Intervenors seek dismissal of $1.25 billion New Mexico Gas Co. sale

Energy advocates, regulatory utility staff and the New Mexico Department of Justice have asked the Public Regulation Commission to dismiss the sale request of New Mexico Gas Co.

The request comes as the Louisiana-based private equity firm Bernhard Capital Partners aims to take over New Mexico Gas Co. from Emera in a $1.25 billion deal. And it follows heightened scrutiny of acquisitions and mergers in the New Mexico utility world, particularly after a major merger case fell apart in early 2024.

Bernhard and New Mexico Gas Co. officially requested regulatory permission in October to conduct the sale.

Intervenors on Tuesday filed a dismissal motion without prejudice, meaning that Bernhard could ask again for acquisition approval in the future. If the PRC denies the dismissal motion, the intervening parties request that the companies submit a new deal application or that the PRC strike certain rebuttal testimonies.

The dismissal request — filed by the NMDOJ, New Energy Economy, Western Resource Advocates and others — comes in response to new deal terms that arose in Bernhard’s rebuttal testimony compared to its original application.

“Instead of filing rebuttal testimony that counteracts or disproves the staff and parties’ criticisms of their application, they have filed testimony that proposes substantive changes to their initial application,” the motion reads.

The changes include new rate credits, a rate freeze, additional economic development investments and a reduction in new hires from around 60 to 20 employees.

In response, Jeff Baudier, senior managing director at Bernhard, told the Journal the updated proposal “brings even greater benefits” to New Mexico Gas Co. customers.

“We’ve listened to feedback from stakeholders throughout the regulatory process and have increased our commitments as a result — including millions of dollars in additional investments for local economic development projects, customer bill credits and charitable contributions — while keeping rates stable for customers,” he said.

The intervenors also argued that Bernhard lacks the necessary experience to operate a utility like New Mexico Gas Co., which oversees about 549,000 households.

“(Gas) is an essential service, and we want to make sure that confident people are running it,” New Energy Economy Executive Director Mariel Nanasi said in an interview.

A hearing on the case is set to begin June 23, though the dismissal motion also requests a pause on that until the PRC approves or denies the dismissal.

Another case for a utility just as large as New Mexico Gas Co. is also likely to come before the PRC, as Blackstone Infrastructure earlier this month announced its intent to acquire PNM’s parent company, TXNM Energy Inc.