Minnesota PUC approves $6.2B Allete sale to private equity

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To receive daily news and insights, subscribe to our free daily Utility Dive newsletter. The Minnesota Public Utilities Commission on Friday unanimously approved the $6.2 billion sale of Allete to the Canada Pension Plan Investment Board and Blackrock’s Global Infrastructure Partners, finding the benefits of the deal to ratepayers outweighed the risks of private equity ownership.“It's pretty clear that because of the collective work of the agency, of us, our staff, the process we've engaged in, in a public and legal manner, we have made the petition better, and it will be to the betterment of Minnesota Power customers,” Katie Sieben, Minnesota PUC chair, said.Duluth, Minnesota-based Allete — parent to Minnesota Power and Superior Water, Light and Power — expects the deal will close later this year after the PUC issues a written order.In part, the review of the deal focused on whether it was in the public interest to let Allete be bought by private equity. And it came as GIP is reportedly in talks to buy AES Corp., which owns AES Indiana and AES Ohio, and Blackstone Infrastructure is seeking to buy TXNM Energy, the parent company of utilities in New Mexico and Texas.A Minnesota administrative law judge in July said the risks of the Allete deal outweighed the benefits, and recommended that the PUC reject the deal.“People voiced very serious concerns about private equity as a broad category taking ownership of one of our public utilities,” PUC Commissioner Audrey Partridge said at the meeting. “Private equity has a bad reputation.”However, in July, the parties to the deal reached an agreement with the Minnesota Department of Commerce that set a series of conditions on the transaction, such as requiring CPP Investments and GIP to fund Allete’s $5 billion, five-year capital plan and provide $50 million for firm clean power. Overall, the deal’s benefits to ratepayers totals about $200 million, according to Allete.Also, under the agreement, Minnesota Power would freeze its base rates for a year and reduce its return on equity from 9.78% to 9.65% until the utility’s next rate case. It includes a 9.78% ROE cap through 2030. Other measures in the agreement set quality of service, reporting and governance requirements.PUC commissioners said those provisions helped allay some concerns about the transaction.“The benefits in the near-term, the medium-term clearly outweigh the status quo,” Commissioner Joe Sullivan said. “I still do have concerns in the out years … 10, 15 years from now.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,710.49 -29.79 (-0.44%)Dow 3046,541.28 -153.69 (-0.33%)Nasdaq22,780.83 -160.83 (-0.70%)Russell 20002,456.92 -29.43 (-1.18%)VIX17.41 +1.04 (+6.35%)Gold4,004.60 +28.30 (+0.71%)PortfolioSign in to access your portfolioSign inTop gainersDGNX Diginex Limited 23.70 +3.90 (+19.61%)TMC TMC the metals company Inc. 9.19 +1.47 (+19.04%)RGC Regencell Bioscience Holdings Limited 19.94 +2.69 (+15.59%)USAR USA Rare Earth, Inc. 29.14 +2.82 (+10.71%)APP AppLovin Corporation 640.30 +53.30 (+9.08%)Top losersPTON Peloton Interactive, Inc. 7.40 -0.95 (-11.34%)MFH Mercurity Fintech Holding Inc. 31.60 -4.19 (-11.71%)FLNC Fluence Energy, Inc. 13.63 -1.64 (-10.71%)SANM Sanmina Corporation 125.29 -14.71 (-10.51%)FORM FormFactor, Inc. 38.65 -3.92 (-9.21%)Most activePLUG Plug Power Inc. 3.7844 -0.3456 (-8.37%)OPEN Opendoor Technologies Inc. 9.08 -0.21 (-2.23%)RGTI Rigetti Computing, Inc. 43.38 +1.67 (+3.99%)DNN Denison Mines Corp. 2.8200 +0.0100 (+0.36%)F Ford Motor Company 11.93 -0.77 (-6.10%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersTMQ Trilogy Metals Inc. 7.23 +5.14 (+246.12%)ORCL Oracle Corporation 283.43 -8.16 (-2.80%)GLTO Galecto, Inc. 20.45 +16.74 (+451.21%)TMC TMC the metals company Inc. 9.19 +1.47 (+18.98%)F Ford Motor Company 11.94 -0.76 (-5.98%)Top economic events