ALBUQUERQUE, N.M. – Joint Applicants Public Service Company of New Mexico and AVANGRID filed documents in the merger application of its parent company, PNM Resources, Inc., with AVANGRID. In the filings, PNM and AVANGRID detailed new commitments and agreements with parties to increase customer rate benefits, economic development benefits, and safeguards to ensure continued customer reliability and customer service.
These new commitments ensure New Mexicans and PNM’s customers will see even more direct benefits to the economy as a result of the proposed merger and PNM will remain a New Mexico-based utility with continued strong ties and responsiveness to the communities and people it serves.
- Customer Rate Benefits: Customer rate benefits have been negotiated among the parties since the merger was filed. The original $24.6 million now stands at $88 million to PNM customers, including $65 million in rate credits, $6 million in COVID arrearages relief, $15 million for low-income energy efficiency assistance and $2 million to improve the access that low-income New Mexicans have to electricity, particularly in remote areas. PNM has also agreed to not file for a change to its base rates or for any new tariffs before June 1, 2022.
- Economic Development Benefits: Contributions to economic development projects or programs in New Mexico have also been increased to $15 million. These contributions are in addition to the previous commitments to both maintain existing jobs, with no reduction of wages or benefits to union or non-union employees, and also add 150 new full-time jobs (originally 100) over three years with an economic development benefit estimated to exceed $200 million.
- Customer Safeguards for Reliable Service: PNM and AVANGRID have agreed to measure, monitor and report on our quality of service, and to ensure reliability metrics are met.
- Safeguards for Governance and Jurisdiction: PNM and Avangrid also agreed to additional language in the stipulation to safeguard customers and ensure local management of the utility, including: PNM’s board will be comprised of seven directors who are New Mexico residents with three independent and disinterested directors, including a Lead Independent Director; a majority vote of directors, along with a majority vote of independent directors will be required for dividend matters; enhanced ring-fencing definitions under which dividend payments will be restricted based on debt ratings; day-to-day operations of PNM and regulatory, operational and community engagement matters will continue to be managed locally, with specific job functions guaranteed to remain in New Mexico, and the ability to review through a management audit and rate cases; Avangrid and Iberdrola agree they are subject to the New Mexico Public Regulation Commission (NMPRC) for PNM regulatory matters.
The stipulated agreement continues to include commitments to provide $12.5 million for the benefit of impacted indigenous community groups in the Four Corners region, to provide park street lighting and complete a substation to enhance service to the Albuquerque International Sunport, enhance an effective Minority- and Woman-Owned Business Procurement Program along with a program to increase diversity on the PNM management team, enhance energy efficiency and solar programs, perform environmental studies and create a Carbon Reduction Task Force and Chief Environmental Officer responsible for carbon-reduction goals, work to develop renewable energy and/or energy storage projects on Navajo Nation land, and triple PNM’s proposed transportation electrification plan budget, among many other commitments.
“We have continued to talk with parties, listen to their proposals and come to agreement on numerous items to provide additional benefits and safeguards to our customers and ensure this merger will move New Mexico forward,” said Pat Vincent-Collawn chairman president and CEO PNM Resources. “Our employees, customers and communities will benefit for years to come from the collaboration between parties that have resulted in these commitments.”
“The negotiations with other parties have been a successful and evolving process over the past few months. What we have now, following our filing of testimony yesterday, are substantially greater benefits to New Mexico and New Mexicans and a consensus from the vast majority of parties in the case that this transaction is in the public interest. We look forward to the opportunity to make our case to the Commission that this transaction should be approved so that we can bring these benefits to customers,” said Robert Kump, Deputy CEO and President.
Remaining Steps for Approval
Five federal agencies and the Public Utilities Commission of Texas have already completed their reviews and approved the proposed merger, leaving the New Mexico Public Regulation Commission as the only remaining approval necessary for the merger. The original application before the NMPRC was filed in November 2020.
Evidentiary hearings on the amended stipulation reached with 13 other parties are scheduled for August 11 – 20, 2021. Parties supporting the amended stipulated agreement include: the Attorney General of the State of New Mexico, Western Resource Advocates, the International Brotherhood of Electrical Workers Local 611, Dine Citizens Against Ruining Our Environment, Nava Education Project, San Juan Citizens Alliance, To Nizhoni Ani, the Coalition for Clean Affordable Energy, Interwest Energy Alliance, Walmart, Inc., Onward Energy Holdings, LLC, M-S-R Power and Los Alamos County.
New commitments reflect agreement on specific items with additional parties.
