Three of five members of the state Public Regulation Commission on Wednesday ripped the proposed merger involving Public Service Company of New Mexico and two other companies, indicating they may vote against the move.
The comments made by Stephen Fischmann of Las Cruces, Cynthia Hall of Albuquerque and Theresa Becenti-Aguilar of Northwest New Mexico were an unmistakable indication the proposal could be in jeopardy. The merger plan was on the commission’s agenda as an information item, but the three chose to reveal where they stood.
“I don’t see that it’s a good thing for our state,” Hall said.
There was no formal vote Wednesday, and wiggle room remains for approval at commission meetings on Dec. 8, Dec. 15 or in January.
PNM and its proposed partners, Avangrid of Connecticut and Iberdrola of Spain, have presented the approximately $8.3 billion deal as a way to bring New Mexico into a new era of renewable energy. Avangrid and Iberdrola have argued they know the technology needed and have the finances available to modernize the state’s electric grid.
PNM issued a statement after the meeting saying it was disappointed but hoped “when all the facts are considered, the merger benefits and opportunities will be realized for all New Mexicans.”
Even if the commission vetoes the proposal, the applicants could appeal to the state Supreme Court.
The merger applicants have pledged a variety of incentives, such as a $67 million rate credit for customers, state economic development money, 150 new jobs, unpaid bill forgiveness for some customers and many other items. In recent months, they have put on an advertising blitz to tout the proposal as well.
Strong figures support the merger proposal, including Gov. Michelle Lujan Grisham and Attorney General Hector Balderas. But during the commission’s public comment period Wednesday, 10 people spoke against the proposal and four favored it.
The meeting lasted more than seven hours, with the bulk of it spent listening to PRC hearing examiner Ashley Schannauer talk about his findings and field questions about the critical report he released a month ago. Schannauer, who serves as a quasi-judge, recommended the commission reject the merger proposal.
Near the end of the meeting, the three commissioners said they wanted to state their positions.
“Ashley’s not the kind of guy who trashes people or trashes utilities. He’s a lot more tolerant than I am,” Fischmann said, adding that made Schannauer’s criticism all the stronger.
Fischmann, the chairman of the commission, called the merger “fool’s gold” that wouldn’t pay off for PNM’s customers.
Becenti-Aguilar said she, like Fischmann and Hall, supported Schannauer’s recommendation. She said New Mexico has the courage to stand up to corporations.
“We are a strong state,” she said.
The two other commissioners, Joseph Maestas of Santa Fe and Jefferson Byrd of Tucumcari, said Wednesday wasn’t the day to state a position. “And I hope we’re not jumping the gun today,” Byrd said.
Maestas said he agreed with Byrd. But then he said, “There’s a black cloud hanging over this transaction, and it cannot be ignored.”
The proposal has been in the public domain for a year, but opposition began to ratchet up in May. That was when Schannauer scolded the companies for not revealing the many fines and penalties against Avangrid subsidiaries in the northeast U.S. for service problems.
His report discussed the fact that Avangrid’s Maine subsidiary last year finished at the very bottom in customer satisfaction of more than 125 midsized and big electric utilities in a study by J.D. Power. Two of three other Avangrid electricity subsidiaries in the northeast ranked poorly as well.
Schannauer also expressed concern about the criminal investigation going on in Spain against Iberdrola leadership and some other companies. He criticized Avangrid’s and Iberdrola’s tendency to withhold information, he said, and to claim various tidbits should be considered confidential.
He said so many modifications had been made to the proposal this spring and summer that there wasn’t a genuine proposal to consider. The merger applicants appeared willing to make concessions to various environmental and community groups, he said, but each concession changed the proposal in such a way that previous plans ceased to be binding.
The hearing examiner’s report said if the commission wanted to vote for the merger, he recommended a number of modifications be made to the proposal.
But he made his position clear.
“The proposed transaction itself was not designed to benefit PNM customers,” he said Wednesday. He said it didn’t serve the public interest in general.
“I’m recommending that it not be approved,” he told the commissioners.
Maestas asked if the current plan could serve as a foundation for some kind of modified proposal. Schannauer reiterated he believed it should be rejected.
“But I’m not the final decision-maker,” he said. “The commission is the final decision-maker.”
Fischmann said throughout the process, Avangrid and Iberdrola haven’t respected the regulatory process or Schannauer. He said the commission could reopen the case and allow the applicants to make another run at it.
But based on the way the proceedings have gone this year, he said, he wondered if the commission could accept the applicants’ assertions as credible.
Hall said she has received dozens of letters about the proposal, and only one supported it. The public drumbeat against the plan, she said, is getting louder.
