Dive Brief:
- Connecticut-based Avangrid has terminated its bid to acquire PNM Resources, the largest electric utility in New Mexico, two years after state regulators denied the merger. The $8 billion deal was announced in 2020.
- The utilities appealed the Public Regulation Commission’s rejection but Avangrid said Tuesday there is “no clear timing” for the New Mexico Supreme Court to resolve the dispute.
- The PRC denied the Avangrid-PNM merger in December 2021 after a hearing examiner warned of reliability risks, the potential for higher electricity prices and slower development of renewable resources.
Dive Insight:
PNM officials say they are “greatly disappointed” with Avangrid’s decision to walk away from the deal.
"As we move forward, our strategic plans remain focused on the infrastructure investments necessary to meet the future energy needs of our customers and communities,” PNM Chairman and CEO Pat Vincent-Collawn said in a statement. “We look to build upon our strong track record of delivering financial results and continue to target long-term earnings growth of 5%.”
Shares of PNM Resources traded down about 6% Tuesday morning.
The deal was announced in October 2020 and received approvals from PNM shareholders, the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and the Public Utility Commission of Texas. But New Mexico regulators balked at the arrangement, leading the companies to challenge the denial in court.
“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 said in a statement.
Avangrid owns New York State Electric & Gas and other utilities in the Northeast, and is itself owned by Spain’s Iberdrola. Avangrid shares were up about 2.5% Tuesday morning.
“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,” Avangrid said.
The utility company said it secured over $9 billion in incremental capital projects while waiting on the merger to close, and will focus on executing $5 billion in capital projects in New York and Maine under multi-year rate plans, $2 billion in capital projects related to clean energy transmission in New York, and repowering over $5 billion of renewable assets utilizing funds from the Inflation Reduction Act.
Avangrid is also developing Vineyard Wind, the first large-scale offshore wind farm in the United States, located off the coast of Massachusetts.
