New Mexico regulatory staff finds $400M stock sale between PNM, private equity violated state law

The New Mexico Public Regulation Commission’s staff on Monday determined that the state’s largest electric provider and the private equity firm seeking to acquire it violated state law in 2025 by conducting a $400 million stock sale tied to the takeover without first obtaining PRC approval.

Hearing examiners late Monday morning issued a recommended decision, which requires PRC approval, to reverse the stock sale and mandate PNM and Blackstone Infrastructure produce a written report explaining how they reversed the deal and how they will make sure ratepayers are not adversely affected. They also recommended maximum penalties against both companies.

The transaction has been the subject of several complaints as PNM and Blackstone work toward an $11.5 billion acquisition.

The Albuquerque anti-poverty nonprofit Prosperity Works and New Mexico Attorney General Raúl Torrez in February raised concerns that the deal violated the state’s Public Utilities Act, which they argued tasks the PRC with approving certain stock sales.

PRC hearing examiners subsequently opened an investigation into the sale in March and paused proceedings on the overall acquisition.

At an April hearing, representatives from both companies said they stood behind the sale and denied any wrongdoing. The sale, they said, was meant to boost PNM and TXNM’s ongoing operations and had no bearing on the overall acquisition.

However, Don Tarry, president and CEO of PNM and its parent company TXNM at the April hearing said it “would have been beneficial” to first seek PRC approval for the stock sale.

In their recommended decision Monday, PRC hearing examiners wrote that the sale “has created legal and procedural questions that may materially affect” the overall acquisition, adding that “the interests of administrative efficiency, procedural integrity, and fundamental fairness may require” both parties to withdraw their application and file a new one that more reflects the steps taken to address the stock sale.

The hearing examiners also recommended imposing the maximum penalties allowed under law on both companies, “due to the deliberate disregard” of obtaining the commission’s prior approval. In particular, they recommended a $100,000 penalty on TXNM and two $100,000 penalties on the Blackstone affiliates that participated in the stock sale.

“This is a resounding victory for the rule of law,” Mariel Nanasi, executive director of the Santa Fe-based clean energy advocacy organization New Energy Economy, said in a statement. Nanasi and her organization frequently intervened in the case. “Blackstone and TXNM thought they could close a $400 million merger-related stock deal first and ask questions later,” she said. “New Mexico law says otherwise.”

PNM and Blackstone did not immediately respond to Source NM’s requests for comment.