A potential $240 million in refunds to customers has become a contentious issue as Prosperity Works files a new claim with the Public Regulation Commission. The Albuquerque-based nonprofit is now pushing for rate credits after regulators canceled a $400 million stock deal between TXNM Energy Inc. and Blackstone Inc. According to the group, the state agency voided the stock transaction on legal grounds and the company should now make good for customers.
Regulators Voided the Stock Sale
In early July, state regulators decided the stock deal violated New Mexico law. This move was part of a larger merger agreement in which Blackstone obtained a 7.59% stake in TXNM. The Public Regulation Commission ordered the companies to cancel the transaction and slapped them with a $300,000 collective fine for breaching regulations. The deal had originally been part of a broader merger that could reshape the state’s energy landscape.
TXNM Energy responded to the voided deal by using $400 million in new debt to repurchase the shares it had sold to Blackstone. However, Prosperity Works claims the company gave up a $350 million termination fee in the merger agreement, which is a significant amount potentially tied to customer refunds. The nonprofit argues that waiving this claim was a poor decision by TXNM, ultimately harming ratepayers.
Despite the PRC’s regulatory actions, TXNM and Blackstone have agreed to extend their merger agreement until May 2027. While several other agencies, including the Public Utility Commission of Texas and the Federal Energy Regulatory Commission, have already approved the deal, the PRC is still in the process of evaluating it. These other bodies have cleared the transaction for moving forward, but the final approval remains in New Mexico.
In a statement, a TXNM spokesperson dismissed Prosperity Works’ claim as “incorrect.” The company maintains it had no legal standing to collect a termination fee from Blackstone. The spokesperson added that TXNM plans to address the issue through the Commission process, emphasizing the company’s vision for long-term benefits to New Mexico and the communities it serves.
Blackstone, the private equity firm at the heart of the debate, has remained silent on the issue, offering no public comments on the nonprofit’s latest filing. Prosperity Works, however, remains steadfast in its argument, accusing TXNM of compromising public interest by forgoing the potential claim. The group is determined to ensure that customers benefit from the situation.
Now, the three-member Public Regulation Commission is the final regulatory gatekeeper, holding the key to whether the $11.5 billion merger will proceed. As TXNM and Blackstone work toward finalizing their agreement, the pressure is mounting for the PRC to deliver a decision that will determine the outcome of the high-stakes deal.