In Bipartisan Letter, Warren, Indiana Reps. Carson (D) and Spartz (R) Lead Lawmakers in Urging Federal Regulator to Reject Proposed Private Equity Takeover of Energy Company

Members Warn of Potential New Electricity Rate Hikes

"This application, submitted by (BlackRock's subsidiary) GIP alongside a consortium of co-investors, comes as private funds and private equity firms increasingly buy up public utility companies."

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, alongside U.S. Representatives André Carson (D-Ind.), Victoria Spartz (R-Ind.), Rashida Tlaib (D-Mich.), and Ayanna Pressley (D-Mass.) wrote to Federal Energy Regulatory Commission (FERC) Chair Laura Swett urging FERC to deny Global Infrastructure Partners' (GIP) application to acquire AES Corporation (AES), a publicly traded energy company that owns two regulated utility companies in Ohio and Indiana. GIP is a private equity firm and subsidiary of BlackRock, a global asset management company. Americans already face record-high utility bills, and the private equity industry's increasing stake in public utility markets creates significant risks of raising energy costs for families.

"Federal law generally authorizes FERC to approve mergers, acquisitions, and sales of public utilities only if FERC finds that the proposed transaction is "consistent with the public interest," wrote the lawmakers. But GIP's application to FERC indicates that the parent company could be "unfairly passing on transaction costs to their consumers … Based on our review of the application filed by BlackRock's GIP and its co-applicants, we urge FERC to deny the merger."

"A potential spike in rate hikes is particularly concerning in this case because AES Ohio and AES Indiana have repeatedly asked for rate hikes in recent years…This trend seems likely to be exacerbated if these firms were under the control of private equity firms designed to maximize profits," the lawmakers continued.

"When evaluating this merger's effect on competition, FERC must examine the transaction within the broader context of BlackRock's expanding ownership of the country's energy and utility infrastructure," the lawmakers wrote. "Data centers require enormous amounts of electricity and can require utility companies to spend hundreds of millions of dollars on upgrades to the grid's infrastructure to adequately serve them. If this merger is approved, BlackRock and GIP would have financial interests on both sides of the equation: GIP would control AES Ohio and AES Indiana, while also having significant control over data centers in the area."

The lawmakers concluded: "FERC has a critical role to play as a backstop to BlackRock's attempt to enmesh itself in the utility industry as electricity rates are increasing for American households."

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