Minnesota regulators approved the $6.2 billion buyout of the state’s second-largest utility by investors led by BlackRock, the world’s largest asset manager, over objections from consumer groups who fear the deal may lead to higher electricity costs and jeopardize the state’s transition to cleaner energy.
The Public Utilities Commission voted 5-0 on Friday to allow the sale of Duluth, Minnesota-based Allete, the parent of Minnesota Power, saying commitments made under negotiated agreements with the state, labor unions and other parties provide an estimated $200 million in reduced rates and other benefits to consumers that outweigh longer-term risks.
Friday’s vote ends a contentious 16-month case and paves the way for BlackRock’s Global Infrastructure Partners (GIP) and the Canadian Pension Plan Investment Board to complete the acquisition, which is expected to close later this year. New York-based GIP, which was acquired by BlackRock last year, will control 60 percent of Allete.
It is part of a broader trend of private investors buying up or taking large stakes in public utilities as the industry faces tens of billions of dollars to build new power plants and wires to replace aging infrastructure and meet projections for a surge in new electricity demand from data centers.
