Document and Entity Information Document	3 Months Ended
Document and Entity Information Document	Mar. 31, 2016 shares
Document and Entity Information [Abstract]
Entity Registrant Name	ALLETE INC
Entity Central Index Key	0000066756
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	49,256,265
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016

Consolidated Balance Sheet - USD ($)
$ in Millions

Mar. 31, 2016

Dec. 31, 2015

Current Assets [Abstract]

Cash and Cash Equivalents

$ 97.0

Accounts Receivable (Less Allowance of $1.2 and $1.0)

124.8

121.2

Inventories

116.0

117.1

Prepayments and Other

41.5

35.7

Total Current Assets

379.3

371.0

Property, Plant and Equipment – Net

3,642.3

3,669.1

Regulatory Assets

367.1

372.0

Investment in ATC

128.6

124.5

Other Investments

72.9

74.6

Goodwill and Intangible Assets – Net

213.9

215.2

Other Non-Current Assets

68.6

68.1

Total Assets

^[1]

4,872.7

4,894.5

Current Liabilities [Abstract]

Accounts Payable

58.8

88.8

Accrued Taxes

52.2

44.0

Accrued Interest

14.9

18.6

Long-Term Debt Due Within One Year

14.8

35.7

Notes Payable

0.7

1.6

Other

82.8

86.1

Total Current Liabilities

224.2

274.8

Long-Term Debt

1,551.3

1,556.7

Deferred Income Taxes

589.7

579.8

Regulatory Liabilities

102.2

105.0

Defined Benefit Pension and Other Postretirement Benefit Plans

205.7

206.8

Other Non-Current Liabilities

347.1

349.0

Total Liabilities

$ 3,020.2

$ 3,072.1

Commitments, Guarantees and Contingencies (Note 13)

Equity [Abstract]

Common Stock Without Par Value, 80.0 Shares Authorized, 49.3 and 49.1 Shares Outstanding

$ 1,281.0

$ 1,271.4

Accumulated Other Comprehensive Loss

(24.7)

(24.5)

Retained Earnings

593.5

573.3

Total ALLETE Equity

1,849.8

1,820.2

Non-Controlling Interest in Subsidiaries

2.7

2.2

Total Equity

1,852.5

1,822.4

Total Liabilities and Equity

$ 4,872.7

$ 4,894.5

[1]

As a result of revised accounting guidance adopted in the first quarter of 2016, we reclassified unamortized debt issuance costs from Other Non-Current Assets to Long-Term Debt on the Consolidated Balance Sheet. Prior period segment assets have been revised to conform to the current presentation. (See Note 1. Operations and Significant Accounting Policies.)

Consolidated Balance Sheet Parentheticals - USD ($) shares in Millions, $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Accounts Receivable [Abstract]
Accounts Receivable, Allowance	$ 1.2	$ 1.0
Common Stock [Abstract]
Common Stock, Par Value	$ 0.00	$ 0.00
Common Stock, Shares Authorized	80.0	80.0
Common Stock, Shares Outstanding	49.3	49.1

Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Operating Revenue	$ 333.8	$ 320.0
Operating Expenses [Abstract]
Fuel and Purchased Power	76.9	86.0
Transmission Services	16.8	14.9
Cost of Sales	33.3	31.2
Operating and Maintenance	78.1	79.7
Depreciation and Amortization	48.1	39.0
Taxes Other than Income Taxes	13.8	12.8
Total Operating Expenses	267.0	263.6
Operating Income	66.8	56.4
Other Income (Expense) [Abstract]
Interest Expense	(16.9)	(15.1)
Equity Earnings in ATC	4.8	3.9
Other	1.0	1.1
Total Other Expense	(11.1)	(10.1)
Income Before Non-Controlling Interest and Income Taxes	55.7	46.3
Income Tax Expense	9.3	6.2
Net Income	46.4	40.1
Less: Non-Controlling Interest in Subsidiaries	0.5	0.2
Net Income Attributable to ALLETE	$ 45.9	$ 39.9
Average Shares of Common Stock and Per Share Data [Abstract]
Basic (in shares)	49.2	46.9
Diluted (in shares)	49.2	47.1
Basic Earnings Per Share of Common Stock	$ 0.93	$ 0.85
Diluted Earnings Per Share of Common Stock	0.93	0.85
Dividends Per Share of Common Stock	$ 0.52	$ 0.505

Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Comprehensive Income [Abstract]
Net Income	$ 46.4	$ 40.1
Other Comprehensive Income (Loss) [Abstract]
Unrealized Gain (Loss) on Securities Net of Income Taxes of $(0.3), and $0.1	(0.4)	0.1
Unrealized Gain on Derivatives Net of Income Taxes of $– and $–	0.0	0.1
Defined Benefit Pension and Other Postretirement Benefit Plans Net of Income Taxes of $0.1 and $0.2	0.2	0.3
Total Other Comprehensive Income (Loss)	(0.2)	0.5
Total Comprehensive Income	46.2	40.6
Less: Non-Controlling Interest in Subsidiaries	0.5	0.2
Comprehensive Income Attributable to ALLETE	$ 45.7	$ 40.4

Consolidated Statement of Comprehensive Income Parentheticals - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Unrealized Gain on Securities, Income Taxes	$ (0.3)	$ 0.1
Unrealized Gain on Derivatives, Income Tax	0.0	0.0
Defined Benefit Pension and Other Postretirement Benefit Plans, Income Tax	$ 0.1	$ 0.2

Consolidated Statement of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Activities [Abstract]
Net Income	$ 46.4	$ 40.1
Allowance for Funds Used During Construction – Equity	(0.9)	(0.9)
Income from Equity Investments – Net of Dividends	(2.9)	(0.8)
Depreciation Expense	46.8	38.4
Amortization of Power Purchase Agreements	(5.6)	(4.9)
Amortization of Other Intangible Assets and Other Assets	2.3	0.8
Deferred Income Tax Expense	9.2	6.1
Share-Based Compensation Expense	0.6	0.6
ESOP Compensation Expense	0.0	2.4
Defined Benefit Pension and Postretirement Benefit Expense	1.3	3.8
Bad Debt Expense	0.6	0.2
Changes in Operating Assets and Liabilities [Abstract]
Accounts Receivable	(4.2)	7.8
Inventories	1.1	(8.8)
Prepayments and Other	0.1	(0.7)
Accounts Payable	(4.2)	(14.0)
Other Current Liabilities	0.9	(1.7)
Changes in Regulatory and Other Non-Current Assets	2.8	(4.1)
Changes in Regulatory and Other Non-Current Liabilities	(1.1)	7.5
Cash from Operating Activities	93.2	71.8
Investing Activities [Abstract]
Proceeds from Sale of Available-for-sale Securities	1.1	0.2
Payments for Purchase of Available-for-sale Securities	(0.3)	(0.4)
Acquisitions of Subsidiaries – Net of Cash Acquired	0.0	(166.9)
Investment in ATC	(1.2)	(0.4)
Changes to Other Investments	0.2	0.0
Additions to Property, Plant and Equipment	(42.4)	(88.2)
Construction Costs for Development Project	0.0	(0.2)
Cash for Investing Activities	(42.6)	(255.9)
Financing Activities [Abstract]
Proceeds from Issuance of Common Stock	9.0	141.5
Changes in Restricted Cash	(5.8)	(0.8)
Changes in Notes Payable	(0.9)	(3.4)
Repayments of Long-Term Debt	(26.6)	(2.0)
Acquisition-Related Contingent Consideration Payments	(0.6)	0.0
Dividends on Common Stock	(25.7)	(24.9)
Cash from (for) Financing Activities	(50.6)	110.4
Change in Cash and Cash Equivalents	0.0	(73.7)
Cash and Cash Equivalents at Beginning of Period	97.0	145.8
Cash and Cash Equivalents at End of Period	$ 97.0	$ 72.1

Consolidated Statement of Shareholders' Equity Consolidated Statement of Shareholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) $ in Millions	Total	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Common Stock [Member]
Beginning Balance at Dec. 31, 2015	$ 1,820.2	$ 573.3	$ (24.5)	$ 1,271.4
Comprehensive Income [Abstract]
Net Income	46.4	46.4
Other Comprehensive Income – Net of Tax [Abstract]
Unrealized Loss on Securities – Net	(0.4)		(0.4)
Defined Benefit Pension and Other Postretirement Plans – Net	0.2		0.2
Total Comprehensive Income	46.2
Non-Controlling Interest in Subsidiaries	(0.5)	(0.5)
Total Comprehensive Income Attributable to ALLETE	45.7
Common Stock Issued – Net	9.6			9.6
Dividends Declared	(25.7)	(25.7)
Ending Balance at Mar. 31, 2016	$ 1,849.8	$ 593.5	$ (24.7)	$ 1,281.0

Operations and Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Operations and Significant Accounting Policies [Text Block]

OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Inventories. Inventories are stated at the lower of cost or market. Inventories in our Regulated Operations and ALLETE Clean Energy segments are carried at an average cost basis. Inventories in our U.S. Water Services and Corporate and Other segments are carried at an average cost, first-in, first-out or specific identification basis.



Inventories	March 31, 2016			December 31, 2015
Millions
Fuel (a)		$56.5			$58.1
Materials and Supplies	49.0			49.1
Raw Materials	2.6			2.7
Work in Progress	0.8			—
Finished Goods	7.4			7.5
Reserve for Obsolescence	(0.3		)	(0.3		)
Total Inventories		$116.0			$117.1


(a)	Fuel consists primarily of coal inventory at Minnesota Power.



Prepayments and Other Current Assets	March 31, 2016		December 31, 2015
Millions
Deferred Fuel Adjustment Clause		$12.4		$10.6
Restricted Cash (a)	11.5		5.6
Other	17.6		19.5
Total Prepayments and Other Current Assets		$41.5		$35.7


(a)	Restricted Cash includes collateral deposits required under ALLETE Clean Energy’s loan agreements and cash pledged as collateral for U.S. Water Services’ standby letters of credit.

Other Non-Current Assets.

Restricted Cash. Included in Other Non-Current Assets on the Consolidated Balance Sheet was restricted cash of $8.1 million as of March 31, 2016, and December 31, 2015, related to collateral deposits required under ALLETE Clean Energy’s loan agreements.



Other Current Liabilities	March 31, 2016		December 31, 2015
Millions
Customer Deposits		$14.0		$15.1
Power Purchase Agreements	23.6		23.3
Other	45.2		47.7
Total Other Current Liabilities		$82.8		$86.1

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)



Other Non-Current Liabilities	March 31, 2016		December 31, 2015
Millions
Asset Retirement Obligation		$136.2		$131.4
Power Purchase Agreements	131.9		138.1
Contingent Consideration (a)	36.7		36.6
Other	42.3		42.9
Total Other Non-Current Liabilities		$347.1		$349.0


(a)	Contingent Consideration relates to the estimated fair value of the earnings-based payment resulting from the U.S. Water Services acquisition. (See Note 3. Acquisitions and Note 5. Fair Value.)

Supplemental Statement of Cash Flows Information.



Three Months Ended March 31,	2016		2015
Millions
Cash Paid During the Period for Interest – Net of Amounts Capitalized		$19.6		$15.3
Cash Paid During the Period for Income Taxes		$0.1		$0.1
Noncash Investing and Financing Activities
Decrease in Accounts Payable for Capital Additions to Property, Plant and Equipment	$(25.6)		$(32.2)
Capitalized Asset Retirement Costs		$3.5		$1.2
AFUDC–Equity		$0.9		$0.9
Contingent Consideration	—			$35.7

Subsequent Events. The Company performed an evaluation of subsequent events for potential recognition and disclosure through the time of the financial statements issuance.

New Accounting Standards.

Amendments to the Consolidation Analysis. In February 2015, the FASB issued revised guidance which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The new standard affects (1) limited partnerships and similar legal entities, (2) evaluating fees paid to a decision maker or a service provider as a variable interest, (3) the effect of fee arrangements on the primary beneficiary determination, (4) the effect of related parties on the primary beneficiary determination, and (5) certain investment funds. This guidance was adopted in the first quarter of 2016 and did not have a material impact on our Consolidated Financial Statements.

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). In May 2015, the FASB issued an accounting standard update which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share (or its equivalent) practical expedient. The guidance applies to investments for which there is not a readily determinable fair value (market quote) or the investment is in a mutual fund without a publicly available net asset value. This guidance was adopted in the first quarter of 2016 and did not have a material impact on our Consolidated Financial Statements.

Presentation of Debt Issuance Costs. In April 2015, the FASB issued revised guidance addressing the presentation requirements for debt issuance costs. Under the revised guidance, all costs incurred to issue debt are to be presented on the Consolidated Balance Sheet as a direct deduction from the carrying amount of that debt liability. This guidance was adopted in the first quarter of 2016 resulting in the reclassification of unamortized debt issuance costs from Other Non-Current Assets to Long-Term Debt on the Consolidated Balance Sheet. The effect of the adoption decreased Total Assets and Total Liabilities on ALLETE's Consolidated Balance Sheet by $12.6 million as of December 31, 2015.

NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

New Accounting Standards (Continued)

Leases. In February 2016, the FASB issued an accounting standard update which revises the existing guidance for leases. Under the revised guidance, lessees will be required to recognize a “right-of-use” asset and a lease liability for all leases with a term greater than 12 months. The new standard also requires additional quantitative and qualitative disclosures by lessees and lessors to enable users of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The accounting for leases by lessors and the recognition, measurement and presentation of expenses and cash flows from leases are not expected to significantly change as a result of the updated guidance. The revised guidance is effective for the Company beginning in the first quarter of 2019 with early adoption permitted. The Company is evaluating the impact of the amended lease guidance on the Company’s Consolidated Financial Statements.

Investments

3 Months Ended

Mar. 31, 2016

Investments [Abstract]

Investments [Text Block]

INVESTMENTS

Investments. As of March 31, 2016, the investment portfolio included the legacy real estate assets of ALLETE Properties, debt and equity securities consisting primarily of securities held in other postretirement plans to fund employee benefits, the cash equivalents within these plans, and other assets consisting primarily of land in Minnesota.



Other Investments	March 31, 2016		December 31, 2015
Millions
ALLETE Properties		$49.1		$50.1
Available-for-sale Securities (a)	17.4		18.5
Cash Equivalents	2.5		2.0
Other	3.9		4.0
Total Other Investments		$72.9		$74.6


(a)	As of March 31, 2016, the aggregate amount of available-for-sale corporate debt securities maturing in one year or less was zero, in one year to less than three years was $1.6 million, in three years to less than five years was $4.1 million, and in five or more years was $4.7 million.

Land Inventory. Land inventory is accounted for as held for use and is recorded at cost, unless the carrying value is determined not to be recoverable in accordance with the accounting standards for property, plant and equipment, in which case the land inventory is written down to estimated fair value. Land values are reviewed for indicators of impairment on a quarterly basis and no impairments were recorded for the three months ended March 31, 2016.

Acquisitions

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Acquisitions [Text Block]

ACQUISITIONS

The acquisitions below are consistent with ALLETE’s stated strategy of investing in energy infrastructure and related services businesses to complement its core regulated utility, balance exposure to business cycles and changing demand, and provide potential long-term earnings growth. The pro forma impact of the following acquisitions was not significant, either individually or in the aggregate, to the results of the Company for the three months ended March 31, 2016 and 2015.

2015 Activity.

U.S. Water Services. In February 2015, ALLETE acquired U.S. Water Services. Total consideration for the transaction was $202.3 million, which included payment of $166.6 million in cash and an estimated fair value of earnings-based contingent consideration of $35.7 million, as estimated at the date of acquisition, to be paid through 2019. The contingent consideration is presented within Other Non-Current Liabilities on the Consolidated Balance Sheet. The Consolidated Statement of Income reflects 100 percent of the results of operations for U.S. Water Services since the acquisition date as the Company has acquired 100 percent of U.S. Water Services.

The acquisition was accounted for as a business combination and the purchase price was allocated based on the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition. The purchase price accounting, which was finalized in 2015, is reflected in the following table. Fair value measurements were valued primarily using the discounted cash flow method.

NOTE 3. ACQUISITIONS (Continued)

2015 Activity (Continued)



Millions
Assets Acquired
Cash and Cash Equivalents		$0.9
Accounts Receivable	16.8
Inventories (a)	13.4
Other Current Assets (b)	5.3
Property, Plant and Equipment	10.6
Intangible Assets (c)	83.0
Goodwill (d)	122.9
Other Non-Current Assets	0.2
Total Assets Acquired		$253.1
Liabilities Assumed
Current Liabilities		$19.2
Non-Current Liabilities	31.6
Total Liabilities Assumed		$50.8
Net Identifiable Assets Acquired		$202.3


(a)	Included in Inventories was $2.7 million of fair value adjustments relating to work in progress and finished goods inventories which were recognized as Cost of Sales within one year from the acquisition date.


(b)	Included in Other Current Assets was $1.6 million relating to the fair value of sales backlog. Sales backlog was recognized as Cost of Sales within one year from the acquisition date. Also included in Other Current Assets was restricted cash of $2.1 million relating to cash pledged as collateral for standby letters of credit.


(c)	Intangible Assets include customer relationships, patents, non-compete agreements, and trademarks and trade names. (See Note 4. Goodwill and Intangible Assets.)


(d)	For tax purposes, the purchase price allocation resulted in $2.9 million of deductible goodwill.

Acquisition-related costs of $3.0 million after-tax were expensed as incurred during the first quarter of 2015 and recorded in Operating and Maintenance on the Consolidated Statement of Income.

Chanarambie/Viking. In April 2015, ALLETE Clean Energy acquired 100 percent of wind energy facilities in southern Minnesota (Chanarambie/Viking) from EDF Renewable Energy, Inc. for $48.0 million.

The facilities have 97.5 MW of generating capability and are located near ALLETE Clean Energy’s Lake Benton facility. The wind energy facilities began commercial operations in 2003 and have PPAs in place for their entire output, which expire in 2018 (12 MW) and 2023 (85.5 MW).

NOTE 3. ACQUISITIONS (Continued)

2015 Activity (Continued)



Millions
Assets Acquired
Current Assets		$4.8
Property, Plant and Equipment	103.0
Other Non-Current Assets (a)	1.0
Total Assets Acquired		$108.8
Liabilities Assumed
Current Liabilities (b)		$6.7
Power Purchase Agreements	49.0
Non-Current Liabilities	5.1
Total Liabilities Assumed		$60.8
Net Identifiable Assets Acquired		$48.0


(a)	Included in Other Non-Current Assets was $0.3 million of goodwill. For tax purposes, the purchase price allocation resulted in no allocation to goodwill.


(b)	Current Liabilities included $5.9 million related to the current portion of Power Purchase Agreements.

Acquisition-related costs of $0.2 million after-tax were expensed as incurred during the second quarter of 2015 and recorded in Operating and Maintenance on the Consolidated Statement of Income.

Armenia Mountain. In July 2015, ALLETE Clean Energy acquired 100 percent of a wind energy facility located near Troy, Pennsylvania (Armenia Mountain) from The AES Corporation (AES) and a minority shareholder for $111.1 million, plus the assumption of existing debt.

The facility has 100.5 MW of generating capability, began commercial operations in 2009, and has PPAs in place for its entire output, which expire in 2024.



Millions
Assets Acquired
Current Assets (a)	$9.0
Property, Plant and Equipment	156.2
Other Non-Current Assets (b)	14.4
Total Assets Acquired		$179.6
Liabilities Assumed
Current Liabilities		$2.9
Long-Term Debt Due Within One Year	5.9
Long-Term Debt	55.0
Other Non-Current Liabilities	4.7
Total Liabilities Assumed	$68.5
Net Identifiable Assets Acquired		$111.1


(a)	Included in Current Assets was $1.0 million related to the current portion of Power Purchase Agreements and $6.0 million of restricted cash related to collateral deposits required under its loan agreement.


(b)	Included in Other Non-Current Assets was $8.2 million related to the non-current portion of Power Purchase Agreements, $6.1 million of restricted cash related to collateral deposits required under its loan agreements, and an immaterial amount of goodwill. For tax purposes, the purchase price allocation resulted in no allocation to goodwill.

NOTE 3. ACQUISITIONS (Continued)

2015 Activity (Continued)

Acquisition-related costs of $1.6 million after-tax were expensed as incurred throughout the second and third quarters of 2015, and recorded in Operating and Maintenance on the Consolidated Statement of Income.

A and W Technologies. In November 2015, U.S. Water Services acquired 100 percent of A and W Technologies, Inc. (AWT). Total consideration for the transaction was $9.3 million, which included payment of $8.3 million in cash and a $1.0 million payment due in April 2017. AWT, similar to U.S. Water Services, is an integrated water management company and was acquired to expand U.S. Water Services’ regional footprint in the Southeastern United States.



Millions
Assets Acquired
Current Assets	$1.0
Property, Plant and Equipment	0.1
Intangible Assets (a)	3.9
Goodwill (b)	4.4
Total Assets Acquired		$9.4
Liabilities Assumed
Current Liabilities		$0.1
Total Liabilities Assumed	$0.1
Net Identifiable Assets Acquired		$9.3


(a)	Intangible Assets include customer relationships and non-compete agreements. (See Note 4. Goodwill and Intangible Assets.)


(b)	For tax purposes, the purchase price allocation resulted in $4.4 million of deductible goodwill.

Acquisition-related costs were immaterial, expensed as incurred during the fourth quarter of 2015 and recorded in Operating and Maintenance on the Consolidated Statement of Income.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4926-128472

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1383-128463

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479

+ Details

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets [Text Block]

GOODWILL AND INTANGIBLE ASSETS

The aggregate carrying amount of goodwill was $130.6 million as of March 31, 2016, and December 31, 2015. There have been no changes to goodwill by reportable segment for the three months ended March 31, 2016.

Balances of intangible assets, net, excluding goodwill as of March 31, 2016, are as follows:



	December 31, 2015		Amortization	March 31, 2016
Millions
Intangible Assets
Definite-Lived Intangible Assets
Customer Relationships	$60.8		$(1.1)		$59.7
Developed Technology and Other (a)	7.2		(0.2)	7.0
Total Definite-Lived Intangible Assets	68.0		(1.3)	66.7
Indefinite-Lived Intangible Assets
Trademarks and Trade Names	16.6		n/a	16.6
Total Intangible Assets		$84.6	$(1.3)		$83.3


(a)	Developed Technology and Other includes patents, non-compete agreements, and land easements.

NOTE 4. GOODWILL AND INTANGIBLE ASSETS (Continued)

Customer relationships have a remaining useful life of approximately 22 years and developed technology and other have remaining useful lives ranging from approximately 3 years to approximately 13 years (weighted average of approximately 9 years). The weighted average remaining useful life of all definite-lived intangible assets as of March 31, 2016, is approximately 20 years.

Amortization expense of intangible assets for the three months ended March 31, 2016, was $1.3 million. Accumulated amortization was $5.4 million as of March 31, 2016 ($4.1 million as of December 31, 2015). The estimated amortization expense for definite-lived intangible assets for the remainder of 2016 is $3.8 million. Estimated annual amortization expense for definite-lived intangible assets is $5.0 million in 2017, $4.7 million in 2018, $4.4 million in 2019, $4.2 million in 2020 and $44.6 million thereafter.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Fair Value

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value [Text Block]

FAIR VALUE

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs, which are used to measure fair value, are prioritized through the fair value hierarchy. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Descriptions of the three levels of the fair value hierarchy are discussed in Note 10. Fair Value to the Consolidated Financial Statements in our 2015 Form 10-K.

The following tables set forth by level within the fair value hierarchy, our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2016, and December 31, 2015. Each asset and liability is classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of these assets and liabilities and their placement within the fair value hierarchy levels. The estimated fair value of Cash and Cash Equivalents listed on the Consolidated Balance Sheet approximates the carrying amount and therefore is excluded from the recurring fair value measures in the following tables.



	Fair Value as of March 31, 2016
Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total
Millions
Assets
Investments (a)
Available-for-sale – Equity Securities		$7.0	—		—			$7.0
Available-for-sale – Corporate Debt Securities	—			$10.4	—		10.4
Cash Equivalents	2.5		—		—		2.5
Total Fair Value of Assets		$9.5		$10.4	—			$19.9

Liabilities (b)
Deferred Compensation	—			$14.9	—			$14.9
U.S. Water Services Contingent Consideration	—		—			$36.7	36.7
Total Fair Value of Liabilities	—			$14.9		$36.7		$51.6
Total Net Fair Value of Assets (Liabilities)		$9.5	$(4.5)		$(36.7)		$(31.7)


(a)	Included in Other Investments on the Consolidated Balance Sheet.


(b)	Included in Other Non-Current Liabilities on the Consolidated Balance Sheet.

NOTE 5. FAIR VALUE (Continued)



	Fair Value as of December 31, 2015
Recurring Fair Value Measures	Level 1		Level 2		Level 3		Total
Millions
Assets
Investments (a)
Available-for-sale – Equity Securities		$7.6	—		—			$7.6
Available-for-sale – Corporate Debt Securities	—			$10.9	—		10.9
Cash Equivalents	2.0		—		—		2.0
Total Fair Value of Assets		$9.6		$10.9	—			$20.5

Liabilities (b)
Deferred Compensation	—			$16.1	—			$16.1
U.S. Water Services Contingent Consideration	—		—			$36.6	36.6
Total Fair Value of Liabilities	—			$16.1		$36.6		$52.7
Total Net Fair Value of Assets (Liabilities)		$9.6	$(5.2)		$(36.6)		$(32.2)


(a)	Included in Other Investments on the Consolidated Balance Sheet.


(b)	Included in Other Non-Current Liabilities on the Consolidated Balance Sheet.

The Level 3 activity in the preceding tables is the result of the February 2015 acquisition of U.S. Water Services. Changes in the fair value of U.S. Water Services’ Contingent Consideration for the three months ended March 31, 2016, are primarily due to accretion expense.

For the three months ended March 31, 2016, and the year ended December 31, 2015, there were no transfers in or out of Levels 1, 2 or 3.

Fair Value of Financial Instruments. With the exception of the item listed in the table below, the estimated fair value of all financial instruments approximates the carrying amount. The fair value for the item listed below was based on quoted market prices for the same or similar instruments (Level 2).



Financial Instruments	Carrying Amount	Fair Value
Millions
Long-Term Debt, Including Current Portion
March 31, 2016	$1,578.4	$1,708.0
December 31, 2015	$1,605.0	$1,676.0

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. Non-financial assets such as equity method investments, goodwill, intangible assets, and property, plant and equipment are measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment is recognized. For the three months ended March 31, 2016, and the year ended December 31, 2015, there were no indicators of impairment for these non-financial assets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Regulatory Matters

3 Months Ended

Mar. 31, 2016

Regulated Operations [Abstract]

Regulatory Matters [Text Block]

REGULATORY MATTERS

Regulatory matters are summarized in Note 5. Regulatory Matters to our Consolidated Financial Statements in our 2015 Form 10-K, with additional disclosure provided in the following paragraphs.

Electric Rates. Entities within our Regulated Operations segment file for periodic rate revisions with the MPUC, the FERC or the PSCW.

2010 Minnesota Rate Case. Minnesota Power’s current retail rates are based on a 2011 MPUC retail rate order, effective June 1, 2011, that allows for a 10.38 percent return on common equity and a 54.29 percent equity ratio. Subsequent to this order, and as authorized by the MPUC, Minnesota Power also recognizes revenue under cost recovery riders for environmental, renewable and transmission investments. (See Transmission Cost Recovery Rider, Renewable Cost Recovery Rider and Boswell Mercury Emissions Reduction Plan.) Revenue from cost recovery riders was $25.4 million for the three months ended March 31, 2016 ($20.7 million for the three months ended March 31, 2015).

NOTE 6. REGULATORY MATTERS (Continued)

Energy-Intensive Trade-Exposed (EITE) Customer Rates. The state of Minnesota enacted an EITE customer ratemaking law in June 2015. The law established that it is the energy policy of the state to have competitive rates for certain industries such as mining and forest products. In November 2015, Minnesota Power filed a rate schedule petition for EITE customers and a corresponding rider for EITE cost recovery with the MPUC. The rate proposal was revenue and cash flow neutral. In an order dated March 23, 2016, the MPUC dismissed the petition without prejudice, providing Minnesota Power the option to refile the petition with additional information or file a new petition. Minnesota Power is evaluating the MPUC’s decision.

FERC-Approved Wholesale Rates. Minnesota Power has 16 non-affiliated municipal customers in Minnesota. SWL&P is a Wisconsin utility and a wholesale customer of Minnesota Power.

In April 2015, Minnesota Power amended its formula-based wholesale electric sales contract with the Nashwauk Public Utilities Commission, extending the term through June 30, 2028. The electric service agreements with SWL&P and one other municipal customer are effective through June 30, 2019. The rates included in these three contracts are set each July 1 based on a cost-based formula methodology, using estimated costs and a rate of return that is equal to Minnesota Power’s authorized rate of return for Minnesota retail customers (currently 10.38 percent). The formula-based rate methodology also provides for a yearly true-up calculation for actual costs incurred.

In September 2015, Minnesota Power amended its wholesale electric contracts with 14 municipal customers, extending the contract terms through December 31, 2024. These contracts include fixed capacity charges through 2018; beginning in 2019, the capacity charge will not increase by more than two percent or decrease by more than one percent from the previous year’s capacity charge and will be determined using a cost-based formula methodology. The base energy charge for each year of the contract term will be set each January 1, subject to monthly adjustment, and will also be determined using a cost-based formula methodology.

All of the wholesale contracts include a termination clause requiring a three-year notice to terminate. In January 2016, one of Minnesota Power’s municipal customers provided notice of its intent to terminate its contract effective June 30, 2019. Minnesota Power currently provides approximately 29 MW of average monthly demand to this customer. Under the Nashwauk Public Utilities Commission agreement, no termination notice may be given prior to June 30, 2025. Under the agreement with SWL&P, no termination notice may be given prior to June 30, 2016. The remaining 14 municipal customers may not give termination notices prior to December 31, 2021.

2012 Wisconsin Rate Case. SWL&P’s current retail rates are based on a 2012 PSCW retail rate order, effective January 1, 2013, that allows for a 10.9 percent return on common equity.

Transmission Cost Recovery Rider. Minnesota Power has an approved cost recovery rider in place for certain transmission investments and expenditures. In an order dated February 3, 2016, the MPUC approved Minnesota Power’s updated billing factor which allows Minnesota Power to charge retail customers on a current basis for the costs of constructing certain transmission facilities plus a return on the capital invested. As a result of the MPUC approval of the certificate of need for the GNTL in June 2015, the project is eligible for cost recovery under the existing transmission cost recovery rider. Minnesota Power anticipates including its portion of the investments and expenditures for the GNTL in future transmission factor filings to include updated billing rates on customer bills.

Renewable Cost Recovery Rider. Minnesota Power has an approved cost recovery rider in place for investments and expenditures related to the 497 MW Bison Wind Energy Center in North Dakota and the restoration and repair of Thomson. Updated customer billing rates for the renewable cost recovery rider were approved by the MPUC in an order dated March 9, 2016, allowing Minnesota Power to charge retail customers on a current basis for the costs of constructing certain renewable investments plus a return on the capital invested. While approving the updated customer billing rates for the renewable cost recovery rider, the MPUC also allowed Minnesota Power additional time to submit support for its position on its utilization of North Dakota investment tax credits.

NOTE 6. REGULATORY MATTERS (Continued)

Minnesota Power accounts for North Dakota investment tax credits based on long-standing regulatory precedents of stand-alone allocation methodology of accounting for income taxes. The stand-alone method provides that income taxes (and credits) are calculated as if Minnesota Power was the only entity included in ALLETE’s consolidated federal and unitary state income tax returns. Minnesota Power has recorded a regulatory liability for North Dakota investment tax credits generated by its jurisdictional activity and expected to be realized in the future. North Dakota investment tax credits attributable to ALLETE’s apportionment and income of ALLETE’s other subsidiaries are included in the ALLETE consolidated group. The Minnesota Department of Commerce (Department) has inquired about our use of the North Dakota investment tax credits, taking the position that all North Dakota investment tax credits generated from the Bison Wind Energy Center should be credited to Minnesota Power ratepayers. The MPUC did not come to a decision on this issue in its order dated March 9, 2016, but requested that Minnesota Power provide further support on its position which was submitted on April 8, 2016.

The amount of North Dakota investment tax credits recognized by ALLETE as of March 31, 2016, total approximately $8 million, which represents the amount of North Dakota investment tax credits that the Department believes should be refunded to ratepayers. Minnesota Power will appropriately consider all avenues of appeal should an adverse decision be issued by the MPUC.

Annual Automatic Adjustment (AAA) of Charges. On April 14, 2016, the MPUC approved Minnesota Power’s AAA filings made in 2012 and 2013, and deferred action for approximately 90 days on the AAA filing made in 2014 pending review and confirmation of coal transportation costs and terms of service. Minnesota Power’s AAA filings made in 2014 and 2015 are pending MPUC approval, and represent approximately $350 million in retail fuel cost recovery collected, but subject to refund. Minnesota Power currently expects full recovery of amounts represented by each AAA filing, although we cannot predict the outcome of the pending filings at the MPUC.

Integrated Resource Plan (IRP). In a November 2013 order, the MPUC approved Minnesota Power’s 2013 IRP which detailed its EnergyForward strategic plan, announced in January 2013. Significant elements of the EnergyForward plan include major wind investments in North Dakota completed in the fourth quarter of 2014, the installation of emissions control technology at Boswell Unit 4 completed in December 2015, planning for the proposed GNTL, the conversion of Laskin from coal to natural gas completed in June 2015 and the retirement of Taconite Harbor Unit 3 completed in May 2015. In September 2015, Minnesota Power filed its 2015 IRP with the MPUC which includes an analysis of a variety of existing and future energy resource alternatives and a projection of customer cost impact by class. The 2015 IRP also contains the next steps in Minnesota Power’s EnergyForward plan including the economic idling of Taconite Harbor Units 1 and 2 in the fall of 2016, the ceasing of coal-fired operations at Taconite Harbor in 2020, and the addition of between 200 MW and 300 MW of natural gas-fired generation in the next decade.

Boswell Mercury Emissions Reduction Plan. Minnesota Power has an approved environmental improvement rider in place for investments and expenditures related to the implementation of the Boswell Unit 4 mercury emissions reduction plan completed in 2015. Customer billing rates for the environmental improvement rider were approved by the MPUC in August 2015. In September 2015, Minnesota Power filed an updated environmental improvement factor filing which included updated costs associated with Boswell Unit 4. Upon approval of the filing, Minnesota Power will be authorized to include updated billing rates on customer bills.

Boswell Remaining Life Petition. In November 2015, Minnesota Power filed a petition with the MPUC for approval to extend Boswell’s remaining life to 2050 for all units and utilize the existing environmental improvement rider to credit a portion of the depreciation expense savings to customers. The extension request is based on the significant multi-emissions retrofit work done at Boswell Unit 3 and Boswell Unit 4.

NOTE 6. REGULATORY MATTERS (Continued)

Great Northern Transmission Line (GNTL). Minnesota Power and Manitoba Hydro have proposed construction of the GNTL, an approximately 220-mile 500 kV transmission line between Manitoba and Minnesota’s Iron Range. The GNTL is subject to various federal and state regulatory approvals. In October 2013, a certificate of need application was filed with the MPUC which was approved in a June 2015 order. Based on this order, Minnesota Power’s portion of the investments and expenditures for the project are eligible for cost recovery under its existing transmission cost recovery rider and are anticipated to be included in future transmission factor filings. In a December 2015 order, the FERC approved our request to recover on construction work in progress related to the GNTL from Minnesota Power’s wholesale customers. In April 2014, Minnesota Power filed a route permit application with the MPUC and a request for a presidential permit to cross the U.S.-Canadian border with the U.S. Department of Energy. In an order dated April 11, 2016, the MPUC approved the route permit which largely follows Minnesota Power’s preferred route, including the international border crossing. A final decision on the presidential permit by the U.S. Department of Energy is expected in the second quarter of 2016. Manitoba Hydro must also obtain regulatory and governmental approvals related to a new transmission line in Canada. In September 2015, Manitoba Hydro submitted the final preferred route and EIS for the transmission line in Canada to the Manitoba Conservation and Water Stewardship for regulatory approval. Construction of Manitoba Hydro’s hydroelectric generation facility commenced in 2014. Upon receipt of all applicable permits and approvals, construction of the GNTL is expected to begin by 2017 and to be completed in 2020.

MISO Return on Equity Complaints. In November 2013, several customer groups located within the MISO service area filed complaints with the FERC requesting, among other things, a reduction in the base return on equity used by MISO transmission owners, including ALLETE, to 9.15 percent. In February 2015, an additional complaint was filed with the FERC seeking an order to further reduce the base return on equity to 8.67 percent. In December 2015, a federal administrative law judge ruled that the MISO transmission users have been charged an unreasonable base return on equity and proposed a reduction to 10.32 percent, subject to approval or adjustment by the FERC. A final decision from the FERC on the administrative law judge’s recommendation is expected in 2016.

Minnesota Solar Energy Standard. In May 2013, legislation was enacted by the state of Minnesota requiring at least 1.5 percent of total retail electric sales, excluding sales to certain industrial customers, to be generated by solar energy by the end of 2020. At least 10 percent of the 1.5 percent mandate must be met by solar energy generated by or procured from solar photovoltaic devices with a nameplate capacity of 20 kilowatts or less. Minnesota Power has two solar projects under development. In August 2015, Minnesota Power filed for MPUC approval of a 10 MW utility scale solar project at Camp Ripley, a Minnesota Army National Guard base and training facility near Little Falls, Minnesota. In an order dated February 24, 2016, the MPUC approved the Camp Ripley solar project as eligible to meet the solar energy standard and for current cost recovery, subject to certain compliance requirements. In September 2015, Minnesota Power filed for MPUC approval of a 1 MW community solar garden project in Saint Louis County, Minnesota, to be owned and operated by a third party with the output purchased by Minnesota Power. If the community solar garden project is also approved, Minnesota Power believes these projects will meet approximately one-third of the overall mandate and approximately one-fourth of the mandate related to solar photovoltaic devices with a nameplate capacity of 20 kilowatts or less. Costs associated with these projects are expected to be recovered from customers.

Regulatory Assets and Liabilities. Our regulated utility operations are subject to accounting guidance for the effect of certain types of regulation. Regulatory assets represent incurred costs that have been deferred as they are probable for recovery in customer rates. Regulatory liabilities represent obligations to make refunds to customers and amounts collected in rates for which the related costs have not yet been incurred. The Company assesses quarterly whether regulatory assets and liabilities meet the criteria for probability of future recovery or deferral. No regulatory assets or liabilities are currently earning a return. The recovery, refund or credit to rates for these regulatory assets and liabilities will occur over the periods either specified by the applicable regulatory authority or over the corresponding period related to the asset or liability.

NOTE 6. REGULATORY MATTERS (Continued)



Regulatory Assets and Liabilities	March 31, 2016		December 31, 2015
Millions
Current Regulatory Assets (a)
Deferred Fuel Adjustment Clause		$12.4		$10.6
Total Current Regulatory Assets	12.4		10.6
Non-Current Regulatory Assets
Defined Benefit Pension and Other Postretirement Benefit Plans (b)	217.0		219.3
Income Taxes (c)	64.4		64.2
Cost Recovery Riders (d)	54.3		58.0
Asset Retirement Obligations (e)	22.5		21.6
PPACA Income Tax Deferral	5.0		5.0
Other	3.9		3.9
Total Non-Current Regulatory Assets	367.1		372.0
Total Regulatory Assets		$379.5		$382.6

Non-Current Regulatory Liabilities
Wholesale and Retail Contra AFUDC (f)		$57.1		$58.0
Plant Removal Obligations	20.6		22.1
Income Taxes (c)	5.7		6.1
Defined Benefit Pension and Other Postretirement Benefit Plans (b)	0.4		0.9
Other	18.4		17.9
Total Non-Current Regulatory Liabilities		$102.2		$105.0


(a)	Current regulatory assets are included in Prepayments and Other on the Consolidated Balance Sheet.

(b)

Defined benefit pension and other postretirement items included in our Regulated Operations, which are otherwise required to be recognized in accumulated other comprehensive income as actuarial gains and losses as well as prior service costs and credits, are recognized as regulatory assets or regulatory liabilities on the Consolidated Balance Sheet. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. (See Note 12. Pension and Other Postretirement Benefit Plans.)


(c)	These assets and liabilities are offsets to deferred income taxes recognized on certain regulatory temporary differences, which will reverse over the remaining lives of those temporary differences.

(d)

The cost recovery rider regulatory assets are revenues not yet collected from our customers primarily due to capital expenditures related to the Bison Wind Energy Center, investment in CapX2020 projects, and the Boswell Unit 4 environmental upgrade and are recognized in accordance with the accounting standards for alternative revenue programs. The cost recovery rider regulatory assets as of March 31, 2016, will be recovered over the next two years.


(e)	Asset retirement obligations will accrete and be amortized over the lives of the related property with asset retirement obligations.


(f)	Wholesale and Retail Contra AFUDC represents the regulatory offset to AFUDC Equity and Debt recorded during the construction period of our cost recovery rider projects prior to placing the projects in service. The regulatory liability will decrease over the remaining depreciable life of the related asset.

Investment in ATC

3 Months Ended

Mar. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Investment in ATC [Text Block]

INVESTMENT IN ATC

Our wholly-owned subsidiary, ALLETE Transmission Holdings, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. We account for our investment in ATC under the equity method of accounting. As of March 31, 2016, our equity investment in ATC was $128.6 million ($124.5 million at December 31, 2015). In the first three months of 2016, we invested $1.2 million in ATC, and on April 29, 2016, we invested an additional $0.4 million. We expect to make additional investments of approximately $4.6 million in 2016.



ALLETE’s Investment in ATC
Millions
Equity Investment Balance as of December 31, 2015		$124.5
Cash Investments	1.2
Equity in ATC Earnings	4.8
Distributed ATC Earnings	(1.9		)
Equity Investment Balance as of March 31, 2016		$128.6

Short-Term and Long-Term Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Short-Term and Long-Term Debt [Text Block]

SHORT-TERM AND LONG-TERM DEBT



March 31, 2016	Principal		Unamortized Debt Issuance Costs	Total
Millions
Short-Term Debt (a)		$16.1	$(0.6)		$15.5
Long-Term Debt	1,563.0		(11.7)	1,551.3
Total Debt		$1,579.1	$(12.3)		$1,566.8


(a)	Consisted of long-term debt due within one year and notes payable.



December 31, 2015	Principal		Unamortized Debt Issuance Costs	Total
Millions
Short-Term Debt (a)		$37.9	$(0.6)		$37.3
Long-Term Debt	1,568.7		(12.0)	1,556.7
Total Debt		$1,606.6	$(12.6)		$1,594.0


(a)	Consisted of long-term debt due within one year and notes payable.

No long-term debt was issued in the first three months of 2016.

Financial Covenants. Our long-term debt arrangements contain customary covenants. In addition, our lines of credit and letters of credit supporting certain long-term debt arrangements contain financial covenants. Our compliance with financial covenants is not dependent on debt ratings. The most restrictive financial covenant requires ALLETE to maintain a ratio of indebtedness to total capitalization (as the amounts are calculated in accordance with the respective long-term debt arrangements) of less than or equal to 0.65 to 1.00, measured quarterly. As of March 31, 2016, our ratio was approximately 0.46 to 1.00. Failure to meet this covenant would give rise to an event of default if not cured after notice from the lender, in which event ALLETE may need to pursue alternative sources of funding. Some of ALLETE’s debt arrangements contain “cross-default” provisions that would result in an event of default if there is a failure under other financing arrangements to meet payment terms or to observe other covenants that would result in an acceleration of payments due. As of March 31, 2016, ALLETE was in compliance with its financial covenants.

Income Tax Expense

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Tax Expense [Text Block]

INCOME TAX EXPENSE



	Three Months Ended
	March 31,
	2016			2015
Millions
Current Tax Expense (a)
Federal	—			—
State		$0.1		$0.1
Total Current Tax Expense		$0.1		$0.1
Deferred Tax Expense (Benefit)
Federal	$4.6				$4.8
State	4.8			1.5
Investment Tax Credit Amortization	(0.2		)	(0.2		)
Total Deferred Tax Expense	$9.2				$6.1
Total Income Tax Expense	$9.3				$6.2


(a)	For the three months ended March 31, 2016 and 2015, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of the Protecting Americans from Tax Hikes Act of 2015, the Tax Increase Prevention Act of 2014 and the American Taxpayer Relief Act of 2012.

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter.

NOTE 9. INCOME TAX EXPENSE (Continued)



Reconciliation of Taxes from Federal Statutory
Rate to Total Income Tax Expense
Three Months Ended March 31	2016			2015
Millions
Income Before Non-Controlling Interest and Income Taxes		$55.7			$46.3
Statutory Federal Income Tax Rate	35		%	35		%
Income Taxes Computed at 35 percent Statutory Federal Rate	19.5			16.2
Increase (Decrease) in Tax Due to:
State Income Taxes – Net of Federal Income Tax Benefit	3.2			1.0
Production Tax Credits	(13.9		)	(12.8		)
Regulatory Differences for Utility Plant	(0.1		)	(0.4		)
Other	0.6			2.2
Total Income Tax Expense		$9.3			$6.2

For the three months ended March 31, 2016, the effective tax rate was 16.7 percent (13.4 percent for the three months ended March 31, 2015).

Uncertain Tax Positions. As of March 31, 2016, we had gross unrecognized tax benefits of $2.3 million ($2.4 million as of December 31, 2015). Of the total gross unrecognized tax benefits, $0.6 million represents the amount of unrecognized tax benefits included in the Consolidated Balance Sheet that, if recognized, would favorably impact the effective income tax rate. The unrecognized tax benefit amounts have been presented as reductions to the tax benefits associated with NOL and tax credit carryforwards on the Consolidated Balance Sheet.

ALLETE and its subsidiaries file a consolidated federal income tax return as well as combined and separate state income tax returns in various jurisdictions. ALLETE is no longer subject to federal or state examination for years before 2012.

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)	3 Months Ended
	Mar. 31, 2016
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) [Abstract]
Reclassifications Out of Accumulated Other Comprhensive Income (Loss) [Text Block]	RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in Accumulated Other Comprehensive Loss. Comprehensive income (loss) is the change in shareholders’ equity during a period from transactions and events from non-owner sources, including net income. The amounts recorded to accumulated other comprehensive loss include unrealized gains and losses on available-for-sale securities, defined benefit pension and other postretirement items, consisting of deferred actuarial gains or losses and prior service costs or credits, and gains and losses on derivatives accounted for as cash flow hedges. For the three months ended March 31, 2016 and 2015, reclassifications out of accumulated other comprehensive income for the Company were not material. See Note 12. Pension and Other Postretirement Benefit Plans regarding the reclassification of a portion of accumulated other comprehensive loss related to the Company’s benefit plans during the year. Changes in accumulated other comprehensive loss for the three months ended March 31, 2016, are presented on the Consolidated Statement of Shareholders’ Equity.

- Definition

The entire disclosure for any adjustments made during the period to avoid double counting in comprehensive income items displayed as part of net income that also had been displayed as part of other comprehensive income in that period or earlier periods. These adjustments include reclassifications to net income of items in accumulated comprehensive income, such as deferred gains or losses on qualifying hedges when hedged item reported in net income, holding gains or losses on available-for-sale securities transferred into trading category, unrealized holding gains or losses on debt securities transferred from held-to-maturity category into available-for-sale category and accumulated translation adjustment attributable to foreign subsidiary or investment in foreign entity upon sale or liquidation.

+ References + Details

Earnings Per Share and Common Stock

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share and Common Stock [Text Block]

EARNINGS PER SHARE AND COMMON STOCK

We compute basic earnings per share using the weighted average number of shares of common stock outstanding during each period. The difference between basic and diluted earnings per share, if any, arises from outstanding stock options, non-vested restricted stock units, performance share awards granted under our Executive Long-Term Incentive Compensation Plan and common shares under the forward sale agreement. For the three months ended March 31, 2016 and 2015, no options to purchase shares of common stock were excluded from the computation of diluted earnings per share.

NOTE 11. EARNINGS PER SHARE AND COMMON STOCK (Continued)



			2016					2015
Reconciliation of Basic and Diluted			Dilutive					Dilutive
Earnings Per Share	Basic		Securities	Diluted		Basic		Securities	Diluted
Millions Except Per Share Amounts
Three months ended March 31,
Net Income Attributable to ALLETE		$45.9			$45.9		$39.9			$39.9
Average Common Shares	49.2		—	49.2		46.9		0.2	47.1
Earnings Per Share		$0.93			$0.93		$0.85			$0.85