PNM and AVANGRID File Additional Customer Benefits and Customer Safeguards in Merger Application

Rhea-AI Summary

On July 30, 2021, PNM and AVANGRID filed additional documents in their merger application, providing new commitments to enhance customer benefits and services in New Mexico. Total customer rate benefits rose from $24.6 million to $88 million, including $65 million in rate credits and $15 million for low-income energy efficiency. Economic development contributions increased to $15 million, with plans to add 150 new jobs. The merger has received prior approvals from five federal agencies, with a key evidentiary hearing scheduled for August 11-20, 2021.

Positive

• Total customer rate benefits increased to $88 million.
• $65 million in rate credits for customers.
• $15 million allocated for low-income energy efficiency assistance.
• Economic development contributions raised to $15 million.
• 150 new jobs to be created over three years.

Negative

• None.

ALBUQUERQUE, N.M., July 30, 2021 /PRNewswire/ -- On Thursday, Joint Applicants Public Service Company of New Mexico (PNM) and AVANGRID (NYSE: AGR).  filed documents in the merger application of its parent company, PNM Resources, Inc. (NYSE: PNM), with AVANGRID. In the filings, PNM and AVANGRID detailed new commitments and agreements with parties to increase customer rate benefits, economic development benefits, and safeguards to ensure continued customer reliability and customer service.

These new commitments ensure New Mexicans and PNM's customers will see even more direct benefits to the economy as a result of the proposed merger and PNM will remain a New Mexico-based utility with continued strong ties and responsiveness to the communities and people it serves.

• Customer Rate Benefits:  Customer rate benefits have been negotiated among the parties since the merger was filed. The original $24.6 million now stands at $88 million to PNM customers, including $65 million in rate credits, $6 million in COVID arrearages relief, $15 million for low-income energy efficiency assistance and $2 million to improve the access that low-income New Mexicans have to electricity, particularly in remote areas. PNM has also agreed to not file for a change to its base rates or for any new tariffs before June 1, 2022.
• Economic Development Benefits: Contributions to economic development projects or programs in New Mexico have also been increased to $15 million. These contributions are in addition to the previous commitments to both maintain existing jobs, with no reduction of wages or benefits to union or non-union employees, and also add 150 new full-time jobs (originally 100) over three years with an economic development benefit estimated to exceed $200 million.
• Customer Safeguards for Reliable Service: PNM and AVANGRID have agreed to measure, monitor and report on our quality of service, and to ensure reliability metrics are met.
• Safeguards for Governance and Jurisdiction: PNM and Avangrid also agreed to additional language in the stipulation to safeguard customers and ensure local management of the utility, including: PNM's board will be comprised of seven directors who are New Mexico residents with three independent and disinterested directors, including a Lead Independent Director; a majority vote of directors, along with a majority vote of independent directors will be required for dividend matters; enhanced ring-fencing definitions under which dividend payments will be restricted based on debt ratings; day-to-day operations of PNM and regulatory, operational and community engagement matters will continue to be managed locally, with specific job functions guaranteed to remain in New Mexico, and the ability to review through a management audit and rate cases; Avangrid and Iberdrola agree they are subject to the New Mexico Public Regulation Commission (NMPRC) for PNM regulatory matters.

The stipulated agreement continues to include commitments to provide $12.5 million for the benefit of impacted indigenous community groups in the Four Corners region, to provide park street lighting and complete a substation to enhance service to the Albuquerque International Sunport, enhance an effective Minority- and Woman-Owned Business Procurement Program along with a program to increase diversity on the PNM management team, enhance energy efficiency and solar programs, perform environmental studies and create a Carbon Reduction Task Force and Chief Environmental Officer responsible for carbon-reduction goals, work to develop renewable energy and/or energy storage projects on Navajo Nation land, and triple PNM's proposed transportation electrification plan budget, among many other commitments.

"We have continued to talk with parties, listen to their proposals and come to agreement on numerous items to provide additional benefits and safeguards to our customers and ensure this merger will move New Mexico forward," said Pat Vincent-Collawn chairman president and CEO PNM Resources. "Our employees, customers and communities will benefit for years to come from the collaboration between parties that have resulted in these commitments."

"The negotiations with other parties have been a successful and evolving process over the past few months. What we have now, following our filing of testimony yesterday, are substantially greater benefits to New Mexico and New Mexicans and a consensus from the vast majority of parties in the case that this transaction is in the public interest. We look forward to the opportunity to make our case to the Commission that this transaction should be approved so that we can bring these benefits to customers," said Robert Kump, Deputy CEO and President.

Remaining Steps for Approval
Five federal agencies and the Public Utilities Commission of Texas have already completed their reviews and approved the proposed merger, leaving the New Mexico Public Regulation Commission as the only remaining approval necessary for the merger. The original application before the NMPRC was filed in November 2020.

Evidentiary hearings on the amended stipulation reached with 13 other parties are scheduled for August 11 – 20, 2021. Parties supporting the amended stipulated agreement include: the Attorney General of the State of New Mexico, Western Resource Advocates, the International Brotherhood of Electrical Workers Local 611, Dine Citizens Against Ruining Our Environment, Nava Education Project, San Juan Citizens Alliance, To Nizhoni Ani, the Coalition for Clean Affordable Energy, Interwest Energy Alliance, Walmart, Inc., Onward Energy Holdings, LLC, M-S-R Power and Los Alamos County.

New commitments reflect agreement on specific items with additional parties.

Additional materials pertaining to the NMPRC application for approval of the merger and amended stipulation are available at https://www.pnmresources.com/investors/rates-and-filings.aspx.

Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2020 consolidated operating revenues of $1.5 billion. Through its regulated utilities, PNM and TNMP, PNM Resources provides electricity to approximately 800,000 homes and businesses in New Mexico and Texas. PNM serves its customers with a diverse mix of generation and purchased power resources totaling 3.1 gigawatts of capacity, with a goal to achieve 100% emissions-free energy by 2040. For more information, visit the company's website at www.PNMResources.com.

CONTACTS:
Analysts                                                                     Media
Lisa Goodman                                                            Ray Sandoval
(505) 241-2160                                                           (505) 241-2782

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release for PNM Resources, Inc. ("PNMR"), Public Service Company of New Mexico ("PNM"), or Texas-New Mexico Power Company ("TNMP") (collectively, the "Company") that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates. PNMR, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. Additionally, there are risks and uncertainties in connection with the proposed acquisition of us by AVANGRID which may adversely affect our business, future opportunities, employees and common stock, including without limitation, (i) 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, (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iii) the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, and (iv) the risk that the proposed transaction could have an adverse effect on the ability of PNMR to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Forms 8-K with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.          

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SOURCE PNM Resources, Inc.

FAQ

What are the new customer benefits from the PNM and AVANGRID merger?

The new customer benefits include a total of $88 million, with $65 million in rate credits and $15 million for low-income energy efficiency assistance.

How many new jobs will be created due to the merger of PNM and AVANGRID?

The merger is expected to create 150 new full-time jobs over three years.

What is the significance of the merger for New Mexico residents?

The merger aims to provide enhanced customer benefits, economic development support, and maintain reliable service for New Mexico residents.

When is the next evidentiary hearing for the PNM and AVANGRID merger?

Evidentiary hearings are scheduled for August 11-20, 2021.

Who approved the PNM and AVANGRID merger?

The merger has been approved by five federal agencies, with only the New Mexico Public Regulation Commission's approval pending.