ALLETE, Inc. Reports 2022 Earnings of $3.38 Per Share

Source: www.gulfoilandgas.com 2/16/2023, Location: North America

ALLETE, Inc. reported 2022 earnings of $3.38 per share on net income of $189.3 million and operating revenue of $1.6 billion. Reported results from 2021 were $3.23 per share on net income of $169.2 million and operating revenue of $1.4 billion.

“I am proud of our many successes and accomplishments throughout 2022, all of which position ALLETE well now and into the future,” said ALLETE Chair, President, and CEO Bethany Owen. “The approval of Minnesota Power’s Integrated Resource Plan results in a $600 million dollar expansion of our capital expenditure plan and will drive rate base growth to 11 percent over the next five years. Minnesota Power also achieved near-perfect system reliability for its customers during the year, and we know that additional transmission investments will be critical to help ensure reliability as the clean-energy transformation continues. To that end, the MISO Tranche 1 approval of the Northern Reliability Project transmission line, and advancing the ALLETE and Grid United vision for the nation’s first transmission corridor to link three regional U.S. electric energy markets are important achievements in the year, which will drive significant future growth. With all of this, and the successful acquisition and integration of New Energy Equity expanding our presence in the growing solar sector – ALLETE’s strategic position is strong as the drive toward a clean-energy economy gains momentum.”

“In 2023, we will continue to advance these and other strategic initiatives that set the stage for meaningful future growth,” Owen continued. “ALLETE’s Sustainability in Action strategy provides significant value to our customers, our communities, and our investors, as well as exciting opportunities for our employees. While our financial results for 2022 were below our expectations, ALLETE’s future is very bright, with transformative clean-energy initiatives, significant infrastructure investments, and new opportunities with the distributed solar platform, pipeline, and strong team at New Energy.”

“Our financial performance in 2022 reflects Regulated Operations within our original guidance range, which included a full year of interim rate reserves recorded in the fourth quarter for the outcome of the Minnesota Power rate case,” said ALLETE Senior Vice President and Chief Financial Officer Steve Morris, “ALLETE Clean Energy and Corporate and Other businesses were below expectations of our guidance range for the year, primarily due to losses taken on the now-completed Northern Wind project and financial underperformance of facilities in the Southwest Power Pool market, where we are working to navigate market and contract volatility related to our Oklahoma wind facilities. I remain confident in our growth prospects driven by our expanded capital expenditure plan over the next five years and investment opportunities well into the future. In addition, I am pleased with the momentum and future growth at New Energy as the team exceeded the acquisition plan for the year while completing integration, entering multiple new markets and significantly expanding their pipeline of projects. We believe our unique mix of businesses will continue to deliver a strong value proposition to shareholders for years to come.”

ALLETE’s Regulated Operations segment, which includes Minnesota Power, Superior Water, Light and Power and the Company’s investment in the American Transmission Co., recorded net income of $149.9 million, compared to $129.1 million in 2021. Higher earnings in 2022 reflect the implementation of interim rates on January 1, 2022, net of interim rate reserves. This was partially offset by higher costs under a 250 MW power purchase agreement, higher operating and maintenance expense, and lower kilowatt-hour sales to industrial customers. ALLETE’s earnings in ATC were lower than in 2021 primarily due to period-over-period changes in ATC’s estimate of a refund liability related to MISO return on equity complaints.

ALLETE Clean Energy recorded 2022 net income of $16.3 million compared to $26.3 million in 2021. Net income in 2022 reflected challenges under the Caddo and Diamond Spring wind energy facilities’ power sales agreements resulting from market volatility and transmission congestion in the Southwest Power Pool. Net income in 2022 also included additional losses related to ALLETE Clean Energy’s now completed and sold Northern Wind project. Net income in 2021 included the impact related to ALLETE Clean Energy’s Diamond Spring wind energy facility due to an extreme winter storm event in February 2021.

Corporate and Other businesses, which include New Energy, BNI Energy, the Company’s investment in the Nobles 2 wind energy facility, and ALLETE Properties, recorded net income of $23.1 million in 2022 compared to net income of $13.8 million in 2021. Net income in 2022 reflects net income from New Energy of $7.8 million, which was impacted by purchase price accounting. Net income in 2022 also reflects higher earnings from our investment in Nobles 2 due to higher wind resources in 2022, higher land sales at ALLETE Properties, and earnings from Minnesota solar projects placed into service in 2022. Partially offsetting these increases were transaction costs of $2.7 million after-tax related to the acquisition of New Energy, and higher other expenses compared to 2021. Net income in 2021 included South Shore Energy’s sale of a portion of its interest in NTEC to Basin Electric Cooperative which resulted in the recognition of an approximately $8.5 million after-tax gain.


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