The Connecticut- and Spain-based electric utilities that hope to merge with Public Service Company of New Mexico have sweetened their offer somewhat.
In testimony filed last week with the New Mexico Public Regulation Commission, an executive and board member with those companies said he would offer a better benefit to PNM ratepayers, increase the state economic development contribution and make a bit of a concession on a sticky board of directors issue.
The merger proposal, touted by some as a way for New Mexico to move more quickly to renewable energy, has encountered numerous challenges revolving around the quality of electric service customers would receive in a different ownership structure. Hearings before the Public Regulation Commission are expected to start with public comment Aug. 9 and the formal hearing Aug. 11.
Pedro Azagra Blázquez of Spain-based Iberdrola said in written testimony the companies would increase a credit given to PNM customers from $50 million to $65 million. The companies would ratchet up their economic development contribution from $7.5 million to $15 million.
Azagra Blázquez is a board member of Avangrid and chief development officer of Iberdrola, the parent company of Connecticut-based Avangrid.
Avangrid and Iberdrola haven’t agreed to create a PNM board in which the majority of members are independent, or free of financial interest from the company. Some New Mexico organizations have called for that.
Azagra Blázquez said he would still have three independent board members on a seven-member board. But when dividends are considered, two of the three independent board members would have to approve the proposal, he said.
“I think those are all positive steps,” said Jeff Albright, an attorney who represents Bernalillo County. That county has not signed onto the merger “stipulation,” or agreement, that many environmental and community groups have signed. “There are some other issues that still need to be resolved.”
Albright said the agreement the Public Regulation Commission will consider might not include the new concessions because they came along too late to amend the official stipulation. “It’s not what’s in front of the commission yet,” he said. But that matter “can probably be worked out.”
He also said he still has concerns about the future of the Four Corners Power Plant. If PNM turns the coal-fired power station over to the Navajo Transitional Energy Co., as planned, it might stay open longer and thus remain an environmental hazard longer, he said.
An August 2020 letter from Iberdrola to PNM indicates a high priority for the multinational energy giant was for PNM to remove itself from Four Corners.
Albright also mentioned about $300 million in “stranded” capital and economic development costs at Four Corners that, he said, will land on PNM ratepayers through long-term bonds.
PNM argues better interest rates will bring that amount down. Furthermore, cheaper renewable energy will be a huge benefit, PNM says. PNM also has said some of the costs at Four Corners already are being paid down by ratepayers.
PNM said customers will actually save money in the deal. The electric utility also has said the Four Corners abandonment is a separate matter from the merger proposal before the commission.
Attorney Stephanie Dzur of the Coalition for Clean Affordable Energy, which supports the merger proposal, said she hopes the new incentives will encourage groups like New Mexico AREA to sign onto the agreement. New Mexico AREA advocates for its members’ energy interests.
Among other things, Avangrid has been challenged in New Mexico over service problems Avangrid subsidiaries have incurred in the Northeastern U.S. Questions also have arisen over a Spanish investigation that includes two Iberdrola executives.
Dzur said she would leave it to the hearing examiners of the Public Regulation Commission to handle those questions.
“They’re very thorough,” she said. “They will get to the bottom of everything.”
Ashley Schannauer is the hearing examiner on the merger proposal.
Pat O’Connell, senior policy analyst for Western Resource Advocates, said the concessions are “great because they bring more people to the table in terms of supporting the merger.” His organization is a proponent.
Mariel Nanasi, an opponent of the merger proposal, said the concessions are “going in the correct direction.”
But she said the $300 million that could fall on customers “dwarfs these positives.”