Hearing wraps up on major New Mexico utility merger

Politics - Government

FILE – This May 20, 2012 file photo shows one of the major transmission lines that runs to the west of Albuquerque, N.M. New Mexico customers voiced concerns to state regulators over a proposed multi-billion-dollar merger of New Mexico’s largest electric utility provider, Public Service Co., with a U.S. subsidiary of Spanish energy Iberdrola during a virtual hearing held Monday, Aug. 9, 2021, citing a sordid track record of reliability and customer service. (AP Photo/Susan Montoya Bryan, File)

SANTA FE, N.M. (AP) — Lawyers and expert witnesses this month ground through seven days of highly anticipated hearings on the Public Service Co. of New Mexico’s proposed merger with two massive utility companies.


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The hearings, which concluded late last week, offer little indication of how hearing examiner Ashley Schannauer will advise the Public Regulation Commission or what ruling the five-member commission will make. But at many points, testimony revealed just how high the stakes are for the players involved, the Santa Fe New Mexican reported.

PNM hopes to merge with Connecticut-based Avangrid and its parent firm, Iberdrola of Spain. If the merger is rejected by the commission, the company would have the chance to come back with a revised proposal.

Regardless of what happens, the commission’s decision can be appealed directly to the New Mexico Supreme Court.

New Mexico’s future in electricity is at stake, with Avangrid and Iberdrola promising investments and the ability to move the state more deftly into the era of renewable energy. But critics fear a loss of local control of New Mexico’s largest utility company.

They also express concern about an Avangrid subsidiary’s service record in Maine, plus Iberdrola’s link to a wide-reaching Spanish investigation of alleged corporate spying.

The laborious hearings involved technical matters, such as the effectiveness of New Mexico’s electricity system, shareholder benefits from a merger and customer costs. The hearings also were sprinkled with moments of conflict and humor.

At one point Avangrid attorney Brian Haverly addressed longtime PNM nemesis Mariel Nanasi as “Mariel.”

“I’m Ms. Nanasi to you,” responded Nanasi, an attorney and head of New Energy Economy, which has led the fight against the proposal.

“I apologize, Ms. Nanasi,” Haverly said.

PNM attorney Richard Alvidrez grilled New Energy Economy expert witness Christopher Sandberg, a retired attorney who now is a professional photographer, on his expertise of the issue. He also jabbed at Sandberg about the background he used in the Zoom meeting.

“You look very scholarly sitting there with your bow tie and the backdrop of the books,” Alvidrez said. “I’m assuming that that’s a backdrop you’ve conjured up and that you’re not quite sitting in a library with leather-bound books.”

“The bow tie is real,” Sandberg said. “The background is fake. Otherwise you would have to look at my very messy workroom and that would be very distracting.”

Schannauer, who is employed by the Public Regulation Commission and has been a quasi-judge on the merger proposal for much of the year, gave the many attorneys involved a schedule at the end of the hearing.

Schannauer said the participants should submit position statements by Aug. 30, legal briefs by Sept. 21 and responses to those briefs by Sept. 28. He said he would make his recommendation based on where the elements of the proposed deal stood at the end of the hearing and would not factor in any negotiations after the hearing.

He noted another hearing vital to PNM, about its departure from Four Corners Power Plant, will start Aug. 31.

That hearing also is important to Avangrid and Iberdrola because they have said they expect PNM to have a plan to abandon the coal-fired Four Corners Power Plant in northwestern New Mexico. PNM expects to turn its 13% share of the plant over to the Navajo Transitional Energy Co.

Because it was handled by Zoom technology, the merger proposal hearing lumbered along. Witnesses and lawyers tried to keep up on their own laptop and desktop computers with the stream of exhibits and previous testimony that was cited.

If speculation can be made about Commissioner Joseph Maestas’ lengthy comments and questions to Avangrid executive Robert Kump, the Santa Fe commissioner sounded willing to compromise.

Maestas, of Santa Fe, said he wanted to see the merger applicants promise investments in modernizing the state’s electrical grid and weatherization program.

“The state needs help,” Maestas told Kump. “We lack resources to truly, you know, implement the planning effort” for New Mexico’s electric system.

Maestas also suggested residents who are behind in their electric bills should be given a continuation of a grace period until federal assistance and other forms of help are sorted out.

Avangrid was eager to help the state modernize its electric grid, Kump responded.

“Well, certainly if we were fortunate enough to have this deal close and we could work with the folks at PNM, we would be more than willing” to assist, Kump said. “Clearly we have the balance sheet, and we’d love to work with PNM on that.”

Pedro Azagra Blázquez, an Avangrid board member and Iberdrola executive, said in his testimony a couple of weeks ago he was willing to increase the incentives his companies have offered the state.

Blázquez said he would increase the customer rate credits to $67 million, up from $65 million and significantly more than the original offer of $25 million.

He also said under questioning by the Albuquerque Bernalillo County Water Utility Authority that the companies would create a $1 million scholarship fund, a $1 million apprenticeship program and raise assistance from $6 million to $10 million for people who are behind on their electric bills.

A PNM spokesman wrote the applicants “put on a strong case.” An Avangrid spokeswoman claimed the hearings revealed enthusiasm for the merger.

“What became clear in the hearing is that the vast majority of the parties support the merger,” spokeswoman Joanie Griffin wrote in an email. “We look forward to the … ruling, and moving forward to help New Mexico achieve its energy transition goals.”

The proposal is supported by Gov. Michelle Lujan Grisham, Attorney General Hector Balderas and numerous community and environmental groups. Some organizations have not signed on, however, such as Bernalillo County and the city of Albuquerque.

Since the merger proposal late last year, thousands of pages of opinions, questions, answers, claims and data have been filed with the commission.

Schannauer expressed eagerness to finish the job, noting: “We need to get a decision done in this case.”

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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