On Avangrid: A bad partner makes a bad deal

There’s no such thing as a good deal with a bad partner. That’s why I joined Public Regulation Commission members in voting unanimously to deny the proposed acquisition of Public Service Company of New Mexico by Avangrid and its Spanish parent company, Iberdrola. I took a lot of heat as commission chair at the time. But honestly, it was one of the easiest votes in my time on the commission. It’s disheartening to see that, despite all the warning signs, negotiations to revive the deal continue.

Avangrid/Iberdrola-owned utilities in Maine, New York and Connecticut have customer satisfaction records ranking among the lowest of the low. Cost, service and reliability performance have been poor, and regulators have levied numerous fines against them throughout the Northeast. Consumer outrage in Maine has led to legislative support for replacing Avangrid/Iberdrola’s subsidiary there with a customer-owned utility.

Ethical and operating issues pervade the entire corporate structure. There have been multiple criminal investigations of Iberdrola’s global management team in Spain. Spanish mayors have accused Iberdrola of draining reservoirs during their 2021 drought and critically endangering water supplies in their communities. Spanish regulators ordered the dismantling of 60% of the subsidiary’s 500-megawatt solar farm because it illegally expropriated land for the project.

Mexican regulators recently levied a $460 million fine on Iberdrola’s utility operation in that country for illegally selling energy to unauthorized customers. That action is hung up in the courts. Similar to Spain, the Mexican operation was ordered to disconnect a wind facility built at an explicitly unauthorized location.

Billing problems are an eerily common issue for Avangrid/Iberdrola globally. Serious accuracy issues, collections abuses or both have occurred in Spain, Scotland, Maine, Connecticut and New York.

Avangrid/Iberdrola may already have inflicted major damage on PNM customers even without completing their deal. PNM executives looking to score multimillion-dollar golden parachutes and stock windfalls are liable to pay close attention to Avangrid/Iberdrola input on current management decisions. PNM’s decision to delay consumer rebates and low-cost bonding issuance related to the San Juan coal plant closure could well have been influenced by Avangrid/Iberdrola. Those decisions are costing PNM customers $98 million annually.

Avangrid/Iberdrola advocates point to Avangrid’s history of developing wind farms as evidence its purchase of PNM will jump-start New Mexico’s green economy. But success as wind generation developers clearly has not translated into competent utility management. And Avangrid/Iberdrola does not need to buy PNM to develop wind farms in New Mexico, anyway. They can already develop all the wind farms they desire. Paradoxically, Avangrid’s Connecticut and New York operations have vigorously opposed meaningful climate legislation.

PNM consumers should not be permanently saddled with the bad and potentially unethical management of Avangrid/Iberdrola. Iberdrola’s record of meddling in its subsidiaries’ operations, and its unwillingness to agree to a truly independent PNM board of directors, make this an indisputable danger.

The message is clear. Beware of Avangrid/Iberdrola. Their proposed purchase of PNM is not in the public interest.