PNM debacle could place utility in peril of takeover by Wall Street
As the attorney general for the state of New Mexico, I was vocal about my support of the Avangrid-PNM merger.
And the reasons are simple: The merger would have led to historic investments in clean energy, new jobs, economic development programs, electric-bill forgiveness options, and $300 million in benefits for our state.
My support for the merger application between Avangrid and PNM was shared by many and was only opposed by one party. Despite the overwhelming support by public entities across the state, in December 2021, the merger was rejected by the former Public Regulation Commission.
The former PRC allowed hearsay to guide its decision rather than the facts. Avangrid and PNM appealed the decision to the New Mexico Supreme Court, which heard arguments in September 2023, but failed to issue its decision for over six months after the case was argued by the parties.
As a result of the former PRC’s denial of the merger application, paired with the New Mexico Supreme Court’s untimely decision in the appeal, Avangrid pulled out of the $8 billion merger altogether in January this year.
After Avangrid withdrew, on March 18, 2024, the New Mexico Supreme Court issued its decision, which held, in accordance with statutory law, that the former PRC’s order denying the merger application must be vacated in its entirety.
This means that the New Mexico Supreme Court found that the decision to deny the merger application is not, and should not be interpreted, as binding.
Further, the New Mexico Supreme Court held that the former PRC’s sanction levied during the merger application proceedings was “unreasonable or unlawful” pursuant to Section 62-11-4 of New Mexico statutes. Accordingly, if Avangrid had not withdrawn, the merger case would be remanded for rehearing by the current PRC.
Unfortunately, the New Mexico Supreme Court decision came too late. Instead, PNM is hitting the streets trying to find new investors that can bring the resources that are necessary to meet the requirements of the state’s Energy Transition Act.
PNM has reported time and time again that it does not have the resources necessary to meet the Energy Transition Act goals of becoming entirely carbon neutral. That means that PNM could be bought by a Wall Street firm in the near future. This is concerning for New Mexico.
JPMorgan Chase, owner of El Paso Electric, agreed to pay about $290 million to settle a class-action lawsuit by Jeffrey Epstein’s victims. New Mexicans are likely to now be left in a less advantageous position when it comes to renewable energy as PNM courts a new suitor to provide the resources necessary to become carbon neutral.
All we ask is that regulatory bodies apply the facts and follow the rule of law.
Hector Balderas is president of Northern New Mexico College in Española. He was a state representative and state auditor before serving two terms as New Mexico attorney general from 2015 to 2023.