Blackstone’s proposed TXNM takeover gets cool reception during public hearing at UNM

The proposed $11.5 billion sale of TXNM Energy Inc. to an arm of private equity giant Blackstone Inc. received a cool reception at a public hearing in Albuquerque on Tuesday. 

Dozens of New Mexicans asked state regulators to reject the sale in the third public hearing on the proposal, including Patrick Denne, a lifelong Albuquerque resident, who called the prospect of a private equity firm taking over the largest power utility in the state “horrifying.”

In August, TXNM Energy, the parent company of Public Service Company of New Mexico, and Blackstone Infrastructure Partners asked the state Public Regulation Commission to approve the deal. Under the proposal, Blackstone would pay $11.5 billion, or $61.25 per share, to acquire TXNM. If approved, TXNM would no longer be a publicly traded company.

TXNM officials argue the sale would give the utility, which serves roughly 550,000 residents in the state, more capital to invest in electric power infrastructure in New Mexico and Texas. 

Texas utility regulators have already approved the sale. Now, the two companies want a green light from New Mexico regulators. Federal regulators with the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission are also reviewing the deal. 

Lisa Goodman, vice president of investor and community relations for TXNM, said in an interview that the sale would help fund the utility’s five-year capital spending plan of $8 billion. She said it is getting more difficult for small-to-mid cap utilities “to raise equity in a sometimes volatile capital market.” 

The two companies have said they will invest $25 million toward clean energy technology in addition to a $105 million in rate credits over four years, lowering the average monthly electric bill by 3.5%. 

“New Mexicans deserve reliable, affordable energy,” TXNM said in a statement. “That remains our priority and is why we want to pursue this partnership.”

But the residents who testified during a hearing held at the University of New Mexico’s Student Union Building overwhelmingly opposed the deal. 

Many advocated for public ownership of utilities, an idea that two Democratic state lawmakers representing portions of Bernalillo County, Sen. Harold Pope and Rep. Patricia Roybal Caballero, floated in a Senate memorial filed during this year’s legislative session.

In a report released this month, the nonprofit New Mexico Foundation for Civic Excellence argued that policing Blackstone would be “effectively impossible.”

“Blackstone is a global financial powerhouse with tremendous resources, extraordinary political influence and an army of lawyers,” the report said. “Blackstone’s scale, myriad business interests and intrinsic lack of transparency will all inhibit the PRC’s capacity to do its job, presenting serious obstacles to effective regulation.”

Zia Udell, 24, told New Mexico’s three state regulators — appointed by Democratic Gov. Michelle Lujan Grisham — that “the best thing for New Mexicans is to keep our energy out of the hands of private equity.”

“Keeping our energy in the hands of New Mexicans would preserve and create new jobs,” Udell said, tearing up during her testimony. Blackstone officials have said PNM will be locally managed and that union agreements with employees would still be honored.

Many residents also expressed concerns about Blackstone’s investments in data centers for artificial intelligence, saying that such projects would hog New Mexico’s scarce water resources. But Blackstone has denied any connection in its data center business — QTS Realty Trust — and the proposed sale.

Other residents said the proposed $105 million in rate credits would not provide significant benefits to New Mexicans.

“They’re dangling carrots in front of people to go ahead and have us believe that they’re acting in our interests,” said Albuquerque resident Jasper Hardesty, 67. 

The commission will hold two more public comment sessions ahead of evidentiary hearings in May, said commission spokesperson Patrick Rodriguez. He noted that members of the public are welcome to testify about the deal during regular commission meetings, too. 

In the statement, TXNM said, “It’s important to note that many of the organized activist comments do not reflect the details of the filing or the way utility rates are regulated in New Mexico.” 

“We’ve listened closely to every public comment session, and we respect all the perspectives shared,” the statement said.

Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.