Allegations of misconduct surround proposed Avangrid-PNM merger

*Editor’s note: This story has been updated with comment from the PRC.

NEW MEXICO (KRQE) – Allegations are flying as lawyers, regulators, and business operators navigate a possible acquisition of New Mexico’s largest energy supplier. The latest public spat revolves around alleged behind-the-scenes conversations that may have broken the law.

In 2021, the out-of-state company, Avangrid, and the local Public Service Company of New Mexico (PNM) proposed a massive merger. But that proposal was shut down by an old versions of the state’s Public Regulation Commission, the group that regulates utilities across the state.

However, the merger idea lived on. While some regulators and third parties – such as the non-profit New Energy Economy – expressed concerns over the proposed merger, Avangrid and PNM asked the New Mexico Supreme Court to weigh in.

In the meantime, the state’s Public Regulation Commission got an overhaul, swapping out five publicly elected officials for three appointed commissioners. Now, some have accused the new Public Regulation Commission and the electric utility companies of having illegal talks about merging.

“The PRC [Public Regulation Commission] is discussing other pending cases behind closed doors, and with certain parties (PNM) and without the input of other parties,” an analysis of records by New Energy Economy says. “This serial action by the PRC is unlawful.”

New Energy Economy is a non-profit that describes itself in part as working “to radically transform our energy systems.” The group is claiming that state regulators broke the law by leaving some people out of conversations regarding the merger. The Public Regulation Commissioners are supposed to be like legal judges, New Energy Economy says, and “are to avoid the appearance of impropriety.” But New Energy Economy claims regulators are working with the electric companies to move the merger forward – with conduct that is far from impartial.

The Public Regulation Commission told KRQE News 13 that the state’s Open Meetings Act, which requires public transparency in certain instances, allows approval of settlement agreements in private meetings, and added: “The Public Regulation Commission is committed to transparency and accountability, and we take seriously our responsibilities under the Open Meeting Act.”

Avangrid rebuffed the allegations. The energy company calls the allegations “inaccurate” and “totally incorrect.”

“In fact, those communications were entirely proper,” Avangrid said in a press release. And Avangrid says the discussions between the Public Regulation Commission and the energy companies “are not prohibited by the Commission’s rules.”

Avangrid goes further, claiming that New Energy Economy is part of some larger plan to have the government take over the electric grid.

“On Monday AVANGRID (NYSE: AGR) filed a response in opposition to New Energy Economy’s objections to the New Mexico Public Regulation Commission in which NEE inaccurately alleged that there were improper ex parte communications. In the filing, PNM and AVANGRID detailed why NEE’s assertion of ex parte communications is totally incorrect. The filing by Avangrid states “In fact, those communications were entirely proper and were not ex parte under applicable statutes and regulations. Secondly, discussions between the Commission as a party to an appeal and Joint Applicants as their opponents in that litigation also are not prohibited by the Commission’s rules,” said Joanie Griffin, Avangrid Spokesperson.

“NEE’s attempts to stall and ultimately kill the merger is part of a larger plan for a government takeover of New Mexico’s energy grid. We are hopeful the New Mexico Supreme Court will remand the case back to the New Mexico Public Regulation Commission and that the benefits the merger will bring to all New Mexicans can be realized.”

So, apart from the debate over proper – or improper – discussions, the larger debate is whether or not the merger will move forward. Right now, the issue is still in the hands of the New Mexico Supreme Court.

But the state could put the merger decision back in the hands of the Public Regulation Commission. In that case, the decision to merge or not to merge would fall to just two people appointed by the Governor, Commissioner Gabriel Aguilera and Commissioner James Ellison. The third commissioner on the three-person board has a history working for one of the third-party advocated in the merger case, so he said he would recuse himself from a vote on the merger if the Commission has the opportunity to vote on it.