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Short-Term and Long-Term Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Short-Term and Long-Term Debt SHORT-TERM AND LONG-TERM DEBT
Short-Term Debt. As of December 31, 2024, total short-term debt outstanding was $94.7 million ($111.4 million as of December 31, 2023), and consisted of long-term debt due within one year and included no unamortized debt issuance costs.

As of December 31, 2024, we had consolidated bank lines of credit aggregating to $362.0 million ($423.1 million as of December 31, 2023), most of which expire in January 2027. We had $16.2 million outstanding in standby letters of credit and $20.0 million outstanding draws under our lines of credit as of December 31, 2024 ($19.4 million in standby letters of credit and $34.1 million outstanding draws as of December 31, 2023).

Long-Term Debt. As of December 31, 2024, total long-term debt outstanding was $1,704.7 million ($1,679.9 million as of December 31, 2023) and included $8.6 million of unamortized debt issuance costs. The aggregate amount of long-term debt maturing in 2025 is $94.7 million; $80.2 million in 2026; $182.5 million in 2027; $55.8 million in 2028; $220.3 million in 2029; and $1,174.5 million thereafter. Substantially all of our regulated electric plant is subject to the lien of the mortgages collateralizing outstanding first mortgage bonds. The mortgages contain non-financial covenants customary in utility mortgages, including restrictions on our ability to incur liens, dispose of assets, and merge with other entities.

Minnesota Power is obligated to make financing payments for the Camp Ripley solar array totaling $1.4 million annually during the financing term, which expires in 2027. Minnesota Power has the option at the end of the financing term to renew for a two-year term, or to purchase the solar array for approximately $4 million. Minnesota Power anticipates exercising the purchase option when the term expires.

On April 23, 2024, ALLETE issued $100 million of its First Mortgage Bonds (Bonds) to certain institutional buyers in the private placement market. The Bonds, which bear interest at 5.72 percent, will mature on April 30, 2039 and pay interest semi-annually in April and October of each year, commencing on October 30, 2024. ALLETE has the option to prepay all or a portion of the Bonds at its discretion, subject to a make-whole provision. The Bonds are subject to additional terms and conditions which are customary for these types of transactions. Proceeds from the sale of the Bonds were used to refinance existing indebtedness and for general corporate purposes. The Bonds were sold in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, to institutional accredited investors.

On July 31, 2024, ALLETE issued a notice to the holders of its 2.65 percent senior notes due September 10, 2025, (“2025 Notes”) regarding the Company’s exercise of its option to prepay all of the issued and outstanding 2025 Notes. ALLETE prepaid all $150 million in aggregate principal amount of the 2025 Notes on September 5, 2024. The 2025 Notes were prepaid at 100 percent of their principal amount, plus accrued and unpaid interest.

On September 5, 2024, ALLETE issued and sold $150 million of senior unsecured notes (“Notes”) to certain institutional buyers in the private placement market. The Notes were sold in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, to institutional accredited investors. Of the Notes issued and sold, $100 million of the Notes bear interest at a rate of 5.94 percent and mature on September 5, 2029, and $50 million of the Notes bear interest at a rate of 6.18 percent and mature on September 5, 2034. Interest on the Notes will be payable semi-annually on March 5 and September 5 of each year, commencing on March 5, 2025. The Company has the option to prepay all or a portion of the Notes at its discretion, subject to a make-whole provision. The Notes are subject to additional terms and conditions which are customary for these types of transactions. Proceeds from the sale of the Notes were used for refinancing of debt and general corporate purposes.

Pursuant to the Merger Agreement, we may incur certain forms of indebtedness only with the written consent of Alloy Parent. (See Note 15. Agreement and Plan of Merger.)
NOTE 8. SHORT-TERM AND LONG-TERM DEBT (Continued)
Long-Term Debt (Continued)

Long-Term Debt  
As of December 3120242023
Millions  
First Mortgage Bonds
3.69% Series Due 2024
—$60.0
4.90% Series Due 2025
$30.030.0
5.10% Series Due 2025
30.030.0
3.20% Series Due 2026
75.075.0
5.99% Series Due 2027
60.060.0
3.30% Series Due 2028
40.040.0
4.08% Series Due 2029
70.070.0
3.74% Series Due 2029
50.050.0
2.50% Series Due 2030
46.046.0
3.86% Series Due 2030
60.060.0
2.79% Series Due 2031
100.0100.0
4.54% Series Due 2032
75.075.0
4.98% Series Due 2033
125.0125.0
5.69% Series Due 2036
50.050.0
5.72% Series Due 2039
100.0—
6.00% Series Due 2040
35.035.0
5.82% Series Due 2040
45.045.0
4.08% Series Due 2042
85.085.0
4.21% Series Due 2043
60.060.0
4.95% Series Due 2044
40.040.0
5.05% Series Due 2044
40.040.0
4.39% Series Due 2044
50.050.0
4.07% Series Due 2048
60.060.0
4.47% Series Due 2049
30.030.0
3.30% Series Due 2050
94.094.0
Armenia Mountain Senior Secured Notes 3.26% Due 2024
—9.5
Industrial Development Variable Rate Demand Refunding Revenue Bonds Series 2006, Due 202527.827.8
Revolving Credit Facility Variable Rate Due 202720.0—
Senior Unsecured Notes 2.65% Due 2025
—150.0
Senior Unsecured Notes 3.11% Due 2027
80.080.0
Senior Unsecured Notes 5.94% Due 2029
100.0—
Senior Unsecured Notes 6.18% Due 2034
50.0—
SWL&P First Mortgage Bonds 4.15% Series Due 2028
15.015.0
SWL&P First Mortgage Bonds 4.14% Series Due 2048
12.012.0
Other Long-Term Debt, 2024 Weighted Average Rate 4.47% Due 2025 – 2051
53.295.1
Unamortized Debt Issuance Costs(8.6)(8.1)
Total Long-Term Debt1,799.41,791.3
Less: Due Within One Year94.7111.4
Net Long-Term Debt$1,704.7$1,679.9
NOTE 8. SHORT-TERM AND LONG-TERM DEBT (Continued)
Long-Term Debt (Continued)
Financial Covenants. Our long-term debt arrangements contain customary covenants. In addition, our lines of credit and letters of credit supporting certain long-term debt arrangements contain financial covenants. Our compliance with financial covenants is not dependent on debt ratings. The most restrictive financial covenant requires ALLETE to maintain a ratio of indebtedness to total capitalization (as the amounts are calculated in accordance with the respective long-term debt arrangements) of less than or equal to 0.65 to 1.00, measured quarterly. As of December 31, 2024, our ratio was approximately 0.36 to 1.00. Failure to meet this covenant would give rise to an event of default if not cured after notice from the lender, in which event ALLETE may need to pursue alternative sources of funding. Some of ALLETE’s debt arrangements contain “cross-default” provisions that would result in an event of default if there is a failure under other financing arrangements to meet payment terms or to observe other covenants that would result in an acceleration of payments due. ALLETE has no significant restrictions on its ability to pay dividends from retained earnings or net income; however, under the Merger Agreement, the Company has agreed not to declare or pay dividends except for quarterly cash dividends payable by us in respect of shares of our common stock on a schedule consistent with our past practices in an amount not to exceed 5 percent per share more than the dividend payable during the prior 12-month period, subject to certain other exceptions. (See Note 15. Agreement and Plan of Merger.) As of December 31, 2024, ALLETE was in compliance with its financial covenants.