Avangrid’s Connecticut utility United Illuminating submitted a rate increase proposal  for the January-July 2023 period representing a 106% increase.[23] The news spurred Connecticut Gov. Ned Lamont to call the state’s General Assembly into special session for a legislative fix, stating “I am disappointed electric distribution utilities are enjoying historic profits at the same time electric generation rates are increasing and customers are experiencing economic hardships.” ​​The Chair of the Connecticut General Assembly’s Energy & Technology Committee pointed out “We are at a point where control of our energy costs is out of our hands and we are now responding to decisions made by Wall Street energy traders and global energy providers.”[24] The Connecticut legislature is considering caps on utility increases and tying any rate increases to performance-based metrics and executive pay.[28] 

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On February 15, 2023, dozens of frustrated RG&E customers, another Avangrid subsidiary in NY, attended a legislative meeting to complain about  high bills (including claims that  their bills had doubled) and billing irregularities, which they called a “RG&E crisis” because of incompetent management (significant attrition in workface, utility representative absenteeism increased from 36% to 41%), billing errors,[25] poor customer service,[26] and called for the establishment of a publicly owned utility company.[27]

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Iberdrola subsidiary Scottish Power has customers experiencing the same kind of “chaotic” cruel harassment of householders debt that they don’t owe: calls pursued a woman in the hospital when the phone rang at her bedside where she was being treated for cancer, allegedly she owed Iberdrola money for an indebted account, even when her family was not even a Scottish Power customer.[29] Another woman was hounded for eight years, until an “Energy Ombudsman upheld her complaint and ordered Scottish Power to cease all contact. Within months another £7,000 bill arrived with threats of bailiffs if she didn’t pay and she feared even leaving her house.”[30] Debt collectors followed others, even when it turned out, they too, didn’t owe anything and were not even customers. Iberdrola/Scottish Power blamed a national database, yet they were “ fined £18m by the regulator Ofgem in 2016. [31]

According to the Energy Ombudsman Scottish Power was the most complained about energy supplier in 2019, with 8,441 cases referred to the office.[32] People have been harassed, aggravated, felt desperate and helpless, and outraged. They feel that Scottish Power chaotic misconduct has been cruel and illegal.[33]

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A whistleblower was told to threaten customers with debt enforcement - even over mistaken bills, [34]​ saying: ‘We’ve all raised concerns about it. I’ve had people screaming, crying, threatening to kill themselves on the phone. It does have a toll on you, yeah, definitely. Just as a normal human being because you’ve got morals, you've got principles.’”[35]​

“Scottish Power’s dividend payments to Iberdrola have amounted to nearly one billion pounds in the past two years alone as customers face energy bills doubling since last winter, despite government intervention.”[39] An economic critic who decried the executive pay, soaring from £200,000 to £1.35m in a year, also chastised the unfair system: “How’s that for trickle down economics? £7 billion handed over from Scottish Power to Iberdrola in Spain. That’s trickle down economics alright. Trickle down from Scotland to Spanish shareholders. Proof that government trickle down policies are rhetoric that is doomed from the start to fail.”[40]

Avangrid told the PRC that it would walk away from the transaction if PNM’s board were required to act independent of Avangrid/Iberdrola.  Under the proposed structure PNM’s board members would be subject to appointment and removal by Avangrid/Iberdrola’s CEO in Spain. Although a local board would control PNM’s day-to-day operations, even those minor decisions would be subject to overrule by Avangrid/Iberdrola.  The PRC's concern was compounded by evidence of Iberdrola’s influence on Avangrid’s management structure, rapid cycling of senior management and overemphasis on closing earnings gaps, all of which  contributed to its subsidiaries’ poor performance.[1]  An independent audit of Avangrid’s management practices in Maine found that Avangrid placed its need for increased profits above its customers’ need for reliable service.[2]

Although Avangrid presents itself as on the cutting-edge of addressing climate change through development of renewables, it hindered solar development in Maine by unilaterally and significantly raising interconnection fees for solar development projects, hampering their completion.  Maine’s regulatory authority conducted an investigation and mentioned that the estimated fees for one project jumped from $100,000 to $1,420,000; a second project saw fees increase from $239,000 to $12,239,000. [45]  Solar developers were reportedly shocked to learn of the interconnection fee issue so late in the process. CMP ultimately admitted that “mitigation could and should have been identified sooner." As the CEO of Avangrid testified during the PRC merger hearing in describing CMP’s, lack of experience in integrating distributed generation projects onto its system: “I’m not an engineer by trade, but in talking to our team, it’s a very, you know, complex issue, and one that we’re quite frankly learning on the fly as we go through this.”[46]

Where Avangrid has acquired other utilities in the Northeast, including Maine, Connecticut, Massachusetts, and New York, most of its utilities have provided unacceptably poor service to their customers.  For example, the utility Avangrid acquired in Maine has ranked last among all comparable utilities in the nation in JD Powers’ customer satisfaction surveys for four years in a row (128th among the 128 investor-owned utilities in the nation). Maine’s legislature was so incensed by Avangrid’s management of Maine’s major utility that it passed a bill that would have transferred the utility to state ownership.[8]  Maine’s governor vetoed the bill but conceded that the service the utility had provided after Avangrid’s acquisition was “abysmal.”[9] Two of Avangrid’s other utilities ranked near the bottom in surveys (New York’s 17th out of 18 in the region; Connecticut’s 11th out of 12).[10]

Avangrid’s subsidiaries, NYSEG and RG&E, in New York have failed to provide basic utility service, including the installation of electric meters within a reasonable time, an impediment to economic development.[11] Following a blaze that destroyed a two-family home, an investigation revealed NYSEG displayed gross systemic incompetence and settled a suit for $2.75M.[12]

The PRC also expressed its concern that Avangrid regarded its purchase of PNM as establishing a “beachhead” from which to expand its regulated and non-regulated activities.[3] ​Avangrid is engaged in many other affiliated businesses that supply and service the market, including electric utilities like PNM.[4] The PRC expressed deep concern that Avangrid will be in a position to favor its affiliated companies, either driving out the competition in the development of solar and wind to supply PNM with power by unfairly competing or driving away potential developers unwilling to compete in a compromised marketplace.[5] 

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Iberdrola is being actively investigated for market manipulation in Mexico,[6] and Italy.[7]

Before and during the PRC hearing, members of Iberdrola’s topmost management, who personally control Avangrid and will control PNM through Avangrid, were under criminal investigation in Spain for bribery, violation of privacy and falsification of documents.  This caused the PRC to identify a risk that this reflects the culture of Iberdrola/Avangrid and that Avangrid/Iberdrola might not maintain PNM’s “culture of respect for state and federal law.”[47] After the PRC investigation ended, the charges in Spain were dismissed.  The dismissal, however, was not because the executives were found not guilty but because a court ruled that the statute of limitations had expired and they could not be prosecuted.[48]

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Not before New Mexico’s PRC at the time of the hearing were further developments in Spain arising from allegations of corruption on the part of Iberdrola.  Spain’s Anti-Corruption Prosecutor’s Office recently opened an investigation into Iberdrola and four of its executives for illegally increasing the price of electricity generated through three hydropower plants in 2013. According to El Confidencial, the prosecutor’s office has asked a national court to fine the company €84.9 million and suggested a two year prison sentence for each of the executives involved in the scheme to raise the price of electricity by limiting supply.[49]

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Iberdrola has also been accused in Spain of draining reservoirs to generate and sell electricity during a period of high demand. In Spain News reports that in the summer of 2021, mayors of municipalities in Zamora, Spain, filed complaints against Iberdrola because the global powerhouse “does not comply with climate change, environmental and sustainability legislation,” and drained reservoirs in order to sell more electricity, which has had a “brutal degradation of the territory and its habitat, [and] leaves damage very difficult to repair, both from a landscape and economic” perspective.[50] Reservoirs in the area went from 95% of capacity to just 12% in four months due to Iberdrola management of the floodgates, according to In Spain News.[51]

Our PRC expressed concern that Avangrid funded a Political Action Committee, “Clean Energy Matters” that “hired private investigators and consultants to research and allegedly interfere with Maine residents attempting to organize a citizens initiative opposing a transmission line proposed by CMP [Central Maine Power, an Avangrid-owned utility].”[41] Avangrid and Iberdrola characterize themselves as leaders in the conversion to renewable energy sources, but according to a 2022 Brown University Laboratory’s analysis, Avangrid opposed more climate legislation between 2013 and 2020 than any other group identified in the report, spending $2.8 million lobbying against climate bills during that period. [42]  

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Avangrid was involved in a number of front groups in New York, representing utility and fossil fuel interests that campaigned against climate legislation, often resorting to misinformation to sway public opinion against the measures. One such group, New Yorkers for Affordable Energy (NY4AE), has over the past five years lobbied against the state’s key climate initiatives. Avangrid’s lobbying spending was nearly a million dollars and was pooled together with other fossil fuel corporate forces to fight legislative action on climate and also influence politics by donating money to politicians and the committees they control.[43]

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In 2022, after our PRC’s hearing,  NY4AE ran an advertising campaign “with the false narrative that banning gas appliances would require New Yorkers to spend thousands of dollars on retrofitting their homes,” according to a report from the Public Accountability Initiative. The ads, falsely claimed that a gas appliance ban would cost homeowners $30,000. But an analysis from the Rocky Mountain Institute (RMI) found New York homes would see a $6,800 cost savings across 15 years, while also preventing 46 tons of carbon dioxide emissions from being released.[44] The irony is that Avangrid/Iberdrola characterize their companies as in the forefront of addressing climate change. 

Avangrid-managed utilities in the Northeast have a history of evasion of regulatory control and regulatory violations resulting in millions of dollars in fines and penalties.[14] Our PRC found that even in this merger case, Avangrid had been evasive in discovery, had violated discovery orders, had already evaded New Mexico regulations in constructing a wind power project here and had a history elsewhere of ignoring regulatory restraints.[15] For example, during Covid, the Connecticut legislature passed legislation requiring utilities to temporarily cease collection efforts and to contact customers who were in arrears to work out payment plans.  Avangrid management, however, ignored the law by engaging in an aggressive program of suing delinquent customers and garnishing their wages. [16]

Connecticut’s regulatory authority had this to say about the Avangrid-owned utility’s conduct: “Garnishing wages is one of the most severe forms of debt collection therefore, violations of Authority orders that may have resulted in unwarranted or avoidable wage garnishments are particularly egregious and necessitate substantial sanctions.”[17] Connecticut’s regulatory authority also found Avangrid had violated state law by referring 48,833 inactive accounts to third-party collection agencies without notifying customers that their information would be submitted to credit agencies in violation of state law. Avangrid was fined $50 per violation, totaling $2.4 million.[18]    ​

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After the PRC hearing, other information regarding Avangrid’s conduct has emerged. In May 2022, Mexico’s Energy Regulatory Commission (CRE) fined Iberdrola Mexico $466 million for violating Mexico’s electrical supply laws.[20] Mexico regulators have also ordered disconnections of several of Iberdrola’s facilities during the past year, most notable being  the disconnection of Iberdrola’s Wind Energy Plant in Guanajuato after regulators found that Iberdrola had placed it in a location other than the location where Iberdrola had received authorization to build it. The Mexican regulatory authority had previously denied an application by Iberdrola to modify its permit for the facility.[21]

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            In 2022, a Spanish court ordered Iberdrola to dismantle 60% of 500 MW operational PV solar plant because Iberdrola built a plant on property that was illegally expropriated.[22]

The reason Avangrid’s service in the Northeast is so poor is grounded in its management’s prioritization of profits over service.  An independent audit of Avangrid’s management structure and conduct, commissioned by the Maine regulatory body found that Avangrid-owned utilities provided poor service as a result of “Management’s overemphasizing of cuts in and limits on resources as a means of closing the gaps in meeting the earnings expectations of the investment community,” and thereby “sacrificed effectiveness in providing service.”[13]