NMPRC Approves PNM Distribution Battery Storage Projects

Rhea-AI Summary

PNM Resources (NYSE: PNM) to Install 12 Megawatts of Utility-Owned Battery Storage for Grid Modernization and Expansion

Insights

Energy Industry Analyst

The recent approval by the New Mexico Public Regulation Commission for the Public Service Company of New Mexico to install 12 megawatts of distribution-level battery storage represents a significant step in grid modernization. This initiative, part of a broader grid and distribution investment plan, is poised to enhance the reliability and resilience of the electrical grid while facilitating the integration of more renewable energy sources.

From a financial perspective, the $26 million capital expenditure for this project is a substantial investment by PNM Resources, which should be evaluated against the potential benefits of improved grid performance and the facilitation of a clean energy transition. The expected operational date in 2024 indicates a relatively short-term horizon for realizing project benefits.

The strategic move towards emissions-free energy by 2040 aligns with broader industry trends towards sustainability and could potentially position PNM Resources favorably in the market. However, the capital outlay and operational risks associated with the deployment of new technologies must be carefully managed to ensure shareholder value is not adversely affected in the long term.

Financial Analyst

The approval of PNM's battery storage project is a noteworthy development for investors, indicating a proactive approach to addressing infrastructure constraints and meeting the growing demand for electricity. The unopposed proposal suggests a consensus on the necessity of these investments among stakeholders, potentially reducing regulatory risks.

Investors should consider the impact of this $26 million investment on PNM Resources' financials, particularly in terms of capital allocation and return on investment. While the investment may lead to increased operational efficiency and cost savings in the long run, the immediate effect on the company's balance sheet and future earnings should be monitored closely.

It is also essential to assess the broader implications of such investments on the company's competitive position within the energy sector, particularly as it transitions towards renewable energy sources and seeks to meet its emissions-free target by 2040.

Sustainability Expert

PNM Resources' initiative to incorporate battery storage into its grid represents a commitment to sustainability and resilience in the energy sector. The move towards accommodating more renewable energy is in line with global efforts to reduce carbon emissions and combat climate change.

For stakeholders, the long-term benefits include a more reliable energy supply and the potential for cleaner energy production. However, the transition to a greener grid involves not only financial investment but also technological innovation, which carries inherent risks and uncertainties.

Understanding the lifecycle of battery storage systems, including their environmental impact and end-of-life disposal, is crucial for a comprehensive sustainability assessment. The long-term goal of achieving 100% emissions-free energy by 2040 is ambitious and will require continuous investment and innovation in renewable energy technologies.

ALBUQUERQUE, N.M., Dec. 26, 2023 /PRNewswire/ -- The New Mexico Public Regulation Commission (NMPRC) approved the application from Public Service Company of New Mexico (PNM), wholly-owned subsidiary of PNM Resources (NYSE: PNM), to install 12 megawatts of utility owned distribution-level battery storage to expand the capacity of overloaded feeders at two locations.

This innovative solution supports reliability and resilience of the grid and accommodates more renewable energy. PNM indicated this type of solution could be implemented more broadly across its system. In the decision, the NMPRC pointed towards the evaluation of further installations in the broader context of grid modernization and distribution investment plans.

"We are pleased with the Commission's approval of these projects and support for broader discussions on distribution and grid modernization investments," said Pat Vincent-Collawn, CEO of PNM. "As we look forward, we continue to see a need for increased investments to meet growing demand with a reliable and resilient grid through this clean energy transition."

The 12-megawatt battery project reflects $26 million of capital expenditures included in PNM's investment plans and is expected to be operational in 2024. The proposal was unopposed by intervening parties.

The NMPRC decision and additional materials pertaining to the filing are available at https://www.pnmresources.com/investors/rates-and-filings.aspx.

Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2022 consolidated operating revenues of $2.2 billion. Through its regulated utilities, PNM and TNMP, PNM Resources provides electricity to more than 800,000 homes and businesses in New Mexico and Texas. PNM serves its customers with a diverse mix of generation and purchased power resources totaling 2.7 gigawatts of capacity, with a goal to achieve 100% emissions-free energy by 2040. For more information, visit the company's website at www.PNMResources.com.

Contacts:
Analysts	Media
Lisa Goodman	Ray Sandoval
(505) 241-2160	(505) 241-2782

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release for PNM Resources, Inc. ("PNMR"), Public Service Company of New Mexico ("PNM"), or Texas-New Mexico Power Company ("TNMP") (collectively, the "Company") that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies, including the unaudited financial results and earnings guidance, are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and apply only as of the date of this report. PNMR, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. Additionally, there are risks and uncertainties in connection with the proposed acquisition of the Company  by Avangrid, Inc. (the "Merger") which may adversely affect the Company's business, future opportunities, employees and common stock, including without limitation, (i) the expected timing and likelihood of completion of the pending Merger, including the timing, receipt and terms and conditions of any remaining required governmental and regulatory approvals of the pending Merger that could reduce anticipated benefits or cause the parties to abandon the transaction, (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iii) the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, and (iv) the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Forms 8-K with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.   

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SOURCE PNM Resources, Inc.

FAQ

What did the New Mexico Public Regulation Commission approve for PNM Resources (NYSE: PNM)?

The NMPRC approved PNM's application to install 12 megawatts of utility-owned distribution-level battery storage to expand the capacity of overloaded feeders at two locations.

What is the purpose of the battery storage installation approved by NMPRC for PNM Resources (NYSE: PNM)?

The installation supports reliability and resilience of the grid and accommodates more renewable energy, with the potential for broader implementation across PNM's system.

What is the expected cost of the 12-megawatt battery project for PNM Resources (NYSE: PNM)?

The project reflects $26 million of capital expenditures included in PNM's investment plans and is expected to be operational in 2024.

How many homes and businesses does PNM Resources (NYSE: PNM) provide electricity to?

PNM and TNMP provide electricity to more than 800,000 homes and businesses in New Mexico and Texas.

What is the goal of PNM Resources (NYSE: PNM) regarding emissions-free energy?

The goal is to achieve 100% emissions-free energy by 2040.