SANTA FE, N.M. – A state hearing examiner has recommended that New Mexico regulators reject the purchase of the state's largest utility, Public Service Co. of New Mexico, by global energy giant Iberdrola.
The potential downsides of the merger outweigh the benefits, Ashley Schannauer, a hearing examiner for the Public Regulation Commission, said in a report and non-binding recommendation made public Monday.
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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 sounding 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.
Schannauer had blasted Avangrid and Iberdrola earlier this year for failing to disclose information about the problems elsewhere. His recommendation again cited missteps and problems, including incomplete responses and overly extensive confidentiality requests.
Joanie Griffin, a New Mexico-based spokeswoman for Avangrid, wrote in an email that the company was “analyzing the decision and examining the pathways for moving forward to approval. … We remain committed to putting PNM customers first and utilizing Avangrid’s and Iberdrola’s financial strength and resources to help New Mexico meet its decarbonization goals more quickly and efficiently.”
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.
It could be several weeks before the Public Regulation Commission makes a final decision, as the parties in the case have 10 days to submit their responses to the recommendation and commissioners will have an opportunity to ask more questions.
If the merger is rejected, the company could submit a revised proposal. Also, the commission’s decision can be appealed to the New Mexico Supreme Court.
Schannauer wrote that if the commission is inclined to approve the merger, changes should be made to a proposed settlement agreement the companies reached earlier this year with numerous organizations interested in the proceedings.
Avangrid had agreed to numerous concessions, including $65 million in customer-rate relief over three years and $50 million more in other types of customer assistance and spending on economic development programs. It also included safeguards to protect the public against adverse management of PNM by Avangrid in the future.
Schannauer noted that months of negotiations led to numerous changes in Avangrid’s commitments and promises, making it difficult to point to a final, cohesive agreement that reflects the interests of all parties involved.