New Energy Economics accuses regulators of 'bias’ in Avangrid-BNM merger

Santa Fe-based New Energy Economy directly accused two Public Regulatory Commission members of „bias” in a May 8 filing with the PRC regarding the proposed merger of New Mexico’s public utility and energy company Avangrid.

In the filing, New Energy Economy (NEE) said PRC lawyers and lawyers representing Avangrid and its parent company Iberdrola, SA, participated in illegal, „ex-post” communications. Those communications prompted commissioners Gabriel Aguilera and James Ellison to support a joint motion in March asking the state Supreme Court to send the merger case back to the PRC for „rehearing” and „reconsideration.” And if the court grants that request, NEE said it will „immediately move” to disqualify Aguilera and Ellison.

“The commission has shown that it is biased in favor of Avangrid/Ipertrola/BNM and cannot legally act as a neutral decision-maker if the case is to be rescheduled,” NEE lawyer Mariel Nanasi filed.

The PRC and other parties maintain that no illegal communications took place between the PRC and Avangrid advocates, and that, in fact, the two commissioners demonstrated concerted efforts to be impartial and transparent.

Illegal communication?

The latest spat between NEE and other parties began on April 20, after the commission released a series of emails exchanged between PRC and Avangrid lawyers discussing their joint motion in the Supreme Court to restructure the merger case.

The petition, filed in March, asked the court to dismiss Avangrid and PNM’s appeal against an earlier, five-member select commission’s decision to reject the merger in December 2021, and then „rehearse” and „reconsider” the case.

NEE says the email exchanges reveal illegal ex parte communications between attorneys.

In the exchanges, Avangrid lawyers asked the PRC to uphold a remand that would have allowed the commission to „adjourn” the merger case based on the existing record, instead of „reopening” the hearings for all parties to „reopen” new evidence with broader public input. Avangrid lawyers also demanded a speedy PRC review and decision if the case is rescheduled. They said they will present all the contracts Avangrid negotiated with the merger proponents in 2021 as the basis for the PRC review during the hearing, as the previous commission ignored many of those contracts when deciding the case.

Ultimately, the joint motion called for a „rehearing” rather than a „reopening” of the case. However, during an April 19 public meeting, commissioners Aguilera and Ellison said they „erred” in calling for a retrial instead of reopening the case, and ordered a change in the joint motion to reflect that.

NEE attorney Nanasi says that, taken together, the emails, the joint motion calling for a „rehearing” and Aguilera’s comments demonstrate „bias, prejudice and bias” in the case.

No other party has accused the Commission of illegal ex-party communications. But Bernalillo County, the attorney general’s office and the Affordable and Reliable Energy Coalition — which represents large energy consumers — asked the Supreme Court to review the emails. They sought a „concise” schedule for the parties to weigh in on the issue, and asked the court to prescribe „an appropriate remedy” if violations by the ex-parte were found.

’Derogatory’ charges

Avangrid and PNM NEE’s allegations are part of an ongoing effort to „discredit” themselves and the commission.

„This is another desperate attempt by a desperate party to screw up the process,” Avangrid spokeswoman Joanie Griffin told the Journal. „It is irresponsible to attempt to tarnish the reputation of individuals without any evidence.”

State law allows the PRC and other public agencies to directly discuss potential settlements with opposing parties in court cases, such as pending Supreme Court appeals, as long as the conversations focus on „procedural” issues to resolve the legal dispute, not „conceptual” ones. “Issues Relating to Merits of Merger to be Done Through Open Public Proceedings in the PRC.

„Communications focused on the resolution of the appeal and how to pursue next steps, not the outcome of such steps,” Avangrid and PNM said in a May 1 filing with the PRC. „… NEE cannot point to any communications on any topic other than email exchanges between attorneys representing the Commission and attorneys representing Avangrid.”

If accepted, NEE’s „peculiar” arguments lead to „absurd conclusions.”

„If NEE’s arguments prevail, the Commission will be the only party (and sole New Mexico entity) in all New Mexico appellate cases, which will be prohibited from engaging in confidential communications with others regarding potential settlement, dismissal, and/or reinstatement of the appeal. The parties, even if such resolution is in the best interest of the Commission, ” they said.

Analyzing emails

The email exchanges show concerted efforts by PRC attorneys to maintain commission impartiality, said Sydney Beadles, a former PRC attorney and now New Mexico clean energy manager at Western Resource Advocates.

In emails, PRC General Counsel Michael Smith ruled out restricting a merger hearing to an existing record to allow the other side to present new evidence, and he rejected any time limits on the PRC’s review of the case.

„I have reviewed emails between PRC and Avangrid attorneys and find no violation,” Beadles told the Journal. „They all relate to practice alone. … There is no suggestion that decisions about the merits of the merger are being made behind closed doors.

It’s hard to imagine the bias of the new commissioners, Aguilera and Ellison, who only joined the PRC in January, Beadles added.

„It’s a leap to accuse the new commissioners — two people with no history of mergers — of bias because they’re willing to hold further inquiries into the merits of mergers,” he said.

PRC spokesman Patrick J. Rodriguez said the commission takes its ethical obligations seriously.

As a party to the Supreme Court appeal, Rodriguez told the Journal, „The commission can communicate with other parties on litigation matters, like motions.” „In this case, there was communication between attorneys for both the Commission and Avangrid regarding a proposed joint motion to dismiss the appeal to the Commission to conduct additional open proceedings on Avangrid’s application without proceeding with the current appeal.”