Avangrid-PNM merger gains support from more groups

Negotiations add $10M to help low-income customers

A coalition of environmental and consumer advocacy groups signed on Friday to an agreement to support the proposed merger between Public Service Company of New Mexico and Connecticut-based energy giant Avangrid.

PNM and Avangrid filed an “initial stipulation” agreement last Tuesday with the state Public Regulation Commission that committed the Attorney General’s Office and six environmental and indigenous community groups to support the merger in public hearings at the PRC, scheduled for early May. In that initial agreement, the companies added a lot more public benefits to its merger

proposal to win broader community support, after many organizations participating in the case criticized the original deal for minimizing rate relief and other assistance for PNM customers and local communities.

Many parties, however, didn’t sign that initial stipulation, prompting the companies to continue negotiating with more groups to possibly amend the agreement with added benefits to attract more support.

As a result, the Coalition for Clean Affordable Energy — which includes 11 different organizations — has now joined an “amended stipulation” that PNM and Avangrid filed with the PRC on Friday. The revised agreement adds significant new commitments, beginning with an extra $10 million for energy efficiency programs to help low-income households cut consumption and reduce their electric bills.

That would increase total spending on those programs to $15 million, up from $5 million promised in the initial stipulation. Under the new commitment, Avangrid now promises to invest $5 million in the first year after the merger deal closes, and then $2.5 million annually for another four years.

CCAE and some of its member organizations, such as the Southwest Energy Efficiency Project, have advocated for years for more utility investment in those programs, said CCAE attorney Stephanie Dzur.

“That’s really important to us,” Dzur told the Journal. “Low-income customers can save a lot from those programs, and $15 million can go a long way. It was critical for us that the companies show they understand local needs here and that they open up their hearts and wallet to help meet those needs.”

Two other amendments will also help the Natural Resources Defense Council, another CCAE member, to now back the stipulation agreement, said Noah Long, NRDC western director for climate and energy.

That includes a promise to strive for 100% non-carbon generation by 2035, five years sooner than PNM’s current goal of carbon-free electricity by 2040. In the initial stipulation, Avangrid promised to “not only meet, but exceed” PNM’s zero-emissions goals without setting a new target date.

Avangrid and PNM now also promise to triple utility spending on transportation electrification programs, assuming the PRC approves such investments.

“Those two new commitments are very meaningful in my view,” Long told the Journal. “It’s enough to sway us to get on board.”

The amendments come on top of many other benefits already written into the initial stipulation, such as $50 million in rate relief for PNM customers, amounting to roughly a $2.62 credit on consumers’ monthly bills for three years. It also includes:

■ $6 million to forgive past-due residential consumer debt accumulated during the pandemic.

■ $2 million to extend electric service to more people in remote areas.

■ $7.5 million in economic development funding.

■ $12.5 million to assist local indigenous communities impacted by the transition from fossil fuels to clean energy.

More negotiations

PNM and Avangrid say they will continue negotiating with more organizations that have yet to support the stipulation agreement, since about two dozen parties are directly intervening in the merger case at the PRC. That includes some groups that are CCAE members but are intervening independently in the hearings, such as the Sierra Club Rio Grande Chapter.

“We’re still analyzing the situation to decide what to do,” Rio Grande Chapter Director Camilla Feibelman told the Journal. “We haven’t taken a position yet.”

For its part, Santa Febased New Energy Economy has already stated its opposition to the agreement. Among other things, it criticizes the $50 million in rate relief as far too little, advocating instead for a potential rate freeze.

But stipulation supporters say they expect more groups to join as negotiations continue.

“I’m hoping what Avangrid is offering will only get better as they talk with other groups to meet community needs,” Dzur said. “There are a lot of clashing interests and it’s not an easy task.”

Many do support the merger in principle, given Avangrid’s reputation as a renewable energy leader that could help accelerate the state’s transition to a clean energy grid.

Gov. Michelle Lujan Grisham, for example, praised the efforts to reach an agreement.

“I’m glad the parties have come together to provide additional relief for New Mexico ratepayers while continuing to transition to a clean energy future for all New Mexicans,” the governor said in a statement.