PNM issues all-source RFP for new resources in 2029-2032

Rhea-AI Summary

PNM, a subsidiary of TXNM Energy (NYSE: TXNM), has issued an RFP for at least 900 megawatts of new energy resources to be operational between 2029 and 2032, with 500 megawatts required by 2030. This aligns with their 2023 Integrated Resource Plan, which identifies needs of 900-2,900 megawatts by 2032.

The company has expanded its capacity from 2,816 megawatts in 2020 to 4,268 megawatts in 2024, achieving 72% carbon-free portfolio. PNM received NMPRC approval for 410 megawatts of new solar and battery storage for 2026 and has requested approval for 430-450 megawatts more by 2028.

The RFP also aims to replace capacity from the Four Corners Power Plant, which PNM plans to exit in 2031, and current natural gas generation.

Positive

• Significant capacity expansion from 2,816MW in 2020 to 4,268MW in 2024
• Achievement of 72% carbon-free energy portfolio
• Secured NMPRC approval for 410MW of new solar and battery storage for 2026
• Planned addition of 430-450MW of solar and battery storage resources by 2028

Negative

• Substantial capital investment required for 900-2,900MW capacity expansion
• Regulatory approval uncertainty for proposed resource replacements

Insights

Energy Infrastructure Analyst

TXNM's subsidiary PNM is executing a significant capacity expansion strategy with the new RFP for 900-2,900 megawatts by 2032. The planned additions represent a potential 21-68% increase from current capacity levels, showcasing aggressive growth in renewable infrastructure. The company's transition from 2,816 MW in 2020 to 4,268 MW in 2024 demonstrates strong execution capability in capacity expansion.

The strategic shift to 72% carbon-free generation positions PNM favorably amid increasingly stringent environmental regulations. The planned exit from Four Corners Power Plant by 2031 further derisk the company's exposure to coal assets. Recent regulatory approvals for 410 MW of solar and battery storage (2026) and pending approval for 430-450 MW (2028) indicate constructive relationships with the NMPRC, important for future growth plans.

For retail investors: Think of this as a company systematically upgrading its power generation fleet from older technology (coal) to newer, cleaner sources (solar, wind, batteries) while expanding capacity to meet growing demand - similar to replacing an aging car fleet with electric vehicles while adding more vehicles to serve a growing customer base.

Utilities Financial Analyst

The RFP signals a substantial capital deployment opportunity that could materially impact TXNM's rate base growth through the early 2030s. Based on current utility-scale solar and battery storage costs, this expansion could represent a $1.8-5.8 billion investment opportunity (assuming $2 million per MW for hybrid solar+storage systems). This provides clear line of sight to long-term earnings growth potential.

PNM's demonstrated success in securing regulatory approvals for recent capacity additions suggests a high probability of recovery for these future investments. The company's strategic focus on regulated utility operations and clean energy transition aligns with current regulatory priorities, potentially supporting favorable rate case outcomes.

In simple terms: When utilities invest in new power plants with regulatory approval, they can earn a return on these investments through customer bills. This RFP outlines a significant multi-year investment program that could drive steady earnings growth for TXNM, much like a landlord expanding their property portfolio with reliable tenants.

ALBUQUERQUE, N.M., Dec. 31, 2024 /PRNewswire/ -- PNM, a wholly-owned subsidiary of TXNM Energy (NYSE: TXNM), has issued a Request for Proposals (RFP) for at least 900 megawatts of new energy resources to come online between 2029 and 2032 to serve customers in New Mexico, with at least 500 megawatts needed by 2030.

The all-source RFP is consistent with resource needs identified through PNM's 2023 Integrated Resource Plan, which identifies a range of 900 – 2,900 megawatts of new capacity needed by 2032, depending on the type of resources selected.

PNM has been integrating new resources to its portfolio, growing its capacity from 2,816 megawatts in 2020 to 4,268 megawatts in 2024, to match the growth in system demand and the transition to carbon-free resources. New solar, wind and battery storage capacity has transitioned PNM's portfolio to 72% carbon-free.

During 2024, PNM received approval from the New Mexico Public Regulation Commission (NMPRC) to add 410 megawatts of new solar and battery storage resources in 2026 and filed a request with the NMPRC to extend a purchase power agreement and add another 430-450 megawatts of solar and battery storage resources in 2028.

In addition to meeting the anticipated growth in system demand, PNM plans to exit its minority ownership from the coal fired Four Corners Power Plant when its current agreements expire in 2031. The 2029-2032 RFP is anticipated to identify potential replacement resources for this plant along with current natural gas generation capacity.

Any proposed resource replacements or additions are subject to review and approval by the NMPRC through a separate application.

Further information for bidders can be accessed via: TXNM Sourcing.  

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  Lisa Goodman   (505) 241-2160	Media Corporate Communications (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 TXNM Energy's planned capacity expansion between 2029-2032?

PNM, TXNM Energy's subsidiary, plans to add at least 900 megawatts of new energy resources between 2029-2032, with a minimum of 500 megawatts needed by 2030. The total requirement could reach up to 2,900 megawatts depending on resource types selected.

How much has TXNM's PNM subsidiary increased its power capacity since 2020?

PNM has increased its power capacity from 2,816 megawatts in 2020 to 4,268 megawatts in 2024.

What percentage of TXNM's PNM energy portfolio is carbon-free as of 2024?

As of 2024, PNM's energy portfolio is 72% carbon-free, achieved through the integration of new solar, wind, and battery storage capacity.

When will TXNM's PNM exit the Four Corners Power Plant?

PNM plans to exit its minority ownership in the coal-fired Four Corners Power Plant when its current agreements expire in 2031.

What new renewable energy capacity has TXNM's PNM secured approval for in 2024?

In 2024, PNM received NMPRC approval for 410 megawatts of new solar and battery storage resources for 2026 and has requested approval for an additional 430-450 megawatts for 2028.