PNM-Avangrid is a winner for customers, climate
The scale of climate change can be debilitating at times, even for me. When I see cottonwoods dying from heat stress along the Rio Grande or acequias running dry, it can be overwhelming.
At times like that, I find that it’s important to back up and refocus on all the things I can do to change our unsustainable status quo. When I do that, I realize just how much we can do today to solve these challenges. We may not have every solution, but we have most of them.
And the biggest hurdles are usually inertia and lack of political will to embrace change. Taking concrete action today, and not waiting around for some theoretical perfect solution, is the only way we’ll reach our goals.
In New Mexico, the power generation sector is a major contributor to our carbon pollution footprint. If we want to quickly achieve our targets for clean electricity generation, we need to be sure that our state’s largest electricity producer and supplier, Public Service Company of New Mexico, has the capital, financing and technical expertise it needs to rapidly scale up its clean electricity generation while balancing the grid and maintaining uncompromised reliability.
In October 2020, Avangrid Renewables, one of the world’s largest clean electricity producers, announced its intent to purchase PNM Resources, the parent company of PNM, and guide the utility into a future free of carbon pollution.
One of the first questions I had as an engineer in considering the merits of this merger was: Does this company have the commitment, experience, financing and engineering depth to manage the transition to a pollution-free grid in New Mexico? Fortunately, Avangrid has a proven track record of completing utility-scale wind and solar projects in New Mexico and our neighboring states.
I know them from major New Mexico clean energy projects like the El Cabo Wind Farm in Torrance County and the La Joya Wind Farm that broke ground just last year. The company is the third-largest wind energy operator in America, and it has successfully delivered gigawatts worth of clean power facilities in more than 20 states in the U.S. and dramatically more internationally. They bring a level of engineering expertise that has few equals in the utility space.
My second question is how will this potential merger treat PNM’s customers? The New Mexico Public Regulation Commission has been absolutely right to ask the same thing and to demand a better deal. Avangrid’s response has been to bring additional cash to the deal that will directly benefit those customers. That includes $67 million for rate credits directly to PNM’s customers, $10 million to assist customers behind in bill payments, $2 million to provide electricity to new customers in remote areas and $15 million to help low-income homeowners install energy-efficiency improvements.
The partnership between Avangrid and PNM is also projected to create 150 careers in New Mexico and generate at least $200 million of new economic impact in our state. Additionally, Avangrid has agreed to contribute tens of millions of dollars to economic development projects in the state, including $12.5 million directly to the Four Corners communities most impacted by the impending closures of PNM’s coal-fired power plants. Finally, Avangrid has also agreed to work with the Navajo Nation to build a 200-megawatt or larger renewable energy project.
Most importantly, under the terms of the new partnership between PNM and Avangrid, the utility will move aggressively to meet or even exceed its carbon reduction goals, which in turn means that New Mexico as a whole can meet our statewide climate targets sooner. There will be a new Carbon Reduction Task Force at PNM to work with stakeholders across our state to decarbonize commercial buildings, expand voluntary renewable energy programs and build out the infrastructure required to meet the growing demands of electric vehicles.
There is also an agreement to develop a Regional Transmission Organization that will reduce the bottleneck of transmission facilities that limits our state’s capacity to build more large-scale clean energy projects. Having advocated for transmission lines myself, I have seen how they can take over a decade to site and permit. So this agreement is actually quite a big deal.
The PRC soon will consider a vote on approval of this historic merger, which has the potential to modernize our state’s electric grid and help us realize our state’s full potential as a clean energy leader. The commission is tasked with holding electric utilities accountable for providing affordable and reliable electricity to New Mexico consumers, and I urge them to continue to hold every utility’s feet to the fire for customers, regardless of who has majority ownership.
Is the plan perfect? No deal ever is, but I’ve seen the perfect be the enemy of the good too many times in our state. This merger will accelerate our decarbonization, directly and financially benefit PNM customers, create new jobs in New Mexico and grow our economy.
I hope the commissioners will give real weight to the substantial benefits of this proposed partnership for all New Mexicans, and I hope they will vote to approve this merger.
