The future of Public Service Co. of New Mexico and energy giant Avangrid’s proposed merger will remain in the state Supreme Court’s hands, at least for now.
In an order released Monday morning, the court rejected a joint request by Avangrid, PNM and the Public Regulation Commission to remand the case back to the PRC for reconsideration. The court’s order also scheduled oral arguments in the case for Sept. 12.
That means the appeal Avangrid and PNM filed last year against a previous PRC decision to reject the merger will continue uninterrupted at the court in a process that now is unlikely to conclude until late 2023 or early 2024, said Cydney Beadles, attorney for Western Resource Advocates, one of the parties involved in the case.
“This means the court will proceed on deciding the merits of the appeal,” Beadles told the Journal. “And since oral argument is now scheduled for Sept. 12, the court may not issue its final opinion until the end of the year.”
That puts a sharp stop to efforts by Avangrid and PNM to get a rapid “rehearing” of the case by the newly appointed PRC, which took office in January. Members of the new commission joined Avangrid and PNM in a March motion asking the court to dismiss the pending appeal against the previous PRC’s rejection of the merger.
That would have allowed the current PRC to regain legal jurisdiction over the case, paving the way for it to reconsider the issue.
But the March motion generated intense controversy among some parties in the case, especially since it called for the court to remand it to the PRC for a “rehearing” of existing evidence, rather than a “reopening” of the record for parties to present new evidence and provide broad input through public hearings.
The PRC did agree in April that reopening rather than rehearing the case would be most appropriate if the court remanded it back to the commission.
But Santa Fe-based New Energy Economy, which adamantly opposes the merger, exhorted the court to outright reject the motion to remand the case, arguing that the previous PRC’s rejection was legally sound and would withstand Avangrid and PNM’s objections if the appeal process is allowed to proceed. It also asked to supplement the court record with “new evidence” against the merger.
The controversy gained intensity in early May, after a series of emails that Avangrid and PRC lawyers had exchanged when discussing their joint motion raised concerns about potentially inappropriate ex-parte communications between the commission and the merger partners. That led some parties to ask that the court hear oral arguments about those communications before ruling on the remand request.
In the end, it’s unclear what arguments persuaded the five Supreme Court judges to reject the remand motion and retain jurisdiction. The order offered no explanations. It simply denied the joint motion and rejected NEE’s request to supplement the record, as well as the request by other parties to review alleged ex-parte communications.
NEE, however, claimed victory and praised the court for protecting public rights.
“I think it’s an enormous vindication of the rule of law and a victory for the people of New Mexico,” NEE executve director Mariel Nanasi told the Journal.
It’s unclear how Avangrid and PNM will respond now that the appeal process continues.
In April, the two companies extended their agreement to merge by three months to July 20. But with oral arguments in the appeal now scheduled for Sept. 12, and a final court decision unlikely until late 2023 or early 2024, the companies will need to extend their merger agreement yet again.
“We received the court’s order and we’re reviewing it,” PNM spokesman Ray Sandoval told the Journal.
The New York Stock Exchange temporarily suspended trading of both Avangrid and PNM Resources Monday afternoon to allow all investors to be informed about the Supreme Court decision before their stock starts trading again.