Action Alert: Submit comments now against private purchase of Minnesota Power 

If you are concerned about the proposed sale of one of Minnesota’s largest electric utilities, Minnesota Power, “going private” in a sale to two institutional investors, the time is now to make your voice heard.  

Before this deal can go forward, the Minnesota Public Utilities Commission (PUC) must find that it is consistent with the public interest. The PUC is accepting public comments until April 17, and public hearings will be held throughout Minnesota Power’s territory and online the week of April 7. The PUC needs to know that Minnesotans are concerned, and public comments are useful to intervening parties like CUB, who can cite them in our formal legal briefs.  

How to Participate 

In writing 

Send an email to consumer.puc@state.mn.us by 4:30 pm on April 17. Be sure to reference PUC Docket Number 24-198, and know that everything included in your comment will become part of the public record.   

In person 

Anyone may attend and speak at one of the following public hearings. The full schedule can be found here.

How to prepare an effective comment 

Here are some tips to craft an effective comment, either in writing or verbally. The PUC offers additional tips here.  

• Identify your relation to the issue. Are you a customer of Minnesota Power? Are you a business owner in the area, or do you depend on the cities and businesses that are?
• Be specific about your concerns. Below are some reasons that CUB is concerned. If these topics concern you, feel free to include them in your comment, and/or speak about other ways that the sale of Minnesota Power will affect you.
• Be yourself. You do not need to have special training to write an effective comment. There are plenty of subject-matter experts already engaged. Public comments are useful because they share the individual experience and values of Minnesotans who stand to be affected by the PUC’s decision.   

Reasons for Concern 

ALLETE, Inc., the Duluth-based company that owns local utility Minnesota Power, has reached a deal to be acquired by two institutional investors: the Canada Pension Plan Investment Board (CPP) and Global Infrastructure Partners (GIP). GIP itself is owned by BlackRock, the world’s largest investment firm. BlackRock’s $11.5 trillion in assets under management exceeds the GDP of every nation except the United States and China.  

Minnesota Power provides electricity to Duluth, the Iron Range, and parts of central and northeastern Minnesota.

The buyers have agreed to buy ALLETE at a substantial premium. They will want to make back their investment. 

Expert witnesses in the case have estimated that the buyers have offered to pay between $393 million and $1.5 billion above the company’s actual value. This is a windfall for ALLETE shareholders that the buyers will expect to recoup, with profits.  

While ALLETE holds multiple businesses, regulated utilities make up the majority of its revenue (81% in 2024). It will be difficult, if not impossible, for the new owners to make back the purchase premium without leaning on ratepayers, which could lead to rate increases for Minnesota Power customers.

Of course, Minnesota Power’s rates must be approved by the PUC, and the company will continue to have to justify any rate increases. However, if the PUC denies the rate increases that Minnesota Power’s new owners want, the owners may decide it is not in their interest to invest much more money in the company, to the detriment of the quality of service that Minnesotans receive. 

Minnesota Power could be for sale again soon. 

Similarly, ALLETE’s new private owners may want to sell the utility if they view it as unprofitable. If CPP and GIP move to quickly resell ALLETE due to perceived underperformance, other potential buyers may be less eager to buy it. This could put Minnesota Power in a more precarious situation.  

Even if the company does provide a healthy profit for its new owners, it may be for sale again soon. GIP typically holds investments like ALLETE for only five to seven years. While that may be “long term” in the investment world, utility timeframes are much longer. It would be disruptive to Minnesota Power to be for sale again so quickly. And, GIP's chair has said: 

"We are quite opportunistic sellers. Each time we review an investment, the team has to justify why we should continue to own it, because if we are not selling, then we are underwriting it at the current value. At the end of the day, we are a finite-life fund – everything we own is for sale.” 

The buyers have promoted claims like: “Private equity is typically long-term focused and more patient, in contrast to the public equity market” in which ALLETE and other Minnesota utilities are currently traded. However, publicly traded utility companies are owned by hundreds or thousands of investors who frequently buy and sell shares of the company. If any of ALLETE’s current shareholders decides to sell their ALLETE shares, there are likely other potential investors ready and willing to buy those shares on public markets without requiring regulatory approval or disrupting the utility’s operations. 

Under the proposed new ownership, Minnesota Power will have just two owners: CPP and BlackRock’s GIP. If one or both of those owners decides to sell, that sale would require review and approval by the PUC—meaning stakeholders would need to repeat the contentious and complex regulatory process currently underway to review this initial proposed transaction. Plus, the PUC would face additional challenges in a secondary sale: either they approve a sale under potentially more risky or uncertain circumstances or deny the sale, forcing Minnesota Power to remain owned by institutional investors no longer interested in investing in it. 

GIP and BlackRock’s investments and actions call into question their clean energy commitments. 

While the companies have promoted the buyers’ commitments to the clean energy transition, GIP and BlackRock’s actions give reason to question these claims. For instance: 

• Under political pressure after President Trump’s election, BlackRock left a coalition aimed at aligning the asset management industry with global climate goals, causing the coalition to suspend its activities.
• BlackRock’s GIP is opening an office in Qatar and investing in, among other things, Abu Dhabi’s National Oil Company.
• BlackRock oversees an enormous amount of shares in fossil fuel companies and has a history of opposing climate-related shareholder motions at these companies.  
   

The buyers are hiding important information from public view.

Private companies are not subject to the public reporting and disclosure requirements that ALLETE currently follows. This can make their business operations and risks much less transparent to the public and the PUC. 

Already, Minnesota Power and its proposed buyers have hidden many details of their plans from public view behind “trade secret” designations. For example, Minnesota Power’s rate increase forecast is redacted, viewable only to intervening parties under non-disclosure agreements. In some cases, the companies have hidden information even from intervenors and the judge without following appropriate legal procedures for doing so. Several parties have raised concerns about this lack of transparency. The judge has already ordered the companies to disclose some of the hidden information and is now considering another motion recently filed by the Office of the Attorney General. 

If GIP and CPP are reluctant to disclose information now, when it is in their interest to earn stakeholders’ and government agencies’ support, we can only assume they will be even more reluctant to do so in the future should the purchase go through.  

Beyond basic transparency, expert testimony in the case also ties GIP leadership to a bankrupt solar company facing allegations of financial misconduct. As of June 2024, GIP owned a significant stake in SunPower, and two high-level GIP employees served on SunPower’s board. That month, “SunPower’s independent accountant resigned because it was unwilling to be associated with financial statements prepared by management,” citing misconduct. SunPower has since faced investigation by the US Securities and Exchange Commission. SunPower’s executives and board members—including a GIP executive testifying in this case—have faced lawsuits related to its financial reporting. That executive provides little explanation of this issue in his rebuttal testimony. 

What comes next? 

Public comments will be collected before April 17, and parties that are formally intervening will provide additional testimony and legal briefs over the coming months. In mid-July, the judge overseeing the case will issue her recommendation to the PUC. The PUC will make the ultimate decision whether to approve or reject the acquisition. Keep an eye on CUB’s website and email newsletter for updates through the process.   

If you are concerned about this sale, please submit a comment and participate in an in-person or virtual hearing—and please don’t hesitate to contact me if you have questions or would like to get more involved. You can reach me at annielf@cubminnesota.org.