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December 1, 2005
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Minnesota Power unveils $60 million initiative
expected to reduce air emissions at Laskin, Taconite Harbor
 Minnesota Power announced a $60 million environmental initiative in October
that is expected to signifi cantly reduce air emissions from two of its
electric generating facilities in northeastern Minnesota. The initiative, called
AREA (for Arrowhead Regional Emission Abatement) is designed to reduce
emissions at the Laskin Energy Center in Hoyt Lakes and the Taconite
Harbor Energy Center in Schroeder.
Minnesota Power already utilizes extensive emission reduction technology
at all of its coal-based facilities and uses low-sulfur, low-mercury coal to operate
at 70 percent below existing air emission permit requirements. While
federal and state governments work toward developing new emission standards,
Minnesota Power plans to take early voluntary action to reduce emissions in the 2006-2008 timeframe, pending regulatory approval. At
Taconite Harbor, Minnesota Power plans to employ multi-emission reduction
technology, while at Laskin, the company plans a retrofi t that would
lower emissions of nitrogen oxides (NOx). Upon projected completion of
the retrofits, Minnesota Power estimates it could reduce NOx emissions by
more than 60 percent at both facilities and reduce sulfur dioxide (SO2) by
65 percent at Taconite Harbor. Laskin Energy Center already has relatively
low emission levels of sulfur dioxide due to existing technology. Additionally,
with the emerging technology being applied at Taconite Harbor, there
is the potential for as much as a 90 percent reduction in mercury.
“Minnesota Power has an excellent environmental record and we take
stewardship of the land, water and air very seriously,” said Don Shippar,
ALLETE President and CEO. “We believe that control and abatement technology
applicable to these plants has matured to the point where further
signifi cant air emission reductions can be attained in a relatively cost-effective
manner.”
Minnesota Power filed the AREA plan with the Minnesota Public Utilities
Commission in October, and, if approved, the cost for implementing it will
be recovered through an adjustment to customer rates.
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Dear Shareholder |
 With a month of work ahead of us in 2005, we are pleased with the
progress we’ve made this year in meeting our fi nancial goals. It’s a very
positive event when we increase our full year earnings guidance after
three quarters, as we did Oct. 28.
Behind the quarterly reporting of ALLETE’s revenue,
earnings and assets lies a framework of operational
achievements guided by our company’s strategy. This
year, I think we’ve done a great job of matching our operations
to our strategy in a way that lifts the potential
of our corporation.
Since I last wrote to you, Minnesota Power announced
an initiative aimed at significantly reducing air emissions at
our Laskin and Taconite Harbor generating stations. This proposal,
which will require regulatory approval, meets a strategic objective to
invest in our energy business while operating in an environmentally
responsible manner.
We’re pursuing a strategic growth opportunity through our intention
to invest in the American Transmission Co., a for-profi t company
created by the transfer of transmission assets previously owned by
several utilities in the upper Midwest. If approved by other parties and
regulators, we will have a $60 million equity investment in ATC by the
end of 2006.
 We’re making great progress on three major real estate development
projects in Florida, realizing our plan of “maximizing the value of the
property with a growing and consistent contribution to earnings.”
As we look forward to the possibilities that lie ahead in 2006, we at ALLETE wish you a warm and happy holiday season. Thanks again for
your investment.
Sincerely,
Don Shippar
Chief Executive Officer
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ALLETE Properties subsidiary files
Ormond Crossings Development of Regional Impact Plan
ALLETE Properties subsidiary Tomoka Holdings LLC has submitted a
Development of Regional Impact (DRI) application for its Ormond Crossings
project, a 6,000-acre mixed-use development in Ormond Beach, Fla.
The DRI was submitted to the East Central Florida Regional Planning
Council. Ormond Crossings, located along Interstate 95 at its interchange
with U.S. Highway 1, will be the largest of three major real estate projects
under development by ALLETE Properties.
The Ormond Crossings proposal includes 5million square feet of commercial,
offi ce and industrial opportunities along with up to 4,400 residential
units. ALLETE Properties anticipates that the DRI approval process
will be concluded in about 16 months, at which time the company would
receive a Development Order from the City of Ormond Beach.
Ground was broken on the Town Center at Palm Coast development
earlier this year and construction is scheduled to begin on the Palm Coast
Park property in 2006. Florida recently granted the Palm Coast Park
Community Development District authority to issue special assessment
revenue bonds to fi nance property development there.
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ALLETE agrees to sell Enventis Telecom for $35.5 million
 ALLETE announced Nov. 9 it had agreed to sell subsidiary Enventis Telecom to HickoryTech Corporation of Mankato, Minn., for $35.5 million.
Under terms of the agreement, ALLETE’s subsidiary
Minnesota Power Enterprises will sell
all of its stock in Enventis to HickoryTech, a
public company listed on the Nasdaq Stock
Exchange. Th e sale is expected to be completed
near the end of the year.
Enventis Telecom is a regional telecommunications
provider and network infrastructure
integrator specializing in Internet Protocol
(IP) communications. ALLETE acquired Enventis
in 2001 and combined it with its MP
Telecom subsidiary.
HickoryTech, a diversified communications
company with operations in Minnesota and
Iowa, is the 29th-largest telephone company
in the United States.
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ALLETE ups earnings guidance after solid third quarter results
ALLETE has increased its 2005 full-year guidance
to 60 percent earnings per share growth from continuing
operations compared to 2004, due to continued
strong sales of energy and real estate. The
increased projection does not include a one-time
charge in the second quarter of 2005 to transfer
a purchased power contract related to a Kendall
County, Ill. energy facility.
“Our financial performance through the first three
quarters of 2005 has exceeded our original expectations,”
ALLETE CEO Don Shippar said in an Oct.
28 conference call with analysts. ALLETE originally
projected in February that 2005 earnings per share
from continuing operations would grow 45 to 50
percent compared to 2004, excluding the anticipated
Kendall transaction.
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MP signs long-term pact with Mittal, world’s largest steelmaker
Minnesota Power has reached a long-term agreement
with Mittal Steel USA to provide all electric
service needs through December 2012 for Mittal’s
production facility near Virginia, Minn.
Mittal Steel USA —Minorca Mine (formerly Ispat
Inland Mining) is Minnesota Power’s fifth largest
energy customer and is located on the Mesabi Iron
Range in northeastern Minnesota.
In 2004 the Minorca Mine produced nearly three
million tons of taconite pellets, representing approximately
7 percent of Minnesota’s annual pellet
output. Taconite pellets are a primary feedstock for
steelmaking.
The agreement is subject to approval by the Minnesota
Public Utilities Commission.
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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 55802-2093 • 218-723-3974 or 1-800-535-3056
E-mail: shareholder@ALLETE.com |
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