Two short and very compelling videos followed by a well-researched, very clear report from New Energy Economy on the Proposed Avangrid acquisition of PNM. I had heard some troubling aspects to this purchase, but NEE unpeels the onion and it will make you cry. We need to resist. We close with a video of our weekly radio show outlining how achieving a milestone birthday and considering mortality leads to surprising insights and actions.
The Truth About Plastic & Recycling
The video below is but 3 minutes long, but it lays out very clearly the myths around the feel good moment when you recycle your waste. And stay tuned, as once this video ends, it segues into an interesting report on how Scandinavia
A Looming Crisis With a Solution
I happened on this quite by accident, as it was the third video following the one above. But this is such a compelling report that I had to share. This is a must watch….really, watch it.
The Exxon of Renewables, Avangrid Wants to Extract & Export Our Solar and Wind at Ratepayer Expense…and so much more!
Before we turn our post over to New Energy Economy, who penned the important commentary that follows, I want to inject my own thoughts on this merger.
I have wondered what the motivation might be for Avangrid’s acquisition and their purchase price that exceeded PNM’s value at the time of the acquisition. In examining the experience of residents of Maine who are served by Central Maine Power (CMP), a subsidiary of Avangrid, two things jump out at me:
- The motivation for Avangrid paying such a steep price for PNM; and
- The nefarious ways in which Avangrid has behaved in Maine, putting profit over the environment and the rate payers. After NEE’s commentary, I’ve provided a VERY compelling video of a webinar conducted by the Natural Resources Council of Maine. It outlines CMP’s (Avangrid’s) plans to construct transmission lines through the heart of Maine’s pristine mountains, so they can import hydroelectric power from Canada. It isn’t just that this plan would mar mountains that have been protected for over a century, offering few jobs, but it also would diminish the capacity to tap Maine’s own potential for generating their own renewable energy via its immense offshore wind capacity.
It isn’t just that this is a bad plan, but the ways in which CMP has tried to move this forward were duplicitous. Rather than going public and seeking public approval, they met privately with leadership from towns all along the proposed transmission corridor to seek their approval. However, once people learned of these agreements, public hearings occurred and, as reported in the video, 27 of those towns have rescinded their agreements and now oppose the corridor.
As to the motivation for Avangrid overpaying to purchase PNM, Utility Dive found that NM has vast wind and solar potential for generating more than enough power to meet its own energy needs with significant renewable energy available for export elsewhere. What’s more, as reported by Green Tech Media, there is a demonstrated need for transmission lines to California and Arizona as they have set high and immanent goals of achieving 100% renewable energy without the resources to generate the energy themselves.
Harken back to Maine for a moment where citizens across the state are fighting an Avangrid subsidiary plans to build transmission lines over protected Maine forest and imagine the same battles here in NM, as Avangrid seeks to build out transmission lines to Arizona and California, with lines marring centuries old landscapes and crossing sacred indigenous lands. It was only in 2014 that we were able to achieve protection for the Organ Mountains and they could well be in the path of Avangrid’s plans for transmission lines to Mexico. Do you trust the same folks to manage this process as those being fought tooth and nail in Maine? Assuming not, is there an alternative?
The alternative is clear. SB 112 is creating an Sustainable Economy Task Force to explore ways to diversify our economy and free us from reliance upon gas and oil revenues. The same economics that have driven Avangrid to seek to purchase PNM and exploit NM’s immense renewable energy transmission potential could drive the state to expand state investments in wind and solar generation and build its own transmission lines, meeting our own energy needs and exporting energy to states in need of that energy…..with profit accruing to the state, not a privately held mega corporation from Spain who would simply extract that profit and distribute it to their shareholders. How is that a good deal for New Mexico?
NEE’s piece below covers other compelling reasons to oppose this acquisition. Once you’ve read that though, I highly recommend you examine the video that follows. It will make very clear exactly who Avangrid is, their motivations, and the way they like to operate. If you think PNM is hard to regulate, just wait til Avangrid rides into town with big promises that will ultimately translate into higher rates and massive profits for their share holders.
Not many understood the full import of the Energy Transition Act and still fewer appreciate what is behind Avangrid’s proposed purchase of PNM. So please review this post and then share it with friends. The PRC decides on whether or not to approve the merger. We need to let them know what is behind this. New Energy Economy lays it out very clearly. Take it away NEE.
We Are At a Crossroad
Energy Democracy and Local Control or Corporate Control, Rate Increases & Reliance on a Distant Mega Corp. NEE’S View
New Mexico stands at a crossroads. Not only between fossil fuels and renewable energy, but also between energy monopoly on steroids and energy democracy. The proposed merger agreement between PNM and Avangrid/Iberdrola, pending now before the PRC, is part of a larger energy transition that is happening across the globe. The PRC’s decision in this case will determine not only whether ordinary New Mexicans will pay hundreds of millions to bail out PNM for their past imprudent climate atrocities, but whether our energy future will be determined locally for the benefit of New Mexicans or will instead be subsumed within an international monopoly conglomerate pursuing global energy dominance and access to the California and Mexico energy markets. (As the NYT has said “they are the “Exxon of renewables.” How does that sit with you?)
A straight line can be drawn from the Four Corners imprudence finding in 2017 to the Energy Transition Act in 2019 to the PNM Avangrid Merger case which is before the commission now. In 2013 and 2014 PNM extended the life of the Four Corners Power Plant by investing approximately a billion dollars of OUR money in the plant without any contemporaneous financial analysis. In 2017, in Case No. 16-00276-UT, we challenged that decision, and Hearing Examiners found that PNM invested in and extended the life of the FCPP without a current financial analysis. The investment was found to be “imprudent” (an imprudence finding means that costs cannot be included in rates), but after lobbying by PNM, PRC Commissioners voted to defer the issue of prudence until PNM’s next rate case, a rate case that has yet to be filed. Four years later we are still paying for high-cost polluting coal at FCPP, and the proposed PNM Avangrid merger would ensure we continue paying for the next 25 years, even as the coal plant continues to operate.
Right after that imprudence finding PNM began working with legislators on the Energy Transition Act. Celebrated for its Renewable Portfolio Standard (a standard that would have been achieved through market forces alone), the ETA was in fact a Trojan horse, containing language giving PNM a 100% bailout for its investments in San Juan and ALL other fossil fuel plants, regardless of prudence (or other regulatory standards). Our legislature was uniquely generous – in no other state does securitization law give utilities a right to 100% cost recovery for imprudent acts AND elimination of regulatory oversight for plant abandonment costs. Because there is so much money at play in the transition from fossil fuels to renewable energy, utilities across the country are aggressively campaigning to influence energy transition legislation for their benefit. (“When Utility Money Talks,” New York Times, Aug. 2, 2020) The Edison Electric Institute, a trade association for electric utilities, worked for many years to hinder the development of solar and wind power, but when market forces finally made that impossible they switched tactics, instead seeking ways to ensure that utilities are bailed out for their investments in coal and nuclear power. Nobody proposed that AT&T should be compensated for their investment in land lines when cell phones became dominant, and nobody owes these for-profit utility companies anything for their shortsighted fossil fuel climate-altering investments.
Most of you probably know that New Energy Economy opposed the Energy Transition Act, and that we proposed amendments in the most recent legislative session to prevent a bailout for the FCPP and nuclear plants yet to be abandoned. Our amendments were unceremoniously tabled in the Senate Conservation committee by both Republican and Democratic legislators, and our Local Choice Energy Act to end the antiquated monopoly utility model in New Mexico met the same fate in Senate Tax, Business and Transportation. New Mexico legislators proved once again that they are beholden to PNM and the oil and gas industry, their largest campaign contributors. (“The New Mexico Oil and Gas Industry and Its Allies: Oceans of Oil, Oceans of Influence,” Common Cause New Mexico and New Mexico Ethics Watch, March 2020), , pp. 8, 13, 26.
PNM was clearly not worried. Even before the legislative session began, they had filed a merger agreement with Avangrid, a subsidiary of the Spanish company Iberdrola. Those talks began as soon as the ETA was proposed, and when it was greased through Avangrid knew it was an opportune and safe investment. All of its uneconomic and soon to be stranded fossil fuel investments could be securitized and passed off to ratepayers. In fact, PNM has already filed for abandonment and full cost recovery for both Four Corners and the Palo Verde Nuclear Plant, but it is important to note here that neither abandonment filing means the plants will actually close. Instead, PNM is simply paying another company to take the Four Corners coal off its hands and selling its shares in Palo Verde nuclear at a significant loss. If approved, the climate altering emissions and toxic waste streams from both plants will continue for years to come, while New Mexicans pay for PNM’s losses on the sales.
The timing of those abandonment filings was also not a coincidence. In fact, the PNM Avangrid merger agreement stipulates that PNM must abandon and securitize its investments in FCPP prior to Dec 31st, 2024, and the only buyer who was willing to accept PNM’s money in order to take the plant off their hands was NTEC, the owner of the coal mine that supplies the plant. They agreed to take the plant with the requirement that PNM ensure the plant cannot close prior to 2027, effectively forcing the plant to remain open longer than projected. Avangrid’s policy precludes ownership of coal – it interferes with their shiny renewable reputation (“ESG”) – but clearly they have no problem with offloading dirty coal to other companies even if that means it will mean more climate polluting emissions. This too is a pattern being followed by large energy companies around the world. (“Companies Go Green but the Planet Doesn’t Always Win,” Politico, 3/30/2021). New Energy Economy filed a Motion to Dismiss the so called “abandonment” application, which we won in part (the Commission ordered PNM to re-file their application) and we will be renewing our Motion based on these very issues, prominently including that it can’t be in the public interest for PNM to sell its coal shares and prolong the burning of coal.
We now find ourselves grateful to stand in solidarity with more than half a dozen intervenors who oppose the PNM Avangrid merger as written. In testimony for the Sierra Club, Jeremy Fisher writes “condition 6.19 of the proposed merger between the Company and Avangrid…requires PNM to enter into “definitive agreements” to exit from the Four Corners Power Plant… on specific terms by no later than December 31, 2024. This clause of the merger agreement is a driving factor in PNM’s transfer of its interest in Four Corners to the Navajo Transitional Energy Company (“NTEC”) — a transfer that is being done in a way that is antithetical to the climate policies and goals of the State of New Mexico.” (pg 6.) In testimony for the New Mexico Attorney General ’s office, Andrea Crane writes “PNM should agree to assume all costs of abandonment of its interest in the Four Corners Power Plant (“FCPP”) and withdraw its filing for the abandonment of the FCPP under the Energy Transition Act (“ETA”) that sets forth an estimated $300 million cost of abandonment.” (pg 7.)
Though several parties have already settled in exchange for various concessions, New Energy Economy and many others continue to hold out for justice. The PRC must decide if any utility merger serves the public interest. Some of the many reasons we think only benefits the shareholders and does not New Mexico, New Mexicans and ratepayers it that the merger:
- Prolongs the operation of the FCPP and thus increases carbon emissions.
- Requires ratepayers be saddled with $300M in FCPP recovery costs that were previously determined to be imprudent, negating any potential benefits from rate credits.
- Offers shareholders $700M+ in premiums and executives $36M in bonus compensation while residential ratepayers receive 45 dollars each on average. PNM is selling its monopoly profit at obscene benefit to their executives and shareholders to a global energy giant, and offering those ratepayers almost nothing in return.
- Does not include a rate freeze, required by NM law and necessary to quantify the benefits of any rate credits included in the merger agreement.
- Includes a paltry $20M in economic development funds, an amount that should be closer to $100M, per legal precedent.
- Does not include enough reparations to the communities impacted by decades of air, water and land pollution from its coal plants, nor provide assurances for sufficient land remediation, and immediate cleanup of abandoned coal facilities.
A merger with Avangrid is the exact opposite of Energy Democracy. Avangrid/Iberdrola want to create NM energy colonization 2.0. We want the PEOPLE to own their own power! In Maine, an Avangrid owned subsidiary, Central Maine Power (CMP), has consistently received the lowest customer satisfaction rates in the country. A group called “Our Power” is proposing legislation to replace the for-profit utility with a lower cost, reliable and responsive ratepayer-owned nonprofit utility company so that “CMP and Versant will no longer be able to give unfair preference to their affiliates, delay connections to new renewable energy projects, or work to block cheaper, cleaner, more efficient energy choices such as solar and efficiency.” (ourpowermaine.org)
They have no option but to fight to replace Avangrid, but we still do. Do we want to double down on energy monopoly? Or do we want to get to a place where New Mexicans produce their own clean energy, benefit from that energy production and control their energy choices? We are at the crossroads. If we don’t choose the right path now, Avangrid will bulldoze the places we love to build their energy empire and use their vast financial resources to ensure we have even less control over our energy future.
Thank you, Mariel. Well done. Retake and NEE will keep you posted as the PRC hearing nears and we will provide ways in which you can raise your voice on this important issue.
Citizens for Fair Rates and the Environment has created a petition to express opposition to this merger. I’d encourage you to sign the petition and share it with others. Click here.
Turning 70, A Week without Roxanne & the Challenge of Creating a Sustainable Rethink
Sometimes in the blog I open up and put a personal spin on a policy, a political affront, or some other challenge. Usually, you folks really appreciate the personal perspective. For our radio show on Saturday, I recorded my personal reaction to reaching a milestone birthday. With Roxanne in California visiting our daughter, I have been caring for the kitty and the starts that will get planted when Roxanne returns this afternoon. So, with Roxanne away, I’ve had lots of time to myself to mull what I want to do with the rest of my life, what I am hoping Roxanne and I can do together, and how all that intersects with our plans to launch Rethink Our Democracy. The conversation comes in two parts, with Part I, having aired on KSFR this Saturday and Part II, taking off from the end of the show to delve into what I think is the more interesting of the two parts. Enjoy.
In solidarity, hope and gratitude,
Paul & Roxanne
Categories: Climate Justice