Business Segments

12 Months Ended

Dec. 31, 2023

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 consolidated net income by each business 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.

NOTE 14. BUSINESS SEGMENTS (Continued)

Year Ended December 31	2023	2022	2021
Millions
Operating Revenue
Residential	$165.7	$175.9	$160.8
Commercial	184.6	187.2	168.6
Municipal	33.4	40.2	52.0
Industrial	593.6	589.0	565.5
Other Power Suppliers	146.1	165.8	168.7
Other	114.9	101.2	112.3
Total Regulated Operations	1,238.3	1,259.3	1,227.9
ALLETE Clean Energy
Long-term PSA	65.0	77.2	75.5
Sale of Wind Energy Facilities	348.4	33.5	—
Other	5.1	7.6	11.4
Total ALLETE Clean Energy	418.5	118.3	86.9
Corporate and Other
Long-term Contract	101.2	89.2	84.4
Sale of Renewable Development Projects	92.5	73.9	—
Other	29.3	30.0	20.0
Total Corporate and Other	223.0	193.1	104.4
Total Operating Revenue	$1,879.8	$1,570.7	$1,419.2
Net Income Attributable to ALLETE (a)
Regulated Operations	$147.2	$149.9	$129.1
ALLETE Clean Energy (b)	71.7	16.3	26.3
Corporate and Other (c)(d)	28.2	23.1	13.8
Total Net Income Attributable to ALLETE	$247.1	$189.3	$169.2

(a)    Includes interest expense and interest income resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation. 

(b)    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.)

(c)    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.

(d)    In 2021, South Shore Energy sold a portion of its undivided ownership interest in NTEC to Basin. The closing of the transaction resulted in the recognition of an approximately $8.5 million after-tax gain which is reflected in Corporate and Other. (See Note 1. Operations and Significant Accounting Policies.)

NOTE 14. BUSINESS SEGMENTS (Continued)

Year Ended December 31	2023	2022	2021
Millions
Depreciation and Amortization
Regulated Operations	$179.2	$171.9	$170.7
ALLETE Clean Energy	57.5	58.6	49.2
Corporate and Other	15.1	11.7	11.8
Total Depreciation and Amortization	$251.8	$242.2	$231.7
Interest Expense (a)
Regulated Operations	$63.9	$58.1	$57.3
ALLETE Clean Energy	0.8	2.3	1.5
Corporate and Other	22.5	19.6	13.2
Eliminations	(6.4)	(4.8)	(2.9)
Total Interest Expense	$80.8	$75.2	$69.1
Equity Earnings
Regulated Operations	$23.1	$19.3	$21.3
Corporate and Other	(1.4)	(0.6)	(1.3)
Total Equity Earnings	$21.7	$18.7	$20.0
Income Tax Expense (Benefit)
Regulated Operations	$22.4	$(10.4)	$(16.6)
ALLETE Clean Energy	2.7	(15.4)	(16.6)
Corporate and Other	2.8	(5.4)	6.3
Total Income Tax Expense (Benefit)	$27.9	$(31.2)	$(26.9)

(a)    Includes interest expense resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation.    

As of December 31	2023	2022
Millions
Assets
Regulated Operations	$4,335.0	$4,291.4
ALLETE Clean Energy	1,594.1	1,873.3
Corporate and Other	727.3	680.9
Total Assets	$6,656.4	$6,845.6
Capital Expenditures
Regulated Operations	$236.3	$158.3
ALLETE Clean Energy	(5.3)	2.2
Corporate and Other	25.0	47.6
Total Capital Expenditures	$256.0	$208.1