ALLETE : Shareholder Newsletter (June 2024)

Bethany Owen

INVESTOR

A newsletter for the shareholders of ALLETE, inc.

JUNE 1, 2024

ALLETE enters agreement to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners

ALLETE and a partnership led by Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP) jointly announced May 6 that they have entered into a definitive agreement under which the partnership will acquire ALLETE in an all-cash merger.

"Our 'sustainability-in-action' strategy has secured ALLETE's place as a clean-energy leader. Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values," said ALLETE Chair, President and CEO Bethany Owen. "CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our ALLETE companies serve in our communities as well as our nation's energy future. Together, we will continue to invest in the clean-energy

transition and build on our 100 plus-year history of providing safe, reliable, affordable energy to our customers."

Owen said transitioning to a private company with these strong partners also will limit ALLETE's exposure to volatile financial markets as the company makes planned investments now and over the long term.

"Importantly, CPP Investments and GIP are aligned with ALLETE's values of safety,

integrity, planet and people. They also recognize the importance of our employees and our ties to the communities we serve and in which we operate," she said. "To that end, we are proud to remain locally managed as we

enter this next chapter as committed as ever to our customers, our communities and our employees. I look forward to all we will achieve together."

A full news release on the agreement is at https://investor.allete.com/news-releases/news-release-details/allete-enters-agreement-be-acquired-partnership-led-canada. Shareholders with questions can call ALLETE Shareholder services at [phone] and select option number two.

Dear fellow shareholders,

In this newsletter we again share the news that ALLETE has entered into a definitive agreement under which a partnership led by Canada Pension Plan Investments and Global Infrastructure Partners would acquire

ALLETE through an all-cash merger.

I'm sure many of you still have questions about this agreement, and I'll try to answer some of them here. But first I want to let you know how grateful I am for your support in making ALLETE what it is today-a leader in developing renewable energy and transmission projects to build the clean-energy future. All of us at ALLETE thank you for your confidence and investment.

This acquisition will not become effective until after shareholder approval and other required regulatory approvals have been obtained. We plan to hold a special meeting of shareholders to vote on the transaction later this year. In advance of that shareholders' meeting, we will file a proxy statement with the SEC that will contain more details about the merger, including the background, the reasons for the merger, and a

summary of the agreement. We look forward to sharing more about this transaction in the weeks and months ahead after we file the proxy.

Until the transaction closes, which is anticipated in the middle of next year, it is business as usual at ALLETE. We will continue to pay quarterly dividends as approved by the ALLETE board and work as diligently as ever to advance our sustainability-in-action strategy, including projects that support thriving communities. And, after the transaction closes, we will still be ALLETE, with our headquarters remaining in Duluth, Minnesota, and our talented team of employees continuing to lead the way to a sustainable clean-energy future - always caring for our customers, our communities, and the climate.

Examples of this work are Minnesota Power's recent requests for proposals for an additional 400 megawatts of wind and 300 megawatts of solar resources to be online by the end of 2027. Through these RFPs, we're doing more than seeking renewable energy. We're also including preferences for diverse bidders and domestically sourced materials, as well as requirements to use prevailing wages and local labor for construction and permanent staffing, and to develop apprenticeship programs to help train the energy

workforce of tomorrow. These criteria will help ensure these renewable projects also strengthen our communities.

While adding renewable generation is vitally important, we must also be able to reliably deliver this renewable energy to customers. That's why ALLETE and Minnesota Power are investing in four major transmission projects that will enhance the reliability and resilience of the regional grid across the Upper Midwest and beyond.

At ALLETE, we know we're not only an energy provider, we're truly part of the communities where we live, work and operate. We have a special responsibility to help our communities thrive, and we take that responsibility very seriously. Everything I've described here is at the heart of who we are, what we do, and importantly

• how we do things at ALLETE. All of that is what makes this company so very special - and that will not change.

ALLETE enters this next chapter as committed as ever to our customers, our communities and our employees. Again, thank you for your interest and investment in ALLETE.

Bethany M. Owen

Chair, President and CEO

Bethany Owen and Maggie Thickens pause for a photo in the ALLETE boardroom after completing their live presentation, which they conducted from their headquarters offices.

ALLETE conducts Annual Meeting of Shareholders

ALLETE conducted its virtual Annual Meeting of Shareholders on Tuesday, May 14. ALLETE shareholders, voting mainly by proxy at the meeting, elected 10 directors: George Goldfarb, James Hoolihan, Madeleine Ludlow, Charles Matthews, Susan Nestegard, Douglas Neve, Barbara Nick, Bethany Owen, Robert Powers and Charlene Thomas. They also approved a compensation-related measure and ratified the selection of the company's independent public accounting firm. ALLETE Chair, President and CEO Bethany Owen and Vice President, Chief Legal Officer and Corporate Secretary Maggie Thickens conducted the meeting, then Owen provided a presentation that touched on the acquisition agreement. She said ALLETE will continue to invest in and build the grid of the future, and its strategy is based on what its leaders believe is the right thing to do-for the company, customers, communities, the climate, and our investors.

To watch a recording of the meeting, go to https://east.virtualshareholdermeeting.com/vsm/web?pvskey=ALE2024.

Minnesota Power issues request for proposals for up to 400 megawatts of wind energy

Minnesota Power in February issued a Request for Proposals (RFP) for up to 400 megawatts of wind energy to come online by the end of 2027, an important milestone in advancing its EnergyForward vision for 100% carbon-free energy.

The RFP follows Minnesota Power's 2021 Integrated Resource Plan approved by the Minnesota Public Utilities Commission, which calls for the company to acquire up to 300 megawatts of solar energy that is being evaluated in a separate RFP and 400 megawatts of wind generation. The procurement of wind through this RFP will increase by nearly 50% Minnesota Power's wind portfolio of owned and

contracted capacity and provide customers with more renewable energy that will help the company and state meet carbon-free energy goals. The company currently delivers more than 50% renewable energy to its 150,000 retail customers.

As part of its EnergyForward strategy for a clean-energy future, Minnesota Power seeks cost-effective wind resources that are within MISO Local Resource Zone 1 with direct interconnections to the transmission system and the ability to enter commercial production in 2026 or 2027.

This RFP will attempt to maximize the benefits of wind development and federal legislation like the Inflation Reduction Act, including preferences for projects in energy-impacted communities; diverse bidders; domestically sourced materials; and requirements for using local prevailing wages, local labor for construction and permanent staffing, and the development of apprenticeship programs.

"The carbon-free future must be sustainable for the climate, customers and communities for everyone to thrive, so we seek projects that will create local jobs, local economic benefits and train people in renewable technologies," said Minnesota Power Chief Operating Officer Josh Skelton. "New wind generation in the Upper Midwest can tap into an excellent wind resource and maximize use of regional transmission assets to deliver renewable energy to our customers and fits well with our portfolio of other energy supply resources to reliably meet customer demands around the clock."

Minnesota Power reaches electric rate settlement with state agencies and large power customers

Minnesota Power has reached a settlement agreement on its

2024 electric rate proposal with the Minnesota Department of Commerce, Minnesota Attorney General's Office and Large Power Intervenors.

If approved by the Minnesota Public Utilities Commission (MPUC), the agreement announced May 3 would set final rate increases of about 4.9% for residential and small business customers and about 4.4% for industrial and large commercial customers. It also would set Minnesota Power's return on equity at 9.78%.

The MPUC approved an interim rate increase of 8.6% that went into effect Jan. 1, 2024. The difference between the interim rate and final rate will be refunded to customers, with interest, through bill credits after the final rates are approved.

"I'm grateful for the hard work on this by all of the parties, who agreed that this settlement is the right path forward for everyone," said ALLETE Chair, President and CEO Bethany Owen. "This agreement recognizes the importance of considering the needs of our customers and communities. Taken as a whole, it results in a lower rate increase for customers than we originally requested while also allowing Minnesota Power to make the investments and hire the workforce needed to ensure we can meet the state's ambitious climate goals."

Minnesota Power filed its rate proposal in November 2023 to support the goals of its EnergyForward strategy: Transitioning to new sources of renewable energy, building more resiliency into the electric grid, employing the workforce necessary to achieve a clean-energy transition, addressing inflation and supply chain issues, and providing a fair return on investment.

"We appreciate the willingness of our regulatory agencies and large power customers to work collaboratively to reach a mutually beneficial settlement agreement and find common ground for setting new rates for the electric utility," said Jennifer Cady, Minnesota Power vice president of Regulatory Legislative Affairs. "This commitment to outreach, collaboration and communication will only become more important as we continue to execute this historic clean-energy transition."

The statements contained in this newsletter and statements that ALLETE may make orally in connection with this newsletter 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 with the Securities and Exchange Commission.

Investor Relations ALLETE ● 30 West Superior Street ● Duluth, MN 55802-2093● [phone] or 1 [phone]● [e-mail] The new phone number for ALLETE's Investor Relations Department is [phone].Please make an appointment to meet with an Investor Relations representative by calling this number and dialing option 2 to reach a representative.

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