US Sens. Bernie Sanders, Elizabeth Warren criticize Blackstone over proposed TXNM Energy purchase

A group of progressive, East Coast U.S. senators is criticizing Blackstone Infrastructure’s proposed $11.5 billion acquisition of TXNM Energy Inc., saying the deal isn’t in the public’s best interest.

U.S. Sens. Elizabeth Warren, D-Mass., Bernie Sanders, D-Vt., and Richard Blumenthal, D-Conn., cited concerns regarding the private equity firm’s interest in purchasing publicly traded utility companies in a joint letter on Thursday to Blackstone CEO Stephen Schwarzman, claiming the acquisition allows the firm to “profit from rising energy demands at the expense of consumers.”

“Investors have typically viewed utility companies as reliable investments with a guaranteed rate of return,” read the letter from the three members of the Senate Banking, Housing, and Urban Affairs Committee. “But now, amidst rapidly rising energy use from (artificial intelligence) data centers and other strains on the grid, Wall Street investors and private equity firms appear to be taking advantage of utilities’ regulated-monopoly status to rake in excess profits.”

The proposed acquisition, filed in August with state regulators, would take TXNM Energy, one of the state’s only publicly traded companies, private. TXNM is the parent company of Texas-New Mexico Power Co. and Public Service Company of New Mexico, the state’s largest electricity provider.

Defending its proposed purchase of TXNM, a Blackstone spokesperson wrote to the Journal that long-term private capital enables utilities to invest in projects that can strengthen and decarbonize the grid.

These investments ensure that customers receive “reliable, affordable power — without the pressure of short-term quarterly metrics,” the spokesperson said. “Private investors have been investing in utilities for more than 20 years, and any transaction must undergo a robust regulatory process and demonstrate clear benefits to consumers to gain approval from local, state and federal regulators.”

The letter, in part, asked Blackstone if it plans to raise electricity prices for PNM and TNMP, and if it will reduce the workforce to meet “investor targets” if its purchase is approved by state regulators. The senators asked Blackstone to respond to their questions by Dec. 18.

The senators claimed other acquisitions, like Balfour Beatty Infrastructure Partners’ 2014 takeover of Upper Peninsula Power Co., increased customers’ electricity bills. That deal raised bills by nine cents more compared to the average rate of other investor-owned utilities in the Michigan area, the senators’ letter said.

A PNM spokesperson said electricity rates would continue to be set by the New Mexico Public Regulation Commission. Blackstone did, however, say it would include $105 million in rate credits over four years, which could lower the average residential customer bill by 3.5%. The private equity firm also said it would retain PNM’s local workforce and keep the utility’s headquarters in the state.

PNM, which serves roughly 550,000 customers, is no stranger to power strains when it comes to growing communities and data center development.

Last week, the Bernalillo County Planning Commission approved applications on a special use permit and sector plan amendment for PNM’s North Albuquerque Acres Substation Project. The utility has been working to build the infrastructure, used as a means to deliver power to surrounding neighborhoods, for nearly eight years as the area continues to grow.

But the letter also touched on Blackstone’s data center business, which operates under the banner QTS Realty Trust. “Blackstone is seeking to buy the utility companies that power (data centers) — raising additional affordability concerns for consumers.” The letter cited an International Energy Agency report claiming electricity demand worldwide will increase by 130% by 2030, in large part due to the power that data centers require.

Like other parts of the U.S., New Mexico is seeing a demand for data centers — and an interest from large companies.

A Doña Ana County data center campus, under the name Project Jupiter, was named one of five sites in the $500 billion Stargate Project in September, led by OpenAI and Oracle.

At least two other companies have eyed New Mexico to house data center operations, including Wyoming-based Zenith Volts Corp., with an 8,400-acre site in Chaves County, and Texas-based New Era Energy & Digital Inc., which wants to put a 3,500-acre campus in Lea County.

Asked in August about the relationship between Blackstone’s data center business and its planned purchase of TXNM, a spokesperson said there “is absolutely no connection” and that its “proposed investment in TXNM Energy is solely because of our conviction in the company, its management and the future growth of the economies of New Mexico and Texas.”