AVANGRID Agrees To Eliminate Some $1 Billion In Debt As Part Of Application To Merge With PNM

STATE News:

ALBUQUERQUE — As part of its merger application before the New Mexico Public Regulation Commission (NMPRC), AVANGRID, Inc. (NYSE: AGR) has agreed to eliminate 100 percent of the approximately $1 billion debt of PNM’s parent company PNM Resources, Inc (PNMR).

That debt will be assumed by AVANGRID, which has already fully funded the merger with $4 billion in additional equity capital.

The reduction in debt at PNM Resources will mean PNM will have stronger credit ratings, lower interest rates and more access to robust funding, that ultimately will benefit fees ratepayers pay. 

Utilities across the nation are very infrastructure intensive businesses and having greater flexibility to raise funds for infrastructure projects is crucial to a utility’s financial strength. The merger incorporates PNM into a $20 billion company that will improve PNM’s credit outlook that can access both credit-debt and new investment dollars at lower costs. These two factors will save PNM customers millions of dollars.  

“AVANGRID and Iberdrola’s financial strength will provide New Mexico’s utility access to needed capital to finance its investment plan and position PNM to pay less on debt and access new capital. This access to financial resources and lower financing can lead to millions in savings for PNM customers,” added Robert Kump, AVANGRID Deputy CEO and President. “This is increasingly important given the recent fluctuations in the financial markets related to Covid-19 disruptions.”

“Decarbonizing our nation’s electricity supply requires substantial investments over the next decade,” said Steve Michel of Western Resource Advocates. “AVANGRID’s financial strength and ability to lower the cost of PNM’s debt will make that buildout much less expensive for PNM customers. That’s important and an additional reason why WRA hopes the merger will be approved.” 

To date, 13 parties have agreed on a stipulation including:

  • Los Alamos County:
  • Attorney General of the State of New Mexico;
  • Western Resource Advocates;
  • International Brotherhood of Electrical Workers Local 611;
  • Dine Citizens Against Ruining Our Environment;
  • Nava Education Project, San Juan Citizens Alliance;
  • To Nizhoni Ani;
  • Coalition for Clean Affordable Energy;
  • Interwest Energy Alliance;
  • Walmart, Inc.;
  • Onward Energy Holdings, LLC; and
  • M-S-R Power.

If approved by the NMPRC, the agreement among the parties will bring more than $270 million in benefits to New Mexico. The hearing examiner for the case has scheduled a hearing on the merger beginning Aug. 11.

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