                                                   | 231.3 |
|                                                  | Depreciation                   | 13.5                                                                                            | 12.2                                                | 39.1                                                                    | 35.8 |
|                                                  |                           | Total      Operating Expenses                                                                   | 167.9                                               | 176.1                                                                   | 521.0 | 529.5 |
| Operating      Income                                 | 33.8                           | 24.7                                                                                            | 83.9                                                | 99.9                                                                    |
| Other      Income (Expense)                           |                           |                                                                                            |                                                |                                                                    |
|                                                  | Interest      Expense          | (7.5)                                                                                           | (6.3)                                               | (21.4)                                                                  | (18.7) |
|                                                  | Equity      Earnings in ATC    | 4.2                                                                                             |         3.2 | 11.2                                                                    | 9.3 |
|                                                  | Other                          | 2.8                                                                                             | 3.2                                                 | 13.9                                                                    | 11.9 |
|                                                  |                           | Total      Other Income (Expense)                                                               | (0.5)                                               | 0.1                                                                     | 3.7 | 2.5 |
| Income      Before Minority Interest and Income Taxes | 33.3                           | 24.8                                                                                            | 87.6                                                | 102.4                                                                   |
| Income      Tax Expense                               | 8.4                            | 8.1                                                                                             | 28.3                                                | 35.4                                                                    |
| Minority      Interest                                | 0.2                            | 0.2                                                                                             | 0.3                                                 | 1.6                                                                     |
| Net      Income                                       | $24.7                          | $16.5                                                                                           | $59.0                                               | $65.4                                                                   |
|                                                  |                           |                                                                                            |                                                |                                                                    |   |   |
| Average      Shares of Common Stock                   |                           |                                                                                            |                                                |                                                                    |
|                                                  | Basic                          | 29.1                                                                                            | 28.5                                                | 28.9                                                                    | 28.2 |
|                                                  | Diluted                        | 29.3                                                                                            | 28.5                                                | 29.0                                                                    | 28.3 |
| Basic      Earnings Per Share of Common Stock         | $0.85                          |                $0.58 | $2.04                                               |           $2.31       |
|                                                  |                           |                                                                                            |                                                |                                                                    |   |   |
| Diluted      Earnings Per Share of Common Stock       | $0.85                          |              $0.58             | $2.04                                               |            $2.31 |
|                                                  |                           |                                                                                            |                                                |                                                                    |   |   |
| Dividends      Per Share of Common Stock              | $0.43                          | $0.41                                                                                           | $1.29                                               | $1.23                                                                   |

|                                 | Sep.      30, | Dec.      31, |   |                                            | Sep.      30, | Dec.      31, |
|--------------------------------------|---------------|---------------|--------|-------------------------------------------------|---------------|---------------|
|                                 | 2008          | 2007          |   |                                            | 2008          | 2007          |
| Assets                               |          |          |   | Liabilities      and Shareholders' Equity       |          |          |
| Cash      and Short-Term Investments | $78.1         | $46.4         |   | Current      Liabilities                        | $135.8        | $137.1        |
| Other      Current Assets            | 141.7         | 168.1         |   | Long-Term      Debt                             | 537.2         | 410.9         |
| Property,      Plant and Equipment   | 1,292.4       | 1,104.5       |   | Other      Liabilities                          | 374.9         | 353.6         |
| Investments                          | 213.3         | 213.8         |   | Shareholders'      Equity                       | 799.7         | 742.6         |
| Other                                | 122.1         | 111.4         |   |                                            |          |          |
| Total      Assets                    | $1,847.6      | $1,644.2      |   | Total      Liabilities and Shareholders' Equity | $1,847.6      | $1,644.2      |

----

|                            |                                     |                                     |        |                            | Quarter      Ended | Year      to Date                             |
|---------------------------------|------------------------------------------|------------------------------------------|-------------|---------------------------------|--------------------|-----------------------------------------------|
|                            |                                     |                                     |        |                            | September      30, | September      30,                            |
| ALLETE,      Inc.               |                                     | 2008                                     | 2007        | 2008                            | 2007               |
| Income      (Loss)              |                                     |                                     |        |                            |               |
| Millions                        |                                     |                                     |        |                            |               |                                          |   |
|                            | Regulated      Utility                   | $16.7                                    | $13.0       | $40.0                           | $37.9              |
|                            | Non-regulated      Energy Operations     | 0.9                                      | 0.6         | 2.3                             | 3.4                |
|                            | ATC                                      |                                     |        | 2.5                             | 1.9                | 6.5                                           | 5.6 |
|                            | Real      Estate                         |                                     | 0.2         | 0.6                             | 2.2                | 15.2                                          |
|                            | Other                                    |                                     |        | 4.4                             | 0.4                | 8.0                                           | 3.3 |
|                            | Net      Income                          | $24.7                                    | $16.5       | $59.0                           | $65.4              |
| Diluted      Earnings Per Share | $0.85                                    | $0.58                                    | $2.04       | $2.31                           |
|                            |                                     |                                     |        |                            |               |                                          |   |   |
| Statistical      Data           |                                     |                                     |        |                            |               |
| Corporate                       |                                     |                                     |        |                            |               |                                          |
|                            | Common      Stock                        |                                     |        |                            |               |
|                            |                                     | High                                     |        | $49.00                          | $50.05             | $49.00                                        | $51.30 |
|                            |                                     | Low                                      |        | $38.05                          | $38.60             | $33.76                                        | $38.60 |
|                            |                                     | Close                                    |        | $44.50                          | $44.76             | $44.50                                        | $44.76 |
|                            | Book      Value                          |                                     | $25.32      | $23.50                          | $25.32             | $23.50                                        |
|                            |                                     |                                     |        |                            |               |                                          |   |   |
| Kilowatt-hours      Sold        |                                     |                                     |        |                            |
| Millions                        |                                     |                                     |        |                            |               |                                          |   |
|                            | Regulated      Utility                   |                                     |        |                            |               |
|                            |                                     | Retail      and Municipals               |        |                            |               |                                          |
|                            |                                     |                                     | Residential | 252.1                           | 258.8              | 853.9                                         | 832.1 |
|                            |                                     |                                     | Commercial  | 360.5                           | 360.5              | 1,027.7                                       | 1,033.6 |
|                            |                                     |                                     | Municipals  | 243.0                           | 255.7              | 742.5                                         | 751.3 |
|                            |                                     |                                     | Industrial  | 1,854.1                         | 1,775.8            | 5,466.2                                       | 5,215.2 |
|                            |                                     |                                     | Other       | 20.5                            | 21.5               | 62.0                                          | 62.8 |
|                            |                                     |                                     |        | Total      Retail and Municipal | 2,730.2            | 2,672.3                                       | 8,152.3 | 7,895.0 |
|                            |                                     | Other      Power Suppliers               | 464.8       | 571.9                           | 1,244.0            | 1,608.8                                       |
|                            |                                     |                                     |        | Total      Regulated Utility    | 3,195.0            | 3,244.2                                       | 9,396.3 | 9,503.8 |
|                            | Non-regulated      Energy Operations     | 60.6                                     | 60.7        | 168.9                           | 184.2              |
|                            |                                     |                                     |        | Total      Kilowatt-hours Sold  | 3,255.6            | 3,304.9                                       | 9,565.2 | 9,688.0 |
|                            |                                     |                                     |        |                            |               |                                          |   |   |
| Real      Estate                |                                     |                                     |        |                            |               |                                          |
|                            | Town      Center Development Project     |                                     |        |                            |               |
|                            |                                     | Non-residential      Square Footage Sold | -           | 50,000                          | -                  | 474,476                                       |
|                            |                                     | Residential      Units                   | -           | -                               | -                  | 130                                           |
|                            |                                     |                                     |        |                            |               |                                          |   |   |
|                            | Palm      Coast Park Development Project |                                     |        |                            |               |
|                            |                                     | Non-residential      Square Footage Sold | -           | -                               | -                  |   40,000                            |
|                            |                                     | Residential      Units                   | -           | -                               | -                  |        406 |
|                            |                                     |                                     |        |                            |               |                                          |   |   |
|                            | Other      Land                          |                                     |        |                            |               |                                          |
|                            |                                     | Acres      Sold                          | 1           | 83                              | 52                 |        450 |