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                                            Filed pursuant to Rule 424(b)(2)
                                            File No. 333-20745
     
     
     PROSPECTUS SUPPLEMENT
     (TO PROSPECTUS DATED FEBRUARY 11, 1997)


                                     $60,000,000

                           MINNESOTA POWER & LIGHT COMPANY

                FIRST MORTGAGE BONDS, 7% SERIES DUE FEBRUARY 15, 2007
                                   _______________

                      INTEREST PAYABLE FEBRUARY 15 AND AUGUST 15
                                   _______________

          The First Mortgage Bonds offered hereby (the "Offered Bonds")
     constitute an issue of a series of the New Bonds.  The Offered Bonds are
     not redeemable prior to maturity.  The Offered Bonds will be represented by
     a global certificate ("Global Security") in the principal amount of
     $60,000,000 registered in the name of a nominee of The Depository Trust
     Company ("DTC").  Beneficial interests in the Global Security will be shown
     on, and transfers thereof will be effected only through, records maintained
     by DTC and its participants.  Except as described herein, Offered Bonds in
     definitive form will not be issued.

          See "Certain Terms of the Offered Bonds" herein and "Description of
     New Bonds" in the accompanying Prospectus.
                                   _______________

       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
                               Price to        Discounts and     Proceeds to
                               Public(1)      Commissions(2)    Company(1)(3)
     ---------------------------------------------------------------------------
     Per Bond  . . . . . . .    99.714%           0.650%           99.064%
     ---------------------------------------------------------------------------
     Total . . . . . . . . .  $59,828,400        $390,000        $59,438,400
     ===========================================================================
     (1)  Plus accrued interest from February 15, 1997.
     (2)  See "Underwriting."
     (3)  Before deducting expenses estimated at $350,000, which are payable by
          the Company.

                                   _______________

          The Offered Bonds are offered by the Underwriter, subject to prior
     sale, when, as and if delivered to and accepted by the Underwriter, and
     subject to its right to reject orders in whole or in part.  It is expected
     that delivery of the Offered Bonds will be made in book-entry form only
     through the facilities of DTC on or about February 20, 1997.
                                   _______________

                               PAINEWEBBER INCORPORATED
                                   _______________

             The date of this Prospectus Supplement is February 12, 1997.


     


          IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
     EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
     OFFERED BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
     OPEN MARKET.  SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
     TIME.
                                   _______________

                          CERTAIN TERMS OF THE OFFERED BONDS

          The following information concerning the Offered Bonds supplements and
     should be read in conjunction with the statements under "Description of New
     Bonds" in the accompanying Prospectus.  Capitalized terms not defined
     herein are used as defined in the accompanying Prospectus.

          GENERAL.  The $60,000,000 aggregate principal amount of Offered Bonds
     will be issued as a new series of the Company's First Mortgage Bonds under
     the Mortgage, as supplemented and amended by various supplemental
     indentures, including the Nineteenth Supplemental Indenture dated as of
     February 1, 1997 relating to the Offered Bonds.

          INTEREST, MATURITY AND PAYMENT.  The Offered Bonds will mature on
     February 15, 2007 and will bear interest from February 15, 1997 at the rate
     shown in their title, the first interest payment to be made on August 15,
     1997, with subsequent payments to be made semi-annually on February 15 and
     August 15.  Principal and interest are payable at The Bank of New York.

          REDEMPTION AND PURCHASE OF BONDS.  The Offered Bonds are not
     redeemable prior to maturity.

          SINKING FUND OR IMPROVEMENT FUND.  The Offered Bonds are not entitled
     to the benefit of a sinking or improvement fund or other provision for
     amortization prior to maturity.

          BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY.  The
     Depository Trust Company ("DTC") will act as securities depository for all
     of the Offered Bonds.  The Offered Bonds will be issued as fully-registered
     bonds registered in the name of Cede & Co., DTC's partnership nominee.  One
     fully-registered global certificate, representing the aggregate principal 
     amount of the Offered Bonds, will be issued and will be deposited with DTC.

          DTC is a limited-purpose trust company organized under the New York
     Banking Law, a "banking organization" within the meaning of the New York
     Banking Law, a member of the Federal Reserve System, a "clearing
     corporation" within the meaning of the New York Uniform Commercial Code and
     a "clearing agency" registered pursuant to the provisions of Section 17A of
     the 1934 Act.  DTC holds securities that its participants ("Participants")
     deposit with DTC.  DTC also facilitates the settlement among Participants
     of securities transactions, such as transfers and pledges, in deposited
     securities through electronic computerized book-entry changes in
     Participants' accounts, thereby eliminating the need for physical movement
     of securities certificates.  Direct Participants include securities brokers
     and dealers, banks, trust companies, clearing corporations and certain
     other organizations ("Direct Participants").  DTC is owned by a number of
     its Direct Participants and by the New York Stock Exchange, Inc., the
     American Stock Exchange, Inc., and the National Association of Securities
     Dealers, Inc.  Access to the DTC system is also available to others, such
     as securities brokers and dealers, banks and trust companies that clear
     transactions through or maintain a direct or indirect custodial
     relationship with a Direct Participant ("Indirect Participants").  The
     rules applicable to DTC and its Participants are on file with the
     Commission.

          Purchases of the Offered Bonds within the DTC system must be made by
     or through Direct Participants, which will receive a credit for the Offered
     Bonds on DTC's records.  The ownership interest of each actual purchaser of

                                  S-2
     

     each Offered Bond (the "Beneficial Owner") is in turn to be recorded on the
     Participants' records.  Beneficial Owners will not receive written
     confirmation from DTC of their purchases, but Beneficial Owners are
     expected to receive written confirmations providing details of the
     transactions, as well as periodic statements of their holdings, from the
     Participants through which the Beneficial Owners purchased Offered Bonds. 
     Transfers of ownership interests in the Offered Bonds are to be
     accomplished by entries made on the books of Participants acting on behalf
     of Beneficial Owners.  Beneficial Owners will not receive certificates
     representing their ownership interests in the Offered Bonds, except in the
     event that use of the book-entry system for Offered Bonds is discontinued.

          To facilitate subsequent transfers, all Offered Bonds deposited by
     Participants with DTC are registered in the name of Cede & Co.  The deposit
     of Offered Bonds with DTC and their registration in the name of Cede & Co.
     effect no change in beneficial ownership.  DTC has no knowledge of the
     actual Beneficial Owners of the Offered Bonds; DTC's records reflect only
     the identity of the Direct Participants to whose accounts such Offered
     Bonds are credited, which may or may not be the Beneficial Owners.  The
     Participants will remain responsible for keeping account of their holdings
     on behalf of their customers.

          Conveyance of notices and other communications by DTC to Direct
     Participants, by Direct Participants to Indirect Participants and by
     Participants to Beneficial Owners will be governed by arrangements among
     them, subject to any statutory or regulatory requirements that may be in
     effect from time to time.

          Neither DTC nor Cede & Co. will consent or vote with respect to
     Offered Bonds.  Under its usual procedures, DTC mails an Omnibus Proxy to
     the Company as soon as possible after the record date.  The Omnibus Proxy
     assigns Cede & Co.'s consenting or voting rights to those Direct
     Participants to whose accounts the Offered Bonds are credited on the record
     date (identified in a listing attached to the Omnibus Proxy).

          Principal and interest payments on the Offered Bonds will be made to
     DTC.  DTC's practice is to credit Direct Participants' accounts on the
     payable date in accordance with their respective holdings shown on DTC's
     records unless DTC has reason to believe that it will not receive payment
     on the payable date.  Payments by Participants to Beneficial Owners will be
     governed by standing instructions and customary practices, as is the case
     with securities held for the account of customers in bearer form or
     registered in "street name," and will be the responsibility of such
     Participants and not of DTC, the Company or the Trustees, subject to any
     statutory or regulatory requirements as may be in effect from time to time.
     Payment of principal and interest to DTC is the responsibility of the
     Company and the paying agent, disbursement of such payments to Direct
     Participants is the responsibility of DTC, and disbursement of such
     payments to the Beneficial Owners is the responsibility of Participants.

          Except as provided herein, a Beneficial Owner will not be entitled to
     receive physical delivery of Offered Bonds.  Accordingly, each Beneficial
     Owner must rely on the procedures of DTC to exercise any rights under the
     Offered Bonds.

          DTC may discontinue providing its services as securities depository
     with respect to the Offered Bonds at any time by giving reasonable notice
     to the Company.  Under such circumstances, in the event that a successor
     securities depository is not obtained, bond certificates are required to be
     printed and delivered.  The Company may decide to discontinue use of the
     system of book-entry transfers through DTC (or any successor depository). 
     In that event, bond certificates will be printed and delivered.

          The information in this section concerning DTC and DTC's book-entry
     system has been obtained from sources that the Company believes to be
     reliable, but the Company does not take responsibility for the accuracy
     thereof.

                                  S-3
     


                               APPLICATION OF PROCEEDS

          The net proceeds to be received from the sale of the Offered Bonds
     will be added to the Company's general funds and will be used for the
     retirement of $60,000,000 principal amount of its First Mortgage Bonds, 
     7-3/8% Series due March 1, 1997 and for other general corporate purposes. 
     Proceeds not immediately used for such purpose will be temporarily invested
     in short-term investments.



                                  S-4
     

                                 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 OFFERING

     Securities Offered by
     the Company . . . . . . . . . . .  $60,000,000 principal amount of First
                                        Mortgage Bonds, 7% Series due February
                                        15, 2007.
     Maturity Date . . . . . . . . . .  The Offered Bonds will be due February
                                        15, 2007.
     Interest Payment Dates  . . . . .  February 15 and August 15 (beginning
                                        August 15, 1997).
     Redemption Provisions . . . . . .  The Offered Bonds are not redeemable
                                        prior to maturity.
     Use of Proceeds . . . . . . . . .  Net proceeds will be used for the
                                        retirement of $60,000,000 principal
                                        amount of the Company's First Mortgage
                                        Bonds, 7-3/8% Series due March 1, 1997
                                        and for other general corporate
                                        purposes.


                         RATIOS OF EARNINGS TO FIXED CHARGES

     The Company has calculated ratios of earnings to fixed charges as follows:


                                            Year Ended December 31,
                                ---------------------------------------------
                                 1992      1993      1994      1995      1996
                                 ----      ----      ----      ----      ----
     Ratio of Earnings to 
       Fixed Charges . . . .     2.60      2.52      2.17      1.90      2.12


                 SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES(1)

     The Company has calculated supplemental ratios of earnings to fixed charges
     as follows:

                                            Year Ended December 31,
                                ---------------------------------------------
                                 1992      1993      1994      1995      1996
                                 ----      ----      ----      ----      ----
     Supplemental Ratio of 
        Earnings to 
        Fixed Charges  . . .     2.25      2.19      1.95      1.73      1.93

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

     (1)  The supplemental ratio of earnings to fixed charges includes the
          Company's obligations under a contract with Square Butte extending
          through 2007 pursuant to which the Company is purchasing 71 percent of
          the output of a generating unit capable of generating up to 470
          megawatts.  The Company is obligated to pay Square Butte all of Square
          Butte's leasing, operating and debt service costs (less any amounts
          collected from the sale of power or energy to others) that shall not
          have been paid by Square Butte when due.  See Note 12 of the Company's
          Consolidated Financial Statements incorporated by reference in the
          Company's 1995 Form 10-K.


     


                            SUMMARY FINANCIAL INFORMATION
                       (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


                                                     YEAR ENDED DECEMBER 31,
                                                   -------------------------
                                                       1995           1996
                                                       ----           ----
     Operating revenue and income.........          $672,917        $846,928
     Net income
        Continuing operations.............          $ 61,857        $ 69,221
        Discontinued operations...........             2,848               -
                                                    --------        --------
           Total..........................          $ 64,705        $ 69,221

     Earnings per share of common stock
        Continuing operations
          Electric operations.............             $1.36           $1.32 
          Water operations................              (.04)            .18 
          Automobile auctions.............               .00             .13 
          Investments.....................              1.46            1.30 
          Corporate charges and other.....              (.72)           (.65)
                                                      ------          ------
        Total continuing operations.......              2.06            2.28 
        Discontinued operations...........               .10               -  
                                                      ------          ------
           Total..........................             $2.16          $2.28(1) 
                                                            


     Capitalization:                            DECEMBER 31, 1996    PERCENT
                                                -----------------    -------
     Common stock equity..................          $610,848           43%
     Preferred stock not subject to
        mandatory redemption..............            11,492            1
     Preferred stock subject to 
        mandatory redemption..............            20,000            2
     Company obligated mandatorily redeemable
        preferred securities of MP&L Capital I
        which holds solely Company Junior 
        Subordinated Debentures...........            75,000            5
     Long-term debt.......................           694,423           49
                                                    --------         ------
     Total capitalization (excluding 
        current maturities)...............        $1,411,763          100%
     --------------------

     (1)  Electric operations contributed less to earnings in 1996 than in 1995
          due to less demand for power by, and lower rates for, large power
          customers.  The performance of water operations in 1996 improved over
          1995 primarily as a result of rate relief and ongoing cost controls at
          Florida Water.  1996 earnings from automobile auctions reflect twelve
          months of results from ADESA while only six months are included in
          1995 earnings.  1996 earnings also reflect growth in Automotive
          Finance Corporation's floorplan financing business and an increase in
          the number of automobiles auctioned by ADESA.  1996 earnings from
          automobile auctions were tempered in part by start-up costs at two new
          auction facilities.  The overall contribution of the Company's
          investments was lower in 1996 due to the fact that (i) the average
          securities portfolio balance was smaller in 1996 since a portion of
          the portfolio was sold in 1995 to fund the purchase of ADESA and (ii)
          Lehigh Acquisition Corporation recognized 52 cents of tax benefits in
          1995.  1995 corporate charges included a 14 cents per share amount
          associated with the write-off of the Company's investment in Reach All
          Partnership.

                                  S-6
     


                                     UNDERWRITING

          The Underwriter, PaineWebber Incorporated, has agreed, subject to the
     terms and conditions set forth in an Underwriting Agreement dated February
     12, 1997 with the Company, to purchase from the Company $60,000,000
     aggregate principal amount of the Offered Bonds. 

          The Underwriting Agreement provides that the obligation of the
     Underwriter to pay for and accept delivery of the Offered Bonds is subject
     to the approval of certain legal matters by its counsel and to certain
     other conditions.  In the Underwriting Agreement, the Underwriter has
     agreed, subject to the terms and conditions set forth therein, to purchase
     all the Offered Bonds offered hereby if any Offered Bonds are purchased.

          The Company has been advised by the Underwriter that it proposes
     initially to offer the Offered Bonds to the public at the public offering
     price set forth on the cover page of this Prospectus Supplement, and to
     certain dealers at such price less a concession not in excess of 0.40 of 1%
     of the principal amount of the Offered Bonds.  The Underwriter may allow,
     and such dealers may reallow, a concession not in excess of 0.25 of 1% of
     the principal amount of the Offered Bonds to certain other dealers.  After
     the initial public offering, the public offering price and such concessions
     may be changed.

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

          The Offered Bonds are a new issue of securities with no established
     trading market.  The Company has been advised by the Underwriter that the
     Underwriter intends to make a market in the Offered Bonds but is not
     obligated to do so and may discontinue market making at any time without
     notice.  No assurance can be given as to the liquidity of the trading
     market, if any, for the Offered Bonds.

                                  S-7
     
     
     PROSPECTUS
     ----------

                                     $80,000,000

                           MINNESOTA POWER & LIGHT COMPANY

                                 FIRST MORTGAGE BONDS 


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

          Minnesota Power & Light Company ("Company") intends to offer from time
     to time not to exceed $80,000,000 aggregate principal amount of its First
     Mortgage Bonds ("New Bonds").  The New Bonds 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 specific designation, aggregate principal amount, the
     purchase price, maturity date, interest rate or rates, time of payment of
     interest, and the redemption terms and other specific terms of the series
     of the New Bonds in respect of which this Prospectus and the Prospectus
     Supplement are delivered ("Offered Bonds").

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

       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 Bonds 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 Bonds, 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  February 11, 1997.

     

          IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
     EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW
     BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
     THE OPEN MARKET.  SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
     ANY TIME.

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

                                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 regarding registrants that file electronically with the
     Commission, including the Company.  The Company's Common Stock and the
     preferred share purchase rights attached thereto 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 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, 1995 ("1995 Form 10-K").

          2.   The Company's Quarterly Reports on Form 10-Q for the
               quarters ended March 31, 1996, June 30, 1996 and
               September 30, 1996 (each as amended by a Form 10-Q/A
               dated January 22, 1997).

          3.   The Company's Current Reports on Form 8-K dated April
               9, 1996, June 18, 1996, August 2, 1996, August 23,
               1996, September 5, 1996, October 3, 1996 and November
               7, 1996.

          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

                                       - 2 -
     

     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.

                                     THE COMPANY

          The Company is an operating public utility incorporated under the laws
     of the State of Minnesota since 1906. Its principal executive office is at
     30 West Superior Street, Duluth, Minnesota 55802, and its telephone number
     is (218) 722-2641.  The Company has operations in four business segments:
     (1) electric operations, which include electric and gas services, and coal
     mining; (2) water operations, which include water and wastewater services;
     (3) automobile auctions, which also include a finance company and an auto
     transport company; and (4) investments, which include real estate
     operations, a 21 percent equity investment in a financial guaranty
     reinsurance company, and a securities portfolio.  As of September 30, 1996
     the Company and its subsidiaries had approximately 5,900 employees.

                                                              (UNAUDITED)
                                                              NINE MONTHS
                                       YEAR ENDED DECEMBER       ENDED
                                               31,           SEPTEMBER 30,
                                       -------------------   ------------
            SUMMARY OF EARNINGS PER
                   SHARE (1)          1993    1994   1995    1995    1996
        --------------------------------------------------------------------

        CONSOLIDATED EARNINGS PER SHARE

            Continuing Operations   $ 2.27 $  1.99  $ 2.06 $ 1.69  $ 1.68

            Discontinued              (.07)    .07     .10    .10      -
              Operations (2)        ------  ------  ------ ------  ------

                Total               $ 2.20  $ 2.06  $ 2.16 $ 1.79  $ 1.68
                                    ======  ======  ====== ======  ======


        PERCENTAGE OF EARNINGS BY BUSINESS SEGMENT

           Continuing Operations

             Electric Operations     67%    66%      63%    57%     59%

             Water Operations         3     23       (2)     2       7

             Automobile Auctions      -      -        0      2       7

             Investments             55     40       67     66      54

             Corporate Charges      (22)   (33)     (33)   (33)    (27)
              and Other (3)

           Discontinued              (3)     4        5      6       -
            Operations (2)          ---    ---      ---    ---     ---

                                    100%   100%     100%   100%    100%
                                    ===    ===      ===    ===     ===
     ----------------
     (1)  Financial statement information may not be comparable between
          periods due to the purchase of 80 percent of ADESA Corporation on
          July 1, 1995, another 3 percent on January 31, 1996 and the
          remaining 17 percent on August 21, 1996.

     (2)  On June 30, 1995 the Company sold its interest in its paper and
          pulp business to Consolidated Papers, Inc. ("CPI") for $118
          million in cash, plus CPI's assumption of certain debt and lease
          obligations.  The Company is still committed to a maximum
          guarantee of $95 million to ensure a portion of a $33.4 million
          annual lease obligation for paper mill equipment under an
          operating lease extending to 2012.  CPI has agreed to indemnify
          the Company for any payments the Company may make as a result of
          the Company's obligation relating to this operating lease.

     (3)  Includes the financial results for the Reach All Partnership and
          general corporate expenses not allocable to a specific business
          segment.

                                       - 3 -
     

     ELECTRIC OPERATIONS

          Electric operations generate, transmit, distribute and sell
     electricity.  The Company provides electricity to 124,000 customers in
     northern Minnesota, while 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.  Another wholly owned subsidiary, BNI Coal, Ltd. 
     ("BNI Coal") 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, the
     Company purchases 71 percent of the output from the Square Butte unit,
     which is capable of generating up to 470 megawatts.

          In 1995 large industrial customers contributed about half of the
     Company's electric operating revenue.  The Company has large power
     contracts to sell power to ten industrial customers (five taconite
     producers, four paper companies and a pipeline company) each requiring 10
     megawatts or more of power.  These contracts, which have termination dates
     ranging from October 1997 to December 2007, require the payment of minimum
     monthly demand charges that cover most of the fixed costs, including a
     return on common equity, associated with having the capacity available to
     serve these customers.

     WATER OPERATIONS

          Water operations include Florida Water Services Corporation ("Florida
     Water", formerly Southern States Utilities, Inc.), Heater Utilities, Inc.
     ("Heater") and Instrumentation Services, Inc. ("ISI"), three wholly owned
     subsidiaries of the Company.  Florida Water is the largest private water
     supplier in Florida.  At September 30, 1996 Florida Water provided water to
     119,000 customers and wastewater treatment services to 54,000 customers in
     Florida.  At September 30, 1996 Heater provided water to 25,000 customers
     and wastewater treatment services to 1,000 customers in North Carolina and
     South Carolina.  ISI provides maintenance services to water utility
     companies in North Carolina, South Carolina, Florida, Georgia, Tennessee,
     Virginia and Texas.

     AUTOMOBILE AUCTIONS

          ADESA Corporation ("ADESA") is a wholly owned subsidiary of the
     Company and is the third largest automobile auction business in the United
     States.  Headquartered in Indianapolis, Indiana, ADESA owns and operates 25
     automobile auctions in the United States and Canada through which used cars
     and other vehicles are sold to franchised automobile dealers and licensed
     used car dealers.  Two wholly owned subsidiaries of ADESA, Automotive
     Finance Corporation and ADESA Auto Transport, perform related services. 
     Sellers at ADESA's auctions include domestic and foreign auto
     manufacturers, car dealers, fleet/lease companies, banks and finance
     companies.

          The Company acquired 80 percent of ADESA on July 1, 1995.  On January
     31, 1996 the Company provided additional capital in exchange for an
     additional 3 percent of ADESA.  On August 21, 1996 the Company acquired the
     remaining 17 percent ownership interest of ADESA from the ADESA management
     shareholders.  In conjunction with the transaction, four of the management
     shareholders left ADESA to pursue other opportunities.

     INVESTMENTS

          The Company owns 80 percent of Lehigh Acquisition Corporation, a real
     estate company that owns various real estate properties and operations in
     Florida.

          The Company has a 21 percent equity investment in Capital Re
     Corporation ("Capital Re").  Capital Re is a Delaware holding company
     engaged primarily in financial and mortgage guaranty reinsurance through
     its wholly owned subsidiaries, Capital Reinsurance Company and Capital
     Mortgage Reinsurance Company.  Capital Reinsurance Company is a reinsurer
     of financial guarantees of municipal and non-municipal debt obligations. 

                                       - 4 -
     

     Capital Mortgage Reinsurance Company is a reinsurer of residential mortgage
     guaranty insurance.  The Company's equity investment in Capital Re at
     September 30, 1996 was $99 million.

          As of September 30, 1996 the Company had approximately $160 million
     invested in a securities portfolio.  The majority of the portfolio consists
     of stocks of other utility companies with investment grade debt securities
     outstanding and are considered by the Company to be conservative
     investments.  Additionally, the Company sells common stock securities short
     and enters into short sales of treasury futures contracts as part of an
     overall investment portfolio hedge strategy.

                               APPLICATION OF PROCEEDS

          The Company is offering a maximum of $80,000,000 aggregate principal
     amount of its New Bonds.  The net proceeds to be received from the issuance
     and sale of the New Bonds will be used for general corporate purposes,
     which may include the redemption or other acquisition, in whole or in part,
     of certain of the Company's outstanding securities.

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

                         RATIOS OF EARNINGS TO FIXED CHARGES

          The Company has calculated ratios of earnings to fixed charges as
     follows:

                                                                Nine Months
                                   Year Ended December 31,         Ended
                                ----------------------------   September 30,
                                1991  1992  1993  1994  1995       1996
                                ----  ----  ----  ----  ----   -------------
                                            
        Ratio of Earnings to
          Fixed Charges . . .   2.55  2.60  2.52  2.17  1.90       2.18


                   SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES

             The Company has calculated supplemental ratios of earnings to
        fixed charges as follows:

                                                                Nine Months
                                   Year Ended December 31,         Ended
                                -----------------------------  September 30,
                                1991  1992  1993  1994  1995       1996
                                ----  ----  ----  ----  ----   ------------
        Supplemental Ratio of  
          Earnings to Fixed    
          Charges . . . . . .   2.20  2.25  2.19  1.95  1.73       1.99  

             The supplemental ratio of earnings to fixed charges includes the
        Company's obligations under a contract with Square Butte extending
        through 2007 pursuant to which the Company is purchasing 71 percent of
        the output of a generating unit capable of generating up to 470
        megawatts.  The Company is obligated to pay Square Butte all of Square
        Butte's leasing, operating and debt service costs (less any amounts
        collected from the sale of power or energy to others) that shall not
        have been paid by Square Butte when due.  See Note 12 of the Company's
        Consolidated Financial Statements incorporated by reference in the
        Company's 1995 Form 10-K.

                                       - 5 -
     

                               DESCRIPTION OF NEW BONDS

             General. The New Bonds are to be issued under the Company's
        Mortgage and Deed of Trust, dated as of September 1, 1945, with Irving
        Trust Company (now The Bank of New York) and Richard H. West (W.T.
        Cunningham, successor), as Trustees, as supplemented by eighteen
        supplemental indentures (herein collectively referred to as the
        "Mortgage"), all of which are exhibits to the Registration Statement. 
        The statements herein with respect to the New Bonds and the Mortgage
        are merely an outline and do not purport to be complete.  They make
        use of terms defined in the Mortgage and are qualified in their
        entirety by express reference to the cited Articles and Sections of
        the Mortgage.

             Reference is made to the Prospectus Supplement for the following
        terms of the Offered Bonds (among others): (i) the designation, series
        and aggregate principal amount of the Offered Bonds; (ii) the
        percentage or percentages of their principal amount at which such
        Offered Bonds will be issued; (iii) the date or dates on which the
        Offered Bonds will mature; (iv) the rate or rates per annum at which
        the Offered Bonds will bear interest; (v) the times at which such
        interest will be payable; and (vi) redemption terms or other specific
        terms.

             Form and Exchanges. The New Bonds will be issued in definitive
        fully registered form without coupons in denominations of $1,000 and
        multiples thereof and will be transferable and exchangeable without
        charge (except for stamp taxes, if any, or other governmental charges)
        at The Bank of New York, New York, New York.

             Interest, Maturity and Payment. Reference is made to the
        Prospectus Supplement for the interest rate or rates of the Offered
        Bonds and the dates on which such interest is payable.  Principal and
        interest are payable at The Bank of New York, New York, New York.

             Redemption and Purchase of Bonds. The New Bonds will be
        redeemable, in whole or in part, on 30 days notice at the redemption
        prices set forth in the Prospectus Supplement for redemptions
        including (i) for the basic improvement fund, (ii) for the maintenance
        and replacement fund, (iii) with certain deposited cash, (iv) with
        proceeds of released property, or (v) at the option of the Company. 
        Reference is made to the Prospectus Supplement for the redemption
        terms of the Offered Bonds.

             If at the time notice of redemption is given the redemption
        moneys are not on deposit with the Corporate Trustee, the redemption
        may be made subject to their receipt before the date fixed for
        redemption.

             Cash deposited under any provisions of the Mortgage (with certain
        exceptions) may be applied to the purchase of Bonds of any series.

             (Mortgage, Art. X.)

             Sinking or Improvement Fund. Reference is made to the Prospectus
        Supplement concerning whether or not the Offered Bonds are entitled to
        the benefit of a sinking or improvement fund or other provision for
        amortization prior to maturity.  Of the currently outstanding Bonds,
        only the 6-1/2% Series due January 1, 1998 has sinking fund or
        improvement fund provisions.

             Replacement Fund. Although the New Bonds as such are not entitled
        to the benefit of a replacement fund, so long as any Bonds of the 6-
        1/2% Series due January 1, 1998 are outstanding, there shall be
        expended for each year for replacements and improvements in respect of
        the mortgaged electric, gas, steam and/or hot water utility property
        and of certain automotive equipment an amount equal to $750,000 plus 2
        percent of net additions to such depreciable mortgaged property made
        after June 30, 1945 and prior to the beginning of such year.  Such
        requirement may be met with cash or gross property additions or by
        certifying net cash expenditures for certain automotive equipment or
        by taking credit for Bonds and qualified lien bonds retired.  Any
        excess in such credits may be applied against future requirements. 
        Such cash may be withdrawn on gross property additions or on waiver of
        the right to issue Bonds or be applied to the purchase or redemption
        of Bonds of such series as may be designated by the Company, including
        the New Bonds. (Mortgage, Sec. 39; Fourth Supplemental, Sec. 3.)

                                       - 6 -
     

             Special Provisions for Retirement of Bonds. If, during any 12
        month period, mortgaged property is disposed of by order of or to any
        governmental authority resulting in the receipt of $5 million or more
        as proceeds, the Company (subject to certain conditions) must apply
        such proceeds, less certain deductions, to the retirement of Bonds. 
        (Mortgage, Sec. 64.)  Reference is made to the Prospectus Supplement
        for information concerning whether the New Bonds are redeemable for
        this purpose and, if so, at what redemption prices.

             Security. The New Bonds and any other Bonds now or hereafter
        issued under the Mortgage will be secured by the Mortgage, which
        constitutes, in the opinion of General Counsel for the Company, a
        first lien on all of the electric generating plants and other
        materially important physical properties of the Company and
        substantially all other properties described in the Mortgage as owned
        by the Company, subject to (a) leases of minor portions of the
        Company's property to others for uses which, in the opinion of such
        counsel, do not interfere with the Company's business, (b) leases of
        certain property of the Company not used in its electric utility
        business, and (c) excepted encumbrances, minor defects and
        irregularities, but such counsel has not examined title to or passed
        upon title to reservoir lands, easements or rights of way, any
        property not costing in excess of $25,000, or lands or rights held for
        flowage, flooding or seepage purposes, or riparian rights.  There are
        excepted from the lien: cash and securities; merchandise, equipment,
        materials or supplies held for sale or other disposition; aircraft,
        automobiles and other vehicles, and materials and supplies for
        repairing and replacing the same; timber, minerals, mineral rights and
        royalties; receivables, contracts, leases and operating agreements.

             The Mortgage contains provisions for subjecting after-acquired
        property (subject to pre-existing liens) to the lien thereof, subject
        to limitations in the case of consolidation, merger or sale of
        substantially all of the Company's assets.

             The Mortgage provides that the Trustees shall have a lien upon
        the mortgaged property, prior to the Bonds, for the payment of their
        reasonable compensation, expenses and disbursements and for indemnity
        against certain liabilities. (Mortgage, Sec. 96.)

             No stocks or properties of subsidiaries are subject to the
        Mortgage.

             Issuance of Additional Bonds. The maximum principal amount of
        Bonds which may be issued under the Mortgage is not limited.  Bonds of
        any series may be issued from time to time on the basis of: (1) 60
        percent of property additions after adjustments to offset retirements;
        (2) retirement of Bonds or qualified lien bonds; and (3) deposit of
        cash.  With certain exceptions in the case of (2) above, the issuance
        of Bonds requires adjusted net earnings before income taxes for 12 out
        of the preceding 15 months of at least twice the annual interest
        requirements on all Bonds at the time outstanding, including the
        additional issue, and on all indebtedness of prior rank.  Such
        adjusted net earnings are computed after provision for retirement and
        depreciation of property equal to the replacement fund requirements
        for such period.  It is expected that the New Bonds will be issued
        upon the basis of the retirement of Bonds or property additions.

             Property additions generally include electric, gas, steam or hot
        water property acquired after June 30, 1945, but may not include
        securities, aircraft, automobiles or other vehicles, or property used
        principally for the production or gathering of natural gas.  There was
        available, as of December 31, 1996, unfunded net property additions of
        approximately $111,272,239.

             In general, when the Bonds of the 6-1/2% Series due January 1,
        1998 have been retired, property additions theretofore funded to
        satisfy sinking or improvement funds and/or replacement funds for all
        series will revert to unfunded status, and such property additions, as
        well as any Bonds theretofore used to satisfy all series' sinking or
        improvement funds and/or replacement funds, will become available as a
        basis for the issuance of additional Bonds.

             The Company has reserved the right to amend the Mortgage without
        any consent or other action by holders of any series of Bonds
        (including the New Bonds) other than the Bonds of the 6-1/2% Series
        due January 1, 1998 so as to include nuclear fuel (and similar or
        analogous devices or substances) as property additions.

                                       - 7 -
     

             The Mortgage contains certain restrictions upon the issuance of
        Bonds against property subject to liens and upon the increase of the
        amount of such liens.  (Mortgage, Sec. 4-8, 20-30, and 46; Fifth
        Supplemental, Sec. 2.)

             Release and Substitution of Property. Property may be released
        upon the basis of: (1) deposit of cash or, to a limited extent,
        purchase money mortgages; (2) property additions, after adjustments in
        certain cases to offset retirement and after making adjustments for
        qualified lien bonds outstanding against property additions; and/or
        (3) waiver of the right to issue Bonds without applying any earnings
        test.  Cash may be withdrawn upon the bases stated in (2) and (3)
        above.  When property released is not funded property, property
        additions used to effect the release may again, in certain cases,
        become available as credits under the Mortgage, and the waiver of the
        right to issue Bonds to effect the release may, in certain cases,
        cease to be effective as such a waiver.  Similar provisions are in
        effect as to cash proceeds of such property.  The Mortgage contains
        special provisions with respect to qualified lien bonds pledged, and
        disposition of moneys received on pledged prior lien bonds. (Mortgage,
        Sec. 5, 31, 32, 37, 46-50, 59-63, 100 and 118.)

             Dividend Covenant. The Company covenants that it will not declare
        or pay dividends (other than dividends payable in common stock) on or
        make any other distributions on or acquire (unless without cost to it)
        any of its common stock unless the provisions for depreciation and
        retirement of property during the period beginning September 1, 1945
        to the date of the proposed payment, distribution or acquisition, plus
        earned surplus of the Company (including current net income available
        to be transferred to earned surplus) remaining:

                  (a) after such payment, distribution or acquisition; and

                  (b) after deducting any remainder of the amount of earned
             surplus of the Company as of August 31, 1945, after deducting
             from such amount the charges to earned surplus subsequent to
             August 31, 1945, other than charges occasioned by dividends
             (other than dividends payable in common stock) on its common
             stock or occasioned by other distributions on or acquisitions of
             its common stock and other than charges to earned surplus with
             corresponding credits to reserve for depreciation and retirement
             of property;

        shall be at least equal to the amount of replacement fund
        requirements, if any, for such period.  (See Replacement Fund.)
        (Mortgage, Sec. 39.)  None of the Company's retained earnings as of
        September 30, 1996 was restricted as a result of such provisions.

             Modification of the Mortgage.  The rights of Bondholders may be
        modified with the consent of the holders of 70 percent of the Bonds
        and, if less than all series of Bonds are affected, the consent also
        of the holders of 70 percent of the Bonds of each series affected. 
        The Company has reserved the right without any consent or other action
        by the holders of any series of Bonds (including the New Bonds) other
        than the Bonds of the 6-1/2% Series due January 1, 1998 to amend the
        Mortgage so as to substitute 66 2/3 percent for 70 percent in the
        foregoing provisions.  In general, no modification of the terms of
        payment of principal and interest, no modification of the obligations
        of the Company under Section 64 and no modification affecting the lien
        or reducing the percentage required for modification, is effective
        against any Bondholder without his consent. (Mortgage, Art. XIX; Fifth
        Supplemental, Sec. 3.)

             Defaults and Notice Thereof. Defaults are defined as being
        default in payment of principal; default for 60 days in payment of
        interest or of installments of funds for retirement of Bonds; certain
        defaults with respect to qualified lien bonds and certain events in
        bankruptcy, insolvency or reorganization; and default of 90 days after
        notice in other covenants. (Mortgage, Sec. 65.)  The Trustees may
        withhold notice of default (except in payment of principal, interest
        or funds for retirement of Bonds) if they think it is in the interest
        of the bondholders. (Mortgage, Sec. 66.)  Under the Trust Indenture
        Act of 1939, as amended, general periodic evidence is required to be
        furnished as to compliance with the conditions and covenants under the
        Mortgage.

             The Corporate Trustee or the holders of 25 percent of the Bonds
        may declare the principal and interest due on default, but a majority
        may annul such declaration if the default has been cured. (Mortgage,

                                       - 8 -
     

        Sec. 67.)  No holder of Bonds may enforce the lien of the Mortgage
        without giving the Trustees written notice of a default and unless
        holders of 25 percent of the Bonds have requested the Trustees to act
        and offered them reasonable opportunity to act and indemnity
        satisfactory to the Trustees and they shall have failed to act.
        (Mortgage, Sec. 80.)  The holders of a majority of the Bonds may
        direct the time, method and place of conducting any proceedings for
        any remedy available to the Trustees, or exercising any trust or power
        conferred upon the Trustees, but the Trustees are not required to
        follow such direction if not sufficiently indemnified for
        expenditures. (Mortgage, Sec. 71.)

                                       EXPERTS

             The Company's consolidated financial statements incorporated in
        this Prospectus by reference to the Company's 1995 Form 10-K, except
        as they relate to ADESA, have been audited by Price Waterhouse LLP,
        independent accountants, and, insofar as they relate to ADESA, by
        Ernst & Young LLP, independent auditors.  Such financial statements,
        except as they relate to ADESA, have been so incorporated in reliance
        on the report of Price Waterhouse LLP, given on the authority of said
        firm as experts in auditing and accounting.

             The financial statement schedule incorporated in this Prospectus
        by reference to the Company's 1995 Form 10-K has 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 consolidated financial statements of ADESA for the period
        from July 1, 1995 to December 31, 1995 which are included in the
        consolidated financial statements of the Company incorporated in this
        Prospectus by reference to the Company's 1995 Form 10-K have been
        audited by Ernst & Young LLP, independent auditors, as set forth in
        their report thereon included in said 1995 Form 10-K.  The
        consolidated financial statements of ADESA for the period from July 1,
        1995 to December 31, 1995 are included in the consolidated financial
        statements of the Company in reliance upon such report given upon the
        authority of such firm as experts in accounting and auditing.

             Legal conclusions and opinions specifically attributed to General
        Counsel herein under Description of New Bonds and in the Incorporated
        Documents have been reviewed by Philip R. Halverson, Esq., Duluth,
        Minnesota, Vice President, General Counsel and Corporate Secretary of
        the Company, and are set forth or incorporated by reference herein in
        reliance upon his opinion given upon his authority as an expert.

             As of December 31, 1996 Mr. Halverson owned approximately 4,432
        shares of the Common Stock of the Company.  Mr. Halverson is regularly
        acquiring additional shares of Common Stock as a participant in the
        Company's Employee Stock Purchase Plan, Employee Stock Ownership Plan
        and Supplemental Retirement Plan.

                                    LEGAL OPINIONS

             The legality of the New Bonds 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 Lane &
        Mittendorf LLP, New York, New York.  Reid & Priest LLP and Lane &
        Mittendorf 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 Bonds 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 Bonds will
        set forth the terms of the offering of the Offered Bonds, including
        the name or names of any underwriters, dealers or agents, the purchase
        price of the Offered Bonds 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.

                                       - 9 -
     

             If underwriters are used in any sale of the New Bonds, the
        Offered Bonds 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 Bonds 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 Bonds will be subject to
        certain conditions precedent and the underwriter or underwriters will
        be obligated to purchase all the Offered Bonds if any are purchased
        except that, in certain cases involving a default by one or more
        underwriters, less than all of the Offered Bonds may be purchased.

             Offered Bonds 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 Bonds 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.

             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 Bonds 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.

                                       - 10 -
     

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

          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 HEREUNDER
     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 SUPPLEMENT 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

     CERTAIN TERMS OF THE OFFERED BONDS  . . . . . . . . . . . . . . . .   S-2
     APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . .   S-4
     SELECTED INFORMATION  . . . . . . . . . . . . . . . . . . . . . . .   S-5
     UNDERWRITING  . . . . . . . . . . . . . . . . . . . . . . . . . . .   S-7


                                      PROSPECTUS


     AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .   2
     INCORPORATION OF CERTAIN DOCUMENTS
       BY REFERENCE  . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
     THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
     APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . .   5
     RATIOS OF EARNINGS TO FIXED CHARGES . . . . . . . . . . . . . . . . .   5
     SUPPLEMENTAL RATIOS OF EARNINGS TO
       FIXED CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
     DESCRIPTION OF NEW BONDS  . . . . . . . . . . . . . . . . . . . . . .   6
     EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
     LEGAL OPINIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
     PLAN OF DISTRIBUTION  . . . . . . . . . . . . . . . . . . . . . . . .   9



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

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



                                     $60,000,000


                                      MINNESOTA


                                    POWER & LIGHT


                                       COMPANY


                           FIRST MORTGAGE BONDS, 7% SERIES


                                DUE FEBRUARY 15, 2007






                                   ---------------
                                PROSPECTUS SUPPLEMENT
                                   ---------------





                               PAINEWEBBER INCORPORATED




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


                                  February 12, 1997

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