New Mexico’s largest utility and the firm seeking to acquire it file responses to a state investigation
Officials for New Mexico’s largest electric company and the private equity firm looking to acquire it told state regulators this week that they stand behind their $400 million stock sale. Critics, including environmental advocates and the New Mexico Attorney General, had previously questioned whether the sale violated state law and state regulators opened a formal investigation into the matter.
The state investigation was the latest development in the controversial proposed sale.
PNM’s parent company TXNM Energy Inc. and private equity firm Blackstone Infrastructure first announced their plans for an $11.5 billion acquisition in 2025, setting in motion regulatory approval by the state Public Regulation Commission. Opposition to the sale emerged in both procedural filings and public hearings.
In February of this year, the Albuquerque anti-poverty nonprofit Prosperity Works and New Mexico Attorney General Raúl Torrez raised concerns that a mid-2025 $400 million stock sale between TXNM and a Blackstone affiliate had violated the state Public Utilities Act, which charges the PRC with overseeing stock sales. The law states in part that stock sales can only happen “with the prior express authorization of the commission.”
The state Public Regulation Commission in March opened a formal investigation and gave PNM and Blackstone until this week to submit proof that the deal did not violate any laws.
The utility and the private equity firm have contended that the $400 million sale was necessary to support TXNM’s operations while the merger is pending.
“The stock sale was for the purpose of funding TXNM’s operating and capital budgets and did not benefit or support our efforts to acquire TXNM,” a Blackstone spokesperson wrote in an email to Source NM.
In a Monday filing, PNM and Blackstone argued that their opponents’ arguments rely on an interpretation of a law that “appears beguilingly simple at first blush” and wrote that the state Supreme Court has not relied on a simple interpretation of this law when it would lead to an “absurd” result.
In the filing, the companies also proposed an alternative. If the commission finds that the stock sale required prior authorization, the companies proposed an alternative arrangement that would allow the utility to hold on to the money and bar Blackstone from being a shareholder until the PRC made a final decision.
“The stock issuance was done in good faith, communicated publicly with advance notice, and with no intent to circumvent any rules or regulations,” a PNM spokesperson wrote in an email to Source NM, adding that the stocks were not sold in exchange for control.
Critics, however, say the alternative proposal would make the existing law little more than window dressing.
“They want the commission to ignore the law so they can keep the benefits of an unlawful stock acquisition,” Mariel Nanasi, executive director of the Santa Fe clean energy advocacy organization New Energy Economy, told Source NM. “That’s a textbook attempt to do indirectly what the law forbids directly. You can’t take an unlawful transaction, rename it and keep the money. That would render the statute meaningless.”
In a Monday filing of its own, Torrez’s New Mexico Department of Justice countered that the merger hinged on the stock sale and violated state law because the PRC did not get a chance to approve the sale before it took place.
