Avangrid Pulls Plug on Merger

More than three years after first announcing a proposed merger with Avangrid, PNM today said the deal is off—following years of regulatory hearings and a pending case at the state Supreme Court.

“We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers and communities,” Pat Vincent-Collawn, PNM Resources chairman and CEO said in a statement. “We had been looking forward to providing customers with the immediate benefits in our agreement and also the longer-term benefits of being part of a larger-scale entity with ties to global innovation and experience in the clean energy transition. As a standalone company, we will continue our work of meeting the future energy needs of our customers and communities with affordable and reliable energy.”

PNM’s parent company, PNM Resources, announced the proposed merger in October 2020. More than a year later, Public Regulation Commission Hearing Examiner Ashley Schannauer recommended rejecting the deal, which the PRC did unanimously in December, 2021, capping a year of allegations and litigation.

PNM and Avangrid filed an appeal with the state Supreme Court over the Public Regulation Commission’s rejection at the start of January 2022. “We believe this merger is unquestionably in the best interests of the state,” Vincent-Collawn said in a statement at the time. “It keeps the local, reliable PNM utility in place and offers a stronger parent company backing to allow PNM to do even more for our customers, our employees, our environment, our state, and our children.”

As noted in a PNM news release this morning, since filing the appeal, PNM and Avangrid had extended the terms of the merger agreement multiple times through 2022 and 2023 while a decision was pending from the court, with the most recent extension expiring Dec. 31, 2023. PNM Resources says it had proposed a further extension of the agreement, but Avangrid instead decided to terminate.

In a statement provided to SFR, Avangrid says it had “fought to gain approval of its merger with PNM,” since 2020, reiterating that the proposed merger would have brought more than “$300 million in benefits to PNM consumers and communities,” along with “the company’s vast experience, and the experience of Iberdrola,” its parent company. “Avangrid and PNM had obtained all the necessary regulatory approvals for the closing of the merger by the end of 2022 except the approval of the New Mexico Public Regulation Commission. However, with the close of 2023 there is still no clear timing on the resolution of the court review of the New Mexico regulator’s denial of the merger nor any subsequent regulatory actions. Avangrid has terminated the merger agreement because all final regulatory approvals were not received by” Dec. 31, 2023, “the end date under the merger agreement after which either Avangrid or PNM could terminate the merger agreement if the merger had not yet been consummated.”

The company says it intends to focus on “its robust growth opportunities,” including projects in New York and Maine. “While our merger agreement with PNM has been terminated, we remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables, helping explore options in the new hydrogen economy, and delivering on the partnership with the Navajo Nation to achieve its clean energy future.”

Last April, Avangrid announced it had signed a memorandum of understanding with the Navajo Nation to develop green energy projects in both New Mexico and Arizona.