JUNE 1, 2012
A NEWSLETTER FOR THE SHAREHOLDERS OF ALLETE, INC.
Boswell 4 retrofit unveiled at annual meeting
Unit 4 of Minnesota Power’s Boswell
Energy Center, the company’s largest
electric generating unit, will undergo a
major environmental retrofit, ALLETE
Chairman, President and CEO Al Hodnik
announced May 8 at the company’s
Annual Meeting of Shareholders.
“This capstone event of our six-year
environmental control effort will
transform Boswell 4, the workhorse of our
generation fleet, so it continues to provide
reliable, safe and affordable electric
power to our customers,” Hodnik told
shareholders at the Duluth Entertainment
Convention Center.
The retrofit at the Cohasset, Minn.,
generating station will reduce emissions of
mercury, particulates and sulfur dioxide.
Boswell Unit 4 is capable of producing 585
megawatts (MW) of electricity. Minnesota
Power owns 80 percent of Boswell 4,
with the balance owned by WPPI Energy.
Minnesota Power’s share of the project is
expected to cost from $350 million to $400
million. Multi-emission reduction project
plans and permit applications will be filed
with federal and state regulators next
month. In his message to an estimated 730
ALLETE shareholders, Hodnik outlined
five “multifaceted multiyear growth
initiatives”: transmission investments,
renewable energy, energy-centric
investments, organic revenue growth and
environmental upgrades.
“This is what excites us today at
ALLETE,” Hodnik said, “the promise
of future growth.” Prior to the Boswell
announcement, the audience was treated
to the premiere of a video featuring
industrial growth on the Iron Range.
amendment to the Employee Stock
Purchase Plan to increase the number of
shares of stock authorized for issuance
under the plan; and ratification of
PricewaterhouseCoopers as the company’s
independent accountant.
Shareholders also elected the following
directors to serve until the next annual
meeting:
Kathleen
Brekken, Kathryn
Dindo, Heidi
Eddins, Sidney
Emery Jr., James
Haines Jr., Alan
Hodnik, James
Hoolihan,
Madeleine
Ludlow, Douglas
Neve, Leonard
Rodman and
Bruce Stender.
Al Hodnik greets employees at the annual meeting.
“When we look at ALLETE’s many growth
opportunities, none is closer to our
heart and home than organic revenue
growth,” Hodnik said, “and to envision
a prosperous future on the mineral-rich
Mesabi Iron Range.”
Voting by proxy, shareholders approved
by wide margins: an advisory resolution
on executive compensation; an
Don Shippar, the former president and
CEO of ALLETE who had served on the
board since 2004 and was board chairman
from 2006 to 2010, has retired from the
board.
Hodnik named Human Resource Analyst
Thor Underdahl recipient of the 2012
Don Shippar Community Service Award.
Dear Shareholders,
Thanks to all of you who filled the ballroom at our Annual
Meeting of Shareholders May 8 in Duluth. The meeting focused
on the five multifaceted, multiyear growth initiatives your
company is working on. We also looked back in thanks to the
service of Don Shippar, who retired as a director this year after
decades of service to ALLETE.
We announced a major environmental project at our largest coalfired generating asset, Boswell Unit 4. When complete, Boswell 4
will join Boswell 3 as two of the cleanest coal units in the nation.
We’ll have more details in future issues of this newsletter.
There is plenty to keep us busy at ALLETE, with new
transmission projects on the drawing board, a large expansion
to our Bison wind farm to complete and many other initiatives
under way.
As always, we sincerely appreciate your investment in ALLETE.
Alan R. Hodnik
Chairman, President and Chief Executive Officer
New transmission would bring Canadian hydropower southward
To bring renewable, carbon-free energy
from Canada and upgrade the Upper
Midwest’s electric system, Minnesota
Power is proposing the construction
of new transmission from Winnipeg to
the Mesabi Iron Range and eventually
into Duluth. Minnesota Power also
is exploring other regional grid
enhancements.
Minnesota Power filed its intent in
February to pursue the project through
the transmission expansion planning
process of MISO, which manages grid
reliability and electricity markets across 11
northern tier states and Manitoba.
Earlier this year, regulators approved
Minnesota Power’s 15-year, 250-MW
purchase of hydropower from Manitoba
Hydro beginning in 2020.
The agreement will provide a competitive
energy resource for customers of
Minnesota Power. Additional hydropower
will support Minnesota Power resource
planning goals of more efficiency,
flexibility and diversity, while lowering
emissions and lessening dependence on
coal.
Winnipeg-based Manitoba Hydro
produces most of its power from
hydroelectric stations in the northern
part of the province, and this agreement
facilitates construction of the new
Keeyask Generating Station.
A unique aspect of the power purchase
agreement is Minnesota Power’s ability to
“store” wind energy generated in North
Dakota in Manitoba Hydro’s hydroelectric
system. Through a provision in the
agreement, Minnesota Power will be able
to deliver electric energy northward from
its wind farms in North Dakota when wind
production is high and electric loads are
low.
New transmission infrastructure to carry
the energy from Manitoba is an essential
component of the power purchase
agreement. Planners at Minnesota Power
and Manitoba Hydro have proposed the
construction of a 500-kilovolt (kV) line that
would strengthen the electric grid, enhance
regional reliability and promote a greater
exchange of sustainable energy.
That 500-kV circuit is expected to extend
southward from Winnipeg and connect
to a substation on the Mesabi Iron
Range, where several Minnesota Power
industrial customers process taconite and
manufacture paper. The Winnipeg-Iron
Range transmission build is expected to be
in service in 2020.
Minnesota Power and American
Transmission Co. (ATC) are also evaluating
the joint development of other transmission
lines connecting the Iron Range to Duluth
and into Wisconsin. Total transmission costs,
ownership shares and cost allocation are still
to be determined.
Weekly safety meetings are held at the Bison Wind Energy Center construction site. By May 1, about
25,000 hours of work had been done on Bison 2 and 3.
Bison 2 and 3 move forward in N.D.
Work is under way on an accelerated
timeline on Minnesota Power’s Bison 2
and Bison 3 wind farms, located adjacent
to the Bison 1 installation in Oliver and
Morton Counties, North Dakota.
Bison 2 and 3 will each consist of 35
Siemens 3-MW direct-drive turbines, and
together they’ll supply an additional 210
MW of renewable energy.
Commissioning of the last Bison 1B
wind turbine near New Salem, N.D., was
completed Jan. 31, 2012, by personnel
from Minnesota Power and its primary
contractor, Siemens. Bison 1A, the first
phase of the 82-MW installation, was
finished in early 2011 and has been
producing renewable energy since.
Work on Bison 2 and 3 continues with
favorable fall and winter weather allowing
solid progress on roads, foundations,
trenching and cabling. The first crossAtlantic shipment of wind turbine
components was scheduled to arrive
in Duluth in May. Bison 2 and 3 are
scheduled for completion by the end of
2012.
In approving Minnesota Power’s long-term
resource plan last May, the Minnesota
Public Utilities Commission ordered the
company to strongly consider adding more
wind to its renewable portfolio before
the expiration of federal production tax
credits on Dec. 31, 2012.
New ALLETE gift
cards now available
ALLETE’s Shareholder Services has stocked
up on colorful new gift cards that can be given
to recipients of ALLETE stock. If you plan
on gifting shares of ALLETE, drop by the
Shareholder Services office at 30 W. Superior St.
in Duluth to pick out your gift cards, or
call 800-535-3056 for more information.
The statements contained in this newsletter and statements that ALLETE may make orally in connection with this newsletter 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.
Shareholder Services ALLETE→● 30 West Superior Street ●→Duluth, MN 55802-3974→● 218.355.3974 or 1.800.535.3056 ● E-mail: shareholder@ALLETE.com