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** New Mexico Gas Company latest utility facing private equity takeover ([link removed])
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By Keriann Conroy on November 13, 2025

A private equity firm whose limited experience owning utilities is checkered with compliance problems and cost overruns is attempting to buy ([link removed]) the New Mexico Gas Company (NMGC), raising concerns from regulators, environmental advocates and customers in that state about the company, Bernhard Capital Partners (BCP).

The proposed bid by BCP to purchase the gas utility is part of a larger national trend in which private equity firms are seeking to buy utility companies. This includes another much larger acquisition attempt in New Mexico, that one by Blackstone to buy Public Service Company of New Mexico (PNM), the state’s largest electric utility company.

The BCP
acquisition ([link removed]) would place NMGC under the ownership of Saturn Utilities Holdco, LLC (Saturn), a subsidiary of BCP, which is based in Louisiana. As a private company, BCP is not subject to the same legal and financial transparency as NMGC’s current owner, the publicly traded energy holding company Emera. The New Mexico Public Regulation Commission (PRC) must approve the transaction.


** Testimony: Bernhard Capital Partners’ ownership of Louisiana water utility included sludge buildup, bloodworms
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Advocates and customers have raised concerns about what they say is BCP’s problematic and limited track record of utility ownership.

New Energy Economy ([link removed]) (NEE), a New Mexico climate advocacy group opposing the BCP acquisition, drew attention ([link removed]) to National Water Infrastructure (NWI), a small Louisiana water utility which BCP has owned since 2020.

Since then, NWI has been subject to an enforcement action resulting in a settlement ([link removed]) with Louisiana’s Department of Environmental Quality (LA DEQ).

NEE’s witness, Louisiana-based attorney Jesse George, testified that the LA DEQ settlement and numerous other non-compliance matters ([link removed]) at NWI are evidence of BCP’s business track record ([link removed]) of exposing its utility customers to harm and its inexperience in operating utilities. The LA DEQ cited NWI under BCP’s leadership for failing to operate and maintain the treatment facility properly. LA DEQ’s inspection found a build-up of solids in the treatment equipment, close to the surface of the wastewater. Further, the inspection revealed a large amount of sludge build-up, with bloodworms observed throughout the sludge – indicative of stagnant water containing organic matter often
associated with sanitary waste.

BCP denied committing any violations, but agreed to pay the LA DEQ a total of $12,817.75 in settlement costs. George’s testimony noted that NWI is a significantly smaller utility than NMGC, with 23,000 customers compared to NMGC’s 556,000 ([link removed]) . George stated ([link removed]) , “The Joint Applicants have not attempted to minimize the risks posed by their ownership and lack of regulated gas utility experience by offering customer protections, like automatic penalties or performance failures. I don’t see any financial insulation for customers if performance declines. Or if reliability declines.”

George testified ([link removed]) that BCP’s track record at NWI was important evidence for the PRC to consider as it applied its six-factor test to evaluate whether the transaction “satisfies the public interest,” as required under New Mexico law. Those factors include “Whether [the transaction] provides benefits to utility customers,” “Whether the quality of service will be diminished,” “Careful verification of the qualifications and financial health of the new owner,” and “Adequacy of protections against harm to customers.”

But at the request of BCP, the NM PRC Hearing Examiners ruled ([link removed]) to deny an exhibit of George’s testimony, in addition to denying his qualifications as an expert witness, instead granting his testimony in part as a lay witness.

During a public comment hearing, the majority of comments came from NMGC customers in opposition ([link removed]) to the purchase. Many cited BCP’s lack of experience and past mishaps running NWI among their concerns.


** BCP donated to decision makers on previous bid for Entergy’s Louisiana gas system
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Though BCP is new to gas utility management, NMGC would not be the firm’s first gas utility acquisition. Earlier this year, through its subsidiary – Delta Utilities – BCP received final approval ([link removed]) from the New Orleans City Council to purchase Entergy’s Louisiana and New Orleans gas systems, following unanimous approval ([link removed]) from the Louisiana Public Service Commission last year. The sale did not receive a full hearing before the council, but nearly a dozen people and organizations provided comments ([link removed]) while approximately 80 people submitted comments online, all of which were in opposition.

BCP and its executives donated to all five of the Louisiana Public Service Commissioners over the seven years prior ([link removed]) to gaining approval of the acquisition, according to the investigative newsroom Floodlight. $149,000 of the total $200,000 in contributions went to Commissioner Craig Greene, whose district covered Entergy Louisiana’s gas service territory. Delta Utilities – backed by BCP – purchased Entergy’s gas systems for $484 million in July 2025 ([link removed]) , acquiring 200,000 customers. The Louisiana Public Service Commission approved the purchase by a 5-0 vote. Greene told Floodlight before the vote that the contributions from BCP did not affect his decision. After the vote, Greene announced he would return the donations he reported receiving from BCP that year, totaling $36,500.

The company also purchased CenterPoint’s gas systems ([link removed]) in Louisiana and Mississippi, which serve 380,000 customers for $1.2 billion. The deal was closed in July of this year ([link removed]) .


** BCP founder formed private equity firm after selling firm that mismanaged multiple costly projects

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BCP’s troubles in managing NWI are not the company founder’s first brush with mismanagement. BCP’s founder, James Bernhard Jr., formed ([link removed]) the private equity firm Bernhard Capital Partners in 2013, following the sale of an engineering, construction, and industrial firm, The Shaw Group. Shaw was involved in several business fiascoes under Bernhard Jr.’s leadership.

After Hurricane Katrina, FEMA awarded ([link removed]) Shaw and three other companies no-bid housing contracts of up to $100 million each to support recovery efforts in the disaster-stricken area in 2005. In the proceeding backlash, with many concerned that the Bush administration was not doing enough to respond post-hurricane, FEMA pledged ([link removed]) to rebid the contracts. Years later, audits revealed ([link removed]) that the contract recipients, including Shaw, wasted tens of millions of dollars across those deals. In addition, after the BP oil spill along the Gulf of Mexico in 2011, the state legislative auditor found ([link removed]) that Shaw may have overbilled the state of Louisiana by nearly $500,000 for costs of building sand berms to block oil from washing
ashore.

Shaw, led by Bernhard Jr., was the main subcontractor ([link removed]) to Westinghouse Electric Company for construction of the Vogtle nuclear power plant in 2012. The project stalled for years, resulting ([link removed]) in cost overruns estimated at $13 billion, and ultimately led to a bankruptcy filing by Westinghouse. By the end of 2012, Bernhard Jr. sold ([link removed]) The Shaw Group for $3 billion.

Other BCP executives have a history of cost overruns and overpromises on project deliverables in the energy sector. BCP executive, and Saturn Holdco President Jeffrey Baudier was the former CEO of Petra Nova LLC, an NRG company capturing carbon dioxide from one of four coal units at W.A Parish Generating Station near Houston, Texas. The carbon capture project ([link removed]) stopped operating in 2020, signaling a major setback for proponents of coal carbon capture. The $1 billion project, including $195 million of public funding from the U.S. Department of Energy (DOE), claimed to reduce emissions by 90%. However, a report submitted to DOE found Petra Nova was capturing only 7% of the coal plant’s carbon dioxide, according to EPA data.


** NM PRC staff recommended substantial changes to the application for approval

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NM PRC staff found ([link removed]) that, as proposed by NMGC and Saturn, the transaction provides “no long-term tangible direct benefit to NMGC’s customers. Staff recommended the inclusion of substantive financial long-term commitments that directly benefit customers, a further commitment to addressing safety issues and staffing, and specific cost allocation to mitigate future rate increases, including ([link removed]) the non-recovery of costs associated with the acquisition. The staff’s position is that the transaction should only be approved if BCP agrees to enact those changes. Staff member Naomi Velasquez notes that “this transaction is, at best, one denoted by status quo with benefits to NMGC and its ratepayers being nebulous under the most optimistic of scenarios.”


** Proposed transaction draws concern over state’s climate commitments

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Many opponents to Entergy’s sale of its Louisiana gas system to BCP’s Delta Utilities voiced concerns ([link removed]) over Delta Utilities’ plans to make additional investments in gas infrastructure, which they believe would hinder greenhouse gas emissions reduction goals. Similar opposition is growing in New Mexico. Gov. Michelle Lujan Grisham signed an executive order ([link removed]) in 2019 committing New Mexico to reduce GHG emissions by at least 45% by 2030 compared to 2005 levels.

Another New Mexico clean energy advocate, the Coalition for Clean Affordable Energy, testified ([link removed]) that the building of any new data centers powered by gas in New Mexico does not align with the state’s climate commitment. BCP CEO Jeff Jenkins said in an interview ([link removed]) that BCP sees a “generational investment opportunity” in providing power to the nation’s growing number of data centers.


** Private equity acquisitions carry high stakes for captive customers

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Private equity interest in utilities ison the rise ([link removed]) , largely focused so far onutilities poised for major infrastructure buildout ([link removed]) to accommodate projected load growth from artificial intelligence and data centers. The value proposition comes when utilities make capital expenditures – they recoup from their captive customers the costs of qualifying projects plus an additional profit margin.

Additionally, the moves to own utilities come after many of the same private equity firms havebuilt up robust portfolios ([link removed]) of large power users – and look to add data centers to the mix. Given the expansiveness of private equity holdings, potential conflicts of interest loom large. For example, a firm that owns a utility might also hold a stake in a large industrial customer of that utility. In that scenario, the private equity firm could have an interest in keeping rates low for the industrial customer – potentially at the expense of captive residential and small business customers.

Such concerns over customer impacts were prominent inBlackRock’s recent bid to take over Allete ([link removed]) , whose largest subsidiary Minnesota Power serves electricity to the northeastern corner of the state, an area that includesa potential new data center ([link removed]) . Minnesota utility regulators signed off onthe contentious deal ([link removed]) in October over theobjections of consumer advocates ([link removed]) andan administrative law judge who warned ([link removed]) that the multitrillion-dollar firm’s aggressive pursuit of profits could stick captive
utility customers with higher costs. Supporters of the deal ([link removed]) mostly includedorganizations and individuals with financial ties to the utility ([link removed]) .

Shortly beforeMinnesota regulators signed off ([link removed]) on the Allete transaction, news broke thatBlackRock is also targeting Virginia-based AES ([link removed]) , a substantially larger energy company that operateselectric utilities in Indiana ([link removed]) and Ohio while also providingrenewable power to large tech companies ([link removed]) – including ones looking to expand their data centerportfolios ([link removed]) . When deal rumors came to light, again promptingconcerns from consumer advocates
([link removed]) , AES was valued around $38 billion. Around the same time,reports surfaced ([link removed]) that BlackRock was planning to buy Aligned Data Centers – a developer worth as much as $40 billion.

While the flurry of private equity interest lately is new, investment firms’ snapping up utilities is not entirely unprecedented. Consumer advocates in the Minnesota proceedingpointed to an earlier example ([link removed]) of a utility take-private deal that did not turn out well for customers. Michigan’s Upper Peninsula Power Company, known as UPPCO, was sold to a private equity firm in 2014 and since then has seena series of successive rate hikes ([link removed]) and a sale to another private equity firm. Its customers now pay rates 9 cents higher per kilowatt than the state average, as cited ([link removed]) in the Minnesota proceeding.


** “A utility is not like a Burger King”

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During an evidentiary hearing on November 4, the NM PRC hosted ([link removed]) on the acquisition of NMGC on Nov. 4, Saturn Holdco President Jeffrey Baudier was cross-examined by Commissioners and intervening parties in the docket. When questioned about his testimony regarding the acquisition premium, an intervenor asked Baudier to explain his position on the staff’s recommendation ([link removed]) that NMGC establish a regulatory liability equal to the goodwill or acquisition premium resulting from the transaction, or $100 million. In his written testimony, Baudier claims the staff proposal is based on “the flawed premise that the acquisition premium is due solely to the government monopoly granted to the utility and that the amount over the book value of the utility should be given to customers.” During the hearing, Baudier goes on to say
([link removed]) , “That would be the legal equivalent of me going to Burger King and buying a hamburger and saying, ‘I own part of Burger King because I paid for the hamburger.’”

Later, Commission Chair Gabriel Aguilera addressed Baudier’s comment, saying ([link removed]) the analogy “completely misses the mark.” Chair Aguilera stated ([link removed]) , “Burger King operates in a competitive environment, and the Gas Company is a natural monopoly. I heard you explain your view on the regulatory compact. Nothing like that exists for Burger King, but it does exist for the Company that you are seeking to purchase.”


** Recent EPI articles and press:
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* Michigan Advance: Complaint argues DTE-tied group aimed to funnel $100k into Unlock Michigan campaign ([link removed])
* The Assembly: Duke Energy, once outspoken on diversity and the environment, now whispers ([link removed])
* The Nevada Independent: Southwest Gas wants to ‘modernize’ how it sets rates. Critics fear risks to customers ([link removed])
* FirstEnergy wants to make Ohio customers pay $108 million for its corporate accounting foul-up ([link removed])

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