|      | For      Release: | August      1, 2008 |
|-----------|-------------------|---------------------|
| Investor: | Tim      Thorp    |
| Contact:  | 218-723-3953      |
|      | tthorp@allete.com |
|      |
| NEWS      |              |                |

----

|                                                  |                           |                                                                                            | Quarter      Ended                                                                                        | Year      to Date                                                       |
|-------------------------------------------------------|--------------------------------|-------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|
|                                                  |                           |                                                                                            | 2008                                                                                                      | 2007                                                                    | 2008 | 2007 |
| Operating      Revenue                                | $189.8                         | $223.3                                                                                          | $403.2                                                                                                    | $428.6                                                                  |
| Operating      Expenses                               |                           |                                                                                            |                                                                                                      |                                                                    |
|                                                  | Fuel      and Purchased Power  | 75.0                                                                                            | 92.9                                                                                                      | 161.3                                                                   | 170.6 |
|                                                  | Operating      and Maintenance | 83.8                                                                                            | 84.6                                                                                                      | 166.2                                                                   | 159.2 |
|                                                  | Depreciation                   | 12.9                                                                                            | 11.9                                                                                                      | 25.6                                                                    | 23.6 |
|                                                  |                           | Total      Operating Expenses                                                                   | 171.7                                                                                                     | 189.4                                                                   | 353.1 | 353.4 |
| Operating      Income                                 | 18.1                           | 33.9                                                                                            | 50.1                                                                                                      | 75.2                                                                    |
| Other      Income (Expense)                           |                           |                                                                                            |                                                                                                      |                                                                    |
|                                                  | Interest      Expense          | (7.2)                                                                                           | (6.1)                                                                                                     | (13.9)                                                                  | (12.4) |
|                                                  | Equity      Earnings in ATC    | 3.6                                                                                             |                  3.2 | 7.0                                                                     | 6.1 |
|                                                  | Other                          | 2.5                                                                                             | 4.1                                                                                                       | 11.1                                                                    | 8.7 |
|                                                  |                           | Total      Other Income (Expense)                                                               | (1.1)                                                                                                     | 1.2                                                                     | 4.2 | 2.4 |
| Income      Before Minority Interest and Income Taxes | 17.0                           | 35.1                                                                                            | 54.3                                                                                                      | 77.6                                                                    |
| Income      Tax Expense                               | 6.2                            | 11.2                                                                                            | 19.9                                                                                                      | 27.3                                                                    |
| Minority      Interest                                | 0.1                            | 1.3                                                                                             | 0.1                                                                                                       | 1.4                                                                     |
| Net      Income                                       | $10.7                          | $22.6                                                                                           | $34.3                                                                                                     | $48.9                                                                   |
|                                                  |                           |                                                                                            |                                                                                                      |                                                                    |   |   |
| Average      Shares of Common Stock                   |                           |                                                                                            |                                                                                                      |                                                                    |
|                                                  | Basic                          | 28.8                                                                                            | 28.2                                                                                                      | 28.7                                                                    | 28.1 |
|                                                  | Diluted                        | 28.9                                                                                            | 28.3                                                                                                      | 28.8                                                                    | 28.2 |
| Basic      Earnings Per Share of Common Stock         | $0.37                          |                $0.80 | $1.19                                                                                                     |           $1.74       |
|                                                  |                           |                                                                                            |                                                                                                      |                                                                    |   |   |
| Diluted      Earnings Per Share of Common Stock       | $0.37                          |              $0.80             | $1.19                                                                                                     |            $1.73 |
|                                                  |                           |                                                                                            |                                                                                                      |                                                                    |   |   |
| Dividends      Per Share of Common Stock              | $0.43                          | $0.41                                                                                           | $0.86                                                                                                     | $0.82                                                                   |

|                                 | Jun.      30, | Dec.      31, |   |                                            | Jun.      30, | Dec.      31, |
|--------------------------------------|---------------|---------------|--------|-------------------------------------------------|---------------|---------------|
|                                 | 2008          | 2007          |   |                                            | 2008          | 2007          |
| Assets                               |          |          |   | Liabilities      and Shareholders' Equity       |          |          |
| Cash      and Short-Term Investments | $99.1         | $46.4         |   | Current      Liabilities                        | $142.0        | $137.1        |
| Other      Current Assets            | 140.1         | 168.1         |   | Long-Term      Debt                             | 538.5         | 410.9         |
| Property,      Plant and Equipment   | 1,224.3       | 1,104.5       |   | Other      Liabilities                          | 349.1         | 353.6         |
| Investments                          | 208.3         | 213.8         |   | Shareholders'      Equity                       | 759.2         | 742.6         |
| Other                                | 117.0         | 111.4         |   |                                            |          |          |
| Total      Assets                    | $1,788.8      | $1,644.2      |   | Total      Liabilities and Shareholders' Equity | $1,788.8      | $1,644.2      |

----

|                            |                                     |                                |        |                            | Quarter      Ended | Year      to Date                             |
|---------------------------------|------------------------------------------|-------------------------------------|-------------|---------------------------------|--------------------|-----------------------------------------------|
|                            |                                     |                                |        |                            | June      30,      | June      30,                                 |
| ALLETE,      Inc.               |                                     | 2008                                | 2007        | 2008                            | 2007               |
| Income      (Loss)              |                                     |                                |        |                            |               |
| Millions                        |                                     |                                |        |                            |               |                                          |   |
|                            | Regulated      Utility                   | $5.2                                | $6.1        | $23.3                           | $24.9              |
|                            | Nonregulated      Energy Operations      | 1.2                                 | 0.6         | 1.4                             | 2.8                |
|                            | ATC                                      |                                |        | 2.0                             | 1.9                | 4.0                                           | 3.7 |
|                            | Real      Estate                         |                                | 2.5         | 11.5                            | 2.0                | 14.6                                          |
|                            | Other                                    |                                |        | (0.2)                           | 2.5                | 3.6                                           | 2.9 |
|                            | Net      Income                          | $10.7                               | $22.6       | $34.3                           | $48.9              |
| Diluted      Earnings Per Share | $0.37                                    | $0.80                               | $1.19       | $1.73                           |
|                            |                                     |                                |        |                            |               |                                          |   |   |
| Statistical      Data           |                                     |                                |        |                            |               |
| Corporate                       |                                     |                                |        |                            |               |                                          |
|                            | Common      Stock                        |                                |        |                            |               |
|                            |                                     | High                                |        | $46.11                          | $51.30             | $46.11                                        | $51.30 |
|                            |                                     | Low                                 |        | $38.82                          | $45.39             | $33.76                                        | $44.93 |
|                            |                                     | Close                               |        | $42.00                          | $47.05             | $42.00                                        | $47.05 |
|                            | Book      Value                          |                                | $24.51      | $23.23                          | $24.51             | $23.23                                        |
|                            |                                     |                                |        |                            |               |                                          |   |   |
| Kilowatthours      Sold         |                                     |                                |        |                            |
| Millions                        |                                     |                                |        |                            |               |                                          |   |
|                            | Regulated      Utility                   |                                |        |                            |               |
|                            |                                     | Retail      and Municipals          |        |                            |               |                                          |
|                            |                                     |                                | Residential | 239.2                           | 231.7              | 601.8                                         | 573.3 |
|                            |                                     |                                | Commercial  | 307.6                           | 320.9              | 667.2                                         | 673.1 |
|                            |                                     |                                | Municipals  | 226.6                           | 229.2              | 499.5                                         | 495.6 |
|                            |                                     |                                | Industrial  | 1,788.9                         | 1,734.0            | 3,612.1                                       | 3,439.4 |
|                            |                                     |                                | Other       | 19.2                            | 19.0               | 41.5                                          | 41.3 |
|                            |                                     |                                |        | Total      Retail and Municipal | 2,581.5            | 2,534.8                                       | 5,422.1 | 5,222.7 |
|                            |                                     | Other      Power Suppliers          | 375.1       | 513.0                           | 779.2              | 1,036.9                                       |
|                            |                                     |                                |        | Total      Regulated Utility    | 2,956.6            | 3,047.8                                       | 6,201.3 | 6,259.6 |
|                            | Nonregulated      Energy Operations      | 59.7                                | 59.8        | 108.3                           | 123.5              |
|                            |                                     |                                |        | Total      Kilowatthours Sold   | 3,016.3            | 3,107.6                                       | 6,309.6 | 6,383.1 |
|                            |                                     |                                |        |                            |               |                                          |   |   |
| Real      Estate                |                                     |                                |        |                            |               |                                          |
|                            | Town      Center Development Project     |                                |        |                            |               |
|                            |                                     | Commercial      Square Footage Sold | -           | 435,000                         | -                  | 435,000                                       |
|                            |                                     | Residential      Units              | -           | 130                             | -                  | 130                                           |
|                            |                                     |                                |        |                            |               |                                          |   |   |
|                            | Palm      Coast Park Development Project |                                |        |                            |               |
|                            |                                     | Commercial      Square Footage Sold | -           | 40,000                          | -                  |   40,000                            |
|                            |                                     | Residential      Units              | -           | 406                             | -                  |        406 |
|                            |                                     |                                |        |                            |               |                                          |   |   |
|                            | Other      Land                          |                                |        |                            |               |                                          |
|                            |                                     | Acres      Sold                     | 49          | -                               | 51                 |        367 |