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08-02-13 S-3ASR


As filed with the Securities and Exchange Commission on August 2, 2013
Registration Statement No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
Form S–3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
________________________________________________________
ALLETE, Inc.
(Exact name of registrant as specified in its charter)
Minnesota
41-0418150
(State of incorporation or organization)
(I.R.S. Employer Identification No.)
30 West Superior Street
Duluth, Minnesota 55802-2093
(218) 279-5000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
MARK A. SCHOBER
DEBORAH A. AMBERG, Esq.
Senior Vice President and
Senior Vice President, General Counsel
Chief Financial Officer
and Secretary
30 West Superior Street
30 West Superior Street
Duluth, Minnesota 55802-2093
Duluth, Minnesota 55802-2093
(218) 279-5000
(218) 279-5000
 
 
DONALD W. STELLMAKER
ROBERT J. REGER, JR., Esq.
Vice President and Treasurer
Morgan, Lewis & Bockius LLP
30 West Superior Street
101 Park Avenue
Duluth, Minnesota 55802-2093
New York, New York 10178-0060
(218) 279-5000
(212) 309-6000
(Names and addresses, including zip codes, and telephone numbers, including area codes, of agents for service)
________________________________________________________
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined by market conditions and other factors.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act of 1933, check the following box.
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act of 1933, check the following box. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.  (Check one):
 
Large Accelerated Filer
x
 
Accelerated Filer
o
 
 
Non-Accelerated Filer
o
 
Smaller Reporting Company
o
 
 
(Do not check if a smaller reporting company)
 
 
 
 
 
________________________________________________________
CALCULATION OF REGISTRATION FEE
 
 
 
Title of Each Class of Securities to be Registered
Proposed Maximum Aggregate Offering Price (1)
Amount of Registration Fee
Common Stock, without par value
 
 
First Mortgage Bonds
 
 
Total
 
(2)
(1)
An unspecified aggregate initial offering of the securities of each identified class is being registered as may from time to time be offered by ALLETE, Inc., or sold by a selling securityholder, at unspecified prices, along with an indeterminate number of securities that may be issued upon exercise, settlement, exchange or conversion of securities offered hereunder. Separate consideration may or may not be received for securities that are issuable upon exercise, settlement, conversion or exchange of other securities or that are issued in units.
(2)
Pursuant to Rule 415(a)(6) under the Securities Act of 1933, there are included on this registration statement an aggregate of 4,209,892 shares of ALLETE, Inc.'s common stock that were previously registered for offer and sale, but not sold, in connection with ALLETE, Inc.'s amended equity distribution agreement pursuant to Registration Statement No. 333-170289 (“Prior Registration Statement”), filed with the Securities and Exchange Commission (“SEC”) on November 2, 2010, and for which an aggregate of $15,526.64 in fees were paid in connection with the filing with the SEC of prospectus supplements dated February 27, 2009 (“2009 Prospectus Supplement”) (which unsold shares were previously included on the Prior Registration Statement) and August 3, 2012 (“2012 Prospectus Supplement”). Pursuant to Rule 415(a)(6), the $1,330.64 filing fee related to the 1,209,892 unsold shares previously paid in connection with the 2009 Prospectus Supplement and the $14,195.50 filing fee related to the 3,000,000 unsold shares previously paid in connection with the 2012 Prospectus Supplement will continue to be applied to such unsold shares and no additional filing fee is required with respect to the 4,209,892 shares. In addition, pursuant to Rule 416(a) of the Securities Act of 1933, this registration statement also covers an indeterminable number of additional shares of common stock as may become deliverable as a result of stock splits, stock dividends, split-ups, recapitalizations or similar transaction that increases the number of shares of ALLETE, Inc. common stock. Pursuant to Rule 415(a)(6) under the Securities Act of 1933, the offering of unsold securities under the Prior Registration Statement will be terminated concurrently with the filing of this registration statement. In connection with the securities offered hereby, except as specified in this paragraph, ALLETE, Inc. will pay “pay-as-you-go registration fees” in accordance with Rule 456(b) and Rule 457(r) under the Securities Act of 1933.



PROSPECTUS
ALLETE, Inc.

Common Stock
and
First Mortgage Bonds



ALLETE, Inc. may offer any combination of the securities described in this prospectus in one or more offerings from time to time in amounts authorized from time to time. This prospectus may also be used by a selling securityholder of the securities described herein.

ALLETE will provide specific terms of the securities, including the offering prices, in supplements to this prospectus. The supplements may also add, update or change information contained in this prospectus. You should read this prospectus and any supplements carefully before you invest.

ALLETE's common stock is listed on the New York Stock Exchange and trades under the symbol “ALE.”

ALLETE's principal executive offices are located at 30 West Superior Street, Duluth, Minnesota 55802-2093, telephone number (218) 279-5000.

See the discussion of risk factors, if any, contained in ALLETE's annual, quarterly and current reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, which are incorporated by reference into this prospectus, to read about certain factors you should consider before purchasing any of the securities being offered.

ALLETE may offer the securities to or through underwriters or dealers, directly to purchasers or through agents designated from time to time. This prospectus may be used in connection with any offering of securities through any of these methods or other methods described in supplements to this prospectus. The supplements to this prospectus will describe the terms of any particular plan of distribution, including any underwriting arrangements. The “Plan of Distribution” section beginning on page 12 of this prospectus also provides more information on this topic.
_____________________________________________________

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is August 2, 2013.



TABLE OF CONTENTS

 
Page

About this Prospectus
1

Where You Can Find More Information
1

Incorporation by Reference
1

Forward-Looking Statements
2

ALLETE, Inc.
3

Use of Proceeds
3

Consolidated Ratio of Earnings to Fixed Charges
3

Description of Common Stock
4

Description of First Mortgage Bonds
5

Plan of Distribution
12

Experts
13

Legal Opinions
13





ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that ALLETE, Inc. filed under the Securities Act of 1933 with the Securities and Exchange Commission, or SEC, using a “shelf” registration process. ALLETE, Inc. is referred to in this prospectus as “ALLETE.” Under this shelf registration process, ALLETE may issue and sell any combination of the securities described in this prospectus in one or more offerings from time to time in amounts authorized by the board of directors of ALLETE.

This prospectus provides you with a general description of the securities ALLETE may offer. Each time ALLETE sells securities, ALLETE will provide a prospectus supplement that will contain specific information about the terms of that offering. Material United States federal income tax considerations applicable to the offered securities will be discussed in the applicable prospectus supplement, if necessary. The applicable prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any applicable prospectus supplement together with additional information described under the headings “Where You Can Find More Information” and “Incorporation by Reference.”

For more detailed information about the securities, you can read the exhibits to the registration statement. Those exhibits have been either filed with the registration statement or incorporated by reference to earlier SEC filings listed in the registration statement.


WHERE YOU CAN FIND MORE INFORMATION

ALLETE files annual, quarterly and other reports and other information with the SEC. You can read and copy any information filed by ALLETE with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can obtain additional information about the Public Reference Room by calling the SEC at 1-800-SEC-0330.

In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including ALLETE. ALLETE also maintains a website (www.allete.com). Information contained on ALLETE's website does not constitute part of this prospectus.


INCORPORATION BY REFERENCE

The SEC allows ALLETE to “incorporate by reference” the information that ALLETE files with the SEC, which means that ALLETE may, in this prospectus, disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Information that ALLETE files in the future with the SEC will automatically update and supersede this information. ALLETE is incorporating by reference the documents listed below and any future filings ALLETE makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus (other than any documents, or portions of documents, not deemed to be filed) until ALLETE sells all of the securities covered by this registration statement:

•
ALLETE's Annual Report on Form 10-K for the year ended December 31, 2012;
•
ALLETE's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013; and
•
ALLETE's Current Reports on Form 8-K filed with the SEC on January 25, 2013, March 1, 2013, April 2, 2013, May 16, 2013, and August 1, 2013 (other than any documents or portions of documents not deemed to be filed).

You may request a copy of these documents, at no cost to you, by writing or calling:

Shareholder Services
ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802-2093
Telephone: (218) 355-5974 or (800) 535-3056
Facsimile: (218) 355-3802
e-mail: shareholder@allete.com


1


Upon request, ALLETE will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in this prospectus but not delivered with this prospectus.


FORWARD-LOOKING STATEMENTS

Statements in this prospectus that are not statements of historical facts are considered “forward-looking” and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there can be no assurance that the expected results will be achieved. Any statements that express, or involve discussions as to, future expectations, risks, beliefs, plans, objectives, assumptions, events, uncertainties, financial performance, or growth strategies (often, but not always, through the use of words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “likely,” “will continue,” “could,” “may,” “potential,” “target,” “outlook” or words of similar meaning) are not statements of historical facts and may be forward-looking.

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, ALLETE is providing this cautionary statement to identify important factors that could cause ALLETE's actual results to differ materially from those indicated in forward-looking statements made by or on behalf of ALLETE in this prospectus or any supplement to this prospectus, in presentations, on ALLETE's website, in response to questions or otherwise. These statements are qualified in their entirety by reference to, and are accompanied by, the following important factors, in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, that could cause ALLETE's actual results to differ materially from those indicated in the forward-looking statements:

•
ALLETE's ability to successfully implement its strategic objectives;
•
regulatory or legislative actions, including those of the United States Congress, state legislatures, the Federal Energy Regulatory Commission, the Minnesota Public Utilities Commission, the Public Service Commission of Wisconsin, the North Dakota Public Service Commission, the Environmental Protection Agency and various state, local and county regulators, and city administrators, that impact ALLETE's allowed rates of return, capital structure, ability to secure financing, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power, capital investments and other expenses, including present or prospective wholesale and retail competition and environmental matters;
•
ALLETE's ability to manage expansion and integrate acquisitions;
•
ALLETE's current and potential industrial and municipal customers’ ability to execute announced expansion plans;
•
the impacts on ALLETE's Regulated Operations of climate change and future regulation to restrict the emissions of greenhouse gases;
•
effects of restructuring initiatives in the electric industry;
•
economic and geographic factors, including political and economic risks;
•
changes in and compliance with laws and regulations;
•
weather conditions, natural disasters and pandemic diseases;
•
war, acts of terrorism and cyber attacks;
•
wholesale power market conditions;
•
population growth rates and demographic patterns;
•
effects of competition, including competition for retail and wholesale customers;
•
zoning and permitting of land held for resale, real estate development or changes in the real estate market;
•
pricing, availability and transportation of fuel and other commodities and the ability to recover the costs of such commodities;
•
changes in tax rates or policies or in rates of inflation;
•
project delays or changes in project costs;
•
availability and management of construction materials and skilled construction labor for capital projects;
•
changes in operating expenses and capital expenditures;
•
global and domestic economic conditions affecting ALLETE or its customers;
•
ALLETE's ability to access capital markets and bank financing;
•
changes in interest rates and the performance of the financial markets;
•
ALLETE's ability to replace a mature workforce and retain qualified, skilled and experienced personnel; and
•
the outcome of legal and administrative proceedings (whether civil or criminal) and settlements.


2


Additional disclosures regarding factors that could cause ALLETE's results or performance to differ from those anticipated by this prospectus and any prospectus supplement are set forth in the discussion of risk factors, if any, contained in ALLETE's annual, quarterly and current reports filed with the SEC under the Securities Exchange Act of 1934, which are incorporated by reference into this prospectus and in any prospectus supplement. Any forward-looking statement speaks only as of the date on which such statement is made, and ALLETE undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which that statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of these factors, nor can ALLETE assess the impact of each of these factors on ALLETE's businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers are urged to carefully review and consider the various disclosures in ALLETE's reports and other information incorporated by reference herein and made by ALLETE in this prospectus or any prospectus supplement that attempt to identify the risks and uncertainties that may affect ALLETE's business.


ALLETE, INC.

ALLETE is comprised of two business segments:

•
Regulated Operations includes ALLETE's regulated utilities, Minnesota Power and Superior Water, Light and Power Company (“SWL&P”), as well as its investment in American Transmission Company LLC, a Wisconsin-based regulated utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. Minnesota Power provides regulated utility electric service in northeastern Minnesota to approximately 143,000 retail customers. Minnesota Power's non-affiliated municipal customers consist of 16 municipalities in Minnesota and 1 private utility in Wisconsin. SWL&P is also a private utility in Wisconsin and a customer of Minnesota Power. SWL&P provides regulated electric, natural gas and water service in northwestern Wisconsin to approximately 15,000 electric customers, 12,000 natural gas customers and 10,000 water customers. ALLETE's regulated utility operations include retail and wholesale activities under the jurisdiction of state and federal regulatory authorities.

•
Investments and Other is comprised primarily of BNI Coal, Ltd., ALLETE's coal mining operations in North Dakota, ALLETE Properties, LLC, ALLETE's Florida real estate investment, and ALLETE Clean Energy, Inc., ALLETE's business aimed at developing or acquiring capital projects that create energy solutions via wind, solar, biomass, midstream gas and oil infrastructure, among other energy-related projects. This segment also includes other business development and corporate expenditures, a small amount of non-rate base generation, approximately 6,000 acres of land in Minnesota, and earnings on cash and investments.


USE OF PROCEEDS

Unless otherwise stated in a prospectus supplement, ALLETE will add the net proceeds from the sale of the securities to its general funds. ALLETE uses its general funds for corporate purposes, including, without limitation, capital investments in its existing business, acquisitions made by or on behalf of it or its subsidiaries, to repay short-term borrowings or to repay, redeem or repurchase outstanding debt. ALLETE may temporarily invest any proceeds that it does not immediately need.


CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

ALLETE's consolidated ratio of earnings to fixed charges for each of its last five fiscal years is as follows:
Years Ended December 31,
2012
2011
2010
2009
2008
3.56
3.63
3.67
3.29
5.05
ALLETE's consolidated ratio of earnings to fixed charges for the six months ended June 30, 2013, was 3.01.

3


DESCRIPTION OF COMMON STOCK

General. The following statements describing ALLETE's common stock are not intended to be a complete description. For additional information, please see ALLETE's Articles of Incorporation and Bylaws. Each of these documents has been previously filed with the SEC and they are exhibits to the registration statement filed with the SEC of which this prospectus is a part. Reference is also made to the laws of the State of Minnesota.

ALLETE has the following capital stock authorized by its Articles of Incorporation: 80,000,000 shares of common stock, without par value, and 3,616,000 shares of preferred stock. As of July 31, 2013, 40,153,653 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

Dividend Rights. ALLETE's common stock is entitled to dividends only after ALLETE has provided for dividends and any sinking fund requirements on any issued and outstanding preferred stock. ALLETE's Articles of Incorporation contain provisions which would restrict net income available for the payment of cash dividends on outstanding common stock in the event that shares of ALLETE's preferred stock were outstanding and certain common stock equity capitalization ratios were not met.

Voting Rights (Non-Cumulative Voting). Holders of ALLETE's common stock are entitled to receive notice of and to vote at any meeting of shareholders. Each share of ALLETE's common stock, as well as each share of any of ALLETE's issued and outstanding preferred stock, is entitled to one vote. Holders of ALLETE's common stock do not have cumulative voting rights. Each director shall be elected by the vote of a majority of the votes cast with respect to the director at a meeting of shareholders called for such purpose at which a quorum is present. At any such meeting for which the number of nominees (other than nominees withdrawn on or before the sixtieth (60th) day before the first anniversary of the preceding year's annual shareholder meeting) exceeds the number of directors to be elected, directors shall be elected by a plurality of the votes present and entitled to vote on the election of directors. In addition, whenever dividends on any of ALLETE's preferred stock are in default in the amount of four full quarterly payments or more, and until all the dividends in default are paid, the holders of ALLETE's preferred stock are entitled, as one class, to elect a majority of the directors. ALLETE's common stock, as one class, would then elect the minority.

The Articles of Incorporation include detailed procedures and other provisions relating to these rights and their termination, including:

•
quorums;
•
terms of directors elected;
•
vacancies;
•
class voting;
•
meetings; and
•
adjournments.

The Articles of Incorporation contain provisions that make it difficult to obtain control of ALLETE through transactions not having the approval of the board of directors of ALLETE. These provisions include:

•
a provision requiring the affirmative vote of 75 percent of the outstanding shares of all classes of ALLETE's capital stock, present and entitled to vote, in order to authorize certain mergers or consolidations, or sales or leases of a significant amount of assets, of ALLETE, and other significant transactions that may have an effect on the control of ALLETE. Any of those transactions are required to meet certain “fair price” and procedural requirements. Neither a 75 percent shareholder vote nor a “fair price” is required for any of those transactions that have been approved by a majority of the “Disinterested Directors,” as that term is defined in the Articles of Incorporation;
•
a provision permitting a majority of the Disinterested Directors to determine whether the above requirements have been satisfied; and
•
a provision providing that some parts of the Articles of Incorporation cannot be altered unless approved by 75 percent of the outstanding shares of all classes of ALLETE's capital stock, present and entitled to vote, unless the alteration is recommended to the shareholders by a majority of the Disinterested Directors. The parts of the Articles of Incorporation that cannot be altered except as stated above include some parts relating to:
•
mergers or consolidations, or sales or leases of a significant amount of assets, of ALLETE, and other significant transactions that may have an effect on the control of ALLETE; and
•
the number, election, terms of office and removal of directors of ALLETE and the way in which vacancies on the board of directors are filled.


4


Liquidation Rights. After ALLETE has satisfied creditors and the preferential liquidation rights of any of its outstanding preferred stock, the holders of its common stock are entitled to share ratably in the distribution of all remaining assets.

Miscellaneous. Holders of ALLETE's common stock have no preemptive or conversion rights. ALLETE's common stock is listed on the New York Stock Exchange. The transfer agents and registrars for ALLETE's common stock are Wells Fargo Bank, N.A. and ALLETE.


DESCRIPTION OF FIRST MORTGAGE BONDS

General. The following description sets forth certain general terms and provisions of ALLETE's first mortgage bonds that ALLETE may offer by this prospectus. ALLETE will describe the particular terms of the first mortgage bonds, and provisions that vary from those described below, in one or more prospectus supplements.

ALLETE may issue the first mortgage bonds from time to time in one or more series. ALLETE will issue the first mortgage bonds under its Mortgage and Deed of Trust, dated as of September 1, 1945, with Irving Trust Company (now The Bank of New York Mellon), as corporate mortgage trustee, and Richard H. West (Philip L. Watson, successor), as individual mortgage trustee (together, the “mortgage trustees”), which has been amended and supplemented in the past, may be supplemented prior to the issuance of these first mortgage bonds and which will be supplemented again by one or more supplemental indentures relating to these first mortgage bonds. The Mortgage and Deed of Trust, as so amended and supplemented, is referred to in this prospectus as the “mortgage.”

This section briefly summarizes some of the terms of the first mortgage bonds and some of the provisions of the mortgage and uses some terms that are not defined in this prospectus but that are defined in the mortgage. This summary is not complete. You should read this summary together with the mortgage and the supplemental indenture establishing the first mortgage bonds for a complete understanding of all the provisions. References to certain sections of the mortgage and particular supplemental indentures are included in parentheses. The mortgage and the form of supplemental indenture have been previously filed with the SEC, and are exhibits to the registration statement filed with the SEC of which this prospectus is a part. In addition, the mortgage is qualified as an indenture under the Trust Indenture Act of 1939 and is therefore subject to the provisions of the Trust Indenture Act of 1939. You should read the Trust Indenture Act of 1939 for a complete understanding of its provisions. All first mortgage bonds issued or to be issued under the mortgage, including the first mortgage bonds offered by this prospectus, are referred to herein as “first mortgage bonds.”

All first mortgage bonds of one series need not be issued at the same time, and a series may be re-opened for issuances of additional first mortgage bonds of such particular series. This means that ALLETE may from time to time, without notice to, or the consent of the existing holders of previously-issued first mortgage bonds of a particular series, create and issue additional first mortgage bonds of such series. Such additional first mortgage bonds will have the same terms as the first mortgage bonds of such series in all respects (except for the payment of interest accruing prior to the issue date of the additional first mortgage bonds or except for the first payments of interest following the issue date of the additional first mortgage bonds) so that the additional first mortgage bonds may be consolidated and form a single series with the first mortgage bonds of such series.

Reference is made to a prospectus supplement relating to each series of first mortgage bonds offered by this prospectus for the following specific terms of that series, among others:

•
the designation of the series of first mortgage bonds and aggregate principal amount of the first mortgage bonds,
•
the offering price of the series,
•
the place where the principal of and interest on the series will initially be payable, if other than at The Bank of New York Mellon in New York, New York,
•
the date or dates on which the series will mature,
•
the rate or rates at which the series will bear interest, or method for determining the interest rate(s),
•
the dates on which such interest will be payable,
•
the currency or currencies in which payment of the principal of and interest on the series may be made, if other than United States dollars,
•
whether all or a portion of the series will be in global form,
•
the redemption terms, and
•
any other terms or provisions relating to the series that are not inconsistent with the provisions of the mortgage.


5


The first mortgage bonds may be sold at a discount below their principal amount. Some of the important United States federal income tax considerations applicable to first mortgage bonds sold at a discount below their principal amount may be described in the applicable prospectus supplement. In addition, some of the important United States federal income tax or other considerations applicable to any first mortgage bonds which are denominated or payable in a currency or currency unit other than United States dollars may be described in the applicable prospectus supplement.

Except as may otherwise be described in a prospectus supplement, the covenants contained in the mortgage will not afford holders of the first mortgage bonds protection in the event of a highly-leveraged or similar transaction involving ALLETE or in the event of a change in control.

Reserved Amendment Rights. ALLETE has reserved the right to amend the mortgage without the consent or other action of the holders of any of the first mortgage bonds created after January 31, 2010, to make the changes described below in this “Description of First Mortgage Bonds.” Holders of first mortgage bonds issued after January 31, 2010, including first mortgage bonds that ALLETE may offer by this prospectus, are deemed to have consented to these amendments. This section briefly summarizes the reserved amendment rights. This summary is not complete. You should read this summary together with the thirty-first supplemental indenture, dated as of February 1, 2010, which has been previously filed with the SEC and is an exhibit to the registration statement filed with the SEC of which this prospectus is a part, together with the mortgage for a complete understanding of the reserved amendment rights.

Form and Exchanges. The first mortgage bonds offered by this prospectus will be issued in fully registered form without coupons, unless otherwise stated in a prospectus supplement. Unless otherwise stated in a prospectus supplement, the first mortgage bonds will be issued in denominations of $1,000 and multiples thereof. The first mortgage bonds will be transferable and exchangeable without charge (except for stamp taxes, if any, or other governmental charges). ALLETE has initially designated The Bank of New York Mellon, in New York, New York, as the place where such transfers or exchanges may be made.

A holder of first mortgage bonds may exchange those first mortgage bonds, for an equal aggregate principal amount of first mortgage bonds of the same series, having the same issue date and with identical terms and provisions, or may transfer those first mortgage bonds, in each case without cost to the holder, other than for applicable stamp taxes or other governmental charges, unless otherwise stated in the applicable prospectus supplement. ALLETE may issue all or some of the first mortgage bonds in “book-entry” form, which means that they will be represented by global notes, instead of certificates. The depository, or its custodian, will hold those global notes. Transfers of beneficial interests in those global notes will be accomplished by entries in the books of participants acting on behalf of beneficial owners. Any additional requirements as to the form and method of exchange of first mortgage bonds will be described in the applicable prospectus supplement.

Redemption and Purchase of First Mortgage Bonds. The first mortgage bonds may be redeemable upon 30 days' notice if the terms of the first mortgage bonds so provide. Reference is made to the applicable prospectus supplement for the prices and other terms and conditions, if any, for redemption of the first mortgage bonds offered by this prospectus. If the first mortgage bonds are redeemable, ALLETE may use certain deposited cash and/or proceeds of released property to effect the redemption.

If at the time a notice of redemption is given the redemption moneys are not on deposit with the corporate mortgage 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 generally be applied to the purchase of first mortgage bonds of any series. (See Mortgage, Article X.)

Subject to applicable law, including United States federal securities law, ALLETE may purchase outstanding first mortgage bonds by tender, in the open market or by private agreement.

Sinking or Improvement Fund. Reference is made to the applicable prospectus supplement concerning whether or not the first mortgage bonds offered by this prospectus are entitled to the benefit of a sinking or improvement fund or other provision for amortization prior to maturity. None of the currently outstanding first mortgage bonds has sinking fund or improvement fund provisions.

Replacement Fund. The first mortgage bonds offered by this prospectus are not entitled to the benefit of any replacement fund.


6


Special Provisions for Retirement of First Mortgage Bonds. If, during any 12 month period, mortgaged property is disposed of by order of or to any governmental authority resulting in the receipt by ALLETE of $5 million or more as proceeds, ALLETE (subject to certain conditions) must apply such proceeds, less certain deductions, to the retirement of first mortgage bonds. If this occurs, ALLETE may redeem first mortgage bonds of any series that are redeemable for such reason at the redemption prices applicable to those first mortgage bonds. (See Mortgage, Section 64.) Reference is made to the applicable prospectus supplement for information concerning whether the first mortgage bonds offered by this prospectus are redeemable for this purpose and, if so, at what redemption prices.

Security. The first mortgage bonds offered by this prospectus and any other first mortgage bonds now or hereafter issued under the mortgage will be secured by the mortgage, which constitutes a first lien on all of the electric generating plants, electric transmission and distribution equipment and fixtures of ALLETE and substantially all other properties owned by ALLETE, other than property expressly excepted. The lien of the mortgage is or may be subject to the following “excepted encumbrances”:

•
liens for taxes, assessments or governmental charges which are not delinquent or the validity of which is being contested at the time by ALLETE in good faith; and liens for workmen's compensation awards and similar obligations which are not delinquent and undetermined liens or charges incidental to construction;
•
liens securing indebtedness, neither assumed nor guaranteed by ALLETE nor on which it customarily pays interest, existing on real property or rights in or relating to real property acquired by ALLETE for substation, transmission line, transportation line, distribution line or right of way purposes;
•
rights of any municipality or public authority to terminate any right, power, franchise, grant, license or permit or to purchase or recapture or to designate a purchaser of any of the property of ALLETE or to control or regulate any property of ALLETE, or to use such property in a manner which does not materially impair the use of such property for the purposes for which it is held by ALLETE;
•
rights of others to take or receive any part of the power, gas, oil or other minerals or timber generated, developed, produced, manufactured, pumped or stored by, or grown on, or acquired with, any property of ALLETE;
•
easements, restrictions, exceptions or reservations in any property and/or rights of way of ALLETE for the purpose of roads, pipe lines, transmission lines, distribution lines, removal of coal or other minerals or timber, and other like purposes, or for the joint or common use of real property, rights of way, facilities and/or equipment, and defects, irregularities and deficiencies in titles of any property and/or rights of way, which do not materially impair the use of such property and/or rights of way for the purposes for which such property and/or rights of way are held by ALLETE; or
•
any obligations or duties, affecting the property of ALLETE, to any municipality or public authority with respect to any franchise, grant, license or permit.

In addition, the lien of the mortgage is or may be subject to the following:

•
defects which ALLETE has the right to cure and which do not impair the use of such properties by ALLETE;
•
possible defects in 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;
•
vendors' liens, purchase money mortgages and liens on property that already exist at the time ALLETE acquires that property;
•
liens for labor, materials, supplies or other objects given priority by law; and
•
liens for taxes, assessments or other governmental charges given priority by law.

ALLETE has reserved the right to amend the mortgage to restate the definition of “excepted encumbrances” to mean substantially the following:

•
tax liens, assessments and other governmental charges or requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or of which at least ten business days' notice has not been given to ALLETE's general counsel or to such other person designated by ALLETE to receive such notices;
•
mechanics', workmen's, repairmen's, materialmen's, warehousemen's and carriers' liens, other liens incident to construction, liens or privileges of any of ALLETE's employees for salary or wages earned, but not yet payable, and other liens, including without limitation liens for worker's compensation awards, arising in the ordinary course of business for charges or requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or of which at least ten business days' notice has not been given to ALLETE's general counsel or to such other person designated by ALLETE to receive such notices;
•
specified judgment liens;

7


•
easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ALLETE's property;
•
liens securing indebtedness or other obligations relating to real property ALLETE acquired for specified transmission, distribution or communication purposes or for the purpose of obtaining rights-of-way;
•
specified leases and leasehold, license, franchise and permit interests;
•
liens resulting from law, rules, regulations, orders or rights of governmental authorities and specified liens required by law or governmental regulations;
•
liens to secure public obligations, rights of others to take minerals, timber, electric energy or capacity, gas, water, steam or other products produced by ALLETE or by others on ALLETE's property;
•
rights and interests of persons other than ALLETE arising out of agreements relating to the common ownership or joint use of property, and liens on the interests of those persons in such property;
•
restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility or public services corporation;
•
liens which have been bonded for the full amount in dispute or for the payment of which other adequate security arrangements have been made;
•
certain easements, ground leases and rights-of-way for the purpose of roads, pipelines, transmission lines, distribution lines, communication lines, railways, removal or transportation of coal, lignite, gas, oil or other minerals or timber, and other like purposes, or for the joint or common use of real property, rights-of-way, facilities and/or equipment, so long as such grant shall not materially impair the use of the property or rights-of-way for the purposes for which such property or rights-of-way are held by ALLETE; and
•
certain prepaid liens. (See Thirty-first Supplemental Indenture, Article IV.)

The mortgage does not create a lien on the following “excepted property”:

•
cash and securities;
•
merchandise, equipment, materials or supplies held for sale or other disposition;
•
fuel, oil and similar materials consumable in the operation of the properties of ALLETE;
•
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; and
•
materials or products, including electric energy, that ALLETE generates, produces or purchases for sale or use by ALLETE.

No stock, properties or other assets of ALLETE's subsidiaries are subject to the mortgage.

The mortgage contains provisions that impose the lien of the mortgage on property acquired by ALLETE after the date of the mortgage, other than “excepted property.” However, if ALLETE consolidates or merges with, or conveys or transfers all or substantially all of ALLETE's mortgaged property to another corporation, the lien created by the mortgage will generally not cover the property of the successor company, other than the property it acquires from ALLETE and improvements, replacements and additions to that property. (See Mortgage, Section 87.)

The mortgage provides that the mortgage trustees shall have a lien upon the mortgaged property for the payment of their reasonable compensation, expenses and disbursements and for indemnity against certain liabilities. This lien takes priority over the lien securing the first mortgage bonds. (See Mortgage, Section 96.)

ALLETE has reserved the right to amend the mortgage to restate the description of the "excepted property," or property of ALLETE not covered by the lien of the mortgage, to exclude from the lien of the mortgage substantially the following types of property:

•
all cash, deposit accounts, securities and all policies of insurance on the lives of ALLETE's officers not paid or delivered to or deposited with or held by the corporate mortgage trustee or required so to be;
•
all contracts, leases, operating agreements and other agreements of all kinds (other than ALLETE's franchises, permits and licenses that are transferable and necessary for the operation of the mortgaged property), contract rights, bills, notes and other instruments, revenues, income and earnings, all accounts, accounts receivable, rights to payment, payment intangibles and unbilled revenues, rights created by statute or governmental action to bill and collect revenues or other amounts from customers or others, credits, claims, demands and judgments;
•
all governmental and other licenses, permits, franchises, consents and allowances (other than ALLETE's franchises, permits and licenses that are transferable and necessary for the operation of the mortgaged property);
•
all unrecorded easements and rights of way;

8


•
all intellectual property rights and other general intangibles;
•
all vehicles, movable equipment, aircraft and vessels and all parts, accessories and supplies used in connection with any of the foregoing;
•
all personal property of such character that the perfection of a security interest therein or other lien thereon is not governed by the Uniform Commercial Code in effect where ALLETE is organized;
•
all merchandise and appliances acquired for the purpose of resale in the ordinary course and conduct of ALLETE's business, and all materials and supplies held for consumption in operation or held in advance of use thereof for fixed capital purposes;
•
all electric energy and capacity, gas, steam and other materials and products generated, manufactured, produced or purchased by ALLETE for sale, distribution or use in the ordinary course and conduct of ALLETE's business;
•
all property which is the subject of a lease agreement designating ALLETE as lessee, and all ALLETE's right, title and interest in and to the property and in, to and under the lease agreement, whether or not the lease agreement is intended as security, and the last day of the term of any lease or leasehold which may become subject to the lien of the mortgage; and
•
all property which subsequent to September 1, 1945 has been released from the lien of the mortgage and any improvements, extensions and additions to such properties and renewals, replacements, substitutions of or for any parts thereof. (See Thirty-first Supplemental Indenture, Article IV.)

Issuance of Additional First Mortgage Bonds. The maximum principal amount of first mortgage bonds which may be issued under the mortgage is not limited so long as it meets the issuance tests set forth in the mortgage, which are generally described below. First mortgage 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 first mortgage bonds or qualified lien bonds; and
(3)
deposit of cash.

With certain exceptions in the case of (2) above, ALLETE may not issue first mortgage bonds unless it meets the “net earnings” test set forth in the mortgage, which 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 first mortgage 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 $750,000 plus, for each of the 12 calendar months selected for the net earnings test, 1/12th of two percent of the net additions to depreciable mortgaged property made after June 30, 1945 and prior to the beginning of the calendar year within which that calendar month is included. It is expected that the first mortgage bonds offered by this prospectus will be issued upon the basis of the retirement of first mortgage bonds or property additions.

Property additions generally include electric, gas, steam or hot water property acquired after June 30, 1945. Securities, fuel, aircraft, automobiles or other vehicles, or property used principally for the production or gathering of natural gas will not qualify as property additions.

ALLETE has the right to amend the mortgage without any consent or other action by holders of any series of first mortgage bonds, including the holders of first mortgage bonds offered by this prospectus, so as to include nuclear fuel as well as similar or analogous devices or substances as property additions. (See Fifth Supplemental Indenture, Section 2.)

ALLETE has reserved the right to amend the mortgage to modify the definition of “property additions” to mean all mortgaged property acquired by ALLETE by purchase, consolidation, merger, donation, construction, erection or in any way whatsoever, subsequent to June 30, 1945, or in the process of construction or erection in so far as actually constructed or erected subsequent to June 30, 1945. (See Thirty-first Supplemental Indenture, Article IV.)

The mortgage contains certain restrictions upon the issuance of first mortgage bonds on the basis of property additions subject to liens prior to the mortgage lien and upon the increase of the amount of such liens. (See Mortgage, Sections 4-8, 20, 23-30, and 46.)


9


Mortgage Amendment-Recalibration of Funded Property. ALLETE has reserved the right to amend the mortgage to change the definition of “funded property,” as long as ALLETE has delivered to the corporate mortgage trustee an independent engineer's certificate referred to as a “funded property certificate.” This funded property certificate will describe all or a portion of mortgaged property which has a fair value not less than 10/6ths of the sum of the principal amount of the first mortgage bonds outstanding and the principal amount of the first mortgage bonds that ALLETE is entitled to have authenticated on the basis of retired first mortgage bonds. Once this funded property certificate is delivered to the corporate mortgage trustee, the definition of “funded property” will mean any mortgaged property described in the funded property certificate. Property additions will become funded property when used under the mortgage for the issuance of bonds, the release or retirement of funded property, or the withdrawal of cash deposited with the corporate mortgage trustee for the issuance of bonds or the release of funded property. (See Thirty-first Supplemental Indenture, Article IV.)

Release and Substitution of Property. Property may be released upon the basis of:

(1)    deposit with the corporate mortgage trustee of cash or, to a limited extent, purchase money mortgages;
(2)    property additions acquired by ALLETE in the last five years, 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 first mortgage bonds,
in each case 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 first mortgage 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. (See Mortgage, Sections 5, 31, 32, 37, 46-50, and 59-63.)

ALLETE has reserved the right to amend the mortgage and the provisions discussed in the foregoing paragraphs under this “Release and Substitution of Property” subheading describing the release and substitution of mortgaged property as follows:

•
to permit releases of property without the sale or disposition of such property;
•
to eliminate the five-year limit referred to in clause (2) above; and
•
to specify that releases of property can be made on the basis of (i) the aggregate principal amount of first mortgage bonds that ALLETE would be entitled to issue on the basis of retired qualified lien bonds; or (ii) 10/6ths of the aggregate principal amount of first mortgage bonds that ALLETE would be entitled to issue on the basis of retired first mortgage bonds, in each case with the entitlement being waived by operation of the release.

In addition, ALLETE has reserved the right to amend the mortgage to permit release of unfunded property if after such release at least one dollar of unfunded property remains subject to the lien of the mortgage. (See Thirty-first Supplemental Indenture, Article IV.)

Modification of the Mortgage. The rights of holders of first mortgage bonds may be modified with the consent of the holders of 66-2/3 percent of the aggregate principal amount of the outstanding first mortgage bonds and, if less than all series of first mortgage bonds are affected, the consent also of the holders of 66-2/3 percent of the aggregate principal amount of all of the outstanding first mortgage bonds of each series affected. ALLETE has reserved the right to amend the mortgage to provide that such modifications can be made with the consent of the holders of a majority in aggregate principal amount of then outstanding mortgage bonds, considered as one class, or if less than all of the series of mortgage bonds outstanding are directly affected by a proposed amendment or modification, then the consent of the holders of only a majority in aggregate principal amount of the outstanding mortgage bonds of all series that are directly affected, considered as one class. In general, no modification of the terms of payment of principal and interest and no modification affecting the lien or reducing the percentage required for modification, is effective against any holder of first mortgage bonds without his consent. (See Mortgage, Article XIX; Twenty-first Supplemental Indenture, Section 3; and Thirty-first Supplemental Indenture, Article IV.)

ALLETE has reserved the right to amend the mortgage to permit ALLETE and the mortgage trustees, without the consent of any holder of mortgage bonds, to enter into one or more supplemental indentures for any of the following purposes:

•
to evidence the assumption by any permitted successor of ALLETE's covenants in the mortgage and in the first mortgage bonds;
•
to add one or more covenants or other provisions for the benefit of the holders of all or any series of mortgage bonds, or to surrender any right or power conferred upon ALLETE and to make an occurrence of a default in performance of any such additional covenants, an additional “default”;

10


•
to correct or amplify the description of any property at any time subject to the lien of the mortgage, or better to assure, convey and confirm unto the mortgage trustees any property subject or required to be subjected to the lien of the mortgage, or to subject to the lien of the mortgage additional property;
•
to change or eliminate or add any new provision to the mortgage; provided, however, that no such change, elimination or addition will adversely affect the interests of the holders of first mortgage bonds of any series in any material respect;
•
to establish the form or terms of mortgage bonds of any other series as permitted by the mortgage;
•
to provide for the procedures required to permit ALLETE to utilize, at its option, a non-certificated system of registration for all or any series of first mortgage bonds;
•
to change any place where principal, premium, if any, and interest shall be payable, mortgage bonds may be surrendered for registration of transfer or exchange, and notices and demands to ALLETE may be served; and
•
to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the mortgage if such changes or additions will not adversely affect the interests of the holders of first mortgage bonds of any series in any material respect. (See Thirty-first Supplemental Indenture, Article IV.)

Defaults and Notice Thereof. The following are defaults under the mortgage:

•
failure to pay principal of any first mortgage bond when due;
•
failure to pay interest on any first mortgage bond for 60 days after that interest is due;
•
failure to pay any installments of funds for retirement of first mortgage bonds for 60 days after that installment is due;
•
failure to pay principal of or interest on any qualified lien bond beyond any applicable grace period for the payment of that principal or interest;
•
certain events in bankruptcy, insolvency or reorganization pertaining to ALLETE; and
•
the expiration of 90 days following notice by the corporate mortgage trustee or holders of 15 percent of the first mortgage bonds relating to the failure by ALLETE to perform its covenants under the mortgage. (See Mortgage, Section 65.)

The mortgage trustees may withhold notice of default, except in the case of failure to pay principal, interest or installment of any fund for retirement of first mortgage bonds, if they determine that withholding the notice is in the interest of the holders of first mortgage bonds. (See Mortgage, Section 66.)

The corporate mortgage trustee, or the holders of 25 percent of the first mortgage bonds may declare the principal and interest due on default, but a majority of the holders of first mortgage bonds may annul such declaration if the default has been cured. (See Mortgage, Section 67.) No holder of first mortgage bonds may enforce the lien of the mortgage without giving the mortgage trustees written notice of a default and unless holders of 25 percent of the first mortgage bonds have requested the mortgage trustees to act and offered them reasonable opportunity to act and indemnity satisfactory to the mortgage trustees and they shall have failed to act. (See Mortgage, Section 80.) The holders of a majority of the first mortgage bonds may direct the time, method and place of conducting any proceedings for any remedy available to the mortgage trustees, or exercising any trust or power conferred upon the mortgage trustees, but the mortgage trustees are not required to follow such direction if not sufficiently indemnified for expenditures. (See Mortgage, Section 71.)

Information about the Mortgage Trustees. The Bank of New York Mellon is the corporate mortgage trustee and Philip L. Watson is the individual mortgage trustee. In addition to acting as corporate mortgage trustee, The Bank of New York Mellon may also act as trustee under other indentures, trusts and guarantees of ALLETE and its affiliates from time to time.

Satisfaction and Discharge of Mortgage. The mortgage may be satisfied and discharged if and when ALLETE provides for the payment of all of the first mortgage bonds and all other sums due under the mortgage. (See Mortgage, Section 106.)

Evidence to be Furnished to the Mortgage Trustee. ALLETE will provide to the mortgage trustee an annual statement by an appropriate officer as to ALLETE's compliance with all conditions and covenants under the mortgage. (See Trust Indenture Act of 1939, Section 314(a)(4).)



11


PLAN OF DISTRIBUTION

ALLETE may sell the securities offered pursuant to this prospectus:

•
through underwriters or dealers;
•
through agents; or
•
directly to one or more purchasers.

This prospectus may be used in connection with any offering of securities through any of these methods or other methods described in the applicable prospectus supplement.

Through Underwriters or Dealers. If ALLETE uses underwriters in the sale of the securities, the underwriters will acquire the securities for their own account. The underwriters may resell the securities 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 underwriters may sell the securities directly or through underwriting syndicates represented by managing underwriters. Unless otherwise stated in the prospectus supplement relating to any of the securities, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all of the securities if they purchase any of them. If ALLETE uses a dealer in the sale, ALLETE will sell the securities to the dealer as principal. The dealer may then resell those securities at varying prices determined at the time of resale.

Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.

Through Agents. ALLETE may designate one or more agents to sell the securities. Unless stated in a prospectus supplement, the agents will agree to use their best efforts to solicit purchases for the period of their appointment.

Directly. ALLETE may sell the securities directly to one or more purchasers. In this case, no underwriters, dealers or agents would be involved.

General Information. A prospectus supplement will state the name of any underwriter, dealer or agent and the amount of any compensation, underwriting discounts or concessions paid, allowed or reallowed to them. A prospectus supplement will also state the proceeds to ALLETE from the sale of the securities, any initial public offering price and other terms of the offering of the securities.

ALLETE may authorize underwriters, dealers or agents to solicit offers by certain institutions to purchase the securities at the public offering price and on the terms described in the related prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future.

The securities may also be offered and sold, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more firms, which are referred to herein as the “remarketing firms,” acting as principals for their own accounts or as ALLETE's agent, as applicable. Any remarketing firm will be identified and the terms of its agreement, if any, with ALLETE and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters, as that term is defined in the Securities Act of 1933, in connection with the securities remarketed thereby.

ALLETE may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately-negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by ALLETE or borrowed from ALLETE or others to settle those sales or to close out any related open borrowings of securities, and may use securities received from ALLETE in settlement of those derivatives to close out any related open borrowings of securities. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement.

ALLETE may make sales of its common stock to or through one or more underwriters, dealers or agents in “at-the-market” offerings, and, if ALLETE engages in such transactions, it will do so pursuant to the terms of a agreement between ALLETE and the underwriters, dealers or agents. If ALLETE engages in at-the-market sales pursuant to a distribution agreement, ALLETE will issue and sell shares of its common stock to or through one or more underwriters or agents, which may act on an agency basis or on a principal basis.


12


ALLETE may have agreements to indemnify agents, underwriters and dealers against, or to contribute to payments which the underwriters, dealers and agents may be required to make in respect of, certain civil liabilities, including liabilities under the Securities Act of 1933.


EXPERTS

The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2012, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.


LEGAL OPINIONS

The legality of the common stock and first mortgage bonds will be passed upon for ALLETE by Deborah A. Amberg, Esq., Senior Vice President, General Counsel and Secretary, and by Morgan, Lewis & Bockius LLP, New York, New York, counsel to ALLETE. Morgan, Lewis & Bockius LLP may rely as to all matters of Minnesota law upon the opinion of Ms. Amberg. Ms. Amberg may rely as to all matters of New York law upon the opinion of Morgan, Lewis & Bockius LLP.

As of July 31, 2013, Ms. Amberg owned 19,225 shares of common stock of ALLETE. Ms. Amberg is acquiring additional shares of ALLETE common stock at regular intervals as a participant in the ALLETE and Affiliated Companies Retirement Savings and Stock Ownership Plan. Under the Executive Long-Term Incentive Compensation Plan, Ms. Amberg has:

•
outstanding options to purchase 24,275 shares of ALLETE common stock, which options are fully vested, and which will expire ten years from the date of grant;
•
restricted stock units pursuant to which 3,716 shares of common stock (plus accrued dividend equivalents) will be distributed to Ms. Amberg after they vest (on December 31, 2013, 2014 and 2015) provided she remains employed on the payment dates; and
•
an award opportunity for up to 13,882 performance shares (plus accrued dividend equivalents) that will be distributed to Ms. Amberg if ALLETE attains certain performance goals for the periods January 1, 2011 through December 31, 2013, January 1, 2012 through December 31, 2014 and January 1, 2013 through December 31, 2015, and provided Ms. Amberg remains employed on the payment dates.
___________________

You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement or in any written communication from ALLETE specifying the final terms of a particular offering of securities. ALLETE has not authorized anyone else to provide you with additional or different information. ALLETE is not making an offer of these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents or that the information incorporated by reference is accurate as of any date other than the date of the document incorporated by reference.

13


PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.    Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the securities being registered, other than underwriting and/or agents compensation, are:
Filing fee for registration statement
 
$*
Minnesota mortgage registration tax
 
  **
Legal and accounting fees
 
  **
Printing (Form S-3, prospectus, prospectus supplement, etc.)
 
  **
Listing fee
 
  ***
Fees of the trustees
 
  **
Rating agencies' fees
 
  **
Miscellaneous
 
  **
Total
 
$**

*    Under Rules 456(b) and 457(r) under the Securities Act of 1933, except as specified in the following paragraph, the SEC registration fee will be paid at the time of any particular offering of securities under this registration statement, and is therefore not currently determinable.
Pursuant to Rule 415(a)(6) under the Securities Act of 1933, there are included on this registration statement an aggregate of 4,209,892 shares of ALLETE's common stock that were previously registered for offer and sale, but not sold, in connection with ALLETE's amended equity distribution agreement pursuant to Registration Statement No. 333-170289 ("Prior Registration Statement"), filed with the SEC on November 2, 2010, and for which an aggregate of $15,526.64 in fees were paid in connection with the filing with the SEC of prospectus supplements dated February 27, 2009 ("2009 Prospectus Supplement") (which unsold shares were previously included on the Prior Registration Statement) and August 3, 2012 ("2012 Prospectus Supplement"). Pursuant to Rule 415(a)(6), the $1,330.64 filing fee related to the 1,209,892 unsold shares previously paid in connection with the 2009 Prospectus Supplement and the $14,196 filing fee related to the 3,000,000 unsold shares previously paid in connection with the 2012 Prospectus Supplement will continue to be applied to such unsold shares and no additional filing fee is required with respect to the 4,209,892 shares.
**    Because an indeterminate amount of securities is covered by this registration statement, the expenses in connection with the issuance and distribution of the securities are not currently determinable. Each prospectus supplement will reflect estimated expenses based on the amount of the related offering.
***    The listing fee is based upon the principal amount of securities listed, if any, and is therefore not currently determinable.
Item 15.    Indemnification of Directors and Officers.
Section 302A.521 of the Minnesota Business Corporation Act generally provides for the indemnification of directors, officers or employees of a corporation made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person against judgments, penalties and fines (including attorneys' fees and disbursements) where such person, among other things, has not been indemnified by another organization, acted in good faith, received no improper personal benefit and with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful.

II-1


Article IX of the Articles of Incorporation of ALLETE contains the following provision:
No director of this Corporation shall be personally liable to this Corporation or its stockholders for monetary damages for breach of fiduciary duty by that director as a director; provided, however, that this Article IX shall not eliminate or limit the liability of a director: (a) for any breach of the director's duty of loyalty to this Corporation or its stockholders; (b) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (c) under Minnesota Statutes Section 302A.559 or 80A.23; (d) for any transaction from which the director derived an improper personal benefit; or (e) for any act or omission occurring prior to the date when this Article IX becomes effective. If, after the stockholders approve this provision, the Minnesota Business Corporation Act, Minnesota Statutes Chapter 302A, is amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of this Corporation shall be deemed eliminated or limited to the fullest extent permitted by the Minnesota Business Corporation Act, as so amended. No amendment to or repeal of this Article IX shall apply to or have any affect on the liability or alleged liability of any director of this Corporation for or with respect to any acts or omissions of such director occurring prior to that amendment or repeal.
Section 13 of the Bylaws of ALLETE contains the following provisions relative to indemnification of directors and officers:
The Corporation shall reimburse or indemnify each present and future Director and officer of the Corporation (and his or her heirs, executors and administrators) for or against all expenses reasonably incurred by such Director or officer in connection with or arising out of any action, suit or proceeding in which such Director or officer may be involved by reason of being or having been a Director or officer of the Corporation. Such indemnification for reasonable expenses is to be to the fullest extent permitted by the Minnesota Business Corporation Act, Minnesota Statutes Chapter 302A. By affirmative vote of the Board of Directors or with written approval of the Chairman and Chief Executive Officer, such indemnification may be extended to include agents and employees who are not Directors or officers of the Corporation, but who would otherwise be indemnified for acts and omissions under Chapter 302A of the Minnesota Business Corporation Act, if such agent or employee were an officer of the Corporation.
Reasonable expenses may include reimbursement of attorneys' fees and disbursements, including those incurred by a person in connection with an appearance as a witness.
Upon written request to the Corporation and approval by the Chairman and Chief Executive Officer, an agent or employee for whom indemnification has been extended, or an officer or Director may receive an advance for reasonable expenses if such agent, employee, officer or Director is made or threatened to be made a party to a proceeding involving a matter for which indemnification is believed to be available under Minnesota Statutes Chapter 302A.
The foregoing rights shall not be exclusive of other rights to which any Director or officer may otherwise be entitled and shall be available whether or not the Director or officer continues to be a Director or officer at the time of incurring such expenses and liabilities.
ALLETE has insurance covering its expenditures which might arise in connection with the lawful indemnification of its directors and officers for their liabilities and expenses, and insuring officers and directors of ALLETE against certain other liabilities and expenses.

II-2


Item 16.    Exhibits.
Exhibit
Number
 
Description of Exhibit
+1(a)
–
Form of Underwriting Agreement for common stock.
+1(b)
–
Form of Underwriting Agreement for first mortgage bonds.
*1(c)1
–
Third Amended and Restated Distribution Agreement between ALLETE, Inc. and KCCI, Ltd. dated August 3, 2012 (filed as Exhibit 1 to the August 3, 2012 Form 8-K, File No. 1-3548).
1(c)2
–
Form of Amendment No. 1 to Third Amended and Restated Distribution Agreement between ALLETE, Inc. and KCCI, Ltd.
+1(d)
–
Form of Distribution Agreement for common stock.
*4(a)1
–
Articles of Incorporation, amended and restated as of May 8, 2001 (filed as Exhibit 3(b) to the March 31, 2001, Form 10-Q, File No. 1-3548).
*4(a)2
–
Amendment to Articles of Incorporation, effective 12:00 p.m. Eastern Time on September 20, 2004 (filed as Exhibit 3 to the September 21, 2004, Form 8-K, File No. 1-3548).
*4(a)3
–
Amendment to Articles of Incorporation, dated as of May 12, 2009 (filed as Exhibit 3 to the June 30, 2009, Form 10-Q, File No. 1-3548).
*4(a)4
–
Amendment to Articles of Incorporation, dated as of May 11, 2010 (filed as Exhibit 3(a) to the May 14, 2010, Form 8-K, File No. 1-3548).
*4(a)5
–
Amendment to Certificate of Assumed Name, filed with the Minnesota Secretary of State on May 8, 2001 (filed as Exhibit 3(a) to the March 31, 2001, Form 10-Q, File No. 1-3548).
*4(b)
–
Bylaws, as amended effective May 11, 2010 (filed as Exhibit 3(b) to the May 14, 2010, Form 8-K, File No. 1-3548).
*4(c)1
–
Mortgage and Deed of Trust, dated as of September 1, 1945, between Minnesota Power & Light Company (now ALLETE) and The Bank of New York Mellon (formerly Irving Trust Company) and Philip L. Watson (successor to Richard H. West), Trustees (filed as Exhibit 7(c), File No. 2-5865).
*4(c)2
–
Supplemental Indentures to ALLETE's Mortgage and Deed of Trust:
Number
 
Dated as of
 
Reference File
 
Exhibit
First
 
March 1, 1949
 
2-7826
 
7(b)
Second
 
July 1, 1951
 
2-9036
 
7(c)
Third
 
March 1, 1957
 
2-13075
 
2(c)
Fourth
 
January 1, 1968
 
2-27794
 
2(c)
Fifth
 
April 1, 1971
 
2-39537
 
2(c)
Sixth
 
August 1, 1975
 
2-54116
 
2(c)
Seventh
 
September 1, 1976
 
2-57014
 
2(c)
Eighth
 
September 1, 1977
 
2-59690
 
2(c)
Ninth
 
April 1, 1978
 
2-60866
 
2(c)
Tenth
 
August 1, 1978
 
2-62852
 
2(d)2
Eleventh
 
December 1, 1982
 
2-56649
 
4(a)3
Twelfth
 
April 1, 1987
 
33-30224
 
4(a)3
Thirteenth
 
March 1, 1992
 
33-47438
 
4(b)
Fourteenth
 
June 1, 1992
 
33-55240
 
4(b)
Fifteenth
 
July 1, 1992
 
33-55240
 
4(c)
Sixteenth
 
July 1, 1992
 
33-55240
 
4(d)
Seventeenth
 
February 1, 1993
 
33-50143
 
4(b)
Eighteenth
 
July 1, 1993
 
33-50143
 
4(c)
Nineteenth
 
February 1, 1997
 
1-3548 (1996 Form 10-K)
 
4(a)3
Twentieth
 
November 1, 1997
 
1-3548 (1997 Form 10-K)
 
4(a)3
Twenty-first
 
October 1, 2000
 
333-54330
 
4(c)3
Twenty-second
 
July 1, 2003
 
1-3548 (June 30, 2003 Form 10-Q)
 
4
Twenty-third
 
August 1, 2004
 
1-3548 (Sept. 30, 2004 Form 10-Q)
 
4(a)
Twenty-fourth
 
March 1, 2005
 
1-3548 (March 31, 2005 Form 10-Q)
 
4

II-3


Exhibit
Number
 
Description of Exhibit
Twenty-fifth
 
December 1, 2005
 
1-3548 (March 31, 2006 Form 10-Q)
 
4
Twenty-sixth
 
October 1, 2006
 
1-3548 (2006 Form 10-K)
 
4(a)3
Twenty-seventh
 
February 1, 2008
 
1-3548 (2007 Form 10-K)
 
4(a)3
Twenty-eighth
 
May 1, 2008
 
1-3548 (June 30, 2008 Form 10-Q)
 
4
Twenty-ninth
 
November 1, 2008
 
1-3548 (2008 Form 10-K)
 
4(a)3
Thirtieth
 
January 1, 2009
 
1-3548 (2008 Form 10-K)
 
4(a)4
Thirty-first
 
February 1, 2010
 
1-3548 (March 31, 2010 Form 10-Q)
 
4
Thirty-second
 
August 1, 2010
 
1-3548 (Sept. 30, 2010 Form 10-Q)
 
4
Thirty-third
 
July 1, 2012
 
1-3548 (July 2, 2012 Form 8-K)
 
4
Thirty-fourth
 
April 1, 2013
 
1-3548 (April 2, 2013 Form 8-K)
 
 
4(c)3
–
Form of Supplemental Indenture relating to the first mortgage bonds.
5(a)
–
Opinion and Consent, dated August 2, 2013, of Deborah A. Amberg, Esq., Senior Vice President, General Counsel and Secretary of ALLETE.
5(b)
–
Opinion and Consent, dated August 2, 2013, of Morgan, Lewis & Bockius LLP.
12
–
Computation of Ratio of Earnings to Fixed Charges.
23(a)
–
Consent of Independent Registered Public Accounting Firm.
*23(b)
–
Consent of Deborah A. Amberg, Esq. (included in opinion, attached hereto as Exhibit 5(a)).
*23(c)
–
Consent of Morgan, Lewis & Bockius LLP (included in opinion, attached hereto as Exhibit 5(b)).
*24
–
Powers of Attorney (included on the signature pages of this registration statement).
25(a)
–
Statement of Eligibility on Form T-1 of The Bank of New York Mellon with respect to the Mortgage.
25(b)
–
Statement of Eligibility on Form T-2 of Philip L. Watson with respect to the Mortgage.
*
 
Incorporated herein by reference as indicated.
+
 
To be filed by amendment or pursuant to a report to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 if applicable.

Item 17.    Undertakings.
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and
(iii)
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement,
provided, however, that subsections (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those subsections is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


II-4


(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i)
each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)
each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof,
provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)
any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)
the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6)
To file, if applicable, an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act of 1939.

(7)
That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

    

II-5


Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-6


POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes any agent for service named in this registration statement to execute in the name of each such person, and to file with the Securities and Exchange Commission, any and all amendments, including post-effective amendments, to this registration statement, and appoints any such agent for service as attorney-in-fact to sign in each such person's behalf individually and in each capacity stated below and file any such amendments to this registration statement and ALLETE, Inc. hereby also appoints each such agent for service as its attorney-in-fact with like authority to sign and file any such amendments in its name and behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, ALLETE, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Duluth, State of Minnesota, on the 2nd day of August, 2013.
ALLETE, Inc.


By
/s/ Alan R. Hodnik
 
Alan R. Hodnik
Chairman, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature
Title
Date
/s/ Alan R. Hodnik

Chairman, President and Chief Executive Officer
(Principal Executive Officer)
August 2, 2013
Alan R. Hodnik
/s/ Mark A. Schober

Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
August 2, 2013
Mark A. Schober
/s/ Steven Q. DeVinck

Controller and Vice President - Business Support
(Principal Accounting Officer)
August 2, 2013
Steven Q. DeVinck





Signature
Title
Date
 
 
 
/s/ Kathryn W. Dindo
Director
August 2, 2013
Kathryn W. Dindo
 
 
 
/s/ Heidi J. Eddins
Director
August 2, 2013
Heidi J. Eddins
 
 
 
/s/ Sidney W. Emery, Jr.
Director
August 2, 2013
Sidney W. Emery, Jr.
 
 
 
/s/ George G. Goldfarb
Director
August 2, 2013
George G. Goldfarb
 
 
 
/s/ James S. Haines, Jr.
Director
August 2, 2013
James S. Haines, Jr.
 
 
 
/s/ Alan R. Hodnik
Director
August 2, 2013
Alan R. Hodnik
 
 
 
/s/ James J. Hoolihan
Director
August 2, 2013
James J. Hoolihan
 
 
 
/s/ Madeleine W. Ludlow
Director
August 2, 2013
Madeleine W. Ludlow
 
 
 
/s/ Douglas C. Neve
Director
August 2, 2013
Douglas C. Neve
 
 
 
/s/ Leonard C. Rodman
Director
August 2, 2013
Leonard C. Rodman
 
 
 
/s/ Bruce W. Stender
Director
August 2, 2013
Bruce W. Stender




Exhibit Index
1(c)2
–
Form of Amendment No. 1 to Third Amended and Restated Distribution Agreement between ALLETE, Inc. and KCCI, Ltd.
4(c)3
–
Form of Supplemental Indenture relating to the first mortgage bonds.
5(a)
–
Opinion and Consent, dated August 2, 2013, of Deborah A. Amberg, Esq., Senior Vice President, General Counsel and Secretary of ALLETE.
5(b)
–
Opinion and Consent, dated August 2, 2013, of Morgan, Lewis & Bockius LLP.
12
–
Computation of Ratio of Earnings to Fixed Charges.
23(a)
–
Consent of Independent Registered Public Accounting Firm.
23(b)
–
Consent of Deborah A. Amberg, Esq. (included in opinion, attached hereto as Exhibit 5(a)).
23(c)
–
Consent of Morgan, Lewis & Bockius LLP (included in opinion, attached hereto as Exhibit 5(b)).
24
–
Powers of Attorney (included on the signature pages of this registration statement).
25(a)
–
Statement of Eligibility on Form T-1 of The Bank of New York Mellon with respect to the Mortgage.
25(b)
–
Statement of Eligibility on Form T-2 of Philip L. Watson with respect to the Mortgage.

EX 1(c)2


Exhibit 1(c)2

FORM OF
AMENDMENT NO. 1 TO
THIRD AMENDED AND RESTATED
DISTRIBUTION AGREEMENT



August 5, 2013


KCCI, Ltd.
66 York Street
Jersey City, NJ 07302
Attention: Mark Nauman

Ladies and Gentlemen:

Reference is hereby made to that certain Third Amended and Restated Distribution Agreement, dated August 3, 2012, between the parties hereto and thereto (the “Third Amended Distribution Agreement”). Such parties desire to amend the Third Amended Distribution Agreement as hereinafter set forth. Accordingly, in consideration of the premises and the agreements, provisions and covenants contained herein, the parties hereto agree to amend the Third Amended Distribution Agreement as set forth below:

I.    Amendments

1.    All references in the Third Amended Distribution Agreement to “this Agreement” (including similar references in the Third Amended Distribution Agreement such as “herein”) shall now mean the Third Amended Distribution Agreement, as amended by this Amendment No. 1.

2.    The second paragraph of the Third Amended Distribution Agreement is amended by deleting the reference to “5,285,535 Shares” in the definition of “Remaining Shares” and replacing with “4,209,892 Shares”.

3.    The third paragraph of the Third Amended Distribution Agreement is amended as follows:
a.    by deleting the reference to “registration statement on Form S-3 (No. 333-170289)” in the definition of “registration statement” and replacing with “registration statement on Form S-3 (No. 333-___________)”; and

b.    by deleting the reference to “the prospectus supplement, dated August 3, 2012” in the definition of “Prospectus Supplement” and replacing with “the prospectus supplement, dated August 5, 2013”.


1


4.    Section 3(b) of the Third Amended Distribution Agreement is amended and restated as follows:

Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold the Shares contemplated by the Prior Distribution Agreement or this Agreement by means of any “prospectus” (within the meaning of the Act) or used any “prospectus” (within the meaning of the Act) in connection with the offer and sale of the Shares, in each case other than (i) the Prospectus, (ii) the Company's prospectus supplement, dated February 19, 2008 and accompanying prospectus dated December 10, 2007, (iii) the Company's prospectus supplement, dated February 27, 2009 and accompanying prospectus dated December 10, 2007, (iv) the Company's prospectus supplement, dated February 18, 2011 and accompanying prospectus dated November 2, 2010 and (v) the Company's prospectus supplement, dated August 3, 2012 and accompanying prospectus dated November 2, 2010 (the documents specified in clauses (ii) through (v), collectively, the “Prior Prospectuses”); the Company has not, directly or indirectly, prepared, used or referred to any Permitted Free Writing Prospectus except in compliance with Rules 164 and 433 under the Act in connection with the offer and sale of the Shares; and the Company is not an “ineligible issuer” (as defined in Rule 405 under the Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the Act with respect to the offering of the Remaining Shares contemplated by the Registration Statement.

5.    Section 3(d) of the Third Amended Distribution Agreement is amended by deleting the reference to “April 30, 2012” with respect to the existing order of the Minnesota Public Utilities Commission and replacing it with “April 29, 2013”.

6.    Exhibits A, B, C and D of the Third Amended Distribution Agreement are each amended to include references to this Amendment No. 1 to the Third Amended and Restated Distribution Agreement (the “Amendment”) and to make the other changes set forth therein, and are restated and set forth in their entirety as Exhibits A, B, C and D, respectively, to this Amendment.

II.    Governing Law; Construction

THIS AMENDMENT SHALL BE GOVERNED BY, INTERPRETED UNDER AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF. The Section headings in this Amendment have been inserted as a matter of convenience of reference and are not a part of this Amendment.

III.    Counterparts

This Amendment may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.


2


If the foregoing correctly sets forth the understanding among ALLETE, Inc. and KCCI, Ltd., please so indicate in the space provided below for the purpose, whereupon this letter and your acceptance shall constitute a binding agreement between ALLETE, Inc. and KCCI, Ltd.


Very truly yours,


ALLETE, Inc.

By
 
Name:
Mark A. Schober
Title:
Sr. Vice President and CFO

                            


Accepted and agreed to as of the
date first above written:

KCCI Ltd.

By
 
Name:
Mark Nauman
Title:
President



3
EX 4(c)3
Exhibit 4(c)3


ALLETE, Inc.
(formerly Minnesota Power & Light Company
and formerly Minnesota Power, Inc.)

TO

THE BANK OF NEW YORK MELLON
(formerly The Bank of New York
(formerly Irving Trust Company))

AND

PHILIP L. WATSON

(successor to Richard H. West, J. A. Austin, E. J. McCabe, D. W. May,
J. A. Vaughan, W. T. Cunningham, Douglas J. MacInnes, and Ming Ryan)


As Trustees under ALLETE, Inc.'s Mortgage and Deed of Trust dated as of September 1, 1945
___________________________________________

_____________ Supplemental Indenture
Providing, among other things, for
First Mortgage Bonds, ____% Series due ________________
(___________ Series)

Dated as of ______________





________________________ SUPPLEMENTAL INDENTURE

THIS INDENTURE, dated as of ______________, by and between ALLETE, Inc. (formerly Minnesota Power & Light Company and formerly Minnesota Power, Inc.), a corporation of the State of Minnesota, whose post office address is 30 West Superior Street, Duluth, Minnesota 55802 (hereinafter sometimes called the “Company”), and The Bank of New York Mellon (formerly The Bank of New York (formerly Irving Trust Company)), a corporation of the State of New York, whose post office address is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes called the “Corporate Trustee”), and Philip L. Watson (successor to Richard H. West, J. A. Austin, E. J. McCabe, D. W. May, J. A. Vaughan, W. T. Cunningham, Douglas J. MacInnes, and Ming Ryan), whose post office address is c/o The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286 (said Philip L. Watson being hereinafter sometimes called the “Co-Trustee” and the Corporate Trustee and the Co-Trustee being hereinafter together sometimes called the “Trustees”), as Trustees under the Mortgage and Deed of Trust, dated as of September 1, 1945, between the Company and Irving Trust Company and Richard H. West, as Trustees, securing bonds issued and to be issued as provided therein (hereinafter sometimes called the “Mortgage”), reference to which Mortgage is hereby made, this indenture (hereinafter sometimes called the “_____________ Supplemental Indenture”) being supplemental thereto:

WHEREAS, the Mortgage was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, an instrument, dated as of October 16, 1957, was executed and delivered under which J. A. Austin succeeded Richard H. West as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, an instrument, dated as of April 4, 1967, was executed and delivered under which E. J. McCabe in turn succeeded J. A. Austin as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, under the Sixth Supplemental Indenture, dated as of August 1, 1975, to which reference is hereinafter made, D. W. May in turn succeeded E. J. McCabe as Co-Trustee under the Mortgage; and

WHEREAS, an instrument, dated as of June 25, 1984, was executed and delivered under which J. A. Vaughan in turn succeeded D. W. May as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, an instrument, dated as of July 27, 1988, was executed and delivered under which W. T. Cunningham in turn succeeded J. A. Vaughan as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, on May 12, 1998, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Minnesota changing its name from Minnesota Power & Light Company to Minnesota Power, Inc. effective May 27, 1998; and

WHEREAS, an instrument, dated as of April 15, 1999, was executed and delivered under which Douglas J. MacInnes in turn succeeded W. T. Cunningham as Co-Trustee under the Mortgage, and such instrument was filed and recorded in various official records in the State of Minnesota; and

1


WHEREAS, on May 8, 2001, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Minnesota changing its name from Minnesota Power, Inc. to ALLETE, Inc.; and

WHEREAS, under the Thirty-second Supplemental Indenture, dated as of August 1, 2010, to which reference is hereinafter made, Ming Ryan in turn succeeded Douglas J. MacInnes as Co-Trustee under the Mortgage; and

WHEREAS, an instrument, dated as of August 1, 2012, was executed and delivered under which Philip L. Watson in turn succeeded Ming Ryan as Co-Trustee under the Mortgage effective at the close of business on August 6, 2012, and such instrument was filed and recorded in various official records in the State of Minnesota; and

WHEREAS, by the Mortgage the Company covenanted, among other things, that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Mortgage and to make subject to the lien of the Mortgage any property thereafter acquired and intended to be subject to the lien thereof; and

WHEREAS, for said purposes, among others, the Company executed and delivered the following indentures supplemental to the Mortgage:
Designation
Dated as of
First Supplemental Indenture
March 1, 1949
Second Supplemental Indenture
July 1, 1951
Third Supplemental Indenture
March 1, 1957
Fourth Supplemental Indenture
January 1, 1968
Fifth Supplemental Indenture
April 1, 1971
Sixth Supplemental Indenture
August 1, 1975
Seventh Supplemental Indenture
September 1, 1976
Eighth Supplemental Indenture
September 1, 1977
Ninth Supplemental Indenture
April 1, 1978
Tenth Supplemental Indenture
August 1, 1978
Eleventh Supplemental Indenture
December 1, 1982
Twelfth Supplemental Indenture
April 1, 1987
Thirteenth Supplemental Indenture
March 1, 1992
Fourteenth Supplemental Indenture
June 1, 1992
Fifteenth Supplemental Indenture
July 1, 1992
Sixteenth Supplemental Indenture
July 1, 1992
Seventeenth Supplemental Indenture
February 1, 1993
Eighteenth Supplemental Indenture
July 1, 1993
Nineteenth Supplemental Indenture
February 1, 1997
Twentieth Supplemental Indenture
November 1, 1997
Twenty‑first Supplemental Indenture
October 1, 2000
Twenty-second Supplemental Indenture
July 1, 2003
Twenty-third Supplemental Indenture
August 1, 2004
Twenty-fourth Supplemental Indenture
March 1, 2005
Twenty-fifth Supplemental Indenture
December 1, 2005
Twenty-sixth Supplemental Indenture
October 1, 2006
Twenty-seventh Supplemental Indenture
February 1, 2008

2


Designation
Dated as of
Twenty-eighth Supplemental Indenture
May 1, 2008
Twenty-ninth Supplemental Indenture
November 1, 2008
Thirtieth Supplemental Indenture
January 1, 2009
Thirty-first Supplemental Indenture
February 1, 2010
Thirty-second Supplemental Indenture
August 1, 2010
Thirty-third Supplemental Indenture
July 1, 2012
Thirty-fourth Supplemental Indenture
April 1, 2013
*
 

which supplemental indentures were filed and recorded in various official records in the State of Minnesota; and

WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Mortgage, as heretofore supplemented, the following series of First Mortgage Bonds:
Series
Principal
Amount
  Issued  
Principal
Amount
Outstanding
3-1/8% Series due 1975
$26,000,000
None
3-1/8% Series due 1979
4,000,000

None
3-5/8% Series due 1981
10,000,000

None
4-3/4% Series due 1987
12,000,000

None
6-1/2% Series due 1998
18,000,000

None
8-1/8% Series due 2001
23,000,000

None
10-1/2% Series due 2005
35,000,000

None
8.70% Series due 2006
35,000,000

None
8.35% Series due 2007
50,000,000

None
9-1/4% Series due 2008
50,000,000

None
Pollution Control Series A
111,000,000

None
Industrial Development Series A
2,500,000

None
Industrial Development Series B
1,800,000

None
Industrial Development Series C
1,150,000

None
Pollution Control Series B
13,500,000

None
Pollution Control Series C
2,000,000

None
Pollution Control Series D
3,600,000

None
7-3/4% Series due 1994
55,000,000

None
7-3/8% Series due March 1, 1997
60,000,000

None
7-3/4% Series due June 1, 2007
55,000,000

None
7-1/2% Series due August 1, 2007
35,000,000

None
Pollution Control Series E
111,000,000

None
7% Series due March 1, 2008
50,000,000

None
6-1/4% Series due July 1, 2003
25,000,000

None
7% Series due February 15, 2007
60,000,000

None
6.68% Series due November 15, 2007
20,000,000

None
Floating Rate Series due October 20, 2003
250,000,000

None


* Here will be inserted additional executed Supplemental Indentures.

3


Series
Principal
Amount
  Issued  
Principal
Amount
Outstanding
Collateral Series A
255,000,000

None
Pollution Control Series F
111,000,000

111,000,000
5.28% Series due August 1, 2020
35,000,000

35,000,000
5.69% Series due March 1, 2036
50,000,000

50,000,000
5.99% Series due February 1, 2027
60,000,000

60,000,000
4.86% Series due April 1, 2013
60,000,000

 None
6.02% Series due May 1, 2023
75,000,000

75,000,000
6.94% Series due January 15, 2014
18,000,000

18,000,000
7.70% Series due January 15, 2016
20,000,000

20,000,000
8.17% Series due January 15, 2019
42,000,000

42,000,000
4.85% Series due April 15, 2021
15,000,000

15,000,000
5.10% Series due April 15, 2025
30,000,000

30,000,000
6.00% Series due April 15, 2040
35,000,000

35,000,000
4.90% Series due October 15, 2025
30,000,000

30,000,000
5.82% Series due April 15, 2040
45,000,000

45,000,000
3.20% Series due July 15, 2026
75,000,000

75,000,000
4.08% Series due July 15, 2042
85,000,000

85,000,000
1.83% Series due April 15, 2018
50,000,000

50,000,000
3.30% Series due October 15, 2028
40,000,000

40,000,000
4.21% Series due October 15, 2043
60,000,000

60,000,000
*
 
 

which bonds are also hereinafter sometimes called bonds of the First through ________** Series, respectively; and

WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds (other than the First Series) issued thereunder and of coupons to be attached to coupon bonds of such series shall be established by Resolution of the Board of Directors of the Company and that the form of such series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as the Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Mortgage; and

WHEREAS, Section 120 of the Mortgage provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Mortgage, whether such power, privilege or right is in any way restricted or is unrestricted, may (to the extent permitted by law) be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any ambiguity contained therein, or in any supplemental indenture, or may establish the terms and provisions of any series of bonds (other than said First Series) by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which any property at the time subject to the lien of the Mortgage shall be situated; and








* Here will be inserted additional outstanding series.
** Here will be inserted the most recent outstanding series.


4


WHEREAS, the Company now desires to create ____ new series of bonds and (pursuant to the provisions of Section 120 of the Mortgage) to add to its covenants and agreements contained in the Mortgage, as heretofore supplemented, certain other covenants and agreements to be observed by it and to alter and amend in certain respects the covenants and provisions contained in the Mortgage, as heretofore supplemented; and

WHEREAS, the execution and delivery by the Company of this _____________ Supplemental Indenture, and the terms of the bonds of the ___________ Series, hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate resolutions of said Board of Directors;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That the Company, in consideration of the premises and of One Dollar to it duly paid by the Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustees and in order further to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time issued under the Mortgage, as heretofore supplemented, according to their tenor and effect and the performance of all the provisions of the Mortgage (including any instruments supplemental thereto and any modification made as in the Mortgage provided) and of said bonds, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances) unto The Bank of New York Mellon and Philip L. Watson, as Trustees under the Mortgage, and to their successor or successors in said trust, and to said Trustees and their successors and assigns forever, all property, real, personal and mixed, of the kind or nature specifically mentioned in the Mortgage, as heretofore supplemented, or of any other kind or nature acquired by the Company after the date of the execution and delivery of the Mortgage, as heretofore supplemented (except any herein or in the Mortgage, as heretofore supplemented, expressly excepted), now owned or, subject to the provisions of subsection (I) of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in this ____________ Supplemental Indenture) all lands, power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts, and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electricity by steam, water and/or other power; all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water works, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and the equipment thereof; all machinery, engines, boilers, dynamos, electric, gas and other machines, regulators, meters, transformers, generators, motors, electrical, gas and mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture and chattels; all municipal and other franchises, consents or permits; all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to real estate or the occupancy of the same and (except as herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right, title and interest of the Company in and to all other property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented, described.


5


TOGETHER WITH all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title and interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof.

IT IS HEREBY AGREED by the Company that, subject to the provisions of subsection (I) of Section 87 of the Mortgage, all the property, rights, and franchises acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) after the date hereof, except any herein or in the Mortgage, as heretofore supplemented, expressly excepted, shall be and are as fully granted and conveyed hereby and by the Mortgage and as fully embraced within the lien hereof and the lien of the Mortgage as if such property, rights and franchises were now owned by the Company and were specifically described herein or in the Mortgage and conveyed hereby or thereby.

PROVIDED that the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of this _____________ Supplemental Indenture and from the lien and operation of the Mortgage, namely: (1) cash, shares of stock, bonds, notes and other obligations and other securities not hereafter specifically pledged, paid, deposited, delivered or held under the Mortgage or covenanted so to be; (2) merchandise, equipment, apparatus, materials or supplies held for the purpose of sale or other disposition in the usual course of business; fuel, oil and similar materials and supplies consumable in the operation of any of the properties of the Company; all aircraft, rolling stock, trolley coaches, buses, motor coaches, automobiles and other vehicles and materials and supplies held for the purpose of repairing or replacing (in whole or part) any of the same; all timber, minerals, mineral rights and royalties; (3) bills, notes and accounts receivable, judgments, demands and choses in action, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or covenanted so to be; the Company's contractual rights or other interest in or with respect to tires not owned by the Company; (4) the last day of the term of any lease or leasehold which may hereafter become subject to the lien of the Mortgage; (5) electric energy, gas, steam, ice, and other materials or products generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; and (6) the Company's franchise to be a corporation; provided, however, that the property and rights expressly excepted from the lien and operation of this _____________ Supplemental Indenture and from the lien and operation of the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the event and as of the date that either or both of the Trustees or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 thereof.

TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto the Trustees and their successors and assigns forever.

IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Mortgage, as supplemented, this _____________ Supplemental Indenture being supplemental thereto.

6


AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as heretofore supplemented, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and Trustees and the beneficiaries of the trust with respect to said property, and to the Trustees and their successors in the trust in the same manner and with the same effect as if said property had been owned by the Company at the time of the execution of the Mortgage, and had been specifically and at length described in and conveyed to said Trustees by the Mortgage as a part of the property therein stated to be conveyed.

The Company further covenants and agrees to and with the Trustees and their successors in said trust under the Mortgage as follows:

ARTICLE I
___________ Series of Bonds


SECTION 1. There shall be a series of bonds designated “____% Series due ________________” (herein sometimes referred to as the “___________ Series”), each of which shall also bear the descriptive title “First Mortgage Bond”, and the form thereof, which shall be established by Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect to the matters hereinafter in this Section specified. Bonds of the ___________ Series shall be dated as in Section 10 of the Mortgage provided, mature on ________________, be issued as fully registered bonds in denominations of One Thousand Dollars and, at the option of the Company, in any multiple or multiples of One Thousand Dollars (the exercise of such option to be evidenced by the execution and delivery thereof) and bear interest from ____________ (computed on the basis of a 360-day year of twelve thirty-day months) [at the rate of ____% per annum, payable semi-annually on ________ and __________ of each year]*, commencing ______________, the principal of and interest on each said bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for public and private debts.
    
Any payment of principal of or interest on any bond of the ___________ Series that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any such bond of the ___________ Series is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

[Redemption provisions, if any, will be inserted here.]

(I)    At the option of the registered owner, any bonds of the ___________ Series, upon surrender thereof for cancellation at the office or agency of the Company in the Borough of Manhattan, The City of New York, together with a written instrument of transfer wherever required by the Company duly executed by the registered owner or by his duly authorized attorney, shall (subject to the provisions of Section 12 of the Mortgage) be exchangeable for a like aggregate principal amount of bonds of the same series of other authorized denominations.
















*Bracketed material to be changed if bonds of the Series to which this Supplemental Indenture shall relate shall bear interest at a rate which may be changed during the life of such bonds or if such bonds shall bear interest payable other than semi-annually.

7


Bonds of the ___________ Series shall be transferable (subject to the provisions of Section 12 of the Mortgage) at the office or agency of the Company in the Borough of Manhattan, The City of New York. The Company shall not be required to make transfers or exchanges of bonds of the ___________________ Series for a period of ten (10) days next preceding any designation of bonds of said series to be prepaid, and the Company shall not be required to make transfers or exchanges of any bonds of said series designated in whole or in part for prepayment.

Upon any exchange or transfer of bonds of the ___________ Series, the Company may make a charge therefor sufficient to reimburse it for any tax or taxes or other governmental charge, as provided in Section 12 of the Mortgage, but the Company hereby waives any right to make a charge in addition thereto for any exchange or transfer of bonds of the ___________ Series.

After the delivery of this ___________ Supplemental Indenture and upon compliance with the applicable provisions of the Mortgage and receipt of consideration therefor by the Company, there shall be an initial issue of bonds of the ___________ Series for the aggregate principal amount of $__________.


[ARTICLE II
Amendment to the Mortgage
Nuclear Fuel


SECTION 1. Pursuant to the reservation of right in Section 2 of the Fifth Supplemental Indenture dated as of April 1, 1971, the Company hereby amends the Mortgage, as supplemented, as set forth in paragraphs (A), (B) and (C) of Section 2 of such Fifth Supplemental Indenture (relating to Nuclear Fuel).]*


ARTICLE III
Consent to Amendments


SECTION 1.  Consent to Amendments  Each initial and future holder of bonds of the ___________ Series, by its acquisition of an interest in such bonds, irrevocably (a) consents to the amendments set forth in Article IV of the Thirty-first Supplemental Indenture, dated as of February 1, 2010, without any other or further action by any holder of such bonds, and (b) designates the Corporate Trustee, and its successors, as its proxy with irrevocable instructions to vote and deliver written consents on behalf of such holder in favor of such amendments at any bondholder meeting, in lieu of any bondholder meeting, in any consent solicitation or otherwise.






















*The Company may insert the bracketed language in any one Supplemental Indenture.

8


ARTICLE IV
Reservation of Right to Amend Sections 35(a) and 101 of the Mortgage


SECTION 1. The Company reserves the right, without any vote, consent or other action by the holders of bonds of the _______________ Series or any subsequent series, to amend the Mortgage, as herein or heretofore supplemented as follows:

(A) By deleting from Section 35(a) the phrase “having its principal office and place of business in the Borough of Manhattan, The City of New York” and the word “such” at the location in said Section 35(a) at which such word first appears.

(B) By adding the following at the end of the first sentence of Section 101:
“; provided however, that if all of the bonds at that time Outstanding are registered as to principal and interest or as to principal only, such notice shall be sufficiently given if mailed, postage prepaid to each such registered owner of bonds at his/her last address appearing on the registry books, on or before the date of on which the first publication of such notice would otherwise have been required.”


ARTICLE V
Miscellaneous Provisions


SECTION [1]. Section 126 of the Mortgage, as heretofore amended, is hereby further amended by adding the words “and ________________,”* after the words “and ______________.”**  

SECTION [2]. Subject to the amendments provided for in this _____________ Supplemental Indenture, the terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes of this _____________ Supplemental Indenture, have the meanings specified in the Mortgage, as heretofore supplemented.

SECTION [3]. The holders of bonds of the ___________ Series consent that the Company may, but shall not be obligated to, fix a record date for the purpose of determining the holders of bonds of the ___________ Series entitled to consent to any amendment, supplement or waiver. If a record date is fixed, those persons who were holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.

SECTION [4]. The Trustees hereby accept the trusts herein declared, provided, created or supplemented and agree to perform the same upon the terms and conditions herein and in the Mortgage set forth and upon the following terms and conditions:


















*Here will be inserted the maturity date of the most recent series of bonds.
**Here will be inserted the maturity date of the series of bonds issued immediately before the most recent series of bonds.

9


The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this _____________ Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XVII of the Mortgage shall apply to and form part of this _____________ Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this _____________ Supplemental Indenture.

SECTION [5]. Whenever in this ______________ Supplemental Indenture any party hereto is named or referred to, this shall, subject to the provisions of Articles XVI and XVII of the Mortgage, as heretofore supplemented, be deemed to include the successors or assigns of such party, and all the covenants and agreements in this _____________ Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of the Trustees shall, subject as aforesaid, bind and inure to the benefit of the respective successors and assigns of such party whether so expressed or not.

SECTION [6]. Nothing in this _____________ Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds and coupons Outstanding under the Mortgage, any right, remedy, or claim under or by reason of this _____________ Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this _____________ Supplemental Indenture contained by and on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the bonds and of the coupons Outstanding under the Mortgage.

SECTION [7]. This _____________ Supplemental Indenture shall be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

SECTION [8]. The Company, the mortgagor named herein, by its execution hereof acknowledges receipt of a full, true and complete copy of this _____________ Supplemental Indenture.



10


IN WITNESS WHEREOF, ALLETE, Inc. has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President, one of its Vice Presidents, or its Treasurer, and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries for and in its behalf, all in the City of Duluth, Minnesota, and The Bank of New York Mellon has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or one of its Assistant Vice Presidents and its corporate seal to be attested by one of its Assistant Treasurers, one of its Vice Presidents or one of its Assistant Vice Presidents, and Philip L. Watson has hereunto set his hand and affixed his seal, all in The City of New York, as of the day and year first above written.

ALLETE, Inc.

By    
 
[Name]
[Title]

Attest:
 
[Name]
[Title]
            
                
Executed, sealed and delivered by ALLETE, Inc.
in the presence of:
 
 






Trustees' Signature Page Follows

11






THE BANK OF NEW YORK MELLON,
as Trustee
By
 
[Name]
[Title]
Attest:
 
[Name]
[Title]

    
                            
L.S.
PHILIP L. WATSON
Executed, sealed and delivered by THE BANK OF NEW
YORK MELLON and PHILIP L. WATSON in the presence of:

 
 





______________ Supplemental Indenture dated as of ______________
To Mortgage and Deed of Trust dated as of September 1, 1945



Trustees' Signature Page



12


STATE OF MINNESOTA    )
) SS:
COUNTY OF ST. LOUIS    )    

On this ______ day of __________, 20____, the foregoing instrument was acknowledged before me by _________________, the ____________________________, of ALLETE, Inc., a Minnesota corporation, on behalf of the Company.

NOTARIAL STAMP OR SEAL
                           
    
                                
 





STATE OF MINNESOTA    )
) SS:
COUNTY OF ST. LOUIS    )
     
On this ______ day of __________, 20____, the foregoing instrument was acknowledged before me by _________________, the ____________________________, of ALLETE, Inc., a Minnesota corporation, on behalf of the Company.

NOTARIAL STAMP OR SEAL

            
                                
 





13


STATE OF NEW YORK    )
) SS:
COUNTY OF NEW YORK    )
On this _____ day of ____________, the foregoing instrument was acknowledged before me by ______________ and ________________, respectively a ______________ and a ____________ of The Bank of New York Mellon, the corporation named in the foregoing instrument.
GIVEN under my hand and notarial seal this ___ day of __________________.
 
Notary Public, State of New York


STATE OF NEW YORK    )
)  SS:
COUNTY OF NEW YORK    )
On this _____ day of ____________, the foregoing instrument was acknowledged before me by Philip L. Watson, the person described in and who executed the foregoing instrument.
GIVEN under my hand and notarial seal this ___ day of __________________.
                        
 
Notary Public, State of New York



14
EX 5(a) Opinion and Consent


Exhibit 5(a)

Deborah A. Amberg
Senior Vice President,
General Counsel, and Secretary

August 2, 2013

ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802


Ladies and Gentlemen:

Reference is made to the Registration Statement on Form S‑3 (the “Registration Statement”) to be filed by ALLETE, Inc. (“Company”), on or about the date hereof, with the Securities and Exchange Commission (“Commission”) under the Securities Act of 1933, as amended (“Securities Act”), for the registration of:

1.an unspecified amount of

(a)
shares of the Company's Common Stock, without par value (“Common Stock”), and

(b)
one or more proposed new series of the Company's first mortgage bonds (“Bonds”) 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 Mellon) and Richard H. West (Philip L. Watson, successor), as mortgage trustees (as amended and supplemented, the “Mortgage”) and

2.
4,209,892 shares of Common Stock (“Distribution Agreement Shares”) available for sale pursuant to the Company's Third Amended and Restated Distribution Agreement, dated August 3, 2012 (as amended, the “Agreement”), between the Company and KCCI, Ltd.

In connection therewith, I have reviewed such documents and records as I have deemed necessary to enable me to express an opinion on the matters covered hereby.

Based upon the foregoing, I am of the opinion that:

1.
The unspecified amount of shares of Common Stock will be validly issued, fully paid and non‑assessable when:

a.
the Company's Board of Directors, or a duly authorized committee thereof, shall have adopted appropriate resolutions approving and authorizing the issuance and sale of the Common Stock and authorizing any other action necessary to the consummation of the proposed issuance and sale of the Common Stock; and


1


b.
the Common Stock shall have been issued and sold for the consideration contemplated by such resolutions and in compliance with authority contained in an order or orders of the Minnesota Public Utilities Commission (“MPUC”), and as otherwise contemplated by the Registration Statement.

2.
The Bonds will be valid, legal and binding obligations of the Company, except as limited or affected by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting mortgagees' and other creditors' rights and remedies generally and general principles of equity, when:

a.
the Company's Board of Directors, or a duly authorized committee thereof, shall have adopted appropriate resolutions approving and authorizing the issuance and sale of the Bonds and any other action necessary to the consummation of the proposed issuance and sale of the Bonds;

b.
the terms and provisions of the Offered Bonds are approved and established in accordance with the Mortgage and within the authority granted by the then current resolutions of the Board of Directors, or a duly authorized committee thereof; and

c.
the Offered Bonds shall have been issued and sold in accordance with their respective terms and provisions and in compliance with authority contained in an order or orders of the MPUC, and as otherwise contemplated by the Registration Statement.

3.
The Distribution Agreement Shares will be validly issued, fully paid and non‑assessable when the Common Stock shall have been issued and sold for the consideration contemplated by the resolutions of the Company's Board of Directors authorizing the issuance and sale of the Distribution Agreement Shares and the terms of the Agreement and in compliance with authority contained in an order or orders of the MPUC, and as otherwise contemplated by the Registration Statement.

I am a member of the Minnesota Bar and this opinion is limited to the laws of the State of Minnesota and the federal laws of the United States insofar as they bear on the matters covered hereby. As to all matters of New York law, I have relied, with your consent, upon the opinion of even date herewith rendered to you by Morgan, Lewis & Bockius LLP, New York, New York. As to all matters of Minnesota law, Morgan, Lewis & Bockius LLP is hereby authorized to rely upon this opinion to the same extent as if this opinion had been addressed to them.

I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. I also consent to the reference to me in the Prospectus included in the Registration Statement under the caption “Legal Opinions.” In giving the foregoing consent, I do not thereby admit that I come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Sincerely,
 
/s/ Deborah A. Amberg
Deborah A. Amberg


2
EX 5(b) Opinion and Consent


Exhibit 5(b)

Morgan, Lewis & Bockius LLP
Morgan Lewis
101 Park Avenue
New York, NY 10178-0060
C O U N S E L O R S A T L A W
Tel: 212.309.6000
 
Fax: 212.309.6001
 
www.morganlewis.com
 

August 2, 2013

ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802

Ladies and Gentlemen:

Reference is made to the Registration Statement on Form S‑3 (the “Registration Statement”) to be filed by ALLETE, Inc. (“Company”), on or about the date hereof, with the Securities and Exchange Commission (“Commission”) under the Securities Act of 1933, as amended (“Securities Act”), for the registration of:

1.an unspecified amount of

(a)
shares of the Company's Common Stock, without par value (“Common Stock”), and

(b)
one or more proposed new series of the Company's first mortgage bonds (“Bonds”) 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 Mellon) and Richard H. West (Philip L. Watson, successor), as mortgage trustees (as amended and supplemented, the “Mortgage”) and

2.
4,209,892 shares of Common Stock (“Distribution Agreement Shares”) available for sale pursuant to the Company's Third Amended and Restated Distribution Agreement, dated August 3, 2012 (as amended, the “Agreement”), between the Company and KCCI, Ltd.

In connection therewith, we have reviewed such documents and records as we have deemed necessary to enable us to express an opinion on the matters covered hereby.

Based upon the foregoing, we are of the opinion that:

1.
The unspecified amount of shares of Common Stock will be validly issued, fully paid and non‑assessable when:

a.
the Company's Board of Directors, or a duly authorized committee thereof, shall have adopted appropriate resolutions approving and authorizing the issuance and sale of the Common Stock and authorizing any other action necessary to the consummation of the proposed issuance and sale of the Common Stock; and

b.
the Common Stock shall have been issued and sold for the consideration contemplated by such resolutions and in compliance with authority contained in an order or orders of the Minnesota Public Utilities Commission (“MPUC”), and as otherwise contemplated by the Registration Statement.

1


2.
The Bonds will be valid, legal and binding obligations of the Company, except as limited or affected by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting mortgagees' and other creditors' rights and remedies generally and general principles of equity, when:

a.
the Company's Board of Directors, or a duly authorized committee thereof, shall have adopted appropriate resolutions approving and authorizing the issuance and sale of the Bonds and any other action necessary to the consummation of the proposed issuance and sale of the Bonds;

b.
the terms and provisions of the Offered Bonds are approved and established in accordance with the Mortgage and within the authority granted by the then current resolutions of the Board of Directors, or a duly authorized committee thereof; and

c.
the Offered Bonds shall have been issued and sold in accordance with their respective terms and provisions and in compliance with authority contained in an order or orders of the MPUC, and as otherwise contemplated by the Registration Statement.

3.
The Distribution Agreement Shares will be validly issued, fully paid and non‑assessable when the Common Stock shall have been issued and sold for the consideration contemplated by the resolutions of the Company's Board of Directors authorizing the issuance and sale of the Distribution Agreement Shares and the terms of the Agreement and in compliance with authority contained in an order or orders of the MPUC, and as otherwise contemplated by the Registration Statement.

This opinion is limited to the laws of the States of Minnesota and New York and the federal laws of the United States insofar as they bear on the matters covered hereby. As to all matters of Minnesota law, we have relied, with your consent, upon the opinion of even date herewith rendered to you by Deborah A. Amberg, Esq., Senior Vice President, General Counsel and Secretary of the Company. As to all matters of New York law, Deborah A. Amberg, Esq., is hereby authorized to rely upon this opinion to the same extent as if this opinion had been addressed to her.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the reference to us in the Prospectus included in the Registration Statement under the caption “Legal Opinions.” In giving the foregoing consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ MORGAN, LEWIS & BOCKIUS LLP
MORGAN, LEWIS & BOCKIUS LLP



2
EX 12


Exhibit 12

ALLETE
Computation of Ratios of Earnings to Fixed Charges (Unaudited)

 
 
 
For the Six Months Ended June 30,
 
For the Years Ended December 31,

 
 2013
 
2012
2011
2010
2009
2008
Millions
 
 
 
 
 
 
 
 
Earnings are defined:
 
 
 
 
 
 
 
 
 
Pretax Income Before Non-Controlling Interest
 

$58.1

 

$135.0


$129.2


$119.1


$91.5


$126.4

 
Add: Fixed Charges
 
27.7

 
51.2

47.6

43.4

38.3

30.3

 
Less: Undistributed Income from Less than
 
 
 
 
 
 
 
 
 
 50 percent Owned Equity Investment
 
2.3

 
3.8

3.8

3.4

3.7

3.8

 
Earnings as defined:
 

$83.5

 

$182.4


$173.0


$159.1


$126.1


$152.9

 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
 
Interest on Long-Term Debt
 

$25.2

 

$47.0


$43.1


$39.7


$34.2


$27.4

 
Other Interest Charges
 
0.7

 
0.4

1.6

1.0

1.6

0.4

 
Interest Component of All Rentals (a)
 
1.8

 
3.8

2.9

2.7

2.5

2.5

 
Total Fixed Charges
 

$27.7

 

$51.2


$47.6


$43.4


$38.3


$30.3

Ratio of Earnings to Fixed Charges
 
3.01

 
3.56

3.63

3.67

3.29

5.05

(a)
Represents interest portion of rents estimated at 33 1/3 percent.



EX 23(a) Consent of Independent Registered Public Accounting Firm


Exhibit 23(a)


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 15, 2013, relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in the ALLETE, Inc. Annual Report on Form 10-K for the year ended December 31, 2012. We also consent to the reference to us under the heading “Experts” in such Registration Statement.  


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, MN
August 2, 2013



EX 25(a)


Exhibit 25(a)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ]
_________________

The Bank of New York Mellon
(Exact name of trustee as specified in its charter)
New York
 
13-5160382
(Jurisdiction of incorporation or
organization if not a U.S. national bank)
 
(I.R.S. Employer
Identification No.)
 
 
 
One Wall Street
New York, New York
 
10286
(Address of principal executive offices)
 
(Zip code)

Legal Department
The Bank of New York Mellon
One Wall Street, 15th Floor
New York, NY 10286
(212) 635-1270
(Name, address and telephone number of agent for service)


ALLETE, Inc.
(Exact name of obligor as specified in its charter)

Minnesota
 
41-0418150
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
30 West Superior Street
Duluth, Minnesota
 
55802-2093
(Address of principal executive offices)
 
(Zip code)

_________________

First Mortgage Bonds
(Title of the indenture securities)
_________________







Item 1. General Information.

Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to
which it is subject.

Superintendent of Banks of the    One State Street, New York, N.Y. 10004-1417
State of New York
and Albany, N.Y. 12223
Federal Reserve Bank of New York
33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation
550 17th Street, N.W., Washington, D.C. 20429
New York Clearing House Association
New York, N.Y. 10005

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

Item 16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).

1.
-    A copy of the Organization Certificate of The Bank of New York Mellon (formerly The Bank of New York (formerly Irving Trust Company)) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed as Exhibit 25.1 to Current Report on Form 8-K of Nevada Power Company, Date of Report (Date of Earliest Event Reported) July 25, 2008 (File No. 000-52378).)

4.
-    A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 with Registration Statement No. 333-155238.)

6.
-    The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152856.)

7.
-    A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
    




SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 2nd day of August, 2013.


THE BANK OF NEW YORK MELLON


By:    /s/ Laurence J. O'Brien    
Name: Laurence J. O'Brien
Title: Vice President






EXHIBIT 7
(Page i of iii)
Consolidated Report of Condition of
THE BANK OF NEW YORK MELLON
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2013, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
ASSETS
Dollar Amounts
In Thousands

Cash and balances due from depository institutions:
 
Noninterest‑bearing balances and currency and coin
$3,356,000
Interest‑bearing balances
124,155,000

Securities:
 
Held-to-maturity securities
8,205,000

Available-for-sale securities
88,405,000

Federal funds sold and securities purchased under agreements to resell
 
Federal funds sold in domestic offices
17,000

Securities purchased under agreements to resell
1,290,000

Loans and lease financing receivables:
 
Loans and leases held for sale
—

Loans and leases, net of unearned income
27,994,000

LESS: Allowance for loan and lease losses
243,000

Loans and leases, net of unearned income and allowance
27,751,000

Trading Assets
4,936,000

Premises and fixed assets (including capitalized leases)
1,198,000

Other real estate owned
4,000

Investments in unconsolidated subsidiaries and associated companies
1,049,000

Not applicable
 
Intangible assets:
 
Goodwill
6,443,000

Other intangible assets
1,454,000

Other assets
14,180,000

Total assets
$282,443,000





EXHIBIT 7
(Page ii of iii)

LIABILITIES
 
Deposits:
 
In domestic offices
$129,296,000
Noninterest‑bearing
85,272,000

Interest‑bearing
44,024,000

In foreign offices, Edge and Agreement subsidiaries, and IBFs
110,151,000

Noninterest‑bearing
8,212,000

Interest‑bearing
101,939,000

Federal funds purchased and securities sold under agreements to repurchase
 
Federal funds purchased in domestic offices
2,224,000

Securities sold under agreements to repurchase
1,030,000

Trading liabilities
6,967,000

Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases).
2,740,000

Not applicable
 
Not applicable
 
Subordinated notes and debentures
1,065,000

Other liabilities
8,917,000

Total liabilities
$262,390,000
Not applicable
 
EQUITY CAPITAL
 
Perpetual preferred stock and related surplus
—

Common stock
1,135,000

Surplus (exclude all surplus related to preferred stock)
9,725,000

Retained earnings
9,273,000

Accumulated other comprehensive income
(430,000
)
Other equity capital components
—

Total bank equity capital
19,703,000

Noncontrolling (minority) interests in consolidated subsidiaries
350,000

Total equity capital
20,053,000

Total liabilities, minority interest, and equity capital
$282,443,000





EXHIBIT 7
(Page iii of iii)
I, Thomas P. Gibbons, Chief Financial Officer of the above‑named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
Thomas P. Gibbons,
Chief Financial Officer

We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
Gerald L. Hassell
Catherine A. Rein
John P. Surma
Directors




EX 25(b)


Exhibit 25(b)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-2

STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ]

_________________


PHILIP L. WATSON
(Name of trustee)


101 Barclay Street
Floor 7W
New York, NY 10286
(Business address: street, city, state and zip code)




ALLETE, Inc.
(Exact name of obligor as specified in its charter)


Minnesota
 
41-0418150
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
30 West Superior Street
Duluth, Minnesota
 
55802-2093
(Address of principal executive offices)
 
(Zip code)


_________________

First Mortgage Bonds
(Title of the indenture securities)
_________________







Item 1.    Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None. (see Note on page 3.)

Item 2.    Trusteeships under other indentures.

If the trustee under another indenture under which any other securities, or                 certificates of interest or participation in any other securities, of the obligor are             outstanding, file a copy of each such indenture as an exhibit and furnish the             following information:
 
(a)    Title of the securities outstanding under each such other indenture.

Not applicable.

(a)
A brief statement of the fact relied upon by the trustee as a basis for the             claim that no conflicting interest within the meaning of Section 310(b)(1) of             the Act arises as a result of the trusteeship under such other indenture,             including a statement as to how the indenture securities will rank as                 compared with the securities issued under such other indenture.

Not applicable.


Item 11.    List of Exhibits.

None




NOTE

Inasmuch as this Form T-2 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 1, the answer to said Item is based on incomplete information.

Item 1 may, however, be considered as correct unless amended by an amendment to this Form T-2.





SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, I, Philip L. Watson have signed this statement of eligibility in The City of New York and State of New York, on the 2nd day of August, 2013.


 
/s/ Philip L. Watson
Name:
Philip L. Watson