Connecticut and Spain-based electric utilities hoping to merge with New Mexico’s Public Service Company have softened their offer somewhat.
In testimony last week with the New Mexico Public Regulatory Commission, a member of the management and board of directors of these companies said it would provide a better benefit to PNM taxpayers, increase the contribution of state to economic development and would make a bit of a concession on a sticky problem board from the developers.
The merger proposal, touted by some as a way for New Mexico to move more quickly to renewables, encountered many challenges related to the quality of electrical service that customers would receive under a different ownership structure. Hearings before the Public Regulatory Commission are scheduled to begin with public comments on August 9 and the formal hearing on August 11.
Pedro Azagra Blázquez of Iberdrola, based in Spain, said in written testimony that the companies would increase credit to PNM customers from $ 50 million to $ 65 million. Businesses would increase their contribution to economic development from $ 7.5 million to $ 15 million.
Azagra Blázquez is a member of the board of directors of Avangrid and director of development of Iberdrola, the parent company of Avangrid, based in Connecticut.
Avangrid and Iberdrola did not agree to create a board of directors of the PNM whose majority of members are independent, or without financial interest of the company. Some organizations in New Mexico have asked for this.
Azagra Blázquez said he would always have three independent directors on a seven-member board. But when dividends are considered, two of the three independent board members are expected to approve the proposal, he said.
“I think these are all positive steps,” said Jeff Albright, an attorney representing Bernalillo County. This county has not signed the “stipulation” or the merger agreement that many environmental and community groups have signed. “There are other issues that still need to be resolved.”
Albright said the deal the Public Regulatory Commission will review may not include the new concessions because they came too late to change the official stipulation. “This is not yet what is before the commission,” he said. But this question “can probably be resolved”.
He also said he still had concerns about the future of the Four Corners power plant. If PNM hands over the coal-fired plant to the Navajo Transitional Energy Co., as planned, it could stay open longer and thus remain an environmental hazard longer, he said.
An August 2020 letter from Iberdrola to PNM says that a high priority for the multinational energy giant was for PNM to pull out of Four Corners.
Albright also mentioned about $ 300 million in “stranded” capital and economic development costs at Four Corners which he said will land on PNM taxpayers through long-term bonds.
PNM maintains that better interest rates will reduce this amount. Plus, cheaper renewable energy will be a huge benefit, according to PNM. PNM also said some of Four Corners’ costs were already paid for by taxpayers.
PNM said customers will save money as part of the transaction. The electric utility also said the abandonment of Four Corners was a separate issue from the merger proposal before the commission.
Lawyer Stephanie Dzur of the Coalition for Clean Affordable Energy, which supports the merger proposal, said she hopes the new incentives will encourage groups like New Mexico AREA to sign the deal. New Mexico AREA defends the energy interests of its members.
Among other things, Avangrid was challenged in New Mexico over service issues that Avangrid affiliates encountered in the northeastern United States. Questions have also been raised about a Spanish investigation that includes two Iberdrola executives.
Dzur said she would leave it to the Public Regulatory Commission hearing examiners to deal with these matters.
“They are very thorough,” she said. “They’ll get to the bottom of it all.”
Ashley Schannauer is the Hearing Examiner on the Merger Proposal.
Pat O’Connell, senior policy analyst for Western Resource Advocates, said the concessions are “great because they bring more people to the table in terms of support for the merger.” His organization is a promoter.
Mariel Nanasi, an opponent of the merger proposal, said the concessions “go in the right direction”.
But she said the $ 300 million that could fall on customers “overshadows those positives.”