PNM AVANGRID MERGER - ROUND 2
IN 2021 NEW MEXICANS SAID NO TO AVANGRID,BUT THEY DIDN'T TAKE NO FOR AN ANSWER. THEY APPEALED TO THE SUPREME COURT AND ON SEPTEMBER 15TH THE COURT WILL HEAR ORAL ARGUMENTS IN THE CASE
New Mexicans spend thousands on electricity every year. In our impoverished state, too many have to choose between filling their pantries and keeping their lights on, and the Public Regulation Commission (PRC) is crucial to protect them against utility greed, enforcing fair rates, reliable service, and the transition to renewable energy.
In 2021 our elected Commissioners took a hard look at Avangrid’s application to buy PNM, our largest utility, and unanimously decided a merger would not benefit New Mexicans because Avangrid and its parent company, Iberdrola, have a long track record of ignoring regulations, flouting the law, predatory billing practices, rate increases and political corruption.
Prior to this year members of the PRC were elected by the people, but in 2023 all of that changed. A misleading ballot referendum funded by dark money resulted in a change to a Governor appointed Commission, which was put in place in January 2023. Despite laws requiring disclosure, the PAC funding the referendum made a deal with the Secretary of State's office in order to avoid revealing its donors.
PRC COMMISSIONERS JOIN PNM AND AVANGRID IN FILING FOR A REMAND OF THE CASE AFTER EX PARTE COMMUNICATIONS WITH THE COMPANIES
Avangrid appealed the merger rejection at the Supreme Court, and then within weeks after our democratically elected PRC was replaced by Governor appointees, those new Commissioners began meeting with Avangrid and PNM behind closed doors in an effort to dismiss the appeal and remand the case back to the PRC for their reconsideration.
On April 20th, 2023, after we filed a motion questioning the PRC's decision to join with Avangrid/Iberdrola and PNM in their motion for dismissal and remand, PRC lawyers filed a Notice of Ex Parte Communication in the case with 94 pages of emails illegally exchanged between the PRC and Avangrid lawyers.
The law is quite clear: Commissions, like judges, are to avoid the appearance of impropriety, but here the evidence demonstrates that practically from the moment of their recent appointment by the Governor and confirmation by the legislature, these Commissioners began engaging with one side in a case they are charged with adjudicating to reach an ex parte decision to overturn the PRC’s previous, final decision rejecting the merger.
That effort failed. The Supreme Court rejected their motion for dismissal and set a hearing for September 15th, 2023 to decide on the merits of the former PRC's decision to reject the merger.
Everyday New Mexicans play by the rules - this movida by wealthy, corporate interests is an effort to corrupt our democracy for their own profit. New Mexico's new PRC must be held to the standards of transparency and integrity necessary to protect electricity customers in New Mexico.
Who will protect New Mexicans if the PRC does not?
Avangrid is a publicly traded worldwide energy conglomerate with approximately $36 billion in assets and operations in 24 U.S. states. Iberdrola, (located in Spain), owns 81.5% of Avangrid’s stock.
In 2021 New Energy Economy stood alone against Avangrid as all other intervenors settled. The Hearing Examiner agreed with our analysis, recommending against the merger, and the PRC voted unanimously to reject it. We are standing up one more time against these big energy giants, and demanding that regulators protect the people.
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Why did new mexicans reject avangrid?
Avangrid Puts Profit
Over People
Avangrid and parent company Iberdrola have a worldwide reputation for putting profits before the people they are supposed to serve - cutting costs and customer service and raising rates to boost corporate profits.
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Avangrid utility United Illuminating in Connecticut proposed a 106% rate increase while earning record profits.
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Frustrated customers of RG&E, an Avangrid utility in New York, are calling for a public utility after alarming billing errors, incompetent management practices and rate hikes.
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Customers of Scottish Power, owned by Avangrid parent company Iberdrola, were hounded by debt collectors for erroneous bills of up to £7000. Customers reported being harassed, aggravated, and feeling desperate and helpless due to the company’s illegal misconduct.
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Iberdrola subsidiary Scottish Power was the most complained about energy supplier in the UK in 2019, with 8,441 cases referred to consumer advocates. As customer’s bills doubled, Scottish Power sent dividend payments to Iberdrola of nearly one billion pounds and executive pay soared from £200,000 to £1.35m. “That’s trickle down economics alright. Trickle down from Scotland to Spanish shareholders,” said one critic.
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Avangrid utility CMP in Maine has ranked last among all comparable utilities in the nation in JD Powers’ customer satisfaction surveys four times in a row (128th among the 128 investor-owned utilities in the nation). Two of Avangrid’s other utilities ranked near the bottom in surveys (New York’s 17th out of 18 in the region; Connecticut’s 11th out of 12).
Avangrid Gaslights & Greenwashes
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Avangrid claims to be an ESG leader and a champion of climate action but the reality is far different.
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A 2022 Brown University Laboratory’s analysis found that in CT Avangrid opposed more climate legislation between 2013 and 2020 than any other group identified in the report, spending $2.8 million lobbying against climate bills during that period.
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In NY Avangrid joined other utilities and fossil fuel companies to fund front groups like New Yorkers for Affordable Energy that campaigned against climate legislation, donated funds to politicians, and published misinformation in ads, including false claims that a gas appliance ban would cost homeowners $30,000 when the Rocky Mountain Institute found New York homes would actually see a $6,800 cost savings across 15 years.
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Avangrid hindered solar development in Maine by significantly raising interconnection fees for solar development projects mid-construction, hampering their completion. Maine’s investigators found estimated fees for one project jumped from $100,000 to $1,420,000; a second project saw fees increase from $239,000 to $12,239,000.
Avangrid Disrespects Our Democracy and Seeks to Silence its Critics
During the first merger hearing the Hearing Examiner examined all the evidence and concluded that a merger with Avangrid was not in our public interest, and our elected PRC agreed. Public comments were overwhelmingly against the merger. Avangrid won’t take NO for an answer. We can’t let corporations buy our democracy.
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Avangrid lawyers engaged in illegal ex parte communications with the PRC in an attempt to circumvent opposition and rush the deal through. They threatened New Energy Economy with a lawsuit for defamation, a tactic they have tried and failed to employ before to silence critics in both the US and Europe.
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Avangrid’s plan to buy out PNM has been under discussion since at least 2018, when Avangrid made its first donation to the New Mexico Democratic Party. During the first merger hearing the Hearing Examiner examined all the evidence and concluded that a merger with Avangrid was not in our public interest, and our elected PRC agreed. In Public Comment New Mexicans overwhelmingly opposed the merger.
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Why is the newly appointed PRC now considering a rehearing? That was the backup plan all along, a fail safe measure in case the elected Commissioners on the former PRC rejected the merger. PNM and Avangrid appealed to the Supreme Court to buy time while they waited for an appointed PRC to be installed in January of 2023. The installation of those appointed Commissioners was not coincidental. The newly appointed PRC’s first act as a Commission was to call on the Supreme Court to dismiss the appeal and send it back to the PRC for a rehearing.
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In 2020 a dark money PAC spent $746,000 to promote the campaign to replace the elected PRC with appointed commissioners more susceptible to influence from the Governor who appoints them, but refused to disclose its donors. Many, including PRC commissioners at the time, suspect that PNM and Avangrid contributed to the effort. Neither company would respond to reporter’s inquiries on the subject.
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PNM and its suitor, Avangrid, together, have contributed at least $150,000 to Governor Lujan Grisham since 2017, $42,000 to Speaker Egolf who sat on the nominating committee in potential violation of the NM constitution, and more than $940,000 to influence the political process in New Mexico through campaign contributions to candidates and PACSs over just the last five years. In 2022 Avangrid donated $25,000, the maximum allowed, to Governor MLG’s inaugural committee.
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The original merger application included $28M in “Golden Parachute” compensation for PNM Executives upon merger approval, more than the total rate credits for all ratepayers combined.
Avangrid Acts as if They Are
Above the Law
Hardworking New Mexican families play by the rules - they follow the law, they pay their electricity bills, but Avangrid and Iberdrola have shown they don’t respect the rule of law.
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Avangrid owned utilities in the Northeast have a long history of evasion of regulatory control and violations resulting in millions of dollars in fines and penalties.
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The Hearing Examiner in the first merger hearing had to halt proceedings to get Avangrid and Iberdrola to provide truthful responses to discovery questions about their record of regulatory violations and fines, and this was followed by illegal ex parte communications with the new PRC to try to settle the deal behind closed doors.
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During covid Avangrid utility United Illuminating referred 48,833 inactive accounts to third-party collection agencies without notifying customers, sued delinquent customers and garnished wages despite a CT law requiring utilities to cease collection efforts.
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In May 2022, Mexico’s Energy Regulatory Commission (CRE) fined Iberdrola Mexico $466 million for violating Mexico’s electrical supply laws.
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In 2022, a Spanish court ordered Iberdrola to dismantle 60% of 500 MW operational PV solar plant because Iberdrola built a plant on property that was illegally expropriated.
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Spain’s Anti-Corruption Prosecutor’s Office recently opened an investigation into Iberdrola and four of its executives for illegally increasing the price of electricity generated through three hydropower plants in 2013. The prosecutor’s office has asked a national court to fine the company €84.9 million and suggested a two year prison sentence for each of the executives involved in the scheme to raise the price of electricity by limiting supply.
Avangrid Wants Monopoly Control of NM's Wind & Sun
Avangrid admits it wants to use ownership of our utility as a “beachhead” to gain ownership of our wind and sun resources. Small clean energy businesses in New Mexico need to be able to compete on a fair playing field. Monopoly ownership and self-dealing is bad for New Mexican entrepreneurs and workers.
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Avangrid admits it wants to use ownership of our utility as a “beachhead” to gain ownership of our wind and sun resources. Affiliated Iberdrola companies like Avangrid Renewables could receive preference and inside information to win contracts and drive out competition.
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Our elected PRC commissioners named this risk of corruption and self-dealing, and the difficulty of policing these transactions as a primary reason for their rejection of the merger.
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There are 87 solar businesses in the state, manufacturers, installers and developers, who employ more than 1880 New Mexicans. These local companies will be disadvantaged if they have to compete against Avangrid subsidiaries for utility contracts.
New Mexico Has Better Alternatives
New Mexico does not need an outside corporation to come here to develop our sun and wind resources and export all the profit to Spain. Local Choice Energy, local energy developers and regulatory reforms can provide the clean and reliable energy we need. New Mexicans deserve the jobs and the profits from our solar and wind resources.
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New Mexico can make the transition from a patchwork of rural electric co-ops and monopoly private investor owned utilities to Local Choice Energy, in which communities that choose to participate build or contract for their own clean energy sources and use the existing grid for distribution. Profits and jobs from energy generation could then stay in our communities.
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New Mexico could opt to purchase and build out the transmission grid, and then contract for local developers to build solar and wind facilities to sell energy to neighboring states. We have the second highest solar energy potential in the country - the real reason that Avangrid is interested in buying PNM - and with state ownership New Mexico can earn up to $1 billion per year in energy sales.
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With legislation and tighter regulation, existing electricity providers can be required to make the transition to 100% renewable energy rapidly, and to pass the savings from that transition on to their customers.
Learn more about alternatives at PublicPowerNM.org
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