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Electric Operating Revenues
 6 Months Ended
Jun. 30, 2022
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 2021 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.

PNM updated its allowance for accounts receivable balances and recorded incremental reductions to credit losses of $(0.7) million and $(1.6) million in the three and six months ended June 30, 2022 and increases of $0.8 million and $2.4 million in the three and six months ended June 30, 2021. 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 six months ended June 30, 2022 and 2021, there were no 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 deferred bad debt expense (credit losses) from defaulting REPs to a regulatory asset which totaled $0.8 million at both June 30, 2022 and December 31, 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 June 30, 2022(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$104,902 $46,121 $151,023 
Commercial101,174 36,557 137,731 
Industrial19,610 9,548 29,158 
Public authority4,744 1,561 6,305 
Economy energy service11,003 — 11,003 
Transmission35,659 29,321 64,980 
Miscellaneous3,128 992 4,120 
Total revenues from contracts with customers
280,220 124,100 404,320 
Alternative revenue programs3,703 (1,124)2,579 
Other electric operating revenues (1)
92,831 — 92,831 
Total Electric Operating Revenues
$376,754 $122,976 $499,730 
Six Months Ended June 30, 2022
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$217,477 $85,489 $302,966 
Commercial189,178 69,660 258,838 
Industrial42,742 17,938 60,680 
Public authority9,170 3,086 12,256 
Economy energy service19,943 — 19,943 
Transmission70,186 54,850 125,036 
Miscellaneous7,168 1,926 9,094 
Total revenues from contracts with customers
555,864 232,949 788,813 
Alternative revenue programs1,638 (4,564)(2,926)
Other electric operating revenues (1)
157,961 — 157,961 
Total Electric Operating Revenues
$715,463 $228,385 $943,848 
(1) Increase in 2022 is primarily the result of participation in the EIM beginning in April 2021.
PNMTNMPPNMR Consolidated
Three Months Ended June 30, 2021(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$108,090 $34,667 $142,757 
Commercial108,085 29,469 137,554 
Industrial22,837 7,046 29,883 
Public authority5,337 1,465 6,802 
Economy energy service6,753 — 6,753 
Transmission16,957 23,653 40,610 
Miscellaneous3,593 941 4,534 
Total revenues from contracts with customers
271,652 97,241 368,893 
Alternative revenue programs1,886 5,350 7,236 
Other electric operating revenues50,411 — 50,411 
Total Electric Operating Revenues
$323,949 $102,591 $426,540 
Six Months Ended June 30, 2021
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$222,759 $69,760 $292,519 
Commercial190,019 58,898 248,917 
Industrial41,737 14,340 56,077 
Public authority9,924 2,948 12,872 
Economy energy service17,334 — 17,334 
Transmission34,460 44,774 79,234 
Miscellaneous6,625 1,900 8,525 
Total revenues from contracts with customers
522,858 192,620 715,478 
Alternative revenue programs2,862 3,465 6,327 
Other electric operating revenues69,442 — 69,442 
Total Electric Operating Revenues
$595,162 $196,085 $791,247 

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 $98.2 million at June 30, 2022 and $86.8 million at December 31, 2021 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). Upon the completion of the Western Spirit Line, PNM entered into a TSA with Pattern Wind under an incremental tariff rate approved by FERC. The terms of the agreement provide for a financing component that benefits the customer. As such, the revenue that PNM recognizes will be in excess of the consideration received at the beginning of the service term resulting in a contract asset. The balance of the contract asset as of June 30, 2022 is $6.2 million and $0.6 million as of December 31, 2021. This contract asset is presented in Other deferred charges on the Condensed Consolidated Balance Sheet.
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 not material for any of the 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.