BlackRock's $6.2bn bid to acquire Minnesota Power through its Global Infrastructure Partners division has drawn criticism from environmental and consumer advocates, who warn it could lead to higher electricity bills and undermine clean energy targets. The deal, pending approval from the Minnesota Public Utilities Commission, would see BlackRock become the controlling shareholder of the utility serving over 150,000 customers.
Opponents argue that private equity's profit-driven model conflicts with affordable rates and the state's decarbonisation goals. Jenna Yeakle of the Sierra Club said the deal would 'force ratepayers to be beholden to the private equity agenda: prioritising profits for executives while raising prices for everyday people.' Critics also note that a proposed one-year rate freeze and investment in renewables are non-binding and insufficient.
Brett Christophers, author of 'Our Lives in Their Portfolios,' described the proposal as a 'classic private-equity play' where profits are prioritised over long-term decarbonisation. He expressed doubt that Global Infrastructure Partners would invest in clean energy given negative investor sentiment under the current political climate. The deal has also drawn concern from local groups like the Duluth Tenants union.
BlackRock and Global Infrastructure Partners declined to comment, while Minnesota Power referred to previous statements from its parent company Allete. Allete CEO Bethany Owen highlighted the partnership's financial strength to support clean energy investments and keep bills low, noting support from labour unions and businesses. However, opponents allege some backers may have been coerced.
The acquisition reflects a broader trend of private equity firms eyeing utilities amid rising energy demand from AI data centres. If approved, it could 'open the floodgates' for similar deals, according to Matt Parr of the Private Equity Stakeholder Project. The Minnesota Department of Commerce initially opposed the purchase but later backed it after conditions were added.
