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+Fiscal impact reports (FIRs) are prepared by the Le gislative Finance Committee (LFC) for standing finance
+committees of the Legislature. LFC does not assume responsibility for th e accuracy of these reports if they
+are used for other purposes.
+
+F I S C A L    I M P A C T    R E P O R T
+
+BILL NUMBER: House Memorial 6
+SHORT TITLE: Private Equity Infrastructure Ownership
+SPONSOR: Roybal Caballero
+LAST
+UPDATE:
+ ORIGINAL
+DATE:
+
+1/30/2026
+
+ANALYST: Francis
+
+ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
+(dollars in thousands)
+Agency/Program FY26 FY27 FY28 3 Year
+Total Cost
+Recurring or
+Nonrecurring
+Fund
+Affected
+ Indeterminate
+but minimal
+Indeterminate
+but minimal
+Parentheses ( ) indicate expenditure decreases.
+*Amounts reflect most recent analysis of this legislation.
+
+Relates to Senate Memorial 9
+
+Sources of Information
+
+LFC Files
+
+Agency or Agencies Providing Analysis
+State Investment Council
+New Mexico Finance Authority
+Public Regulation Commission
+Department of Workforce Solutions
+Public Education Department
+Health Care Authority
+
+SUMMARY
+
+Synopsis of House Memorial 6
+
+House Memorial 6 (HM 6) requests the Legisla tive Finance Committee (LFC) to convene state
+agency experts to jointly study a nd report on the impact of privat e equity ownership and control
+of essential utilities and critical infrastructur e in New Mexico. The examination will assess the
+different outcomes in terms of maintenance, infr astructure investment, sa fety, affordability, and
+reliability based on whether a utility is publicly  owned, cooperative owned, investor owned, or
+owned by a private equity fund. Th e study will also consider impac ts on community service and
+investments, workforce, capital structures and debt levels, and transparency. Additionally, the
+study will consider how la rge-scale data centers and other high-load fac ilities impact both the
+demand for electric power , water consumption, grid reliabilit y, and need for new power sector
+investments and the allocation of  costs among different consumers,  particularly residential and
+small business.  Finally, the study will consider exit scenarios and ri sks to ratepayers and limits
+House Memorial 6 – Page 2
+
+the state should consider for private acquisition of utilities.
+
+LFC would convene experts from  the New Mexico Finance Authority (NMFA), The Public
+Regulation Commission (PRC), the Attorney Genera l, the State Investme nt Council (SIC), the
+Economic Development Department (EDD), the Wo rkforce Solutions Department (WSD), the
+Public Education Department (PED), and the Health Care Authority (HCA) for the study.
+
+The study with recommendations for policy makers identifying specific statutory, regulatory, or
+other policy options available to protect pub lic funds, ratepayers, and long-term service
+reliability would be completed by December 1, 2026.
+
+FISCAL IMPLICATIONS
+
+Memorials do not contain appropriations and are not enforceable as state law. However, the
+study requested in this memo rial is outside of the normal operations of the LFC  and is likely to
+result in additional costs for the LFC and other agencies, due to the scope and complexity of the
+issues and the short timeframe. If passed, LFC would likely need to begin in FY 2026 to meet the
+deadline.
+
+SIGNIFICANT ISSUES
+
+HM 6 requests a study to help policymakers understand  the issues and trad e-offs of different
+types of ownership of public elec tric power utilities. In the disc ussion for the necessity of such a
+study, HM 6 notes that gas and electric utilities are “foundati onal to public he alth, economic
+stability, emergency response, and community well-being.” The concer ns raised primarily
+consider the government’s ability to appropriate ly oversee and regulate regulated utilities to
+ensure long-term reliability, affordability, environmental justice and workforce stability.
+
+HM 6 specifically identifies the proposed acqui sitions of TXNM energy (parent company of
+Public Service Company of New Mexico or PNM) by Blackstone and of New Mexico Gas
+Company by Bernhard Capital Partners. These pr oposed transactions are currently under review
+by the PRC. On October 28, 2025, PRC took public comments on the NM Gas Company
+transaction, and, on February 5, 2026, PRC will take public comments on the PNM acquisition.
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-HOUSE MEMORIAL 6
-57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
-INTRODUCED BY
-Patricia Roybal Caballero and Harold Pope and Kathleen Cates
-and Janelle Anyanonu
-A MEMORIAL
-REQUESTING A COMPREHENSIVE STUDY OF PRIVATE EQUITY OWNERSHIP
-AND CONTROL OF ESSENTIAL GAS AND ELECTRIC UTILITIES AND OTHER
-CRITICAL INFRASTRUCTURE IN NEW MEXICO.
-WHEREAS, gas and electric utilities and other essential
-infrastructure in New Mexico provide services that are
-foundational to public health, economic stability, emergency
-response and community well-being; and
-WHEREAS, utility services function as regulated
-monopolies, are supported by ratepayer dollars and public
-financing mechanisms and require long-term capital investment,
-maintenance and operational continuity; and
-WHEREAS, private equity firms have acquired or sought
-controlling interests in essential service providers across the
-United States, raising questions for states about transparency,
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-regulatory capacity and public leverage; and
-WHEREAS, scholarly research indicates that private equity
-transactions commonly use high-leverage and financial-
-extraction mechanisms, including dividend recapitalizations and
-fee structures that can increase financial distress risk and
-weaken the operating resilience of assets; and
-WHEREAS, wildfire risk and other climate-driven hazards
-create significant and growing danger for utilities, and long-
-term mitigation and maintenance investment is central to public
-safety and affordability; and
-WHEREAS, reports on investor-owned utilities and rate
-drivers in high-risk jurisdictions indicate that customer
-affordability is related to capital spending, risk recovery and
-governance, reinforcing the need to evaluate how ownership
-structures interact with ratepayer exposure; and
-WHEREAS, peer-reviewed evidence in other essential service
-sectors, including hospitals and nursing homes, indicates that
-private equity acquisition has been associated with changes in
-price, quality, adverse events, staffing-related issues and
-consumer experience, underscoring the importance of measuring
-access and service outcomes as well as financial performance;
-and
-WHEREAS, when private equity firms exit investments,
-communities and public entities may face stranded debt,
-degraded assets, unresolved liabilities or pressure for
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-government intervention; and
-WHEREAS, New Mexico has made significant public
-investments through the New Mexico finance authority, the state
-investment council, economic development programs, workforce
-training, education systems and health and human services to
-support infrastructure, workforce stability and community
-resilience; and
-WHEREAS, the transfer of control of essential services to
-external private equity entities may weaken public leverage,
-complicate regulatory oversight and reduce the ability of the
-state to align infrastructure operations with long-term public
-policy goals that include affordability, reliability,
-environmental justice and workforce stability; and
-WHEREAS, private equity firms have sought ownership or
-controlling interests in New Mexico's investor-owned utilities,
-including a proposed acquisition of TXNM energy, the parent
-company of the public service company of New Mexico, by
-Blackstone infrastructure and a proposed acquisition of New
-Mexico gas company by Bernhard capital partners, both subject
-to review by the public regulation commission; and
-WHEREAS, certain industries and systems constitute
-essential services upon which the public depends for health,
-safety and basic daily services, including gas and electric
-utilities, water and wastewater systems, telecommunications
-infrastructure, health care delivery systems and other services
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-that operate as natural monopolies or are supported by public
-financing, ratepayer funds or exclusive franchises; and
-WHEREAS, the acquisition of controlling interests in
-essential services by private equity entities raises distinct
-public policy concerns due to the combination of monopoly
-conditions, long-term capital needs, public dependency and
-financial extraction incentives that may not align with the
-provision of safe, affordable and reliable service; and
-WHEREAS, large-scale data centers and other high-load
-industrial facilities are driving unprecedented growth in
-electric power demand and water consumption across the United
-States, placing significant pressure on power generation,
-transmission and distribution and on water systems and creating
-new risks, such as grid reliability, resource scarcity and
-long-term infrastructure costs; and
-WHEREAS, studies and regulatory analysis indicate that,
-absent appropriate safeguards, the costs of serving large data
-center loads are often socialized through utility rates,
-resulting in residential and small-business ratepayers bearing
-costs associated with private development decisions from which
-they receive limited direct benefit;
-NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF
-REPRESENTATIVES OF THE STATE OF NEW MEXICO that the legislative
-finance committee be requested to convene experts from state
-agencies, including the New Mexico finance authority, the
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-public regulation commission, the attorney general, the state
-investment council, the economic development department, the
-workforce solutions department, the public education department
-and the health care authority, to jointly study and report on
-the impacts of private equity ownership and control of
-essential utilities and critical infrastructure in New Mexico;
-and
-BE IT FURTHER RESOLVED that the legislative finance
-committee-led study be requested to examine:
-A.  outcome differences among publicly owned,
-cooperatively owned, investor-owned and private-equity-owned
-utilities in other states;
-B.  changes in maintenance spending, infrastructure
-investment, outage frequency, wildfire or safety incidents and
-overall system reliability following asset acquisition or
-changes in control;
-C.  exit scenarios and risks to the state and
-ratepayers, including bankruptcy, asset stripping or forced
-public intervention;
-D.  impacts on access to services in rural, tribal
-and low-income communities, including shutoffs, service quality
-and infrastructure investment disparities;
-E.  ownership transparency, holding company
-complexity and the effect of such structures on regulatory
-oversight and enforcement;
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-F.  the capital structures used in asset
-acquisitions, including debt levels, dividend payments,
-management fees and financial extraction mechanisms;
-G.  the impact of ownership and capital structure on
-utility rates, rate filing frequency and long-term
-affordability for consumers;
-H.  workforce impacts, including staffing levels,
-safety outcomes, contractor use, retention and institutional
-expertise;
-I.  whether and under what conditions the state
-should limit, condition or prohibit the acquisition of
-controlling interests in essential services by private equity
-entities, including the development of clear definitions,
-thresholds and criteria to distinguish acceptable forms of
-private investment from ownership structures that pose
-unacceptable risk to the public interest;
-J.  distinctions between minority or non-controlling
-investments and transactions that result in effective control,
-including through voting rights, governance provisions, debt
-covenants or management agreements;
-K.  the impacts of large-scale data centers and
-other high-load facilities on electric power demand, water
-consumption, grid reliability and the need for new power
-generation, transmission and distribution and water
-infrastructure; and
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-L.  the extent to which the costs of serving data
-centers and other high-load facilities are allocated to or
-borne by residential and small-business ratepayers and the
-effectiveness of rate design, cost allocation methods,
-transparency requirements and other regulatory tools in
-protecting ratepayers from subsidizing such loads; and
-BE IT FURTHER RESOLVED that the study be requested to
-include an assessment of the appropriate role of public
-investment, regulation and ownership in protecting essential
-services as compared to private equity ownership models; and
-BE IT FURTHER RESOLVED that the requested study and
-recommendations be completed and delivered no later than
-December 1, 2026; and
-BE IT FURTHER RESOLVED that the findings and
-recommendations be presented to the legislative finance
-committee, the state investment council, the New Mexico finance
-authority and the legislature, with specific identification of
-statutory, regulatory or policy options available to protect
-public funds, ratepayers and long-term service reliability; and
-BE IT FURTHER RESOLVED that copies of this memorial be
-transmitted to the governor, the legislative finance committee,
-the New Mexico finance authority, the public regulation
-commission, the state investment council, the economic
-development department, the workforce solutions department, the
-public education department, the health care authority and the
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-attorney general.
-- 8 -
-.233150.1
+
+Another issue raised by HM 6 is the role of data centers in the growth in demand for electric
+power and water in the U.S. and how that demand will affect rate payers in New Mexico.
+
+SIC notes that PRC will have likely ruled on the NM Gas Company acquisitions “well before
+this proposed study and report would be completed” and that the PNM acquisition is estimated to
+be executed by the end of 2026:
+The report requested by this memorial is expected to be completed by December 1, 2026.
+This makes it unlikely the study could produ ce information that could reasonably be
+considered prior to completion of the sale of either utility, although it could inform future
+sales of utilities or critical infrastructure to private equity entities.
+SIC also reports financial exposure to Blackstone Infrastructure:
+
+1 NMPRC-invites-New-Mexicans-to-comment-on-the-potential-sale-of-New-Mexico-Gas-Co.pdf; PRC public
+comment hearing on TXNM Energy Inc.
+House Memorial 6 – Page 3
+
+The funds SIC manages on be half of New Mexicans have  exposure to Blackstone
+Infrastructure, a fund which may be the vehicle through which the company is purchasing
+TXNM. Should the study be completed on time and have substantial influence on the sale
+of the utility company, this potentially impacts  could affect the state’s sovereign wealth
+fund and the returns it delivers to the state each year.
+
+PERFORMANCE IMPLICATIONS
+
+PRC notes that, because of its role as an impar tial adjudicator, particip ation in the study would
+be “incompatible with the Commission’s statutory role and constitutional obligations.”
+[If] the PRC were to participate in a legislatively direct ed study providing
+“recommendations” as to the propriety or idea l extent of private equity ownership of
+utilities, this would clearly risk an appearan ce that the PRC itself  has already prejudged
+these issues before parties had a chance to  adjudicate them. Were private equity
+companies – or, indeed, other advocates – to  then appear before the PRC and advocate
+for policy outcomes contrary to the recommendations formulated by the study, the PRC’s
+role as an impartial adjudicator would be  compromised, and its decisions subject to
+constitutional challenges.
+
+SIC notes there are existing processes for these transactions:
+Any effort of a private equity firm to acquire a public utility is subject to state and federal
+approvals. These processes safeguard the public  from many of the concerns outlined in
+the memorial, especially rate increases. Histor ically, this is seen in  the planned sale of
+PNM to Avangrid which was ultimately te rminated in January 2024 after years of
+regulatory delays, primarily due to rejecti ons from the New Mexico Public Regulation
+Commission (NMPRC) which cited concerns ov er customer service and public interest,
+despite initial agreements and extensions
+
+NMFA also cites PRC’s current responsibility and suggests PRC take the lead role in the study:
+The New Mexico Public Regulation Commission has existing statutory and regulatory
+authority to ensure safe operations and reliable  utility services at reasonable rates and to
+protect the public interests in utility matters. The PRC regul ates electric, natural gas,
+renewable energy resources, telecommunications, and water and wastewater systems. The
+PRC also reviews and approves or denies ow nership changes of the entities that they
+regulate. The PRC is the best agency to assume a leadership role in conducting a
+comprehensive study as requested in HM 106 because of their statutory and regulatory
+authority and subject matter expertise in these areas.
+
+WSD suggests NM Environment Department and/or the Workers’ Compensation Administration
+should be included for analysis of workplace safety.
+
+CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
+
+Senate Memorial 9 requests a st udy and requests PRC delay a ny decision until after the 2027
+legislative session.
+
+NF/dw/ct