SANTA FE, NM – Today New Energy Economy filed its response to exceptions submitted by Joint Applicants (PNM, Avangrid, and Iberdrola) in the PNM Avangrid merger case. On November 1, 2021 Chief Hearing Examiner Schannauer issued a Certification of Stipulation (CS) and recommended that the proposed merger be rejected because the potential harm and risks of outages and unreliability, diminished service quality, corruption, subsidization of non-utility activities, and reduction in local control are significantly outweighed by any benefits promised by Avangrid/Iberdrola/PNM. The Hearing Examiner also stated that if the merger must be approved, despite the absence of a net public benefit, the PRC should, at least, impose a series of modifications and conditions detailed in the CS.
In an attempt to reassure the public, the Legislature and the Governor, Joint Applicants publicly announced that they would accept all conditions proposed by the Hearing Examiner, but in fact Joint Applicants filed exceptions to four fundamental conditions recommended in the order. Our response argues that these conditions are necessary to mitigate the risks the Hearing Examiner identified in his order, specifically:
The reliability metrics and automatic penalties for reliability failures proposed in the CS are necessary to protect ratepayers given Avangrid’s poor performance in the states where it operates and its history of regulatory noncompliance.
The requirement for a majority of independent directors at PNM is necessary to protect consumers from the parent company’s interests which are in conflict with the interests of New Mexican ratepayers.
The Regulatory Commitment prohibiting PNM employees from holding positions with upstream affiliated interests is necessary to further limit the potential influence of Avangrid/Iberdrola and to protect ratepayers from wasteful expenditures.
The Hearing Examiner’s recommendation for sanctions are necessary to enforce compliance with New Mexico law, given Avangrid/Iberdrola’s obstructionism during the proceeding.
In the CS the Hearing Examiner detailed the illegal and unethical conduct of Avangrid at its Northeast subsidiaries, at its New Mexico affiliates and in this case, and warned “Even assuming the adoption of protections that appear sufficient, including protections to ensure service quality and reliability, the Commission will need to devote considerable enforcement resources to ensure that Avangrid, Inc. and PNM comply with those protections.” (pg 51) The PRC is already stretched thin and underfunded. An enforcement effort would require even more capacity, more oversight, more data, more personnel, and more money from the legislature to properly hold Avangrid/Iberdrola accountable in New Mexico.
In formulating its decision, the Commission must weigh the evidence and findings presented by the Hearing Examiner. It must look carefully at Avangrid/Iberdrola’s track record and assess – even with conditions, if this is a company we should trust with our energy future and to which we should entrust the reliable and responsible provision of electricity for 800,000 New Mexicans.
As recently as November 2nd, after the hearing in this case concluded, the people of Maine voted by a wide margin (59%) to reject a transmission line through Maine’s pristine forests in a referendum that Avangrid’s subsidiary spent $42M to try to defeat. Undeterred, Avangrid announced the very next day that they believed the referendum unconstitutional, and their bulldozers kept operating.
Avangrid/Iberdrola’s actions in Maine demonstrated disregard for the will of the people, disregard for the rule of law, disregard for democracy, and disregard for the environment. Fundamentally, this Commission must decide if it is in the public interest to allow Avangrid/Iberdrola to bulldoze the Land of Enchantment for the profit of a foreign corporation.