PNM-Avangrid: Quest for bad merger continues

When I read recently the proposed Public Service Company of New Mexico-Avangrid merger is stirring in its 2021 grave, my reaction was incredulity, followed closely by anger (“Revamped PRC seeking to reconsider utility merger,” March 9). Truly, when money is involved, there is no such thing as death.

A brief recap: In 2020, PNM and Avangrid applied to the New Mexico Public Regulation Commission for approval to merge. This was not to be an equal partnership: For $8.3 billion, PNM would become a wholly owned subsidiary of Connecticut-based Avangrid and answer to that company, which in turn answers to its Spain-based parent company Iberdrola, one of the largest energy conglomerates in the world with over $137 billion in assets.

In an extensive ad campaign, PNM touted the proposed merger as “a better, greener future for New Mexico.” Good jobs, economic growth and improved energy infrastructure were promised, as well as a boost in meeting the requirements of the 2019 Energy Transition Act.

By law, the PRC has to determine if a marriage like this is in the best interests of the public. In December 2021, the commissioners said “no” in a unanimous 5-0 vote, citing loss of local control and the difficulty of regulating PNM (again, required by law) if it were swallowed up by another company. A PRC hearing officer’s report submitted before the vote stated “the potential harms outweigh the potential benefits.” Avangrid-owned utilities in the Northeast have been accused of “abysmal” customer service, rate gouging and wage garnishing, with regulatory misconduct resulting in over $65 million in fines and penalties by 2021.

OK, you say, game over. But when billions are involved, the game is never over.

No surprise, then, that PNM appealed the PRC ruling to the state Supreme Court in January 2022. To complicate things, voters in 2020 approved a constitutional amendment revamping the PRC from a five-person elected panel to three commissioners appointed by the governor — who has supported the merger. The new PRC began operating in January. Further complicating things, the brand-new panel has joined PNM and Avangrid in asking to dismiss the previous appeal, opening the door to a reconsideration of the deal. (I can’t help thinking of the fox guarding the henhouse.)

One of the new commissioners has recused himself from the case because of prior support for the merger. That would leave two commissioners to vote on an issue affecting hundreds of thousands. Worse, if the court allows it, PNM and Avangrid have requested the PRC decide on an expedited rehearing by April 12, clearly hoping that reconsideration of the matter would end in a swift merger.

The optics here are bad, but the substance is worse. New Mexicans are potentially getting a deal previously rejected for very good reasons rammed down their throats. Avangrid, and by inference Iberdrola, has stated it wants to establish a “strategic beachhead” in the Southwest for future development. Here is corporate strategy writ large — growth for growth’s sake and profit above all. Ratepayers will get piddling rate credits for a few years; shareholders and management will profit handsomely. Most important, local control will cease to exist. Avangrid’s record of customer service is bad. Good luck appealing to Connecticut or Madrid if you have a problem.

Our state prides itself on its unique character, so maybe now is the time to defy the multinational juggernaut trend we see everywhere around us. The state Supreme Court could still deny the PRC/PNM/Avangrid request to remand the case back to the PRC and put to rest suspicions that the fix is in. Let’s hope it does.