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Blackstone's Utility Gambit in New Mexico Could Slip Away
The walls appear to be closing in on private equity giant Blackstone and TXNM Energy, the utility company serving 800,000 customers in Texas and New Mexico which Blackstone is seeking to acquire for $11.5 billion. Because of an illegal equity investment Blackstone made in TXNM before the deal received approval by regulators, the firm might have to pay a hefty fine—or scuttle the entire thing.
As the Prospect reported in February, the state’s Public Utility Act is unmistakably clear: Stock of a utility or utility holding company may only be acquired “with the prior express authorization” of the New Mexico Public Regulation Commission (PRC). But that is exactly what Blackstone failed to do when it purchased eight million TXNM shares a year ago through a private placement. At no point did Blackstone or TXNM seek regulatory approval ahead of time, contravening the statute governing utility acquisitions in New Mexico.
On June 8, staff at the PRC issued their verdict: The $400 million equity transaction was indeed unlawful.
The PRC staff’s recommended decision makes clear that the purchase of TXNM shares was “inextricably linked” and undertaken “for the purposes” of the proposed acquisition. Concurrently, staff recommended the withdrawal of the pending application, and should the joint applicants decide to pursue a regulatory do-over in the future, “submit a new application that fully accounts for the consequences of the unlawful transaction and any corrective actions undertaken.” It also advised the PRC to levy maximum penalties against Blackstone and TXNM due to their “deliberate disregard” of the regulator’s authority; Blackstone and TXNM could face fines of up to $200,000 and $100,000, respectively.
As the Prospect reported in February, the state’s Public Utility Act is unmistakably clear: Stock of a utility or utility holding company may only be acquired “with the prior express authorization” of the New Mexico Public Regulation Commission (PRC). But that is exactly what Blackstone failed to do when it purchased eight million TXNM shares a year ago through a private placement. At no point did Blackstone or TXNM seek regulatory approval ahead of time, contravening the statute governing utility acquisitions in New Mexico.
On June 8, staff at the PRC issued their verdict: The $400 million equity transaction was indeed unlawful.
The PRC staff’s recommended decision makes clear that the purchase of TXNM shares was “inextricably linked” and undertaken “for the purposes” of the proposed acquisition. Concurrently, staff recommended the withdrawal of the pending application, and should the joint applicants decide to pursue a regulatory do-over in the future, “submit a new application that fully accounts for the consequences of the unlawful transaction and any corrective actions undertaken.” It also advised the PRC to levy maximum penalties against Blackstone and TXNM due to their “deliberate disregard” of the regulator’s authority; Blackstone and TXNM could face fines of up to $200,000 and $100,000, respectively.
https://prospect.org/2026/06/17/blackstones-utility-gambit-in-new-mexico-could-slip-away/