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Business Segments | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Business Segments | BUSINESS SEGMENTS We present two reportable segments: Regulated Operations and ALLETE Clean Energy. We measure performance of our operations through budgeting and monitoring of contributions to net income attributable to ALLETE by each reportable segment. Regulated Operations includes three operating segments which consist of our regulated utilities, Minnesota Power and SWL&P, as well as our investment in ATC. ALLETE Clean Energy is our business focused on developing, acquiring and operating clean and renewable energy projects. We also present Corporate and Other which includes three operating segments, New Energy, a renewable energy development company, BNI Energy, our coal mining operations in North Dakota, and ALLETE Properties, our legacy Florida real estate investment, along with our investment in Nobles 2, South Shore Energy, our non-rate regulated, Wisconsin subsidiary developing NTEC, other business development and corporate expenditures, unallocated interest expense, a small amount of non-rate base generation, land holdings in Minnesota, and earnings on cash and investments. Management has identified that the Chief Operating Decision Maker (CODM) for the Company is not an individual, but rather the Executive Officers of ALLETE. These individuals represent various areas of the Company and provide direction for the allocation of resources. They interact with one another on a regular basis, with more formal meetings quarterly to discuss company strategy. The group is provided with monthly and quarterly financial materials that show net income attributable to ALLETE by segment with variances compared to the budget and prior year. No other measure of segment profit or loss is provided regularly to this group or used to assess performance and allocate resources. The group reviews the segment profit and loss taking into account the Company’s goals and strategy, and provides direction for the allocation of resources. NOTE 14. BUSINESS SEGMENTS (Continued)
Year Ended December 31 | 2024 | 2023 | 2022
Millions |  |  |
Operating Revenue |  |  |
Residential | $177.0 |  | $165.7 |  | $175.9 |
Commercial | 189.8 |  | 184.6 |  | 187.2 |
Municipal | 34.2 |  | 33.4 |  | 40.2 |
Industrial | 610.8 |  | 593.6 |  | 589.0 |
Other Power Suppliers | 137.2 |  | 146.1 |  | 165.8 |
Other | 93.7 |  | 114.9 |  | 101.2 |
Total Regulated Operations | 1,242.7 |  | 1,238.3 |  | 1,259.3 |
ALLETE Clean Energy |  |  |
Long-term PSA | 56.4 |  | 65.0 |  | 77.2 |
Sale of Wind Energy Facilities (a) | 22.9 |  | 348.4 |  | 33.5 |
Other | 5.0 |  | 5.1 |  | 7.6 |
Total ALLETE Clean Energy | 84.3 |  | 418.5 |  | 118.3 |
Corporate and Other |  |  |
Long-term Contract | 105.7 |  | 101.2 |  | 89.2 |
Sale of Renewable Development Projects | 72.1 |  | 92.5 |  | 73.9 |
Other | 25.0 |  | 29.3 |  | 30.0 |
Total Corporate and Other | 202.8 |  | 223.0 |  | 193.1 |
Total Operating Revenue | $1,529.8 |  | $1,879.8 |  | $1,570.7 |
Net Income Attributable to ALLETE (b) |  |  |
Regulated Operations | $160.9 |  | $147.2 |  | $149.9 |
ALLETE Clean Energy (c) | 17.8 |  | 71.7 |  | 16.3 |
Corporate and Other (d)(e) | 0.6 |  | 28.2 |  | 23.1 |
Total Net Income Attributable to ALLETE | $179.3 |  | $247.1 |  | $189.3 |
(a) Net income in 2023 includes the sales of ALLETE Clean Energy’s Northern Wind and Red Barn projects. (b) Includes interest expense and interest income resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation. (c) Net income in 2023 includes a $44.3 million after-tax gain recognized for a favorable arbitration ruling. (See Note 9. Commitments, Guarantees and Contingencies.) (d) Net Income in 2022 includes a $8.3 million after-tax expense as a result of purchase price accounting related to projects under development at the time of acquisition and $2.7 million after-tax of transaction costs related to the acquisition of New Energy. (e) Net income in 2024 includes transaction expenses of $22.6 million after-tax related to the Merger. (See Note 15. Agreement and Plan of Merger.) NOTE 14. BUSINESS SEGMENTS (Continued)
Year Ended December 31, 2024 | Regulated Operations | ALLETE Clean Energy | Total Reportable Segments | Corporate and Other / Eliminations | Consolidated
Millions |  |  |  |  |
Contracts with Customers – Utility | $1,242.7 |  | — |  | $1,242.7 |  | — |  | $1,242.7 |
Contracts with Customers – Non-utility | — |  | $79.3 |  | 79.3 |  | $202.8 |  | 282.1 |
Other – Non-utility | — |  | 5.0 |  | 5.0 |  | — |  | 5.0 |
Total Operating Revenue | 1,242.7 |  | 84.3 |  | 1,327.0 |  | 202.8 |  | 1,529.8 |
Significant Segment Expenses: |  |  |  |  |
Fuel, Purchased Power and Gas – Utility | 479.7 |  | — |  | 479.7 |  |  |
Transmission Services – Utility | 64.6 |  | — |  | 64.6 |  |  |
Cost of Sales – Non-utility | — |  | 18.3 |  | 18.3 |  |  |
Operating and Maintenance | 250.0 |  | 46.5 |  | 296.5 |  |  |
Depreciation and Amortization | 196.3 |  | 57.5 |  | 253.8 |  |  |
Taxes Other than Income Taxes | 52.5 |  | 10.4 |  | 62.9 |  |  |
Other Segment Items (a) | (38.7) |  | 66.2 |  | 27.5 |  |  |
Net Income (Loss) Attributable to ALLETE | $160.9 |  | $17.8 |  | $178.7 | $0.6 | $179.3 |
Other Segment Information: |  |  |  |  |
Depreciation and Amortization | $196.3 |  | $57.5 |  | $253.8 |  | $17.7 |  | $271.5 |
Interest Expense | $(66.1) | $(0.3) | $(66.4) | $(15.3) | $(81.7)
Equity Earnings | $26.5 |  | — |  | $26.5 |  | $(1.5) | $25.0 |
Income Tax Benefit (Expense) | $(17.6) | $15.6 | $(2.0) | $(2.7) | $(4.7)
Assets | $4,489.4 |  | $1,477.4 |  | $5,966.8 |  | $787.5 |  | $6,754.3 |
Equity Investment | $194.4 |  | — |  | $194.4 |  | $145.7 |  | $340.1 |
Capital Expenditures | $287.2 |  | $7.7 |  | $294.9 |  | $53.1 |  | $348.0 |
(a) Other Segment Items consist of interest expense, equity earnings, AFUDC – Equity and income tax expense for Regulated Operations, and income tax benefit and net loss attributable to non-controlling interest for ALLETE Clean Energy.
Year Ended December 31, 2023 | Regulated Operations | ALLETE Clean Energy | Total Reportable Segments | Corporate and Other / Eliminations | Consolidated
Millions |  |  |  |  |
Contracts with Customers – Utility | $1,238.3 |  | — |  | $1,238.3 |  | — |  | $1,238.3 |
Contracts with Customers – Non-utility | — |  | $413.4 |  | 413.4 |  | $223.0 |  | 636.4 |
Other – Non-utility | — |  | 5.1 |  | 5.1 |  | — |  | 5.1 |
Total Operating Revenue | 1,238.3 |  | 418.5 |  | 1,656.8 |  | 223.0 |  | 1,879.8 |
Significant Segment Expenses: |  |  |  |  |
Fuel, Purchased Power and Gas – Utility | 484.3 |  | — |  | 484.3 |  |  |
Transmission Services – Utility | 88.2 |  | — |  | 88.2 |  |  |
Cost of Sales – Non-utility | — |  | 342.2 |  | 342.2 |  |  |
Operating and Maintenance | 247.1 |  | 52.1 |  | 299.2 |  |  |
Depreciation and Amortization | 179.2 |  | 57.5 |  | 236.7 |  |  |
Taxes Other than Income Taxes | 44.5 |  | 10.0 |  | 54.5 |  |  |
Other Segment Items (a) | (47.8) |  | 115.0 |  | 67.2 |  |  |
Net Income Attributable to ALLETE | $147.2 |  | $71.7 |  | $218.9 | $28.2 |  | $247.1 |
Other Segment Information: |  |  |  |  |
Depreciation and Amortization | $179.2 |  | $57.5 |  | $236.7 |  | $15.1 |  | $251.8 |
Interest Expense | $(63.9) | $(0.8) | $(64.7) | $(16.1) | $(80.8)
Equity Earnings | $23.1 |  | — |  | $23.1 |  | $(1.4) | $21.7 |
Income Tax Expense | $(22.4) | $(2.7) | $(25.1) | $(2.8) | $(27.9)
Assets | $4,335.0 |  | $1,594.1 |  | $5,929.1 |  | $727.3 |  | $6,656.4 |
Equity Investment | $179.7 |  | — |  | $179.7 |  | $151.5 |  | $331.2 |
Capital Expenditures | $236.3 |  | $(5.3) | $231.0 |  | $25.0 |  | $256.0 |
(a) Other Segment Items consist of interest expense, equity earnings, AFUDC – Equity and income tax expense for Regulated Operations, and income tax expense, net loss attributable to non-controlling interest and gain recognized for a favorable arbitration ruling for ALLETE Clean Energy. NOTE 14. BUSINESS SEGMENTS (Continued)
Year Ended December 31, 2022 | Regulated Operations | ALLETE Clean Energy | Total Reportable Segments | Corporate and Other / Eliminations | Consolidated
Millions |  |  |  |  |
Contracts with Customers – Utility | $1,259.3 |  | — |  | $1,259.3 |  | — |  | $1,259.3 |
Contracts with Customers – Non-utility | — |  | $110.7 |  | 110.7 |  | $193.1 |  | 303.8 |
Other – Non-utility | — |  | 7.6 |  | 7.6 |  | — |  | 7.6 |
Total Operating Revenue | 1,259.3 |  | 118.3 |  | 1,377.6 |  | 193.1 |  | 1,570.7 |
Significant Segment Expenses: |  |  |  |  |
Fuel, Purchased Power and Gas – Utility | 545.5 |  | — |  | 545.5 |  |  |
Transmission Services – Utility | 76.7 |  | — |  | 76.7 |  |  |
Cost of Sales – Non-utility | — |  | 56.7 |  | 56.7 |  |  |
Operating and Maintenance | 239.3 |  | 47.3 |  | 286.6 |  |  |
Depreciation and Amortization | 171.9 |  | 58.6 |  | 230.5 |  |  |
Taxes Other than Income Taxes | 57.4 |  | 10.7 |  | 68.1 |  |  |
Other Segment Items (a) | (18.6) |  | 71.3 |  | 52.7 |  |  |
Net Income Attributable to ALLETE | $149.9 |  | $16.3 |  | $166.2 | $23.1 |  | $189.3 |
Other Segment Information: |  |  |  |  |
Depreciation and Amortization | $171.9 |  | $58.6 |  | $230.5 |  | $11.7 |  | $242.2 |
Interest Expense | $(58.1) | $(2.3) | $(60.4) | $(14.8) | $(75.2)
Equity Earnings | $19.3 |  | — |  | $19.3 |  | $(0.6) | $18.7 |
Income Tax Benefit | $10.4 |  | $15.4 |  | $25.8 |  | $5.4 |  | $31.2 |
Assets | $4,291.4 |  | $1,873.3 |  | $6,164.7 |  | $680.9 |  | $6,845.6 |
Equity Investment | $165.4 |  | — |  | $165.4 |  | $157.3 |  | $322.7 |
Capital Expenditures | $158.3 |  | $2.2 | $160.5 |  | $47.6 |  | $208.1 |
(a) Other Segment Items consist of interest expense, equity earnings, AFUDC – Equity and income tax benefit for Regulated Operations, and income tax benefit and net loss attributable to non-controlling interest for ALLETE Clean Energy.

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