Public weighs in on $11.5 billion Blackstone-TXNM Energy merger
Opponents raise concerns over potential rate hikes and corporate profits, while supporters highlight job growth and grid investments at Public Regulation Commission hearing.
ALBUQUERQUE, N.M. —
Private equity firm, Blackstone Infrastructure, is attempting to acquire TXNM Energy, the parent company of PNM, which is also New Mexico’s largest electric utility provider. The Public Regulation Commission held a public hearing Tuesday, starting at 1 p.m. in the UNM student union building, to allow New Mexicans to share their thoughts on the $11.5 billion merger.
Many who took the stand said the merger should not move forward until the companies first resolve a stock transaction that regulators say violated state law. Others argued that privately owned companies are not the right direction for the state.
“I think the fact that we call investor-owned utilities, IOUs, they want to spend 20 million here and do all this stuff,” an Albuquerque resident said.
Several residents expressed worry that Blackstone would take advantage of customers for its own benefit, calling for the commission to prioritize people over profit.
“Blackstone will invest and manage TXNM to maximize rates approved by you, but mainly to maximize return to them and their shareholders on every penny spent to the value accretion of the company,” Albuquerque resident James Shamley said.
Not all attendees were in opposition. Some supporters argued that Blackstone will bring good-paying jobs and benefits. Supporters also highlighted that Blackstone plans to invest $20 million in apprenticeships, which they said will keep youth in the state and stabilize jobs. Representatives from the Chamber of Commerce also attended, stating that Blackstone will help New Mexico maintain a power grid that the state is currently outgrowing.
“The private sector must be able to grow if, in fact, jobs are to grow in New Mexico and salaries are to grow in New Mexico. TXNM does not have the available cash to make the investments required to grow,” Albuquerque resident Sherman Burke said.
Attendees also questioned whether their electric bills will go up. The utility rate-setting process begins when a utility tells regulators how much money it says it needs to maintain the system, keep the lights on, and make a fair profit.
“The whole effort is to try to find that line where the people are protected in providing affordable rates at the same time providing a reasonable rate of return to the investors who have their capital at risk,” commissioner Greg Nibert said.
Commissioners indicated that increased bills may be inevitable.
“I don’t know what they will go up by. El Paso Electric, which is a case that’s before us now, they’ve requested a substantial increase,” Nibert said.
Commissioners described the situation as a perfect storm, citing rising equipment prices at a time when New Mexico needs to rebuild its system.
“There’s a number of drivers of cost of of energy inflation, buying the equipment that is needed to distribute and transmit that energy from the generating station to your home-all that equipment is going up in price,” Nibert said, “We’re replacing old generation units that have been online for 40, 50, 60, 70 years,” he added.
