Wall street utility takeovers may mean higher bills ahead

As data centers multiply across the United States, energy demand is increasing at a rapid pace. This has not escaped the notice of large investment firms from Wall Street. The likes of BlackRock and Blackstone are trying their very best to acquire utility companies in hopes of capitalizing on lucrative grid upgrades. On the other side of things, consumer advocates and regulators are raising alarms, worried that these moves prioritize profits over public service.

For your information, BlackRock and Blackstone are two of the biggest investment management firms in the world. They have trillions of dollars’ worth of global assets and have become the go-to option for companies that need money. They have enormous influence across various industries and make money by investing in many different types of businesses.

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BlackRock’s bid for Minnesota Power sparks pushback

In a bold move last year, BlackRock’s Global Infrastructure Partners, along with the Canada Pension Plan Investment Board, proposed acquiring Minnesota Power, a utility serving 150,000 customers. The acquisition, which could support tech companies with energy access for new data centers, received initial support from state agencies after negotiation. Even the Minnesota Department of Commerce dropped its opposition after reaching an agreement.

Judge warns of profit motives in BlackRock utility deal

However, Administrative Law Judge Megan J. McKenzie delivered a surprising recommendation on July 15th, urging regulators to deny the deal. She cited troubling signs that profit was the driving force behind the acquisition.

“The nonpublic evidence reveals the partners’ intent to do what private equity is expected to do — pursue profit in excess of public markets through company control,” Judge McKenzie wrote. “The partners themselves have carefully committed to do very little.”

It’s important to note that the judge’s recommendation is not final; state regulators will make the ultimate decision on whether the acquisition goes through.

Power lines. (Kurt “CyberGuy” Knutsson)

Will Minnesota households pay the price?

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