By SheerPost - Derek Seidman / Truthout-November 12, 2025

Ratepayers across the U.S. are facing rising electric bills — a trend that could be turbocharged by Wall Street’s growing effort to capture the electric utilities we all depend on.

A critical turning point in this development occurred in October when Minnesota state regulators greenlit the acquisition of Allete by asset management behemoth BlackRock — set to become Allete’s majority stakeholder — and the Canada Pension Plan Investment Board. Allete owns Minnesota Power, the main electric utility in northern Minnesota. The approval came against significant community opposition and, as Truthout previously reported, an administrative law judge’s report that strongly recommended against the deal.

With the acquisition, BlackRock will turn Allete from a publicly traded company into a private one. Moreover, BlackRock is now gunning for utility giant AES, which has utilities in Ohio and Indiana along with other extensive U.S. and international operations, while another private equity titan, Blackstone, is seeking approval to acquire TXNM Energy, with hundreds of thousands of customers in New Mexico and Texas. Private equity’s escalating run on utilities is largely driven by the boom in data centers — massive consumers of electricity — and the guaranteed rates of return that utilities offer.

Critics of the buyouts say this is a deeply alarming trend, as firms like BlackRock and Blackstone will likely impose a private equity model — opaque, extractive, laser-focused on profit — over basic services. Even well-intentioned state regulators, opponents contend, will be no match for these massively-resourced companies as they look to bulldoze through any obstacles toward enriching their wealthy investors.

Alissa Jean Schafer, climate director at the Private Equity Stakeholder Project, said the Allete deal’s approval was “precedent-setting” for private equity’s growing incursion into utilities.

“The approval of this deal sends a signal that our critical infrastructure is now up for sale to the highest bidder,” said Schafer.

Victory for BlackRock

When BlackRock’s infrastructure arm, Global Infrastructure Partners (GIP), announced a $6.2 billion deal in May 2024 to acquire Allete and take the company private, many local organizers, community members, and ratepayers in Northern Minnesota staunchly opposed the deal, which needed approval from the Minnesota Public Utilities Commission (PUC).

Their fears that a private equity takeover of their electric utility could weaken transparency and raise rates seemed vindicated in July when, after months of comments from all sides, an administrative law judge unequivocally recommended the Minnesota PUC reject the deal. The report stated in stark terms that BlackRock would “do what private equity is expected to do — pursue profit in excess of public markets through company control.”

“That’s when the influence wielding and the political machinations really ramped up,” Maggie Schuppert, an organizer with CURE, a rural community advocacy group intervening against the acquisition, told Truthout.

Minnesota’s Department of Commerce, an important and influential party that participated in the review process of the acquisition, soon reversed its initial opposition to the deal after some concessions from Allete. Records obtained by the Private Equity Stakeholder Project indicate that Pete Wyckoff, the commerce department’s deputy commissioner of energy resources, had cozy communications with Allete as a deal was being worked out.

Reporting from The Lever showed that a former Minnesota PUC commissioner now working on behalf of BlackRock appears to have coordinated with building trades unions to back the deal, which a representative of the union denied, despite evidence showing the former commissioner’s digital footprint on filings from the union in favor of the takeover. Meanwhile, some “clean energy” groups came out in favor of the acquisition after developing relationships with private stakeholders and BlackRock attorneys. In one instance, a “clean energy” nonprofit held a benefit with Allete as a “VIP sponsor.”

At the PUC’s first meeting on the acquisition, Schuppert said it became clear that commissioners were intent on approving the deal, even as PUC staff warned about the “private equity business model” that would be imposed on Allete.

Ultimately, the PUC unanimously approved BlackRock’s takeover of Allete. The approval came with a one-year base rate freeze and other short-term concessions. Opponents like Schuppert, however, say these concessions don’t address the core dangers of selling off a utility to private equity. They suspect that powerful tech, utility, and financial interests helped push the deal through, with their eyes on data centers — both real and rumored — to be built.

“The decision to approve this was entirely political,” said Schuppert. “We saw the PUC and other entities doing everything they could in these final meetings to justify the approval.”

Private Equity Dangers

Private equity’s takeover of utilities presents numerous threats to utility customers, experts told Truthout.

For one, it will weaken transparency that regulators and the public depend on to monitor utilities. Whereas publicly-traded companies are required to disclose significant information, private companies face less scrutiny. Under-resourced regulators will likely struggle to keep pace with the bookkeeping antics of complex financial giants.

“It becomes a game of whack-a-mole” trying to locate information, Tyson Slocum, the director of Public Citizen’s Energy Program, told Truthout.

Concerns over transparency and accountability were major factors driving opposition to BlackRock’s takeover of Allete.

Sandeep Vaheesan, author of Democracy in Power: A History of Electrification in the United States, worries that, shielded by this opaqueness, private equity will bring the same “very extractive orientation” to utilities that it’s already imposed upon sectors like retail and housing, promising “extraordinary returns” to investors achieved by “pulling as much cash out of the portfolio businesses as possible.”

“Look at what happened to Sears or JCPenney,” said Vaheesan, referencing how private equity restructured and stripped assets from the department store chains. “Now imagine that business model being applied to electric utilities, which are essential for life in the United States.”

BlackRock’s GIP, set to own a 60 percent stake in Allete, has advertised a 15 to 20 percent return to clients, well more than Minnesota Power’s current 9.78 percent return on equity, which many critics of the deal said is already too high.

This push for high rates of return could drive private equity-owned utilities to cut costs on things like basic maintenance that could intensify existing issues around safety and reliability. “We should prime ourselves for higher rates and inferior service,” Vaheesan said.

Rising utility bills disproportionately impact poor and working-class, Black, Latino, and Indigenous households, with many families forced to choose between paying for basic necessities like food or rent or paying electric bills.

“Private equity ownership threatens to make all these existing problems even worse,” said Vaheesan.

By turning utilities into just another portfolio company, Slocum also warned that firms like BlackRock and Blackstone could use the “steady cash flow” from utilities “to pump up risk in the rest of their portfolio,” generating more all-around financial instability.

Overpowering State Regulators

Schuppert told Truthout that Minnesota’s PUC commissioners brushed off concerns over their capacity to regulate a colossus like BlackRock. But Vaheesan said that state regulators, however well intentioned, are no match for the financial powerhouses now eyeing utilities.

“Utilities have armies of lawyers, economists and consultants,” he said. “It’s a really uneven political fight.”

This power imbalance will now be intensified with firms like BlackRock and Blackstone — which oversee trillions in assets and have major political influence — swallowing up utilities.

Slocum notes that already under-resourced PUCs will become dependent on voluntary disclosures from private equity giants. This will shift more responsibility onto state regulators who “simply do not have the legal and economic assessment or forensic accounting skills needed to chase down what is going to become a very complex web of shenanigans,” he said.

Critics of the Allete deal worry that its approval by the Minnesota PUC, pushed through after widespread opposition and a critical administrative law judge’s report, sets a dangerous precedent that private equity giants will now use in other states.

“The lesson to be learned is to accumulate and flex political and economic power to make facts irrelevant, and these firms know how to do that,” said Slocum. “I think that regulators in Minnesota made a huge mistake, and I think that they’re going to regret this decision.”

Profiting Off Data Centers

Utilities are appetizing to private equity because they offer investors existing energy infrastructure accompanied by a guaranteed rate of return — a reality now being magnified with the explosion of data centers that utilities are poised to serve.

A recent study found that the growth of data centers could soon increase electricity bills by 25 percent in some regional markets. For Wall Street megafirms sitting on huge amounts of private capital and promising big returns to their wealthy clients, utilities are tantalizing targets.

“If utilities were attractive before, they’re even more attractive now,” said Vaheesan.

Slocum says the U.S. utility system, for all its problems, is still premised on trying to socialize costs by passing on infrastructure and operating expenses to all ratepayers. But the data center boom, driven by the wealthiest corporations in world history, threatens to disrupt this model.

“Data centers completely change that narrative because the nature of their power demand is so astronomically bigger than anything that’s come before it,” said Slocum.

What’s equally alarming, Slocum adds, is that private equity can profit from building new infrastructure to service the AI boom — with a guaranteed return on equity — while offloading risk onto ratepayers.

“Private equity is using its newfound control over utilities to socialize costs for the expansion of data centers,” he said. “Working people should not be subsidizing Big Tech and, by extension, the private equity firms that own these.”

Private equity’s takeover of utilities also imperils prospects of a democratic clean energy transition. Vaheesan warns that clean energy development driven by cash-hungry investors could propel a “project-first approach,” in which private equity builds specific infrastructure to snag quick profits at the expense of a more planned and integrated approach that more broadly balances supply and demand.

“Do we really want to just entrust the private sector to decarbonize based on the profit motive?” asked Vaheesan. “The promise of a public approach offers not only more democratic control over the transition, but the potential for a much more systems-based approach to decarbonization.”

Toward Public Power

Angry public comments have poured in since the Minnesota PUC’s approval of BlackRock’s takeover of Allete.

“This is clearly deeply unpopular,” said Schuppert. “It’s shocking that the folks who supported this deal don’t understand that there will be political consequences for it.”

Slocum said that organizers and advocates who opposed BlackRock’s acquisition shouldn’t give into despair. “It was a great fight in Minnesota,” he said. The task now, he added, is to “lick our wounds” for the upcoming struggles in states like New Mexico, where Blackstone is seeking approval for its acquisition of TXNM Energy.

“We’ve got to support the regulators there and say, ‘Don’t make the same mistake that your friends in Minnesota just made,’” said Slocum.

Schafer agreed that private equity’s attempt to acquire our critical infrastructure highlights the importance of state-level regulators. “It’s critical that people take the opportunity to make their voices heard,” she said.

Vaheesan believes this moment of rising electric bills and Wall Street utility takeovers could boost the case for public power, which he said “already exists on a very large scale” in the form of publicly-owned utilities with lower rates.

“There are other ways of organizing this industry that are more democratic and more likely to deliver affordable, reliable power service than what we may have under investor ownership,” said Vaheesan.

Indeed, public power campaigns, which advocate for decommodified, publicly owned utilities, are growing across the U.S., stretching from New York and Milwaukee to Tucson and San Diego. Schuppert hopes that BlackRock’s acquisition of Allete might serve as a wake-up call around the need for public power in Minnesota and beyond.

“If we can organize around that,” she said, “that could be pretty game changing.”

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Derek Seidman

Derek Seidman is a writer, researcher and historian living in Buffalo, New York. He is a regular contributor for Truthout and a contributing writer for LittleSis. Author Site