JANUARY 2005 AMENDMENT-DIRECTOR COMP DEFERRAL PLAN

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                                                                   EXHIBIT 10(c)

             AMENDMENT TO ALLETE DIRECTOR COMPENSATION DEFERRAL PLAN

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                            Effective January 1, 2005

         WHEREAS, ALLETE, Inc. (the "Company")  maintains  the  ALLETE  Director

Compensation Deferral Plan (the "Plan"); and

         WHEREAS, the American Jobs  Creation Act of  2004 added  a new  section

409A to the Internal Revenue Code  establishing new rules regarding the taxation

of non-qualified  deferred  compensation  plans,  effective for amounts deferred

after December 31, 2004 (the "New Law"); and

         WHEREAS, under the  new law, amounts  deferred on and  after January 1,

2005 under the Plan would be immediately taxable to participants; and

         WHEREAS, the Executive Compensation Committee of the Board of Directors

of the Company has instructed  management to prepare a new deferred compensation

plan (a "New  Plan")  that will  comply  with the New Law to be  adopted  by the

Company no later than December 31, 2005; and

         WHEREAS,  recent  guidance  issued  by  the  Internal  Revenue  Service

specifies that amounts earned by Plan  participants  in 2004 that become payable

in 2005 will, if subject to a deferral election,  be treated as amounts deferred

after December 31, 2004 for purposes of the New Law; and

         WHEREAS, such recent guidance  also allows deferred  compensation plans

to be amended to give  participants  the  opportunity to revoke,  in whole or in

part, certain outstanding elections to defer compensation; and

         WHEREAS, such  recent  guidance also  allows  participants to  elect to

defer certain performance-based  compensation based on services performed over a

period  of at least 12  months  no later  than 6 months  before  the end of that

period; and

         WHEREAS, it is  desirable to  preserve  the deferral of  taxes on  2004

compensation