Public Utility Commission of Texas Approves AVANGRID Merger With Texas-New Mexico Power Company

Rhea-AI Summary

AVANGRID (NYSE: AGR) received approval from the Public Utility Commission of Texas for its merger with PNM Resources. This unanimous agreement anticipates over $16 million in rate relief for Texas-New Mexico Power Company customers over three years. CEO Dennis Arriola highlighted that the merger is beneficial for customers and continues local management. The merger, valued at $8.3 billion, positions AVANGRID as a major player in the clean energy sector, operating ten utilities across six states and becoming the third-largest renewables company in the U.S.

Positive

• Approval of merger with PNM Resources expected to provide over $16 million in rate relief for customers over three years.
• Strengthens AVANGRID's position in the clean energy market with operations in ten utilities across six states.
• The merger is considered beneficial for customers, continuing local management of TNMP.

Negative

• Merger still requires approval from the Nuclear Regulatory Commission.
• Potential risks associated with regulatory approvals and financing arrangements.

AVANGRID, Inc. (NYSE: AGR), a leading sustainable energy company, announced today that the Public Utility Commission of Texas (PUCT) has voted in its public meeting today to approve the unanimous stipulation and agreement among AVANGRID, Texas-New Mexico Power Company (TNMP), the Staff of the PUCT, and all other parties to the proceeding for the approval of the proposed merger with PNM Resources (NYSE: PNM). TNMP is the PNM Resources Texas utility subsidiary.

In the unanimous settlement, which was filed on March 30, all parties agreed the proposed merger is in the public interest.

“This transaction will bring many benefits to TNMP’s customers, including rate relief of more than $16 million over three years and establishes continued local management of the company,” said Dennis V. Arriola, CEO of AVANGRID. “TNMP has a long history of serving its customers well and shares the same values as AVANGRID. We look forward to working with the team at TNMP as we continue our focus on serving customers and the community and move forward in the clean energy future.”

AVANGRID and PNM Resources recently announced a stipulation agreement for the merger in New Mexico, and the Hearing Examiner has requested that parties work on a revised stipulation that would be filed with the New Mexico Public Regulation Commission by May 7.

Today’s announcement also follows the recent Federal Energy Regulatory Commission (FERC) and Federal Communications Commission (FCC) approvals, the approval of the merger by PNM Resources’ shareholders, the receipt of regulatory clearance from the Committee on Foreign Investment in the United States (CFIUS), and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

In addition, the merger requires approval from the Nuclear Regulatory Commission.

AVANGRID announced the strategic PNM Resources merger combination in October 2020 in an all cash offer for PNM Resources’ shares at $50.30 per share, an $8.3 billion enterprise value transaction. The resulting entity would be one of the major clean energy companies in the US with ten regulated utilities in six states and the third largest renewables company with operations in 24 states.

About AVANGRID: AVANGRID, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $38 billion in assets and operations in 24 U.S. states, AVANGRID has two primary lines of business: Avangrid Networks and Avangrid Renewables. Avangrid Networks owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Avangrid Renewables owns and operates a portfolio of renewable energy generation facilities across the United States. AVANGRID employs approximately 7,000 people and has been recognized by Forbes and Just Capital as one of the 2021 JUST 100 companies – a list of America’s best corporate citizens – and was ranked number one within the utility sector for its commitment to the environment and the communities it serves. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2021 for the third consecutive year by the Ethisphere Institute. For more information, visit www.avangrid.com.

Forward-Looking Statements

Certain statements made in this press release for AVANGRID that relate to future events or expectations, developments, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. All statements contained in this Press Release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as “may,” “will,” “would,” “can,” “expect(s),” “intend(s),” “anticipate(s),” “estimate(s),” “believe(s),” “future,” “could,” “should,” “plan(s),” “aim(s),” “assume(s)”, “project(s)”, “target(s)”), “forecast(s)”, “seek(s)” and or the negative of such terms or other variations on such terms, comparable terminology or similar expressions. These forward-looking statements generally include statements regarding the potential transaction between AVANGRID and PNM Resources, including any statements regarding the expected timetable for completing the potential merger, the ability to complete the potential merger, the expected benefits of the potential merger, projected financial information, future opportunities, and any other statements regarding AVANGRID’s and PNM Resources’ future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. Readers are cautioned that all forward-looking statements are based upon current reasonable beliefs, expectations and assumptions. AVANGRID assumes any obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, AVANGRID cautions readers not to place undue reliance on these statements.

AVANGRID’s business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond its control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see AVANGRID’s Form 10-K and Form 10-Q filings and the information filed on Avangrid’s Forms 8-K with the Securities and Exchange Commission (the “SEC”) as well as its subsequent SEC filings, and the risks and uncertainties related to the proposed merger with PNM Resources, including, but not limited to: the expected timing and likelihood of completion of the pending merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the pending merger that could reduce anticipated benefits or cause the parties to abandon the transaction, the failure by AVANGRID to obtain the necessary financing arrangement set forth in commitment letter received in connection with the Merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the proposed Merger, and the risk that the proposed transaction and its announcement could have an adverse effect on the ability of PNM Resources to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. Other unpredictable or unknown factors not discussed in this communication could also have material adverse effects on forward looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

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FAQ

What is the value of the merger between AVANGRID and PNM Resources?

The merger is valued at $8.3 billion.

What benefits will the merger provide to TNMP customers?

Customers are expected to receive over $16 million in rate relief over three years.

What is the expected impact of the AVANGRID and PNM Resources merger?

The merger aims to strengthen AVANGRID's position in the clean energy sector.

When was the merger agreement between AVANGRID and PNM Resources announced?

The merger was announced in October 2020.

What further approvals are needed for the AVANGRID and PNM Resources merger?

Approval from the Nuclear Regulatory Commission is still required.