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Securities and Exchange Commission
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - September 25, 1996
Minnesota Power & Light Company
A Minnesota Corporation
Commission File No. 1-3548
IRS Employer Identification No. 41-0418150
30 West Superior Street
Duluth, Minnesota 55802
Telephone - (218) 722-2641
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Item 5. Other Events.
A. Minnesota Power and USX Sign New Electric Agreement
On September 25, 1996 Minnesota Power & Light Company (Minnesota Power
or Company) and USX Corporation (USX) entered into a Restated Electric Service
Agreement (Agreement) which provides for electric service to USX's Minntac
taconite plant through at least 2007. Minntac is the Company's largest electric
customer and annually produces about 14 million tons of taconite pellets for
steel production. The Agreement is subject to approval by the Minnesota Public
Utilities Commission, which was also requested on September 25, 1996. Existing
contract obligations will remain in effect through the present contract term of
May 1999.
Under this Agreement, USX may elect to increase its future power
requirements on a semi-annual basis and is provided with an incentive of lower
costs if advance notice is provided to Minnesota Power of those future
requirements. In addition, under the Company's Large Power Incentive Program,
USX will receive funding for $5.8 million of conservation projects when approved
by the Minnesota Department of Public Service. Demand charges in the service
schedule will not be increased.
B. Southern States Utilities Implements New Rates
Southern States Utilities, Inc. (SSU), a wholly owned subsidiary of the
Company, implemented new water and wastewater rates on September 20, 1996 that
will result in an annualized increase of approximately $11.1 million in revenue.
SSU requested an $18.1 million rate increase in June 1995. Approved interim
rates of $7.9 million on an annualized basis have been in effect since January
23, 1996. Though a final order has not yet been issued by the Florida Public
Service Commission (FPSC), SSU anticipates that it will appeal certain aspects
of the FPSC decision.
C. ADESA Adds Two New Auto Auction Locations
On September 30, 1996 Minnesota Power exchanged 473,006 shares of
common stock of Minnesota Power (Common Stock) for all the outstanding shares of
common stock of Alamo Auto Auction, Inc. and Alamo Auto Auction Houston, Inc.
The Common Stock was issued by the Company and delivered to the sellers in a
private placement transaction that has been accounted for as a pooling of
interests. ADESA Corporation (ADESA), a wholly owned subsidiary of the Company,
will have oversight of these auto auction businesses in San Antonio and Houston,
Texas. The San Antonio auction site is on 48 acres and has five auction lanes.
The Houston site is on 9 acres and has recently commenced operations.
These purchases, combined with ADESA's auto auction in Austin, Texas,
strengthen ADESA's presence in the Texas market which is the third largest car
and second largest truck market in the United States. ADESA owns and operates 23
automobile auctions in the United States and Canada through which used cars and
other vehicles are sold to franchised automobile dealers and licensed used car
dealers.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Minnesota Power & Light Company
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(Registrant)
October 3, 1996 D. G. Gartzke
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D. G. Gartzke
Senior Vice President - Finance
and Chief Financial Officer
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