ST. PAUL, MINNESOTA – The private equity takeover of Minnesota Power’s parent company, ALLETE, will now move forward after all five members of the Minnesota Public Utilities Commission (PUC) agreed to approve the $6.2 billion deal on Friday morning.

In an interview with the Prospect, Alissa Jean Schafer, climate and energy director at Private Equity Stakeholder Project (PESP), said the ALLETE acquisition “is just going to be a line item in an aggressive strategy” by BlackRock-owned Global Infrastructure Partners to cash in on the artificial intelligence-data center boom.

“We see BlackRock positioning itself very aggressively to take advantage of the entire supply chain when it comes to AI and data centers, and power generation is a really key part of that,” Schafer told the Prospect. The business case for buying a utility is obvious: the data center buildout is jacking up electricity demand, and with the Trump administration strangling both new electricity generation and transmission capacity, prices are going up.

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By year-end, BlackRock’s Global Infrastructure Partners and the Canada Pension Plan Investment Board will own 60 percent and 40 percent of ALLETE, respectively. The recent decision comes as Global Infrastructure Partners inches closer to acquiring multinational utility company AES for approximately $38 billion; sources familiar with the matter told the Financial Times it “would be one of the largest infrastructure takeovers of all time.”

Critics of the deal remain skeptical of its purported benefits, which include an estimated $200 million in customer benefits. According to Hudson Kingston, legal director at CURE, an intervenor in the case, “the very temporary protections, programs, and funding tacked onto this deal cannot offset the billions of dollars of profit the new owners intend to reap from northern Minnesota households and businesses.”

ALLETE Chief Executive Officer Bethany Owen, as well as the many oddly timed supporters of the acquisition, beg to differ.

In a statement, Owen said the PUC’s approval “caps a comprehensive public process and positions ALLETE well to meet the significant infrastructure demands of the clean-energy transition without compromising the high-quality service and commitments to reliability and affordability that define our company.”

Margaret Cherne-Hendrick, CEO of Fresh Energy, took a jab at journalists in a separate statement, applauding the PUC for “seeing through a truly alarming amount of misinformation and disinformation that was propagated by some of the media around this issue.”

In addition to Fresh Energy, the Center for Energy and Environment (CEE) and Clean Grid Alliance intervened in the case after Administrative Law Judge (ALJ) Megan J. McKenzie  recommended that the PUC deny the acquisition in a July 15 report. Fresh Energy maintains that it only filed comments in the docket “after a thorough examination of the record and extensive conversations with stakeholders both for and against the sale.” Among those stakeholders was the Minnesota Department of Commerce, which reached a settlement with ALLETE four days before the ALJ published its findings.

As the Prospect reported, Pete Wyckoff, deputy commissioner of energy resources at the Commerce Department, reached out to Fresh Energy, CEE, and Clean Grid Alliance—prospective allies at the time—to inform them of the settlement. Wyckoff also took the liberty of giving courtesy calls to existing supporters, including the Energy CENTS Coalition and the Laborers’ International Union of North America (LIUNA).

When the PUC rendered its final decision on Friday, the Prospect was there to witness it. Continue reading for our dispatch from St. Paul, Minnesota.

Friday, October 3

492 JACKSON ST., 7:45 A.M.

The PUC hearing starts in an hour or so. It’s less than a five-minute walk from my hotel. I’m halfway through breakfast: ham, egg, and cheese on a croissant with a side of sausage. A gaggle of sharply dressed business folk gather in the lobby across from the coffee machine. Most are seated at tables or on couches, though a couple are standing around. Their chit-chat is inaudible, at least from where I’m sitting.

It’s Owen and what appears to be her entourage, which I’d say is about a dozen-strong.

Some of her people are still eating. They seem to be finishing up. My window is closing, but I have questions. What’s stopping BlackRock from offloading ALLETE before Minnesota Power meets its climate goals? The board directed its financial advisor to conduct a search for prospective buyers in July 2023, so how was there not enough lead time for more public engagement? What impact will the acquisition have on executive compensation?

Too late—their exodus is already underway. My breakfast sandwich is getting cold; I finish it in a few quick bites and make my way to the PUC.

121 7TH PL. EAST, 8:15 A.M.

Bright-eyed and bushy tailed, I retrieve my press credentials and walk down the hallway to the conference room entrance. Two police officers are standing in the doorway. The rather friendly PUC communications director greets me and informs them media are now allowed to come in. They step aside. Another journalist and I sit down at the de facto press box in the back of the conference room.

Most of the seats are empty. It’s still early. I keep to myself for the time being, but I can’t help but notice Owen and her entourage sitting halfway across the room. They’re on the right side, facing the long table where the commissioners sit.

Commissioner John Tuma enters the far side of the room and walks behind the long table. He’s holding a quilt. There’s a black bird in the middle with its wings outstretched. The bird’s origins are unknown to me, but it’s flanked by reeds and evergreens. A star can be seen hovering above the trees. The background is a brilliant blue, and the margins are dotted with tiny dandelion-yellow squares. Tuma hangs the quilt up on the front wall for all to see. I’m told his wife made it entirely by hand. It’s lovely.

A suited man with a briefcase in hand approaches the journalist behind me. It’s Dan Lipschultz, an attorney for the buyers and a former PUC commissioner. They’re having a candid conversation about how long the hearing might take. His over-under guess is 60 minutes. “Can’t wait for this to end,” he says. (As our friends at The Lever revealed, metadata on an August 4 comment letter submitted by the North Central States Regional Council of Carpenters and International Union of Operating Engineers Local 49 shows it was created by Lipschultz.)

The police linger in my peripheral vision, and I bite back the question about his coordination with labor on the buyers’ behalf. I didn’t come this far to get ejected from the hearing before it even starts.

8:40 A.M.

Lipschultz rendezvous with the Owen entourage, and more people enter the conference room. Among them is LIUNA’s Kevin Pranis. He’s wearing a plaid sharkskin suit with a colorful paisley tie. Pranis tells the journalist he expects the hearing to wrap up by 11:15 A.M., remarking how the deal “is going to set the bar” for other utility acquisitions going forward.

I take that to mean if private equity wants in on utilities, it’ll have to meaningfully invest in the energy transition, forge labor agreements, and provide relief for ratepayers. Too bad that private equity ownership of utilities threatens to mutate the investor-owned utility (IOU) industry’s perverse incentives to build out (oftentimes questionable) infrastructure, recover that cost over time at a premium, and force ratepayers to foot the bill. Under the existing model, IOUs have been able to compensate their shareholders up to twice as much as is theoretically allowed by law.

I recall Mark Ellis’s testimony to the PUC in February. Ellis, senior fellow for utilities at the American Economic Liberties Project and expert witness for CURE, detailed “how the proposed transaction proves, unequivocally, that Minnesota Power’s authorized rate of return (ROR) is excessive, and that excessive RORs are the key motivation for the transaction and the root cause of the forecast unprecedented rate increases.”

I also thought about what Ryan Barlow, an attorney representing the buyers, said at the PUC’s September 25 hearing. “The partners are not planning rate increases… we are not actively seeking it.”

The ALJ report tells a very different story.

9:10 A.M.

A quorum is present, and a PUC staff member introduces the sole item on the agenda. The commissioners begin by asking questions. They plan to enter deliberations after a mid-morning recess. For the moment, the focus is on the particulars of Commissioner Hwikwon Ham’s proposed motion to greenlight the acquisition of ALLETE.

Ham has a question for Jonathan Bram, founding partner at Global Infrastructure Partners. The commissioner asks about BlackRock, which Bram notes manages assets on behalf of investors rather than outright owning those assets. As such, BlackRock has a fiduciary responsibility to uphold the interests of its investors.

At the September 25 hearing, Bram told the PUC “it would be personally devastating if something bad happens to ALLETE… I think I’d hang up my cleats.” I wonder why he didn’t hang up his cleats when SunPower—whose board Bram served on from 2022 to 2024—went bankrupt last year. At the time, Global Infrastructure Partners held a 25 percent stake in the company.

But that’s neither here nor there, at least for the PUC. Additional questions pour in. Pre-deliberations more or less end with the company’s spokesperson assuring the commissioners of its commitment to implementing everything it has agreed to as part of the settlement.

10:20 A.M.

We return from a 30-minute recess and deliberations begin. The commissioners mostly point to the strength of Minnesota’s “regulatory compact,” and encourage critics to trust in the PUC’s ability to hold the buyers accountable “if they misbehave.”

Commissioner Tuma acknowledges his initial skepticism, but says he came around to the notion that “the goal here is to grow this Minnesota company.” Tuma also points to labor’s support for the deal before sharing his outlook for data centers in the state.

“I see the benefit of having a possibility of data centers coming in here if something goes wrong with some of our other industries,” he says. “It will be successful if we can work together with those future developers.”

Echoing his colleagues, Tuma remarks how “the pushback was valuable” from the acquisition’s opponents.

PUC Vice Chair Joseph Sullivan also appears to have changed his tune.

“I think that you've met the burden [of proof], and I am supportive of the acquisition,” he says. “I still do have concerns in the out years… but I do think that the benefits in the near-term and the medium-term clearly outweigh the status quo.”

Sullivan’s newfound support comes with a caveat. He concludes his remarks with a stark warning, telling the buyers and Minnesota Power it “is now on you to make sure that you build credibility ... if you don’t build that credibility, that will redound unfavorably to everybody, including this commission.”

Commissioner Audrey Partridge, who prepared her remarks ahead of time, is the next to speak.

“I assumed the absolute worst in these investors, and I tested whether our regulations and the enforceable commitments of these agreements would hold up to protect the utility, its workers, its customers and the communities Minnesota Power serves,” Partridge says. “And in each scenario, I could not find a way for these investors to both make a profit and cause harm.”

PUC Chair Katie Sieben has the final word. Her comments are more direct: “There was much consternation—and quite honestly, it drove me nuts—for people, including some of the people in this room, to say that the acquisition was needed for the state’s clean energy transition. Whether Minnesota Power is publicly traded or privately held, it needs to comply with the laws of the state of Minnesota, including the state’s 2040 carbon-free law.”

Sieben concludes the PUC must “work with everyone in this room to help control overall costs” to ensure ratepayers have access to “affordable and reliable power.”

No further discussion. Five ayes. The motion passes shortly after 11 A.M.

11:15 A.M.

The room is nearly empty. I linger for a bit while the stragglers mingle and collect their belongings. Owen and Lipschultz are gone, but the man I want to talk to is still here.

“Deputy commissioner,” I say. “James Baratta, American Prospect.”

Wyckoff and I shake hands. He seems a little surprised to see me. I ask if he “has a couple minutes for a couple questions.”

It appears he does not.

“How about you work through my media folks?”

I tell him that I have and, with the utmost courteousness, briefly explain my questions to see if he’ll bite.

“Send them to my media people,” Wyckoff tells me.

THE RESPONSE FROM THE DOC was underwhelming. I sent three questions upon returning to the hotel, the first of which sought clarification on the opposition groups Wyckoff contacted in July to inform them the settlement had been reached.

“We already answered your first question pretty thoroughly,” the DOC spokesperson said in an email, instructing me to review the docket for the answers to my remaining questions.

The DOC did not include CUB Minnesota, CURE, and Sierra Club in the list it previously shared with the Prospect. Jenna Yeakle, an organizer with Sierra Club, confirmed that the DOC “did not give us advance notice” about the settlement.

“It's our understanding that the Department also didn't give advance notice to CUB, CURE, Large Power Interventors, or the Office of the Attorney General,” Yeakle told the Prospect. “That was very disappointing because we'd been coordinating with the DOC up until then as we shared many of the same concerns.”