power deal
Blackstone clears major step in acquisition of TXNM Energy
A settlement has been reached in a regulatory dispute over Blackstone Infrastructure’s pending acquisition of TXNM Energy, the parent company of Texas-New Mexico Power Co. , which provides electricity in the Houston area. The settlement still must be approved by the Public Utility Commission of Texas.
Aside from Public Utility Commission staffers, participants in the settlement include TXNM Energy, Texas cities served by Texas-New Mexico Power, the Texas Office of Public Utility Counsel, Texas Industrial Energy Consumers, Walmart and the Texas Energy Association for Marketers.
Texas-New Mexico Power, based in the Dallas-Fort Worth suburb of Lewisville, supplies electricity to more than 280,000 homes and businesses in Texas. Ten cities are in Texas-New Mexico Power’s Houston-area service territory:
- Alvin
- Angleton
- Brazoria
- Dickinson
- Friendswood
- La Marque
- League City
- Sweeny
- Texas City
- West Columbia
Under the terms of the settlement, Texas-New Mexico Power must:
- Provide a $45.5 million rate credit to customers over 48 months, once the deal closes
- Maintain a seven-member board of directors, including three unaffiliated directors as well as the company’s president and CEO
- Embrace “robust” financial safeguards
- Keep its headquarters within the utility’s Texas service territory
- Avoid involuntary layoffs, as well as reductions of wages or benefits related to for-cause terminations or performance issues
The settlement also calls for Texas-New Mexico Power to retain its $4.2 billion five-year capital spending plan through 2029. The plan will help Texas-New Mexico Power cope with rising demand; peak demand increased about 66 percent from 2020 to 2024.
Citing the capital spending plan in testimony submitted to the Public Utility Commission, Sebastian Sherman, senior managing director of Blackstone Infrastructure, said Texas-New Mexico Power “needs the right support to modernize infrastructure, to strengthen the grid against wildfire and other risks, and to meet surging electricity demand in Texas.”
Blackstone Infrastructure, which has more than $64 billion in assets under management, agreed in August to buy TXNM Energy in a $11.5 billion deal.
Neal Walker, president of Texas-New Mexico Power, says the deal will help his company maintain a reliable, resilient grid, and offer “the financial resources necessary to thrive in this rapidly changing energy environment and meet the unprecedented future growth anticipated across Texas.”