Certification of Stipulation

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE JOINT APPLICATION OF	)
IBERDROLA, S.A., AVANGRID, INC., AVANGRID	)
NETWORKS, INC., NM GREEN HOLDINGS, INC.,	)
PUBLIC SERVICE COMPANY OF NEW MEXICO AND	)
PNM RESOURCES, INC. FOR APPROVAL OF THE	)
MERGER OF NM GREEN HOLDINGS, INC. WITH PNM	)
RESOURCES INC.; APPROVAL OF A GENERAL	) Case No. 20-00222-UT
DIVERSIFICATION PLAN; AND ALL OTHER	)
AUTHORIZATIONS AND APPROVALS REQUIRED TO	)
CONSUMMATE AND IMPLEMENT THIS TRANSACTION )
	)
IBERDROLA, S.A., AVANGRID, INC., AVANGRID	)
NETWORKS, INC., NM GREEN HOLDINGS, INC.,	)
PUBLIC SERVICE COMPANY OF NEW MEXICO AND	)
PNM RESOURCES, INC.,	)
	)
JOINT APPLICANTS.	)

______________________________________________________)

CERTIFICATION OF STIPULATION

PUBLIC VERSION

November 1, 2021

		TABLE OF CONTENTS
I. INTRODUCTION ..............................................................................................................	1
II. STATEMENT OF THE CASE ..........................................................................................	1
A. Joint Application and original procedural schedule ....................................................	1
B. Procedural schedule for the June 4 Stipulation (Second Amended Stipulation).........	8
C.	Significant prehearing matters...................................................................................	10
	1.	Texas-New Mexico Power Company stipulation............................................	10
	2.	Motion for Joinder of Iberdrola, S.A. as a necessary party .............................	11
	3.	NEE Motion for Sanctions...............................................................................	11
	4.	Administrative notice of climate change .........................................................	12
	5.	The Maine PUC audit ......................................................................................	14
	6.	Criminal investigation in Spain .......................................................................	14
	7.	Order Disqualifying Iberdrola Attorney ..........................................................	16
D.	August hearings .........................................................................................................	17
III. THE PROPOSED TRANSACTION................................................................................	22
A.	The Joint Applicants..................................................................................................	22
	1.	Iberdrola, S.A...................................................................................................	22
	2.	Avangrid, Inc. ..................................................................................................	22
	3.	NM Green Holdings, Inc. ................................................................................	23
	4.	Avangrid Networks, Inc...................................................................................	23
	5.	PNM Resources, Inc. .......................................................................................	25
	6.	Public Service Company of New Mexico .......................................................	25
	7.	Avangrid Renewables, LLC ............................................................................	27
B.	The Proposed Transaction .........................................................................................	28
IV. LEGAL STANDARDS ....................................................................................................	29

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A.	Standards for administrative adjudications ...............................................................	29
B.	Standards for contested stipulations ..........................................................................	29
C.	Standards for a merger transaction............................................................................	31
D.	Application of the interrelated standards...................................................................	33
V. RECOMMENDATIONS..................................................................................................	35
A.	Summary....................................................................................................................	35
B.	The June 4 Stipulation cannot be approved..............................................................	36
C.	The potential harms of the Proposed Transaction outweigh its benefits...................	37
	1.	Factors to be considered ..................................................................................	37
	2.	Benefits to PNM's utility customers ...............................................................	38
	3.	Potential harms ................................................................................................	42
		a. Preservation of Commission's jurisdiction.............................................	43
		b. Diminishment of service quality .............................................................	43
		c. Subsidization of non-utility activities .....................................................	45

1. Qualifications and financial health of Avangrid, Inc. and Iberdrola, S.A.
   ................................................................................................................. 45

e. Adequacy of protections against harm....................................................	50
4. Balancing of potential harms versus the benefits ............................................	53

1. Potential conditions in the event the Commission finds the benefits outweigh the

potential harms ..........................................................................................................	55
VI. DISCUSSION...................................................................................................................	56
A. The Signatories' proposed amendments to the June 4 Stipulation............................	56
1.	Early versions ..................................................................................................	56
2.	June 4 Stipulation (Second Amended Stipulation)..........................................	57
3.	Post-June 4 Stipulation amendments ...............................................................	58
4.	Recommendation .............................................................................................	65

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B. Whether the transaction provides benefits to utility customers ................................

66

1.	Rate benefits ....................................................................................................	66
	a.	Regulatory Commitment 1	-- Rate credits ..............................................	66
	b.	Regulatory Commitment 1	-- Residential customer arrearages..............	69
	c.	Deferred rate case filing (Stay-out requirement) ....................................	71
2.	Other customer benefits...................................................................................	72

1. Regulatory Commitment 1 -- Connections for customers in remote areas
   ................................................................................................................. 72

b.	Regulatory Commitments 1 and 8 --Low-income energy efficiency ....	73
c.	Regulatory Commitments 5 and 7 -- Charitable Contributions & Low-
	Income Customer Assistance Programs..................................................	74
3. Economic development benefits.....................................................................	75
a.	Regulatory Commitment 2 -- Promise to create 150 full-time jobs........	75

1. Regulatory Commitment 2 -- Contributions to economic development

projects or programs................................................................................

78

1. Regulatory Commitment 2 -- Funds for impacted indigenous community

groups......................................................................................................

80

1. Regulatory Commitment 2 -- Employment opportunities for San Juan

Generating Station displaced workers.....................................................

81

1. Regulatory Commitment 2 -- Access to PNM-owned streetlighting poles
   ................................................................................................................. 81

f.	Scholarship and apprenticeship funds.....................................................	82
g.	Regulatory Commitment 3	-- Albuquerque Streetlighting .....................	83
h.	Regulatory Commitment 4	-- Albuquerque Airport Substation. ............	83

1. Regulatory Commitment 6 -- Minority- and Woman-Owned Business

	Procurement Program .............................................................................	84
j.	Regulatory Commitment 9 -- Local Energy Efficiency Procurement ....	85

1. Regulatory Commitment 21 -- Terminations and Reductions of Wages or

Benefits ...................................................................................................

85

1. Regulatory Commitment 22 -- Collective Bargaining Agreement and

Pension. ...................................................................................................

86

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Case No. 20-00222-UT

m. Regulatory Commitment 47 -- Renewable Resources Development .....

86

4. Financial benefits and improved PNM credit ratings, including Regulatory

Commitment 20 -- Extinguishment of Debt....................................................	86
5. Environmental benefits....................................................................................	90
a. Regulatory Commitment 43 -- Carbon Reduction Task Force...............	90

1. Regulatory Commitment 44 -- Compensation and Carbon Reduction

	Targets.....................................................................................................	93
c.	Regulatory Commitment 45 -- Contract Impacts on Emissions .............	96
d.	Regulatory Commitment 46 -- Transportation Electrification................	96
e.	Regulatory Commitment 48 -- PNM Environmental Studies.................	97
f.	Regulatory Commitment 49 -- Chief Environmental Officer.................	97
g.	Regulatory Commitment 51 -- Solar Direct Program.............................	98
h.	Regulatory Commitment 56 -- San Juan Decommissioning...................	99
6. Additional benefits...........................................................................................	99
a.	Regulatory Commitment 42 -- Regional Transmission Organization ....	99
b.	Regulatory Commitment 50 -- Transmission Plan ...............................	102

1. Regulatory Commitment 10 -- Diversity of PNM Management Team 103

	d. Regulatory Commitments 14 and 17 -- Avangrid, Inc. Controlling
	Ownership Interest & Albuquerque headquarters commitment ...........	104
C.	Whether the Commission's jurisdiction will be preserved .....................................	104
D.	Whether quality of service will be diminished........................................................	107

1. Avangrid Networks, Inc.'s utilities' customer dissatisfaction, penalties and

	disallowances for poor service quality and customer service .......................	107
2.	Legislation in Maine to replace Central Maine Power Company .................	111
3.	Billing and customer service issues in Maine ...............................................	112
4.	Maine PUC Audit ..........................................................................................	120
	a. General conclusions ..............................................................................	120

1. Management's reliance on reductions in headcount and in vegetation

management to meet earnings expectations..........................................

122

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