ALLETE, Inc. (NYSE:ALE) Q4 2023 Earnings Conference Call February 20, 2024 10:00 AM ET Company Participants Bethany Owen - Chair, President, and Chief Executive Officer Steve Morris - Senior Vice President and Chief Financial Officer Frank Frederickson - Minnesota Power's Vice President of Customer Experience and Engineering Services Jeff Scissons - ALLETE Clean Energy's Chief Financial and Strategy Officer Conference Call Participants Julien Dumoulin Smith - Bank of America Chris Ellinghaus - Siebert Willi ...

2023 Year End Earnings Report Presentation February 20, 2024 Cautionary Statements Any statements contained in this presentation and statements that ALLETE, Inc. representatives may make orally in connection with this pres ...

Allete (ALE) came out with quarterly earnings of $0.89 per share, missing the Zacks Consensus Estimate of $0.93 per share. This compares to earnings of $0.90 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -4.30%. A quarter ago, it was expected that this power company owner would post earnings of $0.61 per share when it actually produced earnings of $1.49, delivering a surprise of 144.26%.Over the last four quarters, the compa ...

DULUTH, Minn.--(BUSINESS WIRE)--ALLETE, Inc. (NYSE: ALE) today reported 2023 earnings of $4.30 per share on net income of $247.1 million and operating revenue of $1.9 billion. Reported results from 2022 were $3.38 per share on net income of $189.3 million and operating revenue of $1.6 billion. “We are very pleased with our solid financial results in 2023 and our team’s execution of strategic initiatives that will drive strong earnings growth and investment in clean energy for years to come,” said ALLETE ...

Revenue and Financial Performance - Consolidated operating revenue for 2023 was $1,879.8 million, a 19.7% increase from $1,570.7 million in 2022[17] - ALLETE Clean Energy's revenue contribution increased to 22% in 2023, up from 8% in 2022[17] - Minnesota Power's 2022 general rate case resulted in an allowed return on equity of 9.65 percent and an equity ratio of 52.50 percent, generating approximately $60 million in additional revenue from base rates and $10 million from cost recovery riders annually[50] - SWL&P's 2022 general rate case resulted in an allowed return on equity of 10.00 percent and an equity ratio of 55.00 percent, generating an annual increase of $3.3 million[55] - Minnesota Power recorded a reserve for an interim rate refund of approximately $39 million pre-tax as of September 30, 2023, which was refunded to customers during the fourth quarter of 2023[51] - Minnesota Power has a regulatory liability of $30.2 million related to land sales, with net proceeds to be refunded to ratepayers[52] Customer and Sales Breakdown - Industrial customers accounted for 55% of total regulated utility kWh sales in 2023, with taconite customers representing 70% of industrial sales[19][20] - Residential and commercial customers represented 19% of total regulated utility kWh sales in 2023[29] - Municipal customers accounted for 4% of total regulated utility kWh sales in 2023[29] - Minnesota Power has eight Large Power Customer contracts, with the earliest termination date being December 31, 2027[27][28] - ST Paper became a Large Power Customer in Q1 2023 and announced an asset purchase agreement to sell its Duluth Mill to Sofidel in January 2024[24][28] Energy Production and Supply - Minnesota Power's taconite customers produced 35 million tons in 2023, up from 32 million tons in 2022[23] - Minnesota Power has a PSA with Silver Bay Power through 2031 to supply its full energy requirements, serving approximately 90 MW of load to Northshore Mining[29] - Minnesota Power sold approximately 37% of its 50% output entitlement to Minnkota Power in 2023, increasing Minnkota Power's net entitlement to 41% in 2024, 46% in 2025, and 50% in 2026[30] - Approximately 50% of Minnesota Power's power supply for retail and municipal customers in Minnesota has been provided by renewable energy sources since 2020, enabled by the completion of the 250 MW Nobles 2 wind energy facility and the GNTL[32] - Minnesota Power's annual net peak load was 1,551 MW on August 3, 2023, with total regulated utility power supply reaching 13,206,148 MWh in 2023[33][34] - Coal consumption for electric generation at Minnesota Power's coal-fired generating stations remained steady at 2.7 million tons in 2023, with coal inventories at 0.7 million tons as of December 31, 2023[36] - The average price per ton of coal increased to $41.23 in 2023 from $39.98 in 2022 and $39.51 in 2021[38] - Minnesota Power has long-term PPAs with Manitoba Hydro, including a 250 MW capacity and energy purchase agreement through May 2035 and a 133 MW energy purchase agreement through June 2040[39] - Minnesota Power constructed the Great Northern Transmission Line (GNTL) at a cost of approximately $310 million, with total project costs reaching $660 million, enabling the 250 MW PPA with Manitoba Hydro[42] - Non-rate base generation includes 29 MW of natural gas and hydro generation and approximately 20 MW of solar energy facilities[75] Renewable Energy and Sustainability - Minnesota Power plans to add up to 700 MW of new wind and solar energy resources and cease coal operations at Boswell Units 3 and 4 by 2030 and 2035, respectively[53] - Minnesota Power aims to deliver 100 percent carbon-free energy to customers by 2050, with 50 percent of its power supply already provided by renewable energy sources as of 2020[53][61] - Minnesota legislation requires electric utilities to source 100 percent carbon-free energy by 2040, with interim targets of 80 percent by 2030 and 90 percent by 2035[60] - ALLETE Clean Energy owns and operates more than 1,200 MW of wind energy generation capacity across seven states, with the majority contracted under power purchase agreements[65] - ALLETE Clean Energy's wind operations are primarily located on properties owned by others, with easement rights or governmental consents, and some facilities are subject to tax equity financing structures[67] - ALLETE acquired 100% of New Energy for $165.5 million, which has a project pipeline of over 2,000 MW of renewable projects across 20 states[69] - ALLETE South Wind owns a 49% equity interest in Nobles 2, a 250 MW wind energy facility, with an equity investment of $151.5 million as of December 31, 2023[70] Transmission and Infrastructure - ALLETE Transmission Holdings owns approximately 8% of ATC, with an equity investment of $179.7 million as of December 31, 2023, and ATC's 10-year transmission assessment identifies a need for $6.6 billion to $8.1 billion in transmission system investments[43][44] - South Shore Energy is developing a 600 MW natural gas-fired facility, with an estimated total project cost of $700 million, of which South Shore Energy will fund approximately 20%[71] Regulatory and Rate Changes - Minnesota Power filed a retail rate increase request with the MPUC seeking an average increase of approximately 12.00 percent for retail customers, which would generate approximately $89 million in additional revenue annually[48] - The MPUC approved an interim rate increase of approximately $64 million starting January 1, 2024, subject to refund[48] Coal and Natural Resources - BNI Energy produces approximately 4 million tons of lignite coal annually and has an estimated 650 million tons of reserves, with a total reclamation liability of $82.1 million as of December 31, 2023[72] Real Estate and Land Holdings - ALLETE Properties has approximately 200 acres in the Town Center at Palm Coast project and 500 acres of other land available for sale, with $2.9 million in outstanding finance receivables as of December 31, 2023[73] Workforce and Human Resources - ALLETE has 1,560 employees as of December 31, 2023, with 479 covered under collective bargaining agreements[80] - ALLETE's Human Rights Policy and Code of Business Conduct emphasize integrity, health, safety, and diversity, equity, and inclusion[81][86] - ALLETE supports veterans and military members through its Yellow Ribbon Program, which focuses on recruiting and retaining military-connected employees[87] Executive Leadership - Bethany M. Owen has been Chair, President, and CEO since May 11, 2021, and previously held the role of President and CEO since February 3, 2020[90] - Patrick L. Cutshall has been Vice President and Corporate Treasurer since December 18, 2017[90] - Nicole R. Johnson was Vice President – Human Resources before her current role as Vice President and President of ALLETE Clean Energy[91] - Steven W. Morris has been Senior Vice President and CFO since February 9, 2022, and previously served as Vice President and Chief Accounting Officer[90] - Joshua J. Skelton was Chief Operating Officer of Minnesota Power and Vice President Generation Operations before his current role as Vice President and COO of Minnesota Power[91] - Margaret A. Thickens has been Vice President, Chief Legal Officer, and Corporate Secretary since February 13, 2019[90] - All executive officers have been employed by the company for more than five years in executive or management positions[90] - The current term of office for executive officers extends to the first Board of Directors meeting after the next annual shareholders' meeting, scheduled for May 14, 2024[91] - No family relationships exist between any of the executive officers[91] Market Risk and Disclosures - Quantitative and qualitative disclosures about market risk are discussed in Item 7 of the Management's Discussion and Analysis section[266]

DULUTH, Minn.--(BUSINESS WIRE)--Minnesota Power, a utility division of ALLETE Inc. (NYSE: ALE), has issued a Request for Proposals (RFP) for up to 400 megawatts of wind energy to come online by the end of 2027, an important milestone in advancing its EnergyForward vision for 100% carbon-free energy. The RFP follows Minnesota Power’s 2021 Integrated Resource Plan approved by the Minnesota Public Utilities Commission, which calls for the company to acquire up to 300 megawatts of solar energy that is being ...

RyanJLane Introduction The utility sector is currently interesting for investors, mainly due to its resilience in volatile markets and the growing emphasis on sustainability and clean energy transformation, which creates a new upside. Unlike sectors susceptible to economic cycles, utilities offer stable returns for essential services and are key players in the transition toward more sustainable energy sources. This stability and the sector's critical role in addressing climate change make it a compellin ...

Sjo/E+ via Getty ImagesInvestment Rundown The action with the stock price of ALLETE Inc (NYSE:ALE) hasn't been that great for the past 12 months. I covered the stock before in late August. Since the writing of that article, the stock has appreciated about 6% in total, which has been an underperformance of the broader markets, like the S&P 500, which has grown over 10% during the same period. ALE continues to trade at quite low multiples making it still an appealing buy for the long-term investor. The co ...

DULUTH, Minn.--(BUSINESS WIRE)--ALLETE Inc. (NYSE:ALE) will announce its financial results for 2023 before the stock markets open on Tuesday, February 20, 2024. Following the release, ALLETE Chair, President and Chief Executive Officer Bethany M. Owen, and Senior Vice President and Chief Financial Officer Steven W. Morris will present an overview of results and other factors related to performance, and discuss 2024 earnings guidance during a conference call beginning at 10 a.m. Eastern time. Interested par ...

ANNAPOLIS, Md., Feb. 7, 2024 /PRNewswire/ -- New Energy Equity, national developer and financier of community and commercial solar projects, has welcomed Jackie Chambers to its leadership team as chief investment officer. Chambers will be responsible for shaping project finance strategy and the execution of monetizing and financing New Energy Equity's pipeline of projects.With 13 years in the solar industry, Chambers brings valuable perspective to New Energy Equity and significant experience in project fina ...