New Mexico Public Regulation Commission rejects Avangrid/PNM merger
The New Mexico Public Regulation Commission (NMPRC) rejected a merger agreement between PNM Resources, Inc., its wholly-owned subsidiary Public Service Company of New Mexico (PNM) and AVANGRID, Inc. on Wednesday.
In a 5-0 vote, NMPRC denied the parties’ agreements. The merger agreement had been reviewed and approved by five federal agencies and the Public Utilities Commission of Texas.
Both PNM and Avangrid said they were disappointed with the regulator’s decision.
“I am disappointed the Commission didn’t see the merits of the agreements reached by parties and also rejected our request to hear oral arguments. We put forth an agreement that would strengthen New Mexico’s future as we partnered with a global company to meet the challenges of climate change while ensuring affordable and reliable service to PNM customers for years to come,” said Pat Vincent-Collawn, chairman, president and CEO of PNM Resources based in Albuquerque, N.M. “We will review and evaluate the order. Meanwhile, we remain focused on managing our business, prioritizing our customers and delivering strong shareholder results.”
Advocates said NMPRC’s vote would result in New Mexico losing hundreds of millions of dollars in jobs and climate change-fighting investments. The company had promised to create 150 new high-paying jobs over three years, generating an estimated $200 million in economic benefits. Additionally, its commitment to building a 200-megawatt solar power facility on Navajo land would have brought economic development for the tribe to replace closing coal plants. The lost benefits would also have included $67 million in rate reductions, much of which would have gone to residential customers and small businesses.
“This unfortunate decision by the NMPRC means our state will lose $300 million in benefits for ratepayers, communities, and workers, as well as the important commitments and capabilities Avangrid would bring to address climate change,” said Steve Michel, deputy director of Western Resource Advocates’ Clean Energy Program. “The commission’s refusal to hear directly from the many parties supporting the merger shows that commissioner minds were already made up. As it has done so many times in the past, the PRC’s decision again sends a harmful message that New Mexico is not friendly to business or clean energy development.”
Commissioners said the risks in the agreement outweighed the benefits to consumers.
Avangrid said the company will evaluate its next steps. “While we re-evaluate the path ahead, we remain dedicated to the work we do every day across 24 states to create economic, social and environmental value in all the communities we serve. While we hope to one day welcome New Mexico into the AVANGRID family, our future remains bright – we are grateful for the daily efforts of our dedicated team and inspired by recent groundbreaking of Vineyard Wind, America’s first major offshore wind energy installation,” Avangrid said in a statement.
Avangrid is the third largest wind operator in the United States, and the company had argued that a strategic combination with PNM Resources would provide a platform for Avangrid to expand its renewables business in the Southwest. With headquarters in Orange, Conn., Avangrid Inc. holds the U.S. energy operations of its parent, Spanish energy company Iberdrola.
Other agencies and organizations in support of the agreement included: the Attorney General of the State of New Mexico, Western Resource Advocates, the International Brotherhood of Electrical Workers Local 611, Dine Citizens Against Ruining Our Environment, Nava Education Project, San Juan Citizens Alliance, To Nizhoni Ani, the Coalition for Clean Affordable Energy, Interwest Energy Alliance, Walmart, Inc., Onward Energy Holdings, LLC, M-S-R Power and Los Alamos County.
