The proposed $6.2 billion sale of Minnesota Power to Global Infrastructure Partners, a subsidiary of BlackRock, has sparked intense debate over how the state will finance its move to carbon-free electricity by 2040. The Canada Pension Plan Investment Board would take a minority stake in the deal, which will be reviewed by the Minnesota Public Utilities Commission (PUC) at a key hearing on October 3.
Minnesota Power, a Duluth-based utility owned by Allete, says the sale is necessary to raise the billions of dollars required for clean energy investments. Over the past two decades, the utility has shifted from relying almost entirely on coal to now generating more than half of its power from carbon-free sources. In just the past year, regulators approved nearly $3 billion in new solar projects and transmission lines. But company officials argue much more financing will be needed in the next several years.
Jennifer Cady, Minnesota Power’s vice president of regulatory affairs, said the company faces unusual challenges. It is one of the smallest investor-owned utilities in the nation and depends heavily on a few large industrial customers, such as taconite mines and paper mills, which are vulnerable to economic swings. This makes it harder, she said, to compete for capital in public markets. By turning to private investors, Allete believes it can secure the long-term partnerships needed to meet the state’s Carbon Free Standard.
Supporters of the deal include some clean energy advocates and labor unions, who see private equity investment as a way to guarantee the massive upfront capital needed for renewable energy projects. They argue the risks of underfunding the energy transition outweigh concerns about private ownership. “Regardless of who owns it, Minnesota Power will still be regulated by the PUC,” said Allen Gleckner of the nonprofit Fresh Energy, who added that the utility’s structure doesn’t lend itself to the worst fears about private equity takeovers.
But opponents strongly disagree. Environmental and consumer groups, joined by some lawmakers, warn that the deal could prioritize short-term profits over long-term public interest. Sierra Club organizer Jenna Yeakle said it is misleading to suggest BlackRock’s involvement is the only path to a carbon-free future. Critics also point to Allete’s own financial filings, which indicate it could raise the needed capital without selling.
An administrative law judge, Megan McKenzie, reviewed the case and recommended regulators reject the sale. She concluded Allete had not proven public markets would fail to meet its capital needs and said the utility hadn’t shown the deal was necessary to meet state clean energy goals.
Concerns about rate hikes are also central to the opposition. Hudson Kingston of the environmental group CURE argued that new owners could push to double normal utility profits to recover the $1.5 billion premium they are paying for the acquisition. Consumer advocates worry that higher electricity bills and reduced transparency could follow, since private companies are not required to disclose as much financial information as publicly traded ones.
The state’s response has been divided. The Minnesota Department of Commerce, part of Gov. Tim Walz’s administration, initially opposed the sale but later reached a settlement with Allete and the investors. That agreement included a one-year freeze on electric rates and commitments to invest in clean energy, leading the department to support the deal. However, Attorney General Keith Ellison still opposes the sale, warning it could harm both ratepayers and Minnesota’s clean energy transition.
Unions remain split but emphasize that state regulators will still set the rules regardless of ownership. “We didn’t see any difference between stock market investors and private equity investors as long as the PUC framework stayed in place,” said Kevin Pranis of LiUNA, which represents construction workers on energy projects.
The outcome of the case could set a precedent for utilities nationwide. With electricity demand rising, especially from data centers, private equity firms are showing greater interest in the sector. As Brian Edstrom of the Citizens Utility Board noted, “A lot of people are watching this. It will be a precedent-setting decision.”
