PNM, AVANGRID detail negotiations over merger redo in new court filings

Calling claims of impropriety by an advocacy group organizing against the PNM-AVANGRID merger “misleading” and “absurd”, lawyers for the utilities provided new insight into negotiations to return the case to the commission for a hearing redo according to new legal filings reviewed late Monday by The Paper.

The most recent court dispute came after the Public Regulation Commission (PRC), a state agency responsible for regulating public utilities, voted to reject the merger between PNM and AVANGRID in December 2021.

Shortly thereafter, a voter-approved measure replaced the formerly elected members of that commission with a three-member board nominated by the governor. At the same time, PNM and AVANGRID appealed the rejection to the State Supreme Court, arguing that evidence the PRC had erred in the decision by “ignor[ing] the PRC’s own rules, and relied almost exclusively on inadmissible hearsay, thereby rendering the decision unsupported by fact and contrary to law.” A non-profit advocacy group, New Energy Economy (NEE) had introduced or shared some of that evidence into the PRC hearing process and in public.

Questions about how the initial hearings were handled set up a dispute between the PRC and PNM/AVANGRID that landed at the Supreme Court.  But after a few months of waiting, the parties instead began discussing other settlement options. The new PRC and the utilities finally jointly agreed to dismiss the appeal and essentially start over with a new hearing. They filed a joint motion in court asking permission to do so.

That prompted New Energy Economy to publicly accuse the utilities and the commission of improperly discussing the case outside of public view. “BREAKING: Utility lawyers had one sided talks ahead of filing” the group pushed out from their blog last week.

The new conversations cited by New Energy Economy were hardly a secret. NEE learned of the negotiated dismissal of the appeal through public court and regulatory filings made by the PRC and the utilities themselves. Subsequent stories, including in the Santa Fe New Mexican cited by NEE, stated that conversations were between attorneys for the utilities and PRC covering a “procedural approach” for the Supreme Court appeal.

At least one PRC commissioner and lawyers for the utilities say attorneys discussing how to settle a legal dispute is normal and NEE misrepresented the conversations to the court and public. “I wholeheartedly disagree that these communications are prohibited,” PRC Commissioner Aguilera told the New Mexican. “What’s important to note is that we have not made any decisions.”

In a statement to The Paper, a spokesperson for AVANGRID stated, “it is regular practice for lawyers representing the PRC to speak with lawyers for other parties during potential settlement discussions on appeals.”

The public documents detailed that the PRC, PNM and AVANGRID had all agreed to ask the Supreme Court to throw out the old merger case and start over. “Those communications were entirely proper and were not ex parte under applicable statutes and regulations,” attorneys for the utilities wrote in a new filing filed with the PRC Monday. “The communications focused on settlement of the appeal and how to pursue further proceedings only, not the outcome of any such proceedings.”

Besides, the utilities argue the PRC can only begin hearing evidence if a new hearing is scheduled. “In its current posture, the Commission is a party to the appeal before the New Mexico Supreme Court, not the adjudicative body, and the settlement communications relating to the joint motion to dismiss did not address the merits [of the merger case],” they state in filings. “Once it became a party to the appeal, the Commission became a litigant, and lost its jurisdiction to adjudicate issues related to the merger,” attorneys for PNM state.

For the moment, the future of the state’s biggest business deal remains up in the air as the Supreme Court weighs whether to decide the future of the merger itself or remand it back for a redo.