PRC Finds Private Equity Giant Violated Law … Consumers Call for End of Bid by Blackstone to Take Over Largest Utility

Consumers Argue Blackstone and TXNM Energy’s Violation Should be Nail in the Coffin That Should End Plan by Private Equity to Take Over New Mexico’s Largest Utility.

Today, the Public Regulation Commission ordered the reversal of the Blackstone and TXNM Energy $400 million stock transaction and pay $300,000 in fines, the maximum allowed under state law.

Two consumer organizations argued a huge private equity firm should be prohibited from gaining control over New Mexico’s largest utility, citing the finding today by the regulators that Blackstone and TXNM Energy violated the law by completing the stock transaction without obtaining the approvals required by the Public Utility Act.

“At the hearing today the public showed up in force. The venue had to be changed when crowds filled the hallway outside. When Commissioners asked for a show of hands opposing the Blackstone acquisition of PNM, hundreds raised their hands. When they asked who was present in support not one hand went up,” stated Mariel Nanasi, Executive Director, New Energy Economy.

Blackstone is considered by many to be the largest private equity and alternative asset management firms in the United States, raising concerns among consumers throughout the state that private investment interests will be placed ahead of New Mexico residents’ rights to have fair electric rates.

“This violation should be the nail in the coffin that ends Blackstone’s bid to take over New Mexico’s largest utility,” said Lavran Johnson, an Albuquerque-based attorney at the Center for Biological Diversity.

Johnson continued in his statement that, “Blackstone has shown us exactly how it operates and it isn’t in the public interest. This private equity firm deserves to be sent packing, not rewarded with control over our electricity. I’m glad the commission is standing up for ratepayers and showing that there will be consequences when a public utility or private company breaks the law.”

Since last fall, Blackstone and TXNM have been seeking approval for a deal that would allow the world’s largest private equity firm to acquire the parent company of PNM, New Mexico’s largest electric utility.

The proceeding before the Public Regulation Commission has been on hold for over three months as regulators reviewed whether such the acquisition violated state law.

While Fines Have Been Imposed and Blackstone and TXNM Have Been Ordered to “Unwind” the Stock Transaction, the Merger is Still Before the PRC.

Noting the Blackstone application to take over the utility is still before the PRC, Nanasi argued, “It is difficult to see how the current merits proceeding can realistically remain on schedule while the Commission simultaneously oversees the unwinding, compliance filing, and any resulting investigation or audit.”

According to the press release from the Center for Biological Diversity, “Today’s decision adopts recommendations from two hearing examiners, who advised the companies to withdraw their acquisition application and start over if they still wanted to pursue the deal.”

“Blackstone’s bid to take over TXNM is tainted by the illegal stock sale, and it should be dead on arrival,” said Johnson. “New Mexicans have made it clear that we don’t want Blackstone to own our public utility, and we’ll keep fighting until this deal is defeated.”

This is a developing story with more reporting likely to come.