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���������ֳ�-New York-08 July 2010: ���������ֳ� has affirmed the Issuer Default Rating (IDR) of Otter Tail Corp. (OTTR) at 'BBB-'. ���������ֳ� also affirms the IDR of OTTR's wholly owned subsidiary Otter Tail Power (OTP) at 'BBB'. The Rating Outlook is Stable for both entities.

OTTR's current IDR of 'BBB-' takes into consideration the company's unusual business portfolio including a relatively small electric utility and a mix of small cyclical industrial businesses that operate in fragmented and competitive markets. OTTR generally does not benefit from advantageous size and scale in its industrial markets. The 2008-2009 recession revealed the vulnerability of OTTR's business portfolio; the cyclical industrial and service businesses experienced steep declines, and the electric utility's operating cash flow also dropped due to reduced customer demand and low prices for excess power sold into the wholesale market.

The effect of the downturn on 2009 cash flow was moderated by the realization of tax refunds and investment tax credits. Also, low debt leverage at the parent company and moderate debt leverage of the utility subsidiary limited the distress as a result of lower cyclical business conditions. The Stable Outlook for the parent is based on a base rating case in which ���������ֳ� assumed a moderate recovery in certain of the diversified industrial businesses but not a rebound to the 2007 levels of profitability.

High common dividend payout in excess of earnings and a large capital investment budget will pose a funding challenge for OTTR after 2010. Management forecasts a step-up in planned capital spending in 2011-2014 (averaging $147 million per annum for the utility and $40 million per annum for diversified businesses) that would entail external financing. ���������ֳ�'s base rating case assumes that OTTR will fund with a balanced mix of equity and debt so as to maintain the current debt leverage.

OTP's IDR of 'BBB' is consistent with the utility's stand-alone financial measures and supportive regulatory mechanisms in Minnesota and North and South Dakota, including tracker mechanisms to recover some costs of service. Operating cash flow from the utility business will depend on ongoing rate increases to recover capital investment in increased investment in utility assets. Also, OTP's wholesale power sales are subject to market price exposure. The majority of the group's capex going forward is focused on utility projects; OTP plans to invest in wind generation and network improvements. OTP was previously a participant in a consortium to build a coal baseload power plant, Big Stone II, but that plan has been terminated by the consortium.

���������ֳ�'s ratings of OTTR and OTP take into consideration some modest ring-fencing of the utility subsidiary from its parent and other affiliates, a factor that reduces but does not eliminate linkage between the ratings of OTTR and OTP.

Going forward, key factors to maintain the current rating and Stable Outlook include: cyclical recovery in the diversified industrial and business services segment; continuing rate increases to support higher investment in the regulated electric utility business; and a balanced mix of funding for new capital investment without increasing debt leverage.

OTTR's business segments include the rate regulated electric utility (in Minnesota and North and South Dakota) plus five non-utility business segments, including such disparate activities as plastics (producing PVC pipe); manufacturing (wind towers, metal parts, waterfront equipment; horticultural containers); medical imaging services, and sale of diagnostic medical equipment and patient monitoring equipment; processing potatoes; and other business services. In 2009, the electric utility accounted for 64% of net assets and 130% of net income of the consolidated company.

���������ֳ� affirms the following ratings with a Stable Outlook:

Otter Tail Corporation (OTTR)
--Long-term IDR at 'BBB-';
--Short-term IDR at 'F3';
--Senior Unsecured at 'BBB-';
--Preferred Stock at 'BB'.

Otter Tail Power (OTP)
--Long-term IDR at 'BBB';
--Short-term IDR at 'F3';
--Senior Unsecured at 'BBB+';

���������ֳ� also affirms the following OTP pollution control revenue bonds at 'BBB+':

--Mercer County (ND) 4.85% pollution control refunding revenue bonds due Sept. 1, 2022;
--Grant Count (SD) 4.65% pollution control refunding revenue bonds due Sept. 1, 2017;
--Grant Count (SD) variable rate pollution control refunding revenue bonds due Dec. 1, 2012.

Applicable criteria available on ���������ֳ�'s web site at '' include:

--'Corporate Rating Methodology' Nov. 24, 2009;
--'Credit Rating Guidelines for Regulated Utility Companies' July 31, 2007;
--'U.S. Power and Gas Comparative Operating Risk (COR) Evaluation and Financial Guidelines' Aug. 22, 2007;
--'Utilities Sector Notching and Recovery Ratings', March 16, 2010.

Contact: Ellen Lapson, CFA +1-212-908-0504 or Glen Grabelsky +1-212- 908-0581, New York.

Media Relations: Cindy Stoller, New York, Tel: +1 212 908 0526, Email: cindy.stoller@fitchratings.com.

Additional information is available at ''.