Wall Street firms move to buy electric utilities as data centers drive energy demand

BlackRock and Blackstone are seeking to acquire utilities in Minnesota, New Mexico, and Texas to profit from the electricity needs of expanding data centers, raising concerns from consumer advocates about rate hikes and service reliability.

Ivan Penn reports for The New York Times.

In short:

BlackRock aims to buy Minnesota Power, serving 150,000 customers, but a state judge advised regulators to reject the deal, citing the firm’s focus on profit over public interest.
Blackstone plans to acquire TXNM Energy, which serves 800,000 customers in New Mexico and Texas, positioning itself to support clean energy projects and new data center development.
Consumer advocates argue that private equity ownership could drive up rates and degrade service quality, as firms may load utilities with debt and prioritize investor returns.

Key quote:

“The nonpublic evidence reveals the partners’ intent to do what private equity is expected to do — pursue profit in excess of public markets through company control.”

— Megan J. McKenzie, administrative law judge

Why this matters:

As tech companies race to build power-hungry data centers across the country, utilities are becoming more attractive to Wall Street investors looking for stable, high-return assets. But this shift raises red flags for everyday consumers. Utilities, historically public-service providers with regulated rates, may operate differently under private equity control. Critics warn that financial engineering could trump service quality, leaving residents with soaring energy bills and fewer safeguards. At the same time, electricity demand is climbing again after a decade-long plateau — driven by electric vehicles, AI servers, and climate adaptations. With much of the U.S. grid aging and vulnerable, who owns and operates these systems — and how they’re incentivized — has direct implications for energy affordability, climate resilience, and public accountability.

www.nytimes.com

Wall Street firms move to buy electric utilities as data centers drive energy demand

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