OPINION: Privatizing PNM means less transparancy for New Mexicans

The op-ed “Civility, not hostility, is key to New Mexico’s energy future” (Feb. 15 Sunday Journal) is a seemingly rational call for less confrontational discourse around the proposed acquisition of Public Service Company of New Mexico's parent company TXNM Energy by Blackstone.

I’m no fan of incivility but let’s not pretend there’s no basis for public outrage in response to the over-simplified presentation of this deal.

The article’s author asserts, "The proposed acquisition by Blackstone does not alter PNM’s core structure, mission or operational responsibilities.”

TXNM today is a public company, subject to a spectrum of transparency and disclosure requirements by the Securities and Exchange Commission. Blackstone has announced it will fully privatize TXNM, embedding it inside a vast portfolio of owned and controlled companies. Once privatized, its operations, capital allocations, priorities, financials and compensation will be far less accessible to public scrutiny than they are today, if at all.

He further implies that "Blackstone’s financial capacity” is essential to PNM’s ability to “invest in infrastructure," “support job stability," “strengthen grid stability," and “transition to cleaner energy sources over time," as if those investments would not otherwise occur.

There is nothing in PNM’s strong financials that block access to funds for capital investments without a sell to a private equity company. It might seem that Blackstone’s $1.3 trillion in assets under management gives it control of all the money on Earth, but there are oceans of capital seeking targets for investment with reliable returns — investments that do not require ownership and control.

Blackstone offers to provide $175 million in incentives and investments distributed among 550,000 customers of PNM — $110 million of that would be rate decreases over four years that translate to an average per customer monthly bill reduction of $3.98.

Blackstone is offering to buy TXNM at a 23% bonus over its recent market price — a $1.4 billion premium for current shareholders. Who are those shareholders? Forty-seven percent are 10 institutional shareholders of which No. 1 is Blackrock, which is closely tied historically and financially to Blackstone, which itself is the No. 3 institutional shareholder. About 15 of shares are held by 10 of its mutual fund investors.

Based on reported compensation packages for TXNM senior executives, starting with CEO Don Tarry, whose incentives above his $775,000 annual base salary in December 2024 took his total package to $2.9 million including company stock and options, it is a foregone conclusion the Blackstone purchase will deliver a life-changing financial windfall for TXNM’s current senior management — much more than a $3.98 reduction in monthly electric bills. Their support for and vested interest in this acquisition is thus entirely understandable.

The Blackstone offer poses a possible conflict of interest for consideration by the Public Regulation Commission. The New Mexico State Investment Council, which manages $71 billion, is an investor in Blackstone’s Infrastructure Partners, which is funding the TXNM deal. With Blackstone wholly owning and controlling PNM, a tension will be introduced between the aspirations of the SIC for maximum return on investment and the PRC’s responsibility to protect New Mexico ratepayers from rate increases.

If TXNM was not a valuable prize, Blackstone would not be trying to buy it. It is easy to understand why its transfer to out-of-state ownership triggers a passionate reaction and opposition from the “public” in whose “service” PNM is supposedly committed. What is harder to understand is the motivation of Chambers of Commerce, NM IDEA, NAIOP and others to support PNM’s transition to a public utility monopoly buried in a private equity portfolio headquartered in New York.

Jaemes Shanley is a retired business executive connected to Albuquerque since 1969 and has lived in Albuquerque since 2006.