Iberdrola extends merger agreement with PNM and appeals to New Mexico Supreme Court

Avangrid, Iberdrola's subsidiary in the United States, has notified the Securities Exchange Commission of the agreement reached with PNM Resources to extend until 20 April 2023 the expiry date of the merger agreement signed by the two companies. The agreement is extendable for a period of three months.

The two companies have also decided to file an appeal with the New Mexico Supreme Court against the ruling of the New Mexico Public Regulation Commission ("NMPRC"), dated 9 December 2021, rejecting the voluntary agreement signed between Avangrid, PNM, certain of its subsidiaries and certain third parties submitted in the context of the merger transaction between PNM and Avangrid.

Iberdrola, Avangrid and PNM are thus beginning to defend their interests, considering the decision taken by the NMPRC to be 'unfair'. In this regard, it should be noted that the transaction, which was amicable and recommended by PNM Resources' board of directors, had the backing of stakeholders and had received the approval of various state and federal bodies during the merger project authorisation process, which lasted more than a year.

During 2021, the merger received approval from the Public Utility Commission of Texas and five federal agencies, namely: Federal Energy Regulatory Commission (FERC), Hart-Scott-Rodino Clearance (HSR), Committee on Foreign Investment in the United States (CFIUS), Federal Communications Commission (FCC) and Nuclear Regulatory Commission (NRC), leaving only NMPRC approval.

The rejected bill was worth more than $300 million in benefits to New Mexico customers and communities and included safeguards to ensure local control of utility operations and quality of service for New Mexico customers. It also had the support of the parties involved in the process, including the New Mexico Attorney General, the International Brotherhood of Electrical Workers Local 611, environmental organisations, and organisations representing the interests of tribal communities. In total, 23 of the 24 intervening parties supported or did not oppose the settlement.

The affected companies now have 30 days to file submissions and appeal arguments against the NMPRC's decision. There is no legal deadline for the New Mexico Supreme Court to rule.

The Spanish company, which in 17 years has positioned itself as one of the top 3 renewable energy companies in the United States, continues to see enormous growth opportunities in the country and is committed to supporting US efforts to expand its renewable energy infrastructure, an essential element of the energy transition.

At the end of December 2021, Iberdrola, through its subsidiary Avangrid, was awarded a contract in Massachusetts to supply electricity to the future Commonwealth Wind farm.  The 1,232-megawatt project, New England's largest offshore wind project to date, will create the equivalent of 11,000 full-time jobs over the life of the project and generate enough energy to power 750,000 homes.

At the same time, construction has begun on the first large offshore wind farm in the United States (Vineyard Wind One), which will be operational in 2024. The 800 megawatt (MW) project, located some 24 kilometres south of the coast of Martha's Vineyard, will generate enough wind power to meet the demand of more than 400,000 homes and its commissioning will prevent the emission of more than 1.6 million tonnes of carbon dioxide per year, the equivalent of removing 325,000 vehicles from the road.

Through its subsidiary, Avangrid, it also owns the Kitty Hawk development area (2,500 MW) in North Carolina; it has already begun the BOEM permitting process for the Kitty Hawk North project (800 MW), the first project to be developed in this area, and manages other farms at an earlier stage of development.

Such is its capacity for growth that the company has an investment plan for 2020-2025, with some 30,000 million dollars, in transmission and distribution networks and renewables, which will enable it to practically double its renewable capacity by 2025. These investments are aimed at increasing its presence in the offshore wind and solar photovoltaic sectors, as well as strengthening its leadership in onshore wind.