Ratepayers and stakeholders weigh in on whether the proposed acquisition of Minnesota Power by Global Infrastructure Partners and BlackRock is in the public interest

As the proceeding to determine whether ALLETE, the parent company of Duluth-based utility Minnesota Power, can be purchased by the BlackRock subsidiary Global Infrastructure Partners (GIP), ratepayers are voicing their concerns about a private equity firm buying their utility. PESP has been supporting local organizing efforts by participating in community education events to explain how private equity works and what’s at stake in Minnesota and public comments. 

Ratepayers and Regulators Oppose Acquisition of Minnesota Power by Global Infrastructure Partners

Throughout the week of April 7th, the administrative law judge assigned to the ALLETE proceeding held a series of public hearings allowing ratepayers from across Minnesota Power’s service area to weigh in on the acquisition. A Monday evening hearing in Duluth brought out several dozen speakers including the local Chamber of Commerce and LiUNA which spoke in favor of the acquisition and ratepayers, the Attorney General, and the Minnesota Department of Commerce who spoke of the risks of BlackRock at the helm of the utility. Mary Mingo Gallet, Minnesota Power customer and shareholder had this to say about the acquisition:

“They (BlackRock) go in, and they break things. They tear things apart. They sell them. They sell off pieces for profit,” she said. “And then the people that are left are just left with nothing.” 

In previous comments filed to the Public Utilities Commissions the Minnesota Attorney General’s Office determined “it is clear that the proposed transaction carries risks for ratepayers. What is less clear is what, if any, benefits it holds for ratepayers and whether those benefits outweigh the risks.”

A variety of local news outlets captured the widespread opposition by ratepayers. 

PESP Lends a Hand in Community Organizing Effort

Jordan Ash, PESP Housing Director and Minnesota Power ratepayer also spoke at the Duluth public hearing highlighting the risks of the private equity business model. “After acquiring a company, private equity firms are often laser-focused on growing cash flow, typically by using heavy debt loads and raising the cost to consumers. The private equity industry is known for cost cutting to increase cash flow. This can include reductions of qualified staff and the deferral of necessary maintenance and capital improvements.”

PESP has also collaborated with local grassroots organizing efforts by giving presentations at two community events which updated community members about the proceeding and explained how private equity works. Nichole Heil, Senior Research and Campaign Coordinator was a panelist at a February 20th community listening session and a March 21st webinar about the proposed acquisition of Minnesota Power and what it may mean for ratepayers.

Administrative Law Judges to Recommend Whether Sale is in the Public Interest

In addition to supporting community organizers, PESP participated as an expert witness for CURE MN, a rural nonprofit that has formally intervened in the proceeding. PESP submitted expert testimony on February 4th regarding risks of private equity investments generally and regarding the proposed acquisition of ALLETE. The testimony highlighted several reasons that the acquisition of ALLETE is not in the best interest of Minnesotans including: 

• Private equity ownership of Minnesota Power may be a more expensive way to raise capital than through public markets investments 
• Private equity firms typically use a significantly higher level of debt than publicly traded companies as seen in examples of other utility buyouts 
• BlackRock’s acquisition of GIP creates conflicts of interest because BlackRock has significant ownership stakes in ALLETE customers, supplies and competitors.

In total, nine organizations intervened in the proceeding outside of the parties (Minnesota Power, Canada Pension Plan Investment Board, and Global Infrastructure Partners) involved in the proposed transaction including:

• MN Department of Commerce
• Office of the Attorney General
• Citizens Utility Board
• Large Power Intervenors
• CURE
• Energy CENTS Coalition
• Sierra Club
• International Brotherhood of Electrical Workers Local 31
• Laborers’ International Union of North America

Of these groups, six are opposed to the acquisition. All of these testimonies will inform the ALJ’s recommendation to the Minnesota Public Utilities Commission (PUC) which will ultimately make the final determination on whether GIP can acquire Minnesota Power The ALJ will issue a report to the PUC on July 15, 2025. The utility commission will review the matter in the months following. Earlier in April, FERC granted BlackRock/GIP an extension to the firm’s blanket authorization proceeding, meaning that the Minnesota PUC is the final regulatory step needed for the ALLETE acquisition.