Allete, Inc. (NYSE: ALE) has received unanimous approval from the Minnesota Public Utilities Commission (MPUC) for its acquisition by Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP). With all necessary regulatory approvals now in place, the transaction is expected to close in late 2025. The acquisition is anticipated to provide approximately $200 million in total Minnesota Power customer benefits.
The approval includes significant commitments to customer affordability and rates, with a one-year base rate freeze to support rate stability for Minnesota Power customers, $50 million in additional rate credits provided to customers, and a $10 million long-term residential energy bill mitigation fund to support energy efficiency, conservation, and fuel-switching initiatives for customers. Additionally, there will be a reduction in return on equity (ROE) from 9.78% to 9.65% post-close, immediately lowering costs for customers, and a future ROE cap of 9.78% through December 31, 2030. Up to $3.5 million in residential customer arrearage forgiveness will support eligible low-income customers.
Allete, CPP Investments, and GIP have also agreed to enforceable service quality and system reliability performance metrics for Minnesota Power to ensure that customers continue to receive high levels of reliability and quality.
The agreement also includes commitments to clean energy and infrastructure, with guaranteed access to capital to fund Allete’s five-year plan for advancing transmission and renewable energy goals, as well as a $50 million clean firm technology fund to support regional clean-energy projects and partnerships.
Furthermore, the acquisition will maintain local oversight and control, with a majority independent board of directors, several from Minnesota and Wisconsin, ensuring regional voices have a greater influence in utility decision-making. Allete's headquarters will remain in Duluth, Minnesota, with the current leadership team in place, and a commitment to retain Allete’s current workforce, honor union contracts, and maintain compensation levels and benefits programs.
The transaction has also received approvals from Allete shareholders and federal and state agencies, including the Federal Energy Regulatory Commission and the Public Service Commission of Wisconsin. Upon closing of the transaction, Allete’s shares will no longer trade on the New York Stock Exchange. Minnesota Power and Superior Water, Light and Power will remain public utilities, fully regulated by the Minnesota Public Utilities Commission and the Public Service Commission of Wisconsin, respectively.
In addition to its electric utilities, Minnesota Power and Superior Water, Light and Power of Wisconsin, Allete owns Allete Clean Energy, BNI Energy, and New Energy Equity, and has an 8% equity interest in the American Transmission Co.
The transaction is expected to position Allete well to meet the significant infrastructure demands of the clean-energy transition without compromising the high-quality service and commitments to reliability and affordability that define the company. Following these announcements, the company's shares moved 0.73%, and are now trading at a price of $67.21. Check out the company's full 8-K submission here.
