Energy companies seek to sweeten merger deal in New Mexico

ALBUQUERQUE, N.M. (AP) — New Mexico’s largest electric provider and global energy giant Iberdrola are proposing more concessions as they seek regulatory approval for a multibillion-dollar merger.

PNM Resources, the parent company of Public Service Co. of New Mexico, and Iberdrola subsidiary Avangrid filed a new proposal with the New Mexico Public Regulation Commission on Friday. It includes $10 million more in economic development benefits and additional commitments to corporate governance and other financial protections for customers.

The proposal also calls for PNM to delay its next rate case filing by six months to Dec. 1, 2022.

The companies vowed to establish reliability metrics. If the utility misses its goals, regulators could impose penalties.

The concessions aim to address the concerns of a hearing examiner who recently recommended that the Public Regulation Commission reject the merger. The official found that the potential harm outweighed any benefits.

The commission has the final say.

“Our filing with Avangrid today shows that our companies together are truly committed to moving New Mexico forward and bringing benefits to PNM’s customers and the community," Pat Vincent-Collawn, PNM Resources chairwoman, president and CEO, said in a statement to The Associated Press. “We look forward to bringing all the commitments to our customers and New Mexico into reality.”

New Mexico Attorney General Hector Balderas is among the parties in the case. He acknowledged Friday that the proposal has been hotly contested but remains supportive of the merger with the additional terms.

“As the sole voice elected by and accountable to consumers in this negotiation, I’m optimistic the commission will agree with the majority of the stakeholders that the merger is in the public interest,” Balderas said in a statement.

Under the merger, Connecticut-based Avangrid and its parent firm, Iberdrola of Spain, would acquire PNM Resources and its New Mexico and Texas power subsidiaries. If approved, the $4.3 billion transaction would affect about 800,000 homes and businesses.

New Mexico customers earlier this year sounded the alarm over the proposal, citing a sordid track record of reliability and customer service among utilities owned by Avangrid in other states.

Spanish officials also announced in June that Iberdrola executives would be investigated over alleged bribery, breach of privacy and fraud. The company has maintained that the executives did nothing wrong.

The PRC hearing examiner, Ashley Schannauer, had blasted Avangrid and Iberdrola earlier this year for failing to disclose information about the problems elsewhere. Schannauer's recommendation cited missteps and problems, including incomplete responses and overly extensive confidentiality requests.

Experts have suggested that New Mexico could serve as a platform for producing power that could be exported to larger markets. But critics worry the state’s customers would be reduced to a secondary consideration for Avangrid and Iberdrola as they look to expand their renewable energy holdings.

If the merger is rejected, the companies could submit a revised proposal. Also, the commission’s decision can be appealed to the New Mexico Supreme Court.