You may have heard by now that PNM (pending PRC approval) has been purchased by the Spanish utility Avangrid. According to the Albuquerque Journal article detailing the purchase, Avangrid paid 19.3% above the PNM share price.
The following “check” was used by RGF president Paul Gessing as a prop in a 2019 hearing on the Energy Transition Act. It remains relevant as ever, but perhaps should be paid to the order of Avangrid now.
We don’t know exactly what this all means, but we DO know the following:
- Gov. Lujan Grisham received a $2,500 donation for her campaign from the Spanish company last year.
- While Avangrid MAY be able to bring some efficiencies of scale to the deployment of “renewables” in New Mexico, PNM pledged to REDUCE electricity prices.
- The 19.3% premium (paid by Avangrid) HAS to come from somewhere and it is unlikely those efficiencies of scale will be enough to justify that premium price.
- This adds another wrinkle to the PRC election and ballot measure on the ballot this fall (the PRC will have to approve or deny this purchase).
- Arguably the damage to NM rate payers has already been done (or baked-in) by the ETA. The major impact New Mexicans see from this purchase is that one of the State’s only major publicly-traded companies will be no more. Corporate sponsorships, jobs, and other aspects of PNM’s presence could dry up over time.
2 Replies to “Understand the purchase of PNM by Avangrid”
Doesn’t the PRC have a say in this transaction? It seems like it should.
This blog is not accurate. It says a Spanish utility bought PNM and that’s not true because an American company, Avangrid, bought it. Avangrid is an American company headquartered in the US State of Connecticut in which a Spanish utility, Iberdrola, holds a majority stake. So this blog deserves a correction sent out to everyone please. Thanks.
It is also not clear what the author’s concerns about this sale are. It was a free market transaction -the values that the Rio Grande Foundation stands for- at a fair value price determined and agreed to by the 2 parties involved. Note that the sale still has to go through the New Mexico state regulators -the PRC- as do any proposed utility rate increases in the future in order to ensure that the public’s and society’s interest in the utility is preserved.