HM 6

                                1  HOUSE MEMORIAL 6
                                2    57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4     Patricia Roybal Caballero and Harold Pope and Kathleen Cates
                                5  and Janelle Anyanonu
                                6
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                                10  A MEMORIAL
                                11   REQUESTING A COMPREHENSIVE STUDY OF PRIVATE EQUITY OWNERSHIP
                                12   AND CONTROL OF ESSENTIAL GAS AND ELECTRIC UTILITIES AND OTHER
                                13   CRITICAL INFRASTRUCTURE IN NEW MEXICO.
                                14
                                15        WHEREAS, gas and electric utilities and other essential
                                16   infrastructure in New Mexico provide services that are
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                                17   foundational to public health, economic stability, emergency
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                                18   response and community well-being; and
                                19        WHEREAS, utility services function as regulated
                                20   monopolies, are supported by ratepayer dollars and public
                                21   financing mechanisms and require long-term capital investment,
                                22   maintenance and operational continuity; and
                                23        WHEREAS, private equity firms have acquired or sought
                                24   controlling interests in essential service providers across the
                                25   United States, raising questions for states about transparency,
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                                1    regulatory capacity and public leverage; and
                                2  WHEREAS, scholarly research indicates that private equity
                                3    transactions commonly use high-leverage and financial-
                                4    extraction mechanisms, including dividend recapitalizations and
                                5    fee structures that can increase financial distress risk and
                                6    weaken the operating resilience of assets; and
                                7  WHEREAS, wildfire risk and other climate-driven hazards
                                8    create significant and growing danger for utilities, and long-
                                9    term mitigation and maintenance investment is central to public
                                10   safety and affordability; and
                                11  WHEREAS, reports on investor-owned utilities and rate
                                12   drivers in high-risk jurisdictions indicate that customer
                                13   affordability is related to capital spending, risk recovery and
                                14   governance, reinforcing the need to evaluate how ownership
                                15   structures interact with ratepayer exposure; and
                                16  WHEREAS, peer-reviewed evidence in other essential service
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                                17   sectors, including hospitals and nursing homes, indicates that
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                                18   private equity acquisition has been associated with changes in
                                19   price, quality, adverse events, staffing-related issues and
                                20   consumer experience, underscoring the importance of measuring
                                21   access and service outcomes as well as financial performance;
                                22   and
                                23  WHEREAS, when private equity firms exit investments,
                                24   communities and public entities may face stranded debt,
                                25   degraded assets, unresolved liabilities or pressure for
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                                1    government intervention; and
                                2  WHEREAS, New Mexico has made significant public
                                3    investments through the New Mexico finance authority, the state
                                4    investment council, economic development programs, workforce
                                5    training, education systems and health and human services to
                                6    support infrastructure, workforce stability and community
                                7    resilience; and
                                8  WHEREAS, the transfer of control of essential services to
                                9    external private equity entities may weaken public leverage,
                                10   complicate regulatory oversight and reduce the ability of the
                                11   state to align infrastructure operations with long-term public
                                12   policy goals that include affordability, reliability,
                                13   environmental justice and workforce stability; and
                                14        WHEREAS, private equity firms have sought ownership or
                                15   controlling interests in New Mexico's investor-owned utilities,
                                16   including a proposed acquisition of TXNM energy, the parent
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                                17   company of the public service company of New Mexico, by
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                                18   Blackstone infrastructure and a proposed acquisition of New
                                19   Mexico gas company by Bernhard capital partners, both subject
                                20   to review by the public regulation commission; and
                                21        WHEREAS, certain industries and systems constitute
                                22   essential services upon which the public depends for health,
                                23   safety and basic daily services, including gas and electric
                                24   utilities, water and wastewater systems, telecommunications
                                25   infrastructure, health care delivery systems and other services
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                                1    that operate as natural monopolies or are supported by public
                                2    financing, ratepayer funds or exclusive franchises; and
                                3  WHEREAS, the acquisition of controlling interests in
                                4    essential services by private equity entities raises distinct
                                5    public policy concerns due to the combination of monopoly
                                6    conditions, long-term capital needs, public dependency and
                                7    financial extraction incentives that may not align with the
                                8    provision of safe, affordable and reliable service; and
                                9  WHEREAS, large-scale data centers and other high-load
                                10   industrial facilities are driving unprecedented growth in
                                11   electric power demand and water consumption across the United
                                12   States, placing significant pressure on power generation,
                                13   transmission and distribution and on water systems and creating
                                14   new risks, such as grid reliability, resource scarcity and
                                15   long-term infrastructure costs; and
                                16        WHEREAS, studies and regulatory analysis indicate that,
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                                17   absent appropriate safeguards, the costs of serving large data
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                                18   center loads are often socialized through utility rates,
                                19   resulting in residential and small-business ratepayers bearing
                                20   costs associated with private development decisions from which
                                21   they receive limited direct benefit;
                                22        NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF
                                23   REPRESENTATIVES OF THE STATE OF NEW MEXICO that the legislative
                                24   finance committee be requested to convene experts from state
                                25   agencies, including the New Mexico finance authority, the
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                                1    public regulation commission, the attorney general, the state
                                2    investment council, the economic development department, the
                                3    workforce solutions department, the public education department
                                4    and the health care authority, to jointly study and report on
                                5    the impacts of private equity ownership and control of
                                6    essential utilities and critical infrastructure in New Mexico;
                                7    and
                                8  BE IT FURTHER RESOLVED that the legislative finance
                                9    committee-led study be requested to examine:
                                10  A.   outcome differences among publicly owned,
                                11   cooperatively owned, investor-owned and private-equity-owned
                                12   utilities in other states;
                                13  B.   changes in maintenance spending, infrastructure
                                14   investment, outage frequency, wildfire or safety incidents and
                                15   overall system reliability following asset acquisition or
                                16   changes in control;
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                                17  C.   exit scenarios and risks to the state and
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                                18   ratepayers, including bankruptcy, asset stripping or forced
                                19   public intervention;
                                20  D.   impacts on access to services in rural, tribal
                                21   and low-income communities, including shutoffs, service quality
                                22   and infrastructure investment disparities;
                                23  E.   ownership transparency, holding company
                                24   complexity and the effect of such structures on regulatory
                                25   oversight and enforcement;
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                                1  F.   the capital structures used in asset
                                2    acquisitions, including debt levels, dividend payments,
                                3    management fees and financial extraction mechanisms;
                                4  G.   the impact of ownership and capital structure on
                                5    utility rates, rate filing frequency and long-term
                                6    affordability for consumers;
                                7  H.   workforce impacts, including staffing levels,
                                8    safety outcomes, contractor use, retention and institutional
                                9    expertise;
                                10  I.   whether and under what conditions the state
                                11   should limit, condition or prohibit the acquisition of
                                12   controlling interests in essential services by private equity
                                13   entities, including the development of clear definitions,
                                14   thresholds and criteria to distinguish acceptable forms of
                                15   private investment from ownership structures that pose
                                16   unacceptable risk to the public interest;
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                                17  J.   distinctions between minority or non-controlling
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                                18   investments and transactions that result in effective control,
                                19   including through voting rights, governance provisions, debt
                                20   covenants or management agreements;
                                21  K.   the impacts of large-scale data centers and
                                22   other high-load facilities on electric power demand, water
                                23   consumption, grid reliability and the need for new power
                                24   generation, transmission and distribution and water
                                25   infrastructure; and
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                                1  L.   the extent to which the costs of serving data
                                2    centers and other high-load facilities are allocated to or
                                3    borne by residential and small-business ratepayers and the
                                4    effectiveness of rate design, cost allocation methods,
                                5    transparency requirements and other regulatory tools in
                                6    protecting ratepayers from subsidizing such loads; and
                                7  BE IT FURTHER RESOLVED that the study be requested to
                                8    include an assessment of the appropriate role of public
                                9    investment, regulation and ownership in protecting essential
                                10   services as compared to private equity ownership models; and
                                11        BE IT FURTHER RESOLVED that the requested study and
                                12   recommendations be completed and delivered no later than
                                13   December 1, 2026; and
                                14        BE IT FURTHER RESOLVED that the findings and
                                15   recommendations be presented to the legislative finance
                                16   committee, the state investment council, the New Mexico finance
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                                17   authority and the legislature, with specific identification of
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                                18   statutory, regulatory or policy options available to protect
                                19   public funds, ratepayers and long-term service reliability; and
                                20        BE IT FURTHER RESOLVED that copies of this memorial be
                                21   transmitted to the governor, the legislative finance committee,
                                22   the New Mexico finance authority, the public regulation
                                23   commission, the state investment council, the economic
                                24   development department, the workforce solutions department, the
                                25   public education department, the health care authority and the
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