United States of America Before the Federal Energy Regulatory Commission
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UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Iberdrola, S.A. ) Avangrid, Inc. ) Avangrid Networks, Inc. ) PNM Resources, Inc. ) Public Service Company of New ) Docket No. EC21-___-000 Mexico ) NMRD Data Center II, LLC ) NMRD Data Center III, LLC ) New Mexico PPA Corporation ) APPLICATION FOR AUTHORIZATION OF TRANSACTION UNDER SECTION 203 OF THE FEDERAL POWER ACT AND REQUESTS FOR SHORTENED COMMENT PERIOD, EXPEDITED ACTION, WAIVERS OF FILING REQUIREMENTS AND CONFIDENTIAL TREATMENT OF WORKPAPERS Pursuant to Sections 203(a)(1) and (a)(2) of the Federal Power Act (“FPA”)1 and Part 33 of the Rules and Regulations of the Federal Energy Regulatory Commission (“FERC” or the “Commission”),2 Iberdrola, S.A. (“Iberdrola”), Avangrid, Inc. (“Avangrid”) and Avangrid Networks, Inc. (“Networks” and together with Iberdrola and Avangrid, the “Avangrid Applicants”) and PNM Resources, Inc. (“PNMR”), on behalf of its public utility subsidiaries, Public Service Company of New Mexico (“PNM”), NMRD Data Center II, LLC (“NMRD II”), NMRD Data Center III, LLC (“NMRD III”), and New Mexico PPA Corporation (“NMPC”) (and together with PNMR, the “PNMR Applicants”) (collectively, the Avangrid Applicants and the PNMR Applicants are referred to herein as, the “Applicants”), hereby submit this application (“Application”) requesting Commission authorization for the disposition of jurisdictional facilities resulting from a proposed transaction whereby NM Green Holdings, Inc. (“NM Green 1 16 U.S.C. § 824b(a)(1) and (a)(2). 2 18 C.F.R. pt. 33 (2020). Holdings”), a direct and wholly-owned subsidiary of Avangrid created solely for the purpose of effectuating the Proposed Transaction, will merge with and into PNMR, with PNMR as the surviving entity of the merger (as described further herein, the “Merger Transaction”) and the subsequent transfer of PNMR to Networks, a direct, wholly-owned subsidiary of Avangrid (collectively referred to herein as, the “Proposed Transaction”). The Merger Transaction will be effected pursuant to the terms of the Agreement and Plan of Merger, dated October 20, 2020, by and among Avangrid, NM Green, and PNMR (the “Merger Agreement”). As a result of the Merger Transaction, the PNMR Applicants will become subsidiaries of Avangrid and Iberdrola. Following the closing of the Merger Transaction, Avangrid will transfer 100% of the ownership interests in PNMR to Networks, such that the PNMR Applicants will become a wholly-owned subsidiary of Networks. As described herein, the Proposed Transaction will not have any adverse effect on competition, rates, or regulation and will not result in any inappropriate cross-subsidization of a non-utility company or the encumbrance or pledge of utility assets for the benefit of an associate company. The Commission should therefore authorize the Proposed Transaction as consistent with the public interest without hearing or condition. The Applicants further request that the Commission, consistent with its precedent, grant limited waivers of its Part 33 filing requirements to the extent that the information required by Part 33 is not necessary to determine that the Proposed Transaction meets the statutory requirements of Section 203 of the FPA.3 3 See, e.g., Nat’l Energy & Gas Transmission, Inc., 108 FERC ¶ 62,148 (2004); Northbrook N.Y., LLC, 130 FERC ¶ 62,128 (2010); EBG Holdings LLC, 119 FERC ¶ 62,172 (2007); MACH Gen, LLC, 113 FERC ¶ 61,138 (2005); Boston Generating, LLC, 113 FERC ¶ 61,109 (2005); La Paloma Holding Co., LLC, 112 FERC ¶ 61,052 (2005); Lake Road Holding Co., LLC, 112 FERC ¶ 61,051 (2005). 2 Finally, the Proposed Transaction is scheduled to close promptly upon receipt of the necessary regulatory approvals. The Applicants respectfully request that the Commission issue an order granting the requested authorizations as expeditiously as possible, and in any event, by no later than February 22, 2021, in order to allow the Proposed Transaction to close as quickly as possible. I. THE PARTIES A. The Avangrid Applicants and Their Affiliates 1. Iberdrola, S.A. Iberdrola is a corporation (Sociedad Anónima) organized under the Laws of the Kingdom of Spain, whose shares are publicly traded on the Madrid Stock Exchange. Iberdrola is a global energy leader, the number-one producer of wind power, and one of the world’s biggest electricity utilities by market capitalization. The group supplies energy to almost 100 million people in dozens of countries including Spain, the United Kingdom, the United States, Brazil, Mexico, Australia, Germany, Portugal, Italy and France. A complete list of Iberdrola’s U.S. energy subsidiaries and affiliates is provided as Exhibit B-1, and Exhibit C-1 provides a pre- Proposed Transaction simplified organizational chart showing Iberdrola and its current subsidiaries. 2. Avangrid, Inc. Avangrid’s common stock is publicly traded on the New York Stock Exchange, and Iberdrola owns 81.5% of Avangrid’s stock. Avangrid is a leading, sustainable energy company with approximately $36 billion in assets and operations in 24 U.S. states. Avangrid has two primary lines of business through two intermediate holding companies: (i) Networks (i.e., Avangrid Networks, Inc.); and (ii) Avangrid Renewables Holdings, Inc. (“Avangrid Renewables 3 Holdings”). Networks indirectly owns eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Avangrid Renewables Holdings indirectly owns and operates a portfolio of renewable energy generation facilities across the United States. 3. Avangrid Networks, Inc. Networks, a Maine corporation, is a wholly-owned subsidiary of Avangrid that owns the following electric and natural gas utilities in New York and New England: a. New York State Electric & Gas Corporation New York State Electric & Gas Corporation (“NYSEG”) is a New York corporation and franchised electric and gas public utility regulated by both the Commission and the New York State Public Service Commission (“NYPSC”). NYSEG has no captive customers or bundled wholesale customers because all of NYSEG’s electric customers have the right to choose an alternative supplier of electricity. NYSEG owns certain electric generation, consisting primarily of hydroelectric facilities, and has power purchase contracts from third-parties. NYSEG’s transmission system is under the operational control of the New York Independent System Operator, Inc. (“NYISO”). NYSEG provides transmission service and collects wholesale transmission charges pursuant to the NYISO Open Access Transmission Tariff (“NYISO OATT”). NYSEG has the authority to sell wholesale electric power in interstate commerce at market-based rates.4 b. Rochester Gas and Electric Corporation Rochester Gas and Electric Corporation (“RG&E”) is a New York corporation and franchised electric and gas public utility regulated by both the Commission and the NYPSC. 4 NYSEG Solutions, Inc., et al., 85 FERC ¶ 61,342 (1998). 4 RG&E is engaged in, among other things, the business of purchasing, generating, distributing and selling electric power and natural gas. RG&E has no captive customers or bundled wholesale customers because all of RG&E’s electric customers have the right to choose an alternative supplier of electricity. RG&E owns certain electric generation and has power purchase contracts from third-parties. RG&E’s transmission system is under NYISO’s operational control. RG&E provides transmission service and collects wholesale transmission charges pursuant to the NYISO OATT. RG&E has the authority to sell wholesale electric power in interstate commerce at market-based rates.5 c. Central Maine Power Company Central Maine Power (“CMP”) is a Maine corporation and franchised electric utility regulated by both the Commission and the Maine Public Utilities Commission (“MPUC”). CMP is primarily engaged in transmitting and distributing electricity generated by others to retail customers in Maine. CMP has no captive customers or bundled wholesale customers because all of CMP’s electric customers have the right to choose an alternative supplier of electricity. CMP’s transmission system is under the operational control of ISO New England Inc. (“ISO- NE”). CMP provides network transmission service over its transmission facilities pursuant to the ISO-NE Open Access Transmission Tariff (“ISO-NE OATT”). CMP no longer owns generating assets but retains some power entitlements under long-term contracts with non-utility generators and other market entities. CMP has the authority to sell wholesale electric power in interstate commerce at market-based rates.6 5 Rochester Gas and Elec. Corp., 80 FERC ¶ 61,284 (1997). 6 Carthage Energy, LLC, et al., 111 FERC ¶ 61,240 (2005). 5 CMP also has an interest in three atomic power companies that have been permanently shut down pursuant to Nuclear Regulatory Commission oversight: (i) Maine Yankee Atomic Power Company (38%) (“Maine Yankee”);7 (ii) Connecticut Yankee Atomic Power Company (6%) (“Connecticut Yankee”);8 and (iii) Yankee Atomic Electric Power Company (9.5%) (“Yankee Rowe”).9 Other New England utilities own the remaining interests in each of these companies. Each of these nuclear generation facilities has permanently ceased commercial operations. d. Maine Electric Power Company Maine Electric Power Company (“MEPCO”) is a transmission-only utility organized under the laws of the state of Maine whose sole asset is a 186-mile, 345 kV transmission line connecting the state of Maine and New Brunswick Power. MEPCO has ceded operational control over its transmission