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S&P changes outlook on ALLETE to negative

S&P Global Ratings revised its outlook on ALLETE Inc. to negative from stable, after the Minnesota Public Utilities Commission granted a $12.6 million rate increase for subsidiary Minnesota Power Inc.

The company originally sought approval for a $55.1 million rate increase. "We view the decision as indicative of the company's regulatory risk, which we view as average relative to peers," S&P said in a Feb. 6 report.

The rating agency also expects the recently approved federal tax rate cuts to "potentially strain" ALLETE's cash flow metrics starting this year to reflect a possible reduction in the company's revenue requirement.

S&P affirmed its BBB+ issuer credit rating and A-2 short-term rating on ALLETE.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.