PESP featured in The Lever: Private equity’s utility power grab

BlackRock’s $6.2b bid for Minnesota Power sparks watchdog warnings of higher rates and risks to the clean energy transition.

Last week, The Lever published an in-depth investigative report titled “This Is How Wall Street Could Buy Your Power Company.” The piece zeroes in on a high-stakes $6.2 billion deal in which BlackRock, through its subsidiary Global Infrastructure Partners (GIP), and a Canadian pension fund are seeking to acquire ALLETE, the parent company of Minnesota Power.

The Lever’s reporting raises urgent questions about what happens when Wall Street enters the utility sector — an industry that, until now, had largely avoided private equity ownership. Against the backdrop of rapidly rising electricity demand driven by artificial intelligence data centers, this investigation positions Minnesota as a front line in a broader national trend: whether regulators will allow private equity firms to gain control of essential infrastructure.

The Private Equity Stakeholder Project (PESP) was featured in the story, underscoring the watchdog role it has played in examining the deal. “We’re viewing this as a precedent-setting case,” said Alissa Jean Schafer, climate director at the Private Equity Stakeholder Project, which opposes the BlackRock takeover. “This is a new thing, a new potential strategy”.

The Lever’s Investigation: A Utility on the Auction Block

According to The Lever, the Minnesota Power acquisition represents a new frontier for private equity. Historically, Wall Street investors avoided regulated utilities, in part because state oversight constrained short-term profit-taking. But with soaring energy demand — particularly from data centers fueling artificial intelligence — utilities are once again attractive targets.

The Lever reports that BlackRock’s proposed acquisition has sparked concern among consumer advocates and environmental groups, who fear the deal could lead to:

• Rate hikes for customers, as debt-driven private equity financing gets pushed onto captive ratepayers.

• Slowdowns in renewable energy adoption, as private equity prioritizes short-term returns over long-term infrastructure planning.

• Greater political influence, with Wall Street–backed advocacy campaigns and coordinated support from groups aligned with BlackRock’s interests.

The article situates Minnesota as a test case: if BlackRock is able to take over a regulated utility here, the door could open for similar acquisitions across the country.

PESP’s Stance: The ALJ Got It Right

PESP has raised significant concerns about the deal, arguing that private equity ownership of a utility like Minnesota Power would put ratepayers at risk. “What’s at stake for Minnesota Power ratepayers,” Schafer explains, “is their utility being beholden to the private equity business model, notorious for cost-cutting and raising prices for consumers to generate high profits in a short amount of time”.

Minnesota Administrative Law Judge Megan McKenzie recently reviewed the deal in detail and recommended it be denied. After examining confidential documents and testimony, Judge McKenzie concluded that the promises BlackRock and its partners made publicly did not align with their private commitments. In her words, “The nonpublic evidence reveals the Partner’s intent to do what private equity is expected to do – pursue profit in excess of public markets through company control”.

This recommendation, PESP argues, should guide the Minnesota Public Utilities Commission.

The Costs and Risks of Private Equity Ownership

PESP points to the broader risks of allowing a private equity firm to control a regulated utility:

• Debt burdens on ratepayers: PE firms typically rely on high levels of debt, with the costs passed along to captive customers.

• Short investment horizons: Five- to seven-year PE timelines clash with the decades-long planning cycles utilities require.

• Acquisition premiums that don’t benefit customers: In this case, the $600 million to $1.5 billion premium will go to shareholders and executives, not ratepayers.

• A troubling track record on energy: The BlackRock fund seeking to buy Minnesota Power is also a major investor in the Rio Grande LNG terminal in Texas — a project that, if fully built, could emit greenhouse gases equivalent to 83 coal plants annually.

The Lever also captured this skepticism. “It’s a lot of posturing that we’re seeing around this sales pitch,” Schafer told the outlet. “But if you look at the information that we have, there’s very little reason to trust that BlackRock is going to do the right thing here”.

Broader Implications: Minnesota as a National Signal

The Lever frames the Minnesota Power sale as a story about political influence and national precedent. The investigation notes that industry-aligned groups are now campaigning in support of the acquisition, echoing BlackRock’s talking points that private equity capital is necessary for Minnesota to meet its clean energy goals. Critics, however, see this as a coordinated effort to push regulators toward approval despite serious risks.

PESP has also emphasized the national significance of the decision. “Minnesota is now on the front lines of this national trend,” Schafer notes, “and what happens here will send a signal to other states about whether regulators are willing to put public interest ahead of Wall Street profit”.

If the Minnesota Public Utilities Commission approves the sale, it would set a precedent that essential services — from electricity to water — are open to speculative takeover. If it rejects the deal, it could mark a turning point in how regulators confront Wall Street’s push into public infrastructure.

A Defining Decision for Minnesota

Both The Lever’s investigation and PESP’s analysis underscore the magnitude of the decision facing Minnesota regulators. On one hand, the deal promises an infusion of Wall Street capital; on the other, it carries risks of higher rates, debt burdens, and misalignment with long-term clean energy goals.

Judge McKenzie’s recommendation is clear: deny the deal. PESP urges the Public Utilities Commission to follow that advice. As Schafer concludes, “Minnesota’s energy future should be determined by the needs of its communities, not the short-term ambitions of a private equity firm headquartered thousands of miles away”.

The coming months will reveal whether Minnesota regulators accept Wall Street’s promises — or protect ratepayers from becoming the latest test case for private equity in essential public services.