TXNM's Strong Profits Mask Perilous Path for Blackstone Deal

ALBUQUERQUE, NM – July 31, 2026

TXNM Energy today reported a dramatic surge in second-quarter profits, with GAAP earnings per share rocketing to $0.64, a nearly 200% increase from the $0.22 recorded in the same period last year. The robust performance, which saw net earnings attributable to the company triple to $71.3 million, was fueled by soaring electricity demand across its New Mexico and Texas service areas.

"Increased retail load at both PNM and TNMP, including new all-time system peaks this summer, underscores the need for grid investment to support growing customer demand," said Don Tarry, President and CEO of TXNM Energy. "We continue to pursue approval for our agreement with Blackstone Infrastructure to assist us in meeting these needs."

But behind these impressive financials lies a far more complex and uncertain picture. The company's multi-billion-dollar acquisition by private equity giant Blackstone Infrastructure is stalled by a significant regulatory rebuke, even as the utility pushes forward with ambitious, and expensive, plans to overhaul its energy sources. The confluence of strong operational performance, regulatory gridlock, and a looming capital-intensive energy transition creates a precarious balancing act for the Albuquerque-based utility.

A Tale of Two Realities: Record Earnings Meet Regulatory Gridlock

On the surface, TXNM Energy's second quarter was an unqualified success. Beyond higher electricity sales, the company benefited from approved rate relief in Texas and a significant reduction in merger-related costs, which fell to $7.2 million from $19.5 million a year prior. This operational strength, however, is juxtaposed against the troubled path of its planned acquisition by Blackstone, a cornerstone of its future financing strategy.

The company announced that the termination date for the merger has been extended by a year to May 31, 2027, with an anticipated closing now in the first half of 2027—a notable delay from the original estimate. The reason for the extension lies squarely with the New Mexico Public Regulation Commission (NMPRC), which has proven to be the deal’s most significant hurdle.

Research reveals that the NMPRC paused its review of the merger after ruling in early July that a $400 million stock transaction between TXNM Energy and Blackstone in 2025 was “unlawful” and “void” because it was executed without prior state approval. The commission imposed the maximum allowable fines of $300,000 and ordered the companies to unwind the transaction. This has not only frozen the merger timeline but has also armed critics who question whether private equity ownership serves the public interest—the central test the NMPRC must apply. TXNM Energy is now in the process of securing a $400 million term loan to reverse the stock purchase, a costly and complicated maneuver that highlights the severity of the regulatory misstep.

The Price of Power: Rate Hikes and Customer Impact

While the corporate-level drama unfolds, the business of generating and selling power continues, and its costs are rising. In Texas, TXNM’s subsidiary, Texas New Mexico Power (TNMP), recently received a crucial approval from the Public Utility Commission of Texas (PUCT) for a base rate review. The approved settlement allows TNMP to recover $2.8 billion of its rate base and earn a 9.65% return on equity.

For the company, this regulatory green light provides essential financial stability and a clear revenue stream to fund infrastructure projects in its rapidly growing service territory. The fact that it was a “unanimous settlement” suggests broad agreement among key stakeholders. However, such increases inevitably translate to higher bills for residential and commercial customers. This outcome is the direct financial mechanism for funding the very grid investments the CEO highlighted as critical, placing the cost of reliability and modernization squarely on the shoulders of consumers.

Forging a New Grid: PNM's Ambitious Bet on Renewables

Simultaneously, the company is charting a radically different energy future in New Mexico. Its subsidiary, Public Service Company of New Mexico (PNM), has filed a transformative resource plan for the years 2029-2032. The proposal outlines a massive shift toward clean energy, calling for 800 megawatts (MW) of wind power, 240 MW of solar power, and a staggering 610 MW of battery storage capacity.

The strategic centerpiece of this plan is the complete abandonment of PNM's interest in the coal-fired Four Corners Power Plant by 2031. This move represents a fundamental pivot away from fossil fuels, aligning the utility with state and federal decarbonization goals. This transition is not merely an environmental initiative; it is a direct response to projected energy shortfalls driven by surging regional demand. Data shows New Mexico’s per-person electricity consumption has climbed sharply since 2024, fueled by significant industrial development. The proposed portfolio is designed to ensure grid reliability as this demand rises and legacy power sources are retired, but it will require billions in new investment.

The Blackstone Endgame: Private Capital for Public Infrastructure

The strong earnings, the regulatory fight, and the massive investment plans all point to a single, overarching question: how will it all be paid for? This is where the Blackstone acquisition comes back into focus. For Blackstone, TXNM Energy represents a stable, regulated asset with predictable cash flows—a prime target for an infrastructure fund willing to navigate regulatory complexities for a long-term payoff.

For TXNM Energy, Blackstone represents a vital lifeline of private capital. Independent financial analysis highlights the utility's relatively weak balance sheet, marked by a high debt-to-equity ratio and low interest coverage. Funding a multi-billion-dollar energy transition while servicing existing debt presents a monumental challenge. The Blackstone deal, which is fully financed with equity, is structured to strengthen TXNM’s financial position and inject the capital needed for its ambitious grid modernization and renewable energy projects. To win over skeptical regulators, Blackstone has proposed a suite of benefits for New Mexico, including $105 million in residential rate credits and millions more for economic development. The success of this high-stakes negotiation will determine not only the future ownership of TXNM Energy but also the pace and funding of the energy transition across the Southwest.