Three PRC Commissioners Say They Won’t Support Merger; Report on PNM Press Conference; New NY Lawsuit Charges Avangrid/Iberdrola with Bid Rigging, Racketeering, Price Gouging

It is too early to pop the champagne, but Wednesday’s PRC hearing proved that when we use our voices to rebut misinformation campaigns, we can win. But this is not over yet. A new lawsuit in New York has validated PRC concerns and could not have been filed at a better time. Read on.

At the Dec. 2 press conference, PNM trotted out the Attorney General and execs from Avangrid, Iberdrola, and PNM who offered largely unsubstantiated assertions to counter concerns of bid rigging and other unethical business practices cited in the Hearing Examiner’s recommended decision. But any press conference (PR show) gains were entirely unraveled with news of a new NY lawsuit charging Avangrid/ Iberdrola with price gouging, bid rigging and racketeering. These are the kinds of illegal business practices the Hearing Examiner noted as being possible if the merger is approved. The risk that the merger’s structure would facilitate these kinds of illegal practices was raised as a prominent concern by Commissioners in their Dec. 1 hearing. Today, we report on that hearing, what transpired in the Dec. 2 Press Conference, and the NY lawsuit, along with links to a revised communication strategy that is responsive to all three. We have work to do, but the lawsuit just made that work much, much easier. Read on and share with others. Together, we can win this.

From the Dec. 1 Public Hearing

It is clear that three of the five Commissioners strongly oppose the merger and support the Chief Hearing Examiner’s recommendation. Commissioners Fischmann, Hall, and Becenti-Aguilar stated this emphatically. Even Commissioner Maestas, who was an advocate for giving the process more time, stated that “there is a black cloud” over this merger. That black cloud just got a whole lot darker with news of a stunning NY lawsuit, validating the precise concerns raised by Commissioners and the Chief Hearing Examiner in Wednesday’s hearing.

The PRC process allows the Commissioners to craft their own agreement, and the Hearing Examiner’s recommendation left open the possibility that if the Commissioners disagree with his recommendations, they can reject them. In his decision, he offered 20 conditions that he felt would be essential to any deal made. This is something that Maestas latched on to and was a focal point of the Dec. 2 PNM Press Conference. We expect that the Governor and her allies will apply a good deal of pressure to overturn the recommended decision and reopen the record to give Avangrid/Iberdrola more time to lobby and misinform their way to a deal, as the Press Conference made clear.

So we are taking no chances and are developing a communication strategy to ensure that we provide an avalanche of calls and emails that are personal and persuasive. This is no time to rest. We are so close to a remarkable victory. Click here to review our communication strategy, with messaging targeting each Commissioner and responding to their comments and questions during the hearing. But first, buckle up.

Dec. 2 “Press Conference”

It wasn’t really a press conference, it was a PR event with traitorous corporate enviro. orgs (Western Resource Advocates, National Resource Defense Council), Chambers of Commerce, a Tribal Council Governor, the Attorney General, and Avangrid, PNM, and Iberdrola executives all trotting out unsubstantiated assertions designed to counter PRC concerns. These kinds of assertions will be shared with Commissioners, so we need to focus on giving Commissioners reasons to not take their assertions seriously.

Points made by PNM and others during the Press Conference:

  1. The hearing Examiner wasn’t strong in his opposition to the deal and offered 20 conditions as a framework for a deal… and with the applicants agreeing to all the conditions, there is a path to a deal.

This is a very rose-colored interpretation that was rebutted strongly by the Hearing Examiner when Commissioner Maestas suggested that if we can just use conditions as a starting point, we may be able to find a deal. The Hearing Examiner read this from his recommended decision in response to this notion:

“Even assuming the adoption of protections that appear sufficient, including protections to ensure service quality and reliability, the Commission will need to devote considerable enforcement resources to ensure that Avangrid, Inc. and PNM comply with those protections. Avangrid, Inc. has not been forthcoming regarding the penalties and disallowances that have been assessed against its Northeast public utilities, and it has violated and skirted Commission rules and orders in this proceeding.

Chief Hearing Examiner; Recommended Decision

The Hearing Examiner then added, “I oppose this deal and only offered conditions in case the Commission disagreed with my recommendation. But I oppose this deal even with the conditions.”

The above quote should be referenced in your emails and calls. The Hearing Examiner was unequivocal in his opposition.

2. Reports of Avangrid’s Poor Performance In Maine are Based on Misinformation

The Avangrid CEO stated:

  • Their low ratings were based on fossil-fuel-funded media campaigns designed to undermine Avangrid. (Spoken by the king of misinformation campaigns.)
  • Their low ratings were due to weather conditions that are not present in NM.
  • Their outage numbers are better than other northeast Utilities.
  • The Billing system problems were fixed.

This is greenwashing on steroids. The vast majority of fines imposed on Avangrid were related to issues unrelated to storms and outages, e.g. billing fiascos, shut-off notices in winter and during COVID. And while they claim to have fixed the billing system, it took 3 years. Plus 60% of Maine voters voted just last month to deny Avangrid’s transmission line, not exactly a vote of support. The JD Power’s surveys are highly respected measures and show that for three years running Avangrid is dead last nationally in customer satisfaction. Related to outages, Commissioner Fischmann noted: every region has its challenges, you enter the work knowing this and it is your responsibility to manage those conditions.

But Avangrid/Iberdrola are adept at blaming others for their incompetence and lack of ethics.

3. The governing structure of the deal and the applicant’s agreement to independent evaluator would prevent conflicts of interest and bid rigging.

The applicants asserted at the Press Conference that the PRC would appoint an independent evaluator to assess the fairness of any RFP or procurement process. What they didn’t say is that Avangrid would create a list of evaluators that they approve of and then the PRC can pick from that list. That is not independent evaluation, it is greenwashing. Given the news about the lawsuit described below, the Commissioners now have even more validation of their concerns. This one issue, in and of itself, could be the deal breaker as PRC Commissioners were already very concerned about the possibility of bid rigging. They will be far more concerned when they start hearing about the lawsuit.

NY Lawsuit Charges Avangrid/Iberdrola with Years of Bid Rigging & Racketeering

The Guardian published a report today outlining a lawsuit filed in NY, charging Avangrid/Iberdrola with bid rigging, price gouging, and racketeering in NY, Connecticut, and Maine. From The Guardian:

A cybersecurity company filed a $110m lawsuit in New York this week, accusing the Spanish global energy company Iberdrola and its US subsidiary Avangrid of bid rigging and racketeering.

The 72-page federal court complaint outlines an elaborate scheme by Iberdrola executives to generate millions of dollars in wasteful equipment expenditures in order to turn a profit from its utility customers in New York, Connecticut and Maine.

The lawsuit further alleges that much of this equipment was never put to use and is instead collecting dust in warehouses across the region.

The Guardian: “Energy companies accused of bid rigging and racketeering in US lawsuit: Court complaint outlines scheme to generate millions in wasteful equipment expenditures in New York, Connecticut and Maine.

Ouch! This is precisely what the PRC is fearful could occur in NM because the very structure of the deal leaves the door wide open to bid rigging and rate manipulation resulting from exorbitant, unnecessary equipment purchases and other imprudent investments. The Guardian added:

“Legislators and environmentalists in the U S have attacked it[Avangrid] for price-gouging tactics, citing Maine’s soaring electricity bills and frequent, long-lasting outages ever since Avangrid assumed control of the state’s utility company.”

The Guardian: “Energy companies accused of bid rigging and racketeering in US lawsuit:Court complaint outlines scheme to generate millions in wasteful equipment expenditures in New York, Connecticut and Maine.

The Guardian closes with a quote from New Energy Economy Executive Director Mariel Nanasi, who, to her great credit, has been sounding the alarm about the problems with a proposed partnership with these corporations

“Fraud, bid rigging, jacking up customer rates by making phantom capital expenditures – there is a pattern of misconduct that has emerged,” she said.“Avangrid and Iberdrola act outside the law and the public be damned.”

The Guardian: “Energy companies accused of bid rigging and racketeering in US lawsuit:Court complaint outlines scheme to generate millions in wasteful equipment expenditures in New York, Connecticut and Maine.

The Guardian article is featured in our new communication strategy, as it validates the concerns outlined by the Hearing Examiner and three PRC Commissioners in Wednesday’s hearing. We need to remind the Commissioners that their prescient comments on Dec. 1 are now fully validated, and we encourage them to stand with the Hearing Examiner and reject this merger.

Click here for our Avangrid communication strategy, updated today.

When we joined forces with New Energy Economy in our opposition to this deal, we did so because we thought it was the right thing to do, not because we thought we could win. We knew the deck was stacked with Democratic leadership,(Sen. Heinrich, Governor Lujan Grisham, Attorney General Balderas) solidly supporting the deal. When this is over it will be time to remind these Democrats that leadership is not just a position, it is a responsibility to take courageous stands instead of sheepishly doing the bidding of their corporate donors.

In solidarity and hope,

Paul & Roxanne

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1 reply

  1. Hi Paul and Roxanne – A Sunday cheerleading letter was written in The New Mexican by a local supporting the merger, parroting most of the ‘press conference’ event. There also was a contra argument directly below.

    But if the citizenry are to say no to this bad faith buyout and giveaway it would be prudent, would it not, to supply, from the citizenry side, a fairly well flushed out alternative that is financially and democratically workable?

    Maybe I missed this somewhere in all the dialogue, but if the public is to get its own chance at some innovative type of self-governance, a big positive factor would be to be able to present an alternative that is not only efficient and progressive, but also within the realm of possibility.

    Mick Nickel

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