Minnesota Power's sale to BlackRock gets backing of MN Department of Commerce

(FOX 9) - Allete, the parent company of Minnesota Power, says the Minnesota Department of Commerce is now backing the company's sale to investment firm BlackRock and the Canadian pension fund after a recent agreement.

Allete reached deal

The backstory:

Allete announced last year it had entered into an agreement to be acquired by a partnership between the Canada Pension Plan Investment Board and Global Infrastructure Partners, a division of BlackRock.

Allete is the parent company of Minnesota Power, the electric company that serves parts of central and northeast Minnesota, including Duluth. Allete also owns Superior Light and Power in Wisconsin.

What we know:

In an announcement last week, Allete said it had reached an agreement with the Minnesota Department of Commerce to gain support for the acquisition.

Under the agreement, Allete says Minnesota Power would commit to a one-year base rate freeze and lower its return on equity from 9.78% to 9.65%. The agreement also requires:

Maintaining strong customer service levels.
Investments from BlackRock and the Canadian Pension Plan toward green energy projects.
The new company would have a Board of Directors including 14 members, including six that would be independent and some from Minnesota and Wisconsin.

Dig deeper:

Allete says the recent agreement follows another set of commitments made by the future owners, including honoring union contracts, maintaining the current workforce and compensation levels, keeping the company headquarters in Duluth, and retaining the current management team. The investment funds also agreed to contribute $3.5 million to forgive bills owed by low-income customers.