For those many of you who don't have time to read through legal briefs, yesterday's order from Chief Hearing Examiner Ashley Schannauer stands out as a masterful and thorough indictment of Avangrid, Iberdrola and the proposed merger with PNM. In addition to rejection of the merger, the Hearing Examiner recommends sanctions against Avangrid for the breadth of discovery violations and awards attorneys fees to New Energy Economy for the time expended to obtain discovery about Avangrid's track record and history of penalties and violations.
At the end, New Energy Economy stood alone with PRC staff lawyers against the settlement agreement signed by one party after another in exchange for incremental benefits and inadequate protections. As the Hearing Examiner noted, however, these “benefits” - $1.64 rate credits per month for three years, $15M worth of energy efficiency, etc. do not outweigh the risks of allowing an unreliable and unscrupulous foreign company to gain control of our energy infrastructure.
The Hearing Examiner's order was based squarely on the law, and detailed the extent to which Avangrid and Iberdrola's culture and track record of "skirting" and "flouting" regulations, laws and ethics at its subsidiaries and in the merger case itself are contrary to the public interest. The Hearing Examiner cited five examples in the merger case alone in which Joint Applicants failed to follow the commissions rules and orders, and examples of similar failures at both the El Cabo and La Joya energy projects already owned and operated by Avangrid in New Mexico.
Quoting extensively from management audits conducted by regulators in other states where Avangrid operates, the Hearing Examiner points out that the company's penchant for bringing in financial people to run utilities instead of engineers and operational experts has led to diminished reliability and service quality - a modus operandi they planned to repeat here with the appointment of Don Tarry, the current CFO, to run PNM after the merger.
The Hearing Examiner further warned the PRC that if they choose to approve the merger, extensive enforcement and oversight measures must be adopted to protect against the company's track record of operating on the edge or beyond the bounds of legality.
Now that the Hearing Examiners recommendation has been received, PNM, Avangrid and all parties have the opportunity to write exceptions objecting to the Hearing Examiner's opinion, and parties in the case will then have the opportunity to respond to those exceptions. The Hearing Examiner will make a presentation to the PRC to explain his recommended decision, and the PRC's General Counsel will present the exceptions and responses to the commissioners as well. We’ll let you know when those presentations are on the call.
Even though it is not over, however, we at New Energy Economy are celebrating a significant win for the people of New Mexico. The Commission may choose to reject the merger outright, but even if they opt to pursue the merger under the protections recommended by the Hearing Examiner, Avangrid and Iberdrola would be forced to accept a level of independence, local control and consumer protections that would constrain their capacity to exploit and profit off the people. Within the next ten days we also expect a recommendation on the abandonment application for the Four Corners Power plant, which will have significant implications for the profitability of PNM. Together these developments will shape the energy future of our state in profound ways.
If you want to make your voice known please contact your PRC commissioner.