Two executives of the Public Service Company of New Mexico fielded some rough questions Tuesday from a legislative committee about the proposed merger with two big utility companies.

The hearing before the Legislature’s Science, Technology and Telecommunications Committee turned into more of a grilling than the simple update that might have been anticipated.

Sayuri Yamada, PNM’s executive director of public affairs, suggested to the committee it would be a session to introduce Don Tarry, who is in line to be the next head of PNM, and to briefly discuss the proposed merger with Avangrid of Connecticut and Iberdrola of Spain.

“I promise we’re not going to take the whole hour of your time,” Yamada said with a chuckle. But the session went on for about 75 minutes, and at least a couple of committee members made no effort to water down questions or comments.

A hearing examiner for the Public Regulation Commission recommended early this month the merger not be approved by the commission. The hearing examiner, Ashley Schannauer, listed a set of modifications to the proposed merger agreement if the commission is inclined to approve it.

The merger proposal, which was developed by PNM and Avangrid a year ago, has encountered questions about the reliability of Avangrid subsidiaries, a criminal investigation in Spain involving Iberdrola’s CEO and other matters.

Sen. Bill Tallman, D-Albuquerque, threw some of the toughest questions at Tarry and after one answer said, “So, I’m not buying it.”

Tallman asked why PNM and Avangrid have done so much advertising to promote the merger.

“I’m more suspicious, the more ads I see,” he said. “If it’s such a good idea, why are you spending such a huge amount of money [on ads]?”

Tarry, the chief financial officer of PNM, said it’s important to tell the public what Avangrid is and also to say PNM will continue to run the company. If the merger goes through, Tarry will take over as the head of PNM and current CEO and President Pat Vincent-Collawn will depart.

Tallman also said he didn’t care for the fact that Iberdrola or some Iberdrola executives are under investigation in Spain.

“The company itself is not under investigation,” Tarry responded. “There’s been no indictment, no nothing on the company. They’re looking at several companies in Spain, from that perspective.”



Tarry said the merger would enable New Mexico to benefit from the renewable technology and innovation of Avangrid and Iberdrola.

He also said it would come with, among other incentives, $67 million in rate credits for customers; $15 million for low-income energy efficiency programs; $10 million in forgiveness of past-due bills; $1 million in scholarships and another $1 million for apprenticeships; and 150 new jobs that will pay an average of $88,000 each.

He added, “We feel very strongly there’s a value in the merger.”

Rep. Joy Garratt, D-Albuquerque, applauded PNM and Avangrid for their willingness to contribute to education, citing the scholarship and apprenticeship programs, and a $250,000 PNM donation for school supplies.

But she and Tallman referred to separation agreements with three PNM executives if the merger goes through. The “golden parachutes” total $29 million.

“And it’s a little bit of a pet peeve of mine,” Garratt said.

Sen. William Soules, D-Las Cruces, said the reliability record of Avangrid subsidiaries in the Northeast U.S. concerned him. Three of four of those subsidiaries are at or near the bottom of 2020 customer service rankings against their peers. The other was at the top of its peers.

Tarry said the Northeast’s winter storms are hard on utility companies and the subsidiaries perform well when compared to others in that region.

Soules said he hoped New Mexico wouldn’t experience a “meltdown” in service similar to that of Texas last winter.

“We maintain a very strong grid,” Tarry said. “Because reliability is absolutely fundamental to this utility.”

At the end of the session, Tarry told the committee he was glad to have the chance to speak to the panel.

“Thank you for the questions, the tough ones,” he said. “I do appreciate that.”

(13) comments

Paul Campos

Subject: Maine residents not smiling about performance of Avangrid subsidiary

On November 2nd nearly 60% of Maine voters approved a referendum opposing a destructive power line project championed by Avangrid subsidiary, Central Maine Power. The very next day Avangrid announced that it will continue with construction, despite the vote, and the bulldozers continued in their destructive path.

Over the past few months, New Mexicans have been inundated with an intense/expensive propaganda campaign and advertisements telling us that Avangrid’s acquisition of PNM will be good for New Mexico. The propaganda showed a lot of smiling faces favoring the acquisition of PNM by Avangrid.

In Maine, there are not a lot of smiling faces.

Let’s look to Maine for the truth.

Since Avangrid took over Central Maine Power, service has suffered. Maine Governor Janet Mills called their service “abysmal”, and a survey by J.D. Power found Central Maine Power ranked last in a nationwide survey of residential customer satisfaction for an investor-owned utilities. The Maine Public Utilities Commission recently ordered an audit of Avangrid’s management structure, and the audit showed that Avangrid cared more about meeting earnings expectations of its investors than focusing on service quality for their customers.

Mike Johnson

[thumbup][thumbup]Thank you!

Robert Fields

I don’t know much about Avangrid or the details of the merger, but anyone wanting to avoid rate increases might want to look at putting up solar panels and reduce your bill to just a connection fee.

As to Mike’s tilted view of alternative energy, what he keeps forgetting are that peak grid power demand is during the day when solar panels can really offset conventional power generation using fossil fuels. Plus, there are energy storage technologies that bank power when the sun is out or wind is blowing, and feed it back into the grid when it isn’t. Alternative energies are indeed intermittent but there are a number of solutions. Tesla built a battery bank in Australia that has more power delivery capability than over half of PNM’s New Mexico power plants. It stabilizes their grid and prevents blackouts. Relying only on alternative energy generation without power reserves to pick up the slack when the wind doesn’t blow and the sun doesn’t shine is asking for trouble. But including energy banks can remove the need for conventional energy sources.

Texas tried to blame wind generation during their last blackout but it wasn’t wind that caused their blackout. It was their power infrastructure unable to keep up with demand, no power reserves, and rolling blackouts taking out natural gas pumping that cascaded them into a major blackout.

We have to and will move to alternatives. Homeowners can get net metering and just use the PNM grid as their energy bank for a simple system. Install your own battery bank and you can run some or all of your home and recharge from solar panels during the day. It’s your own alternative energy source with its own power reserves to bridge when the sun isn’t shining and if PNM is in blackout. If we can do this, so can PNM.

Ignore Mike’s comments on this. He is a fossil fuel cheerleader and constantly attacks points already settled with alternatives. If he isn’t just outright denying global warming, he’s claiming we can’t fix it or that anything we do doesn’t matter, it’s too expensive, or whatever other pet demon he wants to conjure to scare people away.

The fact is that home solar has gotten much more economical and depending on configuration can pay for itself in utility savings in 10-15 years while making your home more valuable and insulating homeowners from rate hikes and even power outages. It’s worth checking with an installer to see just what benefits there are for a particular installation. It might surprise you just how far things have come. You can sidestep the whole issue, plus get “free gas” for an EV vs paying PNM if you charge at home.

Mike Johnson

EV owners (all wealthy people since poor people can't afford to buy them) also get a free ride on our highways and transportation infrastructure since they don't pay the gasoline tax. Does that bother you Mr. Fields? If you are the "Democratic" Socialist you claim to be, it should.

Richard Reinders

I just heard Gavin Newson reversed his decision to eliminate natural gas, I think rolling blackouts and pissed off constituents has a lot to do with his decision, and in the same conversation a specialist from the heating industry said spikes and blackouts destroy the expensive electronics in newer heating systems. You only need to look to California to predict how this is going to go also drive to Amarillo to see what the destruction to our beautiful landscape will be with wind generators, approx.. 98% more of them than what is needed to supply NM alone.

Robert Fields

Yeah, those ugly, non-emitting wind generators. I personally much prefer coal-fired power plants that belch smoke, cause respiratory illnesses for miles around, spew tons and tons of mercury into the air, and are a major source of greenhouse gases.

Meanwhile, it’s totally amazing how homeowners can install solar panels and heat their homes using both direct solar and electricity. Cleanly. Just boggles the mind that it’s not impossible to unburden the power grid.

Richard Reinders

Robert, who is preferring coal over NG not me, I would be alright with wind and arrays if there was just what was needed for NM, I have a passive solar home so I am not against solar. Make sure you don’t hurt yourself when you fall off that soap box.

Mike Johnson

True Richard, Newsom did that, and anointed natgas as a "zero carbon" fuel as well, you gotta love left wing politicians.......huzzah...the planet is saved!

https://www.forbes.com/sites/jamesconca/2021/11/03/california-governor-gavin-newsom-proclaims-natural-gas-to-be-zero-carbon/?sh=65470ae62ad2&fbclid=IwAR32QiRa9le7jXZuHEXQp6SuNt5qiT9_oC4bWBtOgdz333iIJTeZNmLG4pA

Mike Johnson

I'm glad to see there are some politicians who are paying attention to this egregious "deal" and how NM ratepayers are being taken for a ride as suckers. The huge amounts of ads bought and which run daily for months speak volumes of the kind of "deal" this really is for ratepayers. The executives walk away with millions, the acquiring company exploits NM, as pointed out below by Richard, and the ratepayers are on the hook to pay for it all for many years. And we get a grid more reliant on weather vagaries and intermittent power, while reliable base load is removed, and the ratepayers will pay for any imported backup necessary in the future that is not necessary now. There is no case to be made anything about this merger is good for New Mexicans, none.

Robert Fields

Moving power from areas with excess to areas that need more is a very basic strategy with alternative energies. It is a fact that alternatives are intermittent. This isn’t a new revelation. That’s why you design in energy storage and build a robust grid - precisely to be able to export and import energy when available/needed. This is a normal and expected thing that already has solutions.

I’m not discussing the merger. I’m talking about the proper way to build an alternative energy grid to where it is robust and resilient. Your intermittent argument is just hot air if the grid is properly provisioned.

Mike Johnson

Since you are not discussing the subject of this story, the merger, let me help you with a comment I made on a related story yesterday:

"Opponents have argued it made no sense environmentally for PNM to dump the plant on Navajo Transitional Energy (which will be paid $75 million by PNM shareholders to take it)..." That's not the least of it. It makes no sense in a capitalist system were are supposed to have in America. The thing that should happen is that the company, their executives and stockholders, should be paying for these mistakes, not the captive customers. But this is what happens when the government steps in to the free market economy and does the wrong thing for consumers for politically expedient reasons. Disgusting.

Richard Reinders

The reason PNM and Avangrid is falling over backwards to get this deal is the potential to sell electricity to California , Mexico and Arizona. We are the stepping stone for them not the primary reason and because of that we should pass on the merger. NM represents about 2% of their potential sales while using 100% of our resources. If the deal went through they should provide free electricity to NM it only 2% of their potential revenue.

Lawrence Leichtman

Totally agree with Richard. We are not going to be a main source of business for them. I think this is a hard pass for NM. The amount of advertising has concerned me. What is advertising anyway? A means of trying to sell you something you really don't want or need.

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