With more than $70 billion available to invest for the benefit of New Mexico, why doesn’t the State Investment Council just buy PNM instead of letting them sell to Blackstone, a private equity company?
This story was originally published at New Mexico Political Report, a nonprofit news service covering politics and policy in the Land of Enchantment. Learn more and support our work at nmreports.org
Some version of that question has entered the public debate over the PNM acquisition at nearly every step of the process. Public commenters proposed that option during Public Regulation Commission hearings on the case earlier this month. Last week, local organizing groups opposed to the deal such as Organizing Power in Numbers, a project of the Working Families Party, and the Albuquerque Party for Socialism and Liberation shared online videos calling for supporters to sign petitions pressing state leaders to circumvent the PRC case with an offer to buy a “seat at the table” as an investor.
So could that work? We checked in with the State Investment Council, the state agency which oversees the state’s sovereign wealth funds to find out.
What is the State Investment Council (SIC)?
New Mexico’s State Investment Council manages about $70 billion in state funds by investing tax dollars into investments to make a return and grow the fund. It’s mission is “to grow revenue from oil and gas – a non-renewable resource – transforming it into a renewable, sustainable financial engine that serves New Mexicans today, and will continue to support them for generations to come.” In other words, taxes flowing from oil and gas severance taxes are pooled and invested in financial instruments to grow their value. Proceeds are then allocated in the Constitution and by the legislature to benefit public schools, higher education and a few other public benefits. New Mexico’s sovereign wealth funds are the second-largest in the country and generated about $2.6 billion in state funding, about 14% of the state budget, in 2025, according to SIC data.
Can SIC use state investment money to buy PNM or a majority stake in the company?
John Clark, the state’s Chief Investment Officer responsible for overseeing SIC investments, addressed questions about SIC investments in a little-noticed video posted online in late June.
Here are some of Clark’s explanations for why a state investment or purchase of PNM isn’t just impractical, but actually impossible given the Constitutional rules governing how investment funds can be spent.
John Clark: First, I understand the concern. For me and my staff of 40 people—who all live here in New Mexico—this is our utility, too. But the question is whether or not we could do this, and currently, we cannot. The constitution prohibits it; we are not allowed to hold more than 10% of the stock of any company.
But what if the constitution weren’t an issue? What if we changed it? Would this be a reasonable option?
Conflicting Interests: We would be pitting the ratepayers of New Mexico against the children of New Mexico. On the one hand, ratepayers would want lower prices, but that would reduce our returns, which in turn reduces our ability to fund the state’s cradle-to-career programs. On the other hand are the children of New Mexico, who are counting on these programs and the funding we provide for them.
There are a number of issues, but I want to cover two in particular:
Lack of Utility Expertise: The State Investment Council doesn’t have any particular expertise on running utilities. I have an amazing staff, but this is an investment shop, and we wouldn’t be able to provide any expertise to help lower rates for New Mexicans or provide better service.
Clark notes that although the SIC is not the right agency for making this case, the Public Regulation Commission’s open process is. “Even though the State Investment Council might not be the answer here, the Public Regulation Commission (PRC) is. The PRC was set up to be exactly this: they are the regulatory authority that oversees utilities for the state, and they are here to hear from New Mexicans,” Clark said.
The PRC held public hearings in early August on the next steps of the process. The companies have already received regulatory approval from other state and federal agencies but are awaiting a final decision from New Mexico. Blackstone and PNM agreed to extend their merger and purchase agreement into 2027 to allow more time for PRC review.