Decision on ALLETE/Minnesota Power sale expected this week

ALLETE, the parent company of Minnesota Power could soon be changing hands. A decision on whether or not it can be sold is expected October 3. Last year, it was announced that the company would be taken private by two buyers: the Canadian Pension Plan Investment Board (CPP) and Global Infrastructure Partners (GIP), the latter of which has since been purchased by the private equity firm BlackRock.

“Why we are here today is really assuring our company’s financial future as we navigate the ups and downs of the economy and do this incredible task before us to transform and decarbonize our system.” said Jennifer Cady, ALLETE’s VP of Public Policy and External Affairs, in a recent hearing before the Minnesota Public Utilities Commission (MPUC).

Minnesota law will require power sources to be carbon-free by the year 2040. ALLETE says that the capitol that it’s potential buyers will be bringing with them will be critical for making the necessary investments in clean power to comply with the law. However, those critical of the deal remain skeptical.

“Minnesota Power/ALLETE has repeatedly reported to the US Securities and Exchange Commission that it’s, ‘well positioned to meet its capital needs due in part to its access to the stock market’, and going private would remove that access.” says Annie Levenson-Falk, Executive Director of the Citizens Utility Board of Minnesota (CUB), a consumer advocacy non-profit. Their organization has spoken against the acquisition.

Since the sale was first announced, there’s been months of public meetings and discussion surrounding the proposal. Many consumers are worried about rate hikes, though Minnesota Power has consistently reminded the public that rate increases will still have to be approved by the MPUC, who also has final say over the sale. Their decision is the last hurdle the buyers must clear before the acquisition can go through.

Ahead of their decision, the meetings, hearings and debate have continued. ALLETE says they’ve listened to the feedback, and have since made changes to the initial deal. Regarding this, they told WDIO the following via e-mail.

“Over the past 16 months we have worked hard to address feedback received during this process.  We appreciate the broad coalition of supporters who have helped to ensure the acquisition is in the best interest of customers, communities and our employees,  including the Minnesota Department of Commerce, organized labor, clean energy groups, business leaders,  and advocates for low-income residents. Our collaborative efforts have resulted in binding commitments and an agreement that totals— more benefits per customer than any other utility acquisition in modern times, including  $50M in rate credits for customers, and additional workforce commitments.”

The CUB however, remains unconvinced.

“We appreciate that the buyers, at the urging of the PUC, have made some additional commitments. But the enforceability of some of those commitments is questionable, I think.” Levenson-Falk said.

“None of those new conditions fundamentally changed the deal.” She added.

The final decision is expected at the MPUC’s October 3 meeting which begins at 9 a.m.. It can be live streamed on the commission’s website.

More information from the MPUC on the proposed acquisition of ALLETE can also be found on the MPUC’s website.