Consumer and environmental groups are dismayed over Duke Energy Indiana’s plan allowing a Singaporean government-owned investment firm to own a 20% stake in the company.

Duke Indiana in February filed with FERC a new holding company structure of its utility operations for the purpose of selling a 19.9% stake in the company to Singapore-based GIC Private Limited. Duke Indiana plans to retain and control its remaining 80.1% indirect interest (EC21-56).

Public Citizen, Citizens Action Coalition of Indiana and the Sierra Club say that it’s unacceptable for Duke to turn over minority control to a wealth fund controlled by the Government of Singapore. They have complained to FERC that the new ownership plan “would result in a change of control of a state-franchised monopoly utility with more than 850,000 captive customers.”

Should FERC approve the transaction, GIC will be able to name two directors to Duke Indiana’s 10-member board of directors.

The groups also say Duke is deliberately circumventing Indiana’s regulatory approvals, alleging the transaction is intentionally structured to dodge the Indiana Utility Regulatory Commission (IURC). The new intermediate Duke holding company would own all of the stock in Duke Indiana and distribute the 19.9% interest in two phases. According to Indiana code, the IURC can only oversee “the franchise works or system” of the utility, not in the stock of a holding company that owns the utility.

Public Citizen’s Tyson Slocum said the arrangement is exposing the “utility’s consumers to significant financial risk.”

The consumer groups said Duke has “boasted that Singapore’s $2.05 billion investment is a significant premium to Duke Energy’s current public equity valuation.”

“The only reason a sophisticated investor like the Government of Singapore would agree to overpay for 19.9% of Duke Indiana’s equity is if it was promised lucrative, above-market dividends in return,” they wrote. “The Government of Singapore’s two-stage investment will result in a foreign nation controlling two of the 10 seats on [the holding company’s] board of directors, giving the Government of Singapore clear control over a franchised utility.”

The groups also claim that GIC’s 27.6% indirect minority interest in the Genesee and Wyoming Railroad, coupled with Duke’s interest, would create an affiliate relationship because the railroad delivers coal to Duke Indiana’s power plants.

“Absent more specificity and affirmations by the IURC, FERC should require full divestment of the Government of Singapore’s financial interest in Genesee and Wyoming as a condition of approving the transaction,” the advocates said.

Duke Indiana said those concerns don’t invalidate the fact that its sales to retail customers are still supervised by IURC and its wholesale power sales are made at market-based rates. It said the consumer advocates “wrongly assert that the transaction may impair effective state regulation of Duke Indiana” by IURC.

Duke also said the groups’ criticisms are peppered with “egregious falsehoods.” It said the railroad concern was overblown because the IURC itself did not intervene in Duke’s FERC filing for the transaction’s approval. The utility also said GIC isn’t promised any “net income or any specified level of return on investment” and the financial integrity of Duke Indiana remains uncompromised.

GIC also acquired a 19.9% equity interest in ITC Holdings in 2016 through an agreement with Canadian utility Fortis, which bought ITC a couple of months earlier.