#1Investor Presentation November 2020 ALLETE#2Forward looking statement Any statements contained in this presentation and statements that ALLETE, Inc. representatives may make orally in connection with this presentation that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties and investors are directed to the risks discussed in documents filed by ALLETE, Inc. with the Securities and Exchange Commission. ALLETE's presentation and other communications may include certain non-Generally Accepted Accounting Principles (GAAP) financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the company's financial statements. Non-GAAP financial measures utilized by the Company may include presentations of earnings (loss) per share and earnings before interest, taxes, depreciation and amortization. ALLETE's management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of changes in the fundamental earnings power of the Company's operations. Management believes that the presentation of the non-GAAP financial measures is appropriate and enables investors and analysts to more accurately compare the company's ongoing financial performance over the periods presented. This presentation was prepared as of November 9, 2020, and ALLETE, Inc. assumes no obligation to update the information or the forward-looking statements contained herein. The 2020 outlook contained herein was provided, and is as of, November 9, 2020. For more information, contact: Vince Meyer Director, Investor Relations and Treasury (218) 723-3952 [email protected] Visit our website at www.allete.com 2 ALLETE#3ALLETE is closely monitoring, proactively planning, and rapidly responding to the COVID-19 pandemic Principles and priorities guiding our COVID-19 strategy, response and actions Protecting the safety and health of our employees, families, customers, and communities •Took action early-on •Suspended travel and group meetings •Working remotely whenever possible •Ensuring PPE supplies for our employees •Will continue to take action promptly as the situation evolves Continuing to provide safe and reliable essential energy services • Customers and communities rely on the services our businesses provide - now more than ever • Closely engaged with industry peers to ensure best practices • Aligned with local, state, and federal requirements in all of the states where we operate, with a focus on safety Ensuring ALLETE's continued financial health and ability to execute our strategy over the longer term • Clearly and regularly communicating with stakeholders the importance of the financial health of our company Doing all we can to ensure that ALLETE remains financially healthy while our customers are facing challenges Frequently communicating with employees, customers and all stakeholders • Close and regular engagement with employees, customers, regulators, and legislators regarding our efforts • Engagement with stakeholders on creative solutions to address challenges Reprioritizing all that we do to ensure we accomplish all of the above • Reprioritizing work and efforts to ensure that everyone stays safe and keeps focused on these objectives - and serving our customers with excellence 3 ALLETE#4Environmental, Social and Governance: Sustainability is an ALLETE value At ALLETE, we recognize that impacts from human activity, including climate change, are real, complex, and interrelated. We are committed to answer the call to transform the nation's energy landscape through innovative and sustainable solutions. The challenges of climate change are real, complex, interrelated, and urgent •ALLETE Strategy: Innovative energy solutions to grow our company while creating a sustainable tomorrow • Minnesota Power/SWL&P: Energy Forward = 50% Renewables and over 50% CO² reduction by 2021 ⚫ALLETE Clean Energy: ALLETE = 2nd largest investor in renewables as a percentage of market cap Bridging the opportunity gap to help people and communities thrive • $1 million in annual giving • Yellow Ribbon Company – recognized for strong support of military-connected employees & families Values-based culture and best-practice governance • Demonstrated commitment to diversity and best practice by Board of Directors and leadership Strategy provides enduring value for all of our stakeholders ALLETE#5Find ESG information at ALLETE.com ALLETE Profile Sustainability (ESG) at ALLETE EEI ESG Sustainability Report Environmental Stewardship at Minnesota Power • https://www.allete.com/Content/Documents/Profile/2019-ale-profile.pdf https://www.allete.com/Sustainability https://www.allete.com/Sustainability/Sustainability Report •https://www.mnpower.com/Environment Serving Our Community https://www.mnpower.com/Community ALLETE 5#6ALLETE is an energy company providing sustainable solutions for future growth Societal expectations, regulation and environmental changing policy are requiring sustainable energy solutions • • Demands for cleaner and more sustainable energy forms are accelerating; over 29 states already have Renewable Portfolio Standards (RPS) Expect over 44 GWs of near term wind power development 29+ States >44 GWS • Many business sectors are increasing focus on being environmentally responsible; the utilities and C&I sector with strong customer demand for renewables Customer Demand • Electrification as an economy-wide approach to addressing climate change Electrification Significant, growing need for investments in hardening and expanding transmission and distribution systems T&D At ALLETE, we recognize that impacts from human activity, including climate change, are real, complex, and interrelated. We are committed to answer the call to transform the nation's energy landscape. 6 ALLETE www.allete.com/Sustainability#7ALLETE business mix - uniquely positioned to leverage clean energy trends minnesota power SWL&P AC AMERICAN TRANSMISSION COMPANY® • Generates, transmits and distributes electricity in northern Minnesota; rich in natural resources • Increased renewable standards are expediting the transition away from coal, creating renewable infrastructure opportunities • • • Additional wind generation/solar/storage and supporting transmission & distribution Provider of electric, natural gas and water service in northwestern Wisconsin Smart metering advancing along with increased renewable service offerings • Natural gas expansion opportunities • Anticipates community solar garden in service late 2020 8% ownership: ATC owns and operates the electric transmission system in portions of Wisconsin, Michigan, Minnesota & Illinois Growing equity investment with planned ten-year build-out ALLETE • Specializes in developing, acquiring, constructing, managing and optimizing clean and renewable energy projects for growth across North America Robust pipeline of PTC projects and acquisition targets under review clean energy. Material growth expected - will have in excess of 1300 MWs with completion of Caddo project SMART. POWERFUL. AHEAD. • • Operates a lignite mine near Center, North Dakota, producing about 4M tons annually, under a long-term cost-plus fixed-fee arrangement to 2037 ✔BNI • Working with partners on potential carbon solutions energy • Leveraging BNI established relationships for clean energy advancement 7 ALLETE#8Clean energy trends are driving ALLETE's 5-7% growth objective ALLETE is well positioned for success and sustainability Strategic geographic positioning; renewables, transmission and distribution • Proven track record of large scale clean energy projects • Investment in PTC qualified turbines for new wind projects • Recent Treasury guidance extends project construction safe harbor- 100% PTC to the end of 2021 and 80% PTC to the end of 2022 • Substantial liquidity to deploy with minimal equity issuance needed Regulated growth 4-5% 8 Energy Infrastructure minimum growth of at least 15% ALLETE#9ALLETE updated 5-year projection as of October 2020 While ALLETE's long-term growth objectives remain unchanged, our October 2020 5-year projection indicates achieving these objectives are expected to be challenging ALLETE's October long-term consolidated average annual earnings per share growth rate, using 2019 as a base year, is ~4% Regulated Operations growth projection of approximately 3 percent • ALLETE Clean Energy and Corporate and Other businesses growth projection of approximately 30 percent COVID-19 pandemic and related disruptions Minnesota Power customer idle and other customers at reduced demand levels Wind energy competition and forward curve prices pressuring ALLETE Clean Energy returns ALLETE stock price impacting project EPS accretion We believe the renewable energy industry is entering a new phase of growth and we are confident that ALLETE's family of businesses will serve as a strong platform for future growth 9 ALLETE#10Major progress evolving our generation mix, providing growth while ensuring reliability and affordability EnergyForward 0000 Wind - 875 MW • Bison 1-4, 500 MW • Nobles 2, 250 MW • Taconite Ridge, 25 MW • Oliver, 100 MW (PPA) Moved faster and further in renewables than other Midwestern utilities ~50% renewable by 2021 7 of 9 coal facilities retired / idled Hydro-370 MW • Minnesota Power, 120 MW • Manitoba Hydro, Solar 20 MW - • Camp Ripley, 10 MW •Other potential Coal - 800 MW • Boswell Units 3-4, 800 MW • Environmentally compliant 250 MW (PPA) Significantly ahead of Minnesota's 25% by 2025 requirement #1 renewable energy provider to customers in the state of Minnesota; #2 in Midwest Potential for higher and accelerated renewables, Governor of Minnesota favors proposals that could lead to 100% clean energy by 2050 Minnesota Power Integrated Resource Plan currently due February 1, 2021 Will address resource needs for next 15 years 10 ALLETE#11EnergyForward projects fuel significant earnings growth and optionality Generation Transmission / Distribution 44 minnesota power EnergyForward #000000 Nobles 2 • 250 MW wind energy facility ALLETE partnership agreement with Tenaska to purchase 49% equity interest, pursuant to a 20-year PPA with Minnesota Power ⚫ALLETE's portion of project ~$170M of which $60 - $70M will be an equity investment •MPUC approved the project Dec. 20, 2018 • Anticipate completion in late 2020, full year earnings impact in 2021 Nemadji Trail Energy Center • 525 MW to 550 MW combined- cycle natural gas-fired generating facility • • Jointly owned with Dairyland Power Cooperative ~$350M investment by subsidiary of ALLETE MPUC approved project Oct. 29, 2018; MN Court of Appeals remanded back to MPUC Dec. 2019; March 2020, MP filed petition with MN Supreme Court - heard case October 2020 • WI PSC approved Jan. 2020, subject to obtaining other • necessary permits • Anticipate completion in 2025 Great Northern Transmission Line Line energized connecting Manitoba-Minnesota Transmission Project to Great Northern Transmission Line June 1, 2020 • 220-mile 500-kV transmission line between Manitoba and Minnesota • 250 MW long-term PPA with Manitoba Hydro • $307M Minnesota Power investment • • DC Line Up to 350 MW upgrade Increasing renewable capacity and optionality potential • Strategically positioned to transport additional renewable energy • Up to ~$425M investment Could provide link to new market opportunities Renewable Superhighways Ongoing investments in smart meters, NERC operations and reliability standards, and security and grid infrastructure • Distribution System Resiliency Integrated Distribution Plan (IDP) approved by MPUC February 2020 More than $150M increase in asset upgrades and grid resiliency through 2029 • Additional details regarding Distributed Energy Resources (DER) spending to be filed February 2021 with Integrated Resource Plan 11 ALLETE#12Significant transmission & distribution investment opportunities - longer term Key investment drivers Grid reliability and resiliency Cyber and physical security Renewable adoption Strategic interconnections Platforms for additional investment growth Confirmed projects •GNTL - 200 mile line connecting to significant Canadian hydro generation completed January 2020 ⚫DC transmission line expansion - increasing capacity from current 550 MW to 750 MW, potentially up to 900 MW •Distribution grid hardening - 2019 Integrated Distribution Plan (IDP) approved by MPUC Feb. 27, 2020 •Additional ATC build-out - $2.9 - $3.5B 10-year forecast •Minnesota Power plans to file updated Integrated Resource Plan (IRP) Developing opportunities • NERC / RTO requirements related to carbon/baseload transformations •CapX 2050 Transmission Vision Report issued March 5, 2020 ⚫ALLETE Clean Energy interconnections / delivery systems - strategic acquisitions •Innovative customer services •Distributed Energy Resources - expansion of regulated solar and launching storage platform pilots 12 ALLETE#13ALLETE is committed to an attractive value proposition Annual total shareholder return* Consolidated average annual earnings growth Consolidated payout ratio Long-term dividend growth Financial Targets 9 - 10% 5 - 7% 60 - 65% align with earnings Sustainable energy solutions * Defined as earnings growth plus dividend yield Multi-faceted earnings growth potential Regulated, contracted or recurring energy revenues Solid balance sheet and credit ratings with growing cash flow from operations Attractive and growing dividend 13 ALLETE#14Multi-year growth expected from ALLETE Clean Energy ALLETE clean energy. SMART. POWERFUL. AHEAD. 1,050 MW 750 MW 550 MW 2018 1,300 MW w/Caddo 2024 ⚫Glen Ullin contributing full year in 2020 •South Peak contributing three quarters year in 2020 •Refurbishment project contributing full potential in 2021 •Diamond Spring contributing full year earnings in 2021 •Caddo built by end of 2021 •Deployment of remaining 100%, 80% and 60% PTC turbines •Additional renewable platform opportunities creates more upside (solar, storage solutions, fleet optimization, renewable services) 14 ALLETE#15Base 5-year CapX plan of ~$2.2B predominantly in support of clean energy initiatives Estimated amounts in millions Regulated Operations Great Northern Transmission Line DC Line Modernization & Upgrade Nemadji Trail Energy Center Base and Other Energy Infrastructure / Related Services ALLETE Spent through 2019 2020 2021 2022 2023 2024 Total Total 2020-2024 project Est. COD $295 $25 $25 $320 Rider Potential 5 45 60 80 190 305 rider/AFUDC 5 10 65 70 165 25 335 340 2025 N/A 135 135 110 120 130 630 630 ALLETE Clean Energy South Peak Diamond Spring Caddo Base and Other Utility-like Projects Nobles 2 Investment Corporate and Other (1) Total Known Projects 105 20 20 125 Early 2020 160 290 290 450 Late 2020 20 130 265 395 415 Late 2021 N/A 30 10 5 5 G 10 60 60 55 115 115 170 Late 2020 N/A $640 15 $770 15 $495 25 $255 30 15 100 100 $380 $260 $2,160 $2,915 (1) 2020-2024 reflects the capital expenditures per the 2019 Form 10-K, and also includes ALLETE's investment in the Nobles 2 project and the ALLETE Clean Energy Caddo and updated DC Line Modernization & Upgrade projects. Potential opportunities not included in the table above support 5-7% growth objective Additional renewable platform opportunities creates more upside • Maintain 8% ownership; • . Acquisition of existing renewables • ATC's 2020 10-year capital investment forecast calls for $2.9 $3.5B in system improvements and expansion Upside opportunities with DC transmission line optionality and available land rights • • . Build, own, transfer for fee Additional investment expected in distribution system hardening; >$150M through 2029 Adding to rate base to enhance services and customer experience Expanding natural gas footprint Building community solar garden and reviewing other clean energy opportunities • PTC projects ALLETE clean energy. ALLETE ALLETE SWL&P AMERICAN TRANSMISSION COMPANY 15 minnesota power#16Base CapX financing plan has limited new equity issuance needs Strong cash flow from Line of credit $400M operations Access to tax equity partners Limited equity needs $ millions $2,500 Financing sources 2020 - 2024 $2,000 $1,500 $240 $150 $1,050 $1,000 $500 $2,160 $720 $0 Cash from operations less Equity* Debt Tax Equity Base Capital Plan** dividends * Assumes DRIP new share issuances ~$20M annually **Supports capital expenditure table on previous page 16 Additional Financing Activities + Cash from new operations + Tax equity + Potential PIE (existing at-market program) ALLETE#17ALLETE liquidity and financing Per September 30, 2020 Form 10-Q ($ millions) $79 $400/$378 available credit facility with $150 accordion Cash on hand Revolving credit Recent Financing Activity First mortgage bonds Tax equity commitments - Nobles Tax equity proposals received - Diamond Spring DRIP expected PIE capacity 17 $140 ~$120 ~$230 $20-25 ~$150 Available liquidity ~$600 ALLETE#18ALLETE 2020 guidance reaffirmed On August 5, 2020, we reinstated our 2020 earnings guidance to reflect demand nominations received August 1, 2020 for Minnesota Power's taconite mining customers and other considerations GUIDANCE RANGE (Non-GAAP)* Regulated Operations ALLETE Clean Energy / Corporate & Other • • Minnesota Power Large Power customers: CONSIDERATIONS $3.25 - $3.45 (Excludes $0.16 rate case settlement impact, net of tax) $2.65 - $2.75 $0.60 - $0.70 Demand nominations received August 1 in effect through December 31, 2020 Cliffs' Northshore Mining, U.S. Steel Minntac, and Hibbing Taconite - full nominations U.S. Steel's Keetac and Verso Paper remain idled; Keetac announced that they will restart in December Other Regulated customers: . • • Commercial, other industrial, municipals - anticipate sales to be down 5% for the remainder of 2020 Commercial & Municipal ~400 MW Residential 200 MW ALLETE Clean Energy / Corporate and Other - no significant change South Peak wind facility in service slightly later than expected Additional project development expenses * 'See ALLETE's press release dated November 9, 2020 for a reconciliation of 2020 annual GAAP earnings guidance range to 2020 annual adjusted earnings guidance range (Non-GAAP). 18 ALLETE#19REGULATED UTILITY BUSINESSES minnesota power SWL&P ATC AMERICAN TRANSMISSION COMPANY® SWLP 1994 ALLETE#20Substantial regulated business optionality - location matters! Seek renewable opportunities to expand scale, and diversify EnergyForward #000000 Clean energy transformation - DC line - a strategic asset with optionality Grid reliability investments • Gas infrastructure investments • Market expansion • Bi-directional opportunity • Additional renewables Manitoba North Dakota m Minnesota GREAT NORTHERN TRANSMISSION LINE 車 Lake Superior SWLP minnesota power Wisconsin minnesota power Natural Resource Rich Minnesota Largest producer of iron ore in the United States • 17 million acres of forestland • One of the largest undeveloped copper, nickel and precious metal deposits in the world 5th largest producer of mineral value in the United States Clean energy economy is dependent on steel and precious metals 20 ALLETE#21m minnesota power Minnesota Power regulatory highlights General rate case filing anticipated November 2021 Minnesota Power's 2019 rate case was settled with the Minnesota Public Utilities Commission in second quarter 2020 • Reduced the interim rate percentage from 5.8% to 4.1%, effective May 1 • Removed current power marketing margin credit in base rates • Reflects actual power marketing margins in the fuel adjustment clause, effective May 1 • Refunded approximately $12M of interim rates collected through April, to customers . Delayed any future rate proposal until at least March 1, 2021 Very Constructive outcome: • Resulted in reasonable rate case outcome, during COVID-19 pandemic environment • Outcome addressed risk mitigation efforts to move power market margins set in rates to FAC • Demonstrates supportive regulatory compact in Minnesota Constructive regulatory framework Deferred Accounting / Lost Revenue Tracker Petition filed November 2020 Minnesota Public Utilities Commission (MPUC) Term Ends Name Party Began Serving Katie Sieben (Chair) D Jan. 2017 Jan. 2023 Joe Sullivan D Apr. 6, 2020 Jan. 2026 Valerie Means D Apr. 22, 2019 Jan. 6, 2025 Matt Schuerger | Feb. 1, 2016 Jan. 3, 2022 •MPUC approved deferral accounting for incremental related COVID-19 costs and lost John Tuma R Feb. 2, 2015 Jan. 4, 2021 revenues •Forward test year • Interim rates • Current cost recovery riders • Fuel adjustment clause • Conservation Improvement Program (CIP) Rate base: $2.7B Authorized ROE: 9.25% Equity Ratio: 53.81% 21 ALLETE#22SW&P is our regulated electric, natural gas and water distribution company in Wisconsin Overview Wisconsin Public Service Commission regulated • Constructive regulatory environment Significant rate base investment growth . • 12/31/2019 YE rate base $84M ~$14M in 2020, ~$50M estimated spend 2020 through 2024 2020 rate filing impacted by COVID-19 • 2021 filing more likely, filing required by December 2022 Current rates based on 55% equity and 10.4% allowed ROE Natural gas footprint expansion potential Community solar investment proposed Superior Water, Light & Power will offer a new renewable energy option for customers through a community solar garden that is expected to be generating power by 2021 SUPERIOR WATER, LIGHT & POWER CUSTOMERS 15,000 electric, 13,000 natural gas, 10,000 water 22 ALLETE#23ALLETE Clean Energy growth vision A premier, growing, world-class clean energy company Known for its high integrity, innovative and tailored customer solutions and ability to develop, operate, build and deliver multifaceted clean energy projects and clean energy solutions across North America Grow portfolio • Invest in clean energy projects supporting a transforming North American electric sector New customers, more diversity • New utility, food and beverage, retail customers • Additional growth driven by sustainability-minded customers Expanding into new markets/RTOs/wind and solar regimes Expanding products and services Strategic developer, constructor and operator of wind assets selling capacity, energy, renewable energy attributes • Increasingly providing asset management and other value-added renewable industry services 23 ALLETE clean energy. SMART POWERFUL. AHEAD. ALLETE#24Proven growth platform - size, creativity, ALLETE clean energy. SMART. POWERFUL. AHEAD. and partnering are key strategic differentiators Add-on initiatives drive material growth Premier locations Diverse RTO Markets Strong counterparty credit Disciplined return objectives PTC turbines / tax optimization 24 14 High quality asset portfolio Long duration PPAs Positioned for new and emerging renewable opportunities ALLETE#25ALLETE Clean Energy is strategically positioned clean energy as demands for clean energy accelerate Condon 50 MW South Peak Glen Ullin 106 MW 80 MW Thunder Thunder Spirit | 107 MW Spirit || 48 MW Chan/Viking 98 MW Lake Benton 104 MW Cisco/Lincoln Heights 17 MW Storm Lake | 108 MW Storm Lake II 78 MW SMART. POWERFUL. AHEAD GROWTH OPPORTUNITIES Near-term • Diamond Spring 303 MW project • Caddo 303 MW project • Additional PTC qualified turbines Build-Own-Transfer Owned Owned-To be refurbished Under construction Caddo 303 MW Diamond Spring 303 MW Armenia Mountain 101 MW 25 25 • Long-term Operating facilities (post tax benefit) totaling over 23,000 MWs presents acquisition opportunities • Build, own, transfer projects •Expanding technologies - evaluating solar and energy storage plus renewable projects • Industry demands expanding products and services ALLETE#26BNI Energy is a well established business Recognized for best in class reclamation with PSC's Award for Excellence in Surface Coal Mining and Reclamation Overview • BNI Lignite mining operations and other energy service solutions Long established presence in energy rich and business friendly North Dakota energy . Advancing CO2 capture and storage solutions • Contracted revenues, cost-plus contracts through 2037 . • 2019 net income $7.4M BNI's location, reputation and track record in North Dakota provide an ideal platform to grow ALLETE in energy rich and policy friendly North Dakota 26 ALLETE#27ALLETE SWL&P minnesota power 60 ALLETE clean energy. SMART, POWERFUL AHEAD. BNI energy APPENDIX November 2020 27 ALLETE#28ALLETE anticipates long-term dividend growth In January of 2020, the ALLETE Board of Directors increased the annualized common stock dividend by ~5%, from $2.35 to $2.47 per share. ALLETE has paid common stock dividends consecutively since 1950. $2.47 $2.35 $2.24 Align with $2.14 $1.78 $1.84 $1.90 $1.96 $2.02 $2.08 earnings growth of 5-7% 74% 71% 71% 66% 67% 66% 66% 66% 65% 74%* 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* Payout Ratio Dividend Amount *based on midpoint of updated 2020 earnings guidance 28 Payout ratio 60-65% ALLETE#29ALLETE will maintain its financial discipline as it executes on its strategy Financial Discipline in Action ✓ ALLETE companies carry appropriate capital structures to support consolidated investment grade credit ratings ✓ Maintain a solid investment grade credit rating ✓ 60-65% dividend payout ratio ✓ Business segments must achieve their targeted rates of return and support the dividend Credit Ratings S&P Global Ratings Moody's BBB* Baa1 A-2 P-2 (a) A2 Issuer Credit Rating Commercial Paper First Mortgage Bonds (a) Not rated by S&P Global Ratings *On April 22, 2020, S&P downgraded the long-term ratings from ALLETE from BBB+ to BBB Debt to Capital Ratio 41% 2019 Regulated, contracted or recurring revenues are consistent with our risk profile and business investment thesis 29 38% Projected 2020 ALLETE#30Relative to size, ALLETE is one of the largest investors in renewables Solar and Wind Capacity as a Percent of Market Cap (MW / US$ Market Cap)1 ALLETE 45% ALLETE continues to evolve as a market leader, increasing its ranking to 2nd since prior report 10% 27% 24% AGR ALE 15% 15% 13% AQN AES NEE POR ED LNT NJR OTTR EMA XEL OGE Key Trends in the U.S. Renewables Sector and Overview of ALE Portfolio ALA PNM EXC 30 Source: Company public filings, SNL, Press Releases, Bloomberg market data as of 03-Feb-20 Note: Includes both regulated and unregulated wind and solar net generation capacity. 1 Calculated as solar and wind net owned operating capacity / market cap. Excludes development pipelines. BKH MGEE SJI DUK DTE EVRG MDU NWE CMS WEC AEP PNW PCG EIX PEG SRE FTS 1 UGI AEE FE ALLETE#31$2.47 $3.00 $2.50 Dividend growth through business cycles m minnesota power 60 60 50 40 40 30 Million Long Tons 20 20 10 10 Taconite Tons --Dividend $2.35 $2.24 $2.14 $2.08 $2.02 $1.96 $1.90 $1.84 $1. $1.76 $1.76 $1.72 $1.45 $1.26 $2.00 Dividend a $1.50 $1.00 $0.50 $0.00 1996 1997 1998 1999 2000 2001 002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Based on original guidance ALLETE 2017 2018 2019 2020 est. 0 1979 1980 1981 1982 1983 Actual taconite tons are from the MN Department of Revenue reports on taxable production. 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 31#32Domestic steel industry is highly dependent on Minnesota taconite Taconite mine ArcelorMittal, Inc. - Minorca Hibbing Taconite Co. Approximate Annual Capacity (million tons) 2.6 8.0 Cliffs - - United Taconite, LLC 5.2 - NorthShore Mining 5.7 41.6 mtpy capacity for Minnesota Taconite facilities USS Corp. - Keewatin - Minntac 5.2 - 14.7 Stelco November 13, 2019 press release: ...the installation of a new pig iron making facility to be constructed at our Lake Erie Works facility. We currently plan to complete the construction of the new facility to coincide with our blast furnace reline scheduled for Q2 of 2020, and to be in a position to commence pig iron shipments the following quarter. SUPERIOR CANADA Overseas Exports HURON amilton, N, CA ONTARIO Nant Municipals, 5% Other, 24% Total annual capacity Regulated Utility Revenue 12/31/19 41.4 Other, 46% Taconite, 30% Paper & Pulp, 7% Commercial, 13% Residential, 12% MICHIGAN ECOR, MI In dlana Harbor, IN BA Gary IN, IN City, IL Cleveland OH Braddock, PA m minnesota power Pipelines and other, 9% Cleveland-Cliffs December 3, 2019 press release On acquisition of AK Steel: .... Further, the potential startup of pig iron manufacturing at AK Steel's facility in Ashland, Kentucky would create future opportunities for pellet demand and more metallics products without significant additional capital expenditures. Duluth News Tribune August 6, 2019 news article: With a $100M upgrade, Cliff's Northshore Mining is set to process up to 3.5M tons of direct-reduced iron pellets per year, most of which will feed its soon-to-be completed HBI plant in Toledo, Ohio Traditional shipping destination points of Minnesota taconite. 32 ALLETE#33DC transmission system upgrades - enables significant potential growth "Through 2030, RPS states need approximately 160 terawatt hours of additional renewable energy generation to meet wind- eligible RPS requirements. This is equivalent to roughly 52.336 gigawatts of wind capacity." Source: American Wind Energy Association | State RPS Market Assessment 2019 DC transmission line Best wind sources DC lines AC lines http://redgreenandblue.org/2019/02/19/verge-wind-energy-gold-rush-midwest/ Maitoho North Deloto GREAT NORTHERN minnesota power Lake Superior SWLP Upgrades for reliability, flexibility and optionality Existing footprint with 465-mile DC transmission line creates future optionality for value and expansion We are upgrading existing 550 MW capacity by up to 350 MW which includes up to $425M planned CapX Additional interconnections to other power markets is possible, as is greater investment and access to new renewable enabling infrastructure The Company has reserved queue positions for DC line upgrades and holds ~36,000 acres of land under option to support additional renewables 33 ALLETE#34Record construction is resulting in material earnings growth in 2020-2022 ALLETE clean energy. SMART. POWERFUL. AHEAD. Glen Ullin Energy Center •20-year, 106 MW PSA with Xcel Energy •In service December 2019 •100% PTC qualified •Full year earnings impact in 2020 South Peak •15-year, 80 MW PSA with North Western Energy •In service Q1 2020 • Expands ALLETE Clean Energy portfolio across high quality northern wind corridor •100% PTC qualified ⚫3/4 year earnings impact in 2020 Refurbishments •Storm Lake I & II •Lake Benton •Condon •These projects on track for completion in 2020 •100% PTC qualified •~$17M in PTCs in 2020 •Full year impact in 2021 Diamond Spring •Acquired project from Apex Clean Energy May 3, 2019 •Total of 303 MW, 15-year PSAs with Walmart and Starbucks, and 12-year PSA with Smithfield •Expands customer & geographic presence •100% PTC qualified •Full year earnings impact in 2021 Caddo ⚫303 MWs using 80% PTC turbines •Expect long-term PSAs with Fortune 500 customers for entire output •Expect to be completed in 2021 With the completion of the South Peak, Glen Ullin, Diamond Spring and Caddo, ALLETE Clean Energy will own and operate over 1,300 MWs of wind generation capacity in seven states while adding new long-term PSAs to its generation portfolio Additional PTC opportunities and acquisitions of existing renewable projects are being pursued 34 ALLETE#35Facilities have diverse power markets and balanced contract expiration Power Markets (MW) Contracted Life¹ ALLETE clean energy. SMART. POWERFUL. AHEAD. 38% 45% 43% 42% 7% 10% 15% Midwest Independent Transmission System Operator (MISO) Pennsylvania New Jersey Maryland (PJM) Western Electricity Coordinating Council (WECC) Southwest Power Pool (SPP) 0-5 Yrs 5-10 Yrs 10+ Yrs Weighted average life of contract 11.5 years² Includes Diamond Spring and Caddo which will be constructed in 2020 and 2021, respectively. 2Based on project book value / investment size 35 ALLETE#36ALLETE Clean Energy's significant and growing portfolio of renewable assets ALLETE clean energy. SMART. POWERFUL. AHEAD. Technology MW Capacity Net Capacity Factor Region Customer S&P Armenia Mountain GE 100.5 ~30% PJM Pennsylvania Chanarambie/Viking Minnesota Condon Delmarva Power & Old Dominion Electric Co-op BBB+/ Stable & A/Stable Moody's Baa1/ Stable & A2/Stable In-Service Power Sale Agreement Term End 2009 2024 GE 97.5 30-35% MISO Northern States Power A-/Stable A3/Stable 2003 2023 Aa3/ Mitsubishi 50 20-25% BPA Bonneville Power AA-/Stable 2002 2022 Oregon Negative Lake Benton * Zond 104 25-30% MISO Northern States Power A-/Stable A3/Stable 1998 2028 Minnesota Storm Lake 1 * Iowa Zond 108 25-30% MISO MidAmerican Energy AA/Stable Aa2/Stable 1999 2027 Storm Lake 2 * Mid-2022-90% Zond 77 25-30% MISO Iowa Alliant Energy A-/Stable A3/Stable 1999 2032-10% Glen Ullin EC GE 106 ~45% MISO Northern States Power A-/Stable A3/Stable 2019 2039 North Dakota South Peak BBB/ Baa2/ GE 80 ~40% NWE Montana NorthWestern Corp Stable 2020 2035 Stable Walmart AA Aa2 2035-175 MW Diamond Spring GE 303 ~45% SPP Starbucks BBB+ Baal Build: 2020 2035-50 MW Oklahoma 2032-75 MW Smithfield BBB Baa2 2033-200 MW Caddo Wind Oklahoma TBD 303 ~45% SPP Fortune 500 Companies Investment Grade Investment Grade Build: 2021 2033-80 MW 2033-20 MW Build, own, transfer projects Thunder Spirit I Thunder Spirit II Nordex Nordex 107 48 MISO MISO Montana-Dakota Utilities Montana-Dakota Utilities A-/Stable A-/Stable N/A Sale: 2015 $198M sale N/A Sale: Oct. 2018 $81M sale As part of wind energy facility acquisitions, ALLETE Clean Energy assumed various PSAs that were above or below estimated market prices at the time of acquisition; the resulting differences between contract prices and estimated market prices are amortized to revenue over the remaining PSA term. Non-cash amortization is expected to be approximately $11.5 million annually in 2020 through 2023, $5.5 million annually in 2024 through 2027, and decreasing thereafter through 2032. * Sites with on-going PTC qualifying refurbishment projects. 36 ALLETE#37ALLETE ALLETE Clean Energy with investment in clean energy. PTC qualified turbines Ample capacity to deploy turbines for 500-600 MW of additional projects-build-own-transfer, build-operate, joint partnerships Safe harbor turbines provide differentiated ability to capture value with holdings of 100%, 80% and 60% PTC qualified turbines Demonstrated project and risk management capability to build safely and within budget and schedule MUNTGRACHT MORE spliethoff SMART. POWERFUL. AHEAD. Proxy for new 100% qualified PTC project earnings 100 MW project • Total project cost $150M • Would include tax equity partner's investment of two- thirds of project Generally, ALLETE Clean Energy's investment of one- third of the project would be all equity and generate ~$5M average annual earnings Proxy for 80% qualified PTC project earnings • Tax equity partner's investment 50-60% •Generate $4M average annual earnings 37 Initial Investment Date By: COD Deadline Wind PTC 2016 12/31/2021 100% 2017 12/31/2022 80% 2018 12/31/2022 60% 2020 12/31/2024 60% Recent Treasury guidance extends project construction safe harbor - 100% PTC out to the end of 2021, 80% PTC out to the end of 2022 ALLETE#38Addressing customer and industry needs. ALLETE clean energy. SMART. POWERFUL. AHEAD. Expanding new carbon-free energy sources Repowering assets to extend operating lives. Solving wind technician talent demands Driving O&M efficiency - service solutions ✓ Evaluating new technologies - solar, storage Exploring wind blade recycling/reuse Innovative partnerships to create value, manage risk ALLETE Clean Energy is partnering with institutes in Minnesota and North Dakota to explore options that will keep blades out of a landfill. https://www.kfyrtv.com/content/news/Researchers-are-developing-a-study-on-how-to-recycle-wind- turbines-in-North-Dakota-565299481.html 38 ALLETE#39ALLETE clean energy. SMART. POWERFUL. AHEAD. Tax equity arrangement - illustration $ millions ACE After-Tax Profile: 100% PTC, 100 MW Project Average Net Income Annual Net Income w/HLBV $9 $8 $7 $6 $5 $4 $3 $2 $1 Year 1 Year 2 Year 4 Year 5 • • Year 3 Gradual slope upward as tax equity investor progresses toward achieving its yield Allocations of pre-tax gain are larger to tax equity in earlier periods and decrease as yield is achieved Year 6 Year 7 Year 8 Year 9 Year 10 Tax Equity Structure Pre-flip Sponsor ACE Tax Equity Partner Tax 1% Cash 80% Post-flip Tax 95% Cash 95% Wind Project, LLC Pre-flip Tax 99% Cash 20% Post-flip Tax 5% Cash 5% Offtaker Pre-Flip Period - 9.5-10 Years Investor Pre-Flip Yield - 5.75-6.5% Partners tax, cash, & PTC allocation percentages will change over the course of the deal HLBV method of accounting for allocation of GAAP earnings Individual project structures and tax equity arrangement terms are unique, provided they comply with IRS regulations. Allocations of income and loss and cash distributions are dependent on deal terms and structure agreed upon with tax equity investor including liquidation provisions. As with any wind facility, revenue and PTCs are dependent on wind resources. Non-cash benefits (PTC and MACRS depreciation) allocated to the tax equity investor will be accretive to ACE over the yield term. The tax equity partner is in a preferred position until its yield is achieved and there may be cash sweep mechanisms in certain periods to achieve or maintain the tax equity partner's yield. 39 ALLETE#40ALLETE's investment in ATC continues to grow •Wisconsin-based transmission company • Owns and operates electric transmission system in portions of Wisconsin, Michigan, Minnesota and Illinois •8% ownership delivers steady earnings and cash flow • FERC regulated - FERC recently approved 10.52% ROE (includes 50 bps adder) •ATC's 2020 10-year capital investment forecast calls for $2.9-$3.5B in system improvements ATC Equity Investment Balance Equity Earnings (pre-tax) ($ in millions) $22.5 $135.6 $141.6 $146.8 $21.7 $19.6 $121.1 $124.5 $128.1 $16.3 $118.7 $17.5 $16.3 $16.7 2014 2015 2016 *2017 2018 2019 2020 Q3 * Impacted by the remeasurement of deferred income tax assets & liabilities resulting from tax reform ... ATC AMERICAN TRANSMISSION COMPANY® 2014 2015 2016 *2017 *2018 2019 2020 Q3 and is a meaningful contributor to earnings ALLETE 40#41ALLETE Earnings (millions) Quarter and nine months ended September 30, 2020 Regulated Operations ALLETE Clean Energy U.S. Water Services Corporate and Other Net Income Attributable to ALLETE Diluted Earnings Per Share of Common Stock Quarter Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 $42.4 $32.4 $111.0 $114.2 1.1 (1.2) 16.8 6.5 (1.1) (2.8) (0.7) 16.3 $40.7 $31.2 $127.1 $135.9 $0.78 $0.60 $2.45 $2.63 See slide 42 for earnings per share impacts related to: 1) 2020 third quarter included timing impacts related to fuel adjustment clause recoveries and income tax expense of $5.2 million. 2) 2020 year-to-date included a reserve for interim rates of $8.3 million after-tax. 3) 2019 year-to-date included the after-tax gain on sale of U.S. Water Services of $11.1 million after-tax. 41 ALLETE#42ALLETE Earnings Per Share Quarter and nine months ended September 30, 2020 Earnings Per Share - GAAP Nine Months Ended September 30, Quarter Ended September 30, 2020 2019 2020 2019 $0.78 $0.60 $2.45 $2.63 Impacts on Earnings Per Share Timing of Fuel Adjustment Clause and Income Tax Expense Regulated Operations: Income Tax Expense Fuel Adjustment Clause Corporate and Other - Income Tax Expense Rate Case Resolution Regulated Operations U.S. Water Services Gain and Results U.S. Water Services - Results of Operations Corporate and Other - Gain on Sale 0.11 0.04 (0.05) 42 22 (0.16) (0.02) 0.22 ALLETE#43ESG is an ALLETE priority Customers and the public •Customer/client satisfaction •Community relations •Fair disclosure and labeling •Fair marketing and advertising •Data security and customer privacy Environmental •Energy and fuel management •Waste and hazardous materials management ⚫Greenhouse gas emissions Online account access, energy assistance programs, home energy analysis, rebates & incentives United Way, community volunteerism, scholarship program, Foundation grants, Day of Caring Attention to fair disclosure to all stakeholders through website, presentations, SEC filings EEI reward for storm response Cyber security and compliance, cyber awareness training Closed 7 of 9 coal-fired units Significant investments in regulated renewable sources of generation Great Northern Transmission Line now energized and delivering Canadian hydro generation to U.S. ALLETE Clean Energy - clean, renewable energy solutions System reliability Businesses operate with focus on public and employee safety Competitive bidding process Mandatory training on proper handling and use of hazardous materials Products and services • The long-term impact •Product quality and safety •Supply chain management Material and services sourcing Corporate governance •Codes of conduct, ethics and anti-corruption •Leadership and board policies •Stakeholder engagement •Political influence and transparency Human resources •Employee health, safety and well-being •Labor relations •Compensation and benefits Fair labor practices Recruitment, development and retention Diversity and inclusion Ethics hotline Diverse board of directors Independent and transparent involvement Disclosure and Policy Committees in place Focus on employee safety Required and optional safety training, wellness center and loans Shared values Fair and transparent hiring practices Market based compensation and benefits 43 ALLETE