Press Release: Advocates applaud MN Administrative Law Judge opinion recommending against the PE acquisition of ALLETE and Minnesota Power, urge Minnesota PUC to protect ratepayers

Advocates applaud Administrative Law Judge opinion recommending against the private equity acquisition of ALLETE and Minnesota Power, urge Minnesota PUC to protect ratepayers

Following the opinion of the Minnesota Administrative Law Judge (ALJ) recommending against the proposed $6.2 billion acquisition of ALLETE and Minnesota Power by Global Infrastructure Partners, which is wholly owned by BlackRock, and the Canada Pension Plan Investment Board, consumer and environmental advocates are calling on the Minnesota Public Utilities Commission (PUC) to take decisive action to protect ratepayers.

The proposed acquisition has raised significant concerns among a broad coalition of organizations, residential and industrial customers, and regulators who fear it will lead to increased costs, compromised reliability, and reduced transparency for Minnesota Power customers.

“We wholeheartedly agree with the ALJ’s opinion recommending against this private equity takeover of a public utility and call on the Minnesota Public Utilities Commission (PUC) to safeguard Minnesotans’ energy future,” stated Nichole Heil, Senior Researcher and Campaign Director for Climate at PESP. “The PUC must ultimately vote to protect ratepayers, prevent rate hikes, and ensure reliable essential services. This acquisition, driven by private equity’s pursuit of profit, would threaten the availability of affordable and reliable electricity for thousands of Minnesotans. No one in northern Minnesota wants higher utility bills solely to line the pockets of Wall Street-based private equity firms.”

“This is a strong precedent for protecting the people of Minnesota from utility owners that would otherwise put profit over people.The Judge’s recommendation reflects the fact that these companies have nothing good to offer Minnesota, and can’t meet the standard under our law for buying one of our utilities. While CURE is very happy with this outcome, it must be upheld by the Commission. We expect the Public Utilities Commission to stand by the public and reject any utility acquisition that will harm Minnesotans and the economy only to enrich private equity speculators.” said Hudson Kingston, Legal Director of CURE.

In the opinion the ALJ stated, “In considering the true risks and benefits of the Acquisition, it is critical that the Petitioner’s agreements and private discussions do not comport with their public statements. 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. The Partners themselves have carefully committed to do very little, instead largely making commitments through expected holding companies or Minnesota Power itself. A prime example of this phenomenon is the promised funding of the five-year capital plan. Access to capital is the primary benefit touted by the Petitioners. However, the Partners have not, in fact, promised to provide capital to ALLETE. ALLETE did not even ask for some commitment to provide equity as part of this merger negotiation, and the merger agreement did not require the Partners to provide ALLETE with any additional equity.”

The ALJ concluded, “There is no doubt the Carbon Free Standard is of critical importance to the future of Minnesota and our nation. However, the Carbon Free Standard does not and should not give private equity a free pass to acquire critical Minnesota public utilities to the detriment of Minnesota ratepayers. The Commission should disapprove the Acquisition.”  

Advocates argue that the acquisition premium, estimated to be between $600 million and $1.5 billion, will inevitably be passed on to ratepayers without providing tangible benefits. Furthermore, expert testimony in the proceeding has pointed to ALLETE’s own SEC filings, which contradict the claim that the deal is necessary to secure capital for the clean energy transition.

This deal in Minnesota is seen as a critical test for how states will address the growing national trend of private investment in essential public utility infrastructure and energy assets. The Minnesota PUC’s final decision, expected this fall, will have significant implications not only for northern Minnesota but for the broader conversation about who should own and control vital public services across the U.S.

A diverse set of stakeholders opposes the deal, including PESP, the Minnesota Office of Attorney General, the Citizens Utility Board of Minnesota, CURE, and Sierra Club, in addition to strong community pushback that has been heard in public and in written comments from concerned Minnesota Power customers. The coalition advocating against this deal remains united in its opposition to it and will continue to advocate for the public interest, emphasizing that Minnesota’s energy future should be determined by community needs, not the financial ambitions of private equity firms.

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