What The Minnesota Power Acquisition Means For Your Power Bill

Allete, the parent company of Minnesota Power, was just sold to private investors after regulators approved the controversial sale. It was a unanimous decision by the five members of the Minnesota Public Utilities Commission, even though some initially had their concerns.

Concessions were made, and a deal was struck for the $6.2 billion dollar sale. Global Infrastructure Partners, which is a subsidiary of BlackRock, will be the majority partner owning 60% of the utility company. The minority partner is the Canada Pension Plan Investment Board.

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Minnesota Power stated that the sale was necessary to fund investments in infrastructure, repairs, and clean energy.

Controversial Sale

Many people were against the sale, including the state Attorney General's office. The fear is that the sale will lead to an increase in electricity rates to drive profits. Some argue that investment companies are more interested in short-term profits than long-term benefits for electric customers. Environmental advocates question whether the company will actually invest in clean energy.

Electricity Rates Froze For One Year + Other Concessions

Under the deal, the current electricity rate will be frozen for one year. Minnesota Power will also have to create a $50 million dollar fund for the proposed new clean energy technology. They'll also be required to spend up to $3.5 million to forgive customers' unpaid bills.

According to MPR, Minnesota Power will also have to give customers $50 million in rate credits and fund energy efficiency improvements to low and moderate-income households.

Read More: Proposed AI Data Centers Could Drain Minnesota's 10,000 Lakes

Profits Capped Through 2030

In the deal, the utility company will have profit caps imposed through 2030. Minnesota Power will still be regulated by the State of Minnesota after the sale. Commissioners point out that any rate increases will have to be approved by the Public Utilities Commission.

Energy Consumption Expected To Rise

With data centers being proposed at different parts of the state to power AI, energy consumption will continue to rise. Minnesota is a favorable place for tech companies to build huge AI data centers because of our stable power grid and access to fresh water used to cool the data centers. Star Tribune columnist Aaron Brown says the takeover opens up the wild west for private energy futures.

The sale is expected to close by the end of 2025.