For utilities and the clean energy sector, 2024 could bring “an exceptional level of volatility and opportunity,” according to Bank of America Global Research analysts. Avangrid had the opportunity to become one of the biggest companies in the US utilities sector but passed on that when they cancelled the merger with Public Service Company of New Mexico (PNM). “We are greatly disappointed with Avangrid’s decision to terminate the merger agreement and its proposed benefits to our customers and communities,” Pat Vincent-Collawn, PNM Resources Chairman and CEO, said in a press release. Avangrid promised continued loyalty to providing clean energy in the area. “While our merger agreement with PNM has been terminated, we remain more than ever steadfast in our commitment to New Mexico in the development of wind and solar renewables, helping explore options in the new hydrogen economy, and delivering on the partnership with the Navajo Nation to achieve its clean energy future,” Avangrid said in a statement.
Uncertainty didn’t stop Enbridge Inc. from purchasing three U.S.-based utility companies — the East Ohio Gas Company, Questar Gas Company and its related Wexpro companies, and the Public Service Company of North Carolina. The company made a US$14 billion cash-and-debt deal that will double the scale of Enbridge’s gas utility and make it the largest by volume in North America.
The downfalls of such a large merger was expressed by Abe Silverman, a former Federal Energy Regulatory Commission member. “The perceived trade-off is that utility commissions lose control when large multinational utilities take over the local utility and that their ability to address things like service quality decreases. For years, utility commissions regularly signed off on mergers so long as there were customer savings. But increasingly, there’s a sense that those mergers exacted a toll on local consumers that goes beyond dollars and cents,” Silverman said.
When companies get big, some people get nervous and others are advocating for an end to utility monopolies. The current utility system was meant to protect customers from unjust energy prices, but many today feel that structure has outlived its original purpose. During ‘an exceptional level of volatility and opportunity,’ it’s hard to be optimistic.
Enbridge Inc. will layoff some 650 employees. “Persistent headwinds – including higher interest rates, economic uncertainty and the ripple effects of geopolitical developments – all contribute to increasingly challenging business conditions across many industries,” said Enbridge spokeswoman Gina Sutherland.