(Above: SGDB images/HN edits)
According to their website, SaveDowses.org, Save Greater Dowses Beach (SGDB) “is a public, grassroots group working to prevent the use of this Cape Cod treasure (and others!) as sites for high-capacity electrical cables.” They believe that running 1200-megawatt windfarm electrical cables under Dowses Beach is a flawed plan.
“SGDB, a nonprofit 501(c)(4) organization, was founded in 2022 by Susanne Conley and Stacey Guenther. We have a small steering committee of about 12 members. However, we have very broad support. Over 6,000 people have signed our petition opposing the Commonwealth Wind project landing at Dowses Beach,” according to a written statement from Hector Guenther of SGDB.
BARNSTABLE, MASSACHUSETTS – [SGDB MEDIA STATEMENT] – The May 17, 2024 announcement of Iberdrola, S.A.’s proposal to acquire the 18.4% of outstanding minority shares – approximately 71.4 million shares – of Avangrid, Inc. for $2.55 billion has sparked significant discussion and raised critical issues and questions among investors, state regulators and power industry experts – and among citizens groups and residents of Cape Cod who oppose Avangrid’s offshore wind projects off the New England coast.
Background of the Acquisition
Iberdrola, which currently owns approximately 81.6% of Avangrid, has offered $35.75 per share to acquire the remaining 18.4% of shares it does not already own. Avangrid is holding its annual meeting at 125 High Street, Boston, Massachusetts at 8:30 a.m. on Thursday, September 26, 2024, to seek shareholder approval for this transaction.
Key Questions and Concerns
1. Diminished Transparency into Avangrid’s Start-Up Offshore Wind (OSW) Venture in the U.S. Many citizens groups in New England are opposing Avangrid’s OSW projects.
Offshore, activists cite the industrialization of the Atlantic Ocean, damage to fishery grounds and harms to whales and other sea life.
Onshore, there are many questions and risk issues regarding:
a. environmental damage to coastal communities hosting the associated infrastructure, including degradation of ecologically sensitive beaches (e.g., the July 13 blade failure on a brand-new wind turbine near Nantucket) and massive new substations being built on top of wellhead protection zones;
b. threats to human health and safety from 24-hour-a-day, 7-days-a week electromagnetic radiation from extra high voltage cables and possible contamination of Cape Cod’s Sole Source Aquifer by toxic substation coolants;
c. permanent damage to host community property values and tax revenues;
d. economic harms to host coastal communities that are heavily reliant on tourism; and
e. extreme financial risks to host communities arising from each OSW project’s limited liability company, or LLC, structure, which absolves Avangrid, Inc. from liability or financial responsibility in case of environmental, public health or economic catastrophe.
Because offshore wind is a brand-new business for Avangrid, it’s critical for investors and ratepayers to be able to monitor the company’s financial and risk management performance. However, after transaction closing, investors, industry experts, consumers and the media will no longer have access to Avangrid’s filings with the U.S. Securities and Exchange Commission, as the company will no longer file with the SEC.
2. Valuation and Fairness. While the offer price of $35.75 per share represents a slight premium, questions remain about whether this valuation truly reflects the long-term potential and intrinsic value of Avangrid. Are minority shareholders receiving a fair deal, or could the company be undervalued given its strategic position in the renewable energy sector?
3. Impact on Minority Shareholders. The acquisition will delist Avangrid, Inc. from the New York Stock Exchange. What protections and assurances are in place for minority shareholders who may be forced to sell their shares? How will their interests be safeguarded during this process?
4. Missing Regulatory Approvals. The transaction has been approved by the Federal Energy Regulatory Commission, while the Maine Public Utilities Commission declined to conduct a full review of the deal. However, Attorney General William Tong has filed with Connecticut utility regulators, seeking a full review of the proposed deal
[https:] It’s unclear whether or if Avangrid has sought approval from Massachusetts and New York utility regulators.
If not, why not? What are the potential hurdles in obtaining these approvals? How might they impact the timeline and completion of the acquisition?
5. Benefits to U.S. Customers of Avangrid’s Utility Operations. Iberdrola has emphasized its commitment to expanding its presence in the U.S. market and enhancing its renewable energy business. However, how, if at all, will this acquisition of minority shares benefit ratepayers and customers of Avangrid’s regulated electric and gas utilities in Maine, Massachusetts, Connecticut and New York. And what specific strategic benefits does Iberdrola anticipate from this acquisition?
6. Diversion of Investment Funds. The acquisition involves a significant cash outlay, over $2.5 billion, for Iberdrola. Why isn’t Iberdrola investing this sum in upgrades to its electric and gas operations in the affected states? Will this expenditure damage Iberdrola’s ability to invest in future U.S. projects?
Conclusion
As this transaction proceeds, it is crucial for all stakeholders, especially taxpayers, ratepayers and residents of the communities affected, to have a clear understanding of the implications and benefits. Transparency and open communication with the media and the investment community will be key in addressing these questions and ensuring that the interests of all parties are considered.
About Avangrid, Inc.
Avangrid, Inc. is a U.S. utility company whose core business is regulated electric and gas utilities in Connecticut, Maine, Massachusetts and New York. Avangrid’s regulated utility operations accounted for 87% of 2023 customer revenues. Avangrid also manages a renewables business in various states.
About Iberdrola, S.A.
Iberdrola, S.A., based in Bilbao, Spain, is one of the world’s top three electricity companies.
