Key Takeaways
- • PRC examiners recommend rejection of Bernhard Capital Partners' proposed $1.25 billion acquisition of New Mexico Gas Company, citing the Louisiana-based private equity firm's limited utility operating experience and problematic compliance track record.
- • BCP's operational history raises red flags: The firm's ownership of National Water Infrastructure (NWI), a Louisiana water utility acquired in 2020, resulted in enforcement action and settlement with Louisiana's Department of Environmental Quality over sludge buildup and infrastructure violations.
- • 550,000 New Mexico residents depend on NMGC for natural gas service; the proposed transaction would transfer ownership from publicly traded Emera to Saturn Utilities Holdco LLC, a private BCP subsidiary, reducing regulatory transparency and accountability.
- • Deal structure reduces public oversight: As a private company subsidiary, Saturn Utilities would not be subject to the same legal and financial transparency requirements as NMGC's current public parent company, Emera.
- • Broader market context: The BCP bid is part of a national trend of private equity acquiring utility assets, including Blackstone's concurrent attempt to acquire Public Service Company of New Mexico (PNM), the state's largest electric utility.
Summary
New Mexico's Public Regulation Commission (PRC) has received examiner recommendations to reject Bernhard Capital Partners' proposed $1.25 billion acquisition of New Mexico Gas Company (NMGC), filed in October 2024. The recommendation reflects growing concerns among state regulators, environmental advocates, and customers regarding BCP's limited experience managing utility assets and its compliance history.
BCP, a Louisiana-based private equity firm, proposes to acquire NMGC through Saturn Utilities Holdco LLC, a subsidiary established for the transaction. The deal would transfer ownership from Emera, a publicly traded energy holding company, to a private entity. This structural change raises transparency concerns, as BCP operates as a private company and would not be subject to the same regulatory disclosure requirements as NMGC's current parent. Approximately 550,000 New Mexico residents depend on NMGC for natural gas service across multiple counties.
Examiners and advocacy groups have focused on BCP's track record of utility ownership, particularly its management of National Water Infrastructure (NWI), a small Louisiana water utility acquired in 2020. Since acquisition, NWI has been subject to enforcement action by Louisiana's Department of Environmental Quality, with documented issues including sludge buildup and infrastructure violations that resulted in a regulatory settlement. New Energy Economy, a New Mexico climate advocacy group, introduced testimony highlighting these compliance problems as evidence of BCP's capacity gaps in utility management.
The proposed acquisition occurs within a broader national trend of private equity firms acquiring utility assets. A larger parallel transaction in New Mexico involves Blackstone's attempt to acquire Public Service Company of New Mexico (PNM), the state's largest electric utility. The PRC retains final authority to approve or reject the BCP transaction. Community groups and advocacy organizations have mobilized public comment and legal filings, including emergency motions to protect regulatory review processes and ensure comprehensive examination of BCP's operational record.
BCP, a Louisiana-based private equity firm, proposes to acquire NMGC through Saturn Utilities Holdco LLC, a subsidiary established for the transaction. The deal would transfer ownership from Emera, a publicly traded energy holding company, to a private entity. This structural change raises transparency concerns, as BCP operates as a private company and would not be subject to the same regulatory disclosure requirements as NMGC's current parent. Approximately 550,000 New Mexico residents depend on NMGC for natural gas service across multiple counties.
Examiners and advocacy groups have focused on BCP's track record of utility ownership, particularly its management of National Water Infrastructure (NWI), a small Louisiana water utility acquired in 2020. Since acquisition, NWI has been subject to enforcement action by Louisiana's Department of Environmental Quality, with documented issues including sludge buildup and infrastructure violations that resulted in a regulatory settlement. New Energy Economy, a New Mexico climate advocacy group, introduced testimony highlighting these compliance problems as evidence of BCP's capacity gaps in utility management.
The proposed acquisition occurs within a broader national trend of private equity firms acquiring utility assets. A larger parallel transaction in New Mexico involves Blackstone's attempt to acquire Public Service Company of New Mexico (PNM), the state's largest electric utility. The PRC retains final authority to approve or reject the BCP transaction. Community groups and advocacy organizations have mobilized public comment and legal filings, including emergency motions to protect regulatory review processes and ensure comprehensive examination of BCP's operational record.
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