PNM / Avangrid ask to contact the PRC directly
Copyright © 2021 Albuquerque Journal
PNM Resources and Connecticut-based energy giant Avangrid wish to testify directly before the state’s Public Regulatory Commission on Wednesday, when the commission meets to consider the proposed company merger.
The companies filed a motion on Friday asking that the five elected PRC commissioners allow them to address the issues raised at the PRC open town hall meeting last week. PRC President Stephen Fischmann and two other commissioners – Cynthia Hall and Theresa Becenti-Aguilar – openly declared their opposition to the deal at this meeting after hearing examiner Ashley Schannauer recommended dismissing fusion.
Schannauer – who chaired eight months of evidence-gathering and two weeks of public hearings in August – told commissioners that, in his view, the potential harm to allow Avangrid and its parent company, Spanish company Iberdrola, SA , to acquire PNM Resources outweighs the public benefits.
But the companies, as well as the organizations supporting the merger, say they want the opportunity to directly address issues and concerns raised at last week’s meeting before commissioners take the final vote on the deal. . This is critical because the commission is ruling on something that will impact the entire state for decades to come, said Pat Vincent-Collawn, chief executive officer of PNM Resources.
“This decision is important to New Mexico, and the parties to the case have worked diligently over the past year to ensure it is in the best interests of clients and communities across the state. “Vincent-Collawn told The Journal in an email. . “As the Commissioners prepare to make this landmark decision, we believe parties should be given an opportunity to describe how the full brief and the many commitments in our agreements were crafted to address concerns raised at this week’s meeting. last. “
What’s at stake
Almost all of the 24 parties involved in the case either categorically support the merger or remain neutral. Only one group, the new energy economy, is directly opposed to it.
If the PRC approves the deal, it will acquire PNM Resources and its two utility subsidiaries – Public Service Company of New Mexico and Texas New Mexico Power – in a $ 4.3 billion cash transaction. of dollars.
The parties in the case have negotiated a settlement agreement with the merger partners that commits Avangrid to investing more than $ 300 million in tariff relief, local economic development programs and job creation. It also includes numerous clauses to guarantee the quality of customer service, the reliability of the network and local and independent control over PNM to guard against abuse of influence or anti-competitive practices by Avangrid or Iberdrola.
But Schannauer said these things are overshadowed by an apparent corporate culture at Avangrid and Iberdrola, which he says have shown a tendency to prioritize profit over public interest. This includes the “poor performance” of Avangrid’s public services in the northeastern United States, as well as a criminal investigation of some Iberdrola executives in Spain.
Companies have also resisted complying with PRC rules and regulations during hearings, such as withholding of information, according to Schannauer.
Schannauer’s findings deeply affected Commissioners, who last week expressed significant concerns about the PRC’s ability to effectively regulate new PNM owners, who they said could use their commercial and financial strength to thwart competition in the local energy market, monopolizing control of things like the development of renewable energies.
“The real problem for me is the behavior of these companies demonstrated here at the commission and elsewhere,” Commissioner Hall told the Journal. “I wonder if the way they are doing business would be good for New Mexico and for consumers.”
Even if all the benefits of the settlement or stipulation negotiated by the parties in the case are considered, the Hearing Examiner still recommends that the PRC reject the agreement due to the alleged risks.
But companies and merger supporters say the settlement itself contains extensive safeguards against these risks, which commissioners should consider before simply accepting the hearing reviewer’s recommendations.
The PRC must now decide whether to allow oral testimony at Wednesday’s meeting.
Parties to the case have already filed “exceptions” or responses to Schannauer’s findings that are on file for commissioners to consider, Hall said.
“They pretty much made their legal arguments already, so I don’t expect us to hear anything new,” she said.
Parties, however, said their exceptions were limited to just 20 pages each, forcing them to focus only on certain issues. And at last week’s meeting, the Commissioners discussed many other concerns they wish to address.
PRC’s impartiality in question
Attorney General Hector Balderas said commissioners have an obligation to hear all parties before making a decision.
“I am concerned that some commissioners are predetermining this case and unfairly communicating their positions in such a way as to deprive other parties of the right to due process,” Balderas told the Journal.
Balderas is a party to the case. He said his office helped negotiate the settlement agreement, or stipulation, with PNM and Avangrid as the state’s elected representative for consumers and small businesses.
But Balderas said the hearing examiner’s findings, along with the commissioner’s willingness to simply accept Schannauer’s recommendations even before voting on the merger, raise concerns about the PRC’s impartiality. In fact, some of the commissioner’s comments at last week’s meeting – where Fischmann called the negotiated deal ‘madman’s gold’ that ignores the risks of the merger – significantly undermine confidence in the process.
“The comments made were very reckless for a judicial process,” Balderas said. “… I don’t think they give due consideration to the stipulation negotiated and supported by almost all parties in this matter.”
Doug Howe – a utilities economist and 35-year veteran of the utilities industry who served as PRC commissioner from 2010 to 2011 – agreed.
“It is unwise to come out openly and openly and basically announce how they will vote, as some commissioners did last week,” Howe told the Journal. “Commissioners have a lot of power, and with that comes the great responsibility not to be prejudiced, to be neutral and to treat everyone equally. I think they’ve crossed a line, that they can jump to judgment without fully hearing all the issues, and that’s unfair.
In fact, the decision recommended by the hearing examiner itself appears flawed, Howe said. This is because he did not find fault with any of the benefits included in the settlement agreement, and he even suggested that if the Commissioners approve the merger, these benefits should all be included, along with some additional conditions. that Schannauer recommended to strengthen consumer protection.
And the merger partners have since said they will agree to any additional Schannauer terms.
“The majority of the recommended decision was to judge the character of the acquiring companies,” Howe said. “That’s the gist, and the hearing examiner makes it very clear that he doesn’t think highly of them. I think this question is subjective, and in my opinion it appears to be a bias. “
Hall said she would carefully consider all arguments if commissioners allowed oral testimony on Wednesday. Things can still change, she said.
“People are changing their minds,” Hall told The Journal. “I don’t know what the other Commissioners think, but I have changed my mind in past cases in the PRC. It can happen.
Fischmann said commissioners might not vote on Wednesday.
“I don’t know how it will turn out,” Fischmann told the Journal. “We could just decide we’re ready to vote on the role, or even decide to postpone it until January to sit on it for a while, think about the exceptions filed and spend a little more time going through them before making a final decision. “