Today is the day folks. Cross examination of Bernhard Capital Partners Jeffrey Baudier.

Today the Bernhard Capital Partner (BCP) acquisition hearing begins. You can listen in on the proceedings via Youtube here at 9:00AM, starting with the cross examination of Jeffrey Baudier, the erstwhile CEO of the new venture, famed for his leadership at the failed Petra Nova carbon capture plant that resulted in very little carbon captured and the loss of more than 300 million in public funds. He will be crossed first by Peter Gould representing NM AREA, and then Mariel will begin her cross in the afternoon, likely around 3:30PM.

Remember, if you have some thoughts about what you hear, you can email your public comment on the case to public.comment@prc.nm.gov with the subject "Public Comment for Case No. 24-00266-UT."

Finally, we wanted to share in its entirety the op-ed published yesterday in the Santa Fe New Mexican by Valerie Espinoza, who served eight years representing District 3 on the Public Regulation Commission.

Private equity shouldn't own New Mexico's gas utility

New Mexicans deserve energy companies that are reliable, transparent and accountable to the public — not private-equity firms that play shell games with our essential services. That’s why the proposed buyout of New Mexico Gas Co. by Bernhard Capital Partners should be rejected. The hearing starts Monday, Nov. 3.

Under New Mexico law, the Public Regulation Commission must approve a utility transfer only if it is “consistent with the public interest.” That legal standard exists to protect ratepayers from unnecessary risk. The evidence shows this deal fails that test — spectacularly.

Bernhard Capital Partners is a private-equity firm with no experience operating a monopoly, regulated gas utility. This alone should stop the deal cold. Running a utility that serves more than 550,000 customers is not like flipping a company for profit; it’s a long-term public trust.

Worse, the little operating experience the firm does have raises red flags about its competence and priorities. One of Bernhard Capital Partner’s portfolio companies, National Water Infrastructure, was cited by Louisiana environmental regulators for violations that endangered public health at a wastewater facility. The Louisiana Department of Environmental Quality found the company “failed to properly operate and maintain the treatment facility.” Inspectors even found feces and bloodworms in the receiving stream, noting the contamination indicated stagnant water “commonly associated with sanitary waste.”

Bernhard Capital Partners tries to excuse this by claiming it buys “distressed” companies. But records show the firm acquired National Water Infrastructure in 2020 — and was still negotiating settlements for those same problems four years later, in 2024. If a company can’t fix a public-health hazard after four years, what does that say about its seriousness in protecting customers?

The same pattern — inexperience, opacity and opportunism — appears to run throughout the firm’s record. It’s a “build-as-you-go” operation with a questionable balance sheet and limited technical expertise. Bernhard Capital Partners’ recently acquired utilities in Louisiana are still in the startup phase, struggling with billing confusion, customer complaints and integration problems. New Mexico should not be its next experiment.

The firm claims it will bring “operational expertise” yet simultaneously promises not to interfere in the gas company’s day-to-day operations. Those claims can’t both be true. Of course, investors want control — that is the whole point of private equity investment — to “streamline” companies so their balance sheets look good and they can be sold at a profit.

What are ratepayers being offered in exchange for this risk? $3.39 a month for one year. That’s the rate credit on offer.

It’s pocket change, especially when compared with a promise by Bernhard Capital Partners to later recoup $45 million from customers for upgraded information technology, an unproven need. That $45 million anticipated rate increase for IT is not based on a cost-effective comparative analysis, which must be produced, to determine if Bernhard Capital Partners’ investment is prudent compared to other investments. This rate credit is not a benefit — it’s a tiny offset against a future significant rate hike for an unjustified expenditure.

Contrast this with New Mexico Gas Co.’s current owner, Emera, a seasoned utility company that has delivered stable, affordable service for years. By every measure, Emera has operated responsibly (even when Texas failed to deliver gas during deadly Winter Storm Uri in 2021, the Emera-owned gas company kept New Mexicans warm), with trained staff, solid finances and regulatory compliance. There’s no public interest served by trading a capable, experienced operator for a speculative investment fund.

At its core, this buyout isn’t about improving service — it’s about extracting wealth from New Mexico. Private equity investors like Bernhard Capital Partners are simply not worth the significant risks: inability to properly maintain and operate facilities, managerial inexperience and siphoning profits from New Mexico families. Ratepayers will shoulder the risk; private investors will pocket the gains.

The PRC’s duty is clear: Protect the public interest. That means rejecting BCP’s application and keeping New Mexico’s energy system in responsible hands. Our families, our businesses and our economy depend on it.

And this comment posted online below the op-ed from Dwight Lamberson, Former NMPRC Utility Division Director -

Valerie Espinoza is exactly right, an investment capital firm operates to extract profits and has no concern for the public welfare. Operating a public utility requires the public trust, regulatory compliance, and the ability to settle for a regulated rate of return. This deal seems an odd fit for an investment firm with a pure profit motive. We need to pay attention to red flags and these are waving.

We hope the Public Regulation Commissioners are paying attention to the public and the experts!