ALLETE Clean Energy to Sell Phase II of Thunder Spirit Wind Farm to Montana-Dakota Utilities

Sale will deliver low-cost renewable energy to MDU customers

DULUTH, Minn.–(BUSINESS WIRE)–ALLETE Clean Energy, a wholly-owned subsidiary of ALLETE Inc. (NYSE:
ALE), today announced its plan to sell the 48-megawatt phase two of the
Thunder Spirit wind farm near Hettinger, North Dakota to Montana-Dakota
Utilities (MDU).

The approximately $85 million sale is expected to close when ALLETE
Clean Energy’s development of the site, scheduled to begin in May 2018,
is complete later this year.

The North Dakota Public Service Commission approved MDU’s request for an
advance determination of prudence in November, noting that electricity
produced at the site is expected to be more economical than energy
purchased on the market.

In 2014, ALLETE Clean Energy acquired the rights to build the
107-megawatt first phase of Thunder Spirit, which includes 43 turbines
and generates enough electricity to power about 30,000 homes. After the
project was completed in 2015, ALLETE Clean Energy sold the wind
facility to MDU for $200 million, and Montana-Dakota operates the wind
farm for its customers.

ALLETE Clean Energy has qualified the project, which brings the Thunder
Spirit site to its 155-megawatt permitted capacity, for federal
renewable energy production tax credits.

The Thunder Spirit phase II development will be part of a busy year for
ALLETE Clean Energy as the company executes its growth strategy. The
company also plans to build the 106-megawatt Clean Energy One wind
project in North Dakota to fulfill a power sales agreement with Xcel
Energy. At its Minnesota and Iowa wind sites, ALLETE Clean Energy is in
the midst of refurbishing up to 385 wind turbines. The refurbishment
project will generate federal production tax credits at the three wind
energy facilities and support the renewal of power sales agreements at
the Storm Lake sites in Iowa.

In addition to its development and refurbishment projects, ALLETE Clean
Energy owns and operates approximately 535 megawatts of wind energy
generation at facilities in Minnesota, Iowa, Oregon and Pennsylvania.

“This sale agreement demonstrates ALLETE Clean Energy's renewable energy
development expertise. It also advances the company’s multipronged
growth strategy to expand its clean energy project portfolio by pursuing
acquisitions, new projects with long-term power sales agreements,
build-transfers and new investments in existing facilities,” said Allan
S. Rudeck Jr., president of ALLETE Clean Energy. “We’re proud to work
with MDU to deliver low-cost, carbon free, North Dakota-sourced energy
to serve its customers.”

“We are in need of additional energy to meet our growing demands, and
with the easements, interconnection to the grid and permits already in
place from the first phase of Thunder Spirit wind, it makes this a great
project for Montana-Dakota,” said Montana-Dakota president and CEO
Nicole Kivisto. “Our relationship with ALLETE Clean Energy on the first
phase of Thunder Spirit proved to be a winning formula, so that allowed
us to move forward with great confidence.”

ALLETE Clean Energy was established in 2011 to acquire and develop
capital projects to create energy solutions by way of wind, solar,
biomass, hydro, natural gas, shale resources, clean coal technology and
other emerging technologies.

ALLETE Inc. is an energy company headquartered in Duluth, Minnesota. In
addition to its electric utilities, Minnesota Power and Superior Water,
Light and Power of Wisconsin, ALLETE owns ALLETE Clean Energy, based in
Duluth; BNI Energy in Bismarck, North Dakota; U.S. Water Services in St.
Michael, Minnesota; and has an 8 percent equity interest in the American
Transmission Co. More information about ALLETE is available at www.allete.com.
ALE-CORP

The statements contained in this release and statements that ALLETE
may make orally in connection with this release that are not historical
facts, are forward-looking statements. These forward-looking statements
involve risks and uncertainties and investors are directed to the risks
discussed in documents filed by ALLETE with the Securities and Exchange
Commission.

Contacts

ALLETE Clean Energy
Amy Rutledge, 218-723-7400
Manager,
ALLETE Corporate Communications
[email protected]
or
Investor
Contact:
Vince Meyer, 218-723-3952
Director, ALLETE Investor
Relations & Treasury
[email protected]