Mariel Nanasi has been PNM’s watchdog for years. Could she kill the state’s biggest energy merger?
By Lindsay Fendt / Searchlight
In July, New Mexican newspapers published a letter by Attorney General Hector Balderas disparaging the efforts of an unnamed woman — “insistent on getting her way” — to derail a proposed multibillion-dollar utility merger. Days after the letter published, Mariel Nanasi, the head of New Energy Economy, sat at her computer, smirking at the ambiguity in Balderas’ letter and reading the first sentences of her freshly typed response.
“He says an unreasonable woman wants to kill the PNM/Avangrid merger,” she read. “That would be me.”
Nanasi has gotten used to political mudslinging during her time at the helm of New Energy Economy, a Santa Fe-based renewable-energy advocacy group. A former civil rights lawyer in Chicago, Nanasi developed a bold legal approach in high-profile police misconduct cases. These days, she applies that same passion and energy to the impassive administrative hearings that govern utility regulation. She will often rattle off lines uttered in dry utility depositions as if they were as interesting and inflammatory as a murder confession.
Her style of lawyering has been known to irk those involved in the buttoned-up utility proceedings. One op-ed writer said she had a “desire for publicity”; another wrote off her positions as “vindictive politics.” But the slight she wears most proudly is one uttered by PNM’s vice president of public policy: “chief adversary.”
Still, she often wins in court and in the commission meetings where energy-regulation decisions are made. Her mission goes beyond renewable energy, to ending what she sees as New Mexico’s role as an “energy colony.” She wants to see the public own and control the flow of electricity, rather than the large companies that have historically done so.
“[They’re] coming here so [they] can exploit New Mexico and extract its resources and sell it to other people,” she said. “But what if that were New Mexico’s money?”
Her uncompromising pursuit of that vision has put her at odds with environmental groups. It’s even more often pitted her against PNM executives, who she sees as willing to subvert the needs of the New Mexican public in pursuit of profit.
“I do hate them, but I hate them because they are liars and cheaters and they steal from the poorest people,” she said.
For Nanasi, the battle over the proposed merger is a culmination of everything she’s ever fought for, one that will decide whether New Mexico doubles down on its current energy model or works toward something new.
In October 2020, PNM and Avangrid, an energy company with utilities and generation facilities in 24 states, announced their intentions to merge. The $8.3 billion deal is worth 20 times PNM’s projected earnings next year and would deliver a $713 million cash buyout to company shareholders. The merger would make PNM a subsidiary of Avangrid, which is itself a subsidiary of Iberdrola, a Spanish company with $38 billion in revenues and energy operations around the world.
It would make PNM a part of the international energy market, instead of just the biggest fish in New Mexico’s relatively small pond. The companies argue it would also be a move to clean up PNM’s fossil-fuel-riddled legacy.
PNM, which provides electricity to some 800,000 homes and businesses, is one of the most influential companies in New Mexico. It is one of the largest corporate contributors to state elections, outspent only by Chevron and Devon Energy since 2014. PNM and lobbyists affiliated with the company gave more than $50,000 to Michelle Lujan Grisham’s campaign for governor, making them one of her largest contributors. They’ve poured hundreds of thousands of dollars into elections for the Public Regulation Commission, PNM’s own regulating body, and to dark money groups linked to election spending in New Mexico.
The company makes no secret of its disdain for New Energy Economy. PNM executives have publicly admonished Nanasi, while shareholders once took out a full-page newspaper ad directly attacking her.
“No matter what proposal it is, whether it’s a good proposal or a bad proposal, if it has PNM’s name attached to it, automatically New Energy Economy is against it,” said PNM spokesman Ray Sandoval in an interview with Searchlight New Mexico.
PNM executives are usually tight-lipped about the company’s political spending, most of which is coordinated through an employee-funded PAC. In the 2018 election, the PAC poured $165,150 into state races. When asked about the company’s political influence, CEO Patricia Vincent-Collawn said its aim was purely educational.
“Michelle — excuse me — Governor Lujan Grisham has always been open to education and learning,” said Vincent-Collawn, who has personally given at least $6,000 to Lujan Grisham’s past congressional campaigns. “It happens that our visions are aligned, but I don’t think any contributions we would give to the governor would make any influence on her.”
The governor’s campaign also downplays the significance of these donations.
“Campaign donations have no effect on policy and to imply otherwise is a disservice to the groundbreaking work made by the governor,” said Kendall Witmer, a spokesperson for the Lujan Grisham campaign.
Utilities typically wield outsized influence in state government; many are allowed competition-free monopolies in return for state regulation. They often own large portions of the infrastructure that goes into generating and delivering electricity; the more they own, the more they can charge customers, making big investments economically appealing.
Nanasi sees this as a perverse incentive for utilities to invest in large, costly fossil-fuel infrastructure. It is one of the driving forces holding back the expansion of clean energy, she says, arguing that renewables — particularly solar energy — threaten this century-old utility system. Rather than shift their business models, many utilities in the U.S. have worked to rig the carbon-free energy transition in their favor, pushing for bailouts or laws that stifle competition.
For example, in 2020, federal agents uncovered a $60 million bribery scheme orchestrated by an Ohio state representative and the utility FirstEnergy Solutions to pass a massive bailout. Investigations by media and law enforcement have uncovered dark money groups funded by utilities in Michigan, Arizona, Wyoming and others, as well as a bribery scheme in Illinois where executives arranged payments to elected officials.
PNM hasn’t been implicated in illegal schemes, and its spending habits are common in modern politics. While PNM and its allies have lobbied for policies that help its bottom line, leaders say their aim is building a climate-friendly, affordable electricity system.
“I would argue that the private sector is better at facilitating the growth, infrastructure and the modernization of the grid than government,” Sandoval said. “I think this is kind of the best of both worlds, when you’re talking about how capitalism and government can coexist in a way that provides one of the most important commodities we could ever have.”
That’s exactly the worldview Nanasi rejects.
“I went into this work thinking about it as climate work, as the transition from coal to renewables.” Instead, she said, “it’s about energy democracy and it’s about a war on poor people.”
Many people take exception and say that rather than helping, Nanasi’s refusal to compromise has actually slowed down the transition to clean, affordable energy and could hold back the promised $115.5 million in rate relief and economic aid for vulnerable communities in the merger deal. They aren’t sure about Nanasi’s idea for public power, either.
“This is a nice idea, but in practice it’s incredibly difficult,” said Ona Porter, executive director of Prosperity Works, an Albuquerque nonprofit that works with PNM to help low-income households reduce their electricity bills. The group signed on in support of the merger in April after PNM included $15 million for efficiency programs.
Others see it in even starker terms.
“I don’t consider [New Energy Economy] to be an environmental advocate. I think they are a group that is trying to reorganize the economic structure,” said Steve Michel, with the clean-energy program at Western Resource Advocates. “And I think that’s dangerous.”
As Nanasi sees it, the real lead-up to the merger started in 2016, years before PNM and Avangrid reached the negotiating table. That year, New Energy Economy challenged PNM’s request to raise its rates in a case before the Public Regulation Commission, an elected five-member board that regulates the state utilities.
PNM wanted ratepayers to reimburse them for $148 million it had spent on pollution controls and upgrades for the Four Corners Power Plant on the Navajo Nation. Nanasi wasn’t having it. She argued that PNM’s decision to reinvest in a dirty coal plant not only damaged the environment, but amounted to bad budgeting — and that utility customers should not be held responsible.
PNM lawyers pointed to a software model that showed that reinvesting in the plant was the most economical option for electricity. But where PNM claimed the software was pulling the strings, Nanasi saw dollar signs. The utility, she argued, had an incentive to reinvest in the plant because it could charge customers for those expenses.
Her experts testified that the software was outdated and its calculations flawed. She won when the PRC administrators agreed with her.
But that was only round one. When the ruling went up for a vote, the full commission decided to defer the decision, buying the utility time. In 2019, the company turned to the state’s legislature, pushing members to pass the Energy Transition Act. The bill set New Mexico on a path toward carbon-free electricity, but it also included language that would allow utilities to pass the cost for past investments on to ratepayers when coal plants are abandoned.
Environmental groups have touted the law as one of the best environmental bills in New Mexico history.
“All they needed to hear was that it was fossil-free by 2045. They didn’t care about anything else or whether the rest of it was a good deal or a bad deal,” said Bill Tallman, an Albuquerque state senator who derided the bill as a “sweetheart deal for PNM.”
In the end, though, he supported the bill, as did nearly everyone else in state government.
Nanasi and New Energy Economy stood alone in their opposition to the ETA, warning that PNM would use it to subvert the PRC ruling on Four Corners. Environment groups including Western Resource Advocates called Nanasi’s fears hysterical, but in the end her warnings proved true.
Last year, PNM filed to abandon Four Corners during its negotiations with Avangrid. If the plan goes forward, the coal plant will continue to operate under a different owner. Citing the ETA, the utility is seeking to recoup all of its investments in the plant, including those that the PRC initially ruled were poor financial decisions.
To Nanasi, the fight over how to pay for Four Corners demonstrates just how much power PNM has and how often its decisions go unchallenged. Other groups, she says, settle for too little and allow PNM to get away with too much.
Nanasi’s preoccupation with justice began long before she even knew of PNM’s existence.
“When there has always presented a road less traveled with more obstacles against harsher odds, my mother has always chosen that instead of taking crumbs at the table,” said Justin, her 28-year-old son.
She got her start in law in the early ’90s, working on civil rights and police misconduct cases in Chicago. Her courtroom clashes with the Chicago Police Department often wound up in local newspapers and they bear resemblance to her more recent spats with PNM. When Justin was a newborn, she carried him on her back to a protest for LGBT rights.
“It’s not that she’s not willing to make a deal, but that there are certain principles she will not compromise on,” said her husband Jeff Haas, one of the founders of the People’s Law Office, well-known for its defense of activists, Puerto Rican nationalists and Black Panthers. He says she’s made enemies of many of the environmental groups in the state, in spite of their shared focus on climate change. “I think that does take a personal toll, because she gets blamed for the fact that she’s really standing up for the principles that they all should be fighting for.”
Nanasi first fell in love with New Mexico on a ski trip to Taos in college. She came back year after year with her family, and finally in 2001, they decided to move to the state full time.
“I think being closer to nature and the risks that are so apparent here with drought and forest fires and heat and a changing climate, I think it had a big, big, big impact on shifting her focus,” said Haas.
She began volunteering with New Energy Economy, and in 2010 she became its executive director. In those early days, New Energy Economy often aligned with other environmental groups in the state. She teamed up with groups like the Sierra Club and the Environmental Law Center to fight coal power and create carbon markets.
“How could I look my children in their eyes and not say that I tried to do something about this?” Nanasi said.
But the more Nanasi fought against fossil fuels, the more her focus began to shift to the arcane dealings of the Public Regulation Commission, which has to sign off on rate increases and other issues. The commission operates in public with elected officials at the helm, and to a casual observer, it’s difficult to see anything nefarious playing out in the reams of hearing documents full of dry testimony and legal citations.
But Nanasi has a gift for taking these boring legal details and crafting them into a compelling narrative. She can quote specific lines from PRC hearings from years prior. In interviews, she will often go on profanity-laden tirades that synthesize several hundred pages of court documents and incorporate anecdotes on how each case was reported in the news.
In early hearings about the PNM-Avangrid merger, she dug into the company’s past and brought attention to $60 million in fines levied against Avangrid’s subsidiary in Maine for poor service.
Then, in July, Nanasi filed a complaint with state ethics authorities regarding Attorney General Hector Balderas’ actions in the merger hearings. Building a case from hundreds of public records and through questions made in the legal discovery process, Nanasi alleged that Balderas — who represents utility customers’ interests in the merger hearings — agreed to sign on to the deal at the request of Marcus Real, a lawyer for Iberdrola and a close friend.
A spokesman for Balderas called the corruption accusations a “sideshow,” but the hearing examiner charged with overseeing the case, Ashley Schannauer, sided with Nanasi.
Avangrid’s failure to disclose its problems in Maine delayed the merger hearings for months so parties could review thousands of additional pages of documents. In early August, Schannauer ruled that there was a clear conflict of interest with Iberdrola’s lawyer and ordered Rael to step down.
Even so, PNM executives continue to dismiss Nanasi’s argument as nonsense. In public hearings and editorial pages of local papers, supporters of the merger call the issues Nanasi raises distractions or radical drivel.
After months of evidence gathering and witness questioning, the public hearings for the merger started earlier this month. If the deal goes through, PNM will become just a small piece of a global energy conglomerate and Nanasi’s dream of publicly owned power will slip further away.
The day of the first live-streamed hearing, Nanasi wore a pastel tweed jacket, her long hair pulled back from her face, a bookshelf as her background. In the quiet moments of the hearing, her face floated in the bottom corner of the screen — just one more muted talking head. But called to speak, her energy and disdain for the opposing lawyers was palpable. After a PNM lawyer unleashed a string of objections to her argument, she dramatically rolled her eyes before explaining her reasoning for presenting certain evidence.
As one of the only parties opposing the merger, Nanasi’s role can seem outsized when watching the hearings. Though she may lack the support of prominent environmental groups, Nanasi is not alone. As the hearings began, a solar engineer who grew up in New Mexico sent New Energy Economy $150 and a reminder: “Fight, Fight, Fight.”
A decision on the merger is expected any day.
Lindsay Fendt got her start covering the environment as a reporter for The Tico Times in San José, Costa Rica. She covered human rights, immigration and the environment throughout Latin America before moving to Colorado in 2017 for the Scripps Fellowship in Environmental Journalism at the University of Colorado. Before joining Searchlight Lindsay worked as a freelancer and is finishing a book about the global rise of murders of environmentalists.