Connecticut-based energy company AVANGRID will acquire New Mexico investor-owned utility PNM Resources in a transaction with an $8.3 billion enterprise value, the companies announced on Oct. 21.
As a result of the transaction, which has been approved by the boards of the two companies, PNM’s shareholders will receive approximately $4.318 billion in cash.
PNM said that the transaction will create a large, diversified national regulated utility and renewable energy platform with approximately $14 billion of rate base and more than four million electric and natural gas utility customers.
AVANGRID is the third largest wind operator in the U.S. and has more than 7.5 gigawatts of installed wind and solar capacity.
“The strategic combination with PNM Resources also provides a platform for AVANGRID to expand its renewables business in the Southwest beyond its existing 1.9-gigawatt capacity wind projects in New Mexico and Texas and 200 megawatts of wind and solar capacity in Arizona,” PNM said in a news release.
PNM said it remains committed to exiting coal
PNM said it remains committed to exiting coal through the approved abandonment of San Juan Generating Station in 2022 and the continued efforts to exit its 200-megawatt ownership interest in the Four Corners Power Plant earlier than originally planned. The plants are located in New Mexico.
PNM said that it sees the potential for additional customer savings by exiting the plant sooner than the expiration of the ownership and coal supply agreements in 2031. “An earlier exit from Four Corners also opens the door for the combined company to bring additional renewable resources onto the grid in support of New Mexico's increasing renewable energy standards and 2045 carbon-free mandate,” it said.
The transaction is subject to PNM Resources shareholder approval, regulatory approvals from the New Mexico Public Regulation Commission, Public Utility Commission of Texas, Federal Energy Regulatory Commission, Department of Justice, Nuclear Regulatory Commission, Federal Communications Commission and Committee on Foreign Investment in the United States, and other customary closing conditions.
The transaction is expected to close between October and December 2021.
Connecticut-based AVANGRID has two primary lines of business: Avangrid Networks and Avangrid Renewables.
Avangrid Networks owns eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Avangrid Renewables owns and operates a portfolio of renewable energy generation facilities across the United States. Spain’s Iberdrola owns 81.5% of the outstanding common stock of AVANGRID.
Through its regulated utilities, Public Service Company of New Mexico and Texas-New Mexico Power, PNM Resources has approximately 2,811 megawatts of generation capacity and provides electricity to approximately 790,000 homes and businesses in New Mexico and Texas.