Approval of TNMP application for incremental rate base recovery

Rhea-AI Summary

TXNM Energy (NYSE: TXNM) subsidiary TNMP has received approval from the Public Utility Commission of Texas (PUCT) for its Transmission Cost of Service (TCOS) application on March 25, 2025. The approval grants an annual rate increase of $11.5 million to recover $83.5 million of incremental transmission rate base.

TNMP, which operates as a regulated utility in Texas, is part of TXNM Energy's portfolio that serves over 800,000 homes and businesses across Texas and New Mexico. The new rates became effective immediately upon approval.

Positive

• Secured regulatory approval for $11.5 million annual rate increase
• Recovery of $83.5 million in transmission rate base investments
• Immediate implementation of new rates upon approval

Negative

• None.

Insights

Utility Regulation Expert

TXNM Energy's Texas subsidiary received a clear regulatory win with this PUCT approval, securing an $11.5 million annual rate increase that enables recovery of $83.5 million in transmission infrastructure investments. This represents textbook execution of the regulated utility model – deploy capital into rate base and secure timely regulatory approval for recovery plus return.

For regulated utilities, these incremental rate case victories are fundamental to financial health. The immediate effectiveness of the new rates eliminates regulatory lag between investment and recovery, promptly improving cash flow. While this increase represents just 0.23% of TXNM's $5 billion market cap, the strategic importance exceeds the raw numbers.

Transmission investments typically earn attractive regulated returns with less revenue volatility than distribution assets. They enhance system reliability, expand capacity for growth, and support integration of renewable resources – all while generating predictable earnings streams.

The straightforward approval suggests TXNM maintains constructive regulatory relationships in Texas, critical for future rate case success. For investors, this represents the steady, incremental financial progress that underpins utility valuations and dividend sustainability. The company's effectiveness in navigating the regulatory process to recover infrastructure investments reinforces the investment thesis for this regulated utility.

ALBUQUERQUE, N.M., March 26, 2025 /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 (TCOS) application.

On March 25, 2025, the Public Utility Commission of Texas (PUCT) approved TNMP's Application for Interim Update of Wholesale Transmission Rates through a TCOS filing. The approved annual rate increase of $11.5 million recovers $83.5 million of incremental transmission rate base. The associated rates became effective upon approval.

The filing 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 is the value of TNMP's approved rate increase for TXNM shareholders?

The PUCT approved an $11.5 million annual rate increase for TNMP to recover $83.5 million in transmission investments.

When did PUCT approve TXNM's TNMP transmission rate increase?

The Public Utility Commission of Texas approved TNMP's rate increase on March 25, 2025.

How many customers does TXNM Energy serve through its utilities?

TXNM Energy serves more than 800,000 homes and businesses across Texas and New Mexico through TNMP and PNM utilities.

What is the purpose of TNMP's TCOS filing for TXNM?

The TCOS filing allows TNMP to recover transmission infrastructure investments through an $11.5 million annual rate increase.