Financial giant Blackrock’s bid for Minnesota Electricity could push up Already make a living Practical bills, opponents warn.
Private equity firms global infrastructure partner, a division of BlackRock, $6.2 billion deal was announced last year If the state’s utility commission grants a green light, take over the parent company of a Duluth-based power company that serves more than 150,000 customers.
Expected in The first week of October.
Some environmental and consumer protection advocates are urging the committee to reject the proposal, which will make BlackRock a controlling shareholder in the utility Minnesota strength.
“If the deal passes, it will force taxpayers to be included in the private equity agenda: prioritize executive profits while daily prices rise for everyday people.”
Blackrock is the world’s largest asset manager, previously for Warm climate invest.
In July, the Department of Commerce, which initially opposed the purchase, supported bids from global infrastructure partners and the Canadian Pension Plan Investment Commission to buy Minnesota Power and its parent company Allete, after the company agreed to freeze a one-year utility tax rate and invest for one year.
Opponents say these rules Do a little Relieve their fears. Since interest rates are not rising every year, they say the frozen rates are frozen as usual. They say the commitment to fund renewable capacity is non-binding.
“These capitalist vultures do not have our best interests,” Cody Pals, a member of the tenant union tenant, said Wednesday. Press Conference.
Brett Christophers, author Our Life in Their Portfolio: Why Asset Managers Have the WorldThe proposal says: “It looks like a classic private equity: buy, own for a few years, and then sell it on profit”.
“So, only if Minnesota is decarbonized will the money be invested [Global Infrastructure Partners] It will be rewarded for thinking that the market will invest in the exit time. ” said Christophers, an economic geographer at Uppsala University.
He said the outlook seems very doubtful given the negative investor sentiment of everything related to clean energy since Trump returned to power. ”
Other financial giants have also made a vision for utilities. In May, private equity behemoth Black Stone Announcement of acquisition plans Utilities with 800,000 customers in the Southwest U.S. awaiting approval from Texas regulators.
Although Wall Street companies have historically had little interest in power companies because they produce slow returns, it is changing as energy demand in AI data centers increases rapidly.
Blackrock CEO and Founder Larry Fink at the latest interview.
“Utilities make money by investing in new energy infrastructure,” said Matt Parr, director of communications for overseeing the organization’s private equity stakeholder program. “With the demand for electricity, the profitability is huge, especially in an environment where the utility committee approved increased interest rates.”
If approved, he said, Minnesota’s proposal could “open the floodgates” for private equity firms focusing on utilities.
Minnesota referred the Guardian to Utilities and Allete’s previous statement after commenting.
“Many highlighted how the proposed partnership provides financial strength and scale to enable energy investments to meet our state’s carbon-free energy targets while keeping the bills for all of our customers as low as possible,” Allete’s CEO Bethany Owen said in an August statement.
Irving not only can the deal be supported by some clean energy advocates, but also from Trade Unions, Businesses and Saviors. (In this regard, the deal’s opponents alleged Some of these supporters Maybe it was courted or even forced by BlackRock’s allies. )
BlackRock and global infrastructure partners declined to comment on the proposal. The Canadian Pension Plan Investment Commission did not respond to a request for comment.
Utilities Price
Opponents say the history of private equity firms can quickly raise utility prices at taxpayer fees.
When a company like this purchased a hydropower station in New Jersey, the company’s consumer bills increased by 28% over four years despite pledging to freeze interest rates during that period The New York Times found.
In 2023, Kansas sued another private equity firm during the February 2021 winter storm, allegedly for high-priced natural gas customers. State officials say taxpayers’ prices rose 200% and the company gains $215 million in profitAccording to the Wall Street Journal.
“Why would there be a private equity interest if it weren’t for their ability to achieve their desired rate of return and margins?” said Maggie Schuppert, director of CURE Minnesota, a rural environmental justice organization. “One way to achieve these high margins is to increase your bills.”
In another example, prices soared after an electric cooperative in Michigan was acquired by a private equity firm. According to late last year, its price was 9 cents higher than the state’s average private utilities. Minnesota judge’s July ruling It is clearly recommended that national regulators reject BlackRock’s proposal.
Administrative Law Judge Megan McKenzie wrote in a highlighted ruling that global infrastructure partners “have no burden of proof that the transaction is consistent with the public interest.” While not binding, the opinion will make a decision for regulators on whether to approve the transaction.
“The expertise of partners is unlikely to provide a significant benefit to Minnesota’s power or its taxpayers,” the comment said. “Scheduled Raise” will exceed inflation and increase income taxpayers on utility percentages.
The potential buyer and Alletle dismissed the judge’s report, saying it was not a “accurate or balanced summary or analysis of the record” and “not even attempting to have a meaningful discussion of the evidence, arguments and rebuttals.”
The document also agreed to reduce its return on equity from 9.78% to 9.65%, and the company also agreed to reduce its shareholding earnings to 9.65%, which said: “has direct returns for customers.”
Renewable energy
Allete claims that the private equity firm “aligns with the company’s vision to continue to promote Minnesota’s clean energy goals.” Some clean energy advocates have also emerged in recent weeks to support the deal, saying it could provide the necessary funding for Minnesota’s power to meet the state. Target of Decarbonize its energy By 2040.
“The main goal of the acquisition is to provide the company with reliable equity capital to fund investment in clean energy technology,” ALLETE and potential buyers say.
But Mackenzie wrote in her ruling that “non-global infrastructure partners are willing or able to provide “significant risks” of the capital needed to transition from fossil fuels to fossil fuels. In fact, Allete is “planning for large capital expenditures on fossil fuels,” she wrote.
Global infrastructure partners often Praise It focuses on sustainability. “We aspire to be one of the world’s leading owners, developers and operators of renewable energy assets,” its website says.
Parr said the company is a major investor in the South Texas gas terminal and other fossil fuel infrastructure. When Blackrock Nine to 22. This year, Black Stone quit A group of asset managers promised zero investment amid political pressure.
Schuppert said she does not think BlackRock is ideologically committed to renewable energy or fossil fuels. “They are committed to making them the biggest money,” she said.
But even if the company does put forward renewable energy targets, if so, at the expense of taxpayers’ energy costs. “That’s not a victory,” Schupert said.
“For those who say they want us to decarbonize in a fair way, this should be real.”
Yeakle said the deal would also hinder the public’s ability to control the power supply if approved, because while the state’s utility commission will still oversee Minnesota’s power, its investors will have more control over its operations.
“This will further erode people’s democracy and governance over people, through the handover of political control,” she said. “We should not further privatize our critical energy, make public transparency, and provide the public with increasing barriers to public oversight to gain the Hall of Power.”
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