XML 31 R13.htm IDEA: XBRL DOCUMENT v3.21.2
Electric Operating Revenues
 9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
Electric Operating Revenues Electric Operating Revenues
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 2020 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, adjustments to the allowance for credit losses are made as necessary and amounts that are deemed uncollectible are written off. As a result of the economic conditions resulting from the COVID-19 pandemic, PNM updated its allowance for accounts receivable balances and recorded incremental credit losses of $0.5 million and $2.9 million in the three and nine months ended September 30, 2021 and $2.0 million and $2.7 million in the three and nine months ended September 30, 2020. The NMPRC issued an order authorizing all public utilities to create a regulatory asset to defer incremental costs related to COVID-19, including increases in uncollectible accounts. See discussion regarding regulatory treatment in Note 12.

In addition to the allowance for credit losses on trade receivables, the Company has evaluated other receivables for potential credit related losses. These balances include potential exposures for other non-retail utility services. In the three and nine months ended September 30, 2021, PNM recorded $0.8 million in estimated credit losses related to these transactions.

In February 2021, Texas experienced a severe winter storm delivering the coldest temperatures in 100 years for many parts of the state. As a result, the ERCOT market was not able to deliver sufficient generation load to the grid resulting in significant, statewide outages as ERCOT directed transmission operators to curtail thousands of firm load megawatts. TNMP
complied with ERCOT directives to curtail delivery of electricity in its service territory and did not experience significant outages on its system outside of the ERCOT directed curtailments. During the weather event, generators experienced an extreme spike in market driven fuel prices and in turn charged REPs excessive market driven power prices which eventually get passed to end users on their electricity bill. Given the uncertainty of the collectability of end users' bills by REPs, ERCOT also increased the collateral required by REPs in order to do business within ERCOT's Balancing Authority. TNMP has deferred bad debt expense (credit losses) from defaulting REPs to a regulatory asset totaling $0.8 million at September 30, 2021 and will seek recovery in a general rate case.

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.
PNMTNMPPNMR Consolidated
Three Months Ended September 30, 2021(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$155,035 $51,839 $206,874 
Commercial137,071 34,434 171,505 
Industrial24,856 7,282 32,138 
Public authority7,388 1,614 9,002 
Economy energy service7,389 — 7,389 
Transmission26,459 24,075 50,534 
Miscellaneous3,503 936 4,439 
Total revenues from contracts with customers
361,701 120,180 481,881 
Alternative revenue programs(8,331)(1,152)(9,483)
Other electric operating revenues82,153 — 82,153 
Total Electric Operating Revenues
$435,523 $119,028 $554,551 
Nine Months Ended September 30, 2021
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$377,794 $121,600 $499,394 
Commercial327,090 93,332 420,422 
Industrial66,593 21,621 88,214 
Public authority17,312 4,561 21,873 
Economy energy service24,722 — 24,722 
Transmission60,919 68,849 129,768 
Miscellaneous10,129 2,837 12,966 
Total revenues from contracts with customers
884,559 312,800 1,197,359 
Alternative revenue programs(5,469)2,313 (3,156)
Other electric operating revenues151,595 — 151,595 
Total Electric Operating Revenues
$1,030,685 $315,113 $1,345,798 
PNMTNMPPNMR Consolidated
Three Months Ended September 30, 2020(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$158,549 $53,114 $211,663 
Commercial125,414 31,077 156,491 
Industrial25,475 6,842 32,317 
Public authority7,982 1,468 9,450 
Economy energy service3,270 — 3,270 
Transmission17,463 19,845 37,308 
Miscellaneous3,697 924 4,621 
Total revenues from contracts with customers
341,850 113,270 455,120 
Alternative revenue programs(7,067)(5,309)(12,376)
Other electric operating revenues29,721 — 29,721 
Total Electric Operating Revenues
$364,504 $107,961 $472,465 
Nine Months Ended September 30, 2020
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$370,448 $122,315 $492,763 
Commercial305,127 87,868 392,995 
Industrial65,313 20,232 85,545 
Public authority17,236 4,311 21,547 
Economy energy service11,802 — 11,802 
Transmission45,727 58,095 103,822 
Miscellaneous10,106 2,597 12,703 
Total revenues from contracts with customers
825,759 295,418 1,121,177 
Alternative revenue programs(2,377)(5,107)(7,484)
Other electric operating revenues50,043 — 50,043 
Total Electric Operating Revenues
$873,425 $290,311 $1,163,736 

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 $98.6 million at September 30, 2021 and $86.2 million at December 31, 2020 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 had no contract assets as of September 30, 2021 or December 31, 2020. 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.