Emails show attorneys for new PRC, Avangrid had one-sided communication ahead of court request for rehearing

Apr. 25—The exchange began just weeks after new members of the state Public Regulation Commission were sworn in.

Thomas Bird, an attorney for Connecticut-based energy company Avangrid, sent an email Jan. 31 to PRC attorneys Michael Smith and Russell Fisk outlining a possible "procedural approach" to returning Avangrid's proposed merger with Public Service Company of New Mexico to the newly appointed commissioners for reconsideration.

The plan formed the basis for Avangrid, PNM and the PRC filing a joint motion March 8 to the state Supreme Court, asking justices to dismiss the utility companies' appeal of the commission's prior rejection of the merger deal and send it back for a new hearing.

The companies' merger agreement was set to expire April 20, so Bird asked the commission to issue a final determination, "one way or another," before April 10.

Commissioners James Ellison and Gabriel Aguilera held five closed-door meetings with staff attorneys to discuss the merger case, raising concerns among some government officials, renewable energy advocates and other opponents of the controversial merger that the PRC had engaged in what's known as "ex parte communication" — or discussions with members of just one side of a legal case — in an effort to fast-track approval of the merger.

A newly released collection of emails from the PRC confirms the agency tasked with overseeing electric utilities had one-sided communication with Avangrid as they planned to pursue a merger "rehearing" — a proceeding that would have been improper, the commissioners announced in recent days.

They now plan instead to request a "reopening" of the merger case, a different type of proceeding allowed under PRC rules.

The emails — exchanged from January to March — appeared April 20 in the agency's public record of the merger case, with a disclosure stating the emails "may constitute ex parte communications."

Commissioners, PRC attorneys and Avangrid officials have argued the communication was legal.

"I wholeheartedly disagree that these communications are prohibited," Aguilera said Monday. "What's important to note is that we have not made any decisions."

Avangrid spokeswoman Joanie Griffin wrote in an email Tuesday the company "did not engage in any ex parte communications" and that "it is regular practice for lawyers representing the PRC to speak with lawyers for other parties during potential settlement discussions on appeals."

Asked why the company proposed an inapplicable rehearing process for the merger, Griffin wrote, "We have no concerns about whether rehearing, reconsideration or reopening of the case is utilized," and "we will work with any process that the Commission determines appropriate if and when the Supreme Court remands the case back to the Commission."

The state administrative code governing the PRC differentiates between ex parte communications that are prohibited and those that are permitted. The code also states both types of communication must be disclosed by staff "promptly."

After Bird's Jan. 31 message to PRC attorneys, the released records show, Avangrid attorney Brian Haverley sent an email Feb. 2 presenting the company's plan in further detail, which included wrapping agreements made in previous proceedings into one measure to streamline the hearing process.

Aguilera and Ellison were interested, Fisk wrote Feb. 9, before prompting Bird to send a proposed Supreme Court motion.

Under the draft motion, the PRC would commit to "reconsideration" of the merger through procedural rules for a "rehearing."

After the five closed-door meetings, the commissioners voted to sign onto the court motion.

They later learned, however, it was too late for a rehearing — a proceeding that had to be requested within 10 days of the PRC's initial decision rejecting the merger deal.

The emails show Avangrid attorneys posed multiple drafts of the motion during the email exchange, altering terms for the PRC rehearing. At one point, a sentence was deleted that would have ensured commissioners could "order additional briefs and oral arguments."

In a Feb. 10 email, Smith expressed concern about language that would have limited commissioners to a decision "based upon the existing record." The provision was deleted.

Smith did not respond to requests for comment.

Bird asked in an email March 1 whether the new commissioners were interested in tying in a settlement of an unrelated case: PNM's ongoing Supreme Court appeal of the PRC's order to distribute rate credits to customers following the closure of the coal-powered San Juan Generating Station in northwestern New Mexico. Bird wrote Avangrid had never expressed interest in such a deal, but that a PNM representative had a "feeling" settlement discussions over the San Juan case could be delaying negotiations over the merger appeal.

Aguilera said Monday there was no settlement underway in the San Juan rate credit case.

"I don't know what they're referencing," he said.

PNM spokesman Ray Sandoval wrote in an email Tuesday, "The motion to remand the merger was not tied to other proceedings."

Retired attorney Bruce Throne, who represented clients before the PRC and its predecessor agencies for more than 40 years, said after reviewing the emails he believes the messages show a "significant institutional failure" at the PRC.

Throne said PRC's Office of General Counsel should never have allowed the discussion to take place and that Commissioners Aguilera and Ellison "should have known better."

John Boyd, an attorney and board member for Santa Fe nonprofit New Energy Economy, which opposes the merger, called the emails "distressing."

"This should never have happened," Boyd said. "This is not supposed to happen in our system of justice."

Aguilera cited a provision in the 2021 PRC order denying the merger, which stated the companies would have an opportunity to request further proceedings on their application.

He said the emails did not reflect a negotiation between the attorneys.

"All we want is to hear everybody's input as to whether we should reopen it," he said of the merger case. "Whatever [Avangrid] proposed initially, well, that's what they started with. All we did was come back and say, 'No, we don't agree with these things.' "