PNM Resources : Stacy R. Whitehurst Supplemental Testimony

P.U.C. DOCKET NO. 51547

BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS

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

SUPPLEMENTAL TESTIMONY IN SUPPORT OF STIPULATION

OF

STACY R. WHITEHURST

ON BEHALF OF

TEXAS-NEW MEXICO POWER COMPANY

MARCH 30, 2021

SUPPLEMENTAL TESTIMONY OF STACY R. WHITEHURST

P.U.C. DOCKET NO. 51547

TABLE OF CONTENTS

I.	INTRODUCTION.............................................................................................................	1
II.	PURPOSE OF SUPPLEMENTAL TESTIMONY IN SUPPORT OF STIPULATION.........	1
IV.	REASONABLENESS OF STIPULATION .......................................................................	4
V.	RATE CREDITS..............................................................................................................	6
VI.	CODE OF CONDUCT .....................................................................................................	8
VII.	SUMMARY AND CONCLUSION ....................................................................................	8

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SUPPLEMENTAL TESTIMONY OF STACY R. WHITEHURST

P.U.C. DOCKET NO. 51547

1 I. INTRODUCTION

• Q. PLEASE STATE YOUR NAME, BUSINESS ADDRESS, AND PLACE OF

• EMPLOYMENT.

• A. My name is Stacy R. Whitehurst. I serve as Vice President of Regulatory Affairs

• at Texas-New Mexico Power Company (TNMP). My business address is 577 N.

• Garden Ridge Blvd., Lewisville, Texas 75067.

• Q. ON WHOSE BEHALF ARE YOU TESTIFYING?

• A. I am testifying on behalf of TNMP.

• Q. ARE YOU THE SAME PERSON WHO FILED TESTIMONY IN THIS DOCKET ON

1. NOVEMBER 23, 2020, AND MARCH 15, 2021?
2. A. Yes. My background and experience were provided as Exhibit SRW-1 to my direct
3. testimony, filed on November 23, 2020.
4. II. PURPOSE OF SUPPLEMENTAL TESTIMONY IN SUPPORT OF STIPULATION
5. Q. WHAT IS THE PURPOSE OF YOUR SUPPLEMENTAL SETTLEMENT
6. TESTIMONY?
7. A. Joint Applicants1 have entered into a unanimous stipulation with all parties that

17 provides for a complete resolution of all issues in this proceeding. My

1. supplemental settlement testimony provides an overview of the Stipulation and
2. explains why the agreement is an appropriate resolution of this case and should
3. be approved by the Public Utility Commission of Texas (Commission).

21	The focus of my supplemental testimony is on those provisions of the
22	Stipulation that provide additional benefits, commitments, and protections

1. compared to those presented by Joint Applicants in their direct testimony. The
2. Joint Applicants presented certain Regulatory Commitments as Exhibit RDK-1 to
3. the Direct Testimony of Robert D. Kump on behalf of Avangrid and Green
4. Holdings, and then, in response to the testimony of other parties, presented
5. Revised Regulatory Commitments as Exhibit PAB-R-1 to the Rebuttal Testimony

1 On November 23, 2020, TNMP, NM Green Holdings, Inc. (Green Holdings), and Avangrid, Inc. (Avangrid) (collectively Joint Applicants) filed a report and application seeking approval of a change of ownership or control of TNMP.

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SUPPLEMENTAL TESTIMONY OF STACY R. WHITEHURST

P.U.C. DOCKET NO. 51547

• of Pedro Azagra Blazquez on behalf of Avangrid and Green Holdings. As a result
  2 of negotiation with other parties, the Stipulation presents commitments beyond

• those previously presented.

4 Q. ARE YOU THE ONLY WITNESS TESTIFYING IN SUPPORT OF THE

• STIPULATION?

• No. Mr. Azagra Blazquez is filing supplemental testimony on behalf of Avangrid
  7 and Green Holdings. In addition, Staff witness Carolyn A. Berry is also filing

• testimony in support of the Stipulation.

• III. SUMMARY OF STIPULATION

1. Q. COULD YOU PLEASE GENERALLY DESCRIBE THE STIPULATION?
2. A. Yes. The Stipulation, along with its attached agreed regulatory commitments, has
3. been filed separately and contemporaneously with the filing of this testimony. In
4. the interest of avoiding unnecessary duplication, I have not attached it to my
5. testimony, but it should be considered with this testimony as being jointly
6. sponsored by Avangrid and Green Holdings witness, Mr. Azagra Blazquez, and
7. myself.

17	The parties to the Stipulation include Joint Applicants, Commission Staff,

1. the Office of the Public Utility Counsel (OPUC), the Cities Served by Texas-New
2. Mexico Power Company (Cities), the Alliance for Retail Markets (ARM), the Texas
3. Energy Association for Marketers (TEAM), Texas Industrial Energy Consumers
4. (TIEC), and Walmart Inc. (collectively, the Signatories).

22	The Signatories have agreed that a negotiated resolution of this proceeding

1. on the basis set forth in the Stipulation - including the modified Regulatory
2. Commitments attached thereto - is in the public interest. The Signatories agree
3. that with the modified Regulatory Commitments made by the Joint Applicants in
4. the Stipulation, the proposed transaction should be found to be in the public
5. interest and approved.

28

29

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SUPPLEMENTAL TESTIMONY OF STACY R. WHITEHURST

P.U.C. DOCKET NO. 51547

• Q. PLEASE DESCRIBE THE KEY ELEMENTS OF THE STIPULATION.

• A. The key elements of the Stipulation that differ from the Joint Applicants' proposals

• in their direct and rebuttal testimony include the following:

• 1. The Stipulation includes significant additional ring-fencing and governance

5	commitments, protecting TNMP's independence and operations.
6	(Stipulation Attachment 1, ¶ 1(e)-(h),(l)-(q), and (t)-(u), and ¶ 7(a)-(b))

• 2. The Stipulation provides additional code of conduct related commitments

8	that provide enhanced protections for the competitive market. (Stipulation
9	Attachment 1, ¶ 1(c), (w))

10 3. The Stipulation provides for an increase of the rate credit for wholesale and

11	retail customers in Texas. (Stipulation Attachment 1, ¶ 6(a))

1. Q. PLEASE DESCRIBE THE ADDITIONAL RING-FENCING AND GOVERNANCE
2. COMMITMENTS PROVIDED BY THE STIPULATION.
3. A. The modified Regulatory Commitments in the Stipulation provide several new,
4. significant ring-fencing and governance measures. These measures include: (a)
5. the elimination of PNMR debt and the commitment that no debt will be incurred at
6. PNMR, TNPE or TNMP Holdings or at any corporate entity between TNMP and
7. PNMR in the future unless authorized in advance by the Commission; (b) a
8. requirement that Avangrid will obtain a non-consolidation legal opinion that
9. provides that, in the event of a bankruptcy of Avangrid or any affiliate of Avangrid,
10. a bankruptcy court will not consolidate the assets and liabilities of TNMP with
11. Avangrid or any affiliate of Avangrid; (c) detailed restrictions on how and when
12. dividends can be issued; and (d) a commitment that neither Avangrid nor any
13. affiliate of Avangrid (excluding TNMP) will incur, guaranty, or pledge assets in
14. respect of any incremental new debt at the closing or thereafter that is dependent
15. on: (1) the revenues of TNMP in more than a proportionate degree than the other

27 revenues of Avangrid, or (2) the stock of TNMP or TNMP Holdings.

28 (Stipulation Attachment 1, ¶ 1(e), (m), (o), (q), and (s))

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