The BlackRock, MP takeover debate

The financial behemoth Blackrock has proposed taking over the Duluth-based electric utility Minnesota Power. The debate over the transaction is revealing some unexpected fault lines.

The debate has a tiny audience, specifically, the five members of the Public Utilities Commission (MPUC), who have the sole power to approve or reject the deal.

Part of that debate is playing out on the opinion pages of the Minnesota Star Tribune. On Monday (April 21), the newspaper published a commentary by Aaron Brown under the headline:

Brown: Capital for companies, unintended consequences for us
Customers fear higher bills if BlackRock-led group buys Minnesota Power.

“Brown” refers to the author of the commentary, Aaron Brown, a long-time journalist who still lives near his hometown of Hibbing. He is a regular columnist writing for the Star Tribune and serves on the paper’s editorial board.

Brown wrote a column earlier this month for the Star Tribune extolling the virtues of renewable energy.

On the BlackRock transaction, Brown writes:

In fact, the [buyout] controversy has Minnesota’s largest mining companies lined up on the same side as the Sierra Club to oppose the sale. 

Brown concludes:

Let’s hope [PUC] commissioners consider carefully. Under the sway of a privately held juggernaut like BlackRock, this might be the last time the public gets much say at all.

On Friday (April 25) the newspaper published a counterpoint by Michael Noble under the headline:

Counterpoint: Sale of Allete/Minnesota Power is in the public interest
Northern Minnesota needs this investment.

Allete is Minnesota Power’s current parent company and also based in Duluth.

For nearly two decades, Noble ran the large Minnesota-based environmental nonprofit Fresh Energy. He stepped aside in June 2023 after completing his life’s work, the passage of the 100 percent renewable energy mandate. In Noble’s last year of running Fresh Energy, the nonprofit produced revenue of more than $8 million.

Regarding Brown’s view of the BlackRock deal, Noble writes:

But I dissent that the risks of the sale outweigh the benefits, and I urge Minnesota state agencies to approve the purchase plan.

Noble sides the company’s view that it will take billions of dollars of new capital to meet the state’s new clean energy mandates and that capital is the one commodity that BlackRock has more than anyone else on earth.

I’ve known of both Brown and Noble for many years. From where I sit on the ideological spectrum, both Brown and Noble are far to the left, much closer to one another than either would be to me. Yet the two men come to opposite conclusions on the desirability of this financial transaction.

I agree with Brown’s concerns on the deal, but from a different direction. Monopolies are, at best, a necessary evil. We already have a state-created electric-utility monopoly in the form of Minnesota Power. There is no public benefit to grafting a financial monopoly on top of it.