ALLETE has entered an agreement to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners and start the process to become a private company. Learn more at www.ALLETEforward.com.

          Information contained herein is subject to completion or
          amendment.  This prospectus shall not constitute an offer to sell
          or the solicitation of an offer to buy nor shall there be any
          sale of these securities in any jurisdiction in which such offer,
          solicitation, or sale would be unlawful prior to registration or
          qualification under the securities laws of any such jurisdiction.



                                SUBJECT TO COMPLETION
              PRELIMINARY PROSPECTUS SUPPLEMENT DATED SEPTEMBER 10, 1998

          PROSPECTUS SUPPLEMENT
          (TO PROSPECTUS DATED MAY 18, 1998)


                                   2,000,000 SHARES


                                MINNESOTA POWER, INC.

                                     COMMON STOCK

                                   ---------------

             Outstanding shares of Common Stock, without par value, and the
          preferred share purchase rights attached thereto ("Common
          Stock"), of Minnesota Power, Inc. ("Company") are, and the shares
          of Common Stock offered hereby ("Offered Stock") will be, listed
          on the New York Stock Exchange (Symbol: MPL).  The last reported
          sale price of the Common Stock on the New York Stock Exchange on
          September 9, 1998 was $42 7/16 per share.  See "Dividends and
          Price Range."

                                   ---------------

           THESE SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED BY THE
             SECURITIES  AND EXCHANGE COMMISSION OR  ANY STATE SECURITIES
              COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
                  OR ANY STATE SECURITIES  COMMISSION  PASSED UPON  
                     THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS 
                     SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. 
                          ANY REPRESENTATION TO THE CONTRARY
                                IS A CRIMINAL OFFENSE.


          ====================================================================
                                                Underwriting     Proceeds
                                   Price to     Discounts and       to
                                    Public     Commissions(1)   Company(2)
          --------------------------------------------------------------------
           Per Share . . . . .     $              $             $
          --------------------------------------------------------------------
           Total . . . . . . .     $              $             $
          --------------------------------------------------------------------
           Total Assuming Full
            Exercise of
            Over-Allotment
            Option (3) . . . .     $              $             $
          ====================================================================
          (1)  See "Underwriting."
          (2)  Before deducting expenses payable by the Company estimated
               at $185,000.
          (3)  Assuming exercise in full of the 30-day option granted by
               the Company to the Underwriters to purchase up to an
               additional 300,000 shares of Common Stock, on the same
               terms, solely to cover over-allotments.  See "Underwriting."


                                   ---------------

               The shares of Offered Stock are offered by the Underwriters,
          subject to prior sale, when, as and if delivered to and accepted
          by the Underwriters, and subject to their right to reject orders
          in whole or in part.  It is expected that delivery of the Offered
          Stock will be made in New York City on or about
                            , 1998.

                                   ---------------
          PAINEWEBBER INCORPORATED

                              ROBERT W. BAIRD & CO. 
                                   INCORPORATED

                                             JANNEY MONTGOMERY SCOTT INC.

                                   ---------------

            The date of this Prospectus Supplement is             , 1998.


     

               CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
          TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE
          PRICE OF THE COMMON STOCK OF THE COMPANY INCLUDING OVER-
          ALLOTMENT, STABILIZING AND SHORT COVERING TRANSACTIONS IN THE
          COMMON STOCK, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION
          WITH THE OFFERING.  FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
          "UNDERWRITING".






                                 SELECTED INFORMATION


               The following material, which is presented herein solely to
          furnish limited introductory information, is qualified in its
          entirety by, and should be considered in conjunction with, the
          information appearing elsewhere in this Prospectus Supplement,
          the accompanying Prospectus and in the Incorporated Documents.

                                     THE COMPANY



               The Company is a broadly diversified service company with
          operations in four distinct business segments.  The Company has
          7,000 employees and operates in 36 states and six Canadian
          provinces.

               .   ELECTRIC OPERATIONS provide electricity to
          141,000 customers in northeastern Minnesota and northwest
          Wisconsin, and in 1997 had the second lowest average cost of
          electricity to retail customers in the United States.  Industrial
          customers contributed approximately one half of 1997 electric
          operating revenue and income.  The Company's large power
          customers include:  five taconite producers (taconite is the raw
          material used in the production of steel), four pulp and paper
          mills, and two pipeline companies.  Long-term contracts with the
          Company's large power customers have termination dates ranging
          from April 2001 to December 2008.  The Company's MPEX division
          markets low-cost wholesale electricity across the Midwest. 
          Electric Operations also sell water and natural gas in Wisconsin,
          and own BNI Coal, Ltd., a North Dakota coal mine.

               .   WATER SERVICES include Florida Water Services
          Corporation, which is the largest investor owned water supplier
          in Florida, and Heater Utilities, Inc., located in North
          Carolina.  Together these two wholly owned subsidiaries provide
          water and wastewater services to over 200,000 customers.  Water
          Services also include three non-regulated water businesses which
          provide predictive maintenance, instrumentation consulting, and
          contract management and operations services.

               .   AUTOMOTIVE SERVICES include three wholly
          owned subsidiaries operating as integral parts of the vehicle
          auction business.

                   .    ADESA Corporation is tied for second place in
          the United States in terms of vehicle auction network size. 
          ADESA owns and operates 28 vehicle auction facilities in the
          United States and Canada through which used cars and other
          vehicles are purchased by franchised automobile dealers and
          licensed used car dealers.  Sellers at ADESA's auctions include
          domestic and foreign auto manufacturers, car dealers, fleet/lease
          companies, banks and finance companies.  ADESA does not generally
          take ownership of vehicles, but specializes in bringing together
          wholesale buyers and sellers.

                   .    Automotive Finance Corporation provides
          inventory financing for wholesale and retail automobile dealers
          who purchase vehicles from ADESA auctions, independent auctions
          and other auction chains.  AFC has 84 loan production offices
          located at most ADESA and ADT Automotive, Inc. auctions, as well
          as at or near other independently owned auto auctions.


                                      S-2
    

                   .    Great Rigs Incorporated is one of the nation's
          largest independent used automobile transport carriers with 153
          leased automotive carriers and 13 strategically located
          transportation hubs.  Customers of Great Rigs include ADESA
          auctions, car dealerships, vehicle manufacturers, leasing
          companies, finance companies and other auctions.

               .   INVESTMENTS include:

                   .    a $190 million securities portfolio at June 30, 1998;

                   .    a 21 percent ownership interest in Capital Re
          Corporation, a New York Stock Exchange listed company engaged in
          the specialty insurance and reinsurance business, which interest
          consists of 6.5 million shares of Capital Re common stock with a
          market value of $234 million at June 30, 1998; and

                   .    an 80 percent ownership interest in Lehigh
          Acquisition Corporation, a Florida real estate company which owns
          1,600 acres of land and approximately 800 home sites near Fort
          Myers, Florida; 900 home sites in Citrus County, Florida; and
          2,400 home sites and 11,400 acres of residential, commercial and
          industrial land at Palm Coast, Florida.


                                   THE OFFERING


           Securities Offered by the
           Company (*) . . . . . . . . .    2,000,000 shares of Common
                                            Stock, without par value,
                                            and the preferred share
                                            purchase rights attached
                                            thereto.
           Indicated Current Annual
           Dividend Rate . . . . . . . .    $2.04 per share

           1996-1998 Price Range (through
           September 9, 1998)  . . . . .    $26 - $44

           Shares Outstanding at August
           31, 1998  . . . . . . . . . .    33,879,967
           Listed  . . . . . . . . . . .    New York Stock Exchange
                                            (Symbol: MPL)

           Use of Proceeds . . . . . . .    Net proceeds will be used
                                            to repay outstanding
                                            commercial paper, to fund
                                            the upcoming acquisition of
                                            Palm Coast Utility
                                            Corporation and for general
                                            corporate purposes,
                                            including capital
                                            expenditures.







          ------------------

          (*)       Assumes the Underwriters' over-allotment
                    option is not exercised.


                                      S-3
     

                            SUMMARY FINANCIAL INFORMATION
                        (IN MILLIONS EXCEPT PER SHARE AMOUNTS)


                                                     (UNAUDITED)
                                                   SIX MONTHS ENDED
                                                       JUNE 30
                                               -----------------------
                                                                       
                                                  1998        1997
             ---------------------------------------------------------
              Operating Revenue and Income
                Electric Operations . . . . .   $274.8        $261.1
                Water Services  . . . . . . .     45.7          43.1
                Automotive Services . . . . .    161.5         124.9
                Investments . . . . . . . . .     33.9          23.4
                                                ------        ------
                                                $515.9        $452.5
                                                ======        ======

              Net Income
                Electric Operations . . . . .   $ 19.2        $ 22.3
                Water Services  . . . . . . .      3.5           2.7
                Automotive Services . . . . .     13.9           7.4
                Investments . . . . . . . . .     15.9          12.2
                Corporate Charges . . . . . .    (11.2)         (9.8)
                                                ------        ------
                                                $ 41.3        $ 34.8
                                                ======        ======

             -----------------------------------------------------------

              Basic and Diluted
               Earnings Per Share of Common      $1.29         $1.12
               Stock  . . . . . . . . . . . .


              Average Shares of Common Stock      31.2          30.4

             -----------------------------------------------------------




                                                      AS OF JUNE 30, 1998
                                              --------------------------------
                                                ACTUAL        ADJUSTED(*)
                                                ------    --------------------

           Capitalization:
           Common stock equity . . . . . . . .$  673.3    $                 %
           Preferred stock not subject to
            mandatory redemption . . . . . . .    11.5        11.5
           Preferred stock subject to
            mandatory redemption . . . . . . .    20.0        20.0
           Company obligated mandatorily
            redeemable preferred
            securities of MP&L Capital I which
            holds solely Company Junior
            Subordinated Debentures  . . . . .    75.0        75.0
           Long-term debt  . . . . . . . . . .   681.9       681.9         
                                               -------     -------     ------
           Total capitalization (excluding
            current maturities)  . . . . . . .$1,461.7    $            100.0%
                                               =======     =======     ======


          -------------------------

          (*)  Adjusted to give effect to the sale of the Offered
               Stock (assuming that the Underwriters' over-allotment
               option is not exercised).


                                      S-4
     

                                   USE OF PROCEEDS

               The Company intends to use the net proceeds to be received
          from the issuance and sale of the Offered Stock to repay
          outstanding commercial paper, to fund the upcoming acquisition of
          Palm Coast Utility Corporation and for general corporate
          purposes, including capital expenditures.  Net proceeds not
          immediately used for the above purposes will be invested in the
          Company's securities portfolio.


                                    LEGAL OPINIONS

               The legality of the Offered Stock will be passed upon for
          the Company by Philip R. Halverson, Esq., Duluth, Minnesota, Vice
          President, General Counsel and Secretary for the Company, and by
          Thelen Reid & Priest LLP, New York, New York, counsel for the
          Company, and for the Underwriters by Morrison Cohen Singer &
          Weinstein, LLP.  Thelen Reid & Priest LLP and Morrison Cohen
          Singer & Weinstein, LLP may rely as to all matters of Minnesota
          law upon the opinion of Mr. Halverson.


                                     UNDERWRITING

               The Underwriters have severally agreed to purchase the
          respective numbers of shares of Offered Stock indicated below
          from the Company, subject to the terms and conditions set forth
          in an Underwriting Agreement dated September    , 1998.
                                                       ---
                                                     NUMBER OF
          UNDERWRITER                               FIRM SHARES
          -----------                               -----------
          PaineWebber Incorporated  . . . . . . . . 1,200,000
          Robert W. Baird & Co. Incorporated  . . .   400,000
          Janney Montgomery Scott Inc.  . . . . . .   400,000
                                                    ---------
               Total  . . . . . . . . . . . . . . . 2,000,000
                                                    =========

               The Company has granted to the Underwriters an option,
          exercisable within 30 days after the date of this Prospectus, to
          purchase up to 300,000 additional shares of Common Stock solely
          for the purpose of covering over-allotments, if any, at the
          public offering price less the underwriting discounts and
          commissions set forth on the cover page hereof.  If the
          Underwriters exercise this option, each Underwriter will be
          committed, subject to certain conditions, to purchase an
          additional number of shares of Common Stock proportionate to such
          Underwriter's initial commitment.

               The Offered Stock is offered subject to prior sale, when, as
          and if issued by the Company and accepted by the Underwriters, to
          the public at the initial offering price set forth on the cover
          page hereof and to certain dealers at such price less a
          concession not exceeding     per share.  Underwriters and dealers
                                   ---
          may reallow to certain other dealers a discount not exceeding 
                                                                        ---
          per share.  After the initial public offering, the public
          offering price and concessions and discounts to dealers may be
          changed by the Underwriters.

               The Underwriting Agreement provides that the Company will
          indemnify the Underwriters against certain liabilities, including
          liabilities under the Securities Act of 1933, as amended.

               In connection with this offering, the Underwriters may
          purchase and sell shares of the Company's Common Stock in the
          open market.  These transactions may include over-allotment and
          stabilizing transactions and purchases to cover syndicate short
          positions created in connection with this offering.  Stabilizing
          transactions consist of certain bids or purchases for the purpose
          of preventing or retarding a decline in the market price of the
          Common Stock; and syndicate short positions involve the sale by
          the Underwriters of a greater number of shares of Common Stock
          than they are required to purchase from the Company in this
          offering.  The Underwriters also may impose a penalty bid,
          whereby selling concessions allowed to syndicate members or other
          broker-dealers in respect of the shares of Common Stock sold in
          this offering for their account, may be reclaimed by the
          syndicate if such shares of Common Stock are repurchased by the
          syndicate in stabilizing or covering transactions.  These
          activities may stabilize, maintain or otherwise affect the market
          price of the Common Stock, which may be higher than the price
          that might otherwise prevail in the open market; and these
          activities, if commenced, may be discontinued at any time.  These
          transactions may be effected on the New York Stock Exchange or
          otherwise.


                                      S-5
     


          PROSPECTUS
          ----------

                                   3,000,000 SHARES

                                MINNESOTA POWER, INC.

                                     COMMON STOCK

                                 (WITHOUT PAR VALUE)


                                   ----------------


               Minnesota Power, Inc. ("Company" or "Minnesota Power")
          intends to offer from time to time not to exceed 3,000,000 shares
          of its Common Stock, without par value ("Common Stock"), and the
          preferred share purchase rights attached thereto ("Rights")
          (collectively, the "New Stock").  The New Stock will be offered
          on terms to be determined at the time of sale.  This Prospectus
          will be supplemented by a prospectus supplement ("Prospectus
          Supplement") which will set forth, as applicable, the number of
          shares, the purchase price and other specific terms of the New
          Stock in respect of which this Prospectus and the Prospectus
          Supplement are delivered ("Offered Stock").


                                   ----------------


            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
                 SECURITIES  AND EXCHANGE  COMMISSION OR  ANY  STATE
                   SECURITIES COMMISSION NOR HAS THE SECURITIES AND
                     EXCHANGE COMMISSION OR ANY STATE SECURITIES
                        COMMISSION PASSED UPON THE ACCURACY OR
                          ADEQUACY OF THIS PROSPECTUS.  ANY
                            REPRESENTATION TO THE CONTRARY
                                IS A CRIMINAL OFFENSE.



                                   ----------------



               The New Stock may be sold directly by the Company or
          through agents designated from time to time or through dealers or
          underwriters.  If any agent of the Company or any underwriters
          are involved in the sales of the New Stock, the names of such
          agents or such underwriters and any applicable commissions or
          discounts and the net proceeds to the Company will be set forth
          in the Prospectus Supplement.



                                   ----------------



                     The date of this Prospectus is May 18, 1998.


     

                                AVAILABLE INFORMATION

               The Company is subject to the informational requirements of
          the Securities Exchange Act of 1934, as amended ("1934 Act") and,
          in accordance therewith, files reports, proxy statements and
          other information with the Securities and Exchange Commission
          ("Commission"). Such reports, proxy statements and other
          information filed by the Company may be inspected and copied at
          the public reference facilities maintained by the Commission at
          450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
          the following Regional Offices of the Commission:  New York
          Regional Office, 7 World Trade Center, 13th Floor, New York, New
          York 10048; and Chicago Regional Office, Citicorp Center, 500
          West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
          of such material may also be obtained at prescribed rates from
          the Public Reference Section of the Commission at 450 Fifth
          Street, N.W., Washington, D.C. 20549. The Commission maintains a
          Web site (http://www.sec.gov) that contains reports, proxy
          statements and other information filed electronically by the
          Company.  The Common Stock and the Rights are listed on the New
          York Stock Exchange. Reports and other information concerning the
          Company may be inspected and copied at the office of such
          Exchange at 20 Broad Street, New York, New York. In addition, the
          Company's 5% Preferred Stock, $100 par value, is listed on the
          American Stock Exchange. Reports and other information concerning
          the Company may also be inspected and copied at the office of
          such Exchange at 86 Trinity Place, New York, New York.


                              --------------------------

                   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

               The following documents, filed by the Company with the
          Commission pursuant to the 1934 Act, are hereby incorporated by
          reference:

               (1)  The Company's Annual Report on Form 10-K for
                    the year ended December 31, 1997 ("1997 Form
                    10-K").

               (2)  The Company's Quarterly Report on Form 10-Q
                    for the quarter ended March 31, 1998.

               (3)  The Company's Current Report on Form 8-K
                    dated May 15, 1998.

               Each document filed subsequent to the date of this
          Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the
          1934 Act prior to the termination of the offering made by this
          Prospectus shall be deemed to be incorporated by reference in
          this Prospectus and shall be a part hereof from the date of
          filing of such document; provided, however, that the documents
          enumerated above or subsequently filed by the Company pursuant to
          Section 13 or 15(d) of the 1934 Act prior to the filing with the
          Commission of the Company's most recent Annual Report on Form 10-
          K shall not be incorporated by reference in this Prospectus or be
          a part hereof from and after the filing of such most recent
          Annual Report on Form 10-K.  The documents which are incorporated
          by reference in this Prospectus are sometimes hereinafter
          referred to as the "Incorporated Documents."

               Any statement contained in a document incorporated or deemed
          to be incorporated by reference herein shall be deemed to be
          modified or superseded for purposes of this Prospectus to the
          extent that a statement contained herein or in any other
          subsequently filed document which is deemed to be incorporated by
          reference herein modifies or supersedes such statement. Any such
          statement so modified or superseded shall not be deemed, except
          as so modified or superseded, to constitute a part of this
          Prospectus.

               The Company will provide without charge to each person,
          including any beneficial owner, to whom a copy of this Prospectus
          is delivered, upon the written or oral request of any such
          person, a copy of any document referred to above which has been
          or may be incorporated in this Prospectus by reference, other
          than exhibits to such documents (unless such exhibits are
          specifically incorporated by reference into such documents).
          Requests for such copies should be directed to:  Shareholder
          Services, Minnesota Power, 30 West Superior Street, Duluth,
          Minnesota 55802, telephone number (218) 723-3974 or (800) 535-
          3056.


                                      2
     

                                     THE COMPANY

               Minnesota Power, a broadly diversified service company
          incorporated under the laws of the State of Minnesota in 1906,
          has operations in four business segments: (1) Electric
          Operations, which include electric and gas services, and coal
          mining; (2) Water Services, which include water and wastewater
          services; (3) Automotive Services, which include a network of
          vehicle auctions, a finance company and an auto transport
          company; and (4) Investments, which include a securities
          portfolio, a 21 percent equity investment in a financial guaranty
          reinsurance and insurance company, and real estate operations.
          Corporate Charges represent general corporate expenses, including
          interest, not specifically allocated to any one business segment.
          As of March 31, 1998 the Company and its subsidiaries had
          approximately 6,900 employees. The principal executive offices of
          the Company are located at 30 West Superior Street, Duluth,
          Minnesota 55802, telephone number (218) 722-2641.

                                                                 (Unaudited)
                                                                Three Months
                                                                    Ended
                                   Year Ended December 31         March 31
                                   ----------------------      --------------
                                  1997      1996      1995     1998      1997
    -------------------------------------------------------------------------
     MILLIONS

        OPERATING REVENUE AND
         INCOME
          Electric Operations    $541.9    $529.2   $503.5    $134.0    $131.5
          Water Services           95.5      85.2     66.1      20.8      20.6
          Automotive
           Services (a)           255.5     183.9     61.6      76.7      60.5
          Investments              60.9      49.9     43.7      15.2       9.5
          Corporate Charges        (0.2)     (1.3)    (2.0)     (0.1)      0.0
                                  -----     -----    -----     -----     -----
                                 $953.6    $846.9   $672.9    $246.6    $222.1
                                  =====     =====    =====     =====     =====

        NET INCOME
          Electric Operations    $ 43.1    $ 39.4   $ 41.0    $  9.5   $  12.3
          Water Services            8.2       5.4     (1.0)      0.7       0.4
          Automotive
          Services (a)             14.0       3.7        -       5.4       3.2
          Investments              32.1      38.1     41.3       8.3       5.6
          Corporate Charges       (19.8)    (17.4)   (19.4)     (5.4)     (5.4)
                                  -----     -----    -----     -----     -----
                                   77.6      69.2     61.9      18.5      16.1
          Discontinued
           Operations (b)             -         -      2.8         -         -
                                  -----     -----    -----     -----     -----
                                 $ 77.6    $ 69.2   $ 64.7    $ 18.5    $ 16.1
                                  =====     =====    =====     =====     =====

    --------------------------------------------------------------------------- 

     BASIC AND DILUTED
       EARNINGS PER SHARE OF
       COMMON STOCK
              Continuing
               Operations         $2.47     $2.28    $2.06      $.58      $.52
              Discontinued
               Operations             -         -      .10         -         -
                                  -----     -----    -----     -----     -----
                                  $2.47     $2.28    $2.16      $.58      $.52
                                  =====     =====    =====     =====     =====


     AVERAGE SHARES OF COMMON
     STOCK - MILLIONS              30.6      29.3     28.5      31.1      30.3

    ---------------------------------------------------------------------------

          (a)  The Company purchased 80 percent of ADESA, including AFC and
               Great Rigs, on July 1, 1995, another 3 percent in January
               1996 and the remaining 17 percent in August 1996.
          (b)  On June 30, 1995 the Company sold its interest in a paper
               and pulp business to Consolidated Papers, Inc.


                                      3
     


          ELECTRIC OPERATIONS

               Electric Operations generate, transmit, distribute and
          market electricity. Minnesota Power provides electricity to
          123,000 customers in northeastern Minnesota. MPEX, a division of
          Minnesota Power, is an expansion of the Company's inter-utility
          marketing group which has been a buyer and seller of capacity and
          energy for over 25 years in the wholesale power market. The
          customers of MPEX are other power suppliers in the Midwest and
          Canada. MPEX also contracts with its customers to provide hourly
          energy scheduling and power trading services. The Company's
          wholly owned subsidiary, Superior Water, Light and Power Company,
          sells electricity to 14,000 customers and natural gas to 11,000
          customers, and provides water to 10,000 customers in northwestern
          Wisconsin. BNI Coal, Ltd. ("BNI Coal"), another wholly owned
          subsidiary of the Company, owns and operates a lignite mine in
          North Dakota. Two electric generating cooperatives, Minnkota
          Power Cooperative, Inc. and Square Butte Electric Cooperative
          ("Square Butte"), presently consume virtually all of BNI Coal's
          production of lignite coal under coal supply agreements extending
          to 2027. Under an agreement with Square Butte, Minnesota Power
          purchases about 71 percent of the output from the Square Butte
          unit which is capable of generating up to 455 megawatts ("MW").

               In 1997 industrial customers contributed about half of the
          Company's electric operating revenue. The Company has large power
          contracts to sell power to eleven industrial customers (five
          taconite producers, four paper and pulp mills, and two pipeline
          companies) each requiring 10 MW or more of power. These
          contracts, which have termination dates ranging from April 2001
          to October 2008, require the Company to have a certain amount of
          generating capacity available.  In turn each customer is required
          to pay a minimum monthly demand charge that covers the fixed
          costs associated with having capacity available to serve the
          customer, including a return on common equity.  Under the
          contracts, industrial customers pay demand charges for the base
          portion of their capacity needs on a take-or-pay basis for the
          entire term of the contract, while most customers are permitted
          bi-annually (coincident with each power pool season) to establish
          their capacity needs above this base, thereby committing to
          additional demand charges.  In addition to the demand charge,
          each customer is billed an energy charge for each kilowatthour
          used that recovers the variable costs incurred in generating
          electricity.

          WATER SERVICES

               Water Services include regulated and non-regulated wholly
          owned subsidiaries of the Company. Florida Water Services
          Corporation, which is the largest investor owned water supplier
          in Florida, provides water to 119,000 customers and wastewater
          treatment services to 53,000 customers. Heater Utilities, Inc.
          provides water to 29,000 customers and wastewater treatment
          services to 2,000 customers in North Carolina. Instrumentation
          Services, Inc. ("ISI") provides predictive maintenance and
          instrumentation consulting services to water and wastewater
          utilities, and other industrial operations throughout the
          southeastern part of the United States as well as Texas and
          Minnesota. U.S. Maintenance and Management Services Corporation
          ("USM&M") was incorporated in 1997 to complement ISI's
          operations. USM&M provides maintenance services to water and
          wastewater utilities, and other industrial operations primarily
          in Florida. Americas' Water Services Corporation, which is
          headquartered near Chicago, Illinois, offers contract management,
          operations and maintenance services to governments and industries
          in the Americas.

          AUTOMOTIVE SERVICES

               Automotive Services include wholly owned subsidiaries
          operating as integral parts of the vehicle auction business:
          ADESA Corporation ("ADESA"), a network of vehicle auctions;
          Automotive Finance Corporation ("AFC"), a finance company; and
          Great Rigs Incorporated ("Great Rigs"), an auto transport
          company. ADESA is the third largest vehicle auction network in
          the United States. Headquartered in Indianapolis, Indiana, ADESA
          owns and operates 25 vehicle auction facilities in the United
          States and Canada through which used cars and other vehicles are
          purchased and sold to franchised automobile dealers and licensed
          used car dealers. In April 1998 ADESA reached agreements to
          purchase three additional vehicle auctions which will increase
          the number of facilities to 28.  Sellers at ADESA's auctions
          include domestic and foreign auto manufacturers, car dealers,
          automotive fleet/lease companies, banks and finance companies.
          AFC provides inventory financing for wholesale and retail
          automobile dealers who purchase vehicles from ADESA auctions,
          independent auctions and other auction chains. AFC is
          headquartered in Indianapolis, Indiana, and has 57 loan


                                      4
     


          production offices located at most ADESA auctions, as well as at
          or near independently owned auto auctions. From these offices car
          dealers obtain credit to purchase vehicles at any of the over 300
          auctions approved by AFC. Great Rigs is one of the nation's
          largest independent used automobile transport carriers with 140
          leased automotive carriers.  Headquartered in Moody, Alabama,
          Great Rigs offers customers pick up and delivery service through
          11 strategically located transportation hubs. Customers of Great
          Rigs include ADESA auctions, car dealerships, vehicle
          manufacturers, leasing companies, finance companies and other
          auctions.

          INVESTMENTS

               Minnesota Power's securities portfolio is managed by
          selected outside managers as well as internal managers. It is
          intended to provide stable earnings and liquidity, and is
          available for investment in existing businesses, acquisitions and
          other corporate purposes. The Company's objective is to maintain
          corporate liquidity between 7 percent and 10 percent of total
          assets ($150 million to $200 million). The Company plans to
          continue to concentrate in market-neutral investment strategies
          designed to provide stable and acceptable returns without
          sacrificing needed liquidity. The securities portfolio is
          structured to perform at an after-tax return between 7 percent
          and 9 percent. While these returns may seem modest compared to
          broader market indices over the past three years, the Company
          believes its investment strategy is a wise course in a volatile
          economic environment. Returns will continue to be partially
          dependent on general market conditions. The Company's investment
          in the securities portfolio at March 31, 1998 was approximately
          $190 million. 

               Minnesota Power owns 3.3 million shares of Capital Re
          Corporation ("Capital Re"), a specialty insurance and reinsurance
          business. Capital Re's product lines currently include financial
          guaranty, mortgage, title, financial, credit and specialty
          reinsurance, and specialty insurance through its participation in
          Lloyds of London. Capital Re trades on the New York Stock
          Exchange under the symbol KRE. Minnesota Power's ownership
          represents 21 percent of the 16 million total outstanding shares
          of Capital Re. The market value of the Company's investment in
          Capital Re was $210 million at March 31, 1998 based on a
          Capital Re share price of $64.25. The Company accounts for its
          investment in Capital Re under the equity method and the carrying
          value was $123 million at March 31, 1998.

               The Company owns 80 percent of Lehigh Acquisition
          Corporation ("Lehigh"), a real estate company in Florida. Lehigh
          owns 2,500 acres of land and approximately 4,000 home sites near
          Fort Myers, Florida; 1,000 home sites in Citrus County, Florida;
          and 2,700 home sites and 12,000 acres of residential, commercial
          and industrial land at Palm Coast, Florida.


                                   USE OF PROCEEDS

               The Company is offering a maximum of 3,000,000 shares of its
          New Stock.  The net proceeds to be received from the issuance and
          sale of the New Stock will be used for general corporate purposes
          which may include, among other things, acquisitions.

               Reference is made to the Incorporated Documents with respect
          to the Company's general capital requirements and general
          financing plans and capabilities.


                                      5
     


                              DIVIDENDS AND PRICE RANGE

               The following table sets forth the high and low sales prices
          per share of the Common Stock reported on the New York Stock
          Exchange composite tape as published in The Wall Street Journal
          and the dividends paid for the indicated periods.

                                             PRICE RANGE      DIVIDENDS
                                             -----------
                                           HIGH        LOW    PER SHARE
                                           ----        ---    ---------

              1996 First Quarter . . .   $29 3/4   $26 1/8     $  0.51  
                   Second Quarter  . .    29        26            0.51  
                   Third Quarter . . .    28 3/4    26            0.51  
                   Fourth Quarter  . .    28 7/8    26 3/8        0.51  

              1997 First Quarter . . .   $29       $27 1/4     $  0.51  
                   Second Quarter  . .    30 5/8    27            0.51  
                   Third Quarter . . .    36 5/16   30 1/4        0.51  
                   Fourth Quarter  . .    44        35 3/16       0.51  

              1998 First Quarter . . .   $43 7/16  $39 1/8     $  0.51  
                   Second Quarter
                   (through May 18,
                   1998) . . . . . . .    42 15/16 $38 11/16

               The last reported sale price of the Common Stock on the New
          York Stock Exchange composite tape on May 18, 1998, was $38 13/16
          per share.

               The Company has paid dividends without interruption on its
          Common Stock since 1948, the date of initial distribution of the
          Common Stock by American Power & Light Company, the former holder
          of all such stock.

               The Company has a Dividend Reinvestment and Stock Purchase
          Plan ("Plan"). The Plan provides investors ("Participants") with
          a convenient method of acquiring shares of Common Stock through
          (i) the reinvestment in Common Stock of all or a portion of the
          cash dividends payable on the Participant's holdings of Common
          Stock and Preferred Stocks, and/or (ii) the investment of
          optional cash payments pursuant to the terms of the Plan.  The
          Company reserves the right to suspend, modify, amend or terminate
          the Plan at any time and to interpret and regulate the Plan as it
          deems necessary or desirable in connection with the operation of
          the Plan.  Shares of Common Stock are offered for sale under the
          Plan only by means of a separate prospectus available upon
          request from the Company.


                             DESCRIPTION OF COMMON STOCK

               General.  The following statements relating to the Common
          Stock are merely an outline and do not purport to be complete. 
          They are qualified in their entirety by reference to the
          Company's Articles of Incorporation ("Articles of Incorporation")
          and the Mortgage and Deed of Trust of the Company.  Reference is
          also made to the laws of the State of Minnesota.

               The Company's authorized capital stock consists of
          130,000,000 shares of Common Stock, without par value, 116,000
          shares of 5% Preferred Stock, $100 par value, 1,000,000 shares of
          Serial Preferred Stock, without par value, and 2,500,000 shares
          of Serial Preferred Stock A, without par value.

               Dividend Rights.  The Common Stock is entitled to all
          dividends after full provision for dividends on the issued and
          outstanding Preferred Stocks and the sinking fund requirements of
          the Serial Preferred Stock A, $7.125 Series and $6.70 Series.

               The Articles of Incorporation provide that so long as any
          shares of the Company's Preferred Stocks are outstanding, cash
          dividends on Common Stock are restricted to 75 percent of
          available net income when Common Stock equity is or would become


                                      6
     


          less than 25 percent but more than 20 percent of total
          capitalization.  This restriction becomes 50 percent when such
          equity is or would become less than 20 percent.  See Note 10 to
          Consolidated Financial Statements incorporated by reference in
          the Company's 1997 Form 10-K.

               Voting Rights (Non-Cumulative Voting).  Holders of Common
          Stock are entitled to notice of and to vote at any meeting of
          shareholders.  Each share of Common Stock, as well as each share
          of the issued and outstanding Preferred Stocks, is entitled to
          one vote.  Since the holders of such shares do not have
          cumulative voting rights, the holders of more than 50 percent of
          the shares voting can elect all the Company's directors, and in
          such event the holders of the remaining shares voting (less than
          50 percent) cannot elect any directors.  In addition, the
          Preferred Stocks are expressly entitled, as one class, to elect a
          majority of the directors (the Common Stock, as one class,
          electing the minority) whenever dividends on any of such
          Preferred Stocks shall be in default in the amount of four
          quarterly payments and thereafter until all such dividends in
          default shall have been paid.  The Articles of Incorporation
          include detailed procedures and other provisions relating to
          these rights and their termination, such as quorums, terms of
          directors elected, vacancies, class voting as between Preferred
          Stocks and Common Stock, meetings, adjournments and other
          matters.

               The Articles of Incorporation contain certain provisions
          which make it difficult to obtain control of the Company through
          transactions not having the approval of the Board of Directors,
          including:

               (1)  A provision requiring the affirmative vote of 75
                    percent of the outstanding shares of all classes of
                    capital stock of the Company, present and entitled to
                    vote, in order to authorize certain "Business
                    Combinations."  Any such Business Combination is
                    required to meet certain "fair price" and procedural
                    requirements.  Neither a 75 percent stockholder vote
                    nor "fair price" is required for any Business
                    Combination which has been approved by a majority of
                    the "Disinterested Directors."

               (2)  A provision permitting a majority of the Disinterested
                    Directors to determine whether the above requirements
                    have been satisfied.

               (3)  A provision providing that certain of the Articles of
                    Incorporation cannot be altered unless approved by 75
                    percent of the outstanding shares of all classes of
                    capital stock, present and entitled to vote, unless
                    such alteration is recommended to the shareholders by a
                    majority of the Disinterested Directors.

               Liquidation Rights.  After satisfaction of creditors and of
          the preferential liquidation rights of the outstanding Preferred
          Stocks ($100 per share plus unpaid accumulated dividends), the
          holders of the Common Stock are entitled to share ratably in the
          distribution of all remaining assets.

               Miscellaneous.  Holders of Common Stock have no preemptive
          or conversion rights.

               The Common Stock is listed on the New York Stock Exchange.

               The transfer agents and registrars for the Common Stock are
          Norwest Bank Minnesota, N.A. and the Company.


                    DESCRIPTION OF PREFERRED SHARE PURCHASE RIGHTS

               Reference is made to the Rights Agreement, dated as of July
          24, 1996 ("Rights Plan") between the Company and the Corporate
          Secretary of the Company, as Rights Agent.  The description of
          the Rights set forth below does not purport to be complete and is
          qualified in its entirety by reference to the Rights Plan. 
          Reference is also made to the laws of the State of Minnesota.

               On July 24, 1996 the Board of Directors of the Company
          declared a dividend distribution of one Right for each
          outstanding share of Common Stock to shareholders of record at
          the close of business on July 24, 1996 ("Record Date") and
          authorized the issuance of one Right with respect to each share
          of Common Stock that becomes outstanding between the Record Date
          and July 23, 2006 or such earlier time as the Rights are


                                      7
     


          redeemed.  Except as described below, each Right, when
          exercisable, entitles the registered holder to purchase from the
          Company one one-hundredth of a share of Junior Serial Preferred
          Stock A, without par value ("Serial Preferred"), at a price of
          $90 per one one-hundredth share ("Purchase Price"), subject to
          adjustment.

               No separate Right Certificates will be distributed.  The
          Rights will be evidenced by the Common Stock certificates
          together with a copy of the Summary of Rights Plan and not by
          separate certificates until the earlier to occur (i) 10 days
          following a public announcement that a person or group of
          affiliated or associated persons (an "Acquiring Person") has
          acquired, or obtained the right to acquire, beneficial ownership
          of 15 percent or more of the outstanding shares of Common Stock
          (the "Stock Acquisition Date") or (ii) 15 business days (or such
          later date as may be determined by action of the Board of
          Directors prior to the time that any person becomes an Acquiring
          Person) following the commencement of (or a public announcement
          of an intention to make) a tender or exchange offer if, upon
          consummation thereof, such person or group would be the
          beneficial owner of 15 percent or more of such outstanding shares
          of Common Stock (the earlier of such dates being called the
          "Distribution Date").

               Until the Distribution Date, the Rights will be transferred
          with and only with the Common Stock.  Until the Distribution Date
          (or earlier redemption, expiration or termination of the Rights),
          the transfer of any certificates for Common Stock, with or
          without a copy of the Summary of Rights Plan, will also
          constitute the transfer of the Rights associated with the Common
          Stock represented by such certificates.  As soon as practicable
          following the Distribution Date, separate certificates evidencing
          the Rights ("Right Certificates") will be mailed to holders of
          record of the Common Stock as of the close of business on the
          Distribution Date and, thereafter, such separate Right
          Certificates alone will evidence the Rights.

               Each whole share of Serial Preferred will have a minimum
          preferential quarterly dividend rate equal to the greater of $51
          per share or, subject to anti-dilution adjustment, 100 times the
          dividend declared on the Common Stock.  In the event of
          liquidation, no distribution will be made to the holders of
          Common Stock unless, prior thereto, the holders of the Serial
          Preferred have received a liquidation preference of $100 per
          share, plus accrued and unpaid dividends.  Holders of the Serial
          Preferred will be entitled to notice of and to vote at any
          meeting of the Company's shareholders.  Each whole share of
          Serial Preferred is entitled to one vote.  Such shares do not
          have cumulative voting rights.  The Serial Preferred, together
          with the issued and outstanding shares of the other Preferred
          Stocks of the Company, will be expressly entitled, as one class,
          to elect a majority of directors (the Common Stock electing the
          minority) whenever dividends on any of the Preferred Stocks shall
          be in default in the amount of four quarterly payments and
          thereafter until all such dividends in default shall have been
          paid.  In the event of any merger, consolidation or other
          transaction in which shares of Common Stock are exchanged for or
          converted into other securities and/or property, each whole share
          of Serial Preferred will be entitled to receive, subject to anti-
          dilution adjustment, 100 times the amount into which or for which
          each share of Common Stock is so exchanged or converted.  The
          shares of Serial Preferred are not redeemable by the Company.

               The Rights are not exercisable until the Distribution Date
          and will expire at the earliest of (i) July 23, 2006 ("Final
          Expiration Date"), (ii) the redemption of the Rights by the
          Company as described below, and (iii) the exchange of all Rights
          for Common Stock as described below.

               In the event that any person (other than the Company, its
          affiliates or any person receiving newly-issued shares of Common
          Stock directly from the Company) becomes the beneficial owner of
          15 percent or more of the then outstanding shares of Common
          Stock, each holder of a Right will thereafter have a right to
          receive, upon exercise at the then current exercise price of the
          Right, Common Stock (or, in certain circumstances, cash, property
          or other securities of the Company) having a value equal to two
          times the exercise price of the Right.  The Rights Plan contains
          an exemption for any issuance of Common Stock by the Company
          directly to any person (for example, in a private placement or an
          acquisition by the Company in which Common Stock is used as
          consideration), even if that person would become the beneficial
          owner of 15 percent or more of the Common Stock, provided that
          such person does not acquire any additional shares of Common
          Stock.


                                      8
     


               In the event that, at any time following the Stock
          Acquisition Date, the Company is acquired in a merger or other
          business combination transaction or 50 percent or more of the
          Company's assets or earning power are sold, proper provision will
          be made so that each holder of a Right will thereafter have the
          right to receive, upon exercise at the then current exercise
          price of the Right, common stock of the acquiring or surviving
          company having a value equal to two times the exercise price of
          the Right.

               Notwithstanding the foregoing, following the occurrence of
          any of the events set forth in the preceding two paragraphs (the
          "Triggering Events"), any Rights that are, or (under certain
          circumstances specified in the Rights Plan) were, beneficially
          owned by any Acquiring Person will immediately become null and
          void.

               The Purchase Price payable, and the number of shares of
          Serial Preferred or other securities or property issuable, upon
          exercise of the Rights, are subject to adjustment from time to
          time to prevent dilution, among other circumstances, in the event
          of a stock dividend on, or a subdivision, split, combination,
          consolidation or reclassification of, the Serial Preferred or the
          Common Stock, or a reverse split of the outstanding shares of
          Serial Preferred or the Common Stock.

               At any time after the acquisition by a person or group of
          affiliated or associated persons of beneficial ownership of 15
          percent or more of the outstanding Common Stock and prior to the
          acquisition by such person or group of 50 percent or more of the
          outstanding Common Stock, the Board of Directors may exchange the
          Rights (other than Rights owned by such person or group, which
          have become void), in whole or in part, at an exchange ratio of
          one share of Common Stock per Right (subject to adjustment).

               With certain exceptions, no adjustment in the Purchase Price
          will be required until cumulative adjustments require an
          adjustment of at least one percent in the Purchase Price.  The
          Company will not be required to issue fractional shares of Serial
          Preferred or Common Stock (other than fractions in multiples of
          one one-hundredths of a share of Serial Preferred) and, in lieu
          thereof, an adjustment in cash may be made based on the market
          price of the Serial Preferred or Common Stock on the last trading
          date prior to the date of exercise.

               At any time after the date of the Rights Plan until the time
          that a person becomes an Acquiring Person, the Board of Directors
          may redeem the Rights in whole, but not in part, at a price of
          $.01 per Right ("Redemption Price"), which may (at the option of
          the Company) be paid in cash, shares of Common Stock or other
          consideration deemed appropriate by the Board of Directors.  Upon
          the effectiveness of any action of the Board of Directors
          ordering redemption of the Rights, the Rights will terminate and
          the only right of the holders of Rights will be to receive the
          Redemption Price.

               Issuance of Serial Preferred or Common Stock upon exercise
          of the Rights will be subject to any necessary regulatory
          approvals.  Until a Right is exercised, the holder thereof, as
          such, will have no rights as a shareholder of the Company,
          including, without limitation, the right to vote or to receive
          dividends.  One million shares of Serial Preferred were reserved
          for issuance in the event of exercise of the Rights.

               The provisions of the Rights Plan may be amended by the
          Company, except that any amendment adopted after the time that a
          person becomes an Acquiring Person may not adversely affect the
          interests of holders of Rights.

               The Rights have certain anti-takeover effects.  The Rights
          will cause substantial dilution to a person or group that
          attempts to acquire the Company without conditioning the offer on
          the Rights being redeemed or a substantial number of Rights being
          acquired, and under certain circumstances the Rights beneficially
          owned by such a person or group may become void.  The Rights
          should not interfere with any merger or other business
          combination approved by the Board of Directors because, if the
          Rights would become exercisable as a result of such merger or
          business combination, the Board of Directors may, at its option,
          at any time prior to the time that any person becomes an
          Acquiring Person, redeem all (but not less than all) of the then
          outstanding Rights at the Redemption Price.


                                      9
     

                                       EXPERTS

               The Company's consolidated financial statements incorporated
          in this Prospectus by reference to the Company's 1997 Form 10-K
          have been so incorporated in reliance on the report of Price
          Waterhouse LLP, independent accountants, given on the authority
          of said firm as experts in auditing and accounting.

               The statements as to matters of law and legal conclusions
          under "Description of Common Stock" and "Description of Preferred
          Share Purchase Rights" in this Prospectus and in the Incorporated
          Documents have been reviewed by Philip R. Halverson, Esq.,
          Duluth, Minnesota, Vice President, General Counsel and Secretary
          for Minnesota Power, and are set forth or incorporated herein by
          reference in reliance upon his opinion given upon his authority
          as an expert.

               As of April 30, 1998 Mr. Halverson owned 7,056 shares
          Minnesota Power Common Stock.  Mr. Halverson is acquiring
          additional shares of Minnesota Power Common Stock at regular
          intervals as a participant in the Company's Employee Stock
          Ownership Plan, Employee Stock Purchase Plan, Supplemental
          Retirement Plan and Dividend Reinvestment and Stock Purchase
          Plan.  In addition, Mr. Halverson has options to purchase 7,558
          shares of Minnesota Power Common Stock pursuant to the Company's
          Executive Long-Term Incentive Compensation Plan.


                                    LEGAL OPINIONS

               The legality of the New Stock will be passed upon for the
          Company by Mr. Halverson and by Reid & Priest LLP, New York, New
          York, counsel for the Company, and for any underwriter, dealer or
          agent by Morrison Cohen Singer & Weinstein, LLP.  Reid & Priest
          LLP and Morrison Cohen Singer & Weinstein, LLP may rely as to all
          matters of Minnesota law upon the opinion of Mr. Halverson.


                                 PLAN OF DISTRIBUTION

               The Company may sell the New Stock in any of three ways: (i)
          through underwriters or dealers; (ii) directly to a limited
          number of institutional purchasers or to a single purchaser; or
          (iii) through agents.  The Prospectus Supplement relating to the
          Offered Stock will set forth the terms of the offering of the
          Offered Stock, including the name or names of any underwriters,
          dealers or agents, the purchase price of the Offered Stock and
          the net proceeds to the Company from such sale, any underwriting
          discounts and other items constituting underwriters'
          compensation, any initial public offering price and any discounts
          or concessions allowed or reallowed or paid to dealers.  Any
          initial public offering price and any discounts or concessions
          allowed or reallowed or paid to dealers may be changed from time
          to time.

               If underwriters are used in any sale of the New Stock, the
          Offered Stock will be acquired by the underwriters for their own
          account and may be resold from time to time in one or more
          transactions, including negotiated transactions, at a fixed
          public offering price or at varying prices determined at the time
          of sale.  The underwriter or underwriters with respect to a
          particular underwritten offering of Offered Stock will be named
          in the Prospectus Supplement relating to such offering and, if an
          underwriting syndicate is used, the managing underwriter or
          underwriters will be set forth on the cover page of such
          Prospectus Supplement.  Unless otherwise set forth in the
          Prospectus Supplement, the obligations of the underwriter or
          underwriters to purchase the Offered Stock will be subject to
          certain conditions precedent and the underwriter or underwriters
          will be obligated to purchase all the Offered Stock if any is
          purchased except that, in certain cases involving a default by
          one or more underwriters, less than all of the Offered Stock may
          be purchased.

               Offered Stock may be sold directly by the Company or through
          agents designated by the Company from time to time.  Any agent
          involved in the offer or sale of the Offered Stock in respect of
          which this Prospectus is delivered will be named, and any
          commissions payable by the Company to such agent will be set
          forth, in the Prospectus Supplement.  Unless otherwise indicated
          in the Prospectus Supplement, any such agent will be acting on a
          best efforts basis for the period of its appointment.


                                      10
     

               If so indicated in the Prospectus Supplement, the Company
          will authorize agents, underwriters or dealers to solicit offers
          by certain specified institutions to purchase Offered Stock from
          the Company at the public offering price to be set forth in the
          Prospectus Supplement pursuant to delayed delivery contracts
          providing for payment and delivery on a specified date in the
          future.  Such contracts will be subject to those conditions set
          forth in the Prospectus Supplement, and the Prospectus Supplement
          will set forth the commission payable for solicitation of such
          contracts.

               Subject to certain conditions, agents and underwriters may
          be entitled under agreements entered into with the Company to
          indemnification by the Company against certain civil liabilities,
          including liabilities under the Securities Act of 1933, as
          amended, arising out of or based upon, among other things, any
          untrue statement or alleged untrue statement of a material fact
          contained in the registration statement, this Prospectus, a
          Prospectus Supplement or the Incorporated Documents or the
          omission or alleged omission to state therein a material fact
          required to be stated therein or necessary to make the statements
          therein, in light of the circumstances under which they were
          made, not misleading.  See the Prospectus Supplement.



                                  ------------------



                                      11
     


          =================================================================

             NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
          MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER
          THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
          PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
          REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
          BY THE COMPANY OR ANY UNDERWRITER.  NEITHER THE DELIVERY OF THIS
          PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUN-
          DER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
          THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
          DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT
          AS OF ANY TIME SUBSEQUENT TO ITS DATE.  THIS PROSPECTUS SUPPLE-
          MENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
          SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
          REGISTERED SECURITIES TO WHICH THEY RELATE.  THIS PROSPECTUS
          SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL
          OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
          CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.


                               -----------------------


                                  TABLE OF CONTENTS

                                                                       PAGE
                                                                       ----
                                PROSPECTUS SUPPLEMENT

          SELECTED INFORMATION  . . . . . . . . . . . . . . . . . . .   S-2
          SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . .   S-4
          USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . .   S-5
          LEGAL OPINIONS  . . . . . . . . . . . . . . . . . . . . . . . S-5
          UNDERWRITING  . . . . . . . . . . . . . . . . . . . . . . .   S-5

                                      PROSPECTUS

          AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . .     2
          INCORPORATION OF CERTAIN DOCUMENTS
            BY REFERENCE  . . . . . . . . . . . . . . . . . . . . . .     2
          THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . .     3
          USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . .     5
          DIVIDENDS AND PRICE RANGE . . . . . . . . . . . . . . . . .     6
          DESCRIPTION OF COMMON STOCK . . . . . . . . . . . . . . . .     6
          DESCRIPTION OF PREFERRED SHARE 
            PURCHASE RIGHTS . . . . . . . . . . . . . . . . . . . . .     7
          EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . .    10
          LEGAL OPINIONS  . . . . . . . . . . . . . . . . . . . . . .    10
          PLAN OF DISTRIBUTION  . . . . . . . . . . . . . . . . . . .    10

          =================================================================


          =================================================================






                                   2,000,000 SHARES



                                MINNESOTA POWER, INC.



                                     COMMON STOCK   



                                 -------------------

                                PROSPECTUS SUPPLEMENT

                                 -------------------





                               PAINEWEBBER INCORPORATED

                                ROBERT W. BAIRD & CO.
                                     INCORPORATED

                            JANNEY MONTGOMERY SCOTT INC.






                                 -------------------



                                              , 1998


          =================================================================