TNMP Receives Approval for Distribution Investment Recovery

Rhea-AI Summary

The Public Utility Commission of Texas (PUCT) has granted Texas-New Mexico Power Company (TNMP), a subsidiary of PNM Resources (NYSE: PNM), approval to recover over $205 million in net distribution infrastructure investments. TNMP's Distribution Cost Recovery Factor (DCRF) application filed in April 2024 was approved, allowing for a $15.7 million annual rate increase effective July 28, 2024. Recent legislation will enable semi-annual filings, reducing regulatory delays. This approval supports TNMP's investment strategy for reliable growth. PNM Resources, an energy holding company, reported $1.9 billion in revenue in 2023 and serves over 800,000 customers in Texas and New Mexico.

Positive

• Approval to recover over $205 million in net distribution infrastructure investments.
• Allowed $15.7 million annual rate increase effective July 28, 2024.
• New legislation enables semi-annual filings, reducing regulatory delays.
• Recovery plan supports TNMP's robust investment strategy for reliable growth.
• PNM Resources reported $1.9 billion in revenue in 2023.

Negative

• None reported within the provided press release.

Insights

Financial Analyst

The approval of TNMP's Distribution Cost Recovery Factor (DCRF) application is significant due to the $205 million in net distribution infrastructure investments that will now be recovered. The immediate annual increase of $15.7 million in rates effective from July 28, 2024, indicates a boost in revenue, which should positively impact the company's financial health in the near term. This is primarily relevant for stakeholders interested in the company's revenue stability and growth prospects. It's important to note that the semi-annual filing process will reduce regulatory delays, resulting in more efficient capital recovery. In comparison to industry norms, such measures are favorable, as they facilitate quicker adaptation to infrastructure needs and evolving market conditions. For retail investors, this approval signifies a more stable and potentially profitable investment environment for PNM Resources.

Market Research Analyst

The market context surrounding the approval is equally important. The transition to semi-annual filings, permitted by recent legislation, signals a more streamlined regulatory landscape in Texas. This reduces the regulatory lag traditionally associated with capital recovery, thus allowing TNMP to better align their investments with market demands and growth opportunities. Such regulatory agility is likely to position TNMP and its parent company, PNM Resources, favorably within the market. The ability to support reliable growth across their service territory ensures not only customer satisfaction but also fortifies their competitive edge. For investors, this regulatory change represents a strategic advantage, potentially leading to higher market valuations and better return on investments over time.

ALBUQUERQUE, N.M., June 14, 2024 /PRNewswire/ -- The Public Utility Commission of Texas (PUCT) approved the application from Texas-New Mexico Power Company (TNMP), the Texas utility subsidiary of PNM Resources, Inc. (NYSE: PNM), to recover over $205 million in net distribution infrastructure investments to reliably serve customers' power needs since its last filing.

TNMP filed the Distribution Cost Recovery Factor (DCRF) application in April 2024 and received approval for the requested $15.7 million increase (on an annual basis) with rates effective July 28, 2024. 

Legislation passed during the 2023 Texas legislative session permits the historically annual filings on a semi-annual basis, further reducing regulatory lag associated with distribution capital investments. Recovery of investments under these filings, combined with recovery of transmission investments under semi-annual Transmission Cost of Service Filings, continues to support the robust investment plan to support reliable growth across the TNMP service territory.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2023 consolidated operating revenues of $1.9 billion. Through its regulated utilities, TNMP and PNM, PNM Resources provides electricity to more than 800,000 homes and businesses in Texas and New Mexico. PNM serves its customers with a diverse mix of generation and purchased power resources totaling 3.3 gigawatts of installed 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	Corporate Communications
(505) 241-2160	(505) 241-2783

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SOURCE PNM Resources, Inc.

FAQ

What did the Public Utility Commission of Texas approve for TNMP?

The PUCT approved TNMP's application to recover over $205 million in net distribution infrastructure investments.

When did TNMP file the Distribution Cost Recovery Factor application?

TNMP filed the DCRF application in April 2024.

How much of a rate increase did TNMP get approved for?

TNMP was approved for a $15.7 million annual rate increase.

When will the new rates for TNMP be effective?

The new rates will be effective on July 28, 2024.

How will the recent legislation impact TNMP's filings?

The legislation allows for semi-annual filings, reducing regulatory delays.

What is the ticker symbol for PNM Resources?

The ticker symbol for PNM Resources is PNM.