While PNM Resources (NYSE: PNM) awaits a state Supreme Court decision that could give the company another shot at a merger with Avangrid (NYSE:AGR), PNM officials said they’ll keep running the company like it’s a standalone business.
The comments came Friday during a conference call with analysts to discuss PNM’s first-quarter results. Much of the discussion focused on Avangrid’s proposed acquisition of PNM, a deal that was announced in October 2020 and valued at $8.3 billion.
The merger received approval from five federal agencies and the Public Utility Commission of Texas, leaving approval from the New Mexico Public Regulation Commission (PRC) as the final hurdle to closing the merger. But in December 2021, the PRC voted 5-0 to reject the merger. (See NM Regulators Reject Avangrid-PNM Merger.)
PNM and Avangrid appealed the decision to the New Mexico Supreme Court. But the companies revised their strategy this year, when the PRC changed from a five-member elected commission to a three-member panel with commissioners appointed by Gov. Michelle Lujan Grisham. (See New NM Commissioner Steps Down over Qualifications.)
In March, the reconfigured PRC joined with PNM and Avangrid to file a motion asking the Supreme Court to dismiss the appeal and remand the case back to the PRC for rehearing.
On Friday, analysts pressed PNM officials for a timeline of the proceedings.
PNM Resources CEO Pat Vincent-Collawn emphasized that the court has no deadline for making a decision. Calling the state’s high court “the Supremes,” Vincent-Collawn referenced a song by the Motown musical group of the same name.
“You can’t hurry love … or mergers,” Vincent-Collawn told analysts.
Vincent-Collawn said that if the Supreme Court agrees to dismiss the appeal, the companies would file a motion for reconsideration of the merger with the PRC. The commission would establish a procedural schedule and decide whether to assign the case to a hearing examiner or manage it at the commission level.
PNM and Avangrid agreed last month to extend their merger agreement until July 20. That follows a decision last year to extend the merger agreement through April 20, 2023.
“This additional time should provide clarity on the path forward and an expected timeframe for further regulatory proceedings,” Vincent-Collawn said.
And for now, it’s business as usual at PNM, according to Don Tarry, the company’s president and chief operating officer.
“We’re focused on continuing to manage the business like it’s a stand-alone business,” Tarry said. “And we’ll continue to operate it that way and continue to fund it that way, too.”
Under the proposed acquisition, Avangrid would pay $50.30 in cash for each share of PNM Resources common stock. PNM Resources includes PNM, New Mexico’s largest electric utility, and TNMP, an electric transmission and distribution utility in Texas.
In discussing the proposed acquisition in a February conference call with analysts, Avangrid CEO Pedro Azagra said he expected the PRC’s new composition to make a difference. (See Avangrid Pushes Forward on NECEC, Offshore Wind, PNM Merger.) Azagra described the new commissioners as “highly experienced individuals” with “deep knowledge” of the energy transition and its challenges.
And in a news release last month announcing an extension of the merger agreement, Azagra said Avangrid remains committed to the merger.
“Together, we will accelerate Texas and New Mexico’s clean energy futures and increase the focus on reliability and resiliency for customers,” Azagra said.
