ALLETE, Inc. provides low-cost, reliable energy services in the upper Midwest and has significant real estate holdings in Florida. Duluth-based electric utility Minnesota Power, incorporated in 1906, serves 137,000 residents, 16 municipalities and some of the nation’s largest industrial customers. Among these are six taconite mines and processing plants that use large quantities of electric power. Taconite is a critical raw material used to make steel. ALLETE is also the parent company of Superior Water, Light and Power, a Wisconsin utility.

ALLETE Properties encompasses real estate operations in several Florida locations. The bulk of our property is in booming northeast Florida, where we have three major projects totaling 9,000 acres in various stages of development. ALLETE also owns BNI Coal of Center, N.D., which consistently ranks as the lowest-cost producer of lignite coal in that state.

ALLETE (ticker symbol ALE) is listed on the New York Stock Exchange.     

    
Minnesota Power’s electric rates are among the lowest in the United States. According to the most recent statistics from the Edison Electric Institute, Minnesota Power’s average retail rates are the lowest in the state, lowest in the region and eighth lowest of 177 utilities in the U.S. Minnesota Power has an annual net peak load of approximately 1,500 megawatts. Its primary generating stations are the Boswell Energy Center in Cohasset, the Laskin Energy Center in Hoyt Lakes and the Taconite Harbor Energy Center in Schroeder, all of which are powered by low-sulfur, sub-bituminous coal from the Powder River Basin in Montana. These plants are supplemented by 10 hydroelectric generators in our territory and power purchases, the largest of which comes from the Square Butte Cooperative in North Dakota.

We have electric transmission and distribution lines of 500 kV (8 miles), 230 kV (606 miles), 161 kV (43 miles), 138 kV (66 miles), 115 kV (1,259 miles) and less than 115 kV (6,935 miles). We own and operate 179 substations with a total capacity of 8,562 megavoltamperes.

Approximately 60% of the ore consumed by integrated steel facilities in the United States originates from taconite customers of Minnesota Power. Taconite, an iron-bearing rock of relatively low iron content, is an important domestic source of raw material for the steel industry. Taconite processing plants use large quantities of electric power to grind the ore-bearing rock, and agglomerate and pelletize the iron particles into taconite pellets.

In December of 2003, the former Eveleth Taconite plant re-opened as United Taconite LLC under new ownership that includes Cleveland-Cliffs Inc. and Laiwu Steel Group, a Chinese-based steel producer. A rise in Chinese steel demand and production has created a new market and firmed prices for the producers of taconite in North America.

Among Minnesota Power’s other large customers are major paper producers: UPM’s Blandin Paper Mill in Grand Rapids, Minn., Boise Paper in International Falls, Sappi in Cloquet and Stora Enso North America in Duluth. The utility also serves two major energy pipeline companies, Enbridge and Minnesota Pipeline.

Minnesota Power has approximately 1,200 full-time employees, about half of whom are members of the International Brotherhood of Electrical Workers.

Minnesota Power diversifies beyond energy   top
 
Incorporated in 1906 under another name, Minnesota Power & Light came into being in the 1920s as an electric utility based in Duluth, Minn. The company was, and is, geographically situated to serve wood products industries and iron mining. The utility’s service territory in northeastern Minnesota is heavily forested and encompasses the largest deposit of iron ore in the U.S. In the 1950s, the Mesabi Iron Range northwest of Duluth was transformed as the nation’s steel industry invested heavily in the major taconite plants within Minnesota Power’s service area. Taconite is a refined and concentrated form of low-grade iron ore mined in northeast Minnesota.

Mesabi Range taconite production peaked in 1979; three years later production plunged as the American steel industry suffered through a recession. The company changed its name from Minnesota Power and Light to Minnesota Power in 1980.
 
A new strategy began to emerge. The company’s northern location and rugged winter climate was a barrier to customer growth. Minnesota Power’s electric sales were overly dependent upon two industries – taconite production and paper and pulp manufacturing – that were very cyclical. Minnesota Power made the decision to diversify both geographically and economically.

A diversification timeline   top

• 1984 – Minnesota Power acquires Milwaukee-based Universal Telephone.
   
• 1985 – Minnesota Power subsidiary invests in Deltona Corp. with option to buy its Florida water, wastewater and LP gas utilities later.
  
• 1987 – Lake Superior Paper Industries starts up $400 million paper mill in Duluth. It’s a partnership of Minnesota Power and Pentair, Inc.
  
• 1987 – Heater Utilities, a water/wastewater company serving the Carolinas, is acquired.
  
• 1989 – Topeka acquires utility holdings of the Deltona Corporation.
  
• 1991 – Topeka acquires Lehigh Corporation and Lehigh Utilities Inc.
  
• 1995 – Minnesota Power acquires ADESA, an automotive auction firm.
   
• 1996 – Minnesota Power, through its real estate subsidiaries, acquires 13,000 acres of land and other assets at Palm Coast, Fla. from ITT.
   
• Auto transport company subsidiary expands and is renamed Great Rigs, Inc.
   
• 1999 – Minnesota Power and Wisconsin Public Service Corp. announce plans to construct a 345-kilovolt transmission line from Wausau, Wis. to Duluth, Minn.
   
• 2000 – Minnesota Power, Inc. changes its corporate name to ALLETE
  
•  Minnesota Power continues as the name of ALLETE’s electric utility.
   
• 2003-2004 – ALLETE sells its water operations for approximately $500 million.
   
• 2004 – ALLETE spins off ADESA to ALLETE’s shareholders, and it becomes an independent publicly-traded company. ADESA pays a $100 million dividend to ALLETE and agrees to repay all inter-company debt.
   
• 2005 – ALLETE Properties begins infrastructure construction at Town Center at Palm Coast, one of three major Florida developments located in and around Flagler County, the fastest-growing county in the United State according to the U.S. Census Bureau.