Brief Overview:

  • New Mexico utility regulators are reviewing a $400 million stock purchase tied to Blackstone's acquisition of TXNM Energy, with the state attorney general and consumer advocacy groups calling for the merger to be rejected.
  • Blackstone's proposed $11.5 billion acquisition of TXNM, the parent company of Public Service Company of New Mexico, has received several approvals but still requires final permission from the New Mexico Public Regulation Commission (PRC).
  • The controversy centers on a stock issuance completed in June 2025: TXNM sold 8 million newly issued shares to a Blackstone affiliate. Regulators are reviewing this transaction in conjunction with the merger, questioning whether it required prior approval under state law and whether it was properly disclosed or structured in the acquisition. The commission's revised procedural order issued on May 8 set a public evidentiary hearing for August 17.

In-Depth Analysis:

It remains unclear whether the financing issue will affect acquisition approval. The proposed agreement was announced in May 2025, with a target to close the deal in the second half of 2026.

Arif Gasilov, a partner at sustainability and ESG consulting firm Gasilov Group, said the stock purchase is at the heart of the regulatory dispute because it may have given Blackstone a substantial financial position before regulators had the opportunity to impose conditions on the deal.

He added that the dispute could indicate either a significant regulatory oversight or a strategic move by Blackstone to address or overcome state regulatory concerns.

"The statute is unusually blunt about unauthorized transactions: 'void and of no effect,'" Gasilov said in an email to Utility Dive.

He noted that New Mexico regulators have previously rejected major utility deals, including the rejection of Avangrid's bid to acquire PNM in 2021, indicating regulators' willingness to veto transactions that do not meet commission standards.

Gasilov said the outcome of this case could set a precedent for how much influence state regulators retain in utility acquisitions, especially when companies take financial positions before formal approval.

The stock purchase agreement was announced concurrently with the merger, and SEC filings show Blackstone agreed to vote the shares in favor of the deal.

Blackstone and TXNM Energy argued in briefing materials that the transaction does not require prior PRC approval because it is independent of the merger and falls outside the scope of utility acquisition regulations.

"We remain confident that the transaction will receive the necessary approvals and continue to believe it brings long-term benefits to New Mexico, including the commitments made in the merger application," Blackstone spokesperson Connor Scannell said in an email.

The companies also stated that the stock sale "followed the Public Utility Act" and was completed in good faith, "without any intent to circumvent any rules or regulations."

TXNM said it continues to move forward with the regulatory process in New Mexico, and the revised procedural schedule, including the August hearing, still supports closing the acquisition by the end of the year. The company added that it does not expect the investigation to affect the transaction or already-approved matters.

"We believe the outcome of the current investigation should not impact the proposed acquisition," TXNM spokesperson Eric Chavez said in an emailed statement.

Opponents said Blackstone's financing approach could put upward pressure on future rates and urged the PRC to dismiss Blackstone's acquisition application with prejudice.

Case records show that Albuquerque consumer advocacy group Prosperity Works filed a motion in February, prompting the commission to issue an order to show cause. Other advocates, including New Energy Economy in Santa Fe and the New Mexico Attorney General's Office, have argued that the acquisition should be denied if violations are confirmed.

Intervenors argue the issue is not the stock purchase itself but the timing of the transaction, stating that Blackstone obtained a substantial financial stake in TXNM before state regulators had the opportunity to review the acquisition and negotiate customer protections. The financing structure dispute comes as the deal advances through other regulatory reviews.

Federal regulators, including the Federal Energy Regulatory Commission (FERC) and the Federal Communications Commission (FCC), as well as Texas utility regulators, have approved the transaction. According to company filings, FCC approval was necessary because TXNM holds communications-related assets or licenses subject to change-of-control review.

In addition to PRC approval, the transaction also requires approval from the Nuclear Regulatory Commission (NRC).

In August 2025, TXNM filed an application with the Public Utility Commission of Texas (PUCT) seeking approval for Blackstone Infrastructure to acquire the company.

The application states that the transaction will keep TXNM's headquarters in Texas and maintain local management, while protecting PUCT-regulated rates, union commitments, and board oversight. The deal also includes approximately $35 million in customer rate credits over four years, as well as $10 million in economic development funds and $5 million in community support funds over ten years.