TEXT-Moody's may cut Allete

(The following statement was released by the ratings agency)

April 10 - Moody's Investors Service placed the long term ratings for
ALLETE, Inc (ALE.N: Quote, Profile, Research) (ALLETE: Baa2 Issuer Rating) and its wholly-owned utility
operating subsidiary Superior Water, Light and Power Company (SWL&P: Baa2
Issuer Rating) under review for possible upgrade. ALLETE's Prime-2 short term
rating for commercial paper is affirmed.

The review for possible upgrade reflects ALLETE's focus on future growth
opportunities primarily within its existing energy business, its well
capitalized balance sheet, robust financial metrics, supportive regulatory
environment and sound liquidity profile. The rating action more importantly
reflects the end of ALLETE's search for an actively managed business
investment. Such an investment, which never materialized, had been a concern in
that it would likely have been outside the company's core competency and could
have weakened its credit profile and increased the overall business risk of the
company.

ALLETE's core financial metrics are positioned toward the higher end of the
range outlined in our Rating Methodology for Baa-rated utilities with similar
risk profiles. Specifically, ALLETE's ratio of CFO pre-W/C to debt and
debt-to-capitalization was approximately 30% and 41%, respectively, for the 12
month period ended December 31, 2007. These metrics remain strong relative to
its existing rating category on a pro-forma basis for $135 million of debt that
ALLETE has raised through private placements year --to-date during 2008.

ALLETE, however, is not without challenges. It is facing a considerable
$1.5 billion capital investment program over the next five years related to its
regulated utility operations that will be funded in part with incremental debt.
Furthermore, ALLETE's Florida-based real estate business, which has
historically generated significant cash flow, is expected to slow.

As a result, Moody's review will consider ALLETE's financing plan for its
capital investment program and its impact on financial metrics. We will also
consider the prospects for the company's upcoming rate case expected to be
filed later in 2008 as well as the cost recovery mechanisms for its utility
capital investment program. Lastly, we plan to question management on the
strategic direction for its real estate business, including any expansion
opportunities, as well as analyze the carrying costs associated with ALLETE's
real estate portfolio currently held for sale. The book value for this
portfolio at December 31, 2007 was a modest $63 million or 4% of total
consolidated assets.

SWL&P's rating reflects its dependent relationship with its parent. SWL&P
has no electric generating assets and purchases all of its power from ALLETE
under an FERC-approved Interchange Service Agreement. Moreover, SWL&P's primary
source for liquidity is through an undocumented credit facility with ALLETE. We
expect the companies' ratings to continue to be linked.

ALLETE, Inc. is headquartered in Duluth, Minnesota.
(New York Ratings Team)