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A broad coalition of organizations and public officials held a joint news conference Thursday morning to voice firm support for the proposed merger between PNM Resources and Connecticut energy giant Avangrid.
Company executives organized the online event in response to Wednesday’s open meeting of the state Public Regulation Commission, during which three of the five elected commissioners said they oppose regulatory approval for the merger.
Representatives from 15 organizations and government entities participated in the news conference, including diverse business, tribal, environmental, consumer and labor leaders. Both Attorney General Hector Balderas and All Pueblo Council of Governments Chairman Wilfred Herrera Jr. addressed reporters.
The participating groups represent tens of thousands of New Mexicans, PNM Resources Chairman, President and CEO Pat Vincent-Collawn told reporters.
“We want to take this opportunity to address some of the concerns you heard at yesterday’s open meeting,” Vincent-Collawn said. “… We have a responsibility to our customers, employees and community partners to ensure they have all the facts when forming an opinion regarding the PNM/Avangrid merger.”
The PRC won’t vote on the merger until at least the next open public meeting on Dec. 8, when supporters will present responses to Hearing Examiner Ashley Schannauer’s recommendation that commissioners reject the deal. Schannauer – who oversaw eight months of evidence gathering, plus two weeks of public hearings in August – presented his findings on Wednesday to the PRC.
During such proceedings, commissioners usually just ask questions and discuss issues to clarify things, postponing a final vote until they hear responses to a hearing examiner’s recommendations from other parties.
But following Schannauer’s presentation, PRC Chairman Stephen Fischmann and two other commissioners – Cynthia Hall and Theresa Becenti-Aguilar – immediately stated their opposition to the merger based on Schannauer’s recommendation.
Balderas said that raises concerns about commissioner impartiality. They need to hear all sides before ruling and “not engage in hyperbole,” he said.
“Based on some commissioners’ statements, I’m concerned that several have implied as jurors that they’re leaning one way or another,” Balderas said. “The process is still ongoing, and they have a duty to be impartial.”
PNM Resources, along with Avangrid and its parent firm, Spanish company Iberdrola, S.A., say they remain confident in the regulatory process and hopeful that their positions will be fully heard and considered by the commission.
“The process isn’t done, and we respect that process,” Vincent-Collawn said. “… I’m still confident we can get a fair shake at the commission.”
If the 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 an all-cash transaction valued at $4.3 billion.
Of 24 parties participating in the case, 23 now either directly support the merger or don’t oppose it, based on dozens of benefits and concessions Avangrid agreed to in negotiations with the parties. That includes more than $300 million in rate relief for PNM customers, economic development investments in local communities, and creation of 150 new, high-paying jobs.
But during the PRC’s Wednesday meeting, commissioners questioned whether regulators can effectively enforce compliance with all the negotiated agreements, and whether PNM’s quality of service and grid reliability would deteriorate under Avangrid.
That’s based on Schannauer’s assertion that Avangrid and Iberdrola have demonstrated a tendency to put corporate profit over the interests of consumers, while also allegedly exhibiting unethical business behavior, such as resistance in complying with PRC rules and regulations by withholding information during the hearing process.
Company executives disputed those claims on Thursday.
Avangrid Deputy CEO Bob Kump said the company’s northeastern utilities – which have collectively been fined about $63 million since 2016, mostly for power outages during severe storms – have actually performed far better than other utilities in the region.
That’s based on standard power “interruption data measurements,” Kump said. And other companies paid much higher fines for storm-related blackouts than Avangrid, such as $75 million imposed on New York-based Con Edison during one storm, compared with just $1.5 million regulators fined Avangrid’s utility for outages during that same event.
In fact, most storm-related outages don’t reflect utility performance, but rather increasingly severe weather related to climate change, plus abundant vegetation in the Northeast that makes transmission-line maintenance much more difficult than in New Mexico’s desert landscapes, Kump said.
As for withholding information, Kump called that a “misconception.” The company responded to more than 1,000 questions during the hearing process with 10-day deadlines to supply all documents. That made rapid responses challenging, but the company did comply with all requests, he said.
Iberdrola Chief Development Officer Pedro Azagra Blázquez also addressed concerns over an ongoing criminal investigation in Spain that involves some Iberdrola executives, which he called a “preliminary fact finding exercise.” There’s been no determination of any wrongdoing, nor an indictment or formal charges.
“An investigation does not amount to a formal accusation or any charges that a crime has been committed,” Azagra Blázquez said.
Finally, PNM Chief Financial Officer Don Tarry, who will become PNM CEO if the merger is approved, said safeguards to ensure compliance with Avangrid’s negotiated agreements in New Mexico are written directly into the settlement accord with parties in the case. Regarding grid reliability, for example, Avangrid will face newly-established standards that no other local utility currently faces, with penalties for violations.
Vincent-Collawn said PNM needs the immense resources that Avangrid and Iberdrola can bring to New Mexico to transition the local electric grid to 100% non-carbon generation over the next two decades as required under the state’s Energy Transition Act.
“(It) will require capital and buying power PNM simply can’t do on its own, and that’s why we have chosen Avangrid and Avangrid has chosen PNM,” she said. “… We hope New Mexicans will see the value in our proposed merger with Avangrid so that together we can light a brighter path to the future.”
Parties respond to PRC concerns, prepare to argue their case next week