TXNM Energy, PNM’s parent company, files $11.5 billion Blackstone acquisition with state regulators

The parent company of Public Service Company of New Mexico and the private equity firm seeking to acquire it filed their acquisition plan with state and federal regulators on Monday, a move that could dramatically reshape New Mexico’s energy sector.

The proposed $11.5 billion sale by TXNM Energy Inc. to Troy ParentCo LLC, a subsidiary of Blackstone Infrastructure, comes just three months after the two companies announced the deal. And it comes nearly five years after Avangrid and TXNM, then called PNM Resources Inc., said they would merge — a proposal that ultimately failed to materialize after the state Public Regulation Commission shot down the deal.

“The benefits in this filing are unprecedented and underscore Blackstone Infrastructure’s commitment to PNM and New Mexico,” said Don Tarry, president and CEO of TXNM, in a statement. “The energy landscape is changing, and New Mexico is at a critical point in time.”

Should the acquisition be successful, there would be “direct and immediate” benefits for PNM customers, officials said in a news release. That includes a $105 million rate credit over four years — which they said will lower the average residential customer bill by 3.5% — exceeding Avangrid’s offer of $67 million over three years during the previous proposed merger.

Monique Jacobson, TXNM senior vice president of corporate services, told the Journal that the influx of funding from the proposed Blackstone deal will allow its utilities, namely PNM, to lower customer pay rates as soon as regulators approve the sale. But, she said, that doesn’t “have a direct impact on what future rate cases may need to happen.”

“If and when this acquisition goes through, the existing rate process will remain in place,” Jacobson said.

The latest filing, if approved, would see Blackstone take one of New Mexico’s only publicly traded companies private. PNM, the largest electricity provider in New Mexico, serves roughly 550,000 customers.

Company officials filed the case with the state PRC, the Public Utility Commission of Texas and the Federal Energy Regulatory Commission on Monday.

The sale will also require approval from the Federal Communications Commission, the Nuclear Regulatory Commission and the Department of Justice, TXNM officials said. The companies plan to close the transaction in the second half of 2026, though first they will have to overcome local opposition, while also running the regulatory gauntlet.

Shares of TXNM closed at $56.76 on Monday, up 0.05% on the day and 16.2% year to date.

Details of the deal

The companies in announcing the sale filing said Blackstone, upon taking control of TXNM, would invest $25 million into innovative or emerging technologies that support New Mexico’s Energy Transition Act. Officials also said $35 million would go toward economic development and building the necessary workforce.

PNM’s Good Neighbor Fund, which helps low-income customers with electricity costs, would receive $10 million over 10 years.

TXNM subsidiaries, including PNM and Texas-New Mexico Power Co., a utility serving certain regions across Texas, would remain locally managed and operated. Jobs, wages, benefits and union contracts are protected under the acquisition, officials said. They said Blackstone, if it acquires TXNM, would hold it “for a minimum of 10 years.”

“We’ve been talking with various parties and leaders across New Mexico to share our intentions for this proposed investment, and today’s filing backs up these conversations with real commitments that exceed any amounts delivered in state history,” said Sean Klimczak, global head of Blackstone Infrastructure, in a statement.

Blackstone, which bills itself as “the world’s largest alternative asset manager,” or private equity firm, manages more than $1.2 trillion in assets. And its infrastructure arm, which would be acquiring TXNM, manages around $60 billion in assets and could provide long-term financial support, according to the filing.

Blackstone has the ability to raise and invest capital needed for customers, clean energy transitions, modernizing the grid, building new transmission and supporting economic development, officials said.

Announced in May, TXNM and Blackstone entered an agreement that would see the latter take over the New Mexico-based company in a deal that would close at $61.25 per share in cash, including net debt and preferred stock.

Securities and Exchange Commission filings show that TXNM’s board of directors decided over an eight-month period that a takeover by Blackstone was in the best interest of shareholders and other stakeholders, including customers and the “communities it serves.”

“This acquisition is important for us to thrive in this time of transformation in the energy landscape,” Jacobson said. “It allows us to continue to serve our customers with safe, reliable energy by having better access to capital.”

A PRC spokesperson said state regulators typically take nine to 13 months from the filing date to decide on such an acquisition.

Potential hitches

New Energy Economy, the sole intervenor that opposed the Avangrid merger, announced Monday that it would intervene, once again in opposition, to the Blackstone acquisition.

The organization claims that the transaction fails the state’s six-factor public-interest test and poses risks to New Mexico families, workers and the environment.

Mariel Nanasi, NEE executive director, compared Blackstone’s “participation in this acquisition” to that of the mythological Trojan horse the Greeks used to take the city of Troy.

“Just like in the myth, Blackstone wants us to feel like there is divine intervention in the works, but there is nothing natural or inevitable about this acquisition,” she said. “Here, Blackstone is offering a Trojan horse to ratepayers, a deceptive gift, one that will ultimately dominate and destroy us if we allow them to enter New Mexico.”

NEE opposed the failed Avangrid merger, announced in 2020, that would have seen the Connecticut-based company take control of PNM in a $4.3 billion deal.

While the majority of intervenors in that merger case either supported or didn’t oppose the deal, a PRC hearing examiner ultimately recommended to commissioners in November 2021 that the potential harms of such a deal outweighed the benefits.

That proposed merger eventually led Avangrid and PNM officials to appeal the PRC’s rejection in the New Mexico Supreme Court in 2022. In 2023, with a new three-member commission, the two companies filed a joint motion to dismiss their appeal in the hopes it would go back to the PRC again. Avangrid ultimately decided last year to dissolve the merger agreement.

But TXNM officials are saying that this go-around is different from the last.

For instance, the day after TXNM and Blackstone announced the proposed acquisition, TXNM “immediately” began stakeholder outreach to hear what mattered most to them, Jacobson said.

TXNM officials also changed their approach in terms of what kind of company they wanted to be acquired by, she said, where Blackstone is considered a “financial backing” type and Avangrid was a “strategic partner.”

“We really felt like the right way to go for our state was with this financial backing type of acquisition. … PNM, really for all intents and purposes, won’t change other than having greater financial backing,” Jacobson said.