A hearing on the possible merger of New Mexico Gas Co. and Saturn Utilities Holdco — a subsidiary of Bernhard Capital Partners Management — has been delayed following a push by advocates and state agencies to have the application dismissed. New Mexico Gas Co. is currently owned by Emera, which is seeking to sell the utility.
A hearing examiner with the New Mexico Public Regulation Commission was initially scheduled to conduct a hearing starting on June 23 that could have lasted two weeks.
Last week, following a prehearing and status conference, the hearing examiners issued an order canceling next week’s hearing. Future hearings could be set in later orders.
The decision comes after the PRC’s Utility Division staff, the New Mexico Department of Justice and the advocacy groups New Energy Economy, Western Resource Advocates, the Coalition for Clean Affordable Energy and the New Mexico Affordable Reliable Energy Alliance filed a joint motion in late May asking for the merger application to be dismissed.
This filing came after New Mexico Gas Co., Bernhard Capital Partners Management and Emera filed information in a rebuttal testimony on May 16 that the advocates and the state agencies claim would have substantially changed the initial application.
In the joint filing, the state agencies and the advocacy groups question Bernhard Capital Partners Management’s experience overseeing large utilities and further argue that the original application doesn’t include any “immediate, tangible customer benefits” such as rate freezes or rate credits. They say Emera had to provide more commitments when it acquired the utility.
Then, rather than withdrawing the application and refiling it with new commitments that would make it more likely to receive commission approval, the advocates and state agencies say the applicants filed rebuttal testimony that includes commitments not originally in the application.
“This tactic has deprived the Staff and Intervenors of the opportunity to fully analyze and respond to the revised Application,” the joint motion states.
The changes include a rate credit, delaying the filing of an application for increased rates and increasing the contribution to economic development efforts in New Mexico.
Some of those changes were made in direct response to recommendations made by entities that are part of the joint motion to dismiss.
By dismissing the application, the advocates and the state agencies say New Mexico Gas Co., Bernhard Capital Partners Management and Emera can “ file a revised Application with their complete ‘best and final’ proposals in a new docket.” This would “restart the clock and give the Commission a clear, coherent record on which to base its decision,” the joint motion states.
But the gas company, its current owner and the company seeking to buy it don’t support such an endeavor and they say the joint motion is procedurally improper and includes inaccurate information. They say the advocacy groups and state agencies have not demonstrated that the application meets the standards that would be required to dismiss or suspend the application to transfer the ownership.
However, they say they do support delaying the hearing to allow more time for the advocates and the state agencies to review the new information.
New Mexico Gas Co., Emera and Bernhard Capital Partners Management say that the motion to dismiss was filed more than three months after the deadline for such actions.
The hearing examiners say it isn’t reasonable to hold hearings next week, given those developments.