Consumer advocacy groups say BlackRock’s move for a controlling stake in utility company AES means the private equity firm needs to be broken up.
In a complaint to the Federal Energy Regulatory Commission filed Monday, the Citizens Action Coalition of Indiana and two other groups argued that if aplanned purchase of AES by investors were to proceed, BlackRock affiliates would control over half of the utility. That includes BlackRock’s management of the California Public Employees’ Retirement System stake in AES.
Public Citizen and the Private Equity Stakeholder Project joined the Hoosier Citizens Action Coalition in the complaint.
The Federal Power Act gives FERC authority to approve public utility acquisitions only if “consistent with the public interest.” The groups argue that level of control is not.
“It is more important than ever for regulators to carefully examine whether the financial incentives driving Wall Street investments are compatible with the long-term public interest of utilities that power Americans’ homes and businesses,” said Nichole Heil, a senior climate and energy researcher at the Private Equity Stakeholder Project, in a news release. “FERC should give this BlackRock transaction that level of scrutiny.”
FERC previously granted holding companies like BlackRock blanket authorization for purchases in utilities, an approval designed to “encourage greater investment in utilities by mutual funds.” But blanket authorizations still have some limitations, including not owning more than 20% of the voting shares of any one utility company.
BlackRock affiliates, the advocate groups argue, would exceed 50% control if the purchase were to proceed.
AES announced earlier this year that it had agreed to be purchased by BlackRock and other investors — and become a private company — in a $33-billion deal expected to close in late 2026 or early 2027. It’s just one of numerous attempts by private equity firmsto purchase public utilities amid a surge in data center demand for electricity.
Other members of the investor group are Swedish private equity firm EQT and the sovereign wealth fund of Qatar
AES Indiana services more than 500,000 retail customers in Indianapolis and surrounding areas.
Firms like BlackRock “are the last people we should want to be running our public utilities,” said Kerwin Olson, executive director of Citizens Action Coalition.
“The aim of private equity firms is to extract as much profit from the assets that they own,” Olson told the Indiana Capital Chronicle. “And in this case, that asset would be our public utility.”
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