PNM and parties file Unopposed Stipulation in 2028 Resource Application

Rhea-AI Summary

TXNM Energy (NYSE: TXNM) subsidiary PNM has filed an unopposed comprehensive stipulation with the New Mexico Public Regulation Commission for its 2028 Resource Application. The proposal includes adding 450 megawatts of new solar and battery storage capacity to meet zero-carbon requirements under New Mexico's Energy Transition Act.

The resource portfolio includes:

• Extension of Valencia PPA for 167 MW through 2039
• 300 MW capacity through two 150 MW battery storage facilities
• 150 MW solar and battery storage facility (100 MW solar, 50 MW battery storage) with option for 20 MW additional storage

The project represents a $252 million capital investment from PNM between 2026-2028. Multiple parties support the stipulation, including NMPRC Staff and various energy advocacy groups. Hearings are scheduled for April 2, 2025.

Positive

• Secured unopposed comprehensive stipulation for major renewable energy expansion
• $252 million capital investment demonstrates significant growth commitment
• 450 MW capacity addition strengthens renewable energy portfolio
• Strong stakeholder support including regulatory staff and energy advocacy groups

Negative

• Significant capital expenditure may impact short-term financial metrics
• Project execution and regulatory risks through 2028 implementation timeline

Insights

Energy Infrastructure Analyst

TXNM Energy's subsidiary PNM has achieved a significant regulatory milestone by securing unanimous support for its 2028 Resource Application from all intervening parties. This unopposed stipulation represents a strong vote of confidence in the company's renewable energy expansion strategy and significantly increases the likelihood of final regulatory approval.

The application outlines a substantial $252 million capital investment to add 450 megawatts of new solar and battery storage capacity by 2028. This investment is strategically important as it aligns with New Mexico's Energy Transition Act requirements for zero-carbon generation while securing long-term capacity through the Valencia PPA extension through 2039.

The comprehensive nature of the portfolio is particularly notable - combining PNM-owned assets (150 MW solar/battery facility) with contracted capacity through Energy Storage Agreements. This balanced approach allows TXNM to maintain an ownership stake in critical infrastructure while utilizing third-party contracts to optimize capital efficiency.

With support from diverse stakeholders ranging from regulatory staff to environmental and consumer advocacy groups, this stipulation effectively de-risks the regulatory approval process. The company has secured a clear path toward executing its capital investment plans while advancing its clean energy transition strategy. Though still subject to final commission approval, the unanimous stakeholder support substantially increases the probability of successful implementation.

Financial Analyst

This filing represents a significant capital allocation decision with positive implications for TXNM's long-term investment thesis. The $252 million capital investment planned for 2026-2028 provides clear visibility into the company's regulated capital expenditure pipeline, which is important for a utility's growth profile and future rate base expansion.

The investment structure demonstrates prudent financial planning through a balanced approach to capital deployment. By owning the 150 MW solar/battery facility directly, TXNM secures regulated returns on owned assets while using PPAs and ESAs to manage overall capital requirements and optimize the balance sheet. This mixed-ownership model allows for regulatory asset growth while maintaining financial flexibility.

Securing unanimous stakeholder support is particularly valuable from a financial risk perspective as it significantly reduces regulatory uncertainty surrounding capital recovery. The unopposed stipulation suggests a high probability of receiving full regulatory approval for the proposed investments and their eventual inclusion in the rate base.

Moreover, the strategic alignment with New Mexico's Energy Transition Act positions TXNM favorably within the regulatory framework, potentially creating a more supportive environment for future capital investments in clean energy infrastructure. The company's proactive approach to meeting zero-carbon requirements demonstrates management's ability to navigate the energy transition while creating opportunities for regulated growth, which is critical for long-term shareholder value creation in the utility sector.

ALBUQUERQUE, N.M., March 13, 2025 /PRNewswire/ -- PNM, a wholly-owned subsidiary of TXNM Energy (NYSE: TXNM), and intervening parties in its 2028 Resource Application filed an unopposed comprehensive stipulation with the New Mexico Public Regulation Commission (NMPRC).

The stipulation supports approval of PNM's proposed resource portfolio adding 450 megawatts (MW) of new solar and battery storage capacity in 2028 to serve customers and continue progress towards the zero-carbon requirements of New Mexico's Energy Transition Act, including:

• extension of a Valencia Purchase Power Agreement (PPA) for 167 MW through 2039 (current agreement expires in 2028),
• addition of 300 MW capacity through Energy Storage Agreements (ESAs) for two, 150 MW battery stand-alone storage facilities, and
• addition of a 150 MW solar and battery storage facility (100 MW solar, 50 MW battery storage) to be owned and operated by PNM, which includes the proposed option to increase the battery storage by an additional 20 MW.

The proposed portfolio reflects $252 million of capital investment from PNM in 2026 through 2028.

Parties to the stipulation include Utility Division Staff of the New Mexico Public Regulation Commission, Coalition for Clean Affordable Energy, New Energy Economy, New Mexico Affordable Reliable Energy Alliance, Western Resource Advocates and Prosperity Works. Central Consolidated School District supports the stipulation. Other parties may file their positions within 5 business days.

The stipulation is subject to NMPRC approval. Hearings on the filing are scheduled to begin on April 2, 2025.

Today's filing and the application are available at https://www.txnmenergy.com/investors/rates-and-filings/pnm-nmprc-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) 241-2743

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 total investment value of TXNM's 2028 Resource Application project?

The project represents a $252 million capital investment from PNM (TXNM's subsidiary) between 2026 and 2028.

How many megawatts of new capacity will TXNM add through the 2028 Resource Application?

TXNM will add 450 megawatts of new solar and battery storage capacity in 2028.

When will the NMPRC hearings begin for TXNM's resource application?

Hearings are scheduled to begin on April 2, 2025.

What are the key components of TXNM's proposed resource portfolio?

The portfolio includes a 167 MW Valencia PPA extension, 300 MW of battery storage, and a 150 MW solar/battery facility with potential for 20 MW additional storage.