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Texas PUC Staff Propose That Blackstone Should Be Required To Sell Its Ownership In Texas REPs As Condition Of TNMP Acquisition
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A witness for Staff of the Public Utility Commission of Texas has proposed that, as a condition of any approval of a proposed merger under which Texas-New Mexico Power Company would become an indirect subsidiary of Troy ParentCo LLC (Troy) and Blackstone Infrastructure (see background here), Blackstone should be required to sell or transfer its
ownership of all existing Texas retail electric providers
As previously reported, as a result of the proposed TNMP-Troy merger, Option 2 retail electric providers Lancium REP I, LLC and Lancium QSE I LLC would become competitive affiliates of TNMP, due to Blackstone's investment and stake in Lancium LLC.
Among other conditions, Staff's witness proposed the following conditions for the merger:
• No affiliated REP: "Blackstone should be required to sell or transfer its
ownership of all existing REPs; should be required to seek approval for any new
affiliate REPs; and should be permanently prohibited from allowing an affiliate
REP to operate in its service area."
• No new affiliated data centers or other large load: "The Commission should
prohibit any new affiliated data center, other large load (as defined by ERCOT), or
generators from locating in TNMP’s service area."
Staff's witness alleged that, under the merger, "TNMP would ... be subject to the risk of affiliate abuse."
Staff's witness alleged, "TNMP’s new association with retail electricity providers could lead to undue preference
and discrimination in favor of affiliated retail providers. Blackstone-affiliated data center
developers could receive unduly preferential treatment in the current rush to interconnect
new large loads to the grid. Blackstone-affiliated generating companies could also receive
undue preference in access and service from TNMP, while Blackstone affiliates that
provide grid equipment and services could be unduly favored as vendors to TNMP."
As an example, Staff's witness alleged that, under the merger, "TNMP would have the incentive to make investments in transmission and distribution
assets that favor its affiliated REP if the REP itself is affiliated with a generator or data
center. These types of undue preference and discrimination may not always be overt or
require explicit agreement or communication between the parties, and thus would be
difficult to guard against through policies (such as robust codes of conduct) and challenging
to monitor. For example, TNMP could provide reduced support for possible expansion
plans that are not the most advantageous to its affiliate REP or could provide superior
service in pursuing expedited interconnection for new large loads taking service from the
affiliated REP."
Staff's witness alleged, "TNMP has a substantial role in the interconnection of
large loads in Texas, and with many new large loads actively pursuing interconnection,
TNMP will have incentive to favor its affiliates in the timing and quality of its efforts to
interconnect the new large loads."
Staff's witness said, "As the gateway company to the grid and a key player in the
grid expansion process, it is critical that TNMP stay independent of data centers. Even if
acting through an independent REP, data centers will be able to tacitly coordinate with
TNMP if they have an affiliate relationship."
Staff's witness said, "TNMP has achieved the best possible structure in the Texas market design with no
connections whatsoever to competitive market segments. This makes TNMP optimally
positioned to provide non-discriminatory services, including interconnection services, to
all of its customers. TNMP is also optimally positioned to expand its transmission and
distribution facilities in a non-discriminatory way that takes into account the needs of its
entire customer base. The Acquisition will create affiliations between TNMP, a monopoly
service provider, and each of the competitive sectors. This is contrary to the independent
and neutral role set out for TDUs in Texas."
Staff's witness said that the current TNMP code of conduct is not sufficient to address competitive concerns from the merger
"The best way to
protect competition is to create a market structure with no competitive REP, generation,
data centers, or other large load affiliates in TNMP’s service area or in ERCOT overall.
This market structure has been achieved in TNMP’s service area. Allowing new affiliations
with competitive sectors as part of the Acquisition is a step in the wrong direction. The
code of conduct may help alleviate some competitive concerns, but will not be sufficient
in the service-based relationships between TNMP and REPs, generators, and large loads
including data centers," Staff's witness said
Staff's witness also proposed modifications to regulatory commitments made by TNMP, including commitments concerning TNMP's identity, name, and logo, including conditions which would apply if TNMP is permitted to have a competitive affiliate which is a REP
Specifically, Staff's witness proposed the following condition (Staff's additions compared TNMP's proposal are shown as underlined)
TNMP will maintain an identity, name, and logo that
is separate and distinct from the identity, name, and logos associated with
Blackstone and any current and future retail electric providers, wholesale
generation companies, and other Texas competitive affiliate of TNMP provided
that the Blackstone name and logo can be added to the TNMP name and logo for
branding purposes but provided that no current or future competitive affiliate with
operations in Texas uses the Blackstone name, logo, or other brand-identifying features for branding purposes. TNMP will not otherwise engage in joint marketing,
advertising, or promotional activities with any Blackstone retail electric provider,
aggregator, wholesale generation company, data center developer, large load that
operates in Texas, or any other current or future Texas competitive affiliate of
TNMP, in a manner that is inconsistent with the Public Utility Regulatory Act and
the Commission’s rules.
Explaining this proposal, Staff's witness said, "While Blackstone can add an indication of its
ownership to the TNMP name and logo (i.e., 'a Blackstone Company'), it should only do so if it cannot similarly brand other Texas competitive affiliates. Otherwise, Blackstone’s
competitive operations in Texas could benefit from TNMP’s advertising of Blackstone’s
name and logo. Moreover, advertising Blackstone’s name and logo, which would now be
associated with TNMP, may give the impression that services provided by Blackstone
affiliates in TNMP’s service territory are superior to services provided by non-affiliated
competitors."
Docket 58536
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November 14, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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