ENERGY
New Mexico AG Torrez questions TXNM stock sale to Blackstone
The $400 million in stock gave the private equity firm an ownership of 7.59% of TXNM’s outstanding shares
New Mexico Attorney General Raúl Torrez in a filing Thursday said the sale of $400 million worth of TXNM Energy stock to an affiliate of Blackstone Inc. in 2025 may have violated a state law requiring New Mexico regulators to approve utility mergers.
“This acquisition must proceed in full compliance with the law,” Torrez said in a statement released Thursday. “State law requires oversight when public utility stock is issued in connection with a transaction like this. We are asking the Commission to ensure that all legal requirements are satisfied and that the public interest remains the guiding priority.”
In August, TXNM, the parent company of the state’s largest provider of electric power, Public Service Company of New Mexico, and Blackstone Infrastructure jointly asked the state’s Public Regulation Commission to approve Blackstone’s proposed acquisition of TXNM for $11.5 billion. That shakes out to $61.25 per share, higher than the $50 per share price of the stock sale at issue.
The proposal for Blackstone to acquire TXNM has sparked public outcry about how one of the world’s largest private equity firms will steward the electric grid that serves some 550,000 New Mexicans.
Torrez made the utility filing in support of a separate Feb. 6 motion filed by Prosperity Works, an Albuquerque nonprofit whose mission is to support New Mexicans living on limited incomes. Prosperity Works initially raised questions about the stock sale earlier this month, arguing that state law requires “prior express Commission authorization for transactions associated with [utility] acquisitions … which has never been obtained.”
The stock sale, which gave the Blackstone affiliate an ownership of 7.59% of TXNM’s outstanding shares, is therefore void and will “likely have severe consequences,” according to Prosperity Works. The nonprofit asked New Mexico’s three PRC commissioners to order TXNM and Blackstone to explain why the transaction does not violate state law and further explain the consequences of the sale on the proposed merger.
Prosperity Works’ filing said if the companies fail to obtain authorization for the sale, “the conclusion must be that Blackstone and its affiliates cannot be trusted to abide by New Mexico law.”
“This should weigh heavily in the Commission’s evaluation of whether it can adequately protect customers and preserve its jurisdiction if the merger is approved,” Prosperity Works added in a reference to the proposed acquisition.
Officials with Blackstone and PNM insisted that the stock sale did not require PRC approval because it was made independent of the proposal for Blackstone to acquire TXNM.
TXNM is using the proceeds of the sale to fund capital projects authorized in the utility’s budget, according to its filing.
“Prosperity Works’ position conflicts with the text, structure, and purpose of the Public Utility Act, serves no regulatory purpose, and threatens utilities’ access to capital,” Paula Chirhart, managing director of global and corporate affairs for Blackstone, said in an email. “Under their interpretation, even the purchase of a single share of utility stock without any control rights by anyone affiliated with a utility would require preemptive Commission approval — an outcome inconsistent with the statute’s language and unsupported by decades of Commission practice.”
Lisa Goodman, vice president for investor and community relations, echoed that argument in an email and added that “Prosperity Works’ position would ultimately raise costs for PNM customers by limiting New Mexico utilities’ financing options.”
Torrez, however, disagreed with the utility’s argument that the stock sale was unrelated to the proposal for Blackstone to acquire the utility.
“This is not a neutral investment,” the filing said. “The record shows the stock purchase was integrated with the merger and used to secure votes in favor of the acquisition. Such actions demand Commission review to preserve transparency and protect ratepayers.”
Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.