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Judge recommends rejection of the private sale of Minnesota Power

July 15, 2025
Brian Edstrom
bridge in duluth

Read all of our writings on the proposed acquisition of Minnesota Power here. 
 

An administrative law judge today issued a report recommending state regulators reject the proposed acquisition of Duluth-based Minnesota Power by two institutional investors. The judge’s report cites analysis conducted by multiple experts on behalf of consumer advocates, state agencies, large industry, and environmental groups that each reached a similar conclusion: The proposed sale creates new risks for Minnesota Power and its customers and could significantly increase electric rates.    

ALLETE, which provides electric service in northern Minnesota under the name Minnesota Power, has signed an agreement to be acquired by two institutional investors: BlackRock, Inc. subsidiary Global Infrastructure Partners (GIP) and the Canada Pension Plan Investment Board (CPP). The buyers have agreed to purchase ALLETE for $6.2 billion. Today’s administrative law judge report will be received by the Minnesota Public Utilities Commission (PUC), which will make the final decision to approve or deny the sale.   

“The acquisition introduces new risks and uncertainties—particularly the risk that new owners will try to raise rates to increase their return,” said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota (CUB), a nonprofit advocate for the state’s energy consumers. “At a time when the separation between the ‘haves’ and the ‘have-nots’ is growing more apparent, this deal puts the interests of ALLETE’s shareholders ahead of Minnesota Power customers. We are glad to see Judge McKenzie recognizes this.” Many Minnesota Power customers struggle to afford their electric bills—total residential arrears at Minnesota Power have doubled since prior to the COVID pandemic.  

Concerns raised about the proposed sale include:  

  • ALLETE put its shareholders’ interests above the public. ALLETE claims the acquisition is needed to improve the company’s access to capital. However, the company has repeatedly reported it has adequate access to capital, including in its 2023 and 2024 annual reports to the Securities and Exchange Commission. ALLETE also rejected two prior, above-market purchase offers from the same buyers because the premium offered to shareholders wasn’t high enough, confident that the public markets could meet its capital needs. It ultimately accepted an offer that included a premium of 19-22% above the company’s market value, an estimated value of more than $600 million.
  • The acquisition could unnecessarily increase electric rates. The buyers intend to recoup their purchase premium, and they seek a return on investment that is far higher than typical for a publicly traded company.  
  • As a privately held company, ALLETE would be solely dependent on its new owners for equity capital. A publicly traded company currently, ALLETE can access capital on the public markets. After a private sale, however, if the new owners are unable to earn the returns they anticipate, they could decide to allocate their investment capital elsewhere or put ALLETE back up for sale.
  • The two new owners, GIP and CPP, would have substantial control over key decisions affecting Minnesota Power and its customers. If the acquisition is approved, GIP and CPP will have far more control over ALLETE than the company’s existing shareholders. The buyers will appoint 10 of 13 ALLETE Board Members and will have consent rights over key decisions. Unfortunately, GIP and CPP have hidden from public view additional details about their proposed governance structure for ALLETE, claiming those details are trade secrets. 
  • Approval of the acquisition would introduce numerous conflicts of interest with affiliates of ALLETE’s new owners. GIP is a wholly owned subsidiary of BlackRock, Inc., the world’s largest asset manager. BlackRock owns substantial interests in numerous companies that do business with ALLETE. There is a real concern that ALLETE’s new owners could leverage their interests in affiliated companies to benefit their customers and shareholders, potentially at the expense of Minnesota Power’s customers.  

The Minnesota Office of the Attorney General, a consortium of Minnesota Power’s large industrial customers, CUB, Sierra Club, and CURE oppose the acquisition.   

The Minnesota Department of Commerce had filed expert testimony and briefs opposing the acquisition but abruptly dropped that opposition in a settlement announced on July 11.  Though CUB acknowledged the settlement includes some positive moves in the right direction, CUB does not believe it goes far enough to protect consumers.   

CUB applauds the judge’s analysis and recommends the Minnesota Public Utilities Commission deny approval of the acquisition. Read more in our legal brief in this matter.