Talks for new TNMP franchise agreement on hold

Jay Hinton
Glen Rose Reporter

GLEN ROSE — Earlier this year, Glen Rose City Administrator Michael Leamons sent a letter to Texas-New Mexico Power in hopes of renegotiating the city’s franchise agreement, but the proposal was shot down — at least for now.

According to a letter sent to the city, TNMP President Neal Walker said the company can’t do anything because TNMP’s parent is being acquired, and “as is typical with such transactions, TNMP, as one of the acquired entities, is required to operate day-to-day operations consistent with TNMP’s standard practices,” he wrote.

In his letter earlier this year, Leamons was asking for an increase from the 2% agreement to 4-5%. The city, however, still has 18 years left in a 50-year franchise agreement.

“Historically, TNMP has typically instituted franchise agreements during the year prior to expiration,” and “initiating a renegotiation at this time would significantly deviate from standard practice,” Walker wrote.

However, it appears he left the door open for discussions once all regulatory reviews have been completed for the acquisition and the transaction closes,  “I expect to have the discretion to discuss the Glen Rose franchise agreement,” Walker wrote.

“This past spring we negotiated a new 4% franchise fee with United Electric Co-op.  Since franchise fees are shared by all of TNMP's customers, it seems only fair that they would provide the same terms to all their municipal customers,” Leamons said. “Four percent to 5% franchise fees seem to be the current industry standard.”

Leamons is hoping by the end of 2021, those discussions can take place, among other current issues.

“We have been disappointed with TNMP here of late,” Leamons said. “The number of power outages we experienced is inexcusable. Some were out of their control, but some were preventable.”

On its website in September, TNMP acknowledged the many outages Glen Rose residents had been affected with, and it said, “a major capital investment project to rebuild and upgrade the Glen Rose substation has been under way since July. This improvement will enable TNMP to meet increased electricity demand in the region with updated equipment that will improve reliability. The finishing touches on the substation are estimated to be complete by Dec. 15.”

While substation upgrades have occurred, Leamons said the company didn’t follow the city of Glen Rose’s zoning ordinances requiring solid fences be erected as a barrier between residential and commercial districts.

“I have received some complaints about the noise being generated by the upgraded substation and had hoped the solid fence would help muffle the noise,” he said.

TNMP installed a new chain link fences, and Leamons said he was informed by the company “that due to special laws regarding utility providers that they didn't have to install the enhanced fencing.”

“So recently, on many fronts TNMP has proven to be a major disappointment,” Leamons said. “I hope this isn't a token of the way it will be going forward working with a company based in Connecticut, the majority of whose shareholders are located in Spain.

“After the holidays are past, I expect we will be taking our grievances to TNMP in hopes of obtaining some relief,” he said.