SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM 10-Q


(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
 For the quarterly period ended  SEPTEMBER 30, 1996
                                         OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
 For the transition period from           to

 Commission file number     0-368


                           OTTER TAIL POWER COMPANY
            (Exact name of registrant as specified in its charter)


             Minnesota                             41-0462685
   (State or other jurisdiction of            (I.R.S. Employer
    incorporation or organization)            Identification No.)

215 South Cascade Street, Box 496, Fergus Falls, Minnesota     56538-0496
(Address of principal executive offices)                       (Zip Code)

                                  218-739-8200
              (Registrant's telephone number, including area code)


(Former name, former address and former fiscal year, if changed since last
report.)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.      YES  X      NO

Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date:

         November 1, 1996 - 11,180,136  Common Shares ($5 par value)
<PAGE>

                          OTTER TAIL POWER COMPANY

                                   INDEX





Part I. Financial Information                                   Page No.

  Item 1. Financial Statements

     Consolidated Balance Sheets - September 30, 1996 (Unaudited)
     and December 31, 1995                                        2 & 3

     Consolidated Statements of Income - Three and Nine
     Months Ended September 30, 1996 and 1995 (Unaudited)             4

     Consolidated Statements of Cash Flows -
     Nine Months Ended September 30, 1996 and 1995 (Unaudited)        5

     Notes to Consolidated Financial Statements (Unaudited)       6 & 7

  Item 2. Management's Discussion and Analysis of 
          Financial Condition and Results of Operations    7, 8, 9 & 10



Part II. Other Information

  Item 6. Exhibits and Reports on Form 8-K                           11


Signatures                                                           11

<PAGE>
                          Part I.  Financial Information

Item 1. Financial Statements
<TABLE>
                             Otter Tail Power Company
                           Consolidated Balance Sheets

                                     -Assets-
<CAPTION>
                                                             September 30,   December 31,
                                                                 1996            1995
                                                              (Unaudited)
                                                                (Thousands of dollars)
Plant:
<S>                                                            <C>             <C>
Electric plant in service                                      $733,185        $715,305
Subsidiary companies                                             90,163          54,266
                                                               ________        ________
       Total                                                    823,348         769,571
Less accumulated depreciation and amortization                  328,560         308,174
                                                               ________        ________
                                                                494,788         461,397
Construction work in progress                                    21,522          16,285
                                                               ________        ________
       Net plant                                                516,310         477,682
                                                               ________        ________

Investments                                                      16,604          12,716
                                                               ________        ________
Intangibles -- net                                               21,329          18,902
                                                               ________        ________
Other assets                                                      6,420           7,732
                                                               ________        ________

Current assets:
Cash and cash equivalents                                         2,477           1,867
Temporary cash investments                                           47           2,208
Accounts receivable:
   Trade - net                                                   30,822          31,184
   Other                                                          5,044           8,276
Materials and supplies:
   Fuel                                                           2,770           3,322
   Inventory, materials and operating supplies                   22,268          19,408
Deferred income taxes                                             4,239           3,754
Accrued utility revenues                                          3,144           4,328
Other                                                             8,523           4,427
                                                               ________        ________
       Total current assets                                      79,334          78,774
                                                               ________        ________

Deferred debits:
Unamortized debt expense and reacquisition premiums               4,334           4,687
Regulatory assets                                                 5,512           5,727
Other                                                             1,582           2,976
                                                               ________        ________
       Total deferred debits                                     11,428          13,390
                                                               ________        ________

       Total                                                   $651,425        $609,196
                                                               ========        ========
</TABLE>
               See accompanying notes to consolidated financial statements

                                        - 2 -


                              Otter Tail Power Company
                            Consolidated Balance Sheets

                                   -Liabilities-
<TABLE>
<CAPTION>
                                                             September 30,   December 31,
                                                                 1996            1995
                                                              (Unaudited)
                                                                (Thousands of dollars)
<S>                                                            <C>             <C>
Capitalization
Common shares, par value $5 per share - authorized
  25,000,000 shares; outstanding 1996 and 1995,
  11,180,136 shares                                             $55,901         $55,901
Premium on common shares                                         30,335          30,335
Retained earnings                                               103,363          98,006
                                                               ________        ________
       Total                                                    189,599         184,242

Cumulative preferred shares - authorized 1,500,000
  shares without par value; outstanding 1996
  and 1995, 388,311 shares:
       Subject to mandatory redemption                           18,000          18,000
       Other                                                     20,831          20,831

Cumulative preference shares - authorized 1,000,000
  shares without par value;  outstanding - none                    --              --

Long-term debt                                                  187,391         168,261
                                                               ________        ________
       Total capitalization                                     415,821         391,334
                                                               ________        ________

Current liabilities
Short-term debt                                                  20,350            --
Sinking fund requirements and current maturities                 18,532          13,733
Accounts payable                                                 26,408          27,828
Accrued salaries and wages                                        2,749           3,703
Federal and state income taxes accrued                              395             393
Other taxes accrued                                              10,880          11,356
Interest accrued                                                  2,001           3,509
Other                                                             4,047           6,752
                                                               ________        ________
       Total current liabilities                                 85,362          67,274
                                                               ________        ________

Noncurrent liabilities                                           15,121          13,498
                                                               ________        ________

Deferred credits
Accumulated deferred income taxes                                98,558          99,398
Accumulated deferred investment tax credit                       20,113          20,994
Regulatory liabilities                                           13,928          14,500
Other                                                             2,522           2,198
                                                               ________        ________
       Total deferred credits                                   135,121         137,090
                                                               ________        ________
       Total                                                   $651,425        $609,196
                                                               ========        ========
</TABLE>
              See accompanying notes to consolidated financial statements

                                         -3-


                                        Otter Tail Power Company
                                    Consolidated Statements of Income
                                               (Unaudited)
<TABLE>
<CAPTION>
                                                    Three months ended            Nine months ended
                                                       September 30                  September 30
                                                    1996          1995            1996          1995
                                                  (Thousands of dollars)        (Thousands of dollars)
<S>                                             <C>           <C>             <C>           <C>
Operating revenues
Electric                                           $45,261       $49,537        $147,079      $153,169
Health services                                     16,527         9,901          43,598        34,784
Manufacturing                                       15,356        10,040          45,334        25,915
Other business operations                           15,722        11,570          34,833        24,950
                                                 _________     _________       _________     _________
           Total operating revenues                 92,866        81,048         270,844       238,818

Operating expenses
Production fuel                                      6,031         7,090          21,632        24,072
Purchased power                                      6,513         7,822          19,010        23,326
Electric operation expenses                         13,491        12,013          39,603        36,359
Electric maintenance                                 3,284         2,531           9,651         8,314
Cost of goods sold                                  32,620        20,049          85,294        53,321
Other nonelectric expenses                          10,006         7,998          26,441        22,688
Depreciation and amortization                        5,784         5,472          16,953        16,344
Property taxes                                       2,864         2,924           8,863         8,936
Income taxes                                         2,453         4,127          11,303        13,266
                                                 _________     _________       _________     _________
           Total operating expenses                 83,046        70,026         238,750       206,626
                                                 _________     _________       _________     _________
Operating income                                     9,820        11,022          32,094        32,192

Allowance for equity (other) funds used
   during construction                                  82           119             225           125
Other income and deductions
   and applicable taxes                                605          (116)          1,883            57
                                                 _________     _________       _________     _________
Income before interest charges                      10,507        11,025          34,202        32,374

Interest charges                                     4,397         3,875          12,248        11,277
Allowance for borrowed funds used
   during construction - credit                        (97)            3            (265)          (94)
                                                 _________     _________       _________     _________
Net income                                           6,207         7,147          22,219        21,191

Preferred dividend requirements                        590           590           1,769         1,769
                                                 _________     _________       _________     _________
Earnings available for common shares                $5,617        $6,557         $20,450       $19,422
                                                 =========     =========       =========     =========
Earnings per average common share                    $0.50         $0.59           $1.83         $1.74
                                                 =========     =========       =========     =========

Average number of common shares outstanding     11,180,136    11,180,136      11,180,136    11,180,136

Dividends per common share                           $0.45         $0.44           $1.35         $1.32


                      See accompanying notes to consolidated financial statements
</TABLE>
                                                 -4-


                                     Otter Tail Power Company
                              Consolidated Statements of Cash Flows
                                           (Unaudited)
<TABLE>
<CAPTION>
                                                                            Nine months ended
                                                                              September 30,
                                                                           1996           1995
                                                                         (Thousands of dollars)
<S>                                                                      <C>            <C>
Cash flows from operating activities:
Net income                                                               $22,219        $21,191
   Adjustments to reconcile net income to net cash
    Provided by operating activities:
        Depreciation and amortization                                     25,557         21,221
        Deferred investment tax credit - net                                (882)          (882)
        Deferred income taxes                                             (2,609)           713
        Change in deferred debits and other assets                         4,578          1,446
        Change in noncurrent liabilities and deferred credits                831          2,397
        Allowance for equity (other) funds used during construction         (225)          (125)
        Losses from investments and disposal of noncurrent assets            496          1,149
    Cash provided by (used for) current assets & current liabilities:
        Change in receivables, materials and supplies                      4,310          1,815
        Change in other current assets                                      (975)          (427)
        Change in payables and other current liabilities                  (2,469)        (3,893)
        Change in interest and income taxes payable                       (1,797)        (2,677)
                                                                        ________       ________
            Net cash provided by operating activities                     49,034         41,928

Cash flows from investing activities:
        Gross capital expenditures                                       (50,613)       (28,837)
        Proceeds from disposal of noncurrent assets                        4,136          2,169
        Purchase of businesses, net of cash acquired                      (7,859)        (1,634)
        Change in temporary cash investments                               2,161             38
        Change in marketable securities and other investments             (8,741)        (8,455)
                                                                        ________       ________
            Net cash used in investing activities                        (60,916)       (36,719)

Cash flows from financing activities:
        Change in short-term debt - net                                   20,350         11,100
        Proceeds from issuance of long-term debt                          90,930         37,970
        Payments for retirement of long-term debt                        (81,926)       (38,556)
        Dividends paid                                                   (16,862)       (16,527)
                                                                        ________       ________
            Net cash provided by (used in) financing activities           12,492         (6,013)

Net change in cash and cash equivalents                                      610           (804)

Cash and cash equivalents at beginning of year                             1,867          1,852
                                                                        ________       ________
Cash and cash equivalents at September 30                                 $2,477         $1,048
                                                                        ========       ========
Supplemental cash flow information
  Cash paid for interest and income taxes:
    Interest (net of amount capitalized)                                 $13,231        $11,952
    Income taxes                                                         $14,494        $14,066
</TABLE>
      See accompanying notes to consolidated financial statements

                                 - 5 -


                          OTTER TAIL POWER COMPANY

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

The Company, in its opinion, has included all adjustments (including normal 
recurring accruals) necessary for a fair presentation of the results of 
operations for the periods.  The financial statements for 1996 are subject 
to adjustment at the end of the year when they will be audited by 
independent accountants.  The financial statements and notes thereto should 
be read in conjunction with the financial statements and notes for the 
years ended December 31, 1995, 1994, and 1993 included in the Company's 
1995 Annual Report to the Securities and Exchange Commission on Form 10-K. 
Because of seasonal and other factors, the earnings for the three-month 
and nine-month periods ended September 30, 1996, should not be taken as an 
indication of earnings for all or any part of the balance of the year.

On February 1, 1996, a subsidiary of the Company acquired a Montana-based 
supplier of X-ray supplies and accessories.  On April 1, 1996 a Company 
subsidiary closed on the purchase of a mobile medical diagnostic services 
company located in Bemidji, Minnesota.  On June 1, 1996, the FCC approved 
the acquisition of two radio stations in the Fargo, ND--Moorhead, MN market 
by Mid-States Broadcasting, a subsidiary of the Company.  On October 16, 
1996, the FCC approved the acquisition of a third radio station in that 
market area in 1996.  In August of 1996, Mid-States Broadcasting announced 
the purchase of another Fargo radio station.  An application for approval 
of the purchase was filed with the FCC on September 19, 1996.  This would 
bring to six the number of radio stations owned by the Company in the 
Fargo, ND--Moorhead, MN market, the maximum allowed in one market area 
under current FCC rules.  The Company's telecommunications subsidiary 
acquired a cable TV system serving the community of Milbank, SD on July 1, 
1996. These completed and pending acquisitions will be accounted for under 
the purchase method of accounting.  The total price for the completed 
acquisitions was $10.2 million.  The combined revenues of the acquired 
companies totaled approximately $24.3 million in 1995.  

On August 8, 1996, the Company's telecommunications subsidiary signed a 
letter of intent to acquire The Peoples Telephone Company ("Peoples") of 
Bigfork, MN, subject to negotiation of a definitive purchase agreement, 
completion of a due diligence investigation, and approval by regulatory 
authorities and by the Boards of Directors of both companies.  Peoples, 
with 1,862 access lines serving five communities in northern Minnesota, had 
1995 revenues of $1.5 million.  The Company anticipates that, if completed, 
this business combination will be accounted for under the pooling of 
interests method.

Quadrant Co. continues to provide primary service to one of its two steam 
customers under an agreement which can be terminated by either party upon 
one year's prior written notice.  Quadrant is currently providing backup 
service to its other steam customer under an agreement that commenced on 
June 1, 1996 and terminates on May 31, 1998, subject to earlier termination 
by either party upon 90 days' written notice.  Quadrant also continues to 
burn municipal solid waste for three Minnesota counties under a contract 
extension which will expire in April of 1997. Two Minnesota counties, 
representing about 30% of Quadrant's waste volume, did not renew or extend 
their contracts for waste incineration which expired in September of 1996. 

Quadrant is in the process of negotiating a new waste incineration 
agreement with the representative of the remaining counties.  New pollution 
rules for Minnesota municipal waste incinerators have recently been issued. 
The impact of these rules on Quadrant Co. operations is currently being 
evaluated.  The costs to comply with new pollution rules combined with a 
decline in future revenues from decreased steam sales and the loss of two 
waste customers threaten the economic viability of the plant, which had a 
net undepreciated book value of approximately $3.4 million on September 30, 
1996. 

The Company is an investor in a North Dakota limited liability company 
constructing a food processing plant.  A letter of credit established in 
September of 1995 providing for $3.5 million in capital commitment payments 
to the limited liability company and set to expire on August 1, 1996, has 
been extended to February 1, 1997.  Management expects the remaining 
commitment, $1.1 million at September 30, 1996, to be drawn by December 31, 
1996.

Under Statement of Financial Accounting Standards No. 87, employers are 
required to recognize liabilities and expenses associated with pension 
plans based on actuary valuations.  In the second quarter of 1996, the 
Company requested restated actuary reports for its Executive Survivor and 
Supplemental Retirement Program amended July 1, 1994, based on revised 
assumptions regarding expected retirement age and projected benefits under 
the July 1, 1994 plan amendment, which expanded the plan to include non-
officer upper level management employees.  The restatement will result in a 
one-time expense adjustment of $2.59 million for the year 1996, along with 
a $711,000 reduction in the $1,426,000 additional minimum liability 
reflected on the Company's December 31, 1995 balance sheet.  The Company 
recognized $864,000 of the expense adjustment as additional operating 
expense in the third quarter of 1996.  

Under Statement of Financial Accounting Standards No. 106, employers are 
required to accrue the expected cost of providing postretirement benefits 
other than pensions during the years qualifying employees provide service 
to the employer.  During the second quarter of 1996 actuary valuations for 
postretirement benefits other than pensions were computed to reflect a 
change in assumptions related to group life insurance.  The change in 
actuarial assumptions will result in a $1.26 million reduction in 1996 
expenses related to a reduction in expected postretirement benefit 
obligations.

Forward Looking Information - Safe Harbor Statement Under the Private 
Securities Litigation Reform Act of 1995:

In connection with the "safe harbor" provisions of the Private Securities 
Litigation Reform Act of 1995 (the "Act"), the Company has filed cautionary 
statements identifying important factors that could cause the Company's 
actual results to differ materially from those discussed in forward-looking 
statements made by or on behalf of the Company.  When used in this Form 10-
Q and in future filings by the Company with the Securities and Exchange 
Commission, in the Company's press releases and in oral statements, words 
such as "may", "will", "expect", "anticipate", "continue", "estimate", 
"project", "believes" or similar expressions are intended to identify 
forward-looking statements within the meaning of the Act.  Factors that 
might cause such differences include, but are not limited to, the factors 
discussed under "Factors affecting future earnings" on pages 29-31 of the 
Company's 1995 Annual Report to Shareholders, which is incorporated by 
reference in the Company's Form 10-K for the fiscal year ended December 31, 
1995.  These factors are in addition to any other cautionary statements, 
written or oral, which may be made or referred to in connection with any 
such forward-looking statement or contained in any subsequent filings by 
the Company with the Securities and Exchange Commission.


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

Material Changes in Financial Position

Cash provided by operating activities of $49,034,000 along with net 
proceeds from the issuance of short-term debt of $20,350,000 as shown on 
the Consolidated Statement of Cash Flows for the nine months ended 
September 30, 1996, combined with funds on hand of $4,075,000 at December 
31, 1995, allowed the Company to finance its capital expenditures and pay 
dividends, and provided for a majority of its investment in additional 
nonutility businesses.  At September 30, 1996, the Company had $28,252,000 
available in unused lines of credit which could be used to supplement cash 
needs.  The Company estimates that funds internally generated, combined 
with funds on hand, will be sufficient to meet all sinking fund payments 
for First Mortgage Bonds in the next five years and to provide for the 
majority of its 1996-2000 electric utility construction program 
expenditures.  

Additional short-term or long-term financing will be required in the period 
1996-2000 in connection with a portion of the Company's estimated capital 
project expenditures, the maturity of First Mortgage Bonds and a Long-Term 
Lease Obligation ($21,000,000), in the event the Company decides to refund 
or retire early any of its presently outstanding debt or cumulative 
preferred shares,  or for other corporate purposes.  Proceeds from the 
issuance of long-term debt net of payments for the retirement of long-term 
debt of $9,004,000, for the nine months ended September 30, 1996, were used 
to finance equipment purchases at the Company's medical and manufacturing 
subsidiaries and to finance a portion of the investment in additional 
nonutility businesses.  Debt repayments and financing activities at the 
subsidiary level in the third quarter of 1996 resulted in a shift of 
approximately $6 million in debt from current to long-term status.

On August 30, 1996, the Company filed a shelf registration statement with 
the Securities and Exchange Commission for the issuance of up to 
$50,000,000 of its debt securities, which may be sold from time to time in 
one or more series, the proceeds of which will be used to repay short-term 
and other indebtedness, to redeem one or more of the outstanding series of 
the Company's First Mortgage Bonds, and for general corporate purposes.  On 
August 30, 1996, the Company also filed a shelf registration statement with 
the Securities and Exchange Commission for the issuance of up to 1,000,000 
Common Shares pursuant to the Company's Automatic Dividend Reinvestment and 
Share Purchase Plan, which will permit shares purchased by shareholders, 
employees, or customers who participate in the plan to be either new issue 
Common Shares or Common Shares purchased on the open market.  Proceeds from 
newly issued Common Shares will be used for general corporate purposes.

Business acquisitions in the first nine months of 1996 accounted for: 
$17,861,000 of the $35,897,000 increase in subsidiary companies plant, the 
entire increase in intangible assets, $12,791,000 of the $19,130,000 
increase in long-term debt, and $4,793,000 of the $4,799,000 increase in 
sinking fund requirements and current maturities.  The remainder of the 
increase in subsidiary companies plant reflects plant and equipment 
purchases in all segments of subsidiary operations.

The increases in electric plant in service and construction work in 
progress for the first nine months of 1996 are due to new construction and 
capital expenditures in all electric utility plant areas: production, 
transmission, distribution, and general.  The increase in investments 
includes $1.3 million invested in limited partnerships that invest in tax-
credit qualifying affordable housing projects, and $2.1 million related to 
business acquisitions and the reclassification of a note receivable.

The decrease in other receivables is due to the timing of payments received 
from the Company's jointly-owned plant partners, the reclassification of a 
note receivable from current to long-term status, and the sale of two large 
notes to a finance company by the Company's health services subsidiary.  
The increase in inventory is related to purchases of medical equipment for 
new installations and increased sales at the Company's manufacturing 
subsidiaries.  The increase in other current assets includes $1,758,000 in 
proceeds from the sale of Big Stone Plant's steel coal cars.  The funds are 
being held by the trustee for the Company's First Mortgage Bonds and are 
expected to be released in the fourth quarter of 1996.  The remainder of 
the increase in other current assets is mainly due to material and 
production costs incurred on construction jobs ahead of allowable billing 
schedules.  The decrease in other deferred debits reflects increased 
allocation of deferred overhead costs related to normal seasonal 
fluctuations in electric construction activity.

The decrease in accounts payable is mainly due to a normal seasonal decline 
in sales at the electric utility.  The decrease in interest accrued is due 
to the timing of bond interest payments, the majority of which are due in 
the first and third quarters of the calendar year.  The reduction in other 
current liabilities reflects payments of $2.7 million in capital 
commitments during the first nine months of 1996.  The increase in 
noncurrent liabilities reflects increases in employee benefit provisions 
resulting mainly from the restatement of the Executive Survivor and 
Supplemental Retirement Program. 


Material Changes in Results of Operations

The 8.6% decrease in electric operating revenues for the quarter ended 
September 30, 1996, as compared to the same period in 1995, is the combined 
result of a 3.0% decrease in retail revenue, an 83.8% decrease in 
contractual power pool sales revenue and a 46.5% decrease in noncontractual 
power pool sales revenue. While retail revenue decreased 3.0% for the three 
month period ended September 30, 1996, as compared to the same period in 
1995, retail kwh sales remained relatively stable.  The decrease in retail 
revenue is the result of lower fuel costs at Big Stone Plant being passed 
on to customers through the Fuel Adjustment Clause and lower rates charged 
to one of the Company's largest industrial customers under the Company's 
recently developed Large General Service Time of Use Rider.  The decrease 
in contractual power pool sales revenue reflects a 40MW firm power sale in 
the summer of 1995 while there was no similar sale in 1996. The 4.0% 
decrease in electric operating revenues for the nine months ended September 
30, 1996 compared to the nine months ended September 30, 1995, is primarily 
due to a 42.6% decrease in noncontractual power pool sales.

A number of  factors have contributed to the decreases in noncontractual 
power pool sales for both the three and nine month periods. Midcontinent 
Area Power Pool (MAPP) line loading relief procedures have resulted in 
schedule cuts. The summer of 1996 was milder than the summer of 1995. In 
addition, high water levels in the summer of 1996 furnished MAPP's hydro 
generators with an excess of low-priced electricity to market. Many 
utilities within and outside of MAPP have renegotiated and lowered their 
freight and fuel costs making power marketing more competitive.  Many 
utilities have increased the time span between unit maintenance outages and 
shifted outage times away from traditional overhaul periods, resulting in 
increases in on-line availability.  MAPP transmission service charges have 
made it less economical to ship energy over longer distances.  In addition, 
lower plant availability in 1996 related to a scheduled outage for repairs 
at Hoot Lake Unit 3 in February and March contributed to the decrease in 
noncontractual power pool sales in the first nine months of 1996.

Production fuel expense decreased for the three and nine month periods 
ended September 30, 1996, as compared to the same periods in 1995, by 14.9% 
and 10.1%, respectively.  Fuel costs and generation declined at all three 
of the Company's major power plants for the three and nine month periods 
ended September 30, 1996, compared to the same periods in 1995, except for 
year-to-date generation at Big Stone Plant.  Big Stone Plant's fuel costs 
for the quarter and nine months ended September 30, 1996, compared to the 
same periods in 1995, are down 11.4% and 10.7%, respectively, while 
generation decreased only 6.5% for the quarter and showed an increase of 
2.5% for the nine months ended September 30, 1996, compared to the same 
periods in 1995.  The price variances at Big Stone Plant are the result of 
switching from lignite to subbituminous coal in August of 1995.  Two 
factors contributing to the decrease in system-wide generation are lower 
demand as a result of fewer opportunity sales, and maintenance shutdowns at 
Hoot Lake Plant in early 1996 and at Big Stone, which began a scheduled 
ten-week major overhaul on September 6, 1996.

The decreases in purchased power for the quarter and nine months ended 
September 30, 1996, as compared to the same periods in 1995, reflect 
decreases in kwh purchases for resale of 47% and 43% for the respective 
periods.  The decreases in purchases for resale correlate to the decreases 
in noncontractual power pool sales.

The increases in electric operation expenses for the three and nine month 
periods ended September 30, 1996, as compared to the three and nine month 
periods ended September 30, 1995, are due to expenses related to coal 
contract and freight negotiations, increased benefit costs resulting from 
revised actuarial assumptions for the Company's Executive Survivor and 
Supplemental Retirement Plan, and increased payments for contracted 
services in 1996.

The increases in electric maintenance expenses for the three and nine month 
periods ended September 30, 1996, as compared to the same periods a year 
ago, are due to increased production plant maintenance expenses, especially 
at Hoot Lake Unit 3 which was down for scheduled maintenance in February 
and March of 1996 and had a turbine rebuild and steam chest replacement in 
July of 1996.  Big Stone Plant showed an increase in maintenance expenses  
for the quarter as a result of beginning a major overhaul on September 6, 
1996.  Transmission and distribution plant maintenance expenses are up 
significantly in the third quarter of 1996, as compared to the third 
quarter of 1995, due to increased expenditures for tree trimming to enhance 
system reliability.  


The breakdown of cost of goods sold and other nonelectric expenses by 
business segments other than electric are as follows:

                                   Three months ended September
                           Cost of goods sold   Other nonelectric expenses
                                1996     1995          1996     1995
                                           (in thousands)
  Health services             $10,661   $5,749        $4,229   $3,965
  Manufacturing               $11,606   $7,407        $2,204   $1,546
  Other business operations   $10,353   $6,893        $3,573   $2,487
                              -------  -------       -------   ------
        Total                 $32,620  $20,049       $10,006   $7,998
                              =======  =======       =======   ======

                                   Nine months ended September 30
                           Cost of goods sold   Other nonelectric expenses
                                1996     1995          1996     1995
                                           (in thousands)
  Health services             $28,260  $20,427       $11,759  $12,085
  Manufacturing               $34,029  $19,526        $5,744   $3,681
  Other business operations   $23,005  $13,368        $8,938   $6,922
                              -------  -------       -------  -------
        Total                 $85,294  $53,321       $26,441  $22,688
                              =======  =======       =======  =======

The increases in health services revenue and cost of goods sold for both 
the three and nine month periods ended September 30, 1996, as compared to 
the same periods in 1995, are due to the acquisitions of two health 
services companies: one on February 1, 1996, and a second more significant 
acquisition on April 1, 1996.  The decrease in health services other 
nonelectric expenses for the nine months ended September 30, 1996, compared 
to the nine months ended September 30, 1995, reflects decreased sales 
activity in the first quarter of 1996.  Health services other nonelectric 
expenses increased in both the third and second quarters of 1996 over the 
same periods in 1995, by $264,000 and $409,000, respectively, as a result 
of the April 1, 1996 acquisition. However, these increases were not 
significant enough to offset a $999,000 decrease in this category in the 
first quarter of 1996, as compared to the first quarter of 1995, as a 
result of the decreased sales activity in 1996.

The increases in manufacturing operating revenue for the three and nine 
month periods ended September 30, 1996, as compared to the same periods in 
1995, reflect revenues from Northern Pipe Products, which was acquired in 
October of 1995, and increased sales at BTD Manufacturing.  The increases 
in manufacturing cost of goods sold and other nonelectric expenses for both 
the three and nine month periods ended September 30, 1996, as compared to 
the same periods in 1995, are directly related to the increases in 
manufacturing revenue.

The increases in other business operations revenue for the quarter and nine 
months ended September 30, 1996, as compared to the quarter and nine months 
ended September 30, 1995, reflect material cost pass through billings by 
the Company's construction subsidiaries on material intensive jobs in 1996, 
and 1996 inaugural season revenues from the Fargo-Moorhead RedHawks 
baseball franchise. The increases in material costs billed are also 
reflected in increased cost of goods sold from other business operations 
for the same comparable periods.  Increases in other business operations 
other nonelectric expenses for the three and nine month periods ended 
September 30, 1996, as compared to the same periods in 1995, are due to 
increased construction activity, RedHawks first-season operations, and 1996 
radio station acquisitions.

The increases in other income and deductions and applicable taxes for the 
three and nine month periods ended September 30, 1996, as compared to the 
same periods in 1995, reflect increases in miscellaneous revenue from the 
subsidiaries in 1996, the initial recording of affordable housing tax 
credits in 1996, and losses on marketable securities recognized in 1995 
related to the Company's preferred stock investment program which ended in 
October of 1995.

The increases in interest charges for the three and nine month periods 
ended September 30, 1996, as compared to the same periods in 1995, are 
related to increased debt at the Company's subsidiaries due to acquisitions 
and growth and to an increase in the use of short-term debt at the parent 
company level in the first nine months of 1996 compared to the first nine 
months of 1995. 


PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

a)  Exhibits:
	
    27  Financial Data Schedule

b)  Report on Form 8-K.

    No reports on Form 8-K were filed during the fiscal quarter ended 
    September 30, 1996. 




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.


                                     OTTER TAIL POWER COMPANY


                                By:    Jeff Legge
                                   ----------------------------
                                            Jeff Legge
                                            Controller
                           (Chief Accounting Officer/Authorized Officer)

Dated:  November 13, 1996