Today we provide an update from Paul and a copy of his written comment to the PRC opposing the PNM/Avangrid merger. We urge you to submit your own written comment before the hearing ends.
First, a brief note to update you on my progress.
Since my stroke on July 21, I continue to improve, albeit more slowly than I would liike, the trajectory is moving in the right direction. Thanks to Roxanne for filling the role of volunteer case manager, I am getting the rehab services I need to further my recovery. I can’t imagine how anyone suffering a stroke could even begin to manage the tortuously inefficient communication channels required to secure an appointment or get results from a CT scan. But Roxanne has managed these communications with amazing resourcefulness. After waiting several days to get a doctor to call us back with CT scan results, she sent the report to our daughter, who is her fourth year of med school, who assured us that there was nothing alarming in it. (Almost 2 weeks later, we still haven’t heard from a doctor.)
I have to admit that the after-effects of the stroke are impeding my efficiency and my ability to generate posts, radio shows, and to adequately prepare for Rethink huddles. Regretfully, I have ceased my weekly radio show, for now. Today, we are re-airing a show from last year with Dahr Jamail. Given the bleak IPCC report earlier this week, I thought it would be good to hear from Dahr again as his insights into the climate catastrophe are so instructive. Tune in at 8:30 a.m. today, KSFR, 101.1 FM, or streaming live at ksfr.org. Or view the video recording below.
Also, until I am further along in my recovery, we will have to postpone the Rethink Huddles. The Huddle scheduled for this Tuesday, Aug. 17 is cancelled, and we will update you when I am able to participate and manage the next meeting, hopefully on Sept. 21.
Public Comment on PRC Hearing re PNM/Avangrid Proposed Merger
I submitted the written comment below to the PRC this week to express my opposition to the PNM/Avangrid merger. I share it with you today in hopes you will offer your own written comment by sending it it to firstname.lastname@example.org. It does not have to be lengthy. Just make one or two key points and close by stating that you firmly oppose this merger. Please submit it before Fri., Aug. 20, as it must be submitted before the evidentiary hearing is over. Feel free to use any of the points in my written testimony below. There are so many reasons to oppose this merger!
I hope that you will also consider writing a letter to the editor or a My View to your local paper. Click here to get contact info and guidelines for submitting letters to every NM newspaper. The hearing continues next week and we need to counter the millions being spent in misleading ads and the uninformed comment the ads generate. Read on!
PRC Public Comment From Paul Gibson, Santa Fe, NM
I’d like to begin my testimony by reacting to Monday’s oral comments, as we heard the result of Avangrid’s use of ads and private meetings with stakeholders to make unsubstantiated promises of jobs and economic benefits to secure support for the merger. This is precisely what they did in Maine in seeking approval from townships for a transmission line through the Maine forest.
In Maine, Avangrid secured support from 26 of 28 townships along the transmission line’s path by promising jobs and other economic benefits to these townships. When more fact-based analysis was done and much of the benefits promised by Avangrid disappeared, all but two of the townships rescinded their support and stood in opposition to the transmission line.
We are seeing the same strategy here in NM with Avangrid holding meetings with Chambers of Commerce, unions, Indigenous groups, county commissioners, and others, promising jobs and other economic benefits without clear description of what kind of jobs, where they would be located, or how these jobs or economic benefit would actually be a result of the merger. Avangrid is also spending millions on ads making the same kinds of promises. Many of those commenting on Monday took those promises as certain and even went so far as to discredit testimony outlining Avangrid’s abysmal record in Maine as being due to ineffective regulatory oversight. As if having the lowest customer satisfaction rating in the nation and the highest number of outages in the nation is the Maine PUC’s fault.
In short, there is plenty of misinformation filtering into the record and I hope that the hearings to come will challenge the promises being made, as Avangrid’s actual performance in Maine, Spain, and Brazil offers a very different picture of what we can expect their future performance and reliability to be.
I’d like to offer some reasonable criteria for objectively determining if this merger is in the public interest. The utility acquirer should have:
- A history of reliable service delivery;
- A history of high customer satisfaction;
- A history of transparent, ethical corporate behavior and respect for impacted communities.
To assess the degree to which Avangrid/Iberdrola meets these criteria, let’s look at their track record in Maine, Spain and Brazil, as we feel past performance is a better indicator of future performance than empty promises.
Reliability of Service Delivery
Iberdrola purchased Central Maine Power(CMP) in 2008 and formed Avangrid in 2016. Based on data collected by MRO Electric & Supply Co. from 2015 – 2019, Maine saw the highest average number of power outages of any state in the nation at nearly four per year. (See chart below.) This is 50% higher than the runner up, West Virginia, which experienced an average of 2.8 outages per year. (“The Most & Least Power Outages by U.S. States,” by Joe Kaminski, March 3, 2021, MRO Electric & Supply Co., Inc.) Note the absence of any other northeastern states in either of the top ten lists below. Their absence from the list underscores that Maine’s topping these lists is NOT a result of nasty northeastern storms but of basic utility failures on the part of Avangrid/ Iberdrola.
What’s more, Maine not only experienced the highest average number of outages per year, but was second in average annual downtime in the country. According to the data in the chart above, downtime in Maine was narrowly second to hurricane-battered Florida.
lf reliability of service has not been a priority in Maine, is there any reason to believe it would be a priority in NM?
In oral comment, Jim Mckenzie, co-founder of 350 NM, spoke glowingly of the merger and Avangrid’s ads promising jobs, renewables, and other economic benefits. He went so far as to suggest that Avangrid’s problems in Maine were likely attributable to faulty regulation in Maine. Long and frequent outages are not a result of faulty regulation and neither are Avangrid’s abysmal customer satisfaction ratings. It is truly sad that one of the leaders of 350 NM could be so easily convinced by specious ads, and remain unmoved by Avangrid/Iberdrola’s horrible work in Maine, Spain, and Brazil and their unethical behavior everywhere else they have operated. (Note to readers, not included in testimony: Because there are people like Jim who have some credibility in the community, who will carry water for Avangrid /Iberdrola, we need people like you to offer written comment today, based on facts and track record rather than baseless ads and unsubstantiated promises.)
Before Iberdrola/Avangrid purchased Central Maine Power, CMP had among the highest customer satisfaction rating in the nation. So, Avangrid inherited a highly satisfied customer base, but in just a few years customer satisfaction plummeted.
According to JD Power and Associates, CMP ranked last in the country among all large and mid-sized electric utilities for customer satisfaction in 2018, 2019 and 2020, even lower than PG&E, whose carelessness caused the deadly firestorm that torched Paradise, California.
Is there any reason to believe that Avangrid/ Iberdrola will do better here in NM?
Unethical corporate behavior
Iberdrola corporate leadership is under investigation in Spain for fraud, bribery, misuse of funds, and corruption. Avangrid will say that these are just “charges,” that they will prove false. So, while the charges are certainly cause for alarm, what hard evidence is there about their corporate culture?
Quite a lot, actually, including:
- Avangrid sent “shut off” notices to hundreds of customers in the dead of Maine’s winter, during a pandemic and in violation of state law.
- Avangrid hired private investigators in Maine to follow petition gatherers who were collecting petitions opposing a proposed Avangrid transmission line through the Maine forest
Do we want petitioners in NM tailed and intimidated by Avangrid-funded, suited P.I.s?
And yet, there is more:
Avangrid hired New Mexico attorney Marcus Rael, paying double his normal rate despite an obvious conflict of interest and despite his having no utility experience, perhaps because of his close personal relationship with the NM Attorney General, a key stakeholder who, before meeting with Rael, had been opposed to the merger and had commissioned the scathing testimony of Scott Hempling, quoted below. Yet after his meeting with Rael, the AG reversed his position despite Avangrid not coming close to meeting his publicly stated criteria. The PRC was so appalled with Rael, that they removed him from the case altogether..
But to my mind what Iberdrola has done in the global South is the most troubling of a wealth of troubling behavior.
Exploitation of Impacted Communities in South and Central America
From “Iberdrola is Not Green: The hypocrisy of a transnational energy corporation that painted itself green,” a study published by the Spanish think tank, HEGOA, the Institute for International Cooperation and Development Studies:
“Iberdrola’s expansion in Latin America in the late 1990s took place at a time when low-wealth countries located primarily in the Global South and Africa fell prey to International Monetary Fund (IMF) lending practices, with the IMF then imposing ‘structural adjustment plans.’ These adjustment plans compelled the adoption of a range of austerity measures that crippled national economies and coerced their cooperation in multinational schemes to privatize strategic sectors of their economies, extract resources, and amass huge profits on the backs of workers who had the choice of starving or working for what these mega corporations offered in wages. The energy sector was among the most pilfered of industries and Iberdrola was a major player in the late 20th and early 21st century.”
Also, “Iberdrola is Not Green: The hypocrisy of a transnational energy corporation that painted itself green,” carefully outlines Iberdrola’s corporate behavior and concludes that “Iberdrola has taken ‘greenwashing’ to an entirely new level, purporting to be on the vanguard of the renewable energy movement while exploiting the Global South and undermining Spanish efforts to transition to renewables.”
Iberdrola IS NOT a fierce advocate for renewables or a trusted partner. Responding to claims that Iberdrola is on the vanguard of the renewable energy movement, HEGOA reported:
“The reality, however, is quite different. Iberdrola continues to operate thermal power plants run on coal and fuel oil, as well as new combined cycle and nuclear plants, and large hydroelectric dams. As indicated on Iberdrola’s electricity bills, in 2013, depending on the time of year, between only 8.9% and 11.3% of the energy comes from renewable resources.”
HEGOA offers numerous examples of Iberdrola’s exploitation of Brazil. But Iberdrola’s strategy is the same throughout the Global South: extract concessions from the host country, concessions extracted under IMF threats, then purchase and privatize key industry assets and natural resources and displace anyone who might be in the way of their profit. Importantly, these behaviors show the business ethics (or lack of ethics) that drives Iberdrola’s business decisions. In Brazil:
“In 1997, Iberdrola acquired 39% of Neoenergia and, in 2011, took control of Elektro, the sixth largest electricity distribution company in the country. By doing so, it became the largest distributor of electricity in Brazil, with over 40 million consumers. Structural adjustment programs forced Brazil – a country where the energy system had been entirely publicly owned – to put its state enterprises up for sale, often at much lower prices than what they were actually worth.
As a result, In Brazil, Iberdrola now owns six cogeneration plants, one combined cycle station, 17 wind farms, and 11 hydroelectric dams, as well as the Baixo Igauçu, Teles Pires and Belo Monte dam projects. Iberdrola has particularly benefited from Belo Monte, which will be the third largest dam in the world. This project is an enormous social and environmental disaster, as it will affect 516 km2 of forest (64.5 hectares in Permanent Preservation Areas), 11 municipalities, nine indigenous territories, and 30 indigenous communities. It will cause the displacement of thousands of people, including 50,000 indigenous peoples.” Source: “Iberdrola is Not Green: The hypocrisy of a transnational energy corporation that painted itself green.”
Is this who we want plotting transmission lines in NM when the most cost-efficient and profitable path might be through Chaco Canyon?
With this track record, the charges in Spain seem highly credible.
More on Iberdrola’s Green Image
From “Iberdrola is Not Green: The hypocrisy of a transnational energy corporation that painted itself green.”:
“The company’s “green” image clashes with its wager on highly polluting and destructive forms of energy such as the new combined cycle plants or hydroelectric power. The former is based on liquefied natural gas that, being a new technology, is much more efficient than the conventional thermal stations in terms of emissions, but still generates large volumes of carbon dioxide and other greenhouse gases. Furthermore, it is important to keep in mind the socio-environmental impacts associated with the extraction and transportation of natural gas. They can be seen in the case of Nigeria, which is where the gas Iberdrola uses in its plants in the Basque Country (Santurtzi, Bahia de Bizkaia, Castejón) comes from. In Nigeria, the extraction (of both oil and gas) has had serious and irreversible effects on the people and the environment due to repeated oil spills and gas flaring, which corporations continue to perform with total impunity. This also involves the contamination of the water that the environment and thousands of people depend on.”
And in Spain:Working in Direct Opposition to Renewable Energy Development
Again from HEGOA:
“Iberdrola’s greenwashing clashes with its belligerent policy against renewable energy in the hands of small producers. In 2011, the Spanish Association for the Thermoelectric Industry Protermosolar expelled Iberdrola for acting against the interests of the thermo-solar sector.
In October 2013, Iberdrola president Ignacio Sánchez-Galán declared,
“If the production of solar and photovoltaic energy was suspended, the electricity bill
would drop 10%”. In addition to these declarations, the corporation took out advertisements in several newspapers affirming how expensive renewable energy is. That same year, Spain’s Partido Popular government heeded the proposal of Iberdrola and other major energy corporations and reduced the electricity tariff deficit by 6 billion euros by eliminating subsidies for renewable energy sources, among other measures. With this cutback, renewable energy producers were unable to compete with the large electricity corporations.”
Based on the behavior reported by HEGOA, is Avangrid/Iberdrola who we want to be negotiating with to help us meet our own renewable energy goals? Or to partner with in developing NM’s capacity to generate and sell our renewable energy to the grid?
Whose benefit would be the highest priority? How seriously do you think Indigenous concerns would be considered?
For that matter, NM badly needs to diversify its revenue base, and wind and solar are key assets that we could develop ourselves with the profits going to NM instead of Avangrid/Iberdrola. Why would we even consider handing over that resource to any multinational corporation, let alone one with such a checkered track record?
In conclusion, the proposed PNM/Avangrid merger should be rejected, if only for the abysmal track record in Maine, Spain and Brazil. To recap:
- Least reliable service in country;
- The most and longest outages;
- The least satisfied customers in the nation;
- A history of unethical corporate behavior in Spain, Maine, Africa South and Central America
What’s more, the deal they propose is bereft of any thought to ratepayers or the people of New Mexico. From utility merger expert Scott Hempling’s testimony:
“At no point in the narrative did PNMR’s executives and advisors demand, or even ask, that prospective acquirers offer any serious customer benefits. (Respectfully, I don’t consider $24.6 million a serious benefit, especially when compared to the PNMR shareholders’ $713 million gain.) PNMR bargained over price, cash-stock ratio, breakup fees, Board membership and executives’ location, but never over customer benefits. No one gathered or presented serious information, conducted serious analyses or made any serious plans, about improving PNM’s performance. Customer benefits were beside the point.” (from p. 18 of Scott Hempling testimony, emphasis mine.)
Avangrid delivered on the points important to PNM, but came with no plans or thoughts about customer benefit, as Scott Hempling underscores in the conclusion to his testimony:
“My testimony is complex because this transaction is complex. But the message is not. Iberdrola/Avangrid wants to control PNM to get a platform; PNMR wants to sell control of PNM’s public franchise to get $713 million. Nothing about this transaction benefits consumers; much about this transaction will harm them. There are no reasons to approve this transaction, and many reasons to reject it.” (from p. 76 of testimony, emphasis mine)
Based upon all the evidence presented above, I ask the PRC to reject this proposal entirely.
NM Taxpayer and
Categories: energy, Uncategorized
Wow! Paul, you’ve got the lucidity part DOWN. (Typing skills probably still a work in progress.)
I’m also grateful for the package of information you assembled that helped me focus my impressions from the Zoominar on Avangrid you presented earlier, so I was able to submit my own comments in opposition to the merger.
Thanks also for exposing 350NM’s dangerous gullibility. Jim McKenzie must have a real taste for snake oil. With friends like that….
FYI: I submitted my objections last week on Tuesday Aug 10th (before 8:30 am Wednesday) as requested.
See todays Guardian article on Iberdola being investigated by Spanish government for draining dammed lakes for greater profit – during unprecedented drought.