PRIVATE EQUITY INFRASTRUCTURE OWNERSHIP

HM006

HOUSE MEMORIAL 6

57
th 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,
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
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
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
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;

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

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
attorney general.

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