Home New mexico economy PNM and Avangrid soften merger deal »Albuquerque Journal

PNM and Avangrid soften merger deal »Albuquerque Journal

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Copyright © 2021 Albuquerque Journal

PNM Resources and Connecticut-based energy giant Avangrid are providing $ 10 million in additional funding for economic development, along with strict regulatory controls to ensure grid reliability, to gain further support for their proposed merger.

The latest concessions, contained in a dossier filed by the companies with the state’s Public Regulatory Commission on Monday afternoon, helped resolve some outstanding disputes with staff in the PRC’s Utilities Division. Until now, staff had opposed the merger. But the new case reflects a negotiated settlement on issues that previously prevented staff from supporting it.

PRC hearing examiner Ashley Schannauer must decide whether he will allow the remaining concessions to form part of the official dossier that will be presented to the full five-member panel for a final decision on the merger this fall. Schannauer presided over nearly two weeks of public hearings with 24 parties intervening in the case. Hearings concluded on Friday and Schannauer told interveners that no new evidence would be accepted.

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But the two companies and PRC staff are now asking Schannauer to either drop the move to allow the incorporation of the new deals contained in Monday’s dossier, or briefly reopen the case to accept them as further evidence.

If Schannauer concedes, that would leave only one party to oppose the merger deal – the Santa Fe-based New Energy Economy. Everyone else in the case is now either directly supporting the merger or not opposing it. said Steve Michel, an attorney for Western Resource Advocates, who joined the merger settlement agreement in April.

“At this point, the opposition is limited to the new energy economy, which wants the merger to be outright rejected,” Michel said. “… Not everyone supports it or opposes it. From the stakeholders’ point of view, it seems that we have come together around a series of agreements on the conditions for the completion of the merger.

If approved by the PRC, Avangrid would 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.

With oral public hearings now over, interveners will still file written submissions in the case, the latest of which are expected in late September. After that, Schannauer will issue a “recommended decision” on the proposed merger, which the five commissioners will then review for a final decision.

Pushed to treat

Comments made during hearings last week by Commissioner Joseph Maestas encouraged staff at PNMR, Avangrid and the PRC to continue negotiating a final resolution of their outstanding differences, although this has not happened. produced only shortly after the hearings ended, according to Monday’s filing.

Maestas had asked Avangrid chairman and deputy chief executive Robert Kump about the merger on the last day of the hearings. Maestas said the financing of economic development is a vital benefit for consumers in the merger process, and urged all parties to once again try to reach a final and consensual agreement.

This has led to new “compromise positions” which, according to the negotiating parties, justify reopening the case. This includes $ 10 million in additional funding for economic development for a total of $ 25 million that Avangrid is now pledging to invest over 10 years, up from $ 15 million over five years previously.

“In other words, if the commission determines that the merger needs to be approved, the value of opening the case is at least a $ 10 million increase,” read Monday’s filing.

Shortly after the hearings began on August 11, Avangrid also offered $ 8 million in fresh money to add to its previous commitments, including an additional $ 6 million in consumer tariff benefits and an additional $ 2 million in financing of economic development.

With the latest $ 10 million concession made with PRC staff, the company is now offering a total of $ 133.5 million in direct merger benefits. Including:

• $ 67 million in tariff relief for customers over three years

• $ 10 million to write off past due residential consumer debt accumulated during the pandemic

• $ 15 million for energy efficiency to help low-income customers reduce their electricity consumption and costs

• $ 2 million to extend electrical service to more people in remote areas

• $ 25 million in economic development funding

• $ 12.5 million for Aboriginal community groups in the Four Corners area

• $ 2 million for scholarships and apprenticeships in the greater metropolitan area

Avangrid also pledged to create 150 new, well-paying jobs over three years, generating an estimated local economic impact of $ 200 million.

Merger partners and PRC staff also announced new regulatory controls to ensure network reliability under Avangrid in the future. Avangrid has previously agreed to work with PRC staff and others to create new reliability standards with annual reports to measure and monitor compliance.

The new controls now define the initial standards that Avangrid must meet, as well as automatic penalties ranging from $ 250,000 to $ 500,000 for each incident of non-compliance, depending on the duration of the problems. This is an important concession from Avangrid, as previous agreements only provided for setting new standards of reliability after the merger, with stipulations allowing staff or other parties to seek sanctions if they did not. -conformity in the future, said Michel.

“The standards and penalties weren’t stated before, and it would have been the responsibility of the staff to ask for fines rather than the automatic obligations now included in this new agreement,” said Michel. “I think there are good reasons now that the merger will benefit PNM’s customers and the government in general. … But we’ll have to see if the Hearing Examiner and the Commissioners think that way.

The new energy economy, however, remains firmly opposed to merger.

NEE executive director Mariel Nanasi said PRC staff had been content with significantly lower economic development funds and much more flexible reliability standards than those originally sought by the utilities division.

“Having automatic penalties for reliability underperformance is a good thing,” Nanasi told the Journal. “But the staff settled for much less than what they said at the hearings is necessary to protect customers from unreliable service.”

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