PNM Resources : Notice of Stipulation

DOCKET NO. 51547

JOINT REPORT AND APPLICATION OF TEXAS-NEW MEXICO POWER COMPANY, NM GREEN HOLDINGS, INC. AND AVANGRID, INC. FOR REGULATORY APPROVALS UNDER PURA §§ 14.101, 39.262, AND 39.915

• PUBLIC UTILITY COMMISSION

§	OF TEXAS
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§
§

NOTICE OF STIPULATION, MOTION FOR ADMISSION OF EVIDENCE, AND

MOTION FOR ENTRY OF AGREED PROPOSED ORDERTexas-New Mexico Power Company, NM Green Holdings, Inc., and Avangrid, Inc.

(collectively Joint Applicants) and all parties to this docket have reached a settlement of all issues concerning the Joint Report and Application of Texas-New Mexico Power Company, NM Green Holdings, Inc., and Avangrid, Inc. for Regulatory Approvals Under PURA §§ 14.101, 39.262, and 39.915 (the "Joint Application") filed in this proceeding.

The terms of the parties' settlement have been memorialized in a Unanimous Stipulation and Agreement (the "Stipulation") by Joint Applicants; the Staff of the Public Utility Commission of Texas, the Office of the Public Utility Counsel, the Cities Served by Texas-New Mexico Power Company, the Alliance for Retail Markets, the Texas Energy Association for Marketers, Texas Industrial Energy Consumers, and Walmart Inc. (collectively, the "Signatories"). The Stipulation is filed concurrently with this pleading. The Signatories agree that a negotiated resolution of this proceeding on the basis set forth in the Stipulation is in the public interest, will conserve the parties' resources, and eliminate controversy. Joint Applicants file this Notice of Stipulation, Motion for Admission of Evidence, and Motion for Entry of Agreed Proposed Order on behalf of themselves and the Signatories to the Stipulation in this proceeding.

The prefiled direct and rebuttal testimony and other exhibits of the parties were admitted into evidence at the prehearing conference held on March 19, 2021. In addition, the Signatories request admission into evidence of the following:

1. the Unanimous Stipulation and Agreement, including attachments, filed on March 30, 2021;
2. the supplemental testimony and exhibits of Stacy R. Whitehurst and Pedro Azagra Blazquez in support of the Stipulation on behalf of Joint Applicants, filed on March 30, 2021; and

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1. the testimony of Carolyn A. Berry, Ph.D. in support of the Stipulation on behalf of Commission Staff, filed on March 30, 2021.

The Signatories have agreed on the form of a Proposed Order in this proceeding, which is attached to this filing for the Commission's consideration. The Signatories respectfully request Commission approval of the Proposed Transaction and entry of an order consistent with the attached Proposed Order.

	Respectfully submitted,
	/s/ Kerry McGrath
	Kerry McGrath
Scott Seamster	Kerry McGrath
State Bar No. 00784939	State Bar No. 13652200
Associate General Counsel	Patrick Pearsall
Texas-New Mexico Power Company	State Bar No. 24047492
577 N. Garden Ridge Blvd.	Duggins Wren Mann & Romero, LLP
Lewisville, TX 75067	600 Congress Ave, Suite 1900
T: 214-222-4143 F: 214-222-4156	Austin, TX 78701
[e-mail]	T: 512-744-9300 F: 512-744-9399
	[e-mail]
	[e-mail]
ATTORNEYS FOR TEXAS-NEW MEXICO POWER COMPANY
	/s/ Andrew Kever
	Andrew Kever
R. Scott Mahoney		Andrew Kever
SVP - General Counsel & Corporate Secretary	William Moore
Avangrid, Inc.		Enoch Kever PLLC
180 Marsh Hill Road		7600 N. Capital of Texas Hwy
Orange, Connecticut 06477		Building B, Suite 200
T: 207-458-1220		Austin, Texas 78731
[e-mail]		[e-mail]
		[e-mail]

ATTORNEYS FOR AVANGRID, INC. AND NM GREEN HOLDINGS, INC.

Certificate of Service

I certify that notice of the filing of this document was provided to all parties of record via electronic mail on March 30, 2021, in accordance with the Order Suspending Rules issued in Project No. 50664.

/s/ Kerry McGrath

Kerry McGrath

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Docket No. 51547

Order

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DOCKET NO. 51547

JOINT REPORT AND APPLICATION OF TEXAS-NEW MEXICO POWER COMPANY, NM GREEN HOLDINGS, INC. AND AVANGRID, INC. FOR REGULATORY APPROVALS UNDER PURA §§ 14.101, 39.262, AND 39.915

• PUBLIC UTILITY COMMISSION

§	OF TEXAS
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§
§

PROPOSED ORDER

This Order addresses the joint report and application filed by Texas-New Mexico Power Company (TNMP), NM Green Holdings, Inc. (Green Holdings), and Avangrid, Inc. (Avangrid) (collectively, the applicants) under PURA1 §§ 14.101, 39.262, and 39.915. On March 30, 2021, the applicants, Commission Staff, the Office of Public Utility Counsel (OPUC), the Cities Served by Texas-New Mexico Power Company (Cities), the Alliance for Retail Markets (ARM), the Texas Energy Association for Marketers (TEAM), Texas Industrial Energy Consumers (TIEC), and Walmart Inc. (collectively, the signatories) filed a unanimous stipulation and agreement. The agreement contains numerous regulatory commitments by the applicants. For the reasons discussed in this Order, the Commission finds that the transaction is in the public interest under PURA §§ 14.101, 39.262, and 39.915, provided that all the regulatory commitments described in this Order are met.

1. Discussion

A. The Proposed Transaction

In the joint report and application filed in this docket, the applicants seek Commission approval of a proposed transaction that would result in the transfer of ultimate ownership and control of TNMP. Specifically, effective October 20, 2020, TNMP's indirect parent company, PNM Resources, Inc. (PNMR), entered into an Agreement and Plan of Merger (Merger Agreement) with Avangrid and its subsidiary, Green Holdings, under which, following receipt of regulatory approvals and satisfaction of other closing conditions, Green Holdings will be merged with and into PNMR with PNMR as the surviving corporation and a direct subsidiary of Avangrid. Avangrid will then contribute 100% of its interest in PNMR to Avangrid Networks, Inc. (Avangrid Networks). Avangrid also proposes to then have PNMR's subsidiary, TNP Enterprises, Inc.

• Public Utility Regulatory Act, Tex. Util. Code § 11.001-66.016.

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Order

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(TNPE) transfer the 100% ownership interest in TNMP to a newly created special purpose entity (SPE) named TNMP Holdings that will be owned by TNPE, so that there will be a SPE interposed between TNMP and TNPE. These collective steps are the Proposed Transaction. After closing, TNMP and Public Service of New Mexico (PNM) will continue to be subsidiaries of PNMR and will be indirect subsidiaries of Avangrid Networks and Avangrid.

B. Regulatory Commitments

The applicants proposed regulatory commitments in both the joint report and application and in their rebuttal testimonies filed in this proceeding. These regulatory commitments were modified and expanded in the parties' agreement. The regulatory commitments are set forth in findings of fact 43 through 55 below. The Commission finds that these regulatory commitments are necessary to find that the transaction is in the public interest under PURA §§ 14.101, 39.262, and 39.915. The Commission may enforce these regulatory commitments under PURA §§ 39.262(o) and 39.915(d).

1. Findings of Fact
   The Commission makes the following findings of Fact.

Applicants

1. TNMP, a wholly owned subsidiary of PNMR, is a transmission and distribution utility serving four areas of Texas, all located in the Electric Reliability Council of Texas (ERCOT). TNMP is authorized to provide service under certificate of convenience and necessity number 30038 and serves more than 259,000 homes and businesses in a service territory totaling 13,613 square miles. With headquarters in Lewisville, TNMP has approximately 400 employees in more than 70 municipalities throughout the state. TNMP historically and currently receives support services from affiliate employees located in Texas and New Mexico.
2. Avangrid, a subsidiary of Iberdrola, S.A., is a leading United States sustainable energy company with approximately $36 billion in assets and operations in 24 states. Avangrid's primary business is ownership of its operating businesses, which are held by two subsidiaries in two primary lines of business: Avangrid Networks and Avangrid Renewables. Avangrid Networks owns eight electric and natural gas utilities, serving approximately 3.3 million customers in New York, Maine, Connecticut, and Massachusetts, delivering electricity to approximately 2.3 million electric utility customers

Docket No. 51547

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and delivering natural gas to approximately 1.0 million natural gas public utility customers. Avangrid Renewables owns and operates approximately 7.5 gigawatts of wind and solar electricity generating capacity, with a presence in 22 states across the United States.

1. Avangrid Texas Renewables, LLC, an indirect subsidiary of Avangrid Renewables, holds power generation company registration number 20213.2
2. Iberdrola Solutions, LLC, an indirect subsidiary of Iberdrola, S.A., holds retail electric provider Option 1 certificate number 10267.3
3. Green Holdings is a New Mexico corporation and a wholly owned subsidiary of Avangrid

that was formed solely for the purpose of merging with and into PNMR in the proposed transaction.

Application and Description of the Proposed Transaction

1. On November 23, 2020, the applicants filed the joint report and application, including direct testimony, seeking approval of a change of ownership or control of TNMP.
2. The transaction will occur in accordance with the merger agreement executed by TNMP's indirect parent company, PNMR, with Avangrid and Green Holdings on October 20, 2020.
3. Under the merger agreement, Green Holdings will merge with and into PNMR, with PNMR as the surviving entity. As a result, TNMP will become a wholly owned subsidiary of Avangrid. Subsequently, Avangrid will contribute 100% of the ownership interests in PNMR to its subsidiary Avangrid Networks with the result that PNMR will become a direct subsidiary of Avangrid Networks and an indirect subsidiary of Avangrid. Finally, Avangrid proposes to then have PNMR, as sole shareholder of TNP Enterprises, Inc. (TNPE), transfer TNPE's 100% ownership interest in TNMP to a newly created special-purpose entity (SPE) named TNMP Holdings that will be indirectly owned by PNMR, so that there will be a SPE interposed between TNMP and TNPE.
4. Under the merger agreement, Avangrid will acquire 100% of the common stock of PNMR and the shareholders of PNMR will receive, in consideration for their shares, $50.30 in cash per share. The total consideration that Avangrid will pay to PNMR shareholders, based upon the number of PNMR shares outstanding, is approximately $4.3 billion.

• Application of lberdrola Texas Renewables, LLC to Amend its Power Generation Company Registration under 16 Texas Administrative Code § 25.109, Project No. 46990, Notice of Approval (Apr. 24, 2017).

• Application of Iberdrola Solutions, LLC for a Retail Electric Provider Certificate, Docket No. 49459, Notice of Approval (Jul. 9, 2019).