Public Citizen is protesting BlackRock’s takeover of ALLETE, a Duluth, Minnesota energy utility, in a $6.2 billion deal that the organization claims could negatively impact consumers in Minnesota and Wisconsin. As one of the largest asset management firms globally, BlackRock has shown keen interest in controlling fossil fuel infrastructure, which raises concerns for over 165,000 customers who would be left vulnerable under private equity ownership.
ALLETE is set to transfer ownership to Global Infrastructure Partners (GIP) and the Canada Pension Plan (CPP) investment board, while GIP is in the process of being acquired by BlackRock for $12.5 billion. This would elevate BlackRock’s role from a passive investor in utilities to one with significant control over energy assets, potentially affecting competition, pricing, and regulatory practices.
Public Citizen, led by Tyson Slocum, has urged the Federal Energy Regulatory Commission (FERC) to mandate a separation between BlackRock’s investment management and private equity operations, which manage energy assets. Minnesota Attorney General Keith Ellison has echoed these concerns, warning about cross-subsidization risks and self-dealing that could disadvantage Minnesota Power’s ratepayers.
This situation highlights a broader trend of private equity gaining control over public utilities, which have historically been subject to strict regulatory oversight to protect public interests. The Federal Power Act mandates that utility rates be just and reasonable, requiring entities seeking to acquire utilities to obtain FERC approval. Concerns have been raised that private equity’s interest in utilities might prioritize profits over public good.
Public Citizen previously asked the Federal Trade Commission (FTC) to investigate potential antitrust violations related to private equity firms, including Blackstone, holding multiple positions in competing utility boards. The organization sees the consolidation of control by private equity in the utility sector as potentially harmful to consumers.
FERC has set a mid-September deadline for stakeholders to raise concerns regarding the acquisition, with a final decision expected in early 2025. Public Citizen promises to continue its advocacy against such acquisitions to safeguard the interests of utility ratepayers.