Texas PUC Chair: "Need To Look At" Issue Of TDU Parent Owning Retail Provider In Avangrid-TNMP Merger Application

During today's Texas PUC open meeting, PUC Chairman DeAnn T. Walker and Commissioner Arthur C. D'Andrea agreed that the Commission should consider the issue of the parent of a transmission and distribution utility (TDU) also owning generation or a retail electric provider, as part of the Commission's review of the application of Texas-New Mexico Power for approval of the merger of its parent, PNM Resources, and Avangrid. Inc.

Among other things, Avangrid owns the recently launched Iberdrola Texas retail electric provider in Texas, as well as Avangrid Renewables. Avangrid currently owns 1,900 MW of renewable energy and a pipeline of 1,400 MW of renewables assets in New Mexico and Texas.

See background on the merger here

In adopting a preliminary order in the proceeding, and in response to a proposal from D'Andrea, Commissioners agreed to add a question to the preliminary order concerning the policy of having a TDU parent owning generation and retail.

Walker agreed that the issue is, "one of the things that we need to look at."

Furthermore, Walker said that the review should go beyond just the policy question, and include consideration of what safeguards are necessary if such a structure is authorized, and whether the existing code of conduct is sufficient.

D'Andrea noted that PURA envisions shared ownership of a TDU and REP, and Walker noted that upon the initial restructuring of the ERCOT investor-owned utilities, several parent companies owned both retail providers and a TDU, but the market has moved away from such a structure due to various business transactions

Docket 51547