Minnesota Power to be acquired by BlackRock subsidiary, Canadian pension fund for $6.2B

PUC clears plan for new ownership of Minnesota PowerThe $6.2 billion decision was unanimously made by the PUC Friday.

The Minnesota Public Utilities Commission on Friday approved a $6.2 billion deal for one of the state’s largest electric companies to be purchased by private equity.

Under the agreement, Allete, Inc., the parent company of Minnesota Power, will be acquired by Global Infrastructure Partners (GIP) and the Canadian Pension Plan Investment Board (CPPIB). GIP is a subsidiary of BlackRock, the world’s largest asset management firm, with more than $12 trillion in holdings.

Minnesota Power, based in Duluth, serves approximately 150,000 customers in northeastern and central Minnesota.

The deal will convert Allete from a publicly traded company to a private entity, with GIP controlling a 60% stake and the remaining 40% going to CPPIB.

Allete says the sale is necessary to achieve the company’s goal of generating 100% of its electricity through carbon-free sources by 2040.

Some customers expressed concern the move could drive up their electricity bills, but Minnesota Power and state regulators emphasized that all rate increases would need PUC approval.

As part of the sale, the commission required GIP and CPPIB to pay $50 million in bill credits to Minnesota Power customers through 2032; provide a $20 monthly discount to low-income customers and forgive $3.5 million in outstanding balances; and cap Minnesota’s profitability at 9.78% through 2030.

The Citizens Utility Board (CUB) of Minnesota, a nonprofit that advocates for affordable energy, said the risks of handing Minnesota Power over to a BlackRock subsidiary outweigh the benefits.

“We believe this sale creates substantial new fundamental risks for ratepayers,” CUB said in a statement. “The Commission has concluded that those risks have been overstated. We disagree, but hope that their conclusion is correct in the long run.”

The post Minnesota Power to be acquired by BlackRock subsidiary, Canadian pension fund for $6.2B first appeared on KSTP.com 5 Eyewitness News.