The following abbreviations or acronyms are used in the text. References in this report to “we,” “us” and “our” are to ALLETE, Inc. and its subsidiaries, collectively.

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

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause our actual results to differ materially from those indicated in forward-looking statements made by or on behalf of ALLETE in this Form 10-K, in presentations, on our website, in response to questions or otherwise. These statements are qualified in their entirety by reference to, and are accompanied by, the following important factors, in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements that could cause our actual results to differ materially from those indicated in the forward-looking statements:

Additional disclosures regarding factors that could cause our results andor performance to differ from results or performancethose anticipated by this report are discussed in Item 1A under the heading “Risk Factors” beginning on page 2628 of this Form 10-K. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which that statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of these factors, nor can itwe assess the impact of each of these factors on theour businesses of ALLETE or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Readers are urged to carefully review and consider the various disclosures made by us in this Form 10-K and in our other reports filed with the SEC that attempt to advise interested parties ofidentify the factorsrisks and uncertainties that may affect our business.

For a detailed discussion of results of operations and trends, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. For business segment information, see Note 1. Operations and Significant Accounting Policies and Note 2. Business Segments.

Large Power Customer contracts require Minnesota Power to have a certain amount of generating capacity available. In turn, each Large Power Customer is required to pay a minimum monthly demand charge that covers the fixed costs associated with having this capacity available to serve the customer, including a return on common equity. Most contracts allow customers to establish the level of megawatts subject to a demand charge on a four-month basis and require that a portion of their megawatt needs be committed on a take-or-pay basis for at least a portion of the term of the agreement. In addition to the demand charge, each Large Power Customer is billed an energy charge for each kilowatt-hour used that recovers the variable costs incurred in generating electricity. Three of the Large Power Customers have interruptible service which provides a discounted demand rate in exchange for the ability to interrupt the customers during system emergencies. Minnesota Power also provides incremental production service for customer demand levels above the contractual take-or-pay levels. There is no demand charge for this service and energy is priced at an increment above Minnesota Power’s cost. Incremental production service is interruptible.

All contracts with Large Power Customers continue past the contract termination date unless the required advance notice of cancellation has been given. The required advance notice of cancellation varies from one to four years. Such contracts minimize the impact on earnings that otherwise would result from significant reductions in kilowatt-hour sales to such customers. Large Power Customers are required to take all of their purchased electric service requirements from Minnesota Power for the duration of their contracts. The rates and corresponding revenue associated with capacity and energy provided under these contracts are subject to change through the same regulatory process governing all retail electric rates. (See Item 1. Business – Regulated Operations – Regulatory Matters – Electric Rates.)

Minnesota Power, as permitted by the MPUC, requires its taconite-producing Large Power Customers to pay weekly for electric usage based on monthly energy usage estimates. These customers receive estimated bills based on Minnesota Power’s predictionestimate of the customer’s energy usage, forecasted energy prices, and fuel clause adjustment estimates. Minnesota Power’s fivefour taconite-producing Large Power Customers have generally predictable energy usage on a week-to-week basis, which makesand any differences that occur are trued-up the variance between the estimated usage and actual usage small.following month.

Minnesota Power also has transportation agreements in place for the delivery of a significant portion of its coal requirements. These transportation agreements expirehave expiration dates through 2015. Currently, Minnesota Power is in various years between 2013discussions regarding the extension of our coal supply and transportation contracts beyond 2015. The delivered costs of fuel for Minnesota Power'sPower’s generation are recoverable from Minnesota Power'sPower’s utility customers through the fuel adjustment clause.

Minnesota Power has a separate long-term PPA with Manitoba Hydro to purchase surplus energy from May 2011 through April 2022. This energy-only transaction primarily consists of surplus hydro energy on Manitoba Hydro’s system that is delivered to Minnesota Power on a non-firm basis. The pricing is based on forward market prices. Under this agreement, Minnesota Power will purchase at least one million MWh of energy over the contract term. On March 31, 2011, the MPUC approved this PPA with Manitoba Hydro.

OnIn May 19, 2011, Minnesota Power and Manitoba Hydro signed aan additional long-term PPA. The PPA calls for Manitoba Hydro to sell 250 MW of capacity and energy to Minnesota Power for 15 years beginning in 2020 and requiresis subject to construction of additional transmission capacity between Manitoba and the U.S., along with construction of new hydroelectric generating capacity in Manitoba (See Item 1. Business – Regulated Operations – Transmission and Distribution.) The capacity price is adjusted annually until 2020 by a change in a governmental inflationary index. The energy price is based on a formula that includes an annual fixed price component adjusted for a change in a governmental inflationary index and a natural gas index, as well as market prices. On January 26, 2012, the MPUC approved this PPA with Manitoba Hydro.

We have electric transmission and distribution lines of 500 kV (8 miles), 345kV345 kV (29 miles), 250 kV (465 miles), 230 kV (632(814 miles), 161 kV (43 miles), 138 kV (128 miles), 115 kV (1,221(1,244 miles) and less than 115 kV (6,216(6,264 miles). We own and operate 164172 substations with a total capacity of 11,13211,110 megavoltamperes. Some of our transmission and distribution lines interconnect with other utilities.

We own office and service buildings, an energy control center, repair shops, and storerooms in various localities. All of our electric plants are subject to mortgages, which collateralize the outstanding first mortgage bonds of Minnesota Power and SWL&P. Generally, we hold fee interest inAll of our generating plants and most of our substations are located on real propertiesproperty owned by us, subject only to the lien of the mortgages. Mosta mortgage, whereas most of our electric lines are located on land notreal property owned in fee, but are covered by others with appropriate easement rights or by necessary permits from governmental authorities. WPPI Energy owns 20 percent of Boswell Unit 4. WPPI Energy has the right to use our transmission line facilities to transport its share of Boswell generation. (See Note 4. Jointly-Owned Electric Facilities.Facilities and Projects.)

We are subject to the jurisdiction of various regulatory authorities.authorities and other organizations. The MPUC has regulatory authority over Minnesota Power’s retail service area in Minnesota, retail rates, retail services, capital structure, issuance of securities and other matters. The FERC has jurisdiction over the licensing of hydroelectric projects, the establishment of rates and charges for the sale of electricity for resale and transmission of electricity in interstate commerce and electricity sold at wholesale (including the rates for our municipal customers), natural gas transportation, certain accounting and record-keeping practices, certain activities of our regulated utilities, and the operations of ATC. The NERC has been certified by the FERC as the national electric reliability organization and has jurisdiction over certain aspects of the Company’s generation and transmission operations, including cybersecurity relating to generation and transmission reliability. The PSCW has regulatory authority over SWL&P’s retail sales of electricity, natural gas, water, issuances of securities, and other matters. The NDPSC has jurisdiction over site and route permitting of generation and transmission facilities necessary for construction in North Dakota.

Electric Rates. All rates and contract terms in our Regulated Operations are subject to approval by appropriateapplicable regulatory authorities. Minnesota Power designs its retail electric service rates based on cost of service studies under which allocations are made to the various classes of customers as approved by the MPUC. Nearly all retail sales include billing adjustment clauses, which adjust electric service rates for changes in the cost of fuel and purchased energy, recovery of current and deferred conservation improvement program expenditures and recovery of certain environmental, transmission and renewable expenditures.

On February 22, 2011,September 25, 2013, the NDPSC approved the site permit for construction of Bison 4, a 205 MW wind project in North Dakota, which is an addition to our Bison Wind Energy Center. As a result, construction has commenced and is expected to be completed by the end of 2014. The total project investment for Bison 4 is estimated to be approximately $345 million, of which $55.6 million was spent through December 31, 2013. On January 17, 2014, the MPUC approved Minnesota Power’s petition seeking cost recovery for investments and expenditures related to Bison 4. We anticipate including Bison 4 as part of our renewable resources rider factor filing along with the Company’s other renewable projects in the first quarter of 2014, which upon approval, authorizes updated rates to be included on customer bills.

The CAIR regulations similarly require certain states to improve air quality by reducing power plant emissions that contribute to ozone and/or fine particle pollution in other states. The CAIR also created an allowance allocation and trading program rather than specifying pollution controls. Minnesota participation in the CAIR was stayed by EPA administrative action while the EPA completed a review of air quality modeling issues in conjunction with the development of a final replacement rule. In its final determination, the EPA listed Minnesota as a CSAPR-affected state based on new 24-hour fine particulate NAAQS analysis. While the CAIR remains in effect, Minnesota participation in the CAIR will continue to be stayed. It isremains uncertain if the CSAPR-related emission restrictions similar to those contained in the CSAPR will become effective for Minnesota utilities.utilities as a result of the August 2012 District of Columbia Circuit Court of Appeals decision.

Pursuant to the regional haze rule, Minnesota was required to develop its SIP by December 2007. As a mechanism for demonstrating progress towards meeting the long-term regional haze goal, in April 2007, the MPCA advanced a draft conceptual SIP which relied on the implementation of CAIR. However, a formal SIP was not filed at that time due to the United States Court of Appeals for the District of Columbia Circuit's remand of CAIR. Subsequently, theThe MPCA requested that companies with BART-eligible units complete and submit a BART emissions control retrofit study, which was completed for Taconite Harbor Unit 3 in November 2008. The retrofit work completed in 2009 at Boswell Unit 3 meets the BART requirements for that unit. In December 2009, the MPCA approved the Minnesota SIP for submittal to the EPA for its review and approval. The Minnesota SIP incorporates information from the BART emissions control retrofit studies that were completed as requested by the MPCA.

In late 2010, the EPA issued guidance to permitting authorities and affected sources to facilitate incorporation of the Tailoring Rule permitting requirements into the Title V and PSD permitting programs. The guidance stated that the project-specific, top-down BACTBest Available Control Technology (BACT) determination process used for other pollutants will also be used to determine BACT for GHG emissions. Through sector-specific white papers, the EPA also provided examples and technical summaries of GHG emission control technologies and techniques the EPA considers available or likely to be available to sources. It is possible that these control technologies could be determined to be BACT on a project-by-project basis. In the near term, one option appears to be energy efficiency maximization.

We are unable to predict the GHG emission compliance costs we might incur; however, the costs could be material. We would seek recovery of any additional costs through cost recovery riders or in a general rate case.

Minnesota Power and SWL&P hadhave an aggregate 615of 596 employees who are members of the IBEW Local 31. The current laborLabor agreements withexpired on January 31, 2014, and on February 5, 2014, Minnesota Power, SWL&P and IBEW Local 31 expire onagreed to amend the current contracts and extend the expiration of both to January 31, 2014.2018.

BNI Coal had 157162 employees, of which 117119 are members of the IBEW Local 1593. The current labor agreement between BNI Coal and IBEW Local 1593 expired on March 31, 2011. A new labor agreement between BNI Coal and IBEW Local 1593 was accepted on March 1, 2011. The contract went into effect on April 1, 2011 and expires on March 31, 2014. Negotiations are proceeding and we believe a ratified agreement will be agreed upon prior to the expiration of the existing contract.

ALLETE makes its SEC filings, including its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(e) or 15(d) of the Securities Exchange Act of 1934, available free of charge on ALLETE’s website, www.allete.com, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC.

All of the executive officers have been employed by us for more than five years in executive positions.

There are no family relationships between any of the executive officers. All officers and directors are elected or appointed annually.

The present term of office of the executive officers listed above extends to the first meeting of our Board of Directors after the next annual meeting of shareholders. Both meetings are scheduled for May 8, 2012.

The factorsrisks and uncertainties discussed below as well as other information set forth in this Form 10-K, which could materially affect our business, financial conditionposition and results of operations and should be carefully considered.considered by stakeholders. The risks and uncertainties described belowin this section are not the only ones we face. Additionalface; additional risks and uncertainties that we are not presently aware of, or that we currently consider immaterial, may also affect our business operations. Our business,operations, financial condition orposition, results of operations could suffer ifand cash flows. Accordingly, the concernsrisks described below should be carefully considered together with other information set forth belowin this report and in future reports that are realized.filed with the SEC.

Accordingly, if our customers experience an economic downturn, incur a work stoppage (including strikes, lock-outs or failureother events), fail to compete effectively in the global economy, or experience decreased demand for their product, there could have abe material adverse effecteffects on their operations and, consequently, could negativelyhave a negative impact on our results of operations if we are unable to remarket at similar prices the energy that would otherwise have been sold to such Large Power Customers.

These governmentallaws and regulations significantly influence our operating environmentoperations and may affect our ability to recover costs from our customers. We are required to have numerous permits, licenses, approvals and certificates from the agencies and other organizations that regulate our business. We believe we have obtained the necessary permits, licenses, approvals and certificates have been obtained for our existing operations and that our business is conducted in accordance with applicable laws; however, we are unable to predict the impact on our operating results from the future regulatory activities of any of these agencies. Changes in regulations or the imposition of additional regulations could have an adverse impact on our results of operations.

Our ability to obtain rate adjustments to maintain currentreasonable rates of return depends upon regulatory action under applicable statutes and regulations, and we cannot provide assurance that rate adjustments will be obtained or currentreasonable authorized rates of return on capital will be earned. Minnesota Power and SWL&P, from time to time, file rate cases with, or otherwise seek cost recovery authorization from, federal and state regulatory authorities. If Minnesota Power and SWL&P do not receive an adequate amount of rate relief in rate cases, including if rates are reduced, if increased rates are not approved on a timely basis or costs are otherwise unable to be recovered through rates, or if cost recovery is not achievedgranted at the requested level, we may experience an adverse impact on our financial condition,position, results of operations and cash flows. We are unable to predict the impact on our business and results of operations results from future legislation or regulatory activities of any of these agencies.agencies or organizations.

These laws and regulations generally acceptsrequire us to obtain and comply with a wide variety of environmental licenses, permits, inspections and other approvals. Both governmental authorities and private parties may seek to enforce applicable environmental laws and regulations. We cannot predict the financial or operational outcome of any related litigation that may arise.

There is growing concern that emissions of GHGs are linked to global climate change. Physical risks of climate change, such as more frequent or more extreme weather events, changes in temperature and precipitation patterns, changes to ground and surface water availability, and other related phenomena, could affect some, or all, of our operations. Severe weather or other natural disasters could be destructive, which could result in increased costs. An extreme weather event within our utility service areas can also directly affect our capital assets, causing disruption in service to customers due to downed wires and poles or damage to other operating equipment. These all have the potential to adversely affect our business and operations.

There is significant uncertainty regarding whether new laws or regulations will be adopted to reduce GHGs and what effect any such laws or regulations would have on us. If any new lawsIn 2013, coal was the primary fuel source for 88 percent of the energy produced by our generating facilities. Future limits on GHG emissions would likely require us to incur significant increases in capital expenditures and operating costs, which if excessive, could result in the closure of certain coal-fired energy centers, impairment of assets, or regulations are implemented, they could have a material effect onotherwise materially adversely affect our results of operations, particularly if implementation costs are not fully recoverable from customers.

We rely on access to financing sources and capital markets as sources of liquidity for capital requirements not satisfied by our cash flow from operations. If we are not able to access capital on satisfactory terms, or at all, the ability to maintain our business or to implement our business plans may be adversely affected. Market disruptions or a downgrade of our credit ratings may increase the cost of borrowing or adversely affect our ability to access financialcapital markets. Such disruptions could include a severe prolongedsignificant economic downturn, the bankruptcyfinancial distress of non-affiliated industry leaders in the same line of businesselectric utility companies or financial services sector,companies, a deterioration in capital market conditions, or volatility in commodity prices.

We are, or may be, engaged in significant capital improvements to its existing electric generation facilities, including the installation of pollution control equipment and subjectthe conversion of certain coal-fired electric generation facilities to substantial risks.natural gas. We are also engaged in development and/or construction of new wind and transmission facilities. Should any such efforts be unsuccessful or not completed in a timely manner, we could be subject to additional costs and/or the write-offimpairments which could have a material adverse impact on our financial position and results of our investment in the project or improvement.operation.

Minnesota Power dependsWe depend on our own transmission and distribution facilities, and facilities owned by other utilities, and transmission facilities primarily operated by MISO, as well as its own such facilities, to deliver the electricity we produceproduced and sellsold to our customers, and to other energy suppliers. If transmission capacity is inadequate, our ability to sell and deliver electricity may be hindered.limited. We may have to forgo sales or we may have to buy more expensive wholesale electricity that is available in the capacity-constrained area. In addition, any infrastructure failure that interrupts or impairs delivery of electricity to our customers could negatively impact the satisfaction of our customers with our service.service, which could have a material impact on our business, operations or results of operations.

Volatility in market prices for electricity and fuel could adversely impact our financial position and results of operations and financial condition and may result from:

Since fluctuations in fuel expense related to our regulated utility operations are passed on to customers through our fuel clause, risk of volatility in market prices for fuel and electricity mainlyprimarily impacts our sales to Other Power Suppliers.

The success of our business heavily depends on the leadership of our executive officers and key employees to implement our business strategy. The inability to maintain a qualified workforce including, but not limited to, executives,executive officers, key employees and employees with specialized skills, may negatively affect our ability to service our existing or new customers, or successfully manage our business or achieve our business objectives. Personnel costs may increase due to competitive pressures or terms of collective bargaining agreements with union employees. We believe we have good relations with our members of the IBEW Local 31 and IBEW Local 1593, and have contracts in place through January 31, 2014,2018, and March 31, 2014, respectively. Negotiations are proceeding between BNI Coal and IBEW Local 1593 and we believe a ratified agreement will be agreed upon prior to the expiration of the existing contract.

The performance of the capital markets affects the values of the assets that are held in trust to satisfy future obligations under our pension and postretirement benefit plans. We have significant obligations to these plans and wethe trusts hold significant assets in these trusts.assets. These assets are subject to market fluctuations and will yield uncertain returns, which may fall below our projected rates of return. A decline in the market value of the pension and postretirement benefit plan assets willwould increase the funding requirements under our benefit plans if the actual asset returns do not recover. Additionally, our pension and postretirement benefit plan liabilities are sensitive to changes in interest rates. As interest rates decrease, the liabilities increase, potentially increasing benefit expense and funding requirements. Our pension and postretirement health carebenefit plan costs are generally recoverable in our electric rates as allowed by our regulators. However, there is no certainty that regulators will continue to allow recovery of these rising costs in the future. See Note 16. Pension and Other Postretirement Benefit Plans of this Form 10-K for more details regarding our current contributions and funding status.

While the pace of technology development has been increasing, the basic conceptstructure of energy production, sale and delivery upon which our business model is based of how energy is produced, sold and delivered, has remained essentiallysubstantially unchanged. The development of new commercially viable technology in areas such as distributed generation, energy storage and energy conservation could fundamentally changesignificantly decrease demand for our current products and services.

Acquisitions are subject to uncertainties. If we are unable to successfully manage future acquisitions or strategic investments it could have an adverse impact on our results of operations. Our actual results may also differ from our expectations due to factors such as ourthe ability to obtain timely regulatory or governmental approvals, integration and operational issues and the ability to retain management and other key personnel.

As part of our long-term strategy, we pursue new wholesale and retail loads in economicand around our service territory. Currently, there are several companies in northeastern Minnesota that are in the process of developing natural resource-based projects that represent long-term growth potential and load diversity for Minnesota Power. These projects may include construction of new facilities and restarts of old facilities, both of which require permitting and/or approvals to be obtained before the projects can be successfully implemented.If a project does not obtain any necessary governmental (including environmental) permits and approvals, our long‑term strategy and thus our results of operations could be adversely impacted. Furthermore, even if the necessary permits and approvals are obtained, our long-term strategy could be adversely impacted if these customers are unable to successfully implement expansion plans.

ALLETE intends to sell its Florida land assets over time or in bulk transactions when opportunities arise. However, if weakadverse market conditions continue, thecould impact on our future operations, would be the continuation ofwhich could result in little to no sales while still incurring operating expenses such as community development district assessments and property taxes. This could result intaxes, as well as continued annual net operating losses. See Note 1. Operations and Significant Accounting Policies – Impairmentlosses at ALLETE Properties. Furthermore, weak market conditions could put the properties at risk for impairment which could adversely impact our results of Long-Lived Assets.operations.

None.

Properties are included in theA discussion of our businessesproperties is included in Item 11. Business and areis incorporated by reference herein.

MaterialA discussion of material legal and regulatory proceedings areis included in the discussion of our businesses in Item 11. Business and areis incorporated by reference herein.

We are involved in litigation arising in the normal course of business. Also in the normal course of business, we are involved in tax, regulatory and other governmental audits, inspections, investigations and other proceedings that involve state and federal taxes, safety, compliance with regulations, rate base and cost of service issues, among other things. We do not expect the outcome of these matters to have a material effect on our financial position, results of operations or cash flows.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires issuers to include in periodic reports filed with the SEC certain information relating to citations or orders for violations of standards under the Federal Mine Safety and Health Act of 1977 (Mine Safety Act). Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and this Item are included in Exhibit 95 to this Form 10-K.

At February 1, 2012,2014, there were approximately 27,00026,000 common stock shareholders of record.