Allete's 1st female CEO takes helm at crossroads

DULUTH – It had been a long-planned and orderly transition of power at Allete, the Duluth-based parent company of Minnesota Power.

But just as CEO Bethany Owen had finished moving into the corner office in February, the pandemic swept the country and gave Owen the biggest test of her career.

"Even pre-COVID, we as leaders need to be calm, consistent and caring," Owen said this month in her first interview since her rise to chief executive. "Doubly so in times like these."

As the virus upended normal life this spring, utilities scrambled to make sure the power stayed on even if bills would go unpaid while high unemployment loomed. Minnesota Power's largest customers — iron mines and paper mills — cut back production and clouded financial projections for Allete, which in May took the unusual step of suspending 2020 earnings guidance, citing unpredictability caused by the pandemic.

Amid all this, Owen said her first priority was to get many of her 1,400 employees working from home or better protected while on the front lines.

"From the very beginning the safety of our employees was No. 1," she said. "Customers are relying on us perhaps even more than in the past."

While most of the mines have come back online, and the company reinstated earnings guidance of $3.09 to $3.29 per share earlier this month, the stock has yet to rebound to pre-pandemic heights, and remains near four-year lows. Allete's market value has sunk from $4.19 billion at the start of the year to $2.8 billion Friday.

"We want to be part of a growth story," Owen said, and that means rooting for highly contentious projects like the PolyMet copper-nickel mine while also supporting increased wind and solar production. Minnesota Power expects to get half of its energy from renewables by next year.

As the head of an energy company Owen finds herself beholden to customers, regulators, shareholders, cost-sensitive industries and, increasingly, social forces calling for a faster push toward green energy and diversity and inclusion among the company's ranks.

"It's something that is personally very important to me, and I'm not one to be out speaking words that don't have action behind them," said Owen, the first woman to be CEO of the company since its founding in 1906. "I believe we have great privilege at our company and so we have a great responsibility to make these better places to live."

Working on her grandparents' dairy farm as a teenager in Tennessee, Owen didn't picture herself leading an energy company or living in Duluth.

Yet ever since she first crested Thompson Hill, where Lake Superior and the city alongside it come into view, she knew she'd found home: "I wouldn't live anywhere else."

Beyond the two utilities, Allete also owns Allete Clean Energy and North Dakota-based coal company BNI Energy.

Last year Owen, now 55, was named company president as CEO Al Hodnik prepared a long exit. Hodnik, who led the company over a prosperous decade, remains executive chairman through his planned retirement next year.

Employees say Allete isn't the kind of place that rewards corporate ladder-climbers — team-builders are the ones who get ahead. Since she joined the company Owen has been known as a "people person first".

"It's why I applied here in the first place — a strong reputation for values," Owen said.

Even without the pandemic, it would have been a busy year at Allete. The company's clean-energy arm continues to grow, a Minnesota Power rate increase was reduced, progress was made toward a controversial new natural gas plant and a high-power transmission line carrying Canadian hydropower to Minnesota was finished.

"We absolutely believe in sustainability and moving toward a cleaner energy economy," Owen said.

At the same time, the company would benefit greatly from increased mining, be it the Mesabi Metallics taconite project or the controversial PolyMet mine.

"We would be very grateful for the economy in northern Minnesota for new customers to come online," Owen said. "Our economy is so interrelated."

Allete is particularly susceptible to swings in iron mining, with every million tons of taconite equal to about $0.04 per share in earnings. Last year Minnesota produced about 37 million tons.

Analyst Andrzej Tomczyk of CFRA Research said the company "has historically traded at a premium" and that its "reliance on U.S. steel production and demand presents unwanted risk in the short term."

Critics also want faster progress on clean energy, but Owen fired back at a Duluth Area Chamber of Commerce talk this month, saying the utility is way ahead of its peers.

"In spite of what you might hear or read, Minnesota Power is leading the state in providing renewable power to our customers," she said.

As stakeholders try to pull her in so many different directions and the pandemic continues to upend what once was normal, Owen said she's focusing on "doing things the right way."

"The company has been around for a very long time, and I'm looking forward to this next era," she said. "Losing trust in this time is something we will not do."

Brooks Johnson • 218-491-6496