ALBUQUERQUE, NM – A panel of New Mexico regulators on Wednesday rejected a proposed multi-billion dollar acquisition of the state’s largest electricity supplier by energy company Avangrid, saying the deal did not offer lack of adequate protections for clients and that the risks outweighed the promised benefits.
The Public Regulatory Commission voted unanimously to accept an auditor’s recommendation to reject the merger.
The five elected commissioners agreed that the deal would not be in the public interest. They have raised concerns about customer service and reliability issues in other states where Avangrid operates, including Maine. They also pointed out that the company initially withheld information during the proceedings, a decision that resulted in a fine of $ 10,000.
Commission Chairman Stephen Fischmann said New Mexico and many other states are at an extremely important stage in the transition to more renewable energy production. He acknowledged that utilities and regulators face more and more demands as transformation drives changes in the supply chain and how customers are affected.
He said Avangrid was not the right partner to help New Mexico through the transition given its track record elsewhere, an ongoing investigation into the executives of its multinational owner Iberdrola in Spain, and the potential to reliability issues and higher electricity rates.
âTo me, this whole deal kind of boils down to promises versus actual performance,â said Fischmann.
Under the proposal, Connecticut-based Avangrid would have acquired PNM Resources and its two utilities – Public Service Co. of New Mexico and Texas New Mexico Power. The cash transaction was valued at over $ 4.3 billion and would have opened the door for Iberdrola and Avangrid in a state where more wind and solar power could be generated and exported to larger markets.
Utilities, in an advertising blitz, touted more than $ 300 million in benefits, including tariff relief for PNM customers for three years, investments in economic development, creation of 150 jobs and other concessions obtained through negotiations with the parties concerned.
PNM Resources President and CEO Pat Vincent-Collawn released a statement after the vote, saying she was saddened by the decision.
“We will continue to assess any next steps that may allow us to bring positive benefits to the people we serve,” she said.
The case has been in the works for a year, with commission hearing officer Ashley Schannauer spending several months overseeing evidence gathering and two weeks of public hearings over the summer.
Schannauer presented his recommendation last week to the committee to veto the proposal. He also cited some conditions the commissioners should implement if they decide to back the merger, but it was clear the commission still had concerns after considering tons of evidence and hours of testimony.
The deal also came in two lawsuits filed last week, starting with a former contractor accusing Avangrid of fraud and racketeering. Avangrid sued for libel, saying the contractor was bitter about not getting new work and made false statements to interfere with the proposed New Mexico merger.
Schannauer at Wednesday’s meeting reiterated his concerns about reliability if Avangrid were to take over.
PNM and Avangrid officials had asked the commission to present oral arguments to address some of the commissioners’ concerns. The committee decided not to do so, noting that companies had had ample time over the past year to make their point.
Some environmental groups suggested on Wednesday that the move could cost the state hundreds of millions of dollars in lost jobs and renewable energy investments. But commissioners questioned the price, saying there was no guarantee that the jobs Avangrid promised would yield the expected economic returns.
During negotiations, Avangrid also pledged $ 12.5 million to support projects in Indigenous communities and to build 200 megawatts of renewable energy production and storage on the Navajo Nation in northwestern New Mexico. .
Yet Commissioner Joseph Maestas said the many concessions made during the negotiations were not enough to alleviate concerns over the deal and suggested that regulators did not have the funding or resources to ensure that the deal. ‘Avangrid would have kept his promises.
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