Minnesota Power is Moving Forward with Flood Repairs to Strengthen Renewable Resource Asset for the Next Hundred Years

  Minnesota Power is Moving Forward with Flood Repairs to Strengthen Renewable
  Resource Asset for the Next Hundred Years

Business Wire

DULUTH, Minn. -- June 18, 2013

Minnesota Power, a division of ALLETE Inc. (NYSE: ALE), said today it expects
to have its largest hydro station, which has been out of commission due to
flooding one year ago, partially back in operation by the end of this year and
fully restored in 2014.

Major repairs are underway at the company’s Thomson Hydro Station on the lower
St. Louis River in Jay Cooke Park. The 106-year-old hydroelectric plant has
been out of service since June 20, 2012, after as much as 10 inches of rain
fell in the region, causing flash floods in some areas and longer-term
flooding in others.

“The significance of this localized event was striking,” said Minnesota Power
Chief Operating Officer Brad Oachs. “We saw peak river flows of 56,000 cubic
feet per second which was 40 percent above previous record flows. Our
employees performed admirably under extremely challenging circumstances.”

While the integrity of the company’s hydro dams was maintained during the
unprecedented event, the sheer volume of water and speed at which the flow of
the river changed flooded the six turbines at Thomson, overtopped the Thomson
reservoir and breached a portion of an earthen dike at the forebay, a small
reservoir that feeds water into the Thomson power station. The flood washed
out roads and caused mudslides in Jay Cooke State Park, limiting access to the
powerhouse by foot or on all-terrain vehicles for months.

Minnesota Power operates five reservoirs and four hydro stations along the St.
Louis River: Knife Falls, Scanlon, Thomson and Fond du Lac. The Thomson
facility, capable of generating 72 megawatts, is the largest hydro facility in
the state of Minnesota and an important part of the company’s EnergyForward
strategy, which calls for a balanced, less carbon-intensive energy portfolio.

“Thomson is the very heart of our hydro system and has served our customers
with low-cost renewable energy for more than 100 years,” Oachs said.
“Investing in repairs and other improvements to strengthen the system against
future flood events will position Thomson as a reliable and cost effective
emission free resource for the next 100 years.”

Minnesota Power has been working closely for the past year with the Federal
Energy Regulatory Commission (FERC), the agency responsible for dam safety
oversight, and an independent consulting board of engineers on assessing
impacts of the June 2012 flood, planning and design development to restore the
forebay and other improvements to the hydro system. The company has filed with
FERC a comprehensive report of how its employees and systems performed during
the June 2012 event.

Repairs to the forebay are estimated at $25 million. In addition to the
forebay work, the company is investing about $35 million in improvements to
harden the system against future flooding and maintenance and rehabilitation
of facilities that would have required extended outages within the next
several years.

Minnesota Power expects to file a request with the MPUC in 2013 for cost
recovery of capital expenditures related to the restoration and repair of the
Thomson facility and other related St. Louis River hydro system projects.

A major component of the forebay reconstruction is expected to get underway in
August. Sheets of steel will be placed into the ground to reinforce almost
3,000 feet of rebuilt earthen embankment. A new permanent concrete spillway
also will be installed at the breach site. Minnesota Power is also working
closely with the Minnesota Department of Transportation, Carlton County, Jay
Cooke State Park and local elected officials to minimize effects construction
will have on area residents and the park and to assist the park in rebuilding
trails damaged in the area.

Minnesota Power provides electric service within a 26,000-square-mile area in
northeastern Minnesota, supporting comfort, security and quality of life for
143,000 customers, 16 municipalities and some of the largest industrial
customers in the United States. 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