LOCAL COLUMN
OPINION: Stock sale reversal shows regulatory process is working
The Public Service Company of New Mexico building in Downtown Albuquerque.
When the Public Regulation Commission voted to require Blackstone Infrastructure and TXNM Energy to unwind an unlawful $400 million stock transaction, some questioned whether enforcing New Mexico law would unnecessarily complicate the proposed acquisition of our state's largest electric utility.
A few weeks later, we have our answer.
Blackstone has extended its acquisition timeline, and TXNM Energy, the parent company of Public Service Company of New Mexico, has announced plans to reverse the unlawful stock transaction exactly as the commission ordered before continuing to seek regulatory approval. Far from demonstrating that the PRC overreached, those actions show the regulatory process worked exactly as it should. The companies corrected the violation, the transaction remains on track, and the commission will now continue evaluating the separate question of whether the proposed acquisition serves the public interest.
The question before the PRC was never whether Blackstone should ultimately be allowed to acquire PNM. That question remains pending.
The issue before the PRC was much narrower: Did the companies complete a major stock transaction without first obtaining approval required under New Mexico law?
After months of testimony, documentary evidence, legal briefing and review by independent hearing examiners, the commission concluded they did. The companies are now taking steps to correct that violation 鈥� exactly how regulatory oversight is supposed to function.
Some argued that requiring the transaction to be unwound would create financial hardship or jeopardize the acquisition. The companies' swift response suggests otherwise. They have announced plans to reverse the transaction, secured financing to do so and continue pursuing regulatory approval. Enforcing the law did not end the acquisition. It required the companies to follow the process New Mexico law demands.
The approval requirement was not an arbitrary technicality. Transactions of this size and significance can affect who controls essential public infrastructure and how that infrastructure is managed for years to come. That's precisely why New Mexico law requires public review before 鈥� not after 鈥� they occur.
Allowing potential costs to excuse violations of the law would have created a far more troubling precedent. Any company could argue that complying with regulatory requirements had become too expensive because it chose to move forward without approval. That is not how the rule of law works.
By requiring the companies to correct the unlawful transaction while ensuring shareholders 鈥� not ratepayers 鈥� bear the costs, the commission reinforced a principle that extends far beyond this case. If the commission had allowed this violation to stand, it would have weakened the legal protections that govern every future utility acquisition in New Mexico 鈥� not just this one.
Utilities provide essential services. Their decisions affect household budgets, business investment, reliability and the future of New Mexico's energy system. The laws governing utility ownership exist because changes of this magnitude deserve independent public review before they occur. Those protections only have meaning if they are enforced consistently.
Whether this acquisition ultimately serves the public interest remains an open question, and it deserves careful review. The commission should examine whether the acquisition provides meaningful benefits for New Mexico customers, whether adequate protections exist against future risks, and whether transferring ownership of our state's largest electric utility will strengthen the system New Mexicans rely on every day.
One question, however, has already been answered.
The companies were required to follow New Mexico law before moving forward, and they are now taking the steps necessary to do so.
That isn't a setback for responsible investment. It's what responsible investment looks like: following the law, correcting mistakes and earning the public's trust through the process established to protect it.
Cara Lynch is an attorney for Prosperity Works, a New Mexico nonprofit dedicated to advancing economic security and protecting consumers through public policy and regulatory advocacy.
