Blackstone Seeks Approval for $11.5B Acquisition of TXNM Energy

TXNM Energy has filed applications with state and federal regulators to approve its $11.5B acquisition by Blackstone. The proposed deal requires approval from the New Mexico Public Regulation Commission, Public Utility Commission of Texas, and Federal Energy Regulatory Commission. TXNM Energy seeks to complete the acquisition, which would be one of the largest in the energy industry.

TXNM Energy, a publicly traded utility company, has filed applications with state and federal regulators to approve its $11.5 billion acquisition by Blackstone Infrastructure, one of the world's largest private equity firms. The proposed deal requires approval from the New Mexico Public Regulation Commission, the Public Utility Commission of Texas, and the Federal Energy Regulatory Commission.

The acquisition, first announced in May, is expected to strengthen TXNM Energy's financial capabilities to navigate growing demand and the energy transition. If approved, the deal would provide significant benefits to customers in both New Mexico and Texas. In New Mexico, the Public Service Co. of New Mexico (PNM) has stated that the deal would offer $175 million in customer benefits, including a $105 million rate credit over four years, which would lower the average residential customer bill by 3.5%. In Texas, Texas-New Mexico Power (TNMP) would receive $35 million in rate credits, along with an additional $15 million in other benefits [1].

Critics, however, have expressed concerns about potential rate increases that could negate the credit. Mariel Nanasi, executive director of New Energy Economy, warned that Blackstone's history of prioritizing profits over people could lead to higher rates for customers [1].

This is not the first time New Mexico's largest utility has been targeted for acquisition. In 2020, Avangrid proposed buying PNM's parent company, PNM Resources, for $8.3 billion. The deal was rejected in 2021 due to concerns over potential electricity price increases [1].

PNM President and CEO Don Tarry stated that the energy landscape is changing rapidly, and New Mexico is at a critical point in time. The utility is working to meet targets set by New Mexico's Energy Transition Act, including delivering 100% carbon-free energy by 2040 [1].

Blackstone officials have emphasized their long-term "patient capital" approach and the potential for the acquisition to support TXNM Energy's growth and development. However, customer advocates have lined up to oppose the deal, arguing that it is not in New Mexico's interest and could lead to rate shock for customers [1].

The proposed merger has sparked controversy, with advocates on both sides presenting compelling arguments. As the regulatory process unfolds, the outcome of this deal will have significant implications for both TXNM Energy and its customers.

References:
[1] https://www.utilitydive.com/news/txnm-energy-blackstone-prc-texas-puc/758591/
[2] https://seekingalpha.com/news/4489272-txnm-energy-seeks-ok-from-state-regulators-for-11_5b-blackstone-takeover