Features

           Allete’s Acquisition Proposal and Pushback

By Ewan Moe (emoe3@css.edu)

April 17, 2025

Minnesota Power, headquartered in Duluth, has provided power to northern Minnesotans for well over a century. With the potential acquisition, the long-time public company is set to turn private. 

In 2024, Duluth corporation, and parent company of Minnesota Power, Allete, announced plans to be acquired for over 6 billion dollars through a joint partnership with Canada Pension Plan Investment Board (CPP) and Global Infrastructure Partners (GIP). 

GIP is located in New York City and is a subsidiary of BlackRock, a global investment management company. BlackRock is the world’s largest investment management company, with holdings soaring well over eleven trillion dollars. Many worry that such a massive company acquiring and making Allete private could decrease transparency, increase prices and change Minnesota Power’s long-term renewable energy goals.

On March 24, Jennifer Cady, Vice President of Regulatory and Legislative Affairs for Minnesota Power, presented plans for the acquisition deal at Duluth’s city council meeting. The plan detailed commitments to the Duluth headquarters, energy goals and keeping prices stable.

“We chose partners who are aligned with our values. Minnesota Power has been headquartered in Duluth for one hundred years, and we want to be here for the next hundred. As long as [GIP & CPP] are in charge, we will remain in Duluth, and all the things that make us uniquely MP will stay in place,” said Cady. 

After the presentation, citizens took to the stand and criticized the acquisition. Eric Enberg commented that despite Allete’s public statement that the partnership would be long-term oriented, the relatively short-term 5–7 year average holding time for Blackrock’s investments raises large concerns. 

Another Duluth resident, Linda Herron, expressed her doubts over the privatization of Allete and Minnesota Power. “With this acquisition, Minnesota Power would be a privately owned utility, not subject to the regulations governing public utilities. The reporting requirements for private companies are far less stringent; don’t we want to know how our utilities are functioning? Private equity firms primarily focus on increasing revenues and decreasing expenditures. This buyout is not in the public interest,” said Herron. 

Sierra Club Central Region Campaign Manager for the Beyond Coal Campaign, Jenna Yeakle, is among the many who are opposed to the deal. The Sierra Club is one of America’s oldest and largest environmental groups, boasting nearly four million members. One of their key focuses is the transition from burning fossil fuels to an electric system that provides clean, renewable energy. In Minnesota, there are about 14,000 members of the North Star Chapter, with many against the acquisition.

“Minnesota Power has not made a commitment to keep rates the same. In its filing, the company acknowledges that it will seek future rate increases, although the details of those increases are confidential. And while Minnesota Power promises to make ‘efforts to achieve’ the Carbon Free Standard, it has not made a binding commitment to achieve [it] through the proposed acquisition,” said Yeakle in a written statement for the Script. 

To get further insights on public views along with organizations in support and against the acquisition, there were a number of public hearings held by the Minnesota Public Utilities Commission across Northern Minnesota.

At a virtual hearing on Apr. 10, representatives from the Minnesota Department of Commerce, the office of Minnesota Attorneys General, Citizens Utility Board (CURE) and the Sierra Club opposed the acquisition. The key reasons were the decreased transparency and conflicts of interest surrounding being owned by a subsidiary of BlackRock, which has ownership in many high-profile oil and natural gas companies.  

“The new owners of Minnesota Power have interests in most corporations, especially corporations that supply fossil fuel energy and use the energy that Minnesota Power provides. We’re very concerned about [Allete] being managed more secretively and being saddled with debt,” said CURE representative Hudson Kingston. 

On the other side of the issue were representatives from Local 31 of the International Brotherhood of Electrical Workers and the Laborers’ International Union of North America (LiUNA). Their support for the sale was largely based on the trust in the current Allete Board of Directors’ decision as well as increased opportunities for construction work and commitments to Union contracts.

“Minnesota Power has been an excellent partner with us. They’ve built using local skilled union labor, and I think they should be commended on trying to find a pragmatic solution to the problem of getting to the [carbon neutral] state standard by 2040,” said LiUNA representative Patrick O’Connel. 

The hearings were presided over by Administrative Law Judge Megan J. McKenzie, who will prepare reports for the Minnesota Public Utilities Commission. They’re set to decide the fate of the acquisition in the fall of this year. If it’s approved, for better or for worse, change will come. 

“If the acquisition were approved, an Allete board controlled by CPP and GIP may prioritize the new owners’ profits and push for changes that harm Minnesota ratepayers. Operational management and Company direction would not solely be up to ALLETE/Minnesota Power anymore,” said Yeakle.