From BCP to Blackstone, private equity is abusing the regulatory system to raise utility rates and burn more fossil fuels for profit
- New Energy Economy
- Sep 3
- 4 min read
Last week, after requesting an extension, Bernhard Capital Partners (BCP), the private equity firm trying to take over NM Gas Company, responded to our last set of interrogatories with what amounts to a hand in the face. We asked for details of violations and penalties from federal and state regulatory agencies that were levied against BCP owned companies. This information is critical to evaluate the fitness of any utility that wants to operate in New Mexico, an evaluation that NM Gas Company and its parent, Emera, failed to conduct. Their response states "The interrogatory purports to request information concerning alleged violations that are not relevant to, or within the scope of, this proceeding."
We beg to differ. A company's operational history is the best indicator of its corporate culture and future actions that could impact New Mexico gas customers.
BCP's failure to file an application with any "customer benefits," its prior effort to hide relevant information through over-designation of testimony as "confidential" and "trade-secret," its successful move to hide the identity of investors in the company, and now its failure to provide fullsome answers to questions about operational practices at companies that it owns provide all the evidence that New Mexicans need to conclude that the deal is not in our best interests. It fails the six part PRC test for authorization of any public utility buyout: the applicants must prove that the new owners have the qualifications and financial health to provide stable and reliable service, and that the proposed deal will benefit customers, preserve the ability of the PRC to provide meaningful oversight, maintain quality of service, protect against improper subsidization of non-utility company activities, and protect the public from harm. BCP fails on all six counts.
We plan to file a Motion to Compel and expect the PRC to exercise its authority to demand fullsome and extensive operational records from any company that wants to take over service to the captive ratepayers that are dependent the PRC for regulatory protection. The applicant's belated effort to add a rate credit of $2.27 with a rate freeze for one year is absolutely meaningless when they are also proposing the creation of a regulatory asset, an accounting gimmick that allows them to add up expenses to be included in rates during the next rate case.
Is this meaningless rate credit worth the risk of future higher rates and lack of accountability that BCP offers? NO. This is especially true given the expectation that gas costs for US customers are expected to rise significantly as a result of unfettered LNG exports. The EIA estimates wholesale prices will rise from an average $3.60/MMbtu in 2025 to $5.40/MMbtu by December 2026. (If you were thinking about switching to an electric heat pump, now is the time!)
WHAT CAN NEW MEXICANS EXPECT IF THESE PRIVATE EQUITY UTILITY BUYOUTS ARE APPROVED? CRUSHING RATE INCREASES
Blackstone is so far offering a rate credit of $3.51 per month for four years, but no rate freeze. Judging by their business portfolio and announced plans to invest massively in AI and data centers, we can actually expect enormous rate increases, unfettered air pollution and depletion of scarce water resources across the state. It's already happening in other states where Blackstone is operating. This illuminating video explains why rates go up when data centers move in:
Massive tech companies like Google, Meta and OpenAI are passing the cost of building out their AI empires onto utility ratepayers across the country, resulting in increasing electricity costs for residential customers while tech billionaires rake in the profits. These companies claim data centers add high tech jobs and provide "economic development" opportunities to communities, but studies show that is not the case. Data centers typically require less than 100 long term employees to operate, primarily low paid contract labor for security, cleaning and monitoring. Tax breaks offered to lure data centers benefit these private corporations at the expense of funding for local schools, emergency response services and local priorities without resulting in meaningful benefits to residents.
They promise "economic development" but what they really do is swallow up all the water in the vicinity, affecting wells, health and quality of life for unfortunate data center neighbors, while exacerbating climate change - building new gas plants and even contracting to extend the life of existing coal plants in pursuit of profit at any cost.
NEW MEXICO IS ALREADY LAYING OUT THE RED CARPET
Some states are passing laws to protect residential customers by creating a separate rate class for these mega-consumers. What has New Mexico done? Our legislature passed SB170 in 2025, which puts any "economic development" project on the fast track at the PRC, requiring that permits must be approved or denied within six months and allowing costs to be added into residential rate base.
No doubt BCP is salivating at the prospect of building out the infrastructure for the new gas powered data centers that Blackstone and its subsidiary, QTS, are likely planning for vulnerable New Mexico communities. All at our expense.
New Mexican families, already ranking near the bottom (49th) for median household income at $50,822 per year, and facing increasing financial pressure from tariffs, federal budget cuts and inflation, cannot and must not bear the cost of building out the infrastructure for Zuckerberg, Musk and Bezos' data center dreams.
Comments