PNM, TNMP Receive Rate Approvals

Rhea-AI Summary

TXNM Energy (NYSE: TXNM) announced regulatory approvals for rate increases at both of its utility subsidiaries. PNM received approval from NMPRC for a $105.0 million revenue increase, based on a 9.45% return on equity and 51% equity capitalization on $3.0 billion rate base. The increase will be phased in with 50% effective July 1, 2025, and the remainder on April 1, 2026. TNMP secured PUCT approval for a $25.0 million annual rate increase through its Distribution Cost Recovery Factor application, covering $176.6 million of incremental distribution rate base at 9.65% ROE with a 45% equity structure. These rate approvals strengthen TXNM's regulated utilities serving over 800,000 customers across Texas and New Mexico.

Positive

• PNM secured approval for $105.0 million revenue increase
• PNM's return on equity increased from 9.26% to 9.45%
• TNMP obtained approval for $25.0 million annual rate increase
• Total rate base expansion with $176.6 million incremental distribution assets for TNMP

Negative

• Phased implementation of PNM rate increase delays full revenue realization until April 2026
• Higher rates could impact customer affordability and potentially lead to reduced consumption

Insights

Utility Regulatory Expert

TXNM secured $130M in rate increases with improved ROE terms, boosting future revenues with minimal regulatory friction.

The regulatory approvals secured by TXNM Energy's subsidiaries represent significant financial wins for the company. PNM's approval includes a $105 million revenue increase based on a 9.45% return on equity (ROE)—an improvement from their previous 9.26% ROE. The unopposed stipulation is particularly noteworthy in the utility sector, as rate increases often face stakeholder resistance.

The strategic implementation schedule—splitting the increase between July 2025 and April 2026—balances shareholder returns with customer impact considerations, demonstrating regulatory savvy. Meanwhile, TNMP's secured $25 million annual rate increase will recover $176.6 million in incremental distribution rate base.

These approvals provide multi-year revenue visibility for TXNM Energy, a valuable asset in the utility sector where regulatory certainty translates directly to financial stability. The improved equity capitalization structure (moving from 50% to 51% at PNM) enhances the company's financial flexibility while maintaining the $3 billion rate base.

The dual approvals across different regulatory jurisdictions demonstrate TXNM's effectiveness in navigating complex regulatory frameworks in both New Mexico and Texas. With these rate cases now resolved, management can focus on operational execution rather than regulatory proceedings, creating a more predictable financial outlook for the company serving 800,000+ customers across both states.

ALBUQUERQUE, N.M., May 15, 2025 /PRNewswire/ -- PNM and TNMP, the wholly-owned subsidiaries of TXNM Energy (NYSE: TXNM), each received regulatory approvals today for pending rate recovery filings.

Approval of PNM 2025 Rate Request Unopposed Stipulation

PNM received approval from the New Mexico Public Regulation Commission (NMPRC) for the unopposed stipulation filed by PNM and parties in PNM's 2025 Rate Request application.

Under the approved stipulation, customer rates are phased in with 50% of the increase effective July 1, 2025, and the remaining increase effective April 1, 2026.

The approved $105.0 million increase to PNM's revenue requirements is based on a 9.45% return on equity and a 51% equity capitalization structure on $3.0 billion of rate base. PNM's previously authorized rates were based on a 9.26% return on equity and 50% equity capitalization structure.

The Final Order will be available once issued, along with other documents related to the application, at https://www.txnmenergy.com/investors/rates-and-filings/pnm-nmprc-filings.aspx.

Approval of TNMP Interim Distribution Cost Recovery

TNMP received approval from the Public Utility Commission of Texas (PUCT) for its recent Distribution Cost Recovery Factor application.

On May 15, 2025, the PUCT approved TNMP's Application to Amend its Distribution Cost Recovery Factor (DCRF). The approved annual rate increase of $25.0 million recovers $176.6 million of incremental distribution rate base at TNMP's authorized return on equity of 9.65% at an authorized capital structure of 55% debt and 45% equity. The associated rates will become effective in approximately 45 days.

The Order of Approval will be available once issued, along with other documents related to the application, 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) 241-2743

 

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 rate increases were approved for TXNM Energy's subsidiaries in May 2025?

PNM received approval for a $105.0 million revenue increase, while TNMP secured a $25.0 million annual rate increase through its Distribution Cost Recovery Factor application.

When will PNM's new rates take effect for TXNM Energy?

PNM's rate increase will be implemented in two phases: 50% effective July 1, 2025, and the remaining increase effective April 1, 2026.

What is the approved return on equity for PNM and TNMP under the new rates?

PNM's approved return on equity is 9.45% (up from 9.26%), while TNMP's authorized return on equity is 9.65%.

How much rate base is covered under PNM's new rate approval?

PNM's rate approval covers $3.0 billion of rate base with a 51% equity capitalization structure.

What is the size of TNMP's incremental distribution rate base under the new approval?

TNMP's approval covers $176.6 million of incremental distribution rate base with a capital structure of 55% debt and 45% equity.