Official: Letter between Avangrid, PNM must be made public

Jun. 29—The contents of an August 2020 letter from multinational energy giant Iberdrola to Public Service Company of New Mexico fail to meet confidentiality requirements and must be divulged, an official with the state Public Regulation Commission said.

Contrary to the claims of PNM, Connecticut-based Avangrid and Avangrid's parent company, Iberdrola of Spain, there is no reason for the letter not to be publicly disclosed, PRC hearing examiner Ashley Schannauer said.

"A document does not deserve confidential treatment just by designating it as such," Schannauer wrote in his order.

The letter gives some indication of the early priorities of Avangrid and Iberdrola as they considered acquiring PNM. Those priorities included PNM removing itself from the coal-fueled Four Corners Power Plant in northwestern New Mexico and the degree to which the board of directors of a new PNM would be independent of Avangrid and Iberdrola.

The hearing examiner's ruling last week also addressed the topic of public disclosure, which has been an issue throughout the case involving the merger proposal.

A local spokeswoman for Avangrid said in a written statement Monday, "Avangrid and PNM respect the Hearing Examiner's decision regarding confidentiality."

The letter in question was sent to Pat Vincent-Collawn — president, chairwoman and CEO of PNM parent company PNM Resources — a little less than a year ago by Iberdrola executive Pedro Azagra Blázquez, who also is an Avangrid board member.

The letter makes clear Avangrid and Iberdrola wanted PNM to get out of its ownership interest in the Four Corners Power Plant.

PNM has said it intends to do this and expects to transfer its ownership interest to the Navajo Transitional Energy Co. of Farmington. But this has brought on criticism from the nonprofit Sierra Club and others who say the plan could end up extending the life of the coal-fired plant.

Some critics also object to the way Avangrid would like PNM's board of directors to be set up. Blázquez's letter says a "burdensome effect" on the transaction would result from "any requirement to impose any independent or disinterested director obligation that would impact Avangrid's control over PNMR."

Mariel Nanasi of Santa Fe-based New Energy Economy said Monday an independent board "will care more about New Mexico" than a board controlled by Avangrid and Iberdrola.

An independent board generally is one with a majority of members who are not employed by the company don't have family members employed by it.

Avangrid spokeswoman Joanie Griffin said Avangrid's current proposal would include two independent board members on a panel of five, or three independent board members out of seven.

Schannauer previously has criticized PNM and Avangrid for failing to volunteer information and data about the customer service problems and penalties Avangrid subsidiaries in the northeastern U.S. have experienced. The companies have said this is public information available for anyone to find.

Three weeks ago, Schannauer ruled Iberdrola is officially a participant in the proceeding. Avangrid and PNM had denied the company was a full participant.

Jeff Albright, an attorney representing Bernalillo County, said Monday the 2020 letter to Collawn identifies Blázquez as a representative of Iberdrola, showing "Iberdrola was involved from the outset" of this proposed transaction. Further, he said, the letter is written on Iberdrola letterhead.

Nanasi also said it was important that Iberdrola be revealed as a key participant in the proposal. It's about who is in control, she said.

And when the board is controlled by Avangrid and Iberdrola, she said, and an early letter in the proposed transaction is attributed to Iberdrola, it's evident that Iberdrola would have a hand in decision-making.