Electric Operating Revenues

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are PNM and TNMP.

Additional information concerning electric operating revenue is contained in Note 4 of the Notes to Consolidated Financial Statements in the 2019 Annual Reports on Form 10-K.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company estimates the allowance for credit losses on trade receivables based on historical experience and estimated default rates. Accounts receivable balances are reviewed monthly and adjustments to the allowance for credit losses are made as necessary and amounts that are deemed uncollectible are written off. On January 1, 2020, the Company adopted Accounting Standards Update 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. As a result of the adoption of the new standard, PNM updated its allowance for accounts receivable balances and recorded incremental credit losses of $0.3 million in the three months ended March 31, 2020. See additional discussion of ASU 2016-13 in Note 7.

Disaggregation of Revenues

A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects alternative revenue program revenues ("ARP") and other revenues.



















	PNM		TNMP		PNMR Consolidated
Three Months Ended March 31, 2020	(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	102,809	$	31,898	$	134,707
Commercial	86,349		28,685		115,034
Industrial	19,466		6,533		25,999
Public authority	4,347		1,423		5,770
Economy energy service	5,253		—		5,253
Transmission	14,167		18,012		32,179
Miscellaneous	3,368		673		4,041
Total revenues from contracts with customers	235,759		87,224		322,983
Alternative revenue programs	2,161		(1,735)		426
Other electric operating revenues	10,213		—		10,213
Total Electric Operating Revenues	$	248,133	$	85,489	$	333,622



















Three Months Ended March 31, 2019
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	107,302	$	30,432	$	137,734
Commercial	85,233		27,429		112,662
Industrial	14,747		5,616		20,363
Public authority	4,711		1,374		6,085
Economy energy service	6,922		—		6,922
Transmission	13,385		14,003		27,388
Miscellaneous	3,641		903		4,544
Total revenues from contracts with customers	235,941		79,757		315,698
Alternative revenue programs	66		570		636
Other electric operating revenues	33,311		—		33,311
Total Electric Operating Revenues	$	269,318	$	80,327	$	349,645

Contract Balances

Performance obligations related to contracts with customers are typically satisfied when the energy is delivered and the customer or end-user utilizes the energy. Accounts receivable from customers represent amounts billed, including amounts under ARPs. For PNM, accounts receivable reflected on the Condensed Consolidated Balance Sheets, net of allowance for credit losses, includes $56.7 million at March 31, 2020 and $59.3 million at December 31, 2019 resulting from contracts with customers. All of TNMP’s accounts receivable results from contracts with customers.

Contract assets are an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). The Company has no contract assets as of March 31, 2020 or December 31, 2019. Contract liabilities arise when consideration is received in advance from a customer before satisfying the performance obligations. Therefore, revenue

is deferred and not recognized until the obligation is satisfied. Under its OATT, PNM accepts upfront consideration for capacity reservations requested by transmission customers, which requires PNM to defer the customer’s transmission capacity rights for a specific period of time. PNM recognizes the revenue of these capacity reservations over the period it defers the customer's capacity rights. Other utilities pay PNM and TNMP in advance for the joint-use of their utility poles. These revenues are recognized over the period of time specified in the joint-use contract, typically for one calendar year. Deferred revenues on these arrangements are recorded as contract liabilities. PNMR's, PNM's, and TNMP's contract liabilities and related revenues are insignificant for all periods presented. The Company has no other arrangements with remaining performance obligations to which a portion of the transaction price would be required to be allocated.