

                                      Registration Nos. 333-     and 333-
           As filed with the Securities and Exchange Commission on   , 1996
     =========================================================================

                          SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                             ---------------------------

                                       FORM S-3
                               REGISTRATION STATEMENT 
                                        UNDER
                              THE SECURITIES ACT OF 1933

                             ---------------------------

                           MINNESOTA POWER & LIGHT COMPANY
                (Exact name of registrant as specified in its charter)

                 MINNESOTA                              41-0418150
      (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                Identification No.)

                                    MP&L CAPITAL I
                (Exact name of registrant as specified in its charter)

                 DELAWARE                            TO BE APPLIED FOR
 (State of incorporation or organization)  (I.R.S. Employer Identification No.)

                               30 WEST SUPERIOR STREET
                               DULUTH, MINNESOTA  55802
                                    (218) 722-2641
            (Address, including zip code, and telephone number, including
                area code,of registrant's principal executive offices)

                 DAVID G. GARTZKE                   PHILIP R. HALVERSON, Esq.
           Senior Vice President-Finance         Vice President, General Counsel
            and Chief Financial Officer              and Corporate Secretary
              30 West Superior Street                30 West Superior Street
              Duluth, Minnesota 55802                Duluth, Minnesota 55802
                  (218) 722-2641                          (218) 722-2641

                 JAMES K. VIZANKO                   ROBERT J. REGER, JR., Esq.
                Corporate Treasurer                     Reid & Priest LLP
              30 West Superior Street                  40 West 57th Street
              Duluth, Minnesota 55802                New York, New York 10019
                  (218) 722-2641                          (212) 603-2000
          (Names and addresses, including zip codes, and telephone numbers,
                     including area codes, of agents for service)

                             ---------------------------

                   It is respectfully requested that the Commission
              send copies of all notices, orders and communications to:
                                MICHAEL CONNOLLY, Esq.
                                  Lane & Mittendorf
                                   320 Park Avenue
                               New York, New York 10022

               APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
          PUBLIC:  As soon as practicable after the registration statement
          becomes effective.

               If the only securities being registered on this Form are
          being offered pursuant to dividend or interest reinvestment
          plans, please check the following box.  [ ]

               If any of the securities being registered on this Form are
          to be offered on a delayed or continuous basis pursuant to Rule
          415 under the Securities Act of 1933, other than securities
          offered only in connection with dividend or interest reinvestment
          plans, check the following box.  [ ]

               If this Form is filed to register additional securities for
          an offering pursuant to Rule 462(b) under the Securities Act of
          1933, please check the following box and list the Securities Act
          of 1933 registration statement number of the earlier effective
          registration statement for the same offering.  [ ]

               If this Form is a post-effective amendment filed pursuant to
          Rule 462(c) under the Securities Act of 1933, check the following
          box and list the Securities Act of 1933 registration statement
          number of the earlier effective registration statement for the
          same offering.  [ ]

               If delivery of the prospectus is expected to be made
          pursuant to Rule 434, please check the following box.  [ ]

                             ---------------------------

      ========================================================================

                           CALCULATION OF REGISTRATION FEE
      ========================================================================
                                        PROPOSED     PROPOSED
        TITLE OF                        MAXIMUM      MAXIMUM
      EACH CLASS OF         AMOUNT      OFFERING     AGGREGATE      AMOUNT OF
      SECURITIES TO          TO BE       PRICE       OFFERING     REGISTRATION
      BE REGISTERED       REGISTERED   PER UNIT(1)   PRICE(1)(2)       FEE
      ------------------------------------------------------------------------
      MP&L CAPITAL I
      CUMULATIVE
      QUARTERLY INCOME
      PREFERRED 
      SECURITIES          5,000,000       $25     $125,000,000    $43,103.45
      ------------------------------------------------------------------------
      MINNESOTA POWER &
      LIGHT COMPANY
      GUARANTEE AND OTHER
      OBLIGATIONS WITH
      RESPECT TO MP&L
      CAPITAL I
      CUMULATIVE QUARTERLY
      INCOME PREFERRED
      SECURITIES(3)
      ------------------------------------------------------------------------
      MINNESOTA POWER &
      LIGHT COMPANY JUNIOR
      SUBORDINATED
      DEBENTURES, SERIES (4)
      =======================================================================
                    (1)  ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING
                         THE REGISTRATION FEE.

                    (2)  EXCLUSIVE OF ACCRUED DISTRIBUTIONS, IF ANY.

                    (3)  NO SEPARATE CONSIDERATION WILL BE RECEIVED FOR THE
                         MINNESOTA POWER & LIGHT COMPANY GUARANTEE AND SUCH
                         OTHER OBLIGATIONS.

                    (4)  THE JUNIOR SUBORDINATED DEBENTURES WILL BE
                         PURCHASED BY MP&L CAPITAL I WITH THE PROCEEDS OF
                         THE SALE OF THE PREFERRED SECURITIES.  NO SEPARATE
                         CONSIDERATION WILL BE RECEIVED FOR THE JUNIOR
                         SUBORDINATED DEBENTURES.

           THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT
      ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE 
      UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY 
      STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME 
      EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 
      1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON 
      SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), 
      MAY DETERMINE.

      <PAGE>


          INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
          AMENDMENT.  A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
          HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. 
          THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
          ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
          EFFECTIVE.  THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
          OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
          SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER,
          SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
          QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.


                    SUBJECT TO COMPLETION, DATED           , 1996

                            5,000,000 PREFERRED SECURITIES
                                    MP&L CAPITAL I
                          % CUMULATIVE QUARTERLY INCOME 
                          PREFERRED SECURITIES (QUIPSSM)*
                (Liquidation preference $25.00 per Preferred Security)
                     Guaranteed to the extent set forth herein by

                           MINNESOTA POWER & LIGHT COMPANY

               The __% Cumulative Quarterly Income Preferred Securities
          (Preferred Securities) offered hereby are being issued by and
          represent undivided preferred beneficial interests in the assets
          of MP&L Capital I (MP&L Capital), a statutory business trust
          created under the laws of the State of Delaware. Minnesota Power
          & Light Company (Company), a Minnesota corporation, will be the
          owner of the undivided common beneficial interests in the assets
          represented by common securities of MP&L Capital (Common
          Securities, together with the Preferred Securities herein
          referred to as the Trust Securities).  The Bank of New York is
          the Property Trustee of MP&L Capital.  MP&L Capital exists for
          the sole purpose of issuing the Preferred Securities and the
          Common Securities and investing the proceeds thereof in   %
          Junior Subordinated Debentures, Series A, Due      ,      to be
          issued by the Company (Junior Subordinated Debentures) in an
          aggregate principal amount equal to the aggregate liquidation
          preference amount of the Trust Securities.  The Preferred
          Securities will have a preference under certain circumstances
          with respect to cash distributions and amounts payable on
          liquidation, redemption or otherwise over the Common Securities. 
          See DESCRIPTION OF THE PREFERRED SECURITIES   "Subordination of
          Common Securities."
                                        (cover continued on following page)


               SEE RISK FACTORS, BEGINNING ON PAGE 7, FOR CERTAIN
          INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED
          SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND
          UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE PREFERRED SECURITIES
          MAY BE DEFERRED AND CERTAIN RELATED FEDERAL INCOME TAX
          CONSEQUENCES.

              THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
               BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY 
               STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
                 AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
                     COMMISSION PASSED UPON THE ACCURACY OR 
                       ADEQUACY OF THIS PROSPECTUS. ANY 
                        REPRESENTATION TO THE CONTRARY 
                            IS A CRIMINAL OFFENSE.

                             ---------------------------

                          INITIAL PUBLIC      UNDERWRITING      PROCEEDS TO
                          OFFERING PRICE      COMMISSION(1)    COMPANY(2)(3)

     Per Preferred
       Security . . . .        $                  (2)              $   
     Total. . . . . . .        $                  (2)              $   

          (1)  MP&L Capital and the Company have agreed to
               indemnify the several Underwriters against certain
               liabilities, including liabilities under the
               Securities Act of 1933, as amended (1933 Act). See
               UNDERWRITING.
          (2)  In view of the fact that the entire proceeds of
               the sale of the Preferred Securities will be used
               to purchase the Junior Subordinated Debentures,
               the Underwriting Agreement provides that the
               Company will pay to the Underwriters, as
               compensation for their arranging the investment
               therein of such proceeds, $    per Preferred Security 
               (or $         in the aggregate). See UNDERWRITING.
          (3)  Expenses of the offering, which are payable by the
               Company, are estimated to be $          .

                             ---------------------------

                    The Preferred Securities offered hereby are offered
          severally by the Underwriters, as specified herein, and subject
          to receipt and acceptance by them and subject to their right to
          reject any order in whole or in part.  It is expected that
          delivery of the Preferred Securities will be made only in
          book-entry form through the facilities of DTC on or about         
            , 1996.

          GOLDMAN, SACHS & CO.                     PAINEWEBBER INCORPORATED

                             ---------------------------  

          ________________________
          *Registered Service Mark of Goldman, Sachs & Co.


                  The date of this Prospectus is            , 1996.

          <PAGE>

          (cover continued)

               Registered owners (Holders) of the Preferred Securities will
          be entitled to receive preferential cumulative cash distributions
          accruing from the date of original issuance and payable quarterly
          in arrears on the last day of March, June, September and December
          of each year, commencing           , 1996, at the per annum rate
          of     % of the liquidation preference amount of $25 per
          Preferred Security (together, at any given time, with any accrued
          but unpaid such amounts and interest thereon, if any, Distributions).
          Interest on the Junior Subordinated Debentures is the sole source 
          of income for MP&L Capital from which payment of Distributions 
          on the Preferred Securities can be made.  The Company has the 
          right to defer payments of interest on the Junior Subordinated 
          Debentures by extending the interest payment period thereon at 
          any time or from time to time for up to 20 consecutive quarters 
          with respect to each deferral period (each, an Extension Period), 
          provided that any such Extension Period may not extend beyond the 
          maturity of the Junior Subordinated Debentures.   Upon the 
          termination of any Extension Period and the payment of all amounts
          then due, including interest on deferred interest payments, the 
          Company may select a new Extension Period, subject to the above 
          requirements.

               If interest payments on the Junior Subordinated Debentures
          are deferred, Distributions on the Preferred Securities will
          also be deferred and the Company will not be permitted, subject 
          to certain exceptions set forth herein, to (i) declare or pay 
          dividends or distributions on (other than dividends or 
          distributions paid in shares of Common Stock of the Company) or 
          redeem, purchase, acquire or make a liquidation payment with respect
          to, any of its capital stock, or (ii) make any payment of 
          principal of, interest or premium, if any, on, or repay, 
          repurchase or redeem any indebtedness that is pari passu
          with the Junior Subordinated Debentures (including other Debt
          Securities as defuned herein) or make any guarantee
          payment with respect to the foregoing.  During an Extension
          Period, quarterly Distributions on the Preferred Securities
          will continue to accrue and Distributions that are in arrears
          will bear interest on the amount thereof at the per annum 
          rate of   % (to the extent permitted by applicable law, 
          compounded quarterly), and Holders of Preferred Securities
          will be required to accrue income for United States federal
          income tax purposes.  See DESCRIPTION OF THE JUNIOR SUBORDINATED
          DEBENTURES -- "Option to Extend Interest Payment Period" and
          CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES  --
          "Potential Extension of Interest Payment Period and Original
          Issue Discount."    Any Extension Period with respect to payment
          of interest on the Junior Subordinated Debentures, other Debt
          Securities (as defined herein) or on any similar securities will
          apply to all such securities and will also apply to Distributions
          with respect to the Preferred Securities and all other securities
          with terms substantially the same as the Preferred Securities. 
          Based upon the Company's current financial condition and, in
          light of the restriction on payment of dividends on the Company's
          securities during an Extension Period, the Company believes that
          an extension of a distribution payment period on the Preferred
          Securities is currently unlikely and has no current intention to
          cause such an extension.  See DESCRIPTION OF THE PREFERRED
          SECURITIES -- "Distributions."

               The payment of Distributions and payments on liquidation of
          MP&L Capital or the redemption of Preferred Securities, in each
          case out of moneys held by MP&L Capital as set forth below, are
          guaranteed by the Company to the extent MP&L Capital has
          sufficient funds available to make such payments (Guarantee). 
          See DESCRIPTION OF THE GUARANTEE.  If the Company fails to make
          interest payments on the Junior Subordinated Debentures held by
          MP&L Capital, MP&L Capital will have insufficient funds to pay
          Distributions on the Preferred Securities.  The Guarantee does
          not cover payment of Distributions when MP&L Capital does not
          have sufficient funds to pay such Distributions. In such event,
          the remedy of a Holder of Preferred Securities would be
          enforcement of the rights of MP&L Capital under the Junior
          Subordinated Debentures held by MP&L Capital.  The Company's
          obligations under the Guarantee are subordinate and junior in
          right of payment to Senior Indebtedness of the Company except any
          liabilities that may be made pari passu expressly by their terms.

               The Preferred Securities are subject to mandatory redemption
          upon repayment of the Junior Subordinated Debentures at maturity
          or upon their earlier redemption.  See DESCRIPTION OF THE
          PREFERRED SECURITIES -- "Redemption Procedures." The Company will
          have the option at any time on or after               , to redeem
          the Junior Subordinated Debentures, in whole or in part.  The
          Company also will have the option at any time, upon the
          occurrence of a Special Event (as defined herein), (i) to redeem
          all of the Junior Subordinated Debentures, in whole but not in
          part, which will result in the redemption of all the Trust
          Securities by MP&L Capital or (ii) to cause the termination of
          MP&L Capital and, in connection therewith, after satisfaction of
          creditors of MP&L Capital, if any, to cause the distribution of
          Junior Subordinated Debentures to the Holders of Preferred
          Securities.  Any redemption of Trust Securities by MP&L Capital
          will be in amounts having an aggregate liquidation preference
          amount equal to the aggregate principal of Junior Subordinated
          Debentures to be redeemed and will be at a redemption price equal
          to 100% of such liquidation preference amount, plus accrued and
          unpaid Distributions, if any, to the redemption date (Redemption
          Price).  Each class of the Trust Securities will be redeemed in
          proportion to the percentage they represent of all the Trust
          Securities.  See DESCRIPTION OF THE JUNIOR SUBORDINATED
          DEBENTURES -- "Optional Redemption."

               The Junior Subordinated Debentures are subordinated and
          junior in right of payment to all Senior Indebtedness (as defined
          herein) of the Company. As of December 31, 1995, the Company had
          approximately $790 million of principal amount of indebtedness
          for borrowed money and capital lease obligations constituting
          Senior Indebtedness (as defined herein).   See DESCRIPTION OF THE
          JUNIOR SUBORDINATED DEBENTURES -- "Subordination" and DESCRIPTION
          OF THE PREFERRED SECURITIES.

               In the event of the liquidation of MP&L Capital, the Holders
          of the Trust Securities will be entitled to receive either (i)
          Junior Subordinated Debentures in an aggregate principal amount
          of $25 per Preferred Security or (ii) a liquidation preference
          amount of $25 per Preferred Security, plus accrued and unpaid
          Distributions thereon to the date of payment, subject to certain
          limitations. See DESCRIPTION OF THE PREFERRED SECURITIES --
          "Liquidation Distribution upon Termination."

               Application will be made to list the Preferred Securities on
          the New York Stock Exchange (NYSE).

               The Preferred Securities will be represented by global
          certificates registered in the name of The Depository Trust
          Company (DTC) or its nominee.  Beneficial interests in the
          Preferred Securities will be shown on, and transfers thereof will
          be effected only through, records maintained by participants in
          DTC.  Except as described herein, Preferred Securities in
          certificated form will not be issued in exchange for the global
          certificates.  See DESCRIPTION OF PREFERRED SECURITIES -- "Book-
          Entry Only Issuance-The Depository Trust Company."

          IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT
          OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
          PRICE OF THE PREFERRED SECURITIES OFFERED HEREBY AT LEVELS ABOVE
          THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.  SUCH
          TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
          THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
          COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

          <PAGE>

                                AVAILABLE INFORMATION

               The Company is subject to the informational requirements of
          the Securities Exchange Act of 1934 (1934 Act) and, in accordance
          therewith, files reports, proxy statements and other information
          with the Securities and Exchange Commission (Commission). Such
          reports, proxy statements and other information filed by the
          Company may be inspected and copied at the public reference
          facilities maintained by the Commission at 450 Fifth Street,
          N.W., Room 1024, Washington, D.C. 20549, and at the following
          Regional Offices of the Commission:  New York Regional Office, 7
          World Trade Center, 13th Floor, New York, New York 10048; and
          Chicago Regional Office, Citicorp Center, 500 West Madison
          Street, Suite 1400, Chicago, Illinois 60661. Copies of such
          material may also be obtained at prescribed rates from the Public
          Reference Section of the Commission at 450 Fifth Street, N.W.,
          Washington, D.C. 20549. The Company's Common Stock is listed on
          the New York Stock Exchange. Reports and other information
          concerning the Company may be inspected and copied at the office
          of such Exchange at 20 Broad Street, New York, New York. In
          addition, certain of the Company's preferred stocks are listed on
          the American Stock Exchange. Reports and other information
          concerning the Company may be inspected and copied at the office
          of such Exchange at 86 Trinity Place, New York, New York.

               No separate financial statements of MP&L Capital are
          included herein.  The Company considers that such financial
          statements would not be material to Holders of the Preferred
          Securities because the Company is a reporting company under the
          1934 Act and MP&L Capital has no independent operations, but
          exists for the sole purpose of issuing the Trust Securities and
          holding as trust assets the Junior Subordinated Debentures.

               MP&L Capital will not file separate reports under the 1934
          Act.  The obligations of the Company under the Junior
          Subordinated Debentures to pay principal and interest, and the
          obligations of the Company under the Junior Subordinated
          Debentures and pursuant to the Trust Agreement to pay amounts
          equal to all expenses of MP&L Capital, together with the
          Guarantee and the rights of the Holders of Preferred Securities
          to directly enforce the Company's obligations with respect to the
          Junior Subordinated Debentures, constitute a full and
          unconditional guarantee by the Company of payments due on the
          Preferred Securities.  See DESCRIPTION OF THE JUNIOR SUBORDINATED
          DEBENTURES -- "Additional Interest" and DESCRIPTION OF THE
          GUARANTEE -- "Events of Default."

                   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

               The following documents, filed by the Company with the
          Commission pursuant to the 1934 Act, are hereby incorporated by
          reference:

               1.   The Company's Annual Report on Form 10-K for the year
                    ended December 31, 1994 (Company 1994 10-K) except for
                    Items 7, 8 and 14(a)(1) thereof;

               2.   The Company's Quarterly Reports on Form 10-Q for the
                    quarters ended March 31, 1995, June 30, 1995 and
                    September 30, 1995;

               3.   The Company's Current Reports on Form 8-K dated January
                    5, 1995, February 23, 1995, February 27, 1995 (as
                    amended on Form 8-K/A dated May 25, 1995), July 12,
                    1995 (as amended on Form 8-K/A dated September 8,
                    1995), October 6, 1995, January 8, 1996 and February
                    16, 1996.

               Each document filed subsequent to the date of this
          Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the
          1934 Act prior to the termination of the offering made by this
          Prospectus shall be deemed to be incorporated by reference in
          this Prospectus and shall be a part hereof from the date of
          filing of such document; provided, however, that the documents
          enumerated above or subsequently filed by the Company pursuant to
          Section 13 of the 1934 Act prior to the filing with the
          Commission of the Company's most recent Annual Report on Form 10-
          K shall not be incorporated by reference in this Prospectus or be
          a part hereof from and after the filing of such Annual Report on
          Form 10-K.  The documents which are incorporated by reference in
          this Prospectus are sometimes hereinafter referred to as the
          "Incorporated Documents."

               Any statement contained in a document incorporated or deemed
          to be incorporated by reference herein shall be deemed to be
          modified or superseded for purposes of this Prospectus to the
          extent that a statement contained herein or in any other
          subsequently filed document which is deemed to be incorporated by
          reference herein modifies or supersedes such statement. Any such
          statement so modified or superseded shall not be deemed, except
          as so modified or superseded, to constitute a part of this
          Prospectus.

               The Company will provide without charge to each person,
          including any beneficial owner, to whom a copy of this Prospectus
          is delivered, upon the written or oral request of any such
          person, a copy of any document referred to above which has been
          or may be incorporated in this Prospectus by reference, other
          than exhibits to such documents (unless such exhibits are
          specifically incorporated by reference into such documents).
          Requests for such copies should be directed to:  Shareholder
          Services, Minnesota Power, 30 West Superior Street, Duluth,
          Minnesota 55802, telephone number (218) 723-3974 or (800) 535-
          3056.

                                  PROSPECTUS SUMMARY

               The following is a summary of certain information contained
          herein and should be read in conjunction with such information
          contained elsewhere in this Prospectus and is subject to and
          qualified by reference to such information.  Capitalized terms
          used herein have the respective meanings ascribed to them
          elsewhere in this Prospectus.

               THE COMPANY

               The Company was incorporated under the laws of the State of
          Minnesota in 1906 and is a diversified electric utility engaged
          in the generation, purchase, transmission, distribution and sale
          of electric energy wholly within the state of Minnesota.  The
          principal executive offices of the Company are located at 30 West
          Superior Street, Duluth, Minnesota 55802; and the telephone
          number is (218) 722-2641.

               MP&L CAPITAL

               MP&L Capital is a Delaware statutory business trust created
          for the exclusive purposes of (i) issuing the Preferred
          Securities and Common Securities representing undivided
          beneficial interests in the assets of MP&L Capital, (ii) holding
          as trust assets the Junior Subordinated Debentures and (iii)
          engaging in only those other activities necessary or incidental
          thereto.  Upon issuance of the Preferred Securities, the Holders
          thereof will own all of the issued and outstanding Preferred
          Securities.  The Company has agreed to acquire Common Securities
          in an amount equal to at least 3% of the total capital of MP&L
          Capital and will own all of the issued and outstanding Common
          Securities.  

               DESCRIPTION OF PREFERRED SECURITIES AND JUNIOR SUBORDINATED
               DEBENTURES

               The Preferred Securities are undivided preferred beneficial
          interests in the assets of MP&L Capital and will have a
          preference, under certain circumstances, with respect to cash
          Distributions and amounts payable on liquidation, redemption or
          otherwise over the trust interests represented by the Common
          Securities issued by MP&L Capital.

               Holders of the Preferred Securities will be entitled to
          receive cumulative cash Distributions accruing from the date of
          original issuance and payable quarterly in arrears on the last
          day of March, June, September and December of each year,
          commencing           , 1996, at the per annum rate of     % of
          the liquidation preference amount thereof to the persons in whose
          names the Preferred Securities are registered at the close of
          business on the relevant record dates.  Such Distributions will
          originally accrue from, and include, the Closing Date and will
          accrue to, and include, the first distribution payment date, and
          thereafter will accrue from, and exclude, the last distribution
          payment date through which Distributions have been paid.  In the
          event that any date on which a distribution is payable on the
          Preferred Securities is not a Business Day (as defined herein),
          then such distribution will be made on the next succeeding
          Business Day (and without any interest or other payment in
          respect of any such delay), except that, if such Business Day is
          in the next succeeding calendar year, such payment shall be made
          on the immediately preceding Business Day, in each case with the
          same force and effect as if made on such date.

               MP&L Capital will hold Junior Subordinated Debentures in an
          aggregate principal amount equal to the liquidation preference
          amount of the Trust Securities.  The Junior Subordinated
          Debentures are unsecured subordinated debt securities issued
          under an Indenture dated as of               , 1996, between the
          Company and The Bank of New York, as Trustee (Indenture).  MP&L
          Capital will use interest payments on the Junior Subordinated
          Debentures to make Distributions on the Preferred Securities. 
          The Junior Subordinated Debentures will be subordinate to all
          Senior Indebtedness of the Company but are senior to all capital
          stock of the Company.

               The Company has the right to defer payments of interest on
          the Junior Subordinated Debentures during Extension Periods of up
          to 20 consecutive quarters, provided that no single distribution
          payment period, as extended, may exceed 20 consecutive quarterly
          interest payment periods or extend beyond the maturity of the
          Junior Subordinated Debentures.  Distributions on the Preferred
          Securities will accrue with interest, compounded quarterly, but
          will not be payable, during an Extension Period.  The Company may
          prepay at any time all or any portion of the interest accrued
          during an Extension Period.  Based upon the Company's current
          financial condition and, in light of the restriction on payment
          of dividends during an Extension Period, the Company believes
          that an extension of a distribution payment period on the
          Preferred Securities is unlikely and has no current intention to
          cause such an extension of a distribution payment period.  
          Upon the termination of any Extension Period and the payment of 
          all amounts then due, the Company may elect another Extension 
          Period.  The Company will give MP&L Capital and the Debenture 
          Trustee notice of its election of an Extension Period prior to 
          the earlier of (i) one Business Day prior to the record date 
          for the distribution which would occur but for such election or 
          (ii) the date the Company is required to give notice to the 
          NYSE or other applicable self-regulatory organization of such 
          record date and will cause MP&L Capital to send notice of such 
          election to the Holders of Preferred Securities.

               If and to the extent the Company makes interest payments on
          the Junior Subordinated Debentures deposited in MP&L Capital as
          trust assets, the Property Trustee is obligated to make
          Distributions promptly on the Preferred Securities.  The payment
          of Distributions on the Preferred Securities and payments on
          liquidation of MP&L Capital and the redemption of Preferred
          Securities are guaranteed by the Company if and to the extent
          that MP&L Capital has funds available therefor.

               The Junior Subordinated Debentures are redeemable, in whole
          or in part, on or after                , or at any time upon the
          occurrence of a Special Event and in certain other circumstances, 
          at the option of the Company.  Upon redemption of the Junior 
          Subordinated Debentures, the Preferred Securities and the Common 
          Securities will be redeemed on a pro rata basis to the same 
          extent as the Junior Subordinated Debentures are redeemed. 

               Upon the occurrence and during the continuation of a Special
          Event, the Company may elect to (i) to redeem the Junior
          Subordinated Debentures at any time or from time to time, in
          whole but not in part, in which event all of the Trust Securities
          will be redeemed or (ii) to cause the termination of MP&L
          Capital, in which event, after the satisfaction of creditors of
          MP&L Capital, if any, the Junior Subordinated Debentures will be
          distributed to the Holders of the Preferred Securities and the
          Common Securities on a pro rata basis, in lieu of any cash
          distribution.  If at any time MP&L Capital is not or will not be
          taxed as a grantor trust but a Tax Event in respect of the
          Preferred Securities has not occurred, the Company has the right
          to terminate MP&L Capital and cause the Junior Subordinated
          Debentures to be distributed to the Holders of the Preferred
          Securities in liquidation of MP&L Capital.  If the Junior
          Subordinated Debentures are distributed to the Holders of the
          Preferred Securities, the Company will use its best efforts to
          have the Junior Subordinated Debentures listed on the New York
          Stock Exchange or on such other exchange as the Preferred
          Securities are then listed.  See DESCRIPTION OF THE PREFERRED
          SECURITIES -- "Special Event Redemption or Distribution."

               The Company will guarantee payment, where applicable, of
          accrued and unpaid Distributions, the Redemption Price and
          amounts due upon liquidation, to the extent MP&L Capital has
          funds available therefor.

               The Trust Agreement (as defined herein) provides that the
          Company shall pay for all debts and obligations (other than with
          respect to the Trust Securities) and all costs and expenses of
          MP&L Capital, including any taxes and all costs and expenses with
          respect thereto, to which MP&L Capital may become subject, except
          for United States withholding taxes.

               No sinking fund will be established for the benefit of the
          Preferred Securities.

                                     RISK FACTORS

               Prospective purchasers of Preferred Securities should
          carefully review the information contained elsewhere herein and
          should particularly consider the following risk factors with
          respect to the Preferred Securities:

          RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE
          JUNIOR SUBORDINATED DEBENTURES

               The Company's obligations under the Guarantee issued by the
          Company for the benefit of the Holders of the Preferred
          Securities are unsecured and rank subordinate and junior in right
          of payment to Senior Indebtedness of the Company, except any
          liabilities that may be made pari passu expressly by their terms.
          The obligations of the Company under the Junior Subordinated
          Debentures are subordinated and junior in right of payment to
          Senior Indebtedness of the Company.  As of December 31, 1995,
          Senior Indebtedness of the Company aggregated approximately $790
          million.  There are no terms of the Preferred Securities, the
          Junior Subordinated Debentures or the Guarantee that limit the
          Company's ability to incur additional indebtedness, including
          indebtedness that would rank senior to the Junior Subordinated
          Debentures and the Guarantee.  See DESCRIPTION OF THE GUARANTEE -- 
          "Status of the Guarantee" and DESCRIPTION OF THE JUNIOR
          SUBORDINATED DEBENTURES -- "Subordination."

               The ability of MP&L Capital to pay amounts due on the
          Preferred Securities is solely dependent upon the Company making
          payments on the Junior Subordinated Debentures as and when
          required.

          OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES

               The Company has the right under the Indenture to extend the
          interest payment period at any time and from time to time on the
          Junior Subordinated Debentures, for a period not exceeding 20
          consecutive quarters.  As a consequence of any such extension,
          quarterly Distributions on the Preferred Securities would be
          deferred by MP&L Capital during such Extension Period, but would
          continue to accumulate additional Distributions thereon at the
          rate of    % per annum.  In the event that the Company exercises
          this right, during the Extension Period the Company may not (i)
          declare or pay dividends or distributions (other than dividends
          or distributions in Common Stock of the Company) on, or redeem,
          purchase, acquire, or make a liquidation payment with respect to
          any of its capital stock, or (ii) make any payment of principal,
          interest or premium, if any, on or repay, repurchase or redeem
          any indebtedness that is pari passu with the Junior Subordinated
          Debentures (including other Debt Securities, as defined herein)
          or make any guarantee payment with respect to the foregoing. 
          Prior to the termination of any such Extension Period, the
          Company may further extend the interest payment period, provided
          that such Extension Period together with all such previous and
          further extensions thereof may not exceed 20 consecutive quarters
          and that such extended interest payment period may not extend
          beyond the maturity date of the Junior Subordinated Debentures.
          Any Extension Period with respect to payment of interest on the
          Junior Subordinated Debentures, other Debt Securities or on any
          similar securities will apply to all such securities and will
          also apply to distributions with respect to the Preferred
          Securities and all other securities with terms substantially the
          same as the Preferred Securities.  See DESCRIPTION OF THE
          PREFERRED SECURITIES -- "Distributions" and DESCRIPTION OF THE
          JUNIOR SUBORDINATED DEBENTURES -- "Option to Extend Interest
          Payment Period."

               Because the Company has the right to extend the interest
          payment period on the Junior Subordinated Debentures, the Junior
          Subordinated Debentures will be treated as having been issued
          with original issue discount (OID) for United States federal
          income tax purposes.  As a result, Holders of Preferred
          Securities will be required to include in their gross income
          Distributions as they accrue, rather than when they are paid,
          regardless of the Holder's regular method of accounting.  OID on
          the Preferred Securities will be treated as interest and will
          generally be equal to the Distributions on the Preferred
          Securities each year.  Should an Extension Period occur, a Holder
          of Preferred Securities will continue to accrue interest (in the 
          form of OID) in income in respect of its pro rata share of
          the Junior Subordinated Debentures held by MP&L Capital for
          United States federal income tax purposes.  As a result, a Holder
          of Preferred Securities will include such interest in gross
          income for United States federal income tax purposes in advance
          of the receipt of cash, and will not receive the cash related to
          such income from MP&L Capital if the Holder disposes of the
          Preferred Securities prior to the record date for the payment of
          Distributions.  See CERTAIN UNITED STATES FEDERAL INCOME TAX
          CONSIDERATIONS -- "Potential Extension of Interest Payment Period
          and Original Issue Discount."

               The Company has no current intention of exercising its right
          to defer payments of interest by extending the interest payment
          period on the Junior Subordinated Debentures.  However, should
          the Company elect to exercise such right in the future, the
          market price of the Preferred Securities is likely to be
          affected.  A Holder that disposes of its Preferred Securities
          during an Extension Period, therefore, might not receive the same
          return on its investment as a Holder that continues to hold its
          Preferred Securities.  In addition, as a result of the existence
          of the Company's right to defer interest payments, the market
          price of the Preferred Securities (which represent a preferred
          undivided beneficial interest in the Junior Subordinated
          Debentures) may be more volatile than other securities on which
          original issue discount accrues that do not have such rights.

          SPECIAL EVENT REDEMPTION OR DISTRIBUTION; POTENTIAL ADVERSE
          EFFECT ON MARKET PRICE

               Upon the occurrence and continuation of a Special Event, the
          Company has the right to (i) redeem the Junior Subordinated
          Debentures, in whole but not in part, and therefore cause a
          mandatory redemption of all the Preferred Securities at the
          Redemption Price within 90 days following the occurrence of such
          Special Event or (ii) cause the termination of MP&L Capital and,
          in connection therewith, after satisfaction of creditors of MP&L
          Capital, if any, cause the Junior Subordinated Debentures to be
          distributed to the Holders of Trust Securities at the Redemption
          Price within 90 days following the occurrence of such Special
          Event.  If at any time MP&L Capital is not or will not be taxed
          as a grantor trust but a Tax Event (as defined herein) in respect
          of the Preferred Securities has not occurred, the Company has the
          right to terminate MP&L Capital and cause the Junior Subordinated
          Debentures to be distributed to the Holders of the Preferred
          Securities in liquidation of MP&L Capital.  There can be no
          assurance as to the market prices for the Junior Subordinated
          Debentures which may be distributed in exchange for Preferred
          Securities if a termination and liquidation of MP&L Capital were
          to occur.  Accordingly, such Junior Subordinated Debentures
          could, if distributed, trade at a discount to the price of the
          Preferred Securities exchanged.  See DESCRIPTION OF THE PREFERRED
          SECURITIES -- "Special Event Redemption or Distribution" and
          CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.

               On December 7, 1995, the U.S. Treasury Department proposed
          certain tax law changes that, among other things, would deny
          interest deductions to corporate issuers of debt under certain
          circumstances.  As described in the Treasury Department's
          proposal, certain of these proposed changes, which are
          potentially applicable to this issue, would not affect the
          ability of the Company to deduct interest on the Junior
          Subordinated Debentures.  However, there can be no assurance that
          subsequent proposals or final legislation will not affect the
          ability of the Company to deduct interest on the Junior
          Subordinated Debentures, which in turn could give rise to a Tax
          Event, as described more fully under DESCRIPTION OF PREFERRED
          SECURITIES -- "Special Event Redemption or Distribution." 
          Accordingly, there can be no assurance that a Special Event will
          not occur.

               There can be no assurance as to the market prices for
          Preferred Securities or Junior Subordinated Debentures that may
          be distributed in exchange for Preferred Securities if a
          dissolution or liquidation of MP&L Capital were to occur. 
          Accordingly, the Preferred Securities that an investor may
          purchase, whether pursuant to the offer made hereby or in the
          secondary market, or the Junior Subordinated Debentures that a
          Holder of Preferred Securities may receive on termination and
          liquidation of the MP&L Capital, may trade at a discount to the
          price that the investor paid to purchase the Preferred Securities
          offered hereby.  Because Holders of Preferred Securities may
          receive Junior Subordinated Debentures upon the occurrence of a
          Special Event, prospective purchasers of Preferred Securities are
          also making an investment decision with regard to the Junior
          Subordinated Debentures and should carefully review all the
          information regarding the Junior Subordinated Debentures
          contained herein.  See DESCRIPTION OF THE PREFERRED SECURITIES -- 
          "Special Event Redemption or Distribution" and DESCRIPTION OF THE
          JUNIOR SUBORDINATED DEBENTURES -- "General" in the accompanying
          Prospectus.

          LIMITED VOTING RIGHTS

               Holders of Preferred Securities will generally have limited
          voting rights relating only to the modification of the Preferred
          Securities and the dissolution, winding-up or termination of MP&L
          Capital.  Holders of Preferred Securities will not be entitled to
          vote to appoint, remove or replace the Property Trustee or the
          Delaware Trustee, which voting rights are vested exclusively in
          the Holder of the Common Securities except upon the occurrence of
          certain events described herein.  The Administrative Trustees and
          the Company may amend the Trust Agreement to ensure that MP&L
          Capital will be classified for United States federal income tax
          purposes as a grantor trust without the consent of Holders, even
          if such action adversely affects the interests of Holders.  See
          DESCRIPTION OF PREFERRED SECURITIES -- "Voting Rights",
          "Amendments" and "Co-Trustees and Separate Property Trustees."

          RIGHTS UNDER THE GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO
          MP&L CAPITAL

               The Guarantee will be qualified as an indenture under the
          Trust Indenture Act of 1939, as amended (Trust Indenture Act). 
          The Bank of New York will act as indenture trustee under the
          Guarantee for the purposes of compliance with the Trust Indenture
          Act (Guarantee Trustee) and will hold the Guarantee for the
          benefit of the Holders of the Preferred Securities.  The Bank of
          New York will also act as trustee for the Junior Subordinated
          Debentures and as Property Trustee under the Trust Agreement.

               The Guarantee guarantees to the Holders of the Preferred
          Securities to the extent not paid by MP&L Capital, the payment
          (but not the collection) of (i) any accrued and unpaid
          Distributions required to be paid on the Preferred Securities, to
          the extent MP&L Capital has funds available therefor, (ii) the
          Redemption Price with respect to Preferred Securities called for
          redemption by MP&L Capital, to the extent MP&L Capital has funds
          available therefor and (iii) upon a voluntary or involuntary
          dissolution, winding-up or termination of MP&L Capital (unless
          the Junior Subordinated Debentures are distributed to Holders of
          the Preferred Securities), the lesser of (a) the aggregate of the
          liquidation preference amount and all accrued and unpaid
          Distributions on the Preferred Securities to the date of payment
          and (b) the amount of assets of MP&L Capital remaining available
          for distribution to Holders of the Preferred Securities in
          liquidation of MP&L Capital. The Holders of not less than a
          majority in aggregate liquidation preference amount of the
          Preferred Securities have the right to direct the time, method
          and place of conducting any proceeding for any remedy available
          to the Guarantee Trustee or to direct the exercise of any trust
          power conferred upon the Guarantee Trustee under the Guarantee. 
          If the Guarantee Trustee fails to enforce the Guarantee, any
          Holder of Preferred Securities may institute a legal proceeding
          directly against the Company to enforce the Guarantee Trustee's
          rights under the Guarantee without first instituting a legal
          proceeding against MP&L Capital, the Guarantee Trustee or any
          other person or entity.  If the Company were to default on its
          obligations under the Junior Subordinated Debentures, MP&L
          Capital would lack available funds for the payment of
          Distributions or amounts payable on redemption of the Preferred
          Securities or otherwise, and in such event Holders of the
          Preferred Securities would not be able to rely upon the Guarantee
          for payment of such amounts. Instead, Holders of the Preferred
          Securities would be required to rely on the enforcement by the
          Property Trustee of its rights, as registered Holder of the
          Junior Subordinated Debentures, against the Company pursuant to
          the terms of the Junior Subordinated Debentures. See DESCRIPTION
          OF THE GUARANTEE -- "Status of the Guarantee" and DESCRIPTION OF
          THE JUNIOR SUBORDINATED DEBENTURES -- "Subordination" herein. The
          Trust Agreement pursuant to which MP&L Capital has been formed
          provides that each Holder of Preferred Securities by acceptance
          thereof agrees to the provisions of the Guarantee and the
          Indenture.

               The Preferred Securities are subject to mandatory redemption
          upon repayment of the Junior Subordinated Debentures at maturity
          or upon their earlier redemption.  See DESCRIPTION OF THE
          PREFERRED SECURITIES -- "Redemption Procedures." The Company will
          have the option at any time on or after                upon not
          less than 45 days' notice, to redeem the Junior Subordinated
          Debentures, in whole or in part.

          TRADING CHARACTERISTICS OF PREFERRED SECURITIES

               The Preferred Securities constitute a new issue of
          securities with no established trading market.  While the Company
          will apply to list the Preferred Securities on the NYSE, a
          minimum of 400 beneficial holders and 1,000,000 outstanding
          securities is required for listing a new class of securities on
          the NYSE.  Accordingly, no assurance can be given as to the
          liquidity of, or the development and maintenance of trading
          markets for, the Preferred Securities.  If approved for listing,
          the Preferred Securities may trade at a price that does not fully
          reflect the value of accrued but unpaid interest with respect to
          the underlying Junior Subordinated Debentures.  A Holder that
          disposes of Preferred Securities between record dates for
          payments of Distributions thereon will be required to include
          accrued but unpaid interest on the Junior Subordinated Debentures
          through the date of disposition in income as ordinary income and
          to add such amount to such Holder's adjusted tax basis in such
          Holder's pro rata share of the underlying Junior Subordinated
          Debentures deemed disposed of.  To the extent the selling price
          is less than such Holder's adjusted tax basis (which will
          include, in the form of OID, all accrued and unpaid interest),
          such Holder will recognize a capital loss.  Subject to certain
          limited exceptions, capital losses cannot be applied to offset
          ordinary income for United States federal income tax purposes. 
          See CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES -- 
          "Potential Extension of Interest Payment Period and Original
          Issue Discount" and "Sale, Exchange and Redemption of the
          Preferred Securities."

                                     THE COMPANY

               The Company is an operating public utility incorporated
          under the laws of the State of Minnesota since 1906. Its
          principal executive office is at 30 West Superior Street, Duluth,
          Minnesota 55802, and its telephone number is (218) 722-2641.  The
          Company has operations in four business segments: (1) electric
          operations, which include electric and gas services, and coal
          mining; (2) water operations, which include water and wastewater
          services; (3) automobile auctions, which also include a finance
          company and an auto transport company; and (4) investments, which
          include real estate operations, a 22.1 percent equity investment
          in a financial guaranty reinsurance company, and a securities
          portfolio.  As of December 31, 1995, the Company and its
          subsidiaries had approximately 5,600 employees.

                                                    YEAR ENDED DECEMBER 31,
                                                    -----------------------
     SUMMARY OF EARNINGS PER SHARE                   1995    1994    1993
     -----------------------------                   ----    ----    ----
                                                            AUDITED

     CONSOLIDATED EARNINGS PER SHARE
        Continuing Operations                       $ 2.06  $ 1.99  $ 2.27
        Discontinued Operations(*)                     .10     .07    (.07)
                                                    ------  ------  ------
          Total                                     $ 2.16  $ 2.06  $ 2.20
                                                    ======  ======  ======

     PERCENTAGE OF EARNINGS BY BUSINESS SEGMENT
        Continuing Operations
          Electric Operations                          61%     63%     63%
          Water Operations                             (2)     23       4
          Automobile Auctions                           0       -       -
          Investments                                  36      11      36
        Discontinued Operations(*)                      5       3      (3)
                                                      ---     ---     ---
                                                      100%    100%    100%
                                                    ======   =====   =====
      -------------------------
          (*)  On June 30,1995, the Company sold its interest in its paper
               and pulp business to Consolidated Papers, Inc.  (CPI) for
               $118 million in cash, plus CPI's assumption of certain debt
               and lease obligations.  The Company is still committed to a
               maximum guarantee of $90 million to ensure a portion of a
               $33.4 million annual lease obligation for paper mill
               equipment under an operating lease extending to 2012.  CPI
               has agreed to indemnify the Company for any payments the
               Company may make as a result of the Company's obligation
               relating to this operating lease.

          ELECTRIC OPERATIONS

               Electric operations generate, transmit, distribute and sell
          electricity.  The Company provides electricity to 122,000
          customers in northern Minnesota, while the Company's wholly owned
          subsidiary, Superior Water, Light and Power Company, sells
          electricity to 14,000 customers and natural gas to 11,000
          customers, and provides water to 10,000 customers in northwestern
          Wisconsin.  Another wholly owned subsidiary, BNI Coal, Ltd.  (BNI
          Coal) owns and operates a lignite mine in North Dakota.  Two
          electric generating cooperatives, Minnkota Power Cooperative,
          Inc. and Square Butte Electric Cooperative (Square Butte),
          presently consume virtually all of BNI Coal's production of
          lignite coal under coal supply agreements extending to 2027. 
          Under an agreement with Square Butte, the Company purchases 71
          percent of the output from the Square Butte unit which is capable
          of generating up to 470 megawatts.

               In 1995 large industrial customers contributed about half of
          the Company's electric operating revenue.  The Company has large
          power contracts to sell power to eleven industrial customers
          (five taconite producers, five paper companies and a pipeline
          company) each requiring 10 megawatts or more of power.  These
          contracts, which have termination dates ranging from April 1997
          to December 2005, require the payment of minimum monthly demand
          charges that cover most of the fixed costs, including a return on
          common equity, associated with having the capacity available to
          serve these customers.

          WATER OPERATIONS

               Water operations include Southern States Utilities, Inc.
          (SSU) and Heater Utilities, Inc. (Heater), both wholly owned
          subsidiaries of the Company.  SSU is the largest private water
          supplier in Florida.  At December 31, 1995, SSU provided water to
          117,000 customers and wastewater treatment services to 53,000
          customers in Florida.  At December 31, 1995, Heater provided
          water to 26,000 customers and wastewater treatment services to
          3,000 customers in North Carolina and South Carolina.  These
          water operations have been upgrading existing facilities and
          building new facilities.

               In April 1995 the Florida First District Court of Appeals
          reversed the 1993 order of the Florida Public Service Commission
          (FPSC) which approved uniform rates for most of SSU's service
          areas in Florida.  Consequently, the FPSC ordered the Company to
          refund about $10 million, including interest, to customers who
          paid more since October 1993 under uniform rates than they would
          have paid under stand-alone rates.  The FPSC also indicated that
          it would not permit collection of the $10 million from customers
          who paid less under uniform rates.  With "uniform rates," all
          customers in the uniform rate areas pay the same rates for water
          and wastewater services.  Uniform rates are an alternative to
          "stand-alone" rates which are calculated based on the cost of
          serving each service area.  In November 1995 SSU filed a request
          for FPSC reconsideration.  The Company believes that it would be
          improper for the FPSC to order a refund to one group of customers
          without permitting recovery of a similar amount from the
          remaining customers because the First District Court of Appeals
          only addressed the issue of alleged over-payment by some service
          areas under the uniform rate design and not the Company's total
          revenue requirement for operations in Florida.  If the FPSC does
          not adopt SSU's position on reconsideration, SSU will vigorously
          pursue reversal of the FPSC's decision in the courts.  No
          provision for refund has been recorded.

               In June 1995 SSU filed a request with the FPSC for an $18.6
          million annual increase in water and wastewater treatment rates. 
          On November 1, 1995, the FPSC denied the Company's original $12
          million interim rate request for two reasons: (1) it was based on
          uniform rates which were deemed improper by a court order
          subsequent to the Company's original filing, and (2) the FPSC had
          not yet formulated a policy on allowable investments and expenses
          to be included in a forward-looking interim test year.  The
          Company submitted additional information to support interim rate
          approval of $12 million based on a forward-looking test year and
          $8.4 million based on a historical test year.  On January 4,
          1996, the FPSC permitted the Company to implement an interim rate
          increase (based on a historical test year) of $7.9 million, on an
          annualized basis, over revenue previously collected under a
          uniform rate structure.  Interim rates went into effect on
          January 23, 1996.  Final rates are anticipated to become
          effective in the fourth quarter of 1996.

          AUTOMOBILE AUCTIONS

               The Company has an 83 percent ownership interest in ADESA
          Corporation (ADESA), the third largest automobile auction
          business in the United States.  ADESA, headquartered in
          Indianapolis, Indiana, owns and operates 19 automobile auctions
          in the United States and Canada through which used cars and other
          vehicles are sold to franchised automobile dealers and licensed
          used car dealers.  Two wholly owned subsidiaries of ADESA,
          Automotive Finance Company and ADESA Auto Transport, perform
          related services.  Sellers at ADESA's auctions include domestic
          and foreign auto manufacturers, car dealers, fleet/lease
          companies, banks and finance companies.

               The Company acquired 80 percent of ADESA on July 1, 1995,
          for $167 million in cash.  Proceeds from the sale of the paper
          and pulp business combined with proceeds from the sale of
          securities investments were used to fund this acquisition. 
          Acquired goodwill and other intangible assets associated with
          this acquisition are being amortized on a straight line basis
          over periods not exceeding 40 years.  In January 1996 the Company
          provided an additional $15 million of capital in exchange for
          1,982,346 original issue common stock shares of ADESA.  This
          capital contribution increased the Company's ownership interest
          in ADESA to 83 percent.  Put and call agreements with ADESA's
          four top managers provide ADESA management the right to sell to
          the Company, and the Company the right to purchase, ADESA
          management's 17 percent retained ownership interest in ADESA, in
          increments during the years 1997, 1998 and 1999, at a price based
          on ADESA's financial performance.

          INVESTMENTS

               The Company owns 80 percent of Lehigh Acquisition
          Corporation, a real estate company which owns various real estate
          properties and operations in Florida.

               The Company has a 22.1 percent equity investment in Capital
          Re Corporation (Capital Re).  Capital Re is a Delaware holding
          company engaged primarily in financial and mortgage guaranty
          reinsurance through its wholly owned subsidiaries, Capital
          Reinsurance Company and Capital Mortgage Reinsurance Company. 
          Capital Reinsurance Company is a reinsurer of financial
          guarantees of municipal and non-municipal debt obligations. 
          Capital Mortgage Reinsurance Company is a reinsurer of
          residential mortgage guaranty insurance.  The Company's equity
          investment in Capital Re at December 31, 1995, was $93 million.

               As of December 31, 1995, the Company had approximately $106
          million invested in a securities portfolio.  The majority of the
          securities are investment grade stocks of other utility companies
          and are considered by the Company to be conservative investments. 
          Additionally, the Company sells common stock securities short and
          enters into short sales of treasury futures contracts as part of
          an overall investment portfolio hedge strategy.

                                     MP&L CAPITAL

               MP&L Capital is a statutory business trust created under
          Delaware law pursuant to (i) a trust agreement executed by the
          Company, as depositor for MP&L Capital, the Property Trustee, the
          Delaware Trustee (each as defined herein) and the Administrative
          Trustees, each of whom is an employee of the Company
          (Administrative Trustees) of such trust (Original Trust
          Agreement) and (ii) the filing of a certificate of trust with the
          Delaware Secretary of State on February 15, 1996.  Such trust
          agreement will be amended and restated in its entirety (as so
          amended and restated, the Trust Agreement) substantially in the
          form filed as an exhibit to the Registration Statement of which
          this Prospectus forms a part.  The Trust Agreement will be
          qualified as an indenture under the Trust Indenture Act.  MP&L
          Capital exists for the exclusive purposes of (i) issuing Trust
          Securities representing undivided beneficial interests in the
          assets of MP&L Capital, (ii) holding the Junior Subordinated
          Debentures as trust assets and (iii) engaging in only those other
          activities necessary or incidental thereto.  All of the Common
          Securities will be owned by the Company.  The Common Securities
          will rank pari passu, and payments will be made thereon pro rata,
          with the Preferred Securities, except that upon the occurrence
          and continuance of a default under the Trust Agreement, the
          rights of the Holder of the Common Securities to payment in
          respect of Distributions and payments upon liquidation,
          redemption and otherwise will be subordinated to the rights of
          the Holders of the Preferred Securities.  The Company will
          acquire Common Securities having an aggregate liquidation
          preference amount equal to 3% of the total capital of MP&L
          Capital.  MP&L Capital has a term of approximately     years, but
          may terminate earlier as provided in the Trust Agreement.  MP&L
          Capital's business and affairs will be conducted by the
          Administrative Trustees.  The office of the Delaware Trustee in
          the State of Delaware is White Clay Center, Route 273, Newark,
          Delaware 19711.  The principal place of business of MP&L Capital
          is c/o Minnesota Power & Light Company, 30 West Superior Street,
          Duluth, Minnesota 55802.


                           MINNESOTA POWER & LIGHT COMPANY
                            SUMMARY FINANCIAL INFORMATION

                                       Historical               Pro Forma(1)
                                ------------------------      ---------------
                                           Year Ended December 31,
                                1993      1994      1995      1994      1995
                                ----      ----      ----      ----      ----
                                   (In thousands except per share amounts)
     INCOME STATEMENT DATA:
       Operating revenue and
         income                $582,495  $582,167  $672,917  $674,696  $729,674
       Income
           Continuing 
             operations        $ 64,374  $ 59,465  $ 61,857  $ 61,771  $ 61,422
           Discontinued 
             operations          (1,753)    1,868     2,848     1,868     2,848
                               --------  --------  --------  --------  --------
               Net Income      $ 62,621  $ 61,333  $ 64,705  $ 63,639  $ 64,270
       Earnings per share of
         common stock
           Continuing 
             operations          $ 2.27    $ 1.99    $ 2.06    $ 2.07    $ 2.04
           Discontinued 
             operations            (.07)      .07       .10       .07       .10
                               --------  --------  --------  --------  --------
               Total             $ 2.20    $ 2.06    $ 2.16    $ 2.14    $ 2.14

                                                        December 31,
                                                            1995      Percent
                                                        ------------  -------
                                                      (In thousands)
     BALANCE SHEET DATA:
       Common stock equity                               $  584,072      46%
       Preferred stock not subject to mandatory
         redemption                                          28,547       2 
       Preferred stock subject to mandatory redemption       20,000       2 
       Long-term debt (excluding current                            
         maturities)                                     $  639,548      50 
                                                         ----------     ---
         Total capitalization                            $1,272,167     100%

                       RATIOS OF EARNINGS TO FIXED CHARGES(2)
                                          YEAR ENDED DECEMBER 31,
                                --------------------------------------------
                                1991      1992      1993      1994      1995
                                ----      ----      ----      ----      ----
     Ratios of Earnings to 
       Fixed Charges            2.55      2.60      2.52      2.17      1.90

               SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES(2)(3)
                                          YEAR ENDED DECEMBER 31,
                                --------------------------------------------
                                1991      1992      1993      1994      1995
                                ----      ----      ----      ----      ----
     Supplemental Ratios of
       Earnings to Fixed
       Charges                  2.20      2.25      2.19      1.95      1.73

           RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS(2)
                                          YEAR ENDED DECEMBER 31,
                                --------------------------------------------
                                1991      1992      1993      1994      1995
                                ----      ----      ----      ----      ----
     Ratios of Earnings to 
       Fixed Charges
       and Preferred Dividends  2.32      2.38      2.32      2.03      1.76

                   SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES
                           AND PREFERRED DIVIDENDS(2)(3)
                                          YEAR ENDED DECEMBER 31,
                                --------------------------------------------
                                1991      1992      1993      1994      1995
                                ----      ----      ----      ----      ----
     Supplemental Ratios of
       Earnings to Fixed
       Charges and
       Preferred Dividends      2.04      2.10      2.05      1.84      1.63

     ----------------
          (1) Presents unaudited pro forma consolidated results as if ADESA
          was acquired on January 1, 1994.  See Note 3 to the Company's
          Consolidated Financial Statements in the Company's Form 8-K dated
          February 16, 1996, incorporated herein by reference.

          (2) Ratios for prior periods have been restated to reflect
          discontinued operations.

          (3) The supplemental ratio of earnings to fixed charges includes
          the Company's obligation under a contract with Square Butte
          Electric Cooperative (Square Butte) which extends through 2007,
          pursuant to which the Company is purchasing 71 percent of the
          output of a generating unit capable of generating up to 470
          megawatts.  The Company is obligated to pay Square Butte all of
          Square Butte's leasing, operating and debt service costs (less
          any amounts collected from the sale of power or energy to others)
          that shall not have been paid by Square Butte when due.  See Note
          12 to the Company's Consolidated Financial Statements in the
          Company's Form 8-K dated February 16, 1996, incorporated herein
          by reference.

                                   USE OF PROCEEDS

               The proceeds to be received by MP&L Capital from the sale of
          the Preferred Securities will be used to purchase Junior
          Subordinated Debentures of the Company.  The proceeds of such
          purchase will be applied by the Company for general corporate
          purposes, which may include the acquisition of outstanding
          securities of the Company.

                       DESCRIPTION OF THE PREFERRED SECURITIES

               MP&L Capital was authorized and created by the Original
          Trust Agreement.  The Preferred Securities and the Common
          Securities will be created pursuant to the terms of the Trust
          Agreement.  The Preferred Securities will represent undivided
          beneficial interests in the assets of MP&L Capital and entitle
          the Holders thereof to a preference over the Common Securities in
          certain circumstances with respect to Distributions and amounts
          payable on redemption or liquidation, as well as other benefits
          as described in the Trust Agreement.  The following summaries of
          certain provisions of the Trust Agreement do not purport to be
          complete and are subject to, and are qualified in their entirety
          by reference to, the provisions of the Trust Agreement, including
          the definitions therein of certain terms, and the Trust Indenture
          Act.  Wherever particular sections or defined terms of the Trust
          Agreement are referred to, such sections or defined terms are
          incorporated herein by reference.  The Trust Agreement has been
          filed as an exhibit to the Registration Statement of which this
          Prospectus forms a part.

               GENERAL

               All of the Common Securities are owned by the Company.  The
          Common Securities will rank pari passu, and payments will be made
          thereon pro rata, with the Preferred Securities based on the
          liquidation preference amount of the Trust Securities, except as
          described under "Subordination of Common Securities." (Section
          4.03).  The Junior Subordinated Debentures will be owned by MP&L
          Capital and held by the Property Trustee in trust for the benefit
          of the Holders of the Trust Securities. (Section 2.09).  The
          Guarantee is a full and unconditional guarantee with respect to
          the Preferred Securities but does not guarantee payment of
          Distributions or amounts payable on redemption or liquidation of
          the Preferred Securities when MP&L Capital does not have funds
          available to make such payments.

               DISTRIBUTIONS

               The Distributions payable on the Preferred Securities will
          be fixed at a rate per annum of     % of the stated liquidation
          preference amount thereof.  The term "Distributions" as used
          herein includes interest payable on overdue Distributions, unless
          otherwise stated.  The amount of Distributions payable for any
          period will be computed on the basis of a 360-day year of twelve
          30-day months and for any period shorter than a full month, on
          the basis of the actual number of days elapsed.  (Section
          4.01(b)).  Distributions that are in arrears will bear interest
          on the amount thereof at the per annum rate of      % (to the
          extent permitted by applicable law, compounded quarterly).

               Distributions on the Preferred Securities will be
          cumulative, will accrue from the date of initial issuance
          thereof, and will be payable quarterly in arrears, on March 31,
          June 30, September 30 and December 31 of each year, commencing    
                  , 1996, except as otherwise described below.  Such
          Distributions will originally accrue from, and include, the date
          of initial issuance and will accrue to, and include, the first
          distribution payment date, and thereafter will accrue from, and
          exclude, the last distribution payment date through which
          Distributions have been paid.  In the event that any date on
          which Distributions are otherwise payable on the Preferred
          Securities is not a Business Day, payment of the distribution
          payable on such date will be made on the next succeeding Business
          Day (and without any interest or other payment in respect of any
          such delay) except that, if such Business Day is in the next
          succeeding calendar year, payment of such distribution shall be
          made on the immediately preceding Business Day, in each case with
          the same force and effect as if made on such date (each date on
          which Distributions are otherwise payable in accordance with the
          foregoing, a distribution payment date).  (Section 4.01(a)).  A
          Business Day is used herein to mean any day other than a Saturday
          or a Sunday or a day on which banking institutions in The City of
          New York are authorized or required by law or executive order to
          remain closed or a day on which the Corporate Trust Office of the
          Property Trustee or the Debenture Trustee (as defined herein) is
          closed for business.

               The Company has the right under the Indenture pursuant to
          which it will issue the Junior Subordinated Debentures to extend
          the interest payment period at any time or from time to time on
          the Junior Subordinated Debentures to a period not exceeding 20
          consecutive quarters, with the consequence that quarterly
          Distributions on the Preferred Securities would be deferred (but
          would continue to accrue with interest payable on unpaid
          Distributions at the rate per annum set forth above, compounded
          quarterly) by MP&L Capital during any such Extension Period.  In
          the event that the Company exercises this right, during such
          period the Company may not (i) declare or pay dividends or
          distributions (other than dividends or distributions in Common
          Stock of the Company) on, or redeem, purchase, acquire, or make a
          liquidation payment with respect to any of its capital stock, or
          (ii) make any payment of principal of, interest or premium, if
          any, on, or repay, repurchase or redeem any indebtedness that is
          pari passu with the Junior Subordinated Debentures (including
          other Debt Securities) or make any guarantee payment with respect
          to the foregoing.  Prior to the termination of any such Extension
          Period, the Company may further extend the interest payment
          period, provided that such Extension Period together with all
          such previous and further extensions thereof may not exceed 20
          consecutive quarters and that such Extension Period may not
          extend beyond the maturity date of the Junior Subordinated
          Debentures.  Any Extension Period with respect to payment of
          interest on the Junior Subordinated Debentures, other Debt
          Securities or on any similar securities will apply to all such
          securities and will also apply to Distributions with respect to
          the Preferred Securities and all other securities with terms
          substantially the same as the Preferred Securities.  Upon the
          termination of any Extension Period and the payment of all
          amounts then due, the Company may select a new extended interest
          payment period, subject to the foregoing requirements. See
          DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES -- "Interest"
          and "Option to Extend Interest Payment Period."

               It is anticipated that the income of MP&L Capital available
          for distribution to the Holders of the Preferred Securities will
          be limited to payments on the Junior Subordinated Debentures to
          be purchased by MP&L Capital with the proceeds of the sale of the
          Preferred Securities.  See DESCRIPTION OF THE JUNIOR SUBORDINATED
          DEBENTURES.  If the Company does not make interest payments on
          the Junior Subordinated Debentures, the Property Trustee will not
          have funds available to pay Distributions on the Preferred
          Securities and the Common Securities.  The payment of
          Distributions (if and to the extent MP&L Capital has sufficient
          funds available for the payment of such Distributions) is
          guaranteed by the Company as set forth herein under DESCRIPTION
          OF THE GUARANTEE.

               Distributions on the Preferred Securities will be payable to
          the Holders thereof as they appear on the register of MP&L
          Capital on the relevant record dates, which as long as the
          Preferred Securities remain in book-entry form, will be one
          Business Day prior to the relevant Distribution Date.  Subject to
          any applicable laws and regulations and the Trust Agreement, each
          such payment will be made as described under "Book-Entry Only
          Issuance The Depository Trust Company."  In the event any
          Preferred Securities are not in book-entry form, the relevant
          record date for such Preferred Securities shall be the date 15
          days prior to the relevant Distribution Date or if such date is 
          not a Business Day, the next succeeding Business Day.  (Section 
          4.01(d)).

               REDEMPTION

               The Junior Subordinated Debentures will mature on            
               , and the Company has the right to redeem the Junior
          Subordinated Debentures (a) in whole or in part, on or after      
                  , or (b) at any time, in whole but not in part, upon the
          occurrence of a Tax Event or an Investment Company Event (each,
          as defined below, a Special Event), subject to the conditions
          described under DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
          -- "Optional Redemption."

               MANDATORY REDEMPTION

               Upon the repayment of the Junior Subordinated Debentures,
          whether at maturity or upon earlier redemption as provided in the
          Indenture, the proceeds from such repayment shall be applied by
          the Property Trustee to redeem a Like Amount (as defined herein)
          of Trust Securities, upon not less than 30 nor more than 60 days'
          notice, at the Redemption Price.  See DESCRIPTION OF THE JUNIOR
          SUBORDINATED DEBENTURES -- "Optional Redemption."

               SPECIAL EVENT REDEMPTION OR DISTRIBUTION

               If a Special Event shall occur and be continuing with
          respect to the Preferred Securities, the Company has the right to
          (i) redeem the Junior Subordinated Debentures in whole, but not
          in part, and therefore cause a mandatory redemption of all the
          Preferred Securities at the Redemption Price within 90 days
          following the occurrence of such Special Event, or (ii) cause the
          termination of MP&L Capital and in connection therewith, after
          satisfaction of MP&L creditors, if any, cause the Junior
          Subordinated Debentures to be distributed to the Holders of the
          Trust Securities at the Redemption Price within 90 days following
          the occurrence of such Special Event.  If at any time MP&L
          Capital is not or will not be taxed as a grantor trust but a Tax
          Event has not occurred, the Company has the right to terminate
          MP&L Capital and cause the Junior Subordinated Debentures to be
          distributed to the holders of the Preferred Securities in
          liquidation of MP&L Capital.  See CERTAIN UNITED STATES FEDERAL
          INCOME TAX CONSEQUENCES -- "Receipt of Junior Subordinated
          Debentures or Cash Upon Liquidation of MP&L Capital."  If the
          Company does not elect either option (i) or (ii) above, the
          Preferred Securities will remain outstanding and, in the event a
          Tax Event has occurred and is continuing, Additional Interest (as
          defined below) will be payable on the Junior Subordinated
          Debentures. 

               "Like Amount" means (i) with respect to a redemption of
          Trust Securities, Preferred Securities and Common Securities,
          each in amounts having a liquidation value equal to the
          proportion all such securities have to the liquidation value of
          all the Trust Securities, together having an aggregate
          liquidation value equal to the principal amount of Junior
          Subordinated Debentures to be contemporaneously redeemed in
          accordance with the Indenture, the proceeds of which are to be
          used to pay the Redemption Price of such Trust Securities and
          (ii) with respect to a distribution of Junior Subordinated
          Debentures to Holders of Trust Securities in connection with a
          liquidation of MP&L Capital upon the occurrence of a Special
          Event or the bankruptcy, termination or liquidation of the
          Company or an order for judicial termination of MP&L Capital
          having been entered by a court of competent jurisdiction, Junior
          Subordinated Debentures having a principal amount equal to the
          liquidation value of the Trust Securities of the Holders to which
          such Junior Subordinated Debentures are distributed.

               "Tax Event" means the receipt by MP&L Capital of an opinion
          of counsel (which may be counsel to the Company or an affiliate
          but not an employee thereof and which must be acceptable to the
          Property Trustee) experienced in such matters to the effect that,
          as a result of any amendment to, or change (including any
          announced prospective change) in, the laws (or any regulations
          thereunder) of the United States or any political subdivision or
          taxing authority thereof or therein affecting taxation, or as a
          result of any official administrative or judicial decision
          interpreting or applying such laws or regulations, which
          amendment or change is effective or such pronouncement or
          decision is announced on or after the date of original issuance
          of the Preferred Securities, there is more than an insubstantial
          risk that (i) MP&L Capital is, or will be within 90 days of the
          date thereof, subject to United States federal income tax with
          respect to income received or accrued on the Junior Subordinated
          Debentures, (ii) interest payable by the Company on the Junior
          Subordinated Debentures, is not, or within 90 days of the date
          thereof, will not be, deductible, in whole or in part, for United
          States federal income tax purposes, or (iii) MP&L Capital is, or
          will be within 90 days of the date thereof, subject to more than
          a de minimis amount of other taxes, duties or other governmental
          charges.

               "Investment Company Event" means the occurrence of a change
          in law or regulation or a change in interpretation or application
          of law or regulation by any legislative body, court, governmental
          agency or regulatory authority (Change in 1940 Act Law) to the
          effect that MP&L Capital is or will be considered an "investment
          company" that is required to be registered under the Investment
          Company Act of 1940, as amended, which Change in 1940 Act Law
          becomes effective on or after the date of original issuance of
          the Preferred Securities.

               On the date fixed for any distribution of Junior
          Subordinated Debentures, upon termination of MP&L Capital (i) the
          Preferred Securities and the Common Securities will no longer be
          deemed to be outstanding, (ii) DTC or its nominee, as the record
          holder of such Preferred Securities, will receive a registered
          global certificate or certificates representing the Junior
          Subordinated Debentures to be delivered upon such distribution
          and (iii) certificates representing Preferred Securities will be
          deemed to represent Junior Subordinated Debentures having an
          aggregate principal amount equal to the stated liquidation
          preference amount of, and bearing accrued and unpaid interest
          equal to accrued and unpaid Distributions on, such Preferred
          Securities until such certificates are presented to the Company
          or its agent for transfer or reissuance.

               There can be no assurance as to the market price for the
          Junior Subordinated Debentures which may be distributed in
          exchange for Preferred Securities if a termination and
          liquidation of MP&L Capital were to occur.  Accordingly, the
          Junior Subordinated Debentures which an investor may subsequently
          receive on termination and liquidation of MP&L Capital, may trade
          at a discount to the price of the Preferred Securities exchanged. 
          If the Junior Subordinated Debentures are distributed to the
          Holders of Preferred Securities upon the dissolution of MP&L
          Capital, the Company will use its best efforts to list the Junior
          Subordinated Debentures on the NYSE or on such other exchange on
          which the Preferred Securities are then listed.

               REDEMPTION PROCEDURES

               The Company may not redeem fewer than all the Junior
          Subordinated Debentures and MP&L Capital may not redeem fewer
          than all the outstanding Preferred Securities unless all accrued
          and unpaid Distributions have been paid on all Preferred
          Securities for all quarterly distribution periods terminating on
          or prior to the date of redemption or if a partial redemption of
          the Preferred Securities would result in the delisting of the
          Preferred Securities by any national securities exchange on which
          the Preferred Securities are then listed.

               Preferred Securities redeemed on each Redemption Date shall
          be redeemed at the Redemption Price with the proceeds from the
          contemporaneous redemption of Junior Subordinated Debentures. 
          Redemptions of the Preferred Securities shall be made and the
          Redemption Price shall be deemed payable on each date selected
          for redemption (Redemption Date) only to the extent that MP&L
          Capital has funds available for the payment of such Redemption
          Price.  (Section 4.02(c)).  See also "Subordination of Common
          Securities."

               If MP&L Capital gives a notice of redemption in respect of
          Preferred Securities (which notice will be irrevocable), then, on
          or before the Redemption Date, MP&L Capital will irrevocably
          deposit with DTC funds sufficient to pay the applicable
          Redemption Price and will give DTC irrevocable instructions and
          authority to pay the Redemption Price to the beneficial holders
          of such Preferred Securities.  If such Preferred Securities are
          no longer in book-entry form, MP&L Capital, to the extent funds
          are available, will irrevocably deposit with the paying agent for
          such Preferred Securities funds sufficient to pay the applicable
          Redemption Price and will give such paying agent irrevocable
          instructions and authority to pay the Redemption Price to the
          Holders thereof upon surrender of their certificates evidencing
          such Preferred Securities.  Notwithstanding the foregoing,
          Distributions payable on or prior to the Redemption Date for any
          Preferred Securities called for redemption shall be payable to
          the Holders of such Preferred Securities on the relevant record
          dates for the related distribution payment dates.  If notice of
          redemption shall have been given and funds deposited as required,
          then on the Redemption Date, all rights of Holders of such
          Preferred Securities so called for redemption will cease, except
          the right of the Holders of such Preferred Securities to receive
          the Redemption Price, but without interest thereon, and such
          Preferred Securities will cease to be outstanding.  In the event
          that any date fixed for redemption of Preferred Securities is not
          a Business Day, then payment of the amount payable on such date
          will be made on the next succeeding day which is a Business Day
          (and without any interest or other payment in respect of any such
          delay).  In the event that payment of the Redemption Price in
          respect of Preferred Securities called for redemption is
          improperly withheld or refused and not paid either by MP&L
          Capital or by the Company pursuant to the Guarantee described
          herein under DESCRIPTION OF THE GUARANTEE, Distributions on such
          Preferred Securities will continue to accrue at the then
          applicable rate, from the original Redemption Date to the date of
          payment, in which case the actual payment date will be considered
          the date fixed for redemption for purposes of calculating the
          Redemption Price.

               Subject to applicable law (including, without limitation,
          United States federal securities law), the Company may at any
          time and from time to time purchase outstanding Preferred
          Securities by tender, in the open market or by private agreement.

               If less than all the Trust Securities are to be redeemed on
          a Redemption Date, then the aggregate liquidation preference of
          such securities to be redeemed shall be allocated on a pro rata
          basis to the Common Securities and the Preferred Securities.  The
          particular Preferred Securities to be redeemed shall be selected
          not more than 60 days prior to the Redemption Date by the
          Property Trustee from the outstanding Preferred Securities not
          previously called for redemption, by such method as the Property
          Trustee shall deem fair and appropriate and which may provide for
          the selection for redemption of Preferred Securities in
          liquidation preference amounts equal to $25 or integral multiples
          thereof.  The Property Trustee shall promptly notify the security
          registrar in writing of the Preferred Securities selected for
          redemption and, in the case of any Preferred Securities selected
          for partial redemption, the liquidation preference amount thereof
          to be redeemed.  For all purposes of the Trust Agreement, unless
          the context otherwise requires, all provisions relating to the
          redemption of Preferred Securities shall relate, in the case of
          any Preferred Securities redeemed or to be redeemed only in part,
          to the portion of the liquidation preference amount of Preferred
          Securities that has been or is to be redeemed.  (Section
          4.02(f)).

               SUBORDINATION OF COMMON SECURITIES

               Payment of Distributions on, and the Redemption Price of,
          the Trust Securities, shall be made pro rata based on the
          Liquidation Amount of the Trust Securities; provided, however,
          that if on any distribution payment date or Redemption Date an
          Event of Default under the Indenture (as described below, see
          "Events of Default; Notice") under the Trust Agreement shall have
          occurred and be continuing, no payment of any Distribution on, or
          Redemption Price of, any Common Security, and no other payment on
          account of the redemption, liquidation or other acquisition of
          Common Securities, shall be made unless payment in full in cash
          of all accrued and unpaid Distributions on all outstanding
          Preferred Securities for all distribution periods terminating on
          or prior thereto, or in the case of payment of the Redemption
          Price, the full amount of such Redemption Price on all
          outstanding Preferred Securities, shall have been made or
          provided for, and all funds available to the Property Trustee
          shall first be applied to the payment in full, in cash, of all
          Distributions on, or Redemption Price of, Preferred Securities
          then due and payable.  (Section 4.03(a)).

               In the case of any default under the Trust Agreement
          resulting from an Event of Default under the Indenture, the
          Company as Holder of the Common Securities will be deemed to have
          waived any such default under the Trust Agreement until the
          effect of all such Defaults with respect to the Preferred
          Securities have been cured, waived or otherwise eliminated. 
          Until any such default under such Trust Agreement with respect to
          the Preferred Securities has been so cured, waived or otherwise
          eliminated, the Property Trustee shall act solely on behalf of
          the Holders of the Preferred Securities and not the Holders of
          the Common Securities, and only Holders of Preferred Securities
          will have the right to direct the Property Trustee to act on
          their behalf.  (Section 4.03(b)).

               LIQUIDATION DISTRIBUTION UPON TERMINATION

               Pursuant to the Trust Agreement, MP&L Capital shall
          terminate and shall be liquidated by the Property Trustee on the
          first to occur of: (i) December 31, [    ], the expiration of the
          term of MP&L Capital; (ii) the bankruptcy, dissolution or
          liquidation of the Company; (iii) the redemption of all of the
          Preferred Securities, (iv) the termination and liquidation of
          MP&L Capital upon (a) the occurrence of a Special Event or (b) in
          the event MP&L Capital is not or will not be taxed as a grantor
          trust under the United States federal income tax law, but a Tax
          Event has not occurred, and, in either such case, the Company as
          Depositor has given written direction to the Property Trustee to
          terminate MP&L Capital within 90 days of such event (which
          direction is optional and wholly within the discretion of the
          Company as Depositor) and (v) an order for judicial termination
          of MP&L Capital having been entered by a court of competent
          jurisdiction. (Sections 9.01 and 9.02).

               If an early termination occurs as described in clause (ii),
          (iii), (iv) or (v) above, MP&L Capital shall be liquidated by the
          Property Trustee as expeditiously as the Property Trustee
          determines to be appropriate by adequately providing for the
          satisfaction of liabilities of creditors, if any, and by
          distributing to each Holder of Preferred Securities and Common
          Securities a Like Amount of Junior Subordinated Debentures,
          unless such distribution is determined by the Property Trustee
          not to be practical, in which event such Holders will be entitled
          to receive, out of the assets of MP&L Capital available for
          distribution to Holders after adequate provision, as determined
          by the Property Trustee, has been made for the satisfaction of
          liabilities of creditors, if any, an amount equal to, in the case
          of Holders of Preferred Securities, the aggregate liquidation
          preference of the Preferred Securities plus accrued and unpaid
          Distributions thereon to the date of payment (such amount being
          the Liquidation Distribution).  If such Liquidation Distribution
          can be paid only in part because MP&L Capital has insufficient
          assets available to pay in full the aggregate Liquidation
          Distribution, then the amounts payable directly by MP&L Capital
          on the Preferred Securities shall be paid on a pro rata basis. 
          The Company, as Holder of the Common Securities, will be entitled
          to receive Distributions upon any such termination pro rata with
          the Holders of the Preferred Securities, except that if default
          has occurred and is continuing under the Trust Agreement, the
          Preferred Securities shall have a preference over the Common
          Securities.  (Sections 9.04(a) and 9.04(d)).  If an early
          termination occurs as described in clause (v) above, the Junior
          Subordinated Debentures will be subject to optional redemption in
          whole but not in part.

               EVENTS OF DEFAULT; NOTICE

               Any one of the following events constitutes an Event of
          Default under the Trust Agreement (whatever the reason for such
          Event of Default and whether it shall be voluntary or involuntary
          or be effected by operation of law or pursuant to any judgment,
          decree or order of any court or any order, rule or regulation of
          any administrative or governmental body):

                    (i) the occurrence of an Event of Default as defined in
               Section 801 of the Indenture (see DESCRIPTION OF THE JUNIOR
               SUBORDINATED DEBENTURES -- "Events of Default"); or

                    (ii) default by MP&L Capital in the payment of any
               distribution when it becomes due and payable, and
               continuation of such default for a period of 30 days; or

                    (iii) default by MP&L Capital in the payment of any
               Redemption Price, of any Trust Security when it becomes due
               and payable; or

                    (iv) default in the performance, or breach, in any
               material respect, of any covenant or warranty of the
               Trustees in the Trust Agreement (other than a covenant or
               warranty a default in the performance of which or the breach
               of which is specifically dealt with in clause (ii) or (iii)
               above), and continuation of such default or breach for a
               period of 60 days after there has been given, by registered
               or certified mail, to the Property Trustee by the Holders of
               Preferred Securities having at least 10% of the total
               liquidation preference amount of the outstanding Preferred
               Securities, a written notice specifying such default or
               breach and requiring it to be remedied and stating that such
               notice is a Notice of Default thereunder; or

                    (v) the occurrence of certain events of bankruptcy or
               insolvency with respect to MP&L Capital;

               Within five Business Days after the occurrence of any Event
          of Default, the Property Trustee shall transmit to the Holders of
          Trust Securities and the Company notice of any such Event of
          Default actually known to the Property Trustee, unless such Event
          of Default shall have been cured or waived.
          
               MERGER OR CONSOLIDATION OF THE PROPERTY TRUSTEE OR THE
               DELAWARE TRUSTEE

               Any entity into which the Property Trustee or the Delaware
          Trustee may be merged or with which it may be consolidated, or
          any entity resulting from any merger, conversion or consolidation
          to which the Property Trustee or the Delaware Trustee shall be a
          party, or any entity succeeding to all or substantially all the
          corporate trust business of the Property Trustee or the Delaware
          Trustee, shall be the successor to the Property Trustee or the
          Delaware Trustee under the Trust Agreement, provided such entity
          shall be otherwise qualified and eligible.  (Section 8.12).

               BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY

               The Depository Trust Company (DTC) will act as securities
          depositary for all of the Preferred Securities.  The Preferred
          Securities will be issued only as fully-registered securities
          registered in the name of Cede & Co. (DTC's nominee).  One or
          more fully-registered global Preferred Securities certificates,
          representing the aggregate number of Preferred Securities, will
          be issued and will be deposited with DTC.

               DTC is a limited-purpose trust company organized under the
          New York Banking Law, a "banking organization" within the meaning
          of the New York Banking Law, a member of the Federal Reserve
          System, a "clearing corporation" within the meaning of the New
          York Uniform Commercial Code and a "clearing agency" registered
          pursuant to the provisions of Section 17A of the 1934 Act.  DTC
          holds securities that its participants (Participants) deposit
          with DTC.  DTC also facilitates the settlement among Participants
          of securities transactions, such as transfers and pledges, in
          deposited securities through electronic computerized book-entry
          changes in Participants' accounts, thereby eliminating the need
          for physical movement of securities certificates.  Direct
          Participants include securities brokers and dealers, banks, trust
          companies, clearing corporations and certain other organizations
          (Direct Participants).  DTC is owned by a number of its Direct
          Participants and by the New York Stock Exchange, the American
          Stock Exchange, Inc., and the National Association of Securities
          Dealers, Inc.  Access to the DTC system is also available to
          others, such as securities brokers and dealers, banks and trust
          companies that clear transactions through or maintain a direct or
          indirect custodial relationship with a Direct Participant
          (Indirect Participants).  The rules applicable to DTC and its
          Direct Participants and Indirect Participants (together,
          Participants) are on file with the Commission.

               Purchases of Preferred Securities within the DTC system must
          be made by or through Direct Participants, which will receive a
          credit for the Preferred Securities on DTC's records.  The
          ownership interest of each actual purchaser of each Preferred
          Security (Beneficial Owner) is in turn to be recorded on the
          Participants' records.  Beneficial Owners will not receive
          written confirmation from DTC of their purchases, but Beneficial
          Owners are expected to receive written confirmations providing
          details of the transactions, as well as periodic statements of
          their holdings, from the Participants through which the
          Beneficial Owners purchased Preferred Securities.  Transfers of
          ownership interests in the Preferred Securities are to be
          accomplished by entries made on the books of Participants acting
          on behalf of Beneficial Owners.  Beneficial Owners will not
          receive certificates representing their ownership interests in
          the Preferred Securities, except in the event that use of the
          book-entry system for the Preferred Securities is discontinued.

               To facilitate subsequent transfers, all the Preferred
          Securities deposited by Direct Participants with DTC are
          registered in the name of DTC's nominee, Cede & Co.  The deposit
          of Preferred Securities with DTC and their registration in the
          name of Cede & Co. effect no change in beneficial ownership.  DTC
          has no knowledge of the actual Beneficial Owners of the Preferred
          Securities; DTC's records reflect only the identity of the Direct
          Participants to whose accounts such Preferred Securities are
          credited, which may or may not be the Beneficial Owners.  The
          Participants will remain responsible for keeping account of their
          holdings on behalf of their customers.

               Conveyance of notices and other communications by DTC to
          Direct Participants, by Direct Participants to Indirect
          Participants and by Participants to Beneficial Owners will be
          governed by arrangements among them, subject to any statutory or
          regulatory requirements that may be in effect from time to time.

               Redemption notices shall be sent to Cede & Co. as the
          registered Holder of Preferred Securities.  If less than all of
          the Preferred Securities are being redeemed, DTC's current
          practice is to determine by lot the amount of the interest of
          each Direct Participant in such issue to be redeemed.

               Although voting with respect to the Preferred Securities is
          limited, in those cases where a vote is required, neither DTC nor
          Cede & Co. will itself consent or vote with respect to Preferred
          Securities.  Under its usual procedures, DTC would mail an
          Omnibus Proxy to MP&L Capital as soon as possible after the
          record date.  The Omnibus Proxy assigns Cede & Co. consenting or
          voting rights to those Direct Participants to whose accounts the
          Preferred Securities are credited on the record date (identified
          in a listing attached to the Omnibus Proxy).  The Company and
          MP&L Capital believe that the arrangements among DTC, Direct and
          Indirect Participants, and Beneficial Owners will enable the
          Beneficial Owners to exercise rights equivalent in substance to
          the rights that can be directly exercised by a holder of a
          beneficial interest in MP&L Capital.

               Distribution payments on the Preferred Securities will be
          made to DTC.  DTC's practice is to credit Direct Participants'
          accounts on the relevant payment date in accordance with their
          respective holdings shown on DTC's records unless DTC has reason
          to believe that it will not receive payments on such payment
          date.  Payments by Participants to Beneficial Owners will be
          governed by standing instructions and customary practices, as is
          the case with securities held for the account of customers in
          bearer form or registered in "street name," and such payments
          will be the responsibility of such Participant and not of DTC,
          the Property Trustee, MP&L Capital or the Company, subject to any
          statutory or regulatory requirements to the contrary that may be
          in effect from time to time.  Payment of Distributions to DTC is
          the responsibility of MP&L Capital, disbursement of such payments
          to Direct Participants is the responsibility of DTC, and
          disbursement of such payments to the Beneficial Owners is the
          responsibility of Participants.

               Except as provided herein, a Beneficial Owner will not be
          entitled to receive physical delivery of Preferred Securities. 
          Accordingly, each Beneficial Owner must rely on the procedures of
          DTC to exercise any rights under the Preferred Securities.

               DTC may discontinue providing its services as securities
          depositary with respect to the Preferred Securities at any time
          by giving reasonable notice to MP&L Capital and the Company. 
          Under such circumstances, in the event that a successor
          securities depositary is not obtained, Preferred Securities
          certificates are required to be printed and delivered. 
          Additionally, the Administrative Trustees (with the consent of
          the Company) may decide to discontinue use of the system of book-
          entry transfers through DTC (or any successor depositary) with
          respect to the Preferred Securities.  In that event, certificates
          for the Preferred Securities will be printed and delivered.

               The information in this section concerning DTC and DTC's
          book-entry system has been obtained from sources that the Company
          and MP&L Capital believe to be reliable, but neither the Company
          nor MP&L Capital takes responsibility for the accuracy thereof.

               VOTING RIGHTS

               Holders of Trust Securities shall be entitled to one vote
          for each $25 in liquidation preferences represented by their
          Trust Securities in respect of any matter as to which such
          Holders of Trust Securities are entitled to vote.  Except as
          described below and under "Amendments to the Trust Agreement,"
          and under DESCRIPTION OF THE GUARANTEE -- "Amendments and
          Assignment" and as otherwise required by law and the Trust
          Agreement, the Holders of the Preferred Securities will have no
          voting rights.  (Section 6.01(a)).

               So long as any Junior Subordinated Debentures are held by
          the Property Trustee, the Property Trustee shall not (i) direct
          the time, method and place of conducting any proceeding for any
          remedy available to the Debenture Trustee, or executing any trust
          or power conferred on the Debenture Trustee with respect to the
          Junior Subordinated Debentures, (ii) waive any past default which
          is waivable under Section 813 of the Indenture, (iii) exercise
          any right to rescind or annul a declaration that the principal of
          all the Junior Subordinated Debentures shall be due and payable
          or (iv) consent to any amendment, modification or termination of
          the Indenture or the Junior Subordinated Debentures, where such
          consent shall be required, without, in each case, obtaining the
          prior approval of the Holders of Preferred Securities having of
          at least 66 2/3% of the liquidation preference amount of the
          outstanding Preferred Securities; provided, however, that where a
          consent under the Indenture would require the consent of each
          Holder of Junior Subordinated Debentures affected thereby, no
          such consent shall be given by the Property Trustee without the
          prior consent of each Holder of Preferred Securities.  The
          Property Trustee shall not revoke any action previously
          authorized or approved by a vote of the Preferred Securities.  If
          the Property Trustee fails to enforce its rights under the Junior
          Subordinated Debentures or the Trust Agreement to the fullest
          extent permitted by law, a Holder of Preferred Securities may,
          after such Holder's written request to the Property Trustee to
          enforce such rights, institute a legal proceeding directly
          against the Company to enforce the Property Trustee's rights
          under the Junior Subordinated Debentures or the Trust Agreement
          without first instituting any legal proceeding against the
          Property Trustee or any other person or entity.  The Property
          Trustee shall notify all Holders of the Preferred Securities of
          any notice of default received from the Debenture Trustee.  In
          addition to obtaining the foregoing approvals of the Holders of
          the Preferred Securities, prior to taking any of the foregoing
          actions, the Property Trustee shall receive an opinion of counsel
          experienced in such matters to the effect that MP&L Capital will
          be classified as a "grantor trust" and will not be classified as
          an association taxable as a corporation for United States federal
          income tax purposes on account of such action.  (Section
          6.01(b)).

               Any required approval of Holders of Preferred Securities may
          be given at a separate meeting of Holders of Preferred Securities
          convened for such purpose or pursuant to written consent.  The
          Administrative Trustees will cause a notice of any meeting at
          which Holders of Preferred Securities are entitled to vote, or of
          any matter upon which action by written consent of such Holders
          is to be taken, to be given to each Holder of Preferred
          Securities in the manner set forth in the Trust Agreement. 
          (Section 6.02).

               No vote or consent of the Holders of Preferred Securities
          will be required for MP&L Capital to redeem and cancel Preferred
          Securities in accordance with the Trust Agreement.

               Notwithstanding that Holders of Preferred Securities are
          entitled to vote or consent under any of the circumstances
          described above, any of the Preferred Securities that are owned
          by the Company, the Property Trustee or any affiliate of the
          Company or the Property Trustee, shall, for purposes of such vote
          or consent, be treated as if they were not outstanding.

               AMENDMENTS

               The Trust Agreement may be amended from time to time by MP&L
          Capital (on approval of a majority of the Administrative
          Trustees) and the Company, without the consent of any Holders of
          Trust Securities, (i) to cure any ambiguity, correct or
          supplement any provision therein which may be inconsistent with
          any other provision therein, or to make any other provisions with
          respect to matters or questions arising under the Trust
          Agreement, which shall not be inconsistent with the other
          provisions of the Trust Agreement, provided, however, that any
          such amendment shall not adversely affect in any material respect
          the interests of any Holder of Trust Securities or (ii) to
          modify, eliminate or add to any provisions of the Trust Agreement
          to such extent as shall be necessary to ensure that MP&L Capital
          will not be classified for United States federal income tax
          purposes as an association taxable as a corporation at any time
          that any Trust Securities are outstanding or to ensure MP&L
          Capital's exemption from the status of an "investment company"
          under the Investment Company Act of 1940, as amended (1940 Act);
          provided, however, that, except in the case of clause (ii), such
          action shall not adversely affect in any material respect the
          interests of any Holder of Trust Securities and, in the case of
          clause (i), any amendments of the Trust Agreement shall become
          effective when notice thereof is given to the Holders of Trust
          Securities.

               Except as provided below, any provision of the Trust
          Agreement may be amended by the Trustees and the Company with (i)
          the consent of Holders of Trust Securities representing not less
          than a majority in liquidation preference of the Trust Securities
          then outstanding and (ii) receipt by the Trustees of an opinion
          of counsel to the effect that such amendment or the exercise of
          any power granted to the Trustees in accordance with such
          amendment will not affect MP&L Capital's status as a grantor
          trust for United States federal income tax purposes or affect
          MP&L Capital's exemption from status of an "investment company"
          under the 1940 Act. 

               Without the consent of each affected Holder of Trust
          Securities, the Trust Agreement may not be amended to (i) change
          the amount or timing of any distribution with respect to the
          Trust Securities or otherwise adversely affect the amount of any
          distribution required to be made in respect of the Trust
          Securities as of a specified date or (ii) restrict the right of a
          Holder of Trust Securities to institute suit for the enforcement
          of any such payment on or after such date.

               REMOVAL OF PROPERTY TRUSTEE

               Unless an Event of Default under the Indenture shall have 
           occurred and be continuing, the Property Trustee may be
           removed at any time by act of the Holder of the Common Securities.
           If an Event of Default under the Indenture has occurred and is 
           continuing, the Property Trustee may be removed at such time by
           act of the Holders of Preferred Securities having a majority of 
           the liquidation preference of the Preferred Securities.  In no
           event will the Holders of the Preferred Securities have the 
           right to vote to appoint, remove or replace the Administrative
           Trustees, which voting rights are vested exclusively in the 
           Company as the Holder of the Common Securities.  No resignation
           or removal of the Property Trustee and no appointment of a
           successor trustee shall be effective until the acceptance of
           appointment by successor Property Trustee in accordance with
           the provisions of the Trust Agreement.  (Section 8.10).

               CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE

               Unless an Event of Default under the Indenture shall have
          occurred and be continuing, at any time or times, for the purpose
          of meeting the legal requirements of the Trust Indenture Act or
          of any jurisdiction in which any part of the Trust Property (as
          defined in the Trust Agreement) may at the time be located, the
          Holder of the Common Securities and the Property Trustee shall
          have power to appoint, and upon the written request of the
          Property Trustee, the Company, as Depositor, shall for such
          purpose join with the Property Trustee in the execution, delivery
          and performance of all instruments and agreements necessary or
          proper to appoint one or more persons approved by the Property
          Trustee either to act as co-trustee, jointly with the Property
          Trustee, of all or any part of such Trust Property, or to act as
          separate trustee of any such property, in either case with such
          powers as may be provided in the instrument of appointment, and
          to vest in such person or persons in such capacity, any property,
          title, right or power deemed necessary or desirable, subject to
          the provisions of the Trust Agreement.  If the Company, as
          Depositor, does not join in such appointment within 15 days after
          the receipt by it of a request so to do, or in case an Event of
          Default under the Indenture has occurred and is continuing, the
          Property Trustee alone shall have power to make such appointment. 
          (Section 8.09).

               FORM, EXCHANGE, AND TRANSFER

               Preferred Securities will be issuable only in fully
          registered form each having a liquidation preference amount of
          $25 and any integral multiple thereof.

               At the option of the Holder, subject to the terms of the
          Trust Agreement, Preferred Securities will be exchangeable for
          other Preferred Securities, of any authorized denomination and of
          like tenor and aggregate liquidation preference.

               Subject to the terms of the Trust Agreement, Preferred
          Securities may be presented for exchange as provided above or for
          registration of transfer (duly endorsed or accompanied by a duly
          executed instrument of transfer) at the office of the Security
          Registrar or at the office of any transfer agent designated by
          the Company for such purpose.  The Administrative Trustees may
          designate the Company as Transfer Agent and Registrar.  No
          service charge will be made for any registration of transfer or
          exchange of Preferred Securities, but the Company may require
          payment of a sum sufficient to cover any tax or other
          governmental charge payable in connection therewith.  Such
          transfer or exchange will be effected upon the Security Registrar
          or such transfer agent, as the case may be, being satisfied with
          the documents of title and identity of the person making the
          request.  The Company may at any time designate additional
          transfer agents or rescind the designation of any transfer agent
          or approve a change in the office through which any transfer
          agent acts, except that the Company will be required to maintain
          a transfer agent in each place of payment for the Preferred
          Securities.

               MP&L Capital will not be required to (i) issue, register the
          transfer of, or exchange any Preferred Securities during a period
          beginning at the opening of business 15 calendar days before the
          day of mailing of a notice of redemption of any Preferred
          Securities called for redemption and ending at the close of
          business on the day of such mailing or (ii) register the transfer
          of or exchange any Preferred Securities so selected for
          redemption, in whole or in part, except the unredeemed portion of
          any such Preferred Securities being redeemed in part.

               REGISTRAR AND TRANSFER AGENT

               The Company will act as transfer agent and Norwest Bank,
          N.A. will act as registrar for the Preferred Securities.

               Registration of transfers of Preferred Securities will be
          effected without charge by or on behalf of MP&L Capital, but upon
          payment (with the giving of such indemnity as MP&L Capital or the
          Company may require) in respect of any tax or other governmental
          charges which may be imposed in relation to it.

               MP&L Capital will not be required to register or cause to be
          registered any transfer of Preferred Securities after they have
          been called for redemption except the unredeemed portion of any
          Preferred Securities being redeemed in part.

               CONCERNING THE PROPERTY TRUSTEE

               The Company maintains deposit accounts and conducts other
          banking transactions with the Property Trustee in the ordinary
          course of their businesses.  The Property Trustee also acts as
          the Guarantee Trustee under the Guarantee, the Debenture Trustee
          under the Indenture and trustee under the Company's Mortgage and
          Deed of Trust with respect to all of the electric generating
          plants and other materially important physical properties of the
          Company and substantially all other properties described in the
          Mortgage as owned by the Company, subject to certain exceptions.

               MISCELLANEOUS

               Application will be made to list the Preferred Securities on
          the New York Stock Exchange.

               The Delaware Trustee will act as the resident trustee in the
          State of Delaware and will have no other significant duties.  The
          Property Trustee will hold the Junior Subordinated Debentures on
          behalf of MP&L Capital and will maintain a payment account with
          respect to the Trust Securities, and will also act as trustee
          under the Trust Agreement for the purposes of the Trust Indenture
          Act.  See "Events of Default; Notice."  The Administrative
          Trustees will administer the day to day operations of MP&L
          Capital.  See "Voting Rights."

               The Administrative Trustees are authorized and directed to
          conduct the affairs of MP&L Capital and to operate MP&L Capital
          so that MP&L Capital will not be deemed to be an "investment
          company" required to be registered under the 1940 Act or taxed as
          a corporation for United States federal income tax purposes and
          so that the Junior Subordinated Debentures will be treated as
          indebtedness of the Company for United States federal income tax
          purposes.  In this connection, the Administrative Trustees and
          the Company are authorized to take any action, not inconsistent
          with applicable law, the certificate of trust or the Trust
          Agreement, that the Administrative Trustees and the Company
          determine in their discretion to be necessary or desirable for
          such purposes, as long as such action does not materially
          adversely affect the interests of the Holders of the Preferred
          Securities.

               Holders of the Preferred Securities have no preemptive or
          similar rights.

                             DESCRIPTION OF THE GUARANTEE

               Set forth below is a summary of information concerning the
          Guarantee that will be executed and delivered by the Company for
          the benefit of the Holders from time to time of Preferred
          Securities.  The Guarantee will be qualified as an indenture
          under the Trust Indenture Act.  The Bank of New York will act as
          Guarantee Trustee under the Guarantee for the purposes of
          compliance with the Trust Indenture Act.  The terms of the
          Guarantee will be those set forth in such Guarantee and those
          made part of such Guarantee by the Trust Indenture Act.  The
          summary does not purport to be complete and is subject in all
          respects to the provisions of, and is qualified in its entirety
          by reference to, the Guarantee, which is filed as an exhibit to
          the Registration Statement of which this Prospectus forms a part,
          and the Trust Indenture Act.  The Guarantee Trustee will hold the
          Guarantee for the benefit of the Holders of the Preferred
          Securities.

               GENERAL

               The Company will fully and unconditionally agree, to the
          extent set forth herein, to pay the Guarantee Payments (as
          defined herein) in full to the Holders of the Preferred
          Securities (except to the extent paid by or on behalf of MP&L
          Capital), as and when due, regardless of any defense, right of
          set-off or counterclaim that the Company may have or assert.  The
          following payments with respect to the Preferred Securities, to
          the extent not paid by or on behalf of MP&L Capital (Guarantee
          Payments), will be subject to the Guarantee (without
          duplication): (i) any accrued and unpaid Distributions required
          to be paid on the Preferred Securities, to the extent MP&L
          Capital has funds available therefor, (ii) the Redemption Price
          with respect to any Preferred Securities called for redemption by
          MP&L Capital, to the extent MP&L Capital has funds available
          therefor and (iii) upon a voluntary or involuntary dissolution,
          winding-up or termination of MP&L Capital (other than in
          connection with a redemption of all of the Preferred Securities),
          the lesser of (a) the aggregate of the liquidation preference
          amount and all accrued and unpaid Distributions on the Preferred
          Securities to the date of payment and (b) the amount of assets of
          MP&L Capital remaining available for distribution to Holders of
          Preferred Securities in liquidation of MP&L Capital.  The
          Company's obligation to make a Guarantee Payment may be satisfied
          by direct payment of the required amounts by the Company to the
          Holders of Preferred Securities or by causing MP&L Capital to pay
          such amounts to such Holders.

               The Guarantee will be a full and unconditional guarantee
          with respect to the Preferred Securities issued by MP&L Capital
          from the time of issuance of the Preferred Securities, but will
          not apply to (i) any payment of Distributions if and to the
          extent that MP&L Capital does not have funds available to make
          such payments, or (ii) collection of payment.  If the Company
          does not make interest payments on the Junior Subordinated
          Debentures held by MP&L Capital, MP&L Capital will not have funds
          available to pay Distributions on the Preferred Securities.  The
          Guarantee will rank subordinate and junior in right of payment to
          all liabilities of the Company (except those made pari passu by
          their terms).  See "Status of the Guarantee."

               AMENDMENTS AND ASSIGNMENT

               Except with respect to any changes that do not materially
          adversely affect the rights of Holders of Preferred Securities
          (in which case no vote will be required), the terms of the
          Guarantee may be changed only with the prior approval of the
          Holders of Preferred Securities having at least 66 2/3% of the
          liquidation preference amount of the outstanding Preferred
          Securities.  All guarantees and agreements contained in the
          Guarantee shall bind the successors, assigns, receivers, trustees
          and representatives of the Company and shall inure to the benefit
          of the Holders of the Preferred Securities then outstanding.

               EVENTS OF DEFAULT

               An event of default under the Guarantee will occur upon the
          failure of the Company to perform any of its payment obligations
          thereunder.  The Holders of Preferred Securities having a
          majority of the liquidation preference of the Preferred
          Securities have the right to direct the time, method and place of
          conducting any proceeding for any remedy available to the
          Guarantee Trustee in respect of the Guarantee or to direct the
          exercise of any trust or power conferred upon the Guarantee
          Trustee under the Guarantee.

               If the Guarantee Trustee fails to enforce the Guarantee, any
          Holder of Preferred Securities may institute a legal proceeding
          directly against the Company to enforce the Guarantee Trustee's
          rights under the Guarantee without first instituting a legal
          proceeding against MP&L Capital, the Guarantee Trustee or any
          other person or entity.

               The Company, as Guarantor, will be required to provide
          annually to the Guarantee Trustee a statement as to the
          performance by the Company of certain of its obligations under
          the Guarantee and as to any default in such performance and an
          officer's certificate as to the Company's compliance with all
          conditions under the Guarantee.

               INFORMATION CONCERNING THE GUARANTEE TRUSTEE

               The Guarantee Trustee, prior to the occurrence of a default
          by the Company in performance of the Guarantee, has undertaken to
          perform only such duties as are specifically set forth in the
          Guarantee and, after default with respect to the Guarantee, must
          exercise the same degree of care as a prudent individual would
          exercise in the conduct of his or her own affairs.  Subject to
          this provision, the Guarantee Trustee is under no obligation to
          exercise any of the powers vested in it by the Guarantee at the
          request of any Holder of Preferred Securities unless it is
          offered reasonable indemnity against the costs, expenses and
          liabilities that might be incurred thereby.  See DESCRIPTION OF
          THE PREFERRED SECURITIES -- "Concerning the Property Trustee."

               TERMINATION OF THE GUARANTEE

               The Guarantee will terminate and be of no further force and
          effect upon full payment of the Redemption Price of all Preferred
          Securities, the distribution of Junior Subordinated Debentures to
          Holders of Preferred Securities in exchange for all of the
          Preferred Securities or full payment of the amounts payable upon
          liquidation of MP&L Capital.  The Guarantee will continue to be
          effective or will be reinstated, as the case may be, if at any
          time any Holder of Preferred Securities must restore payment of
          any sums paid under the Preferred Securities or the Guarantee.

               STATUS OF THE GUARANTEE

               The Guarantee will constitute an unsecured obligation of the
          Company and will rank (i) subordinate and junior in right of
          payment to all liabilities of the Company (except liabilities
          that may be made pari passu by their terms), (ii) pari passu with
          the most senior preferred or preference stock now or hereafter
          issued by the Company and with any guarantee now or hereafter
          entered into by the Company in respect of any preferred or
          preference stock of any affiliate of the Company and (iii) senior
          to the Company's common stock.  The Trust Agreement provides that
          each Holder of Preferred Securities by acceptance thereof agrees
          to the subordination provisions and other terms of the Guarantee.

               The Guarantee will constitute a guarantee of payment and not
          of collection (i.e., the guaranteed party may institute a legal
          proceeding directly against the Guarantor to enforce its rights
          under the Guarantee without first instituting a legal proceeding
          against any other person or entity).

               GOVERNING LAW

               The Guarantee will be governed by and construed in
          accordance with the laws of the State of New York.

                  DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES

               Set forth below is a description of the specific terms of
          the Junior Subordinated Debentures which MP&L Capital will hold
          as trust assets.  The following description does not purport to
          be complete and is qualified in its entirety by reference to the
          description in the Indenture between the Company and the Trustee
          with respect to the Junior Subordinated Debentures (Debenture
          Trustee), which is filed as an exhibit to the Registration
          Statement of which this Prospectus forms a part.  Whenever
          particular provisions or defined terms in the Indenture are
          referred to herein, such provisions or defined terms are
          incorporated by reference herein.  Section references used herein
          are references to provisions of the Indenture unless otherwise
          noted.

               The Indenture provides for the issuance of debentures
          (including the Junior Subordinated Debentures), notes or other
          evidence of indebtedness by the Company (each a Debt Security) in
          an unlimited amount from time to time.  The Junior Subordinated
          Debentures constitute a separate series under the Indenture.

               GENERAL

               The Junior Subordinated Debentures will be limited in
          aggregate principal amount to the sum of the aggregate
          liquidation preference amount of the Preferred Securities and the
          consideration paid by the Company for the Common Securities.  The
          Junior Subordinated Debentures are unsecured, subordinated
          obligations of the Company which rank junior to all of the
          Company's Senior Indebtedness.

               The entire outstanding principal amount of the Junior
          Subordinated Debentures will become due and payable, together
          with any accrued and unpaid interest thereon, including
          Additional Interest (as defined herein), if any, on           ,   
           .  The amounts payable as principal and interest on the Junior
          Subordinated Debentures will be sufficient to provide for payment
          of Distributions payable on the Trust Securities.

                    The Articles of Incorporation of the Company limit the
          amount of unsecured indebtedness with a maturity of more than one
          year that the Company may create or assume, without the consent
          of the Holders of a majority of the total number of shares of
          preferred stock then outstanding, to not more than 25% of the
          aggregate of the sum of the principal amount of the secured
          indebtedness of the Company and the capital stock and surplus of
          the Company as stated on the Company's books of account.  At
          December 31, 1995, the Company could have issued approximately
          $249 million of unsecured indebtedness (such as the Junior
          Subordinated Debentures) without violating this provision.

                    Also under the Articles of Incorporation, the creation
          or assumption of unsecured indebtedness with a maturity of more
          than one year requires that net earnings available for the
          payment of interest for 12 consecutive out of the preceding 15
          months be at least twice the annual interest requirements on all
          outstanding indebtedness of the Company, including the
          indebtedness to be created or assumed.  At December 31, 1995, the
          Company could have issued an additional $141 million of unsecured
          indebtedness, including the Junior Subordinated Debentures, at an
          assumed annual interest rate of 7.75%, without violating this
          provision.

               If Junior Subordinated Debentures are distributed to Holders
          of Preferred Securities in a termination of MP&L Capital, such
          Junior Subordinated Debentures will be issued in fully registered
          certificated form in denominations of $25 and integral multiples
          thereof and may be transferred or exchanged at the offices
          described below.

               Payments of principal and interest on Junior Subordinated
          Debentures will be payable, the transfer of Junior Subordinated
          Debenture will be registrable, and Junior Subordinated Debentures
          will be exchangeable for Junior Subordinated Debentures of other
          denominations of a like aggregate principal amount, at the
          corporate trust office of the Debenture Trustee in The City of
          New York; provided that payment of interest may be made at the
          option of the Company by check mailed to the address of the
          persons entitled thereto and that the payment in full of
          principal with respect to any Junior Subordinated Debenture will
          be made only upon surrender of such Junior Subordinated Debenture
          to the Debenture Trustee.

               OPTIONAL REDEMPTION

               On or after                 , the Company will have the
          right, at any time and from time to time, to redeem the Junior
          Subordinated Debentures, in whole or in part, at a redemption
          price equal to 100% of the principal amount of the Junior
          Subordinated Debentures being redeemed, together with any accrued
          but unpaid interest, including Additional Interest, if any, to
          the Redemption Date.

               If a Special Event shall occur and be continuing, the
          Company shall have the right to redeem the Junior Subordinated
          Debentures, in whole but not in part, at a redemption price equal
          to 100% of the principal amount of Junior Subordinated Debentures
          then outstanding plus any accrued and unpaid interest, including
          Additional Interest, if any, to the Redemption Date.  The Junior
          Subordinated Debentures will be subject to optional redemption in
          whole but not in part upon the termination and liquidation of
          MP&L Capital pursuant to an order for the dissolution,
          termination or liquidation of MP&L Capital entered by a court of
          competent jurisdiction.

               For so long as MP&L Capital is the Holder of all the
          outstanding Junior Subordinated Debentures, the proceeds of any
          such redemption will be used by MP&L Capital to redeem Preferred
          Securities and Common Securities in accordance with their terms. 
          The Company may not redeem less than all the Junior Subordinated
          Debentures unless all accrued and unpaid interest (including any
          Additional Interest) has been paid in full on all outstanding
          Junior Subordinated Debentures for all quarterly interest periods
          terminating on or prior to the date of redemption.

               Any optional redemption of Junior Subordinated Debentures
          shall be made upon not less than 30 nor more than 60 days' notice
          from the Debenture Trustee to the Holders of Junior Subordinated
          Debentures, as provided in the Indenture.  All notices of
          redemption shall state the Redemption Date, the redemption price
          plus accrued and unpaid distributions, if less than all the
          Junior Subordinated Debentures are to be redeemed, the
          identification of those to be redeemed and the portion of the
          principal amount of any Junior Subordinated Debentures to be
          redeemed in part; that on the Redemption Date, subject to the
          Debenture Trustee's receipt of the redemption monies, the
          redemption price plus accrued and unpaid distributions will
          become due and payable upon each such Junior Subordinated
          Debentures to be redeemed and that interest thereon will cease to
          accrue on and after said date; and the place or places where such
          securities are to be surrendered for payment of the redemption
          price plus accrued and unpaid distributions.

               INTEREST

               The Junior Subordinated Debentures shall bear interest at
          the rate of   % per annum.  Such interest is payable quarterly in
          arrears on March 31, June 30, September 30 and December 31 of
          each year (each, an Interest Payment Date), commencing          
          , 1996, to the person in whose name each Junior Subordinated
          Debenture is registered, by the close of business on the Business
          Day 15 days preceding such Interest Payment Date.  It is
          anticipated that MP&L Capital will be the sole Holder of the
          Junior Subordinated Debentures.

               The amount of interest payable for any period will be
          computed on the basis of a 360-day year of twelve 30-day months
          and for any period shorter than a full month, on the basis of the
          actual number of days elapsed (Section 310).  In the event that
          any date on which interest is payable on the Junior Subordinated
          Debentures is not a Business Day, then payment of the interest
          payable on such date will be made on the next succeeding day
          which is a Business Day (and without any interest or other
          payment in respect of any such delay), except that, if such
          Business Day is in the next succeeding calendar year, such
          payment shall be made on the immediately preceding Business Day,
          in each case with the same force and effect as if made on the
          date the payment was originally payable (Section 113).

               OPTION TO EXTEND INTEREST PAYMENT PERIOD

               The Company has the right under the Indenture to extend the
          interest payment period from time to time on the Junior
          Subordinated Debentures to a period not exceeding 20 consecutive
          quarters during which period interest will be compounded
          quarterly.  At the end of an Extension Period, the Company must
          pay all interest then accrued and unpaid (together with interest
          thereon at the rate specified for the Junior Subordinated
          Debentures compounded quarterly, to the extent permitted by
          applicable law).  However, during any such Extension Period, the
          Company shall not (i) declare or pay any dividend or distribution
          (other than a dividend or distribution in Common Stock of the
          Company) on, or redeem, purchase, acquire or make a liquidation
          payment with respect to, any of its capital stock,  or (ii) make
          any payment of principal of, interest or premium, if any, on, or
          repay, repurchase or redeem any indebtedness that is pari passu 
          with the Junior Subordinated Debentures (including other Debt 
          Securities), or make any guarantee payments with respect to the
          foregoing.  Prior to the termination of any such Extension
          Period, the Company may further extend the interest payment
          period, provided that such Extension Period together with all
          such previous and further extensions thereof shall not exceed 20
          consecutive quarters at any one time or extend beyond the
          maturity date of the Junior Subordinated Debentures.  Any
          extension period with respect to payment of interest on the
          Junior Subordinated Debentures, other Debt Securities or on any
          similar securities will apply to all such securities and will
          also apply to Distributions with respect to the Preferred
          Securities and all other securities with terms substantially the
          same as the Preferred Securities.  Upon the termination of any
          such Extension Period and the payment of all amounts then due,
          the Company may select a new Extension Period, subject to the
          above requirements.  No interest shall be due and payable during
          an Extension Period, except at the end thereof.  The Company will
          give MP&L Capital and the Debenture Trustee notice of its
          election of an Extension Period prior to the earlier of (i) one
          Business Day prior to the record date for the distribution which
          would occur but for such election or (ii) the date the Company is
          required to give notice to the NYSE or other applicable
          self-regulatory organization of the record date and will cause
          MP&L Capital to send notice of such election to the Holders of
          Preferred Securities.

               ADDITIONAL INTEREST

               So long as any Preferred Securities remain outstanding, if
          MP&L Capital would be required to pay, with respect to its income
          derived from the interest payments on the Junior Subordinated
          Debentures any amounts for or on account of any taxes, duties,
          assessments or governmental charges of whatever nature imposed by
          the United States, or any other taxing authority, then, in any
          such case, the Company will pay as interest on such Junior
          Subordinated Debentures such additional interest (Additional
          Interest) as may be necessary in order that the net amounts
          received and retained by MP&L Capital after the payment of such
          taxes, duties, assessments or governmental charges shall result
          in the MP&L Capital's having such funds as it would have had in
          the absence of the payment of such taxes, duties, assessments or
          governmental charges.

               DEFEASANCE

               The principal amount of any series of Debt Securities issued
          under the Indenture will be deemed to have been paid for purposes
          of the Indenture and the entire indebtedness of the Company in
          respect thereof will be deemed to have been satisfied and
          discharged, if there shall have been irrevocably deposited with
          the Debenture Trustee or any paying agent, in trust:  (a) money
          in an amount which will be sufficient, or (b) in the case of a
          deposit made prior to the maturity of the Junior Subordinated
          Debentures, Government Obligations (as defined herein), which do
          not contain provisions permitting the redemption or other
          prepayment thereof at the option of the issuer thereof, the
          principal of and the interest on which when due, without any
          regard to reinvestment thereof, will provide moneys which,
          together with the money, if any, deposited with or held by the
          Debenture Trustee, will be sufficient, or (c) a combination of
          (a) and (b) which will be sufficient, to pay when due the
          principal of and premium, if any, and interest, if any, due and
          to become due on the Debt Securities of such series that are
          outstanding.  For this purpose, Government Obligations, include
          direct obligations of, or obligations unconditionally guaranteed
          by, the United States of America entitled to the benefit of the
          full faith and credit thereof and certificates, depositary
          receipts or other instruments which evidence a direct ownership
          interest in such obligations or in any specific interest or
          principal payments due in respect thereof.

               It is possible that for United States federal income tax
          purposes any deposit contemplated in the preceding paragraph
          could be treated as a taxable exchange of the Junior Subordinated
          Debentures outstanding for an issue of obligations of MP&L
          Capital or a direct interest in the cash and securities held by
          MP&L Capital.  In that case, Holders of the Junior Subordinated
          Debentures outstanding would recognize a gain or loss for federal
          income tax purposes, as if their share of MP&L Capital
          obligations or the cash or securities deposited, as the case may
          be, had actually been received by them in exchange for their
          Junior Subordinated Debentures.  In addition, such Holders
          thereafter would be required to include in income a share of the
          income, gain or loss of MP&L Capital.  The amount so required to
          be included in income could be different from the amount that
          would be includable in the absence of such deposit.  Prospective
          investors are urged to consult their own tax advisors as to the
          specific consequences to them of such deposit.

               SUBORDINATION

               The Junior Subordinated Debentures will be subordinate and
          junior in right of payment to all Senior Indebtedness of the
          Company to the extent provided in the Indenture.  No payment of
          principal of (including redemption and sinking fund payments), or
          interest on, the Junior Subordinated Debentures may be made (i)
          upon the occurrence of certain events of bankruptcy, insolvency
          or reorganization, (ii) if any Senior Indebtedness is not paid
          when due, (iii) if any other default has occurred pursuant to
          which the Holders of Senior Indebtedness have accelerated the
          maturity thereof and with respect to (ii) and (iii), such default
          has not been cured or waived, or (iv) if the maturity of any
          series of Debt Securities has been accelerated, because of an
          event of default with respect thereto, which remains uncured. 
          Upon any payment or distribution of assets of the Company to
          creditors upon any dissolution, winding-up, liquidation or
          reorganization, whether voluntary or involuntary or in
          bankruptcy, insolvency, receivership or other proceedings, all
          principal of, and premium, if any, and interest due or to become
          due on, all Senior Indebtedness must be paid in full before the
          Holders of the Junior Subordinated Debentures are entitled to
          receive or retain any payment thereon. (Section 1502).  Subject
          to the prior payment of all Senior Indebtedness, the rights of
          the Holders of the Junior Subordinated Debentures will be
          subrogated to the rights of the Holders of Senior Indebtedness to
          receive payments or distributions applicable to Senior
          Indebtedness until all amounts owing on the Junior Subordinated
          Debentures are paid in full. (Section 1504).

               The term Senior Indebtedness is defined in the Indenture to
          mean all obligations (other than non-recourse obligations and the
          indebtedness issued under the Indenture) of, or guaranteed or
          assumed by, the Company for borrowed money, including both senior
          and subordinated indebtedness for borrowed money (other than the
          Debt Securities), or for the payment of money relating to any
          lease which is capitalized on the consolidated balance sheet of
          the Company and its subsidiaries in accordance with generally
          accepted accounting principles as in effect from time to time, or
          evidenced by bonds, debentures, notes or other similar
          instruments, and in each case, amendments, renewals, extensions,
          modifications and refundings of any such indebtedness or
          obligations, whether existing as of the date of this Indenture or
          subsequently incurred by the Company unless, in the case of any
          particular indebtedness, renewal, extension or refunding, the
          instrument creating or evidencing the same or the assumption or
          guarantee of the same expressly provides that such indebtedness,
          renewal, extension or refunding is not superior in right of
          payment to or is pari passu with the Junior Subordinated
          Debentures; provided that the Company's obligations under the
          Guarantee shall not be deemed to be Senior Indebtedness. (Section
          101).

               The Indenture does not limit the aggregate amount of Senior
          Indebtedness that may be issued.  As of December 31, 1995, the
          Company had approximately $790 million principal amount of
          indebtedness for borrowed money constituting Senior Indebtedness.

               CONSOLIDATION, MERGER, AND SALE OF ASSETS

               Under the terms of the Indenture, the Company may not
          consolidate with or merge into any other entity or convey,
          transfer or lease its properties and assets substantially as an
          entirety to any entity, unless (i) the corporation formed by such
          consolidation or into which the Company is merged or the entity
          which acquires by conveyance or transfer, or which leases, the
          property and assets of the Company substantially as an entirety
          shall be a entity organized and validly existing under the laws
          of any domestic jurisdiction and such entity expressly assumes
          the Company's obligations on all Debt Securities and under the
          Indenture, (ii) immediately after giving effect to the
          transaction, no Event of Default, and no event which, after
          notice or lapse of time or both, would become an Event of
          Default, shall have occurred and be continuing, and (iii) the
          Company shall have delivered to the Debenture Trustee an
          Officer's Certificate and an Opinion of Counsel as provided in
          the Indenture. (Section 1101).

               EVENTS OF DEFAULT

               Each of the following will constitute an Event of Default
          under the Indenture with respect to the Debt Securities of any
          series:  (a) failure to pay any interest on the Debt Securities
          of such series within 30 days after the same becomes due and
          payable, provided that deferral of payment during an Extension
          Period will not constitute an Event of Default; (b) failure to
          pay principal or premium, if any, on the Debt Securities of such
          series when due and payable; (c) failure to perform, or breach
          of, any other covenant or warranty of the Company in the
          Indenture (other than a covenant or warranty of the Company in
          the Indenture solely for the benefit of one or more series of
          Debt Securities other than such series) for 60 days after written
          notice to the Company by the Debenture Trustee, or to the Company
          and the Debenture Trustee by the Holders of at least 33% in
          principal amount of the Debt Securities of such series
          outstanding under the Indenture as provided in the Indenture; (d)
          the entry by a court having jurisdiction in the premises of (1) a
          decree or order for relief in respect of the Company in an
          involuntary case or proceeding under any applicable Federal or
          state bankruptcy, insolvency, reorganization or other similar law
          or (2) a decree or order adjudging the Company a bankrupt or
          insolvent, or approving as properly filed a petition by one or
          more Persons other than the Company seeking reorganization,
          arrangement, adjustment or composition of or in respect of the
          Company under any applicable Federal or state law, or appointing
          a custodian, receiver, liquidator, assignee, trustee,
          sequestrator or other similar official for the Company or for any
          substantial part of its property, or ordering the winding up or
          liquidation of its affairs, and any such decree or order for
          relief or any such other decree or order shall have remained
          unstayed and in effect for a period of 90 consecutive days; and
          (e) the commencement by the Company of a voluntary case or
          proceeding under any applicable Federal or state bankruptcy,
          insolvency, reorganization or other similar law or of any other
          case or proceeding to be adjudicated a bankrupt or insolvent, or
          the consent by it to the entry of a decree or order for relief in
          respect of the Company in a case or other similar proceeding or
          to the commencement of any bankruptcy or insolvency case or
          proceeding against it under any applicable Federal or state law
          or the filing by it of a petition or answer or consent seeking
          reorganization or relief under any applicable Federal or state
          law, or the consent by it to the filing of such petition or to
          the appointment of or taking possession by a custodian, receiver,
          liquidator, assignee, trustee, sequestrator or similar official
          of the Company or of any substantial part of its property, or the
          making by it of an assignment for the benefit of creditors, or
          the admission by it in writing of its inability to pay its debts
          generally as they become due, or the authorization of such action
          by the Board of Directors. (Section 801).

               An Event of Default with respect to the Debt Securities of a
          particular series may not necessarily constitute an Event of
          Default with respect to Debt Securities of any other series
          issued under the Indenture.

               If an Event of Default due to the default in payment of
          principal of or interest on any series of Debt Securities or due
          to the default in the performance or breach of any other covenant
          or warranty of the Company applicable to the Debt Securities of
          such series but not applicable to all series occurs and is
          continuing, then either the Trustee or the Holders of 33% in
          principal amount of the outstanding Debt Securities of such
          series may declare the principal of all of the Debt Securities of
          such series and interest accrued thereon to be due and payable
          immediately (subject to the subordination provisions of the
          Indenture).  If an Event of Default due to the default in the
          performance of any other covenants or agreements in the Indenture
          applicable to all outstanding Debt Securities or due to certain
          events of bankruptcy, insolvency or reorganization of the Company
          has occurred and is continuing, either the Trustee or the Holders
          of not less than 33% in principal amount of all outstanding Debt
          Securities, considered as one class, and not the Holders of the
          Debt Securities of any one of such series may make such
          declaration of acceleration (subject to the subordination
          provisions of the Indenture).

               At any time after the declaration of acceleration with
          respect to the Debt Securities of any series has been made and
          before a judgment or decree for payment of the money due has been
          obtained, the Event or Events of Default giving rise to such
          declaration of acceleration will, without further act, be deemed
          to have been waived, and such declaration and its consequences
          will, without further act, be deemed to have been rescinded and
          annulled, if

               (a)  the Company has paid or deposited with the Debenture
          Trustee a sum sufficient to pay

                    (1)  all overdue interest on all Debt Securities of
          such series;

                    (2)  the principal of and premium, if any, on any Debt
          Securities of such series which have become due otherwise than by
          such declaration of acceleration and interest thereon at the rate
          or rates prescribed therefor in such Debt Securities;

                    (3)  interest upon overdue interest at the rate or
          rates prescribed therefor in such Debt Securities, to the extent
          that payment of such interest is lawful; and

                    (4)  all amounts due to the Debenture Trustee under the
          Indenture; and

               (b)  any other Event or Events of Default with respect to
          Debt Securities of such series, other than the nonpayment of the
          principal of the Debt Securities of such series which has become
          due solely by such declaration of acceleration, have been cured
          or waived as provided in the Indenture. (Section 802).

               Subject to the provisions of the Indenture relating to the
          duties of the Debenture Trustee in case an Event of Default shall
          occur and be continuing, the Debenture Trustee will be under no
          obligation to exercise any of its rights or powers under the
          Indenture at the request or direction of any of the Holders of
          the Junior Subordinated Debentures, unless such Holders shall
          have offered to the Debenture Trustee reasonable indemnity.
          (Section 903).  If an Event of Default has occurred and is
          continuing in respect of a series of Debt Securities, subject to
          such provisions for the indemnification of the Debenture Trustee,
          the Holders of a majority in principal amount of the outstanding
          Debt Securities of such series will have the right to direct the
          time, method and place of conducting any proceeding for any
          remedy available to the Debenture Trustee, or exercising any
          trust or power conferred on the Debenture Trustee, with respect
          to the Debt Securities of such series; provided, however, that if
          an Event of Default occurs and is continuing with respect to more
          than one series of Debt Securities, the Holders of a majority in
          aggregate principal amount of the outstanding Debt Securities of
          all such series, considered as one class, will have the right to
          make such direction, and not the Holders of the Debt Securities
          of any one of such series; and provided, further, that such
          direction will not be in conflict with any rule of law or with
          the Indenture. (Section 812).

               No Holder of Debt Securities of any series will have any
          right to institute any proceeding with respect to the Indenture,
          or for the appointment of a receiver or a trustee, or for any
          other remedy thereunder, unless (i) such Holder has previously
          given to the Debenture Trustee written notice of a continuing
          Event of Default with respect to the Debt Securities of such
          series, (ii) the Holders of not less than a majority in aggregate
          principal amount of the outstanding Debt Securities of all series
          in respect of which an Event of Default shall have occurred and
          be continuing, considered as one class, have made written request
          to the Debenture Trustee, and such Holder or Holders have offered
          reasonable indemnity to the Debenture Trustee to institute such
          proceeding in respect of such Event of Default in its own name as
          trustee and (iii) the Debenture Trustee has failed to institute
          any proceeding, and has not received from the Holders of a
          majority in aggregate principal amount of the outstanding Debt
          Securities of such series a direction inconsistent with such
          request, within 60 days after such notice, request and offer.
          (Section 807).  However, such limitations do not apply to a suit
          instituted by a Holder of a Debt Security for the enforcement of
          payment of the principal of or any premium or interest on such
          Debt Security on or after the applicable due date specified in
          such Debt Security. (Section 808).

               The Company will be required to furnish to the Debenture
          Trustee annually a statement by an appropriate officer as to such
          officer's knowledge of the Company's compliance with all
          conditions and covenants under the Indenture, such compliance to
          be determined without regard to any period of grace or
          requirement of notice under the Indenture. (Section 606).

               MODIFICATION AND WAIVER

               Without the consent of any Holder of Debt Securities, the
          Company and the Debenture Trustee may enter into one or more
          supplemental indentures for any of the following purposes: (a) to
          evidence the assumption by any permitted successor to the Company
          of the covenants of the Company in the Indenture and in the Debt
          Securities; or (b) to add one or more covenants of the Company or
          other provisions for the benefit of the Holders of outstanding
          Debt Securities or to surrender any right or power conferred upon
          the Company by the Indenture; or (c) to add any additional Events
          of Default with respect to outstanding Debt Securities; or (d) to
          change or eliminate any provision of the Indenture or to add any
          new provision to the Indenture, provided that if such change,
          elimination or addition will adversely affect the interests of
          the Holders of Debt Securities of any series in any material
          respect, such change, elimination or addition will become
          effective with respect to such series only (1) when the consent
          of the Holders of Debt Securities of such series has been
          obtained in accordance with the Indenture, or (2) when no Debt
          Securities of such series remain outstanding under the Indenture;
          or (e) to provide collateral security for all but not part of the
          Debt Securities; (f) to establish the form or terms of Debt
          Securities of any other series as permitted by the Indenture; or
          (g) to provide for the authentication and delivery of bearer
          securities and coupons appertaining thereto representing
          interest, if any, thereon and for the procedures for the
          registration, exchange and replacement thereof and for the giving
          of notice to, and the solicitation of the vote or consent of, the
          Holders thereof, and for any and all other matters incidental
          thereto; or (h) to evidence and provide for the acceptance of
          appointment of a successor Debenture Trustee under the Indenture
          with respect to the Debt Securities of one or more series and to
          add to or change any of the provisions of the Indenture as shall
          be necessary to provide for or to facilitate the administration
          of the trusts under the Indenture by more than one trustee; or
          (i)  to provide for the procedures required to permit the
          utilization of a noncertificated system of registration for the
          Debt Securities of all or any series; or (j) to change any place
          where (1) the principal of and premium, if any, and interest, if
          any, on all or any series of Debt Securities shall be payable,
          (2) all or any series of Debt Securities may be surrendered for
          registration of transfer or exchange and (3) notices and demands
          to or upon the Company in respect of Debt Securities and the
          Indenture may be served; or (k) to cure any ambiguity or
          inconsistency or to add or change any other provisions with
          respect to matters and questions arising under the Indenture,
          provided such changes or additions shall not adversely affect the
          interests of the Holders of Debt Securities of any series in any
          material respect. (Section 1201).

               The Holders of at least a majority in aggregate principal
          amount of the Debt Securities of all series then outstanding may
          waive compliance by the Company with certain restrictive
          provisions of the Indenture. (Section 607).  The Holders of not
          less than a majority in principal amount of the outstanding Debt
          Securities of any series may waive any past default under the
          Indenture with respect to such series, except a default in the
          payment of principal, premium, or interest and certain covenants
          and provisions of the Indenture that cannot be modified or be
          amended without the consent of the Holder of each outstanding
          Debt Security of such series affected. (Section 813).

               Without limiting the generality of the foregoing, if the
          Trust Indenture Act is amended after the date of the Indenture in
          such a way as to require changes to the Indenture or the
          incorporation therein of additional provisions or so as to permit
          changes to, or the elimination of, provisions which, at the date
          of the Indenture or at any time thereafter, were required by the
          Trust Indenture Act to be contained in the Indenture, the
          Indenture will be deemed to have been amended so as to conform to
          such amendment of the Trust Indenture Act or to effect such
          changes, additions or elimination, and the Company and the
          Debenture Trustee may, without the consent of any Holders, enter
          into one or more supplemental indentures to evidence or effect
          such amendment. (Section 1201).

               Except as provided above, the consent of the Holders of not
          less than a majority in aggregate principal amount of the Debt
          Securities of all series then outstanding, considered as one
          class, is required for the purpose of adding any provisions to,
          or changing in any manner, or eliminating any of the provisions
          of, the Indenture or modifying in any manner the rights of the
          Holders of such Debt Securities under the Indenture pursuant to
          one or more supplemental indentures; provided, however, that if
          less than all of the series of Debt Securities outstanding are
          directly affected by a proposed supplemental indenture, then the
          consent only of the Holders of a majority in aggregate principal
          amount of outstanding Debt Securities of all series so directly
          affected, considered as one class, will be required; and provided
          further, that no such amendment or modification may (a) change
          the Stated Maturity of the principal of, or any installment of
          principal of or interest on, any Debt Security, or reduce the
          principal amount thereof or the rate of interest thereon (or the
          amount of any installment of interest thereon) or change the
          method of calculating such rate or reduce any premium payable
          upon the redemption thereof, or change the coin or currency (or
          other property) in which any Debt Security or any premium or the
          interest thereon is payable, or impair the right to institute
          suit for the enforcement of any such payment on or after the
          Stated Maturity of any Debt Security (or, in the case of
          redemption, on or after the Redemption Date) without, in any such
          case, the consent of the Holder of such Debt Security, (b) reduce
          the percentage in principal amount of the outstanding Debt
          Security of any series, (or, if applicable, in liquidation
          preference of Preferred Securities) the consent of the Holders of
          which is required for any such supplemental indenture, or the
          consent of the Holders of which is required for any waiver of
          compliance with any provision of the Indenture or any default
          thereunder and its consequences, or reduce the requirements for
          quorum or voting, without, in any such case, the consent of the
          Holder of each outstanding Debt Security of such series, or (c)
          modify certain of the provisions of the Indenture relating to
          supplemental indentures, waivers of certain covenants and waivers
          of past defaults with respect to the Debt Security of any series,
          without the consent of the Holder of each outstanding Junior
          Subordinated Debenture affected thereby.  A supplemental
          indenture which changes or eliminates any covenant or other
          provision of the Indenture which has expressly been included
          solely for the benefit of one or more particular series of Debt
          Securities, or modifies the rights of the Holders of Debt
          Securities of such series with respect to such covenant or other
          provision, will be deemed not to affect the rights under the
          Indenture of the Holders of the Debt Securities of any other
          series. (Section 1202).

               The Indenture provides that in determining whether the
          Holders of the requisite principal amount of the outstanding Debt
          Securities have given any request, demand, authorization,
          direction, notice, consent or waiver under the Indenture, or
          whether a quorum is present at the meeting of the Holders of Debt
          Securities, Debt Securities owned by the Company or any other
          obligor upon the Debt Securities or any affiliate of the Company
          or of such other obligor (unless the Company, such affiliate or
          such obligor owns all Debt Securities outstanding under the
          Indenture, determined without regard to this provision) shall be
          disregarded and deemed not to be outstanding.

               If the Company shall solicit from Holders any request,
          demand, authorization, direction, notice, consent, election,
          waiver or other Act, the Company may, at its option, fix in
          advance a record date for the determination of Holders entitled
          to give such request, demand, authorization, direction, notice,
          consent, waiver or other such act, but the Company shall have no
          obligation to do so.  If such a record date is fixed, such
          request, demand, authorization, direction, notice, consent,
          waiver or other Act may be given before or after such record
          date, but only the Holders of record at the close of business on
          such record date shall be deemed to be Holders for the purposes
          of determining whether Holders of the requisite proportion of the
          outstanding Debt Securities have authorized or agreed or
          consented to such request, demand, authorization, direction,
          notice, consent, waiver or other Act, and for that purpose the
          outstanding Debt Securities shall be computed as of the record
          date.  Any request, demand, authorization, direction, notice,
          consent, election, waiver or other Act of a Holder shall bind
          every future Holder of the same Debt Security and the Holder of
          every Debt Security issued upon the registration of transfer
          thereof or in exchange therefor or in lieu thereof in respect of
          anything done, omitted or suffered to be done by the Debenture
          Trustee or the Company in reliance thereon, whether or not
          notation of such action is made upon such Debt Security. (Section
          104).

               RESIGNATION OF DEBENTURE TRUSTEE

               The Debenture Trustee may resign at any time by giving
          written notice thereof to the Company or may be removed at any
          time by Act of the Holders of a majority in principal amount of
          all series of Debt Securities then outstanding delivered to the
          Debenture Trustee and the Company.  No resignation or removal of
          the Debenture Trustee and no appointment of a successor trustee
          will become effective until the acceptance of appointment by a
          successor trustee in accordance with the requirements of the
          Indenture.  So long as no Event of Default or event which, after
          notice or lapse of time, or both, would become an Event of
          Default has occurred and is continuing and except with respect to
          a Debenture Trustee appointed by Act of the Holders, if the
          Company has delivered to the Debenture Trustee a resolution of
          its Board of Directors appointing a successor trustee and such
          successor has accepted such appointment in accordance with the
          terms of the Indenture, the Trustee will be deemed to have
          resigned and the successor will be deemed to have been appointed
          as trustee in accordance with the Indenture. (Section 910).

               NOTICES

               Notices to Holders of Debt Securities will be given by mail
          to the addresses of such Holders as they may appear in the
          security register therefor.

               TITLE

               The Company, the Debenture Trustee, and any agent of the
          Company or the Debenture Trustee, may treat the Person in whose
          name Debt Securities are registered as the absolute owner thereof
          (whether or not such Debt Securities may be overdue) for the
          purpose of making payments and for all other purposes
          irrespective of notice to the contrary.

               GOVERNING LAW

               The Indenture and the Debt Securities will be governed by,
          and construed in accordance with, the laws of the State of New
          York.

               CONCERNING THE DEBENTURE TRUSTEE

               The Debenture Trustee under the Indenture is The Bank of New
          York.  In addition, The Bank of New York acts as Property Trustee
          under the Trust Agreement and as Guarantee Trustee under the
          Guarantee.  The Bank of New York (Delaware) acts as the Delaware
          Trustee under the Trust Agreement.  See DESCRIPTION OF THE
          PREFERRED SECURITIES -- "Concerning the Property Trustee."

                CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

               The following summary describes certain United States
          federal income tax consequences relevant to the purchase,
          ownership and disposition of Preferred Securities as of the date
          hereof and represents the opinion of Reid & Priest LLP, counsel
          to the Company, insofar as it relates to matters of law or legal
          conclusions.  Except where noted, it deals only with Preferred
          Securities held as capital assets and does not deal with special
          situations, such as those of dealers in securities or currencies,
          financial institutions, life insurance companies, persons holding
          Preferred Securities as a part of a hedging or conversion
          transaction or a straddle, United States Holders (as defined
          herein) whose "functional currency" is not the U.S. dollar, or
          persons who are not United States Holders.  In addition, this
          discussion does not address the tax consequences to persons who
          purchase Preferred Securities other than pursuant to their
          initial issuance and distribution.  Furthermore, the discussion
          below is based upon the provisions of the Internal Revenue Code
          of 1986, as amended (Code), and regulations, rulings and judicial
          decisions thereunder as of the date hereof, and such authorities
          may be repealed, revoked or modified at any time so as to result
          in United States federal income tax consequences different from
          those discussed below.  These authorities are subject to various
          interpretations and it is therefore possible that the United
          States federal income tax treatment of the Preferred Securities
          may differ from the treatment described below.

               PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES, INCLUDING
          PERSONS WHO ARE NOT UNITED STATES HOLDERS AND PERSONS WHO
          PURCHASE PREFERRED SECURITIES IN THE SECONDARY MARKET, ARE
          ADVISED TO CONSULT WITH THEIR TAX ADVISORS AS TO THE UNITED
          STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
          AND DISPOSITION OF PREFERRED SECURITIES IN LIGHT OF THEIR
          PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY STATE,
          LOCAL OR OTHER TAX LAWS.

               UNITED STATES HOLDERS

               As used herein, a "United States Holder" means a Holder that
          is a citizen or resident of the United States, a corporation,
          partnership or other entity created or organized in or under the
          laws of the United States or any political subdivision thereof,
          or an estate or trust the income of which is subject to United
          States federal income taxation regardless of its source.

               CLASSIFICATION OF MP&L CAPITAL

               Reid & Priest LLP, special counsel to the Company and MP&L
          Capital, is of the opinion that, under current law and assuming
          full compliance with the terms of the Indenture and the
          instruments establishing MP&L Capital (and certain other
          documents), MP&L Capital will be classified as a "grantor trust"
          for United States federal income tax purposes and will not be
          classified as an association taxable as a corporation.  Each
          Holder will be treated as owning an undivided beneficial interest
          in the Junior Subordinated Debentures.  Accordingly, each Holder
          will be required to include in its gross income interest (in the
          form of OID) accrued with respect to its allocable share of
          Junior Subordinated Debentures as described below.  No amount
          included in income with respect to the Preferred Securities will
          be eligible for the dividends received deduction.  Investors
          should be aware that the opinion of Reid & Priest LLP does not
          address any other issue and is not binding on the Internal
          Revenue Service or the courts.

               CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES

               Based on the advice of its counsel, the Company believes and
          intends to take the position that the Junior Subordinated
          Debentures will constitute indebtedness for United States federal
          income tax purposes.  No assurance can be given that such
          position will not be challenged by the Internal Revenue Service
          or, if challenged, that such a challenge will not be successful. 
          By purchasing and accepting Preferred Securities, each Holder
          covenants to treat the Junior Subordinated Debentures as
          indebtedness and the Preferred Securities as evidence of an
          indirect beneficial ownership in the Junior Subordinated
          Debentures.  The remainder of this discussion assumes that the
          Junior Subordinated Debentures will be classified as indebtedness
          of the Company for United States federal income tax purposes. 

               On December 7, 1995, the U.S. Treasury Department proposed
          certain tax law changes that, among other things, would deny
          interest deductions to corporate issuers of debt under certain
          circumstances.  As described in the Treasury Department's
          proposal, certain of these proposed changes, which are
          potentially applicable to this issue, would not affect the
          ability of the Company to deduct interest on the Junior
          Subordinated Debentures.  However, there can be no assurance that
          subsequent proposals or final legislation will not affect the
          ability of the Company to deduct interest on the Junior
          Subordinated Debentures, which in turn could give rise to a Tax
          Event, which would permit the Company to cause a redemption of
          the Preferred Securities or a distribution of the Junior
          Subordinated Debentures in liquidation of MP&L Capital, as
          described more fully in the Prospectus under DESCRIPTION OF
          PREFERRED SECURITIES -- "Special Event Redemption or
          Distribution."

               POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL
               ISSUE DISCOUNT

               Under the terms of the Junior Subordinated Debentures, the
          Company has the option to defer payments of interest for up to 20
          consecutive quarterly distribution payment periods and to pay as
          a lump sum at the end of such period all of the interest that has
          accrued during such period.  During any such Extension Period,
          Distributions on the Preferred Securities will also be deferred. 
          Because of this option to extend the interest payment periods,
          the Junior Subordinated Debentures will be treated as having been
          issued with OID for United States federal income tax purposes. 
          As a result, United States Holders will be required to accrue
          interest income (in the form of OID) on an economic accrual basis
          even if they use the cash method of tax accounting.  In the event
          of an Extension Period, a United States Holder will be required
          to continue to include OID in income notwithstanding that MP&L
          Capital will not make any Distribution on the Preferred
          Securities during such Extension Period.  As a result, any Holder
          who disposes of Preferred Securities prior to the record date for
          the payment of Distributions following such Extension Period will
          include interest in gross income but will not receive any
          Distributions related thereto from MP&L Capital.  The tax basis
          of a Preferred Security will be increased by the amount of any
          OID that is included in income, and will be decreased when and if
          Distributions are subsequently received from MP&L Capital by such
          Holders.

               RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON
               LIQUIDATION OF MP&L CAPITAL

               Under certain circumstances, as described under the caption
          DESCRIPTION OF THE PREFERRED SECURITIES -- "Special Event
          Redemption or Distribution," Junior Subordinated Debentures may
          be distributed to Holders of Preferred Securities in exchange for
          the Preferred Securities and in liquidation of MP&L Capital. 
          Under current law, for United States federal income tax purposes,
          such a distribution would be treated as a non-taxable event to
          each United States Holder, and each United States Holder would
          receive an aggregate tax basis in the Junior Subordinated
          Debentures equal to such Holder's aggregate tax basis in its
          Preferred Securities.  A United States Holder's holding period
          for the Junior Subordinated Debentures received in liquidation of
          MP&L Capital would include the period during which such Holder
          held the Preferred Securities.

               Under certain circumstances, as described under the caption
          DESCRIPTION OF THE PREFERRED SECURITIES -- "Redemption of
          Preferred Securities," the Junior Subordinated Debentures may be
          redeemed for cash and the proceeds of such redemption distributed
          to Holders of Preferred Securities in redemption of the Preferred
          Securities.  Under current law, such a redemption would, for
          United States federal income tax purposes, constitute a taxable
          disposition of the Preferred Securities, and a Holder would
          recognize gain or loss as if such Holder had sold such redeemed
          Preferred Securities.  See "Sale, Exchange and Redemption of the
          Preferred Securities."

               SALE, EXCHANGE AND REDEMPTION OF THE PREFERRED SECURITIES

               Upon the sale, exchange or redemption of Preferred
          Securities, a United States Holder will recognize gain or loss
          equal to the difference between the amount realized upon the
          sale, exchange or redemption and such Holder's adjusted tax basis
          in the Preferred Securities.  A United States Holder's adjusted
          tax basis will, in general, be the issue price of the Preferred
          Securities, increased by the OID previously included in income by
          the United States Holder and reduced by any Distributions on the
          Preferred Securities.  Such gain or loss will be capital gain or
          loss and will be long-term capital gain or loss if at the time of
          sale, exchange or redemption, the Preferred Securities have been
          held for more than one year.  Under current law, net capital
          gains of individuals are, under certain circumstances, taxed at
          lower rates than items of ordinary income.  The deductibility of
          capital losses is subject to limitations.

               INFORMATION REPORTING AND BACKUP WITHHOLDING

               Subject to the qualification discussed below, income on the
          Preferred Securities will be reported to holders on Form 1099,
          which should be mailed to such Holders by January 31, following
          each calendar year.

               MP&L Capital will be obligated to report annually to Cede &
          Co., as holder of record of the Preferred Securities, the OID
          related to the Junior Subordinated Debentures that accrued during
          the year.  MP&L Capital currently intends to report such
          information on Form 1099 prior to January 31, following each
          calendar year.  The Underwriters have indicated to MP&L Capital
          that, to the extent that they hold Preferred Securities as
          nominees for beneficial holders, they currently expect to report
          the OID that accrued during the calendar year on such Preferred
          Securities to such beneficial holders on Forms 1099 by January
          31, following each calendar year.  Under current law, holders of
          Preferred Securities who hold as nominees for beneficial holders
          will not have any obligation to report information regarding the
          beneficial holders to MP&L Capital.  MP&L Capital, moreover, will
          not have any obligation to report to beneficial holders who are
          not also record holders.  Thus, beneficial holders of Preferred
          Securities who hold their Preferred Securities through the
          Underwriters will receive Forms 1099 reflecting the income on
          their Preferred Securities from such nominee holders rather than
          from MP&L Capital.

               Payments made in respect of, and proceeds from the sale of,
          Preferred Securities (or Junior Subordinated Debentures
          distributed to holders of Preferred Securities) may be subject to
          "backup" withholding tax of 31% unless the holder complies with
          certain identification requirements or fails to report in full
          dividend and interest income.  Any withheld amounts will be
          allowed as a refund or a credit against the holder's United
          Stated federal income tax liability, provided the required
          information is provided to the Internal Revenue Service.

               These information reporting and backup withholding tax rules
          are subject to temporary Treasury Regulations.  Accordingly, the
          application of such rules to the Preferred Securities could be
          changed.

                                       EXPERTS

               The Company's financial statements incorporated in this
          Prospectus by reference to the Company's Current Report on Form
          8-K, dated February 16, 1996, except as they relate to ADESA (an
          80% owned subsidiary of the Company), have been audited by Price
          Waterhouse LLP, independent accountants, and, insofar as they
          relate to ADESA, by Ernst & Young LLP, independant auditors.  The
          report of Price Waterhouse LLP thereon appears on page 10 of such
          Form 8-K.  Such financial statements, except as they relate to
          ADESA, have been so incorporated in reliance on the report of
          Price Waterhouse LLP, given on the authority of said firm as
          experts in auditing and accounting.

               The financial statement schedule incorporated in this
          Prospectus by reference to the Company 1994 10-K has been so
          incorporated in reliance on the report of Price Waterhouse LLP,
          independent accountants, given on the authority of said firm as
          experts in auditing and accounting.

               The consolidated financial statements of ADESA appearing in
          the Company's Current Report on Form 8-K, dated July 12, 1995,
          for the year ended December 31, 1994, have been audited by Ernst
          & Young LLP, independent auditors, as set forth in their report
          thereon included in said Current Report on Form 8-K and
          incorporated herein by reference in reliance upon such report
          given upon the authority of such firm as experts in accounting
          and auditing.

               The consolidated financial statements of ADESA for the
          period from July 1, 1995 to December 31, 1995 which are included
          in the consolidated financial statements of the Company contained
          in the Company's Current Report on Form 8-K, dated February 16,
          1996 have been audited by Ernst & Young LLP, independent
          auditors, as set forth in their report thereon included in said
          Current Report on Form 8-K.  Such report is given upon the
          authority of such firm as experts in accounting and auditing.

               The statements made in the Company 1994 10-K under Part I,
          Item 1   Business-Regulation and Rates and Environmental Matters,
          incorporated herein by reference, have been reviewed by Philip R.
          Halverson, Esq., Duluth, Minnesota, General Counsel for the
          Company.  All of such statements are set forth or incorporated by
          reference herein in reliance upon the opinion of Mr. Halverson
          given upon his authority as an expert.  At December 31, 1995, 
          Mr. Halverson owned approximately 400 shares of the common stock 
          of the Company.  Statements as to United States federal income 
          taxation under CERTAIN UNITED STATES FEDERAL INCOME TAX 
          CONSEQUENCES herein have been passed upon for the Company and 
          MP&L Capital by Reid & Priest LLP, New York, New York, of 
          counsel to the Company.

                                       LEGALITY

               Certain matters of Delaware law relating to the validity of
          the Preferred Securities, the enforceability of the Trust
          Agreement and the creation of MP&L Capital are being passed upon
          by Richards, Layton & Finger, Special Delaware counsel for the
          Company and MP&L Capital.  The legality of the other securities
          offered hereby will be passed upon for the Company and MP&L
          Capital by Philip R. Halverson, Esq. and by Reid & Priest LLP,
          and for the Underwriters by Lane & Mittendorf LLP, New York, New
          York.  However, all matters pertaining to incorporation of the
          Company and all other matters of Minnesota law will be passed
          upon only by Philip R. Halverson, Esq.

                                     UNDERWRITING

               Subject to the terms and conditions of the Underwriting
          Agreement, the Company and MP&L Capital have agreed that MP&L
          Capital will issue and sell to each of the Underwriters named
          below, and each of the Underwriters, for whom Goldman, Sachs &
          Co. and PaineWebber Incorporated are acting as Representatives,
          has severally agreed to purchase from MP&L Capital the respective
          number of Preferred Securities set forth opposite its name below:

                                                         Number of
                   Underwriters                    Preferred Securities
                   ------------                    --------------------
               Goldman, Sachs & Co. . . . . . .

               PaineWebber Incorporated . . . .
                                                     ================
               Total. . . . . . . . . . . . . .

               Subject to the terms and conditions of the Underwriting
          Agreement, the Underwriters are committed to take and pay for all
          the Preferred Securities offered hereby, if any are taken.
           
               The Underwriters propose to offer the Preferred Securities
          in part directly to the public at the initial public offering
          price set forth on the cover page of this Prospectus, and in part
          to certain securities dealers at such price less a concession of
          $.   per Preferred Security.  The Underwriters may allow, and
          such dealers may reallow, a concession not in excess of $.    per
          Preferred Security to certain brokers and dealers.  After the
          Preferred Securities are released for sale to the public, the
          offering price and other selling terms may from time to time be
          varied by the Representatives.

               In view of the fact that the proceeds of the sale of the
          Preferred Securities will be used to purchase the Junior
          Subordinated Debentures, the Underwriting Agreement provides that
          the Company will pay as compensation, for the Underwriters'
          arranging the investment therein of such proceeds, an amount of $ 
            per Preferred Security for the accounts of the several
          Underwriters.

               Prior to this offering, there has been no public market for
          the Preferred Securities. Application will be made to list the
          Preferred Securities on the NYSE.  In order to meet one of the
          requirements for listing the Preferred Securities on the NYSE,
          the Underwriters will undertake to sell lots of 100 or more
          Preferred Securities to a minimum of 400 beneficial holders. 
          Trading of the Preferred Securities on the NYSE is expected to
          commence within a seven-day period after the initial delivery of
          the Preferred Securities.  The Representatives have advised the
          Company that they intend to make a market in the Preferred
          Securities prior to commencement of trading on the NYSE, but are
          not obligated to do so and may discontinue any such market making
          at any time without notice.
           
               The Company and MP&L Capital have agreed to indemnify the
          Underwriters against certain liabilities, including liabilities
          under the 1933 Act.

               Goldman, Sachs & Co. and PaineWebber Incorporated each
          engage in transactions with, and from time to time have performed
          services for, the Company in the ordinary course of business.

          <PAGE>

         =====================================================================
               NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
          MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PRO-
          SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
          TIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.  THIS
          PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
          TION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
          DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITA-
          TION OF ANY OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN
          WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.  NEITHER THE
          DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
          UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
          INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
          SUBSEQUENT TO THE DATE OF SUCH INFORMATION.


                                  TABLE OF CONTENTS
                                                                       PAGE
                                                                       ----


          AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . 2

          INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . 2

          PROSPECTUS SUMMARY  . . . . . . . . . . . . . . . . . . . . . . 4

          RISK FACTORS  . . . . . . . . . . . . . . . . . . . . . . . . . 6

          THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . 9

          MP&L CAPITAL  . . . . . . . . . . . . . . . . . . . . . . . .  11

          SUMMARY FINANCIAL INFORMATION . . . . . . . . . . . . . . . .  12

          USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . .  13

          DESCRIPTION OF THE PREFERRED SECURITIES . . . . . . . . . . .  13

          DESCRIPTION OF THE GUARANTEE  . . . . . . . . . . . . . . . .  23

          DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES . . . . . .  25

          CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES . . . .  33

          EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . .  35

          LEGALITY  . . . . . . . . . . . . . . . . . . . . . . . . . .  36

          UNDERWRITING  . . . . . . . . . . . . . . . . . . . . . . . .  36

         ====================================================================



         ====================================================================
                                     

                                      ----------





                                 PREFERRED SECURITIES


                                    MP&L CAPITAL I


                             CUMULATIVE QUARTERLY INCOME
                            PREFERRED SECURITIES (QUIPS)SM




                               GUARANTEED TO THE EXTENT
                                 SET FORTH HEREIN BY



                                   MINNESOTA POWER
                                   & LIGHT COMPANY





                                    --------------

                                      PROSPECTUS

                                    --------------




                                 GOLDMAN, SACHS & CO.

                               PAINEWEBBER INCORPORATED



                         REPRESENTATIVES OF THE UNDERWRITERS

         =====================================================================

         <PAGE>

                                       PART II.

                        INFORMATION NOT REQUIRED IN PROSPECTUS


          ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

               The following table sets forth the expenses payable by the
          Company in connection with the issuance and distribution of the
          securities to be registered.


          Filing fee Securities and Exchange Commission  . . . .   $43,103.45 
          Fees of the Trustee  . . . . . . . . . . . . . . . . .        * 
          Counsel Fees . . . . . . . . . . . . . . . . . . . . .        * 
          Auditors' fees . . . . . . . . . . . . . . . . . . . .        * 
          Rating agencies' fees  . . . . . . . . . . . . . . . .        *    
          Printing, including Registration Statement,
          prospectuses, exhibits, etc. . . . . . . . . . . . . .        * 
          Miscellaneous  . . . . . . . . . . . . . . . . . . . .        * 
                                                                     -------- 
          Total expenses . . . . . . . . . . . . . . . . . . . .   $    * 
                                                                     ======== 
          ----------------
          *    To be supplied by amendment.

          ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

               Section 302A.521 of the Minnesota Business Corporation Act
          generally provides for the indemnification of directors, officers
          or employees of a corporation made or threatened to be made a
          party to a proceeding by reason of the former or present official
          capacity of the person against judgments, penalties and fines
          (including attorneys' fees and disbursements) where such person,
          among other things, has not been indemnified by another
          organization, acted in good faith, received no improper personal
          benefit and with respect to any criminal proceeding, had no
          reasonable cause to believe his conduct was unlawful.

               Section 13 of the Bylaws of the Company contains the
          following provisions relative to indemnification of directors and
          officers:

               "The Company shall reimburse or indemnify each present and
          future director and officer of the Company (and his or her heirs,
          executors and administrators) for or against all expenses
          reasonably incurred by such director or officer in connection
          with or arising out of any action, suit or proceeding in which
          such director or officer may be involved by reason of being or
          having been a director or officer of the Company. Such
          indemnification for reasonable expenses is to be to the fullest
          extent permitted by the Minnesota Business Corporation Act,
          Minnesota Statutes Chapter 302A. By affirmative vote of the Board
          of Directors or with written approval of the Chairman and Chief
          Executive Officer, such indemnification may be extended to
          include agents and employees who are not directors or officers of
          the Company, but who would otherwise be indemnified for acts and 
          omissions under Chapter 302A of the Minnesota Business
          Corporation Act, if such agent or employee were an officer of the
          Company."

               "Reasonable expenses may include reimbursement of attorney's
          fees and disbursements, including those incurred by a person in
          connection with an appearance as a witness."

               "Upon written request to the Company and approval by the
          Chairman and Chief Executive Officer, an agent or employee for
          whom indemnification has been extended, or an officer or director
          may receive an advance for reasonable expenses if such agent,
          employee, officer or director is made or threatened to be made a
          party to a proceeding involving a matter for which
          indemnification is believed to be available under Minnesota
          Statutes Chapter 302A."

               "The foregoing rights shall not be exclusive of other rights
          to which any director or officer may otherwise be entitled and
          shall be available whether or not the director or officer
          continues to be a director or officer at the time of incurring
          such expenses and liabilities."

               The Company has insurance covering its expenditures which
          might arise in connection with the lawful indemnification of its
          directors and officers for their liabilities and expenses, and
          insuring officers and directors of the Company against certain
          other liabilities and expenses.

          ITEM 16. EXHIBITS.

               *1(a)     -    Form of Underwriting Agreement.

               +3(a)1    -    Articles of Incorporation, restated as of
                              July 27, 1988 (filed as Exhibit 3(a), File
                              No. 33-24936).

               +3(a)2    -    Certificate Fixing Terms of Serial Preferred
                              Stock A, $7.125 Series (filed as Exhibit
                              3(a)2, File No. 33-50143).

               +3(a)3    -    Certificate Fixing Terms of Serial Preferred
                              Stock A, $6.70 Series (filed as Exhibit
                              3(a)3, File No. 33-50143).

               +3(b)     -    Bylaws as amended January 23, 1991 (filed as
                              Exhibit 3(b), File No. 33-45549).

               4(a)      -    Trust Agreement relating to the Preferred
                              Securities.

               4(b)      -    Form of Amended and Restated Trust Agreement
                              relating to the Preferred Securities.

               4(c)      -    Form of Indenture relating to the Junior
                              Subordinated Debentures.

               4(d)      -    Form of Guarantee Agreement.

               4(e)      -    Form of Agreement as to Expenses and
                              Liabilities.

               4(f)      -    Form of Officer's Certificate establishing
                              Debentures.

               4(g)      -    Form of Preferred Securities.

               5(a)      -    Opinion and Consent of Philip R. Halverson,
                              Esq., General Counsel and Corporate Secretary
                              of the Company.

               5(b)
                and 8    -    Opinion and Consent of Reid & Priest LLP.

               5(c)      -    Opinion and Consent of Richards, Layton &
                              Finger, Special Delaware Counsel to the
                              Company and MP&L Capital.

               12(a)     -    Computation of Ratio of Earnings to Fixed
                              Charges and Supplemental Ratio of Earnings to
                              Fixed Charges of the Company.

               12(b)     -    Computation of Ratio of Earnings to Fixed
                              Charges and Preferred Dividends and
                              Supplemental Ratio of Earnings to Fixed
                              Charges and Preferred Dividends of the
                              Company.

               23(a)     -    Consent of Price Waterhouse LLP.

               23(b)     -    Consent of Ernst & Young LLP.

               23(c)     -    Consents of Philip R. Halverson, Esq., Reid &
                              Priest LLP and Richards, Layton & Finger are
                              contained in Exhibits 5(a), 5(b) and 5(c),
                              respectively.

               24        -    Power of Attorney (see page II-6).

               25(a)     -    Statement on Form T-1 of The Bank of New York
                              relating to Amended and Restated Trust
                              Agreement.

               25(b)     -    Statement on Form T-1 of The Bank of New York
                              relating to Indenture.

               25(c)     -    Statement on Form T-1 of The Bank of New York
                              relating to Guarantee Agreement.

               ---------------
               *         To be supplied by amendment.

               +         Incorporated herein by reference as indicated.


          ITEM 17. UNDERTAKINGS.

               The undersigned registrant hereby undertakes:

                    (1)  That, for purposes of determining any liability
               under the 1933 Act, each filing of the registrant's annual
               report pursuant to Section 13(a) or Section 15(d) of the
               1934 Act that is incorporated by reference in this
               Registration Statement shall be deemed to be a new
               registration statement relating to the securities offered
               herein, and the offering of such securities at that time
               shall be deemed to be the initial bona fide offering
               thereof.

                    (2)  That, for purposes of determining any liability
               under the 1933 Act, the information omitted from the form of
               prospectus filed as part of this registration statement in
               reliance upon Rule 430A and contained in a form of
               prospectus filed by the registrant pursuant to Rule
               424(b)(1) or (4) or 497(h) under the 1933 Act shall be
               deemed to be part of this registration statement as of the
               time it was declared effective.

                    (3)  That, for the purpose of determining any liability
               under the 1933 Act, each post-effective amendment that
               contains a form of prospectus shall be deemed to be a new
               registration statement relating to the securities offered
               therein, and the offering of such securities at that time
               shall be deemed to be the initial bona fide offering
               thereof.

                    (4)  That, insofar as indemnification for liabilities
               arising under the 1933 Act may be permitted to directors,
               officers and controlling persons of the registrant pursuant
               to the provisions described under Item 15 above, or
               otherwise, the registrant has been advised that in the
               opinion of the Securities and Exchange Commission such
               indemnification is against public policy as expressed in the
               Act and is, therefore, unenforceable.  In the event that a
               claim for indemnification against such liabilities (other
               than the payment by the registrant of expenses incurred or
               paid by a director, officer or controlling person of the
               registrant in the successful defense of any action, suit or
               proceeding) is asserted by such director, officer or
               controlling person in connection with the securities being
               registered, the registrant will, unless in the opinion of
               its counsel the matter has been settled by controlling
               precedent, submit to a court of appropriate jurisdiction the
               question whether such indemnification by it is against
               public policy as expressed in the Act and will be governed
               by the final adjudication of such issue.

         <PAGE>      

                                  POWER OF ATTORNEY

               Each person whose signature appears below hereby authorizes
          any agent for service named in this registration statement to
          execute in the name of each such person, and to file with the
          Securities and Exchange Commission, any and all amendments,
          including post-effective amendments, to the registration
          statement, and appoints any such agent for service as attorney-
          in-fact to sign in each such person's behalf individually and in
          each capacity stated below and file any such amendments to the
          registration statement and the registrant hereby also appoints
          each such agent for service as its attorney-in-fact with like
          authority to sign and file any such amendments in its name and
          behalf.

                                      SIGNATURES

               Pursuant to the requirements of the Securities Act of 1933,
          the registrant certifies that it has reasonable grounds to
          believe that it meets all of the requirements for filing on Form
          S-3 and has duly caused this registration statement to be signed
          on its behalf by the undersigned, thereunto duly authorized, in
          the City of Duluth, State of Minnesota, on February 16, 1996.



                                        MINNESOTA POWER & LIGHT COMPANY
                                                   (Registrant)


                                        By  /s/ Edwin L. Russell
                                          --------------------------------
                                                 Edwin L. Russell
                                                  President and
                                             Chief Executive Officer


               Pursuant to the requirements of the Securities Act of 1933,
          this registration statement has been signed by the following
          persons in the capacities and on the dates indicated.


              SIGNATURE                   TITLE                  DATE
              ---------                   -----                  ----

       /s/ Edwin L. Russell                          
      ------------------------           President,         February 16, 1996
         Edwin L. Russell         Chief Executive Officer
            President,                 and Director
      Chief Executive Officer
           and Director                   


       /s/ D. G. Gartzke
      ------------------------    Senior Vice President-    February 16, 1996
           D. G. Gartzke             Finance and
        Senior Vice President-   Chief Financial Officer
           Finance and        
      Chief Financial Officer


       /s/ Mark A. Schober
      ------------------------    Corporate Controller      February 16, 1996
             Mark A. Schober                 
          Corporate Controller

      <PAGE>

              SIGNATURE                  TITLE                   DATE
              ---------                  -----                   ---- 


       /s/ Merrill K. Cragun
      ----------------------------     Director             February 16, 1996
          Merrill K. Cragun


       /s/ Dennis E. Evans
      ----------------------------     Director             February 16, 1996
          Dennis E. Evans


       /s/ Sister Kathleen Hofer
      ----------------------------     Director             February 16, 1996
         Sister Kathleen Hofer


       /s/ D. Michael Hockett
      ----------------------------     Director             February 16, 1996
           D. Michael Hockett


       /s/ Peter J. Johnson
      ----------------------------     Director             February 16, 1996
            Peter J. Johnson


       /s/ Jack R. Kelly, Jr.
      ----------------------------     Director             February 16, 1996
           Jack R. Kelly, Jr.


       /s/ Paula F. McQueen
      ----------------------------     Director             February 16, 1996 
            Paula F. McQueen


       /s/ Robert S. Nickoloff
      ----------------------------     Director             February 16, 1996
           Robert S. Nickoloff


       /s/ Jack I. Rajala
      ----------------------------     Director             February 16, 1996
             Jack I. Rajala


       /s/ Charles A. Russell
      ----------------------------     Director             February 16, 1996
           Charles A. Russell


       /s/ Arend J. Sandbulte
      ----------------------------  Chairman and Director   February 16, 1996
           Arend J. Sandbulte


       /s/ Nick Smith
      ----------------------------     Director             February 16, 1996   
               Nick Smith


       /s/ Bruce W. Stender
      ----------------------------     Director             February 16, 1996
            Bruce W. Stender


       /s/ Donald C. Wegmiller
      ----------------------------     Director             February 16, 1996
           Donald C. Wegmiller

      <PAGE>

                                      SIGNATURES

               Pursuant to the requirements of the Securities Act of 1933,
          the registrant certifies that it has reasonable grounds to
          believe that it meets all of the requirements for filing on Form
          S-3 and has duly caused this registration statement to be signed
          on its behalf by the undersigned, thereunto duly authorized, in
          the City of Duluth, State of Minnesota, on February 16, 1996.


                                   MP&L CAPITAL I 

                                   By:  /s/ Philip R. Halverson
                                      ------------------------------------
                                   Philip R. Halverson, not in his
                                   individual capacity but solely as
                                   Trustee

      <PAGE>

                               EXHIBIT INDEX
                               -------------

      Exhibit          Description
      -------          -----------

       4(a)            Trust Agreement relating to the Preferred
                       Securities

       4(b)            Form of Amended and Restated Trust Agreement
                       relating to the Preferred Securities

       4(c)            Form of Indenture relating to the Junior
                       Subordinated Debentures

       4(d)            Form of Guarantee Agreement

       4(e)            Form of Agreement as to Expenses and
                       Liabilities

       4(f)            Form of Officer's Certificate establishing
                       Debentures

       4(g)            Form of Preferred Securities

       5(a)            Opinion and Consent of Philip R. Halverson,
                       Esq., General Counsel and Corporate 
                       Secretary of the Company

       5(b)
        and 8          Opinion and Consent of Reid & Priest LLP

       5(c)            Opinion and Consent of Richards, Layton &
                       Finger, Special Delaware Counsel to the 
                       Company and MP&L Capital

      12(a)            Computation of Ratio of Earnings to Fixed
                       Charges and Supplemental Ratio of Earnings
                       to Fixed Charges of the Company

      12(b)            Computation of Ratio of Earnings to Fixed 
                       Charges and Preferred Dividends and 
                       Supplemental Ratio of Earnings to Fixed
                       Charges and Preferred Dividends of the 
                       Company

      23(a)            Consent of Price Waterhouse LLP

      23(b)            Consent of Ernst & Young LLP

      25(a)            Statement on Form T-1 of The Bank of
                       New York relating to Amended and
                       Restated Trust Agreement

      25(b)            Statement on Form T-1 of The Bank of
                       New York relating to Indenture

      25(c)            Statement on Form T-1 of The Bank of 
                       New York relating to Guarantee Agreement
 
