Dive Brief
- TXNM Energy has completed the reversal of the $400 million stock sale tied to Blackstone’s proposed acquisition of the company, according to a New Mexico Department of Justice response filed Wednesday with state utility regulators. In July, the New Mexico Public Regulation Commission declared the transaction “void and of no effect” after finding that the share issuance required the commission’s prior approval.
- The PRC’s order required TXNM and its transaction partners to file a compliance report documenting how they returned the money. TXNM borrowed $400 million through a 30-month Wells Fargo term loan to repay Troy TopCo, the Blackstone affiliate that bought the stock, and canceled the roughly 8 million shares issued. Troy TopCo also repaid $13.3 million in dividends it had received, recent filings show.
- The DOJ’s response focused on whether TXNM’s replacement financing could create indirect costs for ratepayers of its operating subsidiary Public Service Company of New Mexico, or PNM. The agency said the amended compliance report does not provide enough information to make that determination and recommended that PNM “be prepared to book a regulatory liability” in its next rate case to ensure customers are not charged for its effect.
Dive Insight
TXNM Energy owns PNM, New Mexico’s largest electric utility, which serves nearly 550,000 customers across the state. Blackstone announced its proposed acquisition of TXNM on May 19, 2025.
The PRC’s July 2 order required TXNM to certify that costs associated with the transaction would not be charged to New Mexico ratepayers. In response, TXNM and its prospective Blackstone owner said any financial impact would remain at the holding-company level and would not flow through to PNM customers.
TXNM disclosed in its July 27 compliance report, though, that the additional debt could weaken its financial position and affect its creditworthiness. The company estimated that the debt could reduce key credit measures by about 80 basis points under Moody’s methodology and by 100 basis points under S&P Global Ratings’ approach.
The DOJ is seeking more information on whether those effects could extend beyond TXNM’s balance sheet. The agency requested details on the borrowing, including the interest rate and terms, and whether TXNM sought more favorable financing. It also asked for workpapers or outside analyses supporting the company’s estimates of the impact on its credit metrics, credit rating and cost of capital.
In an emailed statement to Utility Dive on Sept. 10, PNM spokesperson Eric Chavez said the financing issue has been resolved since the July 27 filing. The company maintains that TXNM has issued new equity in compliance with the state regulator’s rules and orders and repaid the Wells Fargo term loan, restoring its credit metrics.
“We remain confident the rollback does not create costs for New Mexico customers and will continue providing information that shows ratepayer protections remain intact,” Chavez said. “The companies will continue working with the Commission and parties to ensure the record reflects that New Mexico customers are protected and that the acquisition delivers meaningful customer and community benefits.”
The DOJ’s filing comes as questions about customer protections continue to shape the proposed Blackstone acquisition. A petition signed by more than 50 New Mexico organizations and 1,400 people asks senior state officials and both candidates for governor to explore a public investment in TXNM Energy.
Meanwhile, the PRC is seeking guidance from the New Mexico Supreme Court on the standards it must apply when reviewing the merger. In a late August filing, a commission attorney asked the justices to consider “whether, and to what extent” an analysis of proposed public benefits and consumer protections must be included in the commission’s review.
The question arose after the PRC approved the $1.25 billion sale of New Mexico Gas Co. to Louisiana-based private equity firm Bernhard Capital Partners on July 30. The commission has asked the Supreme Court for an expedited decision, citing the pending Blackstone proceeding.
Blackstone’s proposed acquisition of TXNM Energy remains subject to PRC review. The companies have extended the deadline for either side to terminate their merger agreement to May 31, 2027, giving the deal additional time to move through regulatory review.
