Minnesota Power's 2013 Resource Plan Reshapes Energy Supply Through Additional Renewable Resources, Less Carbon, and Balanced

  Minnesota Power's 2013 Resource Plan Reshapes Energy Supply Through
  Additional Renewable Resources, Less Carbon, and Balanced Approach

Business Wire

DULUTH, Minn. -- March 1, 2013

In its 2013 Resource Plan filed today, Minnesota Power, a division of ALLETE
(NYSE: ALE), further outlined its commitment to meeting the needs of customers
with a reliable, affordable and sustainable power supply now and into the
future.

“Minnesota Power’s Resource Plan is the next chapter in our EnergyForward road
map to a cleaner energy future,” said ALLETE Chairman, President and CEO Al
Hodnik. “Through wise investments in our existing facilities, additions of
emission free wind and hydro resources and a balancing of our coal fueled
generation, Minnesota Power is well positioned to further diversify its energy
mix, while preserving reliability and cost effectively meeting the increasing
energy needs of its customers.”

Minnesota Power’s Resource Plan recommends specific action on its coal fleet
to comply with state and federal environmental regulations, and the addition
of new wind resources in the short term and natural gas in the long term to
further diversify its power supply.

The comprehensive Resource Plan, which is required to be submitted by
utilities in Minnesota to the Minnesota Public Utilities Commission (MPUC)
about every two years, spans a 15-year planning period from 2013 to 2027. It
assesses environmental and economic futures affecting energy supply and demand
while weighing the benefits and risks of various resource supply options.
Minnesota Power’s planning position differs from most other utilities because
it forecasts load growth largely associated with the ferrous and non-ferrous
mining sector of Northeast Minnesota.

“Our Resource Plan represents the next step in reshaping our power supply and
moving toward our EnergyForward vision of a balanced energy mix comprised of
approximately one-third coal, one-third renewable resources, and one-third
natural gas and other market resources,” Hodnik said.

“Energy demand in our region is expected to increase significantly in the
coming years due to large-scale industrial projects coming online,” Hodnik
said. “Our resource strategy will provide the necessary power to cost
effectively meet increasing customer needs; at the same time we are moving
forward in a socially responsible manner and will reduce carbon emissions 30
percent by 2015 compared to 2005, well ahead of Minnesota’s carbon goals.”

Under the 2013 Resource Plan the company will:

  *Request proposals for up to 200 megawatts of additional wind energy
    following the extension of the federal Production Tax Credit to be brought
    online in 2014-2015.
  *Continue and enhance its leading-edge Power of One conservation program to
    meet or exceed state conservation goals of 1.5 percent.
  *Invest $350 million in additional environmental control technology at
    Boswell Unit 4, the company’s newest, largest and most efficient
    generating unit, to retain reliability and reduce mercury emissions by 90
    percent. The upgrades will comply with the Minnesota Mercury Emission
    Reduction Act and the EPA Mercury Air Toxics Standard (MATS).
  *Reduce coal fired generation on its fleet by 185 megawatts through the
    conversion of Laskin Energy Center in Hoyt Lakes to a natural gas peaking
    station and the retirement of one of three units at Taconite Harbor Energy
    Center in Schroeder.
  *Further transition the company’s energy supply mix toward one-third
    natural gas and other market resources, one-third coal, and one-third
    renewable energy in the long term through hydro and wind energy additions
    and a post-2020 natural gas generation resource.
  *Leverage surplus energy market conditions to maintain competitive electric
    service rates.
  *Deliver 250 megawatts of hydropower under contract from Manitoba Hydro by
    2020 through a proposed 500-kilovolt transmission line – the Great
    Northern Transmission Line.

Minnesota Power’s Resource Plan is subject to review and approval by the
Minnesota Public Utilities Commission. The Commission is anticipated to take
action on the Plan by the end of 2013. The Plan can be found on Minnesota
Power’s website at mnpower.com

Minnesota Power provides retail electric service within a 26,000-square-mile
area in northeastern Minnesota to 144,000 customers and wholesale electric
service to 16 municipalities. More information can be found at
www.mnpower.com.

The statements contained in this release and statements that ALLETE may make
orally in connection with this release that are not historical facts, are
forward-looking statements. Actual results may differ materially from those
projected in the forward-looking statements. These forward looking statements
involve risks and uncertainties and investors are directed to the risks
discussed in documents filed by ALLETE with the Securities and Exchange
Commission.

Contact:

Minnesota Power/ALLETE
Amy Rutledge, 218-723-7400
Manager - Corporate Communications
arutledge@mnpower.com
 
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