PNM Resources : Unanimous Stipulation and Agreement

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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UNANIMOUS STIPULATION AND AGREEMENT

As of March 30, 2021, Texas-New Mexico Power Company ("TNMP" or the Company), NM Green Holdings, Inc. ("Green Holdings"), and Avangrid, Inc. ("Avangrid") (collectively Joint Applicants), and all parties to this docket have reached a settlement 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 filed in this proceeding. Based upon that settlement, the following parties join in this stipulation ("Stipulation") regarding all issues in this docket: TNMP, Green Holdings, Avangrid, the Staff of the Public Utility Commission of Texas ("Commission"), the Office of the Public Utility Counsel ("OPUC"), the Cities Served by Texas-New Mexico Power Company ("Cities"),1 the Alliance for Retail Markets ("ARM"), the Texas Energy Association for Marketers ("TEAM"), Texas Industrial Energy Consumers ("TIEC"), and Walmart Inc. (collectively, the "Signatories"). The Signatories agree that a negotiated resolution of this proceeding on the basis set forth in this Stipulation is in the public interest, will conserve the parties' resources, and will eliminate controversy. Accordingly, the Signatories request that the Commission approve this Stipulation and enter an order (including findings of fact and conclusions of law) consistent with the Stipulation.

I.

By this Stipulation, the Signatories resolve all issues among them related to this proceeding, hereby stipulate and agree to the terms set forth below, and request that the Commission enter a final order approving such terms and the proposed Transaction, as follows:

• The coalition of Cities served by TNMP includes Alvin, Dickinson, Friendswood, La Marque, Lewisville and Texas City.

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1. Transaction:
2. 1. In the Joint Report and Application filed in this docket, TNMP, Green Holdings and Avangrid, a subsidiary of Iberdrola, S.A.,2 requested Commission approvals necessary to complete the proposed "Transaction." 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. ("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 an SPE interposed between TNMP and TNPE. These collective steps are the 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.
   2. The Signatories agree that, based on the requirements of this Stipulation, the Transaction is in the public interest in accordance with PURA §§ 39.262(l)-(m) and 39.915. The Signatories specifically agree that the Transaction will not adversely affect TNMP's reliability of service, availability of service, or cost of service.
   3. The Signatories also agree that, based on the requirements of this Stipulation, the Transaction is in the public interest in accordance with PURA § 14.101. The Signatories specifically agree that the Transaction will not: (a) result in the transfer of jobs to workers outside of Texas, (b) adversely affect the health or safety of the utility's customers or employees, or (c) result in a decline in service. The Signatories also agree that the Transaction will result in no TNMP property or other assets being sold, transferred, or otherwise affected.

• Iberdrola, S.A. owns 81.5% of Avangrid.

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1. Agreed Regulatory Commitments:
   The Signatories agree to the Regulatory Commitments set forth in Attachment 1 to this

Stipulation. Except to the extent that any of the Regulatory Commitments in Attachment 1 or any of the following conditions in this Stipulation explicitly states otherwise, the Regulatory Commitments in Attachment 1 will apply as of closing of the Transaction and continue to apply thereafter, unless and until altered by the Commission.

II.

The Signatories agree that the terms of this Stipulation are fair, reasonable, and in the public interest. The Signatories further agree to take all reasonable efforts to obtain the Commission's prompt adoption of an order consistent with this Stipulation. The Signatories further agree to support and defend the terms of this Stipulation as set forth herein.

III.

This Stipulation has been drafted by all Signatories and is the result of negotiation, compromise, settlement, and accommodation. The Signatories agree that the terms and conditions herein are interdependent. The various provisions of this Stipulation are not severable. None of the provisions of this Stipulation shall become fully operative unless the Commission shall have entered a final order approving this Stipulation. If the Commission does not accept this Stipulation as presented or issues an order inconsistent with the terms of this Stipulation, the Signatories agree that any Signatory adversely affected by that alteration has the right to withdraw from this Stipulation, thereby being released from its obligations arising hereunder, and to proceed as otherwise permitted by law to exercise all rights available under the law. The right to withdraw must be exercised by providing the other Signatories written notice within 20 calendar days of the date the Commission order acting on this Stipulation is filed. Failure to provide such notice within the specified time period shall constitute a waiver of the right to withdraw from the Stipulation and acceptance of the changes to this Stipulation made by the Commission.

IV.

This Stipulation is binding on each of the Signatories only for the purpose of settling the issues as set forth herein and for no other purposes. The matters resolved herein are resolved on the basis of a compromise and settlement. Except to the extent that this Stipulation expressly

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governs a Signatory's rights and obligations for future periods, this Stipulation shall not be binding or precedential on a Signatory outside of this proceeding except for a proceeding to enforce the terms of this Stipulation. The Signatories agree that a Signatory's support of the resolution of this proceeding in accordance with this Stipulation may differ from its position or testimony regarding contested issues of law, policy, or fact in other proceedings before the Commission or other forum. Because this is a Stipulation, a Signatory is under no obligation to take the same position as set out in this Stipulation in other proceedings not referenced in this Stipulation, regardless of whether those proceedings present the same or a different set of circumstances. Notwithstanding any other provision herein, a Signatory's agreement to entry of a final Commission order consistent with this Stipulation should not be regarded as an agreement to the appropriateness or correctness of any assumptions, methodology, or legal or regulatory principle that may have been employed in reaching this Stipulation.

V.

This Stipulation contains the entire agreement among the Signatories. Moreover, this Stipulation supersedes all other written and oral exchanges or negotiations among the Signatories or their representatives with regard to the subjects contained herein. The Signatories hereby waive the right to an evidentiary hearing in this proceeding and waive cross-examination of all witnesses.

VI.

Each person executing this Stipulation represents that he or she is authorized to sign this Stipulation on behalf of the party represented. Facsimile or emailed copies of signatures are valid for purposes of evidencing this Stipulation, which may be executed in multiple counterparts.

AGREED:

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TEXAS-NEW MEXICO POWER COMPANY

BY: /s/ Kerry McGrath

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