Hands off our due process rights! Hands off NM Gas Company!

First and foremost, we are asking you to join people of goodwill across the country who are mobilizing to stand up against the unconstitutional and dangerous actions of the current administration on Saturday. Hands Off rallies will be held across the state, including in Santa Fe at 12:00PM, Albuquerque at 2:00PM and Taos, Las Cruces, Portales, Otero County, El Morro, Socorro, Truth or Consequences, Portales, Los Lunas, Silver City and Gallup.

Why is protest critical now? Because we stand so close to the edge of free fall into an authoritarian nightmare that could take decades to escape. This is the moment in time when we decide whether to allow a secret police force to terrorize the people of this country, citizen or non-citizen, without due process or representation. As so eloquently and clearly illustrated in this important op-ed in the NY times about the gestapo-like tactics of ICE, and further punctuated by the knowledge that April 20th is when the administration will make its case for imposition of the Insurrection Act, the use of force against the people is not a far off threat but, in fact, already starting, and on the brink of significant expansion.

Now is the time to stand up and speak up, or forever hold your peace.

WHAT'S HAPPENING ON THE ENERGY FRONT?

There have been countless articles about the administration's "drill, baby, drill" policy approach, and outright hostility towards clean energy, environmental regulation and the basic value of science based decision making. But despite all the talk and the dangerous rollbacks of clean energy funding and existing and planned emissions regulations, the overall result of the administration's policies on climate progress remain unpredictable because, as Heatmap editor Robinson Meyer reports here, the President's disastrous economic policies are likely to result in a significant international economic slowdown, lower demand for oil and gas, and ultimately a slowdown in drilling in the Permian. Oil executives see disaster looming, with one anonymously lamenting:

“The threat of $50 oil prices by the administration has caused our firm to reduce its 2025 and 2026 capital expenditures,” writes one of them. “‘Drill, baby, drill’ does not work with $50 per barrel oil. Rigs will get dropped, employment in the oil industry will decrease, and U.S. oil production will decline as it did during COVID-19.”

The most likely scenario is that renewable energy will continue to advance exponentially all over the world, reducing reliance on oil and gas from the US, and further accelerating the managed decline of fossil fuel use while the United States is left behind.

What we do know is that administration policies will harm the poorest people the most. The announced tariffs will increase the cost for basic necessities, and the planned tax cuts for the wealthy will be offset by drastic cuts in support programs. Those cuts include most recently the Department of Health and Human Services announcement yesterday of massive Reduction in Force layoffs, including all the staff at Low Income Home Energy Assistance Program, or LIHEAP, which helps 6.2 million of the poorest people across the country afford their energy bills.

IN THAT CONTEXT, RIGOROUS OVERSIGHT OF PUBLIC UTILITIES AND ENERGY RATEMAKING IS EVEN MORE IMPORTANT

During the busy legislative session we continued our legal efforts to oppose Bernhard Capital Partners (BCP)'s proposed acquisition of NM Gas Company. In December we reported on the significant risks of allowing a private equity company to purchase a publicly regulated utility, and the specific risks posed by Bernhard Capital Partners, with its history of questionable payments to regulators in Louisiana and its lack of experience in the utility sector. Those include:

1. Lack of transparency. Private equity firms operate in relative secrecy, with no required reports to the SEC, and therefore there are no public records against which regulators can confirm company statements. Nor are they required to appoint independent boards.

2. Higher rates to pay off debts incurred in the leveraged buyout. BCP is in the business of buying up companies, usually with large sums of borrowed money that ratepayers are then obligated to pay off. The purpose is to leverage capital and assets to provide large dividends to the private owners of the business, squeeze higher profitability numbers out of the company through ruthless cost cutting, and then sell the now “streamlined” business as soon as another windfall profit opportunity comes along. Nowhere in this equation is the public interest, reliable and low cost gas service, benefits for workers, or concerns about the significant climate impacts of reliance on methane gas for heating.

3. Potential impacts to reliability and service quality as BCP, with no experience in the utility industry, seeks to cut costs and puts off necessary repairs and investments in infrastructure and efficiency. Jeffrey Baudier, the CEO, bragged about his record as CEO at Petra Nova LLC in his testimony. What he did not disclose was the fact that Petra Nova, the world’s largest carbon capture facility on a coal-fired power plant, was shut down after just four years because it failed to capture the CO2 promised, actually built and operated a new gas fired power plant in order to meet the energy demands of the failing Carbon Capture process, and lost more than $310 million of federal and state public funds invested in the project.

4. A short term, profit driven ethos that precludes the kind of long term planning necessary to transition a company based entirely on the burning of methane into a sustainable one. Instead under Bernhard Capital Group we suspect the utility’s motto will be “Burn Harder, Burn Faster.”

   
   

As feared, we've submitted more than 100 interrogatories and requests for production of documents in discovery and have had to fight tooth and nail to obtain responses. They refused to reveal their contributions to political campaigns and politicians in New Mexico. They refused to reveal any details about Emera's analysis before its determination to sell NM Gas Company. They refused to reveal CEO Jeffrey Baudier's salary and compensation package. Finally in February the Hearing Examiner issued a Bench Request demanding fullsome discovery from the company, and we then received information, some of which was so heavily redacted as to be meaningless.

Yesterday the Hearing Examiner required that BCP provide her with unredacted versions of documents so that she could determine whether claims of privilege had any merit.

One piece of information that we are particularly interested in? The Governor's former Chief of Staff, Dominic Gabello, has been contracted by BCP for an unknown purpose and an unknown amount, though we did find that up until December 12th he was paid $96,860, and an IPRA response showed that he arranged for a meeting between BCP and the Governor. We asked for a copy of his contract and received this in response:

"The Joint Applicants also object to this interrogatory because it seeks disclosure of confidential, proprietary, competitively sensitive or trade secret information that is not subject to public disclosure."

There is no basis for their objection to our discovery request or the confidential seal. In fact, in the Avangrid case, the merger applicants similarly attempted to keep their contract with Marcus Rael a secret and the Hearing Examiner ruled that the contract must be shared.

Why? Because when you want to become the owner of a publicly regulated utility, with captive customers who are supposed to be protected by the PRC, your financial records and history of regulatory compliance become relevant to a determination of public interest.

What was Dominic Gabello's contract for? What services is he providing? How much is he being paid? These questions are particularly important in this case, because an analysis of BCP's campaign contributions by Floodlight found that the company and its executives had donated more than $200,000 to all the five Louisiana Public Service commissioners, and one former commissioner, before the Commission voted unanimously to approve the company's acquisition of two Louisiana utilities in August. 

These are not the kind of corporate executives we need to run NM Gas Company, which is responsible for providing low-cost, reliable service to 1.3 million New Mexicans.

This is the lack of transparency and obstruction we can expect from private ownership of a regulated utility, and a risk that the PRC must understand intimately, as another case looms on the horizon - it was recently announced that PNM's parent company TXNM (previously called PNMR) is in buyout talks with another private equity firm, one KKR & Co, one of the world's largest alternative asset managers, with $624.4 billion in total managed assets.

Our testimony in opposition to the proposed acquisition is due on April 18th.