Power lines traverse a stretch of BLM land in central New Mexico. (Aaron Wilson / )
Copyright © 2021
A broad coalition of organizations and officials held a joint press conference Thursday morning to show their firm support for the proposed merger between PNM Resources and Connecticut energy giant Avangrid.
Company executives organized the online event in response to the state public regulation commission’s open meeting on Wednesday at which three of the five elected commissioners said they were against regulatory approval of the deal.
The press conference was attended by representatives from 15 organizations and government agencies, including representatives from various business, tribal, environmental, consumer and employee representatives. Both Attorney General Hector Balderas and All Pueblo’s governing councilor Wilfred Herrera Jr. reached out to reporters.
The participating groups represent tens of thousands of New Mexicans, Pat Vincent-Collawn, chairman, president and CEO of PNM Resources, told reporters.
“We would like to take this opportunity to address some of the concerns you heard at yesterday’s open session,” said Vincent-Collawn. “… We have a responsibility to our customers, employees and community partners to ensure that they have all the facts when forming an opinion on the PNM / Avangrid merger.”
The PRC will not vote on the merger until the next public session on December 8th if supporters provide responses to Hearing Examiner Ashley Schannauer’s recommendation that commissioners reject the deal. Schannauer – who oversaw the gathering of evidence for eight months and two weeks of public hearings in August – presented his findings to the PRC on Wednesday.
In such procedures, commissioners usually just ask questions and discuss questions to clear things up and postpone a final vote until they hear replies to a hearing examiner’s recommendations from other parties.
But after Schannauer’s presentation, PRC chairman Stephen Fischmann and two other commissioners – Cynthia Hall and Theresa Becenti-Aguilar – immediately declared their opposition to the merger based on Schannauer’s recommendation.
Balderas said this raises concerns about the impartiality of the commissioners. You have to listen to all sides before making a decision, and “don’t go overboard,” he said.
“Based on what some commissioners have said, I am concerned that several jurors have indicated that they are leaning in one way or another,” Balderas said. “The process is still ongoing and you have a duty to be impartial.”
PNM Resources, along with Avangrid and its parent company, Spanish company Iberdrola, SA, remain confident about the regulatory process and hope that their positions will be fully heard and taken into account by the Commission.
“The process is ongoing and we respect that process,” said Vincent-Collawn. “… I am still confident that we will get a fair share at the Commission.”
If PRC approves the merger, Avangrid would acquire PNM Resources and its two utility subsidiaries – Public Service Co. of New Mexico and Texas New Mexico Power – in a $ 4.3 billion cash transaction.
Of the 24 parties involved in the case, 23 now either directly support or oppose the merger, based on dozens of benefits and concessions Avangrid agreed in negotiations with the parties. This includes more than $ 300 million in tariff relief for PNM customers, investing in economic development in local communities, and creating 150 new, high-paying jobs.
However, during Wednesday’s meeting of the People’s Republic of China, commissioners questioned whether regulators can effectively enforce compliance with all negotiated agreements and whether PNM’s service quality and network reliability would deteriorate under Avangrid.
This is based on Schannauer’s assertion that Avangrid and Iberdrola have shown a tendency to put corporate profits above consumers’ interests while also displaying allegedly unethical business conduct, such as:
Company executives denied these claims on Thursday.
Avangrid Deputy CEO Bob Kump said the company’s northeastern utilities, which have been fined about $ 63 million overall since 2016, mostly for power outages during severe storms, actually fared far better than other utilities in the region.
That’s based on standard performance “interruption data measurements,” said Kump. And other companies paid much higher fines for storm-related power outages than Avangrid, such as $ 75 million imposed on New York City’s Con Edison during a storm, compared to just $ 1.5 million by regulators that Avangrids utilities contributed to Fined failures during the same event.
In fact, most storm-related outages do not reflect utility performance, but rather increasingly harsh weather related to climate change, as well as lush vegetation in the northeast that makes transmission lines much more difficult to maintain than in the desert landscapes of New Mexico, Kump said.
As for withholding information, Kump called it a “misunderstanding”. The company answered more than 1,000 questions during the hearing process with 10 days notice to provide all documents. This made it difficult to respond quickly, but the company complied with all requests, he said.
Pedro Azagra Blázquez, Iberdrola’s Chief Development Officer, also raised concerns about an ongoing criminal investigation in Spain involving some Iberdrola executives, which he described as a “preliminary investigation into the facts”. No wrongdoing was found, nor were indictments or formal charges brought.
“An investigation does not constitute a formal charge or an allegation that a crime has been committed,” said Azagra Blázquez.
Finally, Don Tarry, PNM’s chief financial officer, who will become PNM’s CEO if the merger is approved, said security measures to ensure compliance with the agreements negotiated by Avangrid in New Mexico will be included directly in the settlement agreement with the parties to the case. With regard to network reliability, for example, Avangrid is confronted with newly introduced standards to which no other local utility is currently exposed, with sanctions in the event of violations.
Vincent-Collawn said PNM needed the immense resources Avangrid and Iberdrola can bring to New Mexico to convert their local electricity grid to 100% carbon-free generation in accordance with the state’s energy transition law over the next two decades.
“(It) takes capital and purchasing power that PNM cannot afford on its own, and that’s why we chose Avangrid and Avangrid chose PNM,” she said. “… We hope that New Mexicans will see the value of our proposed merger with Avangrid so that together we can find a better way forward.”
The parties are responding to the PRC’s concerns and preparing to argue their case next week
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