Private Purchase of Minnesota Power
On May 6, 2024, ALLETE, Inc., the Duluth-based company that owns local utility Minnesota Power, 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.
Here at CUB, we fight for transparency, accountability, and fairness between utilities and Minnesotans. The sale of Minnesota Power to CPP and GIP/BlackRock contradicts these values.
All of Minnesota’s investor-owned utilities are public companies or subsidiaries of public companies. Two institutional investors acquiring a public utility and taking it private is uncharted water for our state.
Tell the PUC: Reject the private sale of one of Minnesota's biggest utilities
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 at 4:30pm.
To make your voice heard, send an email to consumer.puc@state.mn.us and be sure to reference PUC Docket Number 24-198. Please know that everything included in your comment will become part of the public record.
Five reasons we're concerned about the sale of Minnesota Power
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.
Throughout the sale, the buyers have shown a serious lack of transparency - hiding future plans behind trade secret designations and redactions. This makes it harder for the public to understand how this deal will impact Minnesota Power customers.
If these investors are withholding critical information now - with a pending case before the PUC - how transparent will they be with Minnesota ratepayers further down the line?
ALLETE claims that selling to CPP and GIP/BlackRock means they'll have an easier time raising the funds needed for Minnesota Power to meet our state's net-zero carbon emissions goal by 2040. However, GIP/BlackRock's recent actions raise serious doubts about their commitment to clean energy.
For example, BlackRock just left a coalition aimed at aligning the asset management industry with global climate goals, causing the coalition to suspend its activities. Further, BlackRock oversees an enormous amount of shares in fossil fuel companies and has a history of opposing climate-related shareholder motions at these companies.
According to comments posted on GIP’s website, 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. If these new owners decide to sell, that sale would again require review and approval by the PUC.
BlackRock is the world’s largest investment firm. It holds $11.5 trillion in assets under management. That exceeds the GDP of every nation on Earth except the United States and China.
If the sale of Minnesota Power to CPP and GIP/BlackRock goes through, this creates massive conflict of interest concerns. There’s a real possibility that these buyers could make decisions in their own interests over the interests of Minnesota Power and its customers.
The sale of Minnesota Power, by the numbers
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CUB's Minnesota Power Article Library
Action Alert: Submit comments now against private purchase of Minnesota Power
Minnesota Power, which supplies electricity to a large portion of northeast Minnesota, is in the process of being acquired by two large private investors, including a company wholly owned by BlackRock.
Potential higher rates, lack of transparency, and an uncertain commitment to clean energy goals won’t benefit Minnesotans. Read our Action Alert to learn more about the pending acquisition.
Does Minnesota Power need private equity capital to comply with Minnesota’s carbon free standard, or not?
Minnesota Power argues that its acquisition would provide it with access to the capital it needs to comply with state law pushing electric utilities to eliminate their carbon emissions over the next 15 years.
Meanwhile, in a separate proceeding before the PUC, Minnesota Power plans to “add approximately 1,000 megawatts of new natural gas capacity,” including 750 megawatts of new natural gas—a proposal that seems inconsistent with the Company’s efforts to reduce carbon emissions.
Why we're worried about the acquisition of Minnesota Power
Outside experts hired by the Minnesota Department of Commerce, a group of large industrial customers of Minnesota Power, CUB, the Sierra Club, and the nonprofit CURE each filed testimony that recommended the Commission reject the deal. An internal expert at the Minnesota Office of the Attorney General was also highly critical of the proposed sale. Some labor unions have been more supportive—though even some of that support has been tepid as union leaders await firmer commitments from the petitioners to continue employing local union labor moving forward.
PUC decides on procedure for addressing private acquisition of Minnesota Power
Learn about the role the Minnesota Public Utilities Commission has in this acquisition. The PUC expects the judge assigned to this contested case to return a report explaining the judge’s analysis and recommendations by July 2025. Though that report will inform the PUC’s analysis of the acquisition, it will ultimately be up to the PUC to decide whether or not to approve it. That decision will likely come next fall.
BlackRock, Canadian Pension Plan to co-own Minnesota Power – is that a good thing?
CUB's first article on this proposed sale with our initial reactions to the news.