Advertising for utility merger proposal costs more than $1M - Albuquerque Journal

Advertising for utility merger proposal costs more than $1M

SANTA FE – Public Service Company of New Mexico poured more than $1 million into advertising from March through June to sell the public on its proposed merger with Avangrid.

Included among four bills to PNM from the Albuquerque marketing firm 3 Advertising is one from early March for $864,290 for ad campaign planning and production, plus broadcast, radio, digital and print ads, the Santa Fe New Mexican reported.

The expenditures – and in-person visits by PNM and Avangrid executives to key influencers – indicate the companies face not just a challenge to gain merger approval from the Public Regulation Commission. They’re also seeking wider public support in a process that could immediately go to the state Supreme Court if the commission rejects the proposal.

The advertising keeps coming.

“Well, there’s a lot of it, that’s for sure. It’s pretty amazing,” said Jeff Albright, who represents Bernalillo County in the matter. “I think it would be nice if they put that same level of effort into working with the parties” affected by the proposal.

Connecticut-based Avangrid, which hopes to buy PNM for $8.3 billion, has had a bumpy journey since the announcement of the planned merger late last year. Avangrid has been accused, among other things, of withholding information from the Public Regulation Commission about service problems involving its subsidiaries in the northeastern United States.

Avangrid on July 11 ran a full-page ad in the New Mexican, titled “An open letter to New Mexico from AVANGRID.” The letter, signed, “Humbly yours, Bob,” was from Bob Kump, president and deputy CEO of Avangrid.

He wrote Avangrid “never intended to leave the impression that we were withholding information and if we created that impression, we apologize.”

PNM and Avangrid also ran a joint full-page ad that day in the New Mexican that asserted, “PNM is merging with AVANGRID.” But approval of the merger from the Public Regulation Commission appears to be less than certain.

And the companies are not just advertising. PNM, Avangrid and Avangrid’s parent company, Spain-based Iberdrola, have brought out their bosses to talk to individuals who have input into key organizations’ positions on the proposed merger.

Pedro Azagra Blázquez, who serves the dual role of Avangrid board member and Iberdrola’s corporate development director, came to New Mexico last Monday to win support for the proposal.

Among those he met with in Albuquerque were representatives of Bernalillo County and the Albuquerque-Bernalillo County Water Utility Authority, neither of which has signed on with the merger proposal.

“We’re still trying to bridge the gap, and we are making progress,” Albright said, adding there’s “still a long way to go.” Attempts to schedule an interview with Blázquez through Avangrid and PNM public relations staff members were unsuccessful.

Many organizations have given their blessing to the proposed merger. Those include the San Juan Citizens Alliance, Diné Citizens Against Ruining Our Environment, Western Resource Advocates and the NAVA Education Project.

And some have not, including the Sierra Club and New Mexico Affordable Reliable Energy Alliance.

Some of the outstanding issues include the composition of the board that would oversee PNM, how much economic development aid would be given directly to the state in the transaction, and an investigation in Spain of potential wrongdoing involving two Iberdrola executives and some other companies’ officials.

Avangrid said the investigation is only a fact-finding mission, adding there have been no charges and Iberdrola is cooperating with investigators.

The merger proposal has the support of Gov. Michelle Lujan Grisham and Attorney General Hector Balderas, both Democrats.

Supporters say PNM and New Mexico lag in converting to increasingly important renewable energy sources such as solar and wind. They say New Mexico has an abundance of both and that Avangrid and Iberdrola, which have considerable experience in renewable energy, could move the state into the new era.

Pat Vincent-Collawn, president and CEO of PNM Resources, was among Avangrid and PNM executives who met with representatives of the New Mexican’s editorial board in May.

At that meeting, Vincent-Collawn said: “I’m sure you know we would like you to look favorably on and ultimately endorse the merger that we’re talking about with the Avangrid family of companies. … But we would like today to answer every one of your questions, no matter how difficult they are.”

PNM and Avangrid are making their arguments for the importance of this merger through ads. “They say that shareholders are paying for this,” said Mariel Nanasi of Santa Fe, a critic of the merger. “Almost weekly now, they’re having ads in the Albuquerque Journal and Santa Fe New Mexican.”

Tim Calkins, a clinical professor of marketing at Northwestern University in Illinois, said “you have to make sure the benefits come across” when companies make a proposal like this. Calkins hasn’t studied the New Mexico situation extensively.

“Some of the negatives are getting a lot of attention and overwhelming the positives,” he said. He said image-building for companies is best done early because “playing catch-up” is tough. “And when you miss that window, it’s hard to overcome it.”

The four invoices to PNM from 3 Advertising were acquired by Nanasi, head of New Energy Economy. Nanasi is a dogged adversary of PNM and the merger who has sought one document after another through the discovery process allowed in Public Regulation Commission cases.

Documents that are acquired through discovery are shared with dozens of other participants in a case, such as lawyers and staffers, and may become relevant to a case.

Avangrid has hired Joanie Griffin, a marketing and public relations specialist with Sunny505 in Albuquerque, to assist it with ads and media relations. Griffin said she and her company are getting paid their standard rate, totaling $150 an hour.

The ads are designed to “introduce the company” to New Mexico. Griffin helps write ad copy and devise the marketing strategy. “They hired me to have someone on the team that is local and knows the media here,” she wrote. “Advertising is one of the ways we use … to get the truth out.”

Griffin, contracted for service in May, said through email, “I joined the effort because I believe the merger is the best way for New Mexico to achieve the governor’s goals of being 100% renewable by 2045.” She said the feedback she receives from people about the proposal is excellent.

Some expert witnesses, such as Scott Hempling, a Maryland attorney who has written extensively about utilities, have offered scorching written assessments of the merger proposal. The proposal is required by the commission to be in the public interest. Hempling said the proposal appeared designed to benefit shareholders rather than the public.

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