Equity Method Investment

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

As discussed in Note 21 of the Company’s 2022 Annual Reports on Form 10-K, PNMR Development and AEP OnSite Partners created NMRD in September 2017 to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. As of September 30, 2023, NMRD’s renewable energy capacity in operation was 185 MW. PNMR Development and AEP OnSite Partners each have a 50% ownership interest in NMRD. The investment in NMRD is accounted for using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations. PNMR Development, together with AEP OnSite Partners, has selected an adviser for the sale of NMRD.

In the nine months ended September 30, 2023, PNMR Development and AEP OnSite Partners each made cash contributions to NMRD of $25.8 million for its construction activities. In the nine months ended September 30, 2022, neither PNMR Development nor AEP OnSite Partners made any cash contributions to NMRD for its construction activities.

PNMR presents its share of net earnings from NMRD in other income on the Condensed Consolidated Statements of Earnings. Summarized financial information for NMRD is as follows:


	Results of Operations
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Operating revenues	$	4,020	$	3,407	$	10,525	$	10,224
Operating expenses	1,743		2,381		6,127		7,172
Net earnings	$	2,277	$	1,026	$	4,398	$	3,052


	Financial Position
	September 30,		December 31,
	2023		2022
	(In thousands)
Current assets	$	9,529	$	8,357
Net property, plant, and equipment	229,659		169,440
Non-current assets	2,480		9,631
Total assets	241,668		187,428
Current liabilities	4,176		5,822
Non-current liabilities	355		366
Owners’ equity	$	237,137	$	181,240