The potential acquisition of New Mexico’s largest utility provider by an outside private equity firm took a major blow Thursday at a hearing in Santa Fe. State regulators voted to reverse a $400 million stock sale between the two companies, saying they broke state law when they went through with the sale without getting approval first.
The New Mexico Public Regulation Commission voted 2-1 to support an order reversing the sale. The larger acquisition remains unaffected, with a hearing on that scheduled to begin August 17.
Last June, Blackstone purchased 8 million shares, or about a 7% stake, of TXNM Energy, the parent company of the Public Service Company of New Mexico. The sale came just a month after the companies announced an 11.5 billion dollar acquisition of TXNM by Blackstone.
Regulators also ordered the companies to pay a total of $300,000 in fines in addition to reversing the sale. Commissioner Greg Nibert was the sole vote in opposition. He presented an alternate order that would have reduced the fines and would not have required the $400 million to be returned, saying the law regulating the deal is vague.
Commissioner Gabriel Aguilera could not see Nibert’s logic.
“There's no confusion there, and I continue to not see the ambiguity in the statute,’ Aguilera said. “To me it's clear.”
Moreover, he said while he agrees with Nibert’s point that being forced to return the $400 million dollars could harm PNM financially, the order requires the company to pay that money back in a way that does not affect ratepayers.
“This is an issue of their own doing” he said, “and we need to ensure that it's undone in a way that holds customers harmless.”
Youth United for Climate Crisis Action, or YUCCA NM, have been organizing against the acquisition since its announcement. YUCCA’s Zephyr Jaramillo told KUNM while the PRC’s decision is a victory for the organization, it won’t be slowing down anytime soon.
“We will continue organizing to ensure New Mexico's essential infrastructure is never treated as just another asset for private equity to buy and profit from,” Jaramillo said. “We believe our communities, not Wall Street investors, should have a voice in shaping our energy future, and we will keep building that power together.”
Last month hearing examiners found the sale violated the state’s Public Utility Act. They recommended the PRC reverse the sale, and issue maximum fines, largely guiding the PRC’s final order Thursday.
The PRC has instructions on how to provide feedback on the acquisition at its website. Opponents of the deal argue selling the utility to a private equity firm will ultimately hurt ratepayers. Supporters say it will give PNM the money to make urgently needed upgrades to energy infrastructure, and meet emission goals.
Support for this coverage comes from the W.K. Kellogg Foundation.
