BlackRock’s utility pressure campaign sparks outcry

BlackRock’s pressure campaign sparks outcry as Minnesota regulators weigh utility takeover

Proposed acquisition raises alarms about Wall Street’s influence over Minnesota’s energy future

DULUTH, Minn. – As the Minnesota Public Utilities Commission (PUC) considers whether to approve BlackRock’s proposed takeover of ALLETE, community members and watchdog groups are warning of troubling alleged behind-the-scenes tactics surrounding the deal. Today, elected officials and advocates gathered outside Minnesota Power’s headquarters in Duluth to urge the PUC to reject the private equity acquisition.

“Folks from all over Duluth and across the Northland have been ringing the alarm bells for over a year. Like most private equity vultures, these firms threaten to gut ALLETE and Minnesota Power, trying to pick last bits of easy profit while Minnesotans will be burdened with higher utility bills. We shouldn’t have to pay more for an essential service that keeps the lights on while private equity executives rake in profits at our expense. All eyes are on Minnesota and the PUC: we cannot put private equity profits over everyday people. The public needs to be protected by rejecting this heinous deal,” said Jenna Yeakle, Central Region Campaign Manager, Beyond Coal at Sierra Club.

A recent investigation has alleged that a supportive statement filed by two unions in favor of the takeover was in fact ghostwritten by an attorney representing the would-be buyers, raising serious questions about transparency and undue influence. Other so-called “clean energy” groups have also lined up in support of the deal while simultaneously receiving sponsorship from Minnesota Power and the law firm representing BlackRock, raising alarms that the appearance of community backing may be manufactured rather than genuine.

“Recent reporting has raised questions about just how much political muscle and behind-the-scenes dealmaking BlackRock and its partners are willing to deploy to gain control of a public utility,” said Alissa Jean Schafer, Climate and Energy Director at the Private Equity Stakeholder Project. “Minnesota regulators and elected officials should be alarmed by the differences in what BlackRock is saying publicly and privately. Decisions about who owns and operates Minnesota Power should be made with the public’s best interest at heart — not dictated by shady Wall Street insiders working behind closed doors.”

An Administrative Law Judge has already recommended rejecting the deal, citing evidence that the buyers’ intent is to “do what private equity is expected to do – pursue profit in excess of public markets through company control.” Judge Megan McKenzie emphasized that the deal’s risks outweigh its purported benefits, concluding it would cause net harm for ratepayers.

The proposed $6.2 billion acquisition would hand control of Minnesota Power, the largest utility in northern Minnesota, to private equity investors with short-term profit priorities. Advocates argue this model is incompatible with the long-term planning and stability required for utilities. Meanwhile, the deal’s acquisition premium, estimated at up to $1.5 billion, would flow to shareholders and executives, while ratepayers inherit higher costs and risks.

Opponents warn that if Minnesota regulators allow BlackRock’s deal to go forward, it will set a dangerous precedent for how Wall Street can use political influence and financial engineering to capture essential public services.

“BlackRock wants to use northern Minnesota as a test case for Wall Street control of public utilities,” Schafer said. “If regulators approve this sale, it won’t just reshape one company, it will signal to private equity that communities across the country are open for speculative takeover, with working families left to shoulder the costs.”

The decision now rests with the Minnesota Public Utilities Commission, which is expected to make a ruling in late September or early October. Hearing dates have not yet been announced.

Find full video of the Minnesota press conference: https://www.facebook.com/CUREmn