New Mexico utility executives tout merger to state lawmakers
ALBUQUERQUE, N.M. (AP) — New Mexico utility officials on Tuesday touted millions of dollars in economic development benefits and customer savings if state regulators approve a multibillion-dollar merger with a subsidiary of global energy giant Iberdrola.
Two executives with Public Service Co. of New Mexico testified before a panel of legislators, hoping to win more favor for the contested proposal as regulators prepare to weigh whether the deal is in the best interest of the public. Among other things, they said the merger would result in 150 new jobs, greater purchasing power for the utility and a better credit rating for financing $4 billion in investments that will be needed over the next few years.
Both Republican and Democratic lawmakers on the panel raised questions about reliability and customer service issues in other states where the subsidiary — Connecticut-based Avangrid — operates electric utilities.
In recommending that the merger be rejected as proposed, a hearing examiner with the state Public Regulation Commission recently found that the potential downsides of the deal outweigh the benefits and that regulators would have to include provisions to protect customers and ensure reliability.
Don Tarry, PNM’s senior vice president and chief financial officer, told lawmakers Tuesday that the companies would agree to those provisions outlined by the hearing examiner, including penalties if the utility misses benchmarks for providing electricity to customers.
He said reliability is at the core of PNM’s mission, and the utility has to balance that with mandates for environmental protection and how the price tag ultimately affects customers.
“We’re very aware we’re not a wealthy state, and so there’s got to be a balance as you transition,” he said, referring to the goal of being emissions-free over the next two decades.
Sayuri Yamada, PNM’s executive director of government and public affairs, said the utility is constantly modeling what sources of electricity it will be able to tap to meet state mandates, remain reliable and limit the cost for customers. She noted that the utility is working on a proposal now to replace the electricity that will be lost if regulators approve the transfer of PNM’s share in the coal-fired Four Corners Power Plant to a Navajo energy company.
“It’s not a straight line,” she said. “People think from here to zero carbon is from A to B, but I think there’s lots of different pathways we’re going to have to take a look at. This is all new for all of us. It’s something that all the states and all the utilities are challenged with.”
Sen. Bill Tallman, an Albuquerque Democrat, said he wasn’t buying the executives’ promises and pointed to the more than $1 million PNM has poured into television, radio and newspaper advertisements touting the merger. He said he grows more suspicious with each ad he sees.
Tallman also reiterated the concerns of other critics who have suggested that Avangrid and Iberdrola want to acquire PNM as a way to gain a foothold in New Mexico to develop its wind and solar resources and sell that power to larger markets in the West.
Tarry responded that if the merger adds to New Mexico’s tax base, boosts renewables and benefits the West, he’s supportive. If the merger is approved, Tarry would serve as the utility’s new CEO and president.