Official: Global Energy Firm Must Be Party To Utility Merger

SANTA FE, N.M. (AP) — A ruling this week by an official with the New Mexico Public Regulation Commission locks a third company into a merger proposal that could profoundly affect how electricity is handled in the state.

The official, commission hearing examiner Ashley Schannauer, said Spanish energy company Iberdrola must be officially named a participant in the proposal to merge Public Services Co. of New Mexico with an Iberdrola subsidiary, Avangrid of Connecticut.

Iberdrola “has acted as a party, but it has resisted submitting itself to the complete jurisdiction of the Commission as a party,” Schannauer wrote.

Some say the order obligates Iberdrola to commitments and regulatory authority that other energy companies in the state operate under. Iberdrola and Avangrid had argued, among other things, the Spanish parent company was merely a holding company and not a full participant in the merger proposal.

New Mexico Attorney General Hector Balderas told the Santa Fe New Mexican on Wednesday he wants everyone to keep their eyes on what’s key in the merger.

“Most importantly,” he said, “I want to focus on how the merger helps people receive improved energy security in New Mexico.”

Balderas, who has given his support to the merger, said in an interview he had no problem with Schannauer’s ruling. Opponents should be heard, he said, and information should be accessible to them. But Balderas doesn’t want the proposal to merely become a fight showcasing lawyers.

New Mexico’s energy grid is antiquated, he said, and there are New Mexico residents who don’t have electricity. “There are more important issues in the merger for the experts to focus on” than legal details, Balderas added.

Avangrid said Wednesday in a statement: “While there has never been any requirement in New Mexico for holding companies to be parties or applicants in merger proceedings, we are happy to make Iberdrola a party to the merger case. ... Iberdrola had already agreed to comply with all regulatory requirements.”

Some critics of the proposal said naming Iberdrola a participant in the case enables interested parties to gain more information through the legal discovery process. Schannauer concluded the same.

“That opportunity will not be easily accomplished if Iberdrola is not a party,” Schannauer wrote.

The information critics might seek includes everything from Iberdrola’s executive pay to the degree to which the company is lobbying interested parties in New Mexico. Iberdrola has hired New Mexico attorney Marcus Rael for $400 an hour to wield influence, critics say, but now they will get a better sense of his responsibilities.

Critics also point to a case in Maine in which Iberdrola allegedly avoided being named in a class-action suit because it hadn’t been attached as a participant in the merger between Avangrid and Central Maine Power.

Avangrid responded that Iberdrola “has complied with all merger conditions in every state (including Maine), and there has never been any effort by Iberdrola to avoid the jurisdiction of any state regulatory authority (including in Maine).”

Mariel Nanasi with the Santa Fe-based non-profit New Energy Economy said the hearing examiner’s ruling acknowledges what is obvious in the merger proposal. “Who’s calling the shots here? It’s actually Iberdrola,” she said.

Schannauer’s ruling said Iberdrola “has been a central participant in the proceeding and the merger negotiation that led to the proceeding.”

Avangrid contends that adding Iberdrola to the merger proposal is a procedural distraction. The company said the sooner the commission approves the merger, the sooner customers can "reap the benefits of this deal.”