<PAGE>
                                                                 EXHIBIT  10(d)3
                                                           ALLETE 2006 FORM 10-K

                               SECOND AMENDMENT TO
              FOURTH AMENDED AND RESTATED COMMITTED FACILITY LETTER

        This Second Amendment to Fourth Amended and Restated  Committed Facility
Letter (this "AMENDMENT") is dated as of December 14, 2006, by and among ALLETE,
INC., a Minnesota corporation (the "COMPANY"), the banks from time to time party
to the Committed  Facility  Letter (as  hereinafter  defined) (each a "BANK" and
collectively the "BANKS") and LASALLE BANK NATIONAL ASSOCIATION, in its capacity
as agent for the Banks (in such capacity, the "AGENT").

                                WITNESSETH THAT:

        WHEREAS,  the Company, the Banks and the Agent are party to that certain
Fourth Amended and Restated  Committed  Facility  Letter dated as of January 11,
2006 (as amended by that certain First  Amendment to Fourth Amended and Restated
Committed Facility Letter dated as of June 9, 2006,  together with all exhibits,
schedules,   attachments,   appendices  and  further  amendments  thereof,   the
"COMMITTED FACILITY LETTER"); and

        WHEREAS, the Company has requested that the Committed Facility Letter be
amended as set forth  herein and the Banks are  agreeable to such request on the
terms and subject to the conditions set forth herein;

        NOW,  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which is hereby  acknowledged,  the  Company,  the Banks and the
Agent hereby agree as set forth below.

     1. The Committed Facility Letter is amended as follows:

             (a) The defined  term  "INITIAL  MATURITY  DATE"  appearing  in the
     second sentence of Section 1(f)  ("MATURITY") is hereby amended by deleting
     the date  "January 11, 2011" and  substituting  the date "January 11, 2012"
     therefor.

             (b) The defined  term  "EXTENDED  MATURITY  DATE"  appearing in the
     second  paragraph of Section  1(f) is hereby  amended by deleting the dates
     "January 11, 2012" and "January 11, 2013" appearing in clauses (i) and (ii)
     thereof and substituting therefor the dates "January 11, 2013" and "January
     11, 2014", respectively.

             (c) The definition of "APPLICABLE MARGIN" appearing in Section 8 is
     hereby amended by deleting said definition in its entirety and substituting
     the following new definition in lieu thereof:

        "APPLICABLE  MARGIN"  means (i) with respect to  Eurodollar  Loans,  (a)
        0.180% per annum for any day Level I Status exists; (b) 0.270% per annum
        for any day Level II Status  exists;  (c)  0.350%  per annum for any day
        Level  III  Status  exists;  (d)  0.425%  per annum for any day Level IV
        Status  exists;

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        (e) 0.525% per  annum for any  day Level V Status exists, and (f) 0.800%
        per annum for any day Level VI Status  exists; and (ii) with  respect to
        Prime Rate Loans, 0.000% per annum.

             (d) The  definition  of  "FUNDED  DEBT"  appearing  in Section 8 is
     hereby amended by deleting clauses (d) and (e) thereof.

             (e) The definition of "FACILITY FEE RATE" appearing in Section 8 is
     hereby amended by deleting said definition in its entirety and substituting
     the following new definition in lieu thereof:

        "FACILITY  FEE RATE"  means a rate equal to (i) 0.070% per annum for any
        day Level I Status  exists;  (ii)  0.080% per annum for any day Level II
        Status  exists;  (iii)  0.100%  per annum  for any day Level III  Status
        exists;  (iv) 0.125% per annum for any day Level IV Status  exists;  (v)
        0.175% per annum for any day Level V Status exists;  and (vi) 0.200% per
        annum for any day Level VI Status exists.

             (f) The  definition of "REQUIRED  BANKS"  appearing in Section 8 is
     hereby amended by deleting said definition in its entirety and substituting
     the following new definition in lieu thereof:

        "REQUIRED BANKS" means, at any time, Banks having more than 50.0% of the
        aggregate amount of the Commitments.

             (g) The  definition  of "TOTAL  CAPITAL"  appearing in Section 8 is
     hereby amended by deleting said definition in its entirety and substituting
     the following new definition in lieu thereof:

        "TOTAL  CAPITAL"  means,  as of  any  date  determination,  the  sum  of
        Consolidated Net Worth and Funded Debt.

             (h)  Section 8 is  further  amended  by adding  the  following  new
     defined term in its appropriate alphabetic order:

        "CONSOLIDATED NET WORTH" means, as of any date of determination, the sum
        of  stockholders'  equity  (including  preferred stock and QUIPs),  PLUS
        additional paid-in capital, PLUS retained earnings (or MINUS accumulated
        deficits) plus preferred securities of the Company and its Subsidiaries,
        PROVIDED,  however, that the computation of Consolidated Net Worth shall
        exclude  Accumulated Other  Comprehensive  Income/Loss and unearned ESOP
        shares, all of the foregoing  determined with respect to the Company and
        its  Subsidiaries  on a  consolidated  basis  in  accordance  with  GAAP
        consistently applied.

                                      -2-

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     2. Except as expressly  amended hereby,  the Committed  Facility Letter and
all other documents executed in connection  therewith shall remain in full force
and effect in accordance with their  respective  terms.  The Committed  Facility
Letter,  as  amended  hereby,  and all rights and  powers  created  thereby  and
thereunder  or under such  other  documents  are in all  respects  ratified  and
confirmed.  From and after the date hereof,  the Committed Facility Letter shall
be deemed to be  amended  and  modified  as herein  provided  and,  except as so
amended and modified, the Committed Facility Letter shall continue in full force
and effect in accordance  with its terms and the Committed  Facility  Letter and
this  Amendment  shall  be  read,  taken  and  construed  as one  and  the  same
instrument.  On and after the date  hereof the term  "AGREEMENT"  as used in the
Committed  Facility  Letter and all other  references to the Committed  Facility
Letter in the  Committed  Facility  Letter,  the  other  documents  executed  in
connection  therewith  and/or  herewith  or any other  instrument,  document  or
writing  executed by the Company or any other  person or  furnished to the Agent
and/or the Banks by the Company,  or any other person in connection  herewith or
therewith, shall be deemed to be a reference to the Committed Facility Letter as
hereby amended.

     3. The  effectiveness  of this Amendment is subject to the  satisfaction of
the following conditions precedent:

             (a) The Company  and each Bank shall have  executed  and  delivered
     this Amendment to Agent together with such other  documents and instruments
     as Agent may reasonably require;

             (b) The  payment of the  Extension  Fee (as  defined  below) to the
     Agent for the benefit of the Banks;

             (c) No  Default  or Event of Default  shall  have  occurred  and be
     continuing; and

             (d) Agent shall have received a certificate of the Secretary of the
     Company  showing the names and titles,  and bearing the  signatures of, the
     officers of the Company authorized to execute this Amendment.

     4. On and as of the date hereof, the Company represents and warrants to the
Agent and to the Banks that:

             (a) The representations and warranties  contained in this Amendment
     and the  Committed  Facility  Letter are true and  correct in all  material
     respects,  in each case as though made on and as of the date hereof, except
     to the extent  such  representations  and  warranties  relate  solely to an
     earlier  date (and then shall have been true and correct as of such earlier
     date); and

             (b) Both  before  and after  giving  effect to this  Amendment,  no
     Default or Event of Default has occurred and is  continuing or would result
     from the execution and delivery of this Amendment; and

                                      -3-

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             (c) The Company is, and will be, in full compliance with all of the
     material terms,  conditions and all other  provisions of this Amendment and
     the Credit Documents; and

             (d) This Amendment has been duly authorized, executed and delivered
     on its behalf,  and both the Committed  Facility Letter,  both before being
     amended and supplemented hereby and as amended and supplemented hereby, and
     this  Amendment   constitute  its  legal,   valid  and  binding  obligation
     enforceable against it in accordance with their terms, except to the extent
     that a  remedy  or  default  may be  determined  by a  court  of  competent
     jurisdiction  to  constitute  a  penalty  and  except  to the  extent  that
     enforceability  may be limited by bankruptcy,  insolvency,  reorganization,
     moratorium  or other  similar  laws  relating  to  creditors'  rights or by
     general principles of equity.

     5. The  Company  agrees  to  reimburse  the  Agent  and/or  the  Banks  for
reasonable  fees and expenses  incurred with respect to the  preparation of this
Amendment and all matters  incidental  thereto.  Without limiting the foregoing,
the  Company  shall pay to the Agent for the  ratable  benefit of the  Banks,  a
non-refundable  $37,500 extension fee (the "EXTENSION FEE"), which Extension Fee
shall be due and payable and fully earned upon the execution and delivery by the
Agent and the Banks of this Amendment.

     6. This Amendment shall be construed in accordance with and governed by the
internal laws of the State of Illinois,  without regard to its conflicts of laws
principles.

     7. This  Amendment  may be signed in any  number of  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same instrument. This Amendment may also be signed by facsimile, and
any  facsimile signature  hereto shall  for all  purposes be  deemed an original
signature.

     8. Except as otherwise specified herein, this Amendment embodies the entire
agreement  and  understanding  between the Company and the Banks with respect to
the subject  matter hereof and  supersedes  all prior  agreements,  consents and
understandings relating to such subject matter.

     9. This  Amendment  shall be binding  upon and inure to the  benefit of the
Banks and  their  successors  and  assigns  and the  Company  and its  permitted
successors and assigns.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -4-

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        IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to Fourth Amended and Restated Committed Facility Letter to be duly executed and
delivered by their duly  authorized  officers as of the day and year first above
written.


THE COMPANY:                            ALLETE, INC., a Minnesota corporation
-----------

                                        By:    /s/ Mark A. Schober
                                            ------------------------------------
                                        Name:  Mark A. Schober
                                              ----------------------------------
                                        Title: Sr. Vice President & CFO
                                               ---------------------------------


AGENT/BANKS:                            LASALLE BANK NATIONAL
-----------                             ASSOCIATION, in its individual capacity
                                        as a Bank and as Agent

                                        By:    /s/ Meghan Schultz
                                           -------------------------------------
                                        Name:  Meghan Schultz
                                             -----------------------------------
                                        Title: Assistant Vice President
                                              ----------------------------------


                                      -5-
<PAGE>

                                                                  SIGNATURE PAGE
       SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED COMMITTED FACILITY LETTER
                                                               DECEMBER 14, 2006

OTHER BANKS:
-----------

                                        U.S. BANK NATIONAL ASSOCIATION

                                        By:    /s/ Christine G. Dean
                                           -------------------------------------
                                        Name:  Christine G. Dean
                                        Title: Vice President


                                        WELLS FARGO BANK,
                                        NATIONAL ASSOCIATION

                                        By:    /s/ Patrick McCue
                                           -------------------------------------
                                        Name:  Patrick McCue
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------


                                        JPMORGAN CHASE BANK, N.A.

                                        By:    /s/ Nancy R. Barwig
                                           -------------------------------------
                                        Name:  Nancy R. Barwig
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------


                                        THE BANK OF TOKYO -
                                        MITSUBISHI, UFJ, LTD., CHICAGO
                                        BRANCH

                                        By:    /s/ Matthew A. Ross
                                           -------------------------------------
                                        Name:  Matthew A. Ross
                                        Title: Vice President & Manager


                                      -6-