NM recommendation shows why Blackstone should not own PNM utility

PESP: New Mexico recommendation shows why Blackstone should not own PNM utility

Hearing examiners’ finding that Blackstone and TXNM violated state law raises new doubts about proposed utility takeover

Santa Fe, NM — The Private Equity Stakeholder Project (PESP) today said a recommendation from New Mexico Public Regulation Commission hearing examiners finding that Blackstone and TXNM Energy violated state law reinforces concerns that private equity ownership is incompatible with the public-interest obligations of regulated utilities.

The recommendation concluded that Blackstone and TXNM violated New Mexico law and recommended significant penalties related to Blackstone’s proposed acquisition of TXNM Energy, parent company of Public Service Company of New Mexico (PNM). The recommendation comes as the Public Regulatory Commission (PRC) continues to evaluate whether Blackstone’s proposed takeover of New Mexico’s largest electric utility is in the public interest.

“This week’s recommendation validates what many New Mexicans have been concerned about from the beginning: private equity firms view utilities as financial assets first and public services second,” said Nichole Heil, Senior Research Coordinator at PESP. “Regulators should carefully consider whether Blackstone is the right steward for an essential public service that hundreds of thousands of New Mexicans rely on every day.”

The recommendation adds to concerns PESP has previously raised regarding affordability, labor practices, and private equity ownership of essential utilities. PESP has warned that private-equity-style return expectations can create pressure for higher utility rates while shifting focus away from the long-term interests of customers and communities.

Blackstone has pointed to its current utility investment as evidence of its expertise to NM regulators. In Blackstone’s application to the NM PRC, the company cited its investment in Northern Indiana Public Service Company (NIPSCO) as experience that would benefit New Mexico customers. Yet NIPSCO has faced significant scrutiny over affordability concerns, some of the highest utility bills in Indiana, and a month-long lockout involving approximately 1,600 union workers. According to the Energy and Policy Institute, nearly 20% of NIPSCO customer bills go to profit, ranking the utility among the highest in the nation for the share of customer bills devoted to profit.

“Blackstone has pointed to NIPSCO as evidence of its utility expertise. If that is the case, regulators should pay close attention to what customers and workers have experienced there,” Heil said. “New Mexicans deserve answers about affordability, labor relations, and whether utility decisions will be driven by the needs of New Mexicans or by Blackstone’s return expectations.”

The New Mexico hearing examiners’ recommendation echoes concerns raised in other utility proceedings. During BlackRock’s acquisition of Minnesota Power, an administrative law judge warned that private-equity-style return expectations could create pressure for higher utility rates because utility customers cannot turn to competitors if costs increase. While that acquisition was ultimately approved, the recommendation underscored broader concerns about the compatibility of private equity ownership and the public-interest obligations of regulated utilities.

Beyond utilities, Blackstone has faced scrutiny over labor, environmental, and consumer issues across its portfolio. PESP’s Private Equity Labor Scorecard gave Blackstone an F grade based on wage-and-hour violations, OSHA violations, layoffs, and other labor concerns at portfolio companies. At Blackstone-owned Great Wolf Lodge locations, the company hired anti-union consultants during worker organizing campaigns in 2024. Blackstone-owned Packers Sanitation was also at the center of allegations of child labor involving more than 100 children working hazardous overnight shifts cleaning industrial meat-processing equipment.

Blackstone’s growing involvement in data centers has also raised concerns. The firm owns QTS, a major data center developer that proposed controversial projects in Indiana and has faced scrutiny in Georgia after residents discovered a QTS facility had consumed nearly 30 million gallons of water through improperly tracked hookups.

“The Commission’s responsibility is to protect New Mexicans, not Blackstone’s investments,” Heil said. “The hearing examiners’ recommendation should serve as a warning sign for commissioners evaluating whether this acquisition is truly in the public interest. New Mexicans deserve a utility focused on serving their community, not one ultimately accountable to a trillion-dollar Wall Street firm.”