PNM/Avangrid merger is still a bad deal for state
The Public Service Company of New Mexico/ Avangrid drama continues, with an appeal before the Supreme Court and rumors of a new application as soon as an appointed Public Regulation Commission takes over in January, but newspapers seem intent on not asking tough questions or reporting on the larger issues.
To me, recent articles read as a PR campaign to convince readers and officials of the merits of approving the acquisition, instead of what’s needed: an update on Avangrid/Iberdrola’s egregious activities.
It is a mistake to call this a merger. Avangrid is 15 times larger than PNM. Iberdrola, the parent company, is even larger. Iberdrola, is one of the largest corporations in the world, with more than $160 billion in assets, more than the gross domestic product of 150 nations.
Iberdrola’s net income for one year is nearly half of New Mexico’s recurring general fund budget. Consigning our energy future — our rates, our choice of generation sources, the reliability of our grid — to a company of this size and financial influence is extremely risky.
Consider this article (bit. ly/3RVWztf) that decried Avangrid’s performance in New York for failing to service new homes and properties in a timely manner. So much for caring about local customers.
The expectation that the PRC, whether elected or appointed, will be able to exercise regulatory oversight over such an enormous company is foolishly optimistic.
Independent solar and wind operators will have no chance against the company and its countless affiliates and subsidiaries.
Avangrid will run circles around the PRC, engaging in self-dealing and price-fixing until all competition has been driven out of the energy market. In the long run, New Mexicans will suffer.
The post-purchase local management will take orders from Avangrid on the East Coast or Spain. Once Avangrid controls all the energy generation, distribution, transmission and potential energy export capacity, the well-being of its New Mexico customers will be of little concern.
Companies buy other companies for one reason — to make money. It is naive to think the acquisition is intended to help New Mexico. Three current senior management will leave with huge payouts — $29 million to be exact.
New Mexico would lose its only company listed on the New York Stock Exchange; many high-paying management positions will end up leaving New Mexico forever; and the inevitable pressure to cut costs and cut corners on investments and upgrades will prevail.
I believe Avangrid/PNM will raise electricity rates and fees to serve the larger mega-conglomerate and its shareholders will eventually bleed New Mexico dry.
The pot-sweetening Avangrid payouts used to influence Attorney General Hector Balderas and social and environmental organizations, who acquiesced for relatively small, one-time payments, will guarantee permanent lack of future local control.
It is sad they have fallen prey to the money. It would have been one thing had Avangrid agreed to clean up PNM’s toxic environmental legacy at San Juan Generating Station and Four Corners Power Plant, but on balance, the merger signatories got very little.
PNM does not need Avangrid’s “financial muscle” to make the energy transition needed. PNM borrows money to meet needs, and customers pay it back, as they always have. If necessary technical knowledge is not available within PNM, put third-party independent contractors to work and let them build out the robust renewable energy market we need.
Fewer and fewer large companies control American critical infrastructure. It goes against the desire of the American people and actually hampers resiliency. We literally can’t afford to turn our renewable energy market over to an incompetent and lawless international corporate monopoly.