A specialist trader works at the post where BlackRock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 21, 2022. REUTERS/Brendan McDermid

By Ross Kerber

(Reuters) -Minnesota power regulators on Friday approved a $6.2 billion plan for a BlackRock unit and Canada Pension Plan to buy utility owner Allete, parent of Minnesota Power, saying recent modifications by the parties should address concerns about rates and clean-power investments.

The 5-0 vote by the Minnesota Public Utility Commission may reassure investors that BlackRock will be able to address regulatory and antitrust concerns as its Global Infrastructure Partners unit, which it bought last year, presses for more deals.

Earlier this week, people familiar with the matter said the infrastructure unit was in talks to buy utility group AES. Separately, on Friday two people said the unit was in talks to buy a data center business backed by Macquarie.

Company executives said the Minnesota deal, first announced last year, would help Allete to transition to clean energy sources.

Opponents, including the environmental group Sierra Club, business customers and State Attorney General Keith Ellison, had raised concerns the agreement could lead to higher rates and did not guarantee that Minnesota Power could meet a requirement for state electricity to be carbon-free by 2040.

At Friday's meeting, which was webcast, commissioners said recent modifications helped to ease their previous skepticism towards the deal. A filing from the companies indicates recent term changes will add benefits worth up to $258 million for utility stakeholders, including through a clean technology fund and via bill credits for consumers.

Commissioner Hwikwon Ham, in comments made before the decision, said those modifications gave him confidence in the agreement and that the commission could review company rates "if they misbehave."

Commission Chair Katie Sieben said Minnesota Power needs massive new investments to pay for projects such as a new transmission line to bring in hydropower from Manitoba.

In a securities filing, leaders of BlackRock and Canada Pension Plan Investment Board praised the decision and said that, with all required regulatory approvals now secured, the transition is expected to close in late 2025.

"We are committed to preserving Allete's legacy of intense community focus as it continues to provide safe, reliable, and affordable energy which is increasingly carbon-free for Northeastern Minnesota," said Global Infrastructure Partners' founding partner Jonathan Bram in the filing.

Several groups voiced criticism towards the decision, including the Private Equity Stakeholder Project and the Sierra Club, which said it remains concerned about rates and that it is not certain the investors would provide capital for less-polluting energy.

(Reporting by Ross Kerber; Editing by Edmund Klamann)