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April 17 (Reuters) – U.S. energy regulators gave BlackRock (BLK.N) renewed permission to own major stakes in public utility companies on Thursday, a win for the world’s top asset manager over politically-charged concerns that it wields too much influence.
The decision by the U.S. Federal Energy Regulatory Commission included a concurring opinion by Mark Christie, its Republican Chairman. He wrote that while he holds concerns about BlackRock’s market power, public utilities need access to capital.
“It is a fact of economic life that public utilities regulated by the Commission must seek investment capital from wherever it is available, and much of it is now either owned or managed by huge asset managers,” he wrote.
Technically the decision by the body known as FERC extends for three more years BlackRock’s permission to own up to 20% of the voting securities of any one U.S.-traded utility, higher than the traditional 10% baseline threshold. In addition, no single BlackRock fund can own more than 10% of a utility’s voting securities.
BlackRock has some $11.5 trillion under management. In a statement sent by a representative, BlackRock thanked FERC for the decision.
“At a time when energy affordability and reliability are especially important, we look forward to continuing to provide billions of dollars in capital for the American energy sector on behalf of our clients,” BlackRock said.
BlackRock’s application had drawn objections across the political spectrum. Republican state politicians and the conservative-leaning nonprofit Consumers’ Research had said BlackRock’s past participation in investor climate groups could violate its commitment to serve only as a passive investor.
Will Hild, the nonprofit’s executive director, called FERC’s decision disappointing.
“If the FERC members are going to flat out refuse to enforce the law, or even the conditions of their own agreements with asset managers like BlackRock, then President (Donald) Trump should remove the commissioners unwilling to follow their own policies,” he said via e-mail.
More liberal consumer groups, including nonprofit Public Citizen, also questioned the waiver. They argued, among other things, that BlackRock has become more of an active investor through deals like its $12.5 billion purchase of Global Infrastructure Partners.
Tyson Slocum, director of Public Citizen’s energy program, said FERC’s decision was based on politics and investment needs.
“What’s clear is that the Commission continues to have concerns, but that BlackRock is too big to mess with,” Slocum said in a telephone interview.
Reporting by Ross Kerber; Editing by Kirsten Donovan and Nia Williams
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