Houston Chronicle examines risks of Blackstone’s proposed TXNM takeover

A recent investigation by the Houston Chronicle examines what Blackstone’s proposed acquisition of TXNM could mean for electricity customers across Texas and New Mexico. The story highlights concerns from small businesses, consumer advocates, and regulators about higher electricity rates, reduced transparency, and whether private equity ownership could shift priorities away from reliable, affordable service as electricity demand rises, driven in part by data centers and artificial intelligence development.

TXNM, parent company to two electric utilities, PNM and TNMP, announced plans to be acquired by Blackstone’s Infrastructure platform in May of 2025 in a $11.5 billion take-private deal. This proposed acquisition would impact PNM and TNMP’s combined 800,000 residential and business customers in New Mexico and Texas, respectively. Blackstone has indicated that the firm is looking to purchase TXNM through its Blackstone Infrastructure Partners evergreen fund, whose investors include major public pension systems as well as the Public Investment Fund of Saudi Arabia, the largest investor in the fund earmarked for the utility acquisition.

To complete the proposed acquisition, Blackstone and TXNM must obtain approvals from a variety of state and federal regulatory agencies, including the Federal Energy Regulatory Commission, the New Mexico Public Regulation Commission, and the Public Utility Commission of Texas. For state utility regulators to approve this deal, it must be deemed to be in the public interest. The joint application outlines proposed benefits such as capital investments, temporary customer rate credits, and the retention of local management, but digging into the details of these proposed benefits shows they only scratch the surface of what may be needed to provide true ratepayer protections against the proposed risks of the acquisition.

An expert witness with access to non-public trade secret information described Blackstone’s plan to meet TNMP’s capital needs as relying on double leverage, a high risk tactic known for amplifying returns for investors while risking financial strain at the portfolio company, which is responsible for paying back that debt. Temporary customer rate credits, which amount to only a few dollars per month for many customers, could be quickly erased if Blackstone and TXNM file future rate cases seeking approval to raise electricity rates.

The Houston Chronicle reports that public evidence shows electricity rates could more than double during the period Blackstone owns Texas-New Mexico Power, increasing at a 6.5% compound annual growth rate, according to testimony submitted to regulators. Key details related to projected rate increases remain redacted from public view, heightening concerns about transparency. The article quotes Alissa Jean Schafer, a director with the Private Equity Stakeholder Project, who warned that private equity’s business model creates intense pressure on utilities to extract profit from customers. “Private equity’s ‘handbook’ is to be riskier and more aggressive in their investments to deliver higher returns than the public stock market,” Schafer said. “That means there is likely to be immense pressure to get as much profit out of the utility’s customers as possible”.”

The story also cites concerns about reduced disclosure if TXNM is taken private. Nichole Heil, a researcher at the Private Equity Stakeholder Project, warned that removing the utility from public markets could mean “the public might lose some understanding of why their bills are going up.”

Additional scrutiny has focused on Blackstone’s extensive data center investments and the risk that utility customers could be exposed to cross-subsidization. Blackstone has not been shy about the firm’s enthusiasm for investing in data centers or participating in the AI boom, and currently manages $85 billion worth of data centers globally. Federal regulators have already found Blackstone’s application deficient in explaining how TXNM customers would be protected from being inappropriately used to benefit other Blackstone-owned companies, reinforcing concerns raised by consumer advocates as regulatory reviews continue in Texas, New Mexico, and at the federal level .