TECO wants to acquire New Mexico Gas in a stock-purchase and debt-assumption deal valued at $950 million. But PRC staff, the Attorney General’s Office and New Mexico Industrial Energy Consumers oppose it, arguing that TECO is overpaying for the utility and that quality and reliability of service could suffer as the new owners seek to cut costs to recoup their investment.
PRC hearing examiner Carolyn Glick said up to nine days will be needed to accommodate all testimony and cross-examination. The case is considered one of the most contested nonrate-related issues to be heard by the PRC.
“This is the biggest case I’ve seen in 10 to 15 years at the commission,” said Peter Gould, general counsel for Industrial Energy Consumers.
If approved, the transaction would mark the largest acquisition to date by TECO, a publicly traded holding company that operates two electric and natural gas utilities in Florida with 1 million customers. The sale would grow the company’s base by 50 percent, with 509,000 New Mexico homes and businesses joining its roster.
Before testimony began Monday, Glick approved requests by the AARP and the city of Farmington to withdraw as intervenors in the case. Farmington had never taken an official position in the case despite its original decision to participate.
The AARP, however, has opposed the sale, arguing that older people on fixed incomes could end up paying much higher rates for less service if TECO tries to aggressively recoup its investment. The organization withdrew from the case because its positions are adequately represented by other intervenors, said AARP attorney Jeffrey Albright.
Meanwhile, leaders from the New Mexico Business Coalition and the New Mexico Utility Shareholders Alliance spoke in favor of the sale. The business coalition delivered a petition in support of the deal signed by more than a hundred businesses from around the state.