Lawyers for New Mexico’s largest electric company and the private equity firm seeking to acquire it argued Thursday that a $400 million stock sale did not violate New Mexico law. The testimony came as part of an eight-hour evidentiary hearing before the Public Regulation Commission, during which protesters gathered outside PNM’s downtown headquarters.
Blackstone and PNM’s parent company, TXNM Energy Inc., jointly announced the proposed $11.5 billion acquisition in 2025. If approved, it would give ownership of TXNM to Blackstone subsidiary Troy ParentCo LLC. Officials with the companies have long maintained that the takeover would quickly give PNM the capital it needs to “to thrive in a rapidly changing energy environment.”
Public Regulation Commission hearing examiners opened an investigation into the stock sale in March and paused the main acquisition proceedings after the Albuquerque anti-poverty nonprofit Prosperity Works sounded alarms over the $400 million transaction and argued that it could have violated the Public Utilities Act.
Attorneys for Prosperity Works and PNM and Blackstone disagreed Thursday as to whether the law requires the PRC to sign off on stock sales like this before they go through. Those representing PNM and Blackstone argued that the sale was not “for the purpose” of the acquisition and that the law, therefore, didn’t apply.
“Prosperity Works’ interpretation produces results that are so at odds with the statute’s structure that it, respectfully, cannot be correct,” Troy ParentCo LLC attorney Anna Rotman said during the hearing.
Steve Michel, an attorney representing Prosperity Works, disagreed. Opposing lawyers were “making this a whole lot more complicated than it is or has to be,” he said, adding that “a first-year law student” could have figured out that the law requires prior PRC approval.
During cross-examination, PNM and TXNM President and CEO Don Tarry reiterated what a Blackstone spokesperson previously told Source NM — that the stock sale had no bearing on the pending acquisition and was “to meet the needs of PNM and Texas-New Mexico Power.” However, he said that, looking back, it “would have been beneficial” to seek PRC approval for the stock sale.
Hearing examiners presiding over the meeting did not indicate when they intended to make a recommendation to PRC commissioners on whether the sale violated state law. The Public Regulation Commission is expected to announce a revised schedule for the main acquisition case no later than May 8, according to the commission’s website.
Protest outside PNM’s HQ
While the hearing played out, a crowd of about 100 set up outside PNM’s downtown Albuquerque headquarters at noon with megaphones and picket signs to protest the proposed acquisition.
The crowd participated in chants of, “We need clean air, not another billionaire” and raised signs with slogans including, “Stop corporate greed,” “PNM ratepayers say no! Bye bye Blackstone” and “CEO fatcats break the law to snatch your money in their claws.”
“Blackstone is cheating the people and we don’t want their cheating,” Linda Starr, an Albuquerque resident, told Source NM. “We want clean water, clean air and a healthy environment. They think they’re fooling us, but they’re not.”
After about an hour of protest, Sen. Harold Pope (D-Albuquerque), who’s running to be lieutenant governor and earlier this week co-signed a letter with 15 other state lawmakers urging the PRC to shoot the deal down, grabbed the megaphone from organizers and told the crowd to call the state representatives and senators who haven’t publicly opposed the proposed takeover.
“I just don’t see a benefit to ratepayers…we’re going to end up getting screwed in the end because they come in seeking profit,” Pope told Source NM, adding that the state government should explore helping PNM in its search for capital. “They’re not here to make an investment. They’re here to make money.”
Republican state lawmakers — including Sen. Jay Block (R-Rio Rancho) and Rep. Brian Baca (R-Los Lunas) — and Navajo Nation President Buu Nygren, by contrast, backed the proposed acquisition during a recent PRC meeting’s public comment period.
