State officials, lawyers and executives met in Santa Fe Thursday to discuss the legality of a $400 million stock sale involving the Public Service Company of New Mexico’s parent company and the private equity firm seeking to acquire it. Meanwhile in Albuquerque, about 100 people rallied in front of PNM’s headquarters to protest that very acquisition.
In downtown Albuquerque at Silver Avenue and Fifth Street, protesters called out what they called greed and a lack of accountability on the part of PNM, as well as its parent company, TXNM Energy, and Blackstone Infrastructure, the private equity firm looking to pay $11.5 billion to acquire TXNM and therefore PNM.
Protesters sang a song addressed to state officials – “It’s okay to change your mind, say no to Blackstone, leave them behind … and you can save us, save us from their crimes.” Their chants echoed off the PNM building and along Downtown’s streets — “We need clean air, not another billionaire,” “Tax the rich,” and “PNM get off it, put people over profit,”
Last June, just a month after the acquisition was announced, Blackstone purchased $400 million dollars’ worth of stock in TXNM energy. In response, several parties including New Mexico Attorney General Raul Torrez, anti-poverty nonprofit Prosperity Works, questioned the sale’s legality. In March, the Public Regulation Commission (PRC) launched an investigation into the sale.
Zoe Craft with YUCCA NM said the deal shows the parties involved don’t respect New Mexico’s laws or processes.
“So before regulators could even rule, they were already positioning themselves to take control. And that's not just a technicality, that is moving like the rules don't apply to them,” she said. “So the question is this, if they act like this before they own our power, what do you think will happen when they do? Electricity is not abstract. It powers hospitals, dialysis machines, ventilators. It keeps insulin cold. It keeps people alive in the heat. It powers our lives.”
Blackstone and PNM representatives have been trying to assuage the public's fears of rate hikes. They point to the PRC, which is in charge of setting utility rates, and say nothing is changing.
They also say the acquisition would help fund much-needed utility infrastructure improvements, and help PNM meet the state’s climate goals.
Protestor Mary Meiklejohn said she doesn’t trust the companies to live up to their word.
“Language and words have been turned to the equivalent of toilet paper these days, and people can say whatever they want because words are words, and promises are promises, and the action is what matters.”
She points to rate hikes that have happened in other cases when Blackstone purchased a utility.
Meiklejohn said she used to work with municipal government boards, and found that large corporations would “do whatever they want” because local governments lack the resources to take on multinational conglomerates.
“They don't have the capacity to. All of our public institutions and our administrative states are completely overburdened,” she said. “It's a completely asymmetrical situation, because there's no way that they have the administrative ability to hold these corporations to account.”
Jonathan Juarez, also with YUCCA, said he thinks the decisions argued at the hearing in Santa Fe affect every rate payer, and wants those ratepayers voices to be heard by PNM and Blackstone executives.
“People making these decisions in Manhattan skyscrapers at Blackstone are not from here. Some of them have never stepped foot in New Mexico, and they are the ones who will be dictating the decisions that we live with the consequences of. They are not accountable to our communities,” he said. “They are not the ones choosing between groceries and their electricity bill. They will not live with the consequences of these decisions, but we will”
Protesters highlighted the possible financial gains for PNM executives. Protesters held millions of dollars in fake oversized checks with executives' names. Gabrielle Gonzales said they were a message to PNM.
“They are symbols of corruption, symbols of misplaced priorities, and symbols of exactly why this merger must be stopped,” she said, “because utilities should serve the people, not millionaire investors and corporate executives.”
Meanwhile, at the same time, some of those very executives were giving testimony to hearing examiners for the PRC in a marathon evidentiary hearing that lasted eight hours.
PNM president and CEO Don Tarry told examiners the sale of 8 million shares had nothing to do with the larger acquisition, and that as a distinct investment it does not violate state law. But, he acknowledged that it would have simplified things if they had approached the PRC for permission for the stock sale.
“In hindsight, based on the concern — not the concern we knew when we signed it — but based on the concern that staff and the [attorney general] and others have,” he said, “you know, I think that looking at it today, it would have been beneficial.”
Lawyers on the other side, like Steve Michel representing Prosperity Works, said the statute is so clear that a first-year law student would understand it.
“It's not rocket science,” Michel said. “You look at the statute, and it's pretty obvious what you need to do. And even if it's not, it's at least obvious that you go to the commission and say, ‘hey, please give us approval if we need it, or please tell us whether we need approval.’”
Michel pointed out that the stock purchase was mentioned over 70 times in the merger agreement. He argues that the sale was thus “part and parcel” of the merger, which is therefore “unlawful and should be denied.”
Erin Lecoq, with the PRC’s general counsel, said if the stock sale is voided the $400 million would have to be paid back, which she said could be “harmful, ultimately, for New Mexico.”
“The commission has to take things like that into consideration,” she said.
Hearing examiners did not say if they will be making any recommendations to the PRC, but did say they will be sending briefing orders to the parties involved with further details. The PRC is scheduled to meet on May 6 to plan the next steps for the acquisition process itself.
Iyla Hernden contributed to this reporting. Support for this coverage comes from the W.K. Kellogg Foundation.
