Asset Retirement Obligations

12 Months Ended

Dec. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

AROs are recorded based on studies to estimate the amount and timing of future ARO expenditures and reflect underlying assumptions, such as discount rates, estimates of the future costs for decommissioning, and the timing of the removal activities to be performed. Approximately 76% of PNM’s total ARO liabilities are related to nuclear decommissioning of PVNGS. PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS, including portions under lease both during and after termination of the leases. Studies of the decommissioning costs of PVNGS, SJGS, Four Corners, and other facilities are performed periodically and revisions to the ARO liabilities are recorded. Changes in the assumptions underlying the calculations may also require revisions to the estimated AROs when identified.

A reconciliation of the ARO liabilities is as follows:


	PNMR		PNM		TNMP
	(In thousands)
Liability at December 31, 2017	$	146,679	$	145,707	$	793
Liabilities incurred	—		—		—
Liabilities settled	(192)		—		—
Accretion expense	11,482		11,402		67
Revisions to estimated cash flows	705		705		—
Liability at December 31, 2018	158,674		157,814		860
Liabilities incurred	—		—		—
Liabilities settled	(987)		(935)		(52)
Accretion expense	12,635		12,562		73
Revisions to estimated cash flows(1)	11,640		11,640		—
Liability at December 31, 2019	181,962		181,081		881
Liabilities incurred	—		—		—
Liabilities settled	(1,444)		(1,192)		(252)
Accretion expense	11,310		11,235		75
Revisions to estimated cash flows(2)	(8,407)		(8,407)		—
Liability at December 31, 2020	$	183,421	$	182,717	$	704

(1) Reflects the impacts of an updated SJGS decommissioning study that assumes PNM will retire its share of SJGS in 2022.

(2) Reflects a decrease of $9.2 million related to an updated PVNGS decommissioning study and an increase of $0.8 million related to an updated Four Corners decommissioning study.