Avangrid has pulled the plug on its proposed $8.3 billion acquisition of PNM Resources, as final approval for the deal remains tied up at the New Mexico Supreme Court.

The court is considering the companies’ appeal of the New Mexico Public Regulation Commission’s decision in December 2021 to reject the acquisition. A green light from the PRC was the final regulatory approval needed.

While awaiting the court’s decision, the parties agreed several times to extend the deadline to complete the merger, including the most recent extension to Dec. 31. PNM was willing to extend the deadline an additional three months, but Avangrid said time was up.

“With the close of 2023, there is still no clear timing on the resolution of the court review of the New Mexico regulator’s denial of the merger nor any subsequent regulatory actions,” Avangrid said in a statement on Jan. 2. “Avangrid has terminated the merger agreement because all final regulatory approvals were not received by Dec. 31, 2023.”

PNM CEO Pat Vincent-Collawn said the company was “greatly disappointed” in Avangrid’s decision.

“We had been looking forward to providing customers with the immediate benefits in our agreement and also the longer-term benefits of being part of a larger-scale entity with ties to global innovation and experience in the clean energy transition,” she said.

PNM Resources is the parent company of Public Service Company of New Mexico, the state’s largest investor-owned public utility. The utility plans to transition its generation portfolio to 100% carbon‐free resources by 2040.

Avangrid said its decision doesn’t signal a loss of interest in New Mexico.

“We remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables, helping explore options in the new hydrogen economy and delivering on the partnership with the Navajo Nation to achieve its clean energy future,” Avangrid said in a statement.

Transaction Timeline

Avangrid and PNM announced their merger plans in 2020. The proposal was expected to bring more than $300 million in benefits to New Mexico, in the form of PNM customer rate credits, past-due bill forgiveness, low-income energy efficiency programs, new jobs, training programs and economic development funds.

But the PRC rejected the merger in December 2021, saying “the potential harms resulting from the proposed transaction outweigh its benefits.” The commission’s chair at the time, Stephen Fischmann, said Avangrid’s “demonstrated record of poor performance” in states such as Maine, Connecticut and New York could counteract any benefits PNM might see from the acquisition. (See NM Regulators Reject Avangrid-PNM Merger.)

The companies appealed the decision to the New Mexico Supreme Court the following month.

The merger seemed to be getting a fresh chance in 2023, when the PRC’s five elected commissioners were replaced with three commissioners appointed by the governor. (See New NM Commissioner Steps Down over Qualifications.)

The revamped PRC, along with Avangrid and PNM, asked the state Supreme Court in March to dismiss the previously filed appeal and send the matter back to the PRC for reconsideration. In a May decision, the court declined to do so.

The court held oral arguments in September on the appeal but has yet to issue a decision.

In its statement, Avangrid said it would continue to focus on growth opportunities, including $5 billion in capital projects under multiyear rate plans in New York and Maine and $2 billion in clean energy transmission projects in New York.

Avangrid is also a partner in Vineyard Wind 1, a utility-scale offshore wind project now under construction off the coast of Massachusetts.