By Peter Burrows 8/15/21 - elburopete@gmail.com, and https:silvercityburro.com

Avangrid, a New England electric utility which is 82 percent owned by a Spanish company, has offered to purchase Public Service of New Mexico, PNM, for $4.3 billion, or roughly $50 per share. The offer was overwhelmingly approved by the people who own PNM, the shareholders, last February.

Public Regulation Commission (PRC) hearings are currently underway to determine if the merger is in the public interest. PRC approval is the final hurdle for the merger to go through, and, unsurprisingly, the "usual suspects" are objecting to the merger.

The objections fall into two main categories, the first alleging that Avangrid and its parent company, Iberdrola, have a record of "unreliability, corruption and disrespect for the law." The other type of objection argues that the merger "would allow a foreign entity to control the development and transmission of our energy resources, thereby exploiting our citizens and small businesses for profit."

That last was in a press release from "Our New Mexico," an organization formed to "bring citizen voices into the discussion and debate around Avangrid's proposed takeover of PNM." I was struck by their blatant assumption that New Mexicans don't realize that any and all "control" of energy "transmission and energy resources" is firmly in the hands of the PRC and will remain so, no matter who owns PNM. Ditto any "exploitation" for -- GASP! -- profit, something specifically controlled by the PRC.

People who should know better are buying into this demagoguery, even some Republicans, one of whom took umbrage when I suggested that if she and her friends at Our New Mexico were so upset by foreign "control," why don't they pool their resources and make a competing offer? In a similar vein, people who think Walmart doesn't pay enough are free to start their own company and pay what they think is a fair wage. Easier to issue government dicta.

Also leading the anti-merger charge is New Energy Economy, NEE, a Santa Fe non-profit whose stated mission is to replace all the fossil fuel and nuclear generated electricity used in New Mexico (and the world) with renewable energy. They, too, are concerned about both Avangrid/Iberdrola "misdeeds' as well as "questions of foreign control and governance."

I'm fairly certain NEE knows that "foreign control" is a strawman argument, but I'm less certain that they know much about the fundamentals of utility grid management or how the equity markets work. They seem to think that Avangrid/Iberdrola should spend $4 billion to buy PNM and then turn its management over to a board of directors composed of only New Mexico residents, with 40% of the seats reserved for "independent" members, which probably means NEE and other know-nothings.

Why, those horrid bastards at Avangrid/Iberdrola think the board should be controlled by people "with financial interests" in the company, I.e., by the people who paid for and own PNM. How retrograde is that?

In spite of these objections, the merger is very likely to be approved by the PRC. The governor has voiced her support, as has the attorney general, as well as numerous environmental groups. If the PRC nixes the merger based on the concerns raised, especially the ridiculous contention that the PRC itself will somehow neglect to regulate Ivangrid, then I would expect the State of New Mexico to be sued, hopefully with NEE et al as codefendants.

Before that happens, the governor will probably call upon the legislature to override the PRC. Remember, the PRC becomes a three-member appointed body next year, instead of the current elected five-member commission. The jury is out on whether that will be an improvement, but if the governor wants the merger to go through it certainly will, this year or next.