Group that blocked New Mexico utility merger eyes data centers in Blackstone deal
By Laila Kearney
NEW YORK (Reuters) -Blackstone Infrastructure's plans for data centers in New Mexico will be a deciding factor in whether stakeholders challenge the private equity group's $11.5-billion proposed acquisition of electric company TXNM Energy, the group that blocked TXNM's previous merger plan told Reuters this week.
TXNM, which is a holding company for regulated utilities, including PNM in New Mexico, announced its sale agreement with Blackstone on Monday in the latest of several recent U.S. power industry deals propelled by rising electricity demand from Big Tech's AI data centers.
The agreement will require the approval of state regulators, with input from PNM stakeholders, including the New Mexico Department of Justice, consumer advocates and clean power groups such as New Energy Economy.
New Energy led the effort to ultimately thwart TXNM's last agreement to sell to power company Avangrid, the U.S. unit of Spanish electric company Iberdrola. After the fight over the proposed acquisition escalated to the New Mexico Supreme Court, Avangrid abandoned its $8.3-billion bid for TXNM in late 2023.
Since the foiled deal, data centers have emerged as the biggest driving force behind U.S. electricity demand, which is on track to reach record highs this year and in 2026.
How Blackstone plans to capitalize on that demand in New Mexico will be a key issue in New Energy Economy's scrutiny of the TXNM purchase, the nonprofit's director, Mariel Nanasi, said.
Among the considerations are whether Blackstone intends to own data centers in New Mexico, either directly or through affiliates, and how it handles the costs of upgrading electrical systems to connect the large energy loads, Nanasi said.
"We are going to want to have real guardrails around that," she said.
TXNM and Blackstone representatives, on a call with investors shortly after the acquisition announcement, said they planned to meet with stakeholders over the next 90 days before filing their plan with the state.
As artificial intelligence data centers proliferate and grow to use record amounts of electricity, regulatory fights have emerged over who pays for additional infrastructure and upgrades needed for the giant energy consumers.
The regulated utilities under TXNM can power data centers, but they are barred by state regulations from developing, owning, or operating the centers for third parties, said one person familiar with the Blackstone-TXNM arrangement, who spoke on condition of anonymity.
Any transmission upgrades or power generation built to serve data centers would be paid for by the data center companies, the person said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
21 minutes ago
- Business Insider
Top U.S. Automaker Rare Earth Suppliers Receive Export Licenses from China
Last week, President Trump accused China of violating its preliminary trade deal reached with the U.S. These violations included the continued restriction of rare earth element exports, which are critical in the development of semiconductors, cars, and planes. Now, China has responded in favor of the U.S. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter China has provided temporary rare earth export licenses to suppliers of three top U.S. automaker brands, General Motors (GM), Ford (F), and Stellantis (STLA), per Reuters. This comes after Beijing imposed rare earth export restrictions in April as a response to Trump's tariffs, although the restrictions didn't apply just to the U.S. Automakers around the world had previously warned of supply chain disruptions if China continued to restrict the elements. China Eases Rare Earth Exports to Top U.S. Automakers The export licenses will be in effect for six months, with the timeline possibly set in order to respond to U.S.-China trade developments. Reuters ' sources didn't mention the quantity or exact rare earths covered through the export licenses. China holds a near-monopoly on rare earths and produces about 90% of them across the globe.
Yahoo
29 minutes ago
- Yahoo
USDA redaction of trade analysis causes concern about report integrity
By Julie Ingwersen and Leah Douglas CHICAGO/WASHINGTON (Reuters) - Analysts voiced concerns this week about the integrity of U.S. Department of Agriculture reports after the agency delayed a report and excluded findings that point to tariffs as a reason for a forecasted increase in the agricultural trade deficit, according to Reuters interviews with four analysts. The administration of President Donald Trump has pledged to shrink the farm trade deficit and has said tariffs will strengthen the farm economy, but farm groups have been critical of the approach. The agency's delay of a quarterly agricultural trade report and exclusion of its typical explanatory text were concerning because the moves raised questions about the objectivity of the data, two analysts said. "The trade is uneasy about USDA statistics now," said Charlie Sernatinger, head of grains with Marex, a brokerage and financial services company. A USDA spokesperson said the report was delayed by an internal review. "The report was hung up in internal clearance process and was not finalized in time for its typical deadline. Given this report is not statutory as with many other reports USDA does, the department is undergoing a review of all of its non-statutory reports, including this one, to determine next steps," the spokesperson said. The quarterly trade outlook report jointly published by the USDA's Economic Research Service and Foreign Agricultural Service was scheduled to be released on May 29. Shortly before it was set to publish, its authors were told to stop its release, according to a source familiar with the situation. The authors were then questioned by leaders at the ERS, FAS and USDA Office of the Chief Economist about the report's attribution of the growing agriculture trade deficit to tariffs and sentiments like "Buy Canadian" that have reduced demand for U.S. goods, the source said. In the delayed report released on Monday, the USDA raised its forecast of the U.S. agriculture trade deficit for fiscal-year 2025 to $49.5 billion, from the $49 billion it previously forecast in February. The version of the report published on Monday contains correct and unaltered data, the source said, but excludes explanatory text typically contained in the forecasts. The report delay and redaction were first reported by Politico. Such trade reports would typically be reviewed by communications and policy staff, but the removal of the explanatory text was highly unusual, according to a second source familiar with the report publication process. Two other analysts said they were confident in the USDA data for now, but expressed concern about how Trump's disruption of the federal government could affect future reports. "Departures of key personnel limit the ability of agencies to collect and analyze information," said Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. The USDA has lost about 27% of ERS employees and 14% of FAS employees to terminations or voluntary incentives to leave the agency as the Trump administration works to reduce the size and cost of the federal government, according to Reuters reporting. The U.S. had an agricultural trade surplus for decades but in recent years, imports of high-value goods like alcohol, fruits and vegetables have driven a growing deficit, according to USDA data. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Yahoo
32 minutes ago
- Yahoo
Analysts raise price targets on CoreWeave after blowout Q1, despite CapEx concerns
-- CoreWeave Inc (NASDAQ:CRWV) reported a strong debut earnings release as a public company, delivering better-than-expected revenue and robust guidance. Yet, shares fell by 5.4% in Thursday's trading, with investors focusing on the company's aggressive capital expenditure plans. Despite near-term pressure, analysts overwhelmingly reiterated bullish ratings and have significantly raised price targets. They cited rapid AI infrastructure demand and substantial new customer wins as the driving forces behind CoreWeave's long-term positioning. The AI-oriented cloud infrastructure firm delivered first-quarter revenue of $981.6 million, surpassing estimates by over $100 million and growing 420% year-over-year. CoreWeave expects Q2 revenue of $1.06 billion to $1.1 billion and full-year revenue between $4.9 billion and $5.1 billion, well ahead of consensus estimates. However, CapEx guidance of $3 to $3.5 billion for the second quarter, roughly three times expected revenue, led to concerns around free cash flow and dilution risk. Investors reacted negatively to the elevated spending levels despite the otherwise strong results. BofA analyst Brad Sills raised his price target to $76 from $42 while maintaining a Buy rating, calling CoreWeave's Q1 performance validation of its 'best-of-breed' position in the AI infrastructure market. Sills flagged better-than-expected return on net assets and strong contract signings, including a $12 billion OpenAI deal and $4 billion expansion with another large enterprise. While acknowledging CapEx came in above forecasts, he highlighted margin stability when adjusting for IPO-related costs. Mizuho's Gregg Moskowitz lifted his price target to $70 from $46 and reiterated an Outperform rating. He noted that the company's top-line guidance is 'materially' ahead of already strong Street expectations. 'CRWV is positioned to capture meaningful share of an AI cloud provider market growing at a server-melting pace,' Moskowitz wrote. He acknowledged near-term pressure on margins due to accelerated investment but said valuation remains reasonable. Jefferies analyst Brent Thill raised his price target to $80 from $51. He called CoreWeave a 'multi-year winner' based on customer growth and its ability to align CapEx with signed contractual deals. Thill cited new enterprise traction and the deal with OpenAI as evidence of momentum. He said the stock's premium to peers is justified by its unmatched growth profile in a rapidly scaling market. Not all analysts were bullish. Citi reiterated a Neutral rating and $43 target, pointing to mixed profitability and declining RPO. DA Davidson downgraded the stock to Underperform with a $36 target. The firm warned that investors 'may not want to scale this business,' drawing comparisons to the pitfalls of scaling WeWork (OTC:WEWKQ). Still, most analysts see CoreWeave as poised to capitalize on accelerating AI infrastructure demand. As Morgan Stanley's Keith Weiss wrote, 'Accruing large contracts from the most demanding GenAI users provides strong validation of CoreWeave's positioning.' Related articles Analysts raise price targets on CoreWeave after blowout Q1, despite CapEx concerns Constellation Brands jumps as Berkshire raises stake CrowdStrike CEO Kurtz said 'not riding off into sunset', remains large shareholder Connectez-vous pour accéder à votre portefeuille
