In Wednesday's PRC hearing Commissioner's Steven Fischmann and Cynthia Hall expressed concern about the potential risk of anti-competitive behaviors in dealings between an Avangrid/Iberdrola owned utility and potentially unlimited subsidiaries and affiliates operating concurrently in New Mexico. Commissioner Hall expressed doubts that the PRC has the resources to "meaningfully police those activities." The lawsuit filed this week accuses Avangrid of exactly the anti-competitive behaviors the Commissioner's expressed concerns about.
The news appeared this morning in the Guardian and in Searchlight New Mexico, where the reporter explains:
The 72-page federal court complaint outlines an elaborate scheme by Iberdrola executives to generate millions of dollars in wasteful equipment expenditures in order to turn a profit from its utility customers in New York, Connecticut and Maine. The lawsuit further alleges that much of this equipment was never put to use and is instead collecting dust in warehouses across the region.
The benefit of these wasteful expenditures derives from a policy designed to encourage the development of energy infrastructure. Utilities are allowed to charge customers for the cost of capital expenditures plus an additional return on equity (9.575% for PNM), which the utility keeps as profit. Iberdrola and Avangrid are accused of exploiting a similar policy in New York to artificially increase their expenses and justify rate increases for customers.
As Mariel put it “Fraud, bid-rigging, jacking up customer rates by making phantom capital expenditures — there is a pattern of misconduct that has emerged. Avangrid and Iberdrola act outside the law and the public be damned.”
PRC Commissioners themselves expressed concern that New Mexico does not have the resources to police a multi-billion dollar mega-corporation making countless deals between itself and its own affiliates, subsidiaries and sub-contractors. The inevitable end result will be increased rates, lack of competition and transparency in the transition to renewable energy, and the extraction of not only our resources but the income of New Mexican ratepayers for the profit of Iberdrola and Avangrid shareholders on Wall Street.