TNMP Receives Approval for Incremental Rate Base Recovery Applications

Rhea-AI Summary

TNMP, a subsidiary of TXNM Energy, Inc. (NYSE: TXNM), has received approval from the Public Utility Commission of Texas (PUCT) for two rate base recovery applications. The first, a Transmission Cost of Service (TCOS) filing, was approved on September 20, 2024, allowing for an annual rate increase of $3.9 million to recover $20.6 million of incremental transmission rate base. The second, a Distribution Cost Recovery Factor (DCRF) application, was approved on October 3, 2024, permitting an annual rate increase of $7.7 million to recover $43.7 million of incremental distribution rate base.

TXNM Energy, based in Albuquerque, New Mexico, serves over 800,000 customers in Texas and New Mexico through its regulated utilities, TNMP and PNM. The approved TCOS rates are already in effect, while the DCRF rates will become effective in approximately 45 days.

Positive

• Approval of $3.9 million annual rate increase for transmission cost recovery
• Approval of $7.7 million annual rate increase for distribution cost recovery
• Recovery of $20.6 million in incremental transmission rate base
• Recovery of $43.7 million in incremental distribution rate base

Negative

• None.

Insights

Financial Analyst

The approval of TNMP's rate recovery applications by the PUCT is a positive development for TXNM Energy. The combined annual rate increases of $11.6 million ($3.9 million for transmission and $7.7 million for distribution) will allow the company to recover $64.3 million of incremental rate base investments.

This regulatory approval demonstrates a supportive regulatory environment in Texas, which is important for utility companies' ability to earn returns on their infrastructure investments. The timely recovery of capital expenditures helps maintain a healthy balance sheet and supports future growth initiatives.

For investors, this news indicates improved revenue visibility and the potential for enhanced earnings stability. The incremental rate base additions should contribute positively to TXNM's bottom line, potentially leading to improved financial performance in the coming quarters. However, it's important to note that the impact on overall financials may be modest given TXNM's total market capitalization of $3.77 billion.

ALBUQUERQUE, N.M., Oct. 4, 2024 /PRNewswire/ -- TNMP, the wholly-owned Texas subsidiary of TXNM Energy, Inc. (NYSE: TXNM) received approval from the Public Utility Commission of Texas (PUCT) for its recent Transmission Cost of Service and Distribution Cost Recovery Factor applications.

On September 20, 2024, the PUCT approved TNMP's Application for Interim Update of Wholesale Transmission Rates through a Transmission Cost of Service (TCOS) filing. The approved annual rate increase of $3.9 million recovers $20.6 million of incremental transmission rate base. The associated rates became effective upon approval.

On October 3, 2024, the PUCT approved TNMP's Application to Amend its Distribution Cost Recovery Factor (DCRF). The approved annual rate increase of $7.7 million recovers $43.7 million of incremental distribution rate base. The associated rates will become effective in approximately 45 days.

The filings can be found at https://www.txnmenergy.com/investors/rates-and-filings/tnmp-puct-filings.aspx.

Background:
TXNM Energy (NYSE: TXNM), an energy holding company based in Albuquerque, New Mexico, delivers energy to more than 800,000 homes and businesses across Texas and New Mexico through its regulated utilities, TNMP and PNM. For more information, visit the company's website at www.TXNMEnergy.com.

CONTACTS:

Analysts	Media
Lisa Goodman	Corporate Communications
(505) 241-2160	(505) 241-2783

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release for TXNM Energy, Inc. ("TXNM"), 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. TXNM, 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, TXNM, PNM, and TNMP caution readers not to place undue reliance on these statements. TXNM'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 TXNM Energy, Inc.

FAQ

What rate increases did TNMP receive approval for in 2024?

TNMP received approval for two rate increases in 2024: a $3.9 million annual increase for transmission costs and a $7.7 million annual increase for distribution costs.

When will the new DCRF rates for TNMP become effective?

The new Distribution Cost Recovery Factor (DCRF) rates for TNMP will become effective approximately 45 days after the October 3, 2024 approval date.

How much incremental rate base is TNMP recovering through these approvals?

TNMP is recovering a total of $64.3 million in incremental rate base: $20.6 million for transmission and $43.7 million for distribution.

What is TXNM Energy's stock symbol?

TXNM Energy's stock symbol is TXNM, and it is listed on the New York Stock Exchange (NYSE).