Merger sparks concerns at utility commission

PRC staffer: Renewable energy company Avangrid cut regulatory corners on its state wind projects

A company hoping to merge with Public Service Company of New Mexico already has two wind projects in the state, both of which dodged certain requirements early on, said a staffer from a regulatory agency.

John Reynolds of the New Mexico Public Regulation Commission has written that Avangrid, a Connecticut-based renewable energy company, needs to “address its regulatory shortcuts in New Mexico” before it wins approval to merge with PNM.

The alleged shortcuts at the Torrence County wind farms are among a few concerns Reynolds cited about the proposed PNM-Avangrid merger.

Besides Reynolds, a variety of organizations and government entities, such as the Sierra Club and Bernalillo County, have filed analyses, criticisms or outright opposition to the proposed multibillion-dollar merger.

Reynolds and others also expressed skepticism over the degree to which PNM would retain control of its operations if it’s absorbed into two huge organizations. Avangrid is largely owned by another energy company, Iberdrola of Spain.

The commission will hold hearings on the merger proposal early next month and has the authority to approve or disapprove of the plan.

Avangrid said Monday evening: “Regulatory compliance is of utmost importance to us and we can confirm the El Cabo and La Joya projects are in full compliance with the PRC regulatory requirements.

“We immediately addressed an inconsistency in the La Joya permitting and the appropriate filing was made on Friday of last week that has brought the La Joya project into full compliance. This merger will bring two companies together that are built on strong values and a commitment to our communities and the environment, in addition to bringing additional jobs to the state and rate benefits to New Mexico customers.”

Public Regulation Commissioner Theresa Becenti-Aguilar, who represents northwestern New Mexico, said Monday she would study the testimony submitted. She said it wouldn’t be appropriate to give an opinion at this point.

“I am very interested in get

ting the testimonies and seeing how we can make a decision that’s good for New Mexico,” she said.

Commissioner Joseph Maestas of Santa Fe said he wants no suggestion that he’s “prejudging” the matter and stopped at that.

Other commissioners didn’t call back or declined to comment.

In testimony filed with the commission, Reynolds said Avangrid already has energy projects called El Cabo Wind Farm and La Joya Wind Farm in Torrance County. Both of those received scrutiny from Reynolds, who is the commission’s utility division director.

Reynolds said early this month of the El Cabo project that Avangrid Renewables failed to gain approval from the commission for “location control” and right-of-way width.

Also on El Cabo, Reynolds wrote, it appears Avangrid Renewables “deliberately skirted the New Mexico statute” by stating it would produce a capacity of 298 megawatts of power. At 300 megawatts, the commission has control over the location.

The commission said Monday it “remains unclear” whether El Cabo can produce 300 megawatts, although output can increase “when it is windier than normal.”

On the La Joya project, Reynolds said the Avangrid Renewables subsidiary called Pacific Wind Development failed to file copies of construction permits with the commission and notification of when service started.

The commission said Monday the La Joya Wind Farm currently is not in service. It had been expected to start running late last year.

Reynolds also expressed concern, as did some others who filed testimony, about PNM’s ability to retain control of its services and operations if it merges. He said PNM would be owned by a financially powerful company, but “being bigger and stronger is not necessarily better.”

Participants in the proposed merger said the PNM board would have at least two “local leaders” from the state. Reynolds called this inadequate, as did another person who submitted testimony.

Maureen Reno, a New Hampshire economist with expertise in public utilities, testified for Bernalillo County that the pledge to have two local board members was weak.

Currently, all five PNM board members are New Mexicans, PNM said.

Reno said the change would represent “a direct loss of local control over PNM.”

She said she was appalled by the “nonchalance” shown by the applicants’ assertion that there would be only two board members from the state.