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Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 7.01	Regulation FD Disclosure

•	Total capital expenditures for 2013 of approximately $300 million, of which approximately $125 million is expected to qualify for current cost recovery treatment.

•	Higher cost recovery revenue and federal production tax credits as a result of the Bison 2 and 3 wind generation projects in service for a full year, Minnesota Power’s continued participation in CapX2020 transmission projects, and capital expenditures for the Boswell Unit 4 environmental project, subject to regulatory approval.

•	The expected continuation of strong electricity usage by Minnesota Power’s current industrial customers. On December 1, 2012, Minnesota Power received demand nominations from Large Power taconite customers subject to demand nomination requirements indicating that they are expecting to operate at full demand levels for the first four months of 2013.

•	The expectation of an Essar Steel Minnesota (Essar) start-up in mid-2013, with pellet production beginning during the second half of the year resulting in a minimal impact on earnings until late 2013. ALLETE believes Essar will move towards full production capacity levels during 2014. Essar is a customer of the City of Nashwauk.

•	Higher depreciation and interest expenses resulting from recent capital additions.

•	Earnings from BNI Coal and a net loss at ALLETE Properties similar to 2012.

•	An effective tax rate of approximately 20 percent in 2013 due to increased federal production tax credits as a result of additional wind generation. We expect this effective tax rate will continue in 2014.

•	Earnings per share dilution between $0.10 and $0.15 as a result of higher average shares of common stock outstanding primarily due to shares issued in late 2012.

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•	our ability to successfully implement our strategic objectives;

•

regulatory or legislative actions, including changes in governmental policies of the United States Congress, state legislatures, the FERC, the MPUC, the PSCW, the NDPSC, the EPA and various state, local and county regulators, and city administrators, about allowed rates of return, capital structure, financings, industry and rate structure, acquisition and disposal of assets and facilities, real estate development, operation and construction of plant facilities, recovery of purchased power, capital investments and other expenses, present or prospective wholesale and retail competition (including but not limited to transmission costs), zoning and permitting of land held for resale and environmental matters;

•	our ability to manage expansion and integrate acquisitions;

•	our industrial customers’ ability to execute potential expansion plans;

•	the potential impacts of climate change and future regulation to restrict the emissions of GHG on our Regulated Operations;

•	effects of restructuring initiatives in the electric industry;

•	economic and geographic factors, including political and economic risks;

•	changes in and compliance with laws and regulations;

•	weather conditions, natural disasters and pandemic diseases;

•	war, acts of terrorism and cyber attacks;

•	wholesale power market conditions;

•	population growth rates and demographic patterns;

•	effects of competition, including competition for retail and wholesale customers;

•	changes in the real estate market;

•	pricing and transportation of commodities;

•	changes in tax rates or policies or in rates of inflation;

•	project delays or changes in project costs;

•	availability and management of construction materials and skilled construction labor for capital projects;

•	changes in operating expenses and capital expenditures;

•	global and domestic economic conditions affecting us or our customers;

•	our ability to access capital markets and bank financing;

•	changes in interest rates and the performance of the financial markets;

•	our ability to replace a mature workforce and retain qualified, skilled and experienced personnel; and

•	the outcome of legal and administrative proceedings (whether civil or criminal) and settlements.

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