New Mexico Gas Co. files to be sold

New Mexico Gas Co. has officially requested state permission to be sold.

Canada-based Emera is the current parent company of New Mexico Gas Co. In August, Emera announced its intent to sell the New Mexico gas utility to the Louisiana-based private equity firm Bernhard Capital Partners, or BCP Management, at a cost of $1.252 billion.

On Monday afternoon, New Mexico Gas Co., Emera and Saturn Utilities Holdco — part of a managed portfolio of companies under BCP Management — filed a request with the New Mexico Public Regulation Commission so Saturn Holdco could replace Emera as the owner of New Mexico Gas Co.

If approved, Saturn Holdco would pay about $700 million in cash at closing and assume about $550 million in debt New Mexico Gas Co. holds, according to the PRC filing.

“The shared philosophy of BCP Management and Saturn Holdco is to partner with existing strong management teams who run the day-to-day operations of its portfolio companies, including utilities such as (New Mexico Gas Co.),” the executive summary of the filing states.

New Mexico Gas Co. would continue operating as a standalone entity, even if the sale is approved, with its own local board of directors and management team, according to the filing. Designated Saturn Holdco board members would replace Emera board members.

In August, BCP Founder and Partner Jeff Jenkins committed to keeping all of the gas company’s current jobs in place as well as adding 70 new jobs. However, the estimated job creation numbers are slightly lower than anticipated, according to Monday’s filing.

Jeff Baudier, president of Saturn Holdco and senior managing director at BCP Management, acknowledged that in his testimony, which was included in the sale request filing to the PRC. He said though the initial estimate of new jobs was in the range of 70, further analysis suggested that 51 to 61 new jobs “are more likely.”

“Through all of this, (New Mexico Gas Co.) customers will experience improved quality and reliability of service from what they experienced prior to the closing of the transaction,” he said.

The 51 to 61 new jobs should result in $40 million or more in annual additional economic activity in New Mexico and more than $2.2 million annually in new state and local tax revenues, according to the filing’s executive summary.

Saturn Holdco is “well funded,” according to the filing. Emera previously told the Journal the decision to sell New Mexico Gas Co. stemmed partly from financial reasons.

Emera would still plan to stick around for a little bit after the sale. Per a transition services agreement, Emera would continue for a year and a half after closing “to provide certain support services” to New Mexico Gas Co., so there’s time to move the support services back to New Mexico.

Of course, it’s up to the PRC if the sale goes through. The companies requesting it asked state regulators to approve it as soon as possible and at least before Sept. 30, 2025, which is when the companies would anticipate closing the sale.