NMPRC Issues Decision in PNM Rate Review

ALBUQUERQUE, N.M., Jan. 4, 2024 /PRNewswire/ -- The New Mexico Public Regulation Commission (NMPRC) issued an order in the application for a 2024 change in customer base rates by Public Service Company of New Mexico (PNM), a wholly-owned subsidiary of PNM Resources (NYSE: PNM).

The order modified the recommended decision in the case and equates to an estimated increase in base rates of $15.3 million, based on a 9.26% return on equity and a 50% equity capitalization structure on $2,557 million of rate base. PNM had requested a $63.8 million increase to base rates. PNM's current authorized rates are based on a 9.575% return on equity with a 50% equity capitalization ratio.

"We are disappointed with this outcome after holding rates steady for the past six years," said Pat Vincent-Collawn, Chairman and CEO of PNM Resources. "The transition to clean energy means our system is changing rapidly, requiring investments to upgrade the grid to maintain reliability while bringing solutions to customers at affordable prices. As we move forward it will require collaboration by stakeholders to achieve the clean energy transition while preserving the financial health of the utility." 

In addition to the changes made to the return on equity and equity capitalization structure, the final order also includes adjustments related to traditional legacy power sources:

• Disallowance of $64 million net rate base investments in the Four Corners coal plant,
• No return on $39 million of rate base associated with the Palo Verde leasehold improvements regulatory asset, as well as a
• Separate rate rider to refund $38 million associated with expiration of Palo Verde leases over two years.

The order also postpones recovery of $55 million of rate base investments that may be requested again in PNM's next filing and $9 million of adjustments to forecasted annual costs.

PNM will evaluate the final order and consider its next steps, including the potential appeal of certain issues.  Additionally, PNM plans to file its next rate case during 2024 with rates requested to be implemented during 2025.

ADDITIONAL DETAILS ON WEBSITE
Additional information detailing the estimated ongoing earnings impacts of the order, including continuation of the 5% long-term earnings growth target, are available at https://www.pnmresources.com/investors/events-and-presentations.aspx.

Customer rates under the order are expected to take effect in January 2024.  The order and additional materials pertaining to the filings 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:

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. 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.