ALBUQUERQUE, N.M.  — A panel of New Mexico regulators on Wednesday rejected a proposed multibillion-dollar acquisition of the state’s largest electricity provider by energy company Avangrid, saying the deal did not offer adequate protections for customers and the risks outweighed the promised benefits.

The Public Regulation Commission voted unanimously to accept the recommendation of a hearing examiner to deny the merger.

All five elected commissioners agreed the deal would not be in the public’s interest. They cited concerns about customer service problems and reliability issues in other states where Avangrid operates, including Maine. They also pointed to the company initially withholding information during the proceeding, a move that resulted in a $10,000 penalty.

Commission Chairman Stephen Fischmann said New Mexico and many other states are going through an incredibly important stage with respect to navigating the shift toward more renewable energy production. He acknowledged that utilities and regulators are facing more demands as the transformation results in changes across the supply chain and how customers are affected.

He said Avangrid is not the right partner to help New Mexico through the transition given its track record elsewhere, a pending investigation of executives at its multinational owner Iberdrola in Spain and the potential for reliability issues and higher electric rates.

“This whole deal to me kind of boils down promises versus actual performance,” Fischmann said.

Under the proposal, Connecticut-based Avangrid would have acquired PNM Resources and its two utilities – Public Service Co. of New Mexico and Texas New Mexico Power. The all-cash transaction had been valued at more than $4.3 billion and would have opened the door for Iberdrola and Avangrid in a state where more wind and solar power could be generated and exported to larger markets.

The utilities, as part of an advertising blitz, touted more than $300 million in benefits that included rate relief for PNM customers for three years, economic development investments, the creation of 150 jobs and other concessions reached through negotiations with parties in the case.

PNM Resources chairwoman, president and CEO Pat Vincent-Collawn issued a statement after the vote, saying she was saddened by the decision.

“We will continue to evaluate any next steps that could allow us to bring the positive benefits to the people we serve,” she said.

The case has been a year in the making, with commission hearing officer Ashley Schannauer spending several months overseeing evidence gathering and two weeks of public hearings during the summer.

Schannauer last week presented his recommendation for the commission to veto the proposal. He also cited certain conditions commissioners should implement if they decide to support the merger, but it was clear the commission still had concerns after reviewing reams of evidence and hours of testimony.

The deal also came up in two lawsuits filed last week, starting with a former subcontractor accusing Avangrid of fraud and racketeering. Avangrid countersued for defamation, saying the contractor was bitter over not getting new work and had been making false statements to interfere with the proposed New Mexico merger.

Schannauer during Wednesday’s meeting reiterated concerns about reliability if Avangrid were to take over.

PNM and Avangrid officials had asked the commission to present oral arguments to address some of the commissioners’ concerns. The commission decided against it, noting that the companies had ample time over the course of the last year to make their case.

Some environmental groups suggested Wednesday that the decision could cost the state hundreds of millions of dollars in lost jobs and renewable energy investments. But commissioners questioned the price tag, saying there were no guarantees that the jobs promised by Avangrid would net the economic returns that were projected.

During negotiations, Avangrid also had promised $12.5 million to support projects in Indigenous communities and to build 200 megawatts of renewable energy generation and storage on the Navajo Nation in northwestern New Mexico.

Still, Commissioner Joseph Maestas said the numerous concessions made during negotiations weren’t enough to mitigate the concerns surrounding the deal and he suggested regulators don’t have the funding or resources necessary to ensure Avangrid would have followed through on its promises.

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