October 21, 2020

Connecticut-based utility company agrees to buy PNM Resources

The company that owns New Mexico’s largest utility PNM is being acquired by Avangrid, a Connecticut-based utility owner, in a merger deal totalling $8.3 billion. The two companies announced the deal early Wednesday. 

Avangrid operates natural gas and electric utilities and renewable energy generation assets across 24 states. The investor-owned company’s headquarters are located in Orange, Connecticut, but the majority shareholder is Spain-based Iberdrola, S.A., which is the third largest utility company in the world. 

Avangrid’s renewable energy-focused arm is considered one of the largest in the world. It’s the third largest wind energy operator in the U.S., with 7.4 gigawatts of installed wind and solar capacity. The company owns 1.9-gigawatt capacity wind projects in New Mexico and Texas and 200 megawatts of wind and solar capacity in Arizona.

RELATED: Natural gas will play a big role in state’s energy transition

Pat Vincent-Collawn, PNM Resources CEO, president and chairperson, emphasized the transition to clean energy as a top consideration in the merger. 

“Our combined companies provide greater opportunities to invest in the infrastructure and new technologies that will help us navigate our transition to clean energy while maintaining our commitments to our local teams and communities,” Vincent-Collawn said in a statement. 

Dennis Arriola, Avangrid CEO, said the merger is a “a strategic fit” for Avangrid. The merger “helps us further our growth in both clean energy distribution and transmission, as well as helping to expand our growing leadership position in renewables,” Arriola said in a statement.

Renewable energy advocates in the state had mixed reactions to the news of the merger. Ben Shelton, political and policy director for Conservation Voters New Mexico, said he was encouraged by the announcement. 

“New Mexico’s renewable generation potential has been on the cusp of a major boom for years,” Shelton said in a statement. “We’re encouraged to see a large renewables-focused company like Avangrid validate that belief with their investment here. We hope this move will solidify a deep, long-term commitment to New Mexico’s future as a West-wide renewable energy generation leader.”

Some questioned what the acquisition might mean for the Four Corners region of the state, which is facing an uncertain economic future as PNM plans to exit the coal-fired San Juan Generating Station. 

“Front and center is the opportunity to protect and manage water sources in the Four Corners region,” said Nicole Horseherder, director of the Diné environmental group To Nizhoni Ani. “A transition to solar, wind, renewable, clean-energy investments helps eliminate the waste and misuse of water. Precious water sources have been used to feed giant power-plants all over the Four Corners region for over half a century. These water sources are limited and have been compromised in many regions.” 

Camilla Feibelman, director of the Rio Grande Chapter of the Sierra Club, said she wants to see Avangrid commit to financially supporting a just transition for those communities. 

“We urge Avangrid to commit to a complete cleanup of San Juan and Four Corners coal plant and a reinvestment into a long-term renewable economy for the communities that have been sacrificed for PNM’s profits,” Feibelman said in a statement. “Avangrid could demonstrate its commitment to New Mexico by investing its own resources to back up the community funding created by the Energy Transition Act.” 

The merger faces a number of regulatory hurdles. It needs to be approved by PNM Resources shareholders, New Mexico’s Public Regulation Commission, the Federal Energy Regulatory Commission, the U.S. Justice Department, the federal Nuclear Regulatory Commission, the U.S. Federal Communications Commission and the Committee on Foreign Investment in the United States. 

If successful, the combined company will own 10 utilities in six states and will have renewable operations in 24 states. Arriola will serve as CEO of the combined company.