NM utility execs tout merger to lawmakers
New Mexico utility officials on Tuesday touted millions of dollars in economic development benefits and customer savings if state regulators approve a multibilliondollar merger with a subsidiary of global energy giant Iberdrola.
Two executives with Public Service Co. of New Mexico testified before a panel of legislators, hoping to win more favor for the contested proposal as regulators prepare to weigh whether the deal is in the best interests of the public. Among other things, they said the merger would result in 150 new jobs, greater purchasing power for the utility and a better credit rating for financing the $4 billion in investments that will be needed over the next few years. Republican and Democratic lawmakers on the panel raised questions about reliability and customer service issues in other states where Connecticutbased Avangrid operates electric utilities.
In recommending that the merger be rejected as proposed, a hearing examiner with the state Public Regulation Commission recently found that the potential downsides of the deal outweigh the benefits, and that regulators would have to include provisions to protect customers and ensure reliability. Don Tarry, PNM’s senior vice president and chief financial officer, told lawmakers the companies would agree to those provisions, including penalties if the utility misses benchmarks for providing electricity to customers. He said reliability is at the core of PNM’s mission, and the utility has to balance that with mandates for environmental protection and how the price tag ultimately affects customers.
“We’re very aware we’re not a wealthy state, so there’s got to be a balance as you transition,” he said, referring to the goal of being emission-free over the next two decades.
Sayuri Yamada, PNM’s executive director of government and public affairs, said the utility is currently working on a proposal to replace the electricity that will be lost if regulators approve the transfer of PNM’s share in the coal-fired Four Corners Power Plant to a Navajo energy company.
“It’s not a straight line,” she said. “People think from here to zero carbon is from A to B, but I think there’s lots of different pathways we’re going to have to take a look at.”
Sen. Bill Tallman, an Albuquerque Democrat, said he wasn’t buying executives’ promises and pointed to the more than $1 million PNM has poured into television, radio and newspaper advertisements touting the merger. Tallman also reiterated the concerns of other critics who have suggested that Avangrid and Iberdrola want to acquire PNM as a way to gain a foothold in New Mexico to develop its wind and solar resources, and sell that power to larger markets in the West.
Tarry responded that, if the merger adds to New Mexico’s tax base, boosts renewables and benefits the West, he’s supportive. If the merger is approved, Tarry would serve as the utility’s new CEO and president.