ENERGY
Bernhard asks regulators to strip some redactions from report on gas company sale
In filing, the Louisiana firm says 鈥榩ublic disclosure also serves the public interest鈥�
Bernhard Capital Partners asked the state Public Regulation Commission on Thursday to remove some redactions from a report by two hearing examiners recommending that commissioners approve a $1.25 billion sale of New Mexico鈥檚 largest gas utility.
The move by Bernhard, which is in a bid before regulators to purchase New Mexico Gas Co. from the Canadian energy company Emera Group, follows a Journal investigation showing that PRC officials had redacted portions of the hearing examiners鈥� report concerning public policy issues such as jurisdiction.
But in a filing Thursday, Bernhard asked regulators to remove redactions from many 鈥� but not all 鈥� of the passages quoted by the Journal鈥檚 June 21 investigation.
鈥淭he BCP Applicants appreciate the Hearing Examiners鈥� care in preserving confidentiality of confidential material in this proceeding,鈥� Bernhard wrote.
鈥淧ublic disclosure also serves the public interest,鈥� Bernhard wrote in the filing. 鈥淒e-designating and un-redacting the material at issue will promote transparency without compromising any protected information.鈥�
Patrick Rodriguez, a PRC spokesperson, declined for a second time to identify who made the redactions to the report.
鈥淭he Commission will review the Joint Applicants鈥� request to remove the redactions and will issue an order after allowing time for other parties to respond,鈥� Rodriguez said. 鈥淚t鈥檚 also worth noting that the Joint Applicants initially asked for certain information to remain confidential. If they now choose to make that information public, that decision is solely theirs to make.鈥�
Some information Bernhard wants unredacted includes passages in which hearing examiners questioned whether the firm had secured equity commitments from its investment funds.
鈥淔inancially, the (purchase sales agreement) depends on the equity contributions of the BCP entity sponsors,鈥� the hearing examiners wrote in one passage Bernhard asked the commission to make public.
Other passages that Bernhard asked to be unredacted concerned the public policy issue of whether the commission has jurisdiction over the funds.
But Bernhard wants other passages to remain redacted. Bernhard declined to answer the Journal鈥檚 questions about why that is so.
Those redactions concern information about how much and which of Bernhard鈥檚 funds will contribute money in exchange for stakes in the gas company.
For instance, Bernhard wants the following passage to remain out of public view:
鈥淎t a downstream level, the original equity sponsors for Saturn HoldCo to purchase NMGC Group are other funds managed by BCP Management.鈥�
The PRC redacted all but the first four words of that passage in its public report.
In the passage, examiners suggest that the equity sponsors of the deal 鈥� the investors that will pony up the nearly $450 million to finance the purchase of a parent company of the utility, NMGC Group 鈥� are other funds managed by Bernhard that may not have participated in the regulatory proceedings. Saturn HoldCo is a limited liability company set up for the sale.
鈥淭he internal mechanisms of how these entities relate to one another has a determinative impact on whether the proposed transaction is in the public interest,鈥� the hearing examiners wrote in an unredacted passage.
Bernhard also wants the equity allocation share 鈥� how much each of its six funds will contribute to the nearly $450 million in equity financing 鈥� kept secret.
Bernhard consulted other parties in the case about its filing. The firm secured support from groups such as the Coalition for Clean Affordable Energy, Western Resource Advocates and state and federal officials.
The filing said the New Mexico Department of Justice 鈥� whose Attorney General Ra煤l Torrez has expressed concerns about the sale 鈥� consented to the request.
New Energy Economy told Bernhard that it 鈥渙pposed the request because it does not seek to have the entire recommended decision unredacted.鈥�
Mariel Nanasi, executive director of the nonprofit, which opposes the sale, filed a June 22 motion in the gas company acquisition case. She pointed to a state Supreme Court decision in an American Civil Liberties Union lawsuit against the New Mexico Corrections Department.
The local ACLU had sued the state over violations of the Inspection of Public Records Act, the state鈥檚 law that requires governmental bodies to disclose records.
鈥淭he court held that exceptions to disclosure must be narrowly construed and that government agencies may not create secrecy merely by labeling information confidential,鈥� Nanasi wrote in her filing, describing the ruling.
She added that, in the gas company acquisition, the 鈥渋dentity of the entities that may own, finance, influence, govern, or control NMGC, their ownership percentages, governance rights, veto powers, control rights and affiliate relationships are not peripheral business details.鈥�
鈥淭hey are essential 鈥� to the public鈥檚 ability to understand whether the Commission is preserving its jurisdiction and verifying the qualifications and financial health of the proposed new owner,鈥� Nanasi鈥檚 filing added.
Justin Horwath covers tech and energy for the Journal. He can be reached at jhorwath@abqjournal.com.
