LOCAL COLUMN
OPINION: The governor doesn't get it, let's hope the PRC does
In her column published by the July 26 Sunday Journal, Gov. Michelle Lujan Grisham admonishes us to 鈥渓et it (the Public Regulation Commission) do its job鈥� and implies it is adequately empowered to regulate any owner of Public Service Company of New Mexico or its parent company to protect and ensure 鈥渞eliable, affordable and clean energy for every New Mexican.鈥�
In telling us 鈥渨e need investment of private partners to ensure a reliable energy grid and achieve our climate goal of 100% carbon-free electricity by 2045,鈥� she reveals her understanding of 鈥渃apital鈥� does not differentiate between sources that loan money to independent public companies and those that leverage their funds to fully acquire and privatize those public companies in order to extract into their own accounts every penny of future value growth.
The former is an unrestricted standard business practice. The latter is what has allowed Blackstone to become a formidable global financial titan since its modest inception in 1985 and has made its principal owner, chairman and CEO Stephen Schwarzman personally worth an estimated $50 billion and a consequential campaign funder and adviser to Donald Trump.
The governor鈥檚 naivety on this score appears to be shared by New Mexico鈥檚 chambers of commerce and various unions. As evidenced by outspoken citizens in multiple open public meetings since February, it is not shared by the general public, whose interests the PRC is mandated to serve.
The PRC鈥檚 decision on Blackstone鈥檚 acquisition of TXNM Energy must be based purely on whether it serves the public interest 鈥� not on whether it is legal, and not on whether a few million dollars in trivial community benefits justify handing over billions in future company value to private hands.
Texas utility regulators have shown their true colors by rolling over without a whimper. Let鈥檚 hope New Mexico鈥檚 regulators are made of better mettle.
Electricity will be the most essential energy resource for the future march of human progress. It will matter enormously how New Mexico navigates its electrical energy priorities, infrastructure development, allocation and rates. The critical bottleneck will not be capital availability, regardless of who owns PNM. It will likely be transformers, an essential enabler of the grid and one that is already constrained in the U.S. by inadequate manufacturing and critical component supplies controlled by China.
Whether needed capital for PNM infrastructure comes from private equity or borrowing from private capital markets, it will be financially managed the same way, as a balance sheet asset expensed through amortization. Blackstone is not a charity. Any portion of its upfront sprinkling of 鈥渃ommunity benefits鈥� will be recouped down the road and, if its well-documented history is any guide, in spades.
The public understands quite clearly the challenges the PRC will face in regulating a PNM that is fully privatized and buried in Blackstone鈥檚 investment portfolio, no longer subject to the financial transparency and reporting requirements of the Securities and Exchange Commission. The army of financial engineers, lawyers and quants working for and within Blackstone will be able to run circles around the comparatively meager staff resources of New Mexico鈥檚 PRC.
It cannot be in the public interest for an essential utility monopoly to be privately owned. New Mexicans should not be deprived of the opportunity to directly acquire and own shares of a publicly traded company whose value growth is driven by the rates they pay.
When their 鈥渏ob鈥� is to serve the public interest, it is not enough to just let regulators 鈥渄o it.鈥� The public must demand what the job actually looks like.
Jaemes Shanley is a retired business executive and president of the Mark Twain Neighborhood Association in Albuquerque.
