PNM and Avangrid File Stipulation in New Mexico
PNM Resources, through its subsidiary PNM, has filed a stipulation in its merger application with Avangrid before the New Mexico Public Regulation Commission. This agreement, supported by multiple parties, aims to enhance customer and state benefits, with over $250 million in total benefits projected for New Mexico. Key commitments include $63 million in customer rate benefits, $200 million in economic development, and enhanced environmental initiatives. The merger is expected to maintain local management and job stability for at least three years, contributing positively to PNM's future.
- Over $250 million in benefits projected for New Mexico.
- $63 million in customer rate benefits including $50 million in rate credits over 3 years.
- Creation of 150 new full-time jobs over 3 years, valued between $150-200 million.
- Increased commitment to economic development funding by $7.5 million.
- Enhanced environmental initiatives to meet carbon reduction goals.
- No reduction in wages or benefits for current employees for a minimum of 3 years.
- Local management will remain with a board majority from New Mexico.
- None.
ALBUQUERQUE, N.M., April 21, 2021 /PRNewswire/ -- PNM Resources, Inc. (NYSE: PNM) wholly-owned New Mexico subsidiary, Public Service Company of New Mexico (PNM), and Avangrid filed a stipulation in its merger application before the New Mexico Public Regulation Commission (NMPRC) with the New Mexico Attorney General, Western Resource Advocates, International Brotherhood of Electrical Workers Local 611, Dine Citizens Against Ruining Our Environment, Nava Education Project, San Juan Citizens Alliance, and To Nizhoni Ani. This agreement among a diverse set of parties enhances and builds upon the commitments in the original merger application to benefit customers and the state of New Mexico.
PNM and Avangrid share in the excitement about the possibilities for New Mexico's future in the global transition to clean energy. PNM customers today will continue to be PNM customers in the future, served by local New Mexico employees and operations that are regulated by the NMPRC.
If approved by the NMPRC, the agreement among the parties will bring over
Customer Rate Benefits:
- Customer rate benefits of
$63 million - Benefits include
$50 million in rate credits over 3 years,$6 million in COVID arrearages relief,$5 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.
Economic Development Benefits:
- Economic development benefits approximating
$200 million - 150 new full-time jobs will be added to New Mexico over 3 years, which will remain for at least 5 years afterwards (conservatively valued between
$150 million and$200 million in economic benefits to the State.) - In addition to this significant contribution, the agreement increases the commitment to economic development fundings to
$7.5 million along with a separate, additional$12.5 million contribution to community groups in the Four Corners region.
Enhanced Environmental Benefits:
- Other commitments aim to enhance energy efficiency and solar programs, perform environmental studies and create a Carbon Reduction Task Force to ensure that PNM will not only meet but exceed its zero carbon goals by 2040.
- PNM will hire a Chief Environmental Officer with significant environmental and climate change experience with responsibility for meeting PNM's carbon reduction goals. Executive compensation will be linked to carbon-reduction targets.
Maintaining Current Jobs, Low-Income Programs, and Charitable Leadership:
- The stipulation commits to maintaining PNM jobs, with no reduction of wages or benefits to union or non-union employees, for a minimum of 3 years following the transaction. Avangrid will honor PNM's current collective bargaining agreement.
- The merger commitments ensure that the benefits PNM currently provides to its customers and communities in the past through its PNM Good Neighbor Fund or charitable giving will not be reduced, with a similar expectation for the PNM Resources Foundation's separate charitable activities.
- PNM will work with the Attorney General to initiate a program designed to increase the contract opportunities for minority and woman-owned businesses in New Mexico with PNM for procurement of its goods and services.
Local Management:
- PNM will continue to be managed locally.
- PNM will be governed by a PNM Board of Directors comprised of a majority of local leaders from New Mexico, with forty percent qualifying as "independent directors" as defined by the rules of the New York Stock Exchange.
Financing and Ownership:
- As stated in the original merger application, none of the merger costs will come from customers, and PNM and PNM Resources will not take on any new debt in conjunction with the proposed transaction.
- Avangrid commits not to sell its controlling interest in PNM for a period of not less than 10 years.
- Avangrid will pay off all existing PNM Resources debt, which will strengthen the balance sheet and credit profile of the new company.
In order to allow all parties to the merger proceeding to evaluate the stipulation, PNM and Avangrid are seeking to revise the procedural calendar.
These stipulation commitments enhance the future service and benefits of the combined companies' value to customers. The shareholders of PNM's parent company, PNM Resources, earlier approved the proposed merger, affirming their view that the merger represents a reasonable and fair price for their investment and risk associated with their ownership in the company.
PNM has always believed that this merger is good for our customers, our employees, our communities and the state as a whole. The proposed stipulation builds upon the underlying merger agreements in tangible and concrete actions that improve the public benefit of the merger.
Additional materials pertaining to the stipulation and PNM's application for approval of the merger with the NMPRC 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
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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 failure by AVANGRID to obtain the necessary financing arrangement set forth in commitment letter received in connection with the Merger, (iii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iv) 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 (v) 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.
