ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IRS Employer Identification No. |
Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
PNM Resources, Inc. |
Registrant | Title of each class | |||||||
Public Service Company of New Mexico | ||||||||
($100 stated value without sinking fund) |
PNM Resources, Inc. (“PNMR”) | ☑ | No | ☐ | ||||||||||||||
Public Service Company of New Mexico (“PNM”) | Yes | ☐ | ☑ | ||||||||||||||
Texas-New Mexico Power Company (“TNMP”) | Yes | ☐ | ☑ |
PNMR | Yes | ☐ | ☑ | ||||||||||||||
PNM | Yes | ☐ | ☑ | ||||||||||||||
TNMP | ☑ | No | ☐ |
PNMR | ☑ | No | ☐ | ||||||||||||||
PNM | ☑ | No | ☐ | ||||||||||||||
TNMP | Yes | ☐ | ☑ |
PNMR | ☑ | No | ☐ | ||||||||||||||
PNM | ☑ | No | ☐ | ||||||||||||||
TNMP | ☑ | No | ☐ |
Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PNMR | ☑ | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Large accelerated filer | Accelerated filer | Smaller reporting company | Emerging growth company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PNM | ☐ | ☐ | ☑ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Large accelerated filer | Accelerated filer | Smaller reporting company | Emerging growth company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TNMP | ☐ | ☐ | ☑ |
PNMR | Yes | No | ☐ | ||||||||||||||
PNM | Yes | ☐ | No | ||||||||||||||
TNMP | Yes | ☐ | No |
PNMR | |||||
PNM | |||||
TNMP |
Page | |||||||||||
PART I | |||||||||||
ITEM 1. BUSINESS | A - 1 | ||||||||||
A - 1 | |||||||||||
A - 2 | |||||||||||
OPERATIONS AND REGULATION | A - 2 | ||||||||||
REGULATED OPERATIONS | |||||||||||
A - 2 | |||||||||||
A - 4 | |||||||||||
A - 5 | |||||||||||
A - 5 | |||||||||||
A - 8 | |||||||||||
A - 9 | |||||||||||
A - 9 | |||||||||||
A - 10 | |||||||||||
A - 10 | |||||||||||
A - 12 | |||||||||||
ITEM 1A. RISK FACTORS | A - 12 | ||||||||||
ITEM 1B. UNRESOLVED STAFF COMMENTS | A - 24 | ||||||||||
ITEM 2. PROPERTIES | A - 24 | ||||||||||
ITEM 3. LEGAL PROCEEDINGS | A - 24 | ||||||||||
ITEM 4. MINE SAFETY DISCLOSURES | A - 24 | ||||||||||
A - 25 | |||||||||||
PART II | |||||||||||
ITEM 5. MARKET FOR PNMR’S COMMON EQUITY, RELATED STOCKHOLDER | |||||||||||
MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES | A - 25 | ||||||||||
ITEM 6. [RESERVED] | A - 25 | ||||||||||
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | A - 26 | ||||||||||
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK | A - 59 | ||||||||||
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | B - 1 | ||||||||||
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING | C - 1 | ||||||||||
AND FINANCIAL DISCLOSURE | |||||||||||
ITEM 9A. CONTROLS AND PROCEDURES | C - 1 | ||||||||||
ITEM 9B. OTHER INFORMATION | C - 2 | ||||||||||
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | C - 2 | ||||||||||
PART III | |||||||||||
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE | C - 2 | ||||||||||
ITEM 11. EXECUTIVE COMPENSATION | C - 2 | ||||||||||
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND | |||||||||||
MANAGEMENT AND RELATED STOCKHOLDER MATTERS | C - 2 | ||||||||||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR | |||||||||||
INDEPENDENCE | C - 2 | ||||||||||
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES | C - 2 | ||||||||||
PART IV | |||||||||||
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | D - 1 | ||||||||||
ITEM 16. FORM 10-K SUMMARY | D - 10 | ||||||||||
E - 1 |
Definitions: | ||||||||
2024 Rate Change | PNM’s request for a general increase in electric rates filed with the NMPRC on December 5, 2022 using a calendar year 2024 FTY | |||||||
ABCWUA | Albuquerque Bernalillo County Water Utility Authority | |||||||
ABO | Accumulated Benefit Obligation | |||||||
ACE Rule | Affordable Clean Energy Rule | |||||||
AEP OnSite Partners | AEP OnSite Partners, LLC, a subsidiary of American Electric Power, Inc. | |||||||
Afton | Afton Generating Station | |||||||
AFUDC | Allowance for Funds Used During Construction | |||||||
ALJ | Administrative Law Judge | |||||||
AMI | Advanced Metering Infrastructure | |||||||
AMS | Advanced Meter System | |||||||
Anaheim | City of Anaheim, California | |||||||
AOCI | Accumulated Other Comprehensive Income | |||||||
APBO | Accumulated Postretirement Benefit Obligation | |||||||
APS | Arizona Public Service Company, the operator and a co-owner of PVNGS and Four Corners | |||||||
ARO | Asset Retirement Obligation | |||||||
ARP | Alternative Revenue Program | |||||||
Avangrid | Avangrid, Inc., a New York corporation | |||||||
BART | Best Available Retrofit Technology | |||||||
Board | Board of Directors of PNMR | |||||||
BSER | Best system of emission reduction technology | |||||||
BTU | British Thermal Unit | |||||||
CAA | Clean Air Act | |||||||
CAISO | California Independent System Operator | |||||||
Carbon Pollution Standards | Carbon Pollution Standards established by the EPA on August 3, 2015 | |||||||
Casa Mesa Wind | Casa Mesa Wind Energy Center | |||||||
CCAE | Coalition for Clean Affordable Energy | |||||||
CCR | Coal Combustion Residuals | |||||||
CFIUS | Committee on Foreign Investment in the United States | |||||||
CFRE | Citizens for Fair Rates and the Environment | |||||||
CIAC | Contributions in Aid of Construction | |||||||
CO2 | Carbon Dioxide | |||||||
Community Solar Act | Senate Bill 84 effective June 18, 2021 | |||||||
COVID-19 | Novel coronavirus global pandemic | |||||||
CSA | Coal Supply Agreement | |||||||
DC Circuit | United States Court of Appeals for the District of Columbia Circuit | |||||||
DCOS | TNMP’s applications for a distribution cost recovery factor | |||||||
DOE | United States Department of Energy | |||||||
Effective Time | The time the Merger is consummated | |||||||
EGU | Electric Generating Unit | |||||||
EIM | Western Energy Imbalance Market developed and operated by CAISO | |||||||
ELG | Effluent Limitation Guidelines | |||||||
End Date | The date at which the Merger Agreement may be terminated if the Effective Time has not yet occurred; January 20, 2022, subsequently extended to April 20, 2023. | |||||||
Energy Transition Charge | Rate rider established to collect non-bypassable customer charges for repayment of the Securitized Bonds | |||||||
EPA | United States Environmental Protection Agency | |||||||
EPE | El Paso Electric Company | |||||||
ERCOT | Electric Reliability Council of Texas | |||||||
ESG | Environmental, Social, and Governance principles | |||||||
ETA | The New Mexico Energy Transition Act | |||||||
EUEA | The New Mexico Efficient Use of Energy Act | |||||||
EV | Electric Vehicle | |||||||
Exchange Act | Securities Exchange Act of 1934 | |||||||
Farmington | The City of Farmington, New Mexico | |||||||
FASB | Financial Accounting Standards Board |
FAST Act | SEC’s modernization and simplification of Regulation S-K | |||||||
FCC | Federal Communications Commission | |||||||
FERC | Federal Energy Regulatory Commission | |||||||
Four Corners | Four Corners Power Plant | |||||||
Four Corners Abandonment Application | PNM’s January 8, 2021 application for approval for the abandonment of Four Corners and issuance of a securitized financing order | |||||||
Four Corners CSA | Four Corners’ coal supply contract with NTEC | |||||||
Four Corners Purchase and Sale Agreement | PNM’s pending sale of its 13% ownership interest in Four Corners to NTEC | |||||||
FPPAC | Fuel and Purchased Power Adjustment Clause | |||||||
FTC | Federal Trade Commission | |||||||
FTY | Future Test Year | |||||||
GAAP | Generally Accepted Accounting Principles in the United States of America | |||||||
GHG | Greenhouse Gas Emissions | |||||||
Grid Modernization Application | PNM's October 3, 2022 application for approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy | |||||||
GWh | Gigawatt hours | |||||||
HSR | Hart-Scott Rodino Antitrust Improvement Act of 1976 | |||||||
IBEW | International Brotherhood of Electrical Workers | |||||||
Iberdrola | Iberdrola, S.A., a corporation organized under the laws of the Kingdom of Spain, and 81.5% owner of Avangrid | |||||||
INDC | Intended Nationally Determined Contribution | |||||||
IRA | Inflation Reduction Act | |||||||
IRC | Internal Revenue Code | |||||||
IRP | Integrated Resource Plan | |||||||
IRS | Internal Revenue Service | |||||||
ISFSI | Independent Spent Fuel Storage Installation | |||||||
Joint Applicants | PNM, PNMR, Merger Sub, Avangrid and Iberdrola, S.A. | |||||||
kV | Kilovolt | |||||||
KW | Kilowatt | |||||||
KWh | Kilowatt Hour | |||||||
La Joya Wind I | La Joya Wind Facility generating 166 MW of output that became operational in February 2021 | |||||||
La Joya Wind II | La Joya Wind Facility generating 140 MW of output that became operational in June 2021 | |||||||
La Luz | La Luz Generating Station | |||||||
Leased Interest | Leased capacity in PVNGS Unit 1 and Unit 2 | |||||||
Leeward | Leeward Renewable Energy Development, LLC | |||||||
LIBOR | London Interbank Offered Rate | |||||||
Lightning Dock Geothermal | Lightning Dock geothermal power facility, also known as the Dale Burgett Geothermal Plant | |||||||
Lordsburg | Lordsburg Generating Station | |||||||
Los Alamos | The Incorporated County of Los Alamos, New Mexico | |||||||
Luna | Luna Energy Facility | |||||||
MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Merger | The merger of Merger Sub with and into PNMR pursuant to the Merger Agreement, with PNMR surviving the Merger as a direct, wholly-owned subsidiary of Avangrid | |||||||
Merger Agreement | The Agreement and Plan of Merger, dated October 20, 2020, between PNMR, Avangrid and Merger Sub, as amended by the amendment to the Merger Agreement dated January 3, 2022 | |||||||
Merger Sub | NM Green Holdings, Inc., a New Mexico corporation and wholly-owned subsidiary of Avangrid which will merge with and into PNMR at the effective time of the Merger (defined below) | |||||||
Meta | Meta Platform, Inc., formerly known as Facebook Inc. | |||||||
MMBTU | Million BTUs | |||||||
Moody’s | Moody’s Investor Services, Inc. | |||||||
MW | Megawatt | |||||||
MWh | Megawatt Hour | |||||||
NAAQS | National Ambient Air Quality Standards | |||||||
NDT | Nuclear Decommissioning Trusts for PVNGS | |||||||
NEE | New Energy Economy | |||||||
NERC | North American Electric Reliability Corporation | |||||||
New Mexico Wind | New Mexico Wind Energy Center |
NM 2015 Rate Case | Request for a General Increase in Electric Rates Filed by PNM on August 27, 2015 | |||||||
NM 2016 Rate Case | Request for a General Increase in Electric Rates Filed by PNM on December 7, 2016 | |||||||
NM AREA | New Mexico Affordable Reliable Energy Alliance, formerly New Mexico Industrial Energy Consumers Inc. | |||||||
NM District Court | United States District Court for the District of New Mexico | |||||||
NM Supreme Court | New Mexico Supreme Court | |||||||
NMAG | New Mexico Attorney General | |||||||
NMED | New Mexico Environment Department | |||||||
NMMMD | The Mining and Minerals Division of the New Mexico Energy, Minerals and Natural Resources Department | |||||||
NMPRC | New Mexico Public Regulation Commission | |||||||
NMRD | NM Renewable Development, LLC, owned 50% each by PNMR Development and AEP OnSite Partners, LLC | |||||||
NOx | Nitrogen Oxides | |||||||
NOPR | Notice of Proposed Rulemaking | |||||||
NPDES | National Pollutant Discharge Elimination System | |||||||
NRC | United States Nuclear Regulatory Commission | |||||||
NTEC | Navajo Transitional Energy Company, LLC, an entity owned by the Navajo Nation | |||||||
OATT | Open Access Transmission Tariff | |||||||
OCI | Other Comprehensive Income | |||||||
OPEB | Other Post-Employment Benefits | |||||||
OSM | United States Office of Surface Mining Reclamation and Enforcement | |||||||
Paris Agreement | A legally binding international treaty on climate change adopted on December 12, 2015 | |||||||
Pattern Wind | Pattern New Mexico Wind, LLC, an affiliate of Western Spirit and Pattern Development | |||||||
PBO | Projected Benefit Obligation | |||||||
PCRBs | Pollution Control Revenue Bonds | |||||||
PM | Particulate Matter | |||||||
PNM | Public Service Company of New Mexico and Subsidiaries | |||||||
PNM New Mexico Credit Facility | PNM’s $40.0 Million Unsecured Revolving Credit Facility | |||||||
PNM 2019 $40.0 Million Term Loan | PNM’s $40.0 Million Unsecured Term Loan | |||||||
PNM 2021 Fixed Rate PCRBs | PNM’s $100.3 million PCRBs remarketed on October 1, 2021 | |||||||
PNM 2021 Note Purchase Agreement | PNM’s Agreement for the sale of PNM’s 2021 SUNs | |||||||
PNM 2021 SUNs | PNM’s $160.0 Million Senior Unsecured Notes issued on July 14, 2021 | |||||||
PNM 2021 Term Loan | PNM’s $75.0 Million 18-month Unsecured Term Loan that was repaid on August 5, 2022 | |||||||
PNM 2022 Delayed- Draw Term Loan | PNM's $225.0 million Unsecured Term Loan that matures February 5, 2024 | |||||||
PNM Floating Rate PCRBs | PNM's $100.3 million PCRBs remarketed on July 1, 2020 | |||||||
PNM Revolving Credit Facility | PNM’s $400.0 Million Unsecured Revolving Credit Facility | |||||||
PNM September 2021 Note Purchase Agreement | PNM’s Agreement for the sale of PNM’s September 2021 SUNs | |||||||
PNM September 2021 SUNs | PNM’s $150.0 Million Senior Unsecured Notes issued on December 2, 2021 | |||||||
PNMR | PNM Resources, Inc. and Subsidiaries | |||||||
PNMR 2018 SUNS | PNMR’s $300.0 Million Senior Unsecured Notes issued on March 9, 2018 | |||||||
PNMR 2018 Two-Year Term Loan | PNMR’s $50.0 Million Two-Year Unsecured Term Loan | |||||||
PNMR 2019 Term Loan | PNMR’s $150.0 Million Unsecured Term Loan | |||||||
PNMR 2020 Forward Equity Sale Agreements | PNMR’s Block Equity Sale of 6.2 million Shares of PNMR Common Stock with Forward Sales Agreement | |||||||
PNMR 2020 Term Loan | PNMR’s $150.0 million Unsecured Term Loan that was repaid on May 18, 2021 |
PNMR 2020 Delayed-Draw Term Loan | PNMR’s $300.0 million Unsecured Delayed-Draw Term Loan that was repaid on May 18, 2021 | |||||||
PNMR 2021 Delayed-Draw Term Loan | PNMR’s $1.0 Billion Unsecured Delayed-Draw Term Loan that matures on May 18, 2025 | |||||||
PNMR 2022 ATM Program | PNMR’s agreement to sell up to an aggregate sales price of $200.0 million of common stock | |||||||
PNMR Development | PNMR Development and Management Company, an unregulated wholly-owned subsidiary of PNMR | |||||||
PNMR Development Revolving Credit Facility | PNMR Development’s $40.0 million Unsecured Revolving Credit Facility | |||||||
PNMR Development Term Loan | PNMR Development’s $65.0 Million Unsecured Term Loan that was repaid on May 18, 2021 | |||||||
PNMR Revolving Credit Facility | PNMR’s $300.0 Million Unsecured Revolving Credit Facility | |||||||
PPA | Power Purchase Agreement | |||||||
PUCT | Public Utility Commission of Texas | |||||||
PV | Photovoltaic | |||||||
PVNGS | Palo Verde Nuclear Generating Station | |||||||
PVNGS Leased Interest Abandonment Application | Application with the NMPRC requesting approval for the decertification and abandonment of 114MW of leased PVNGS capacity | |||||||
RCT | Reasonable Cost Threshold | |||||||
REA | New Mexico’s Renewable Energy Act of 2004 | |||||||
RECs | Renewable Energy Certificates | |||||||
Red Mesa Wind | Red Mesa Wind Energy Center | |||||||
REP | Retail Electricity Provider | |||||||
RFP | Request For Proposal | |||||||
Rio Bravo | Rio Bravo Generating Station, formerly known as Delta | |||||||
ROE | Return on Equity | |||||||
RPS | Renewable Energy Portfolio Standard | |||||||
S&P | Standard and Poor’s Ratings Services | |||||||
SCE | Southern California Edison Company | |||||||
SCPPA | Southern California Public Power Authority | |||||||
SEC | United States Securities and Exchange Commission | |||||||
Securitized Bonds | Energy transition bonds | |||||||
SIP | State Implementation Plan | |||||||
SJCC | San Juan Coal Company | |||||||
SJGS | San Juan Generating Station | |||||||
SJGS Abandonment Application | PNM’s July 1, 2019 consolidated application seeking NMPRC approval to retire PNM’s share of SJGS in 2022, for related replacement generating resources, and for the issuance of securitized bonds under the ETA | |||||||
SJGS CSA | San Juan Generating Station Coal Supply Agreement | |||||||
SNCR | Selective Non-Catalytic Reduction | |||||||
SO2 | Sulfur Dioxide | |||||||
SOFR | Secured Overnight Financing Rate | |||||||
SRP | Salt River Project | |||||||
SUNs | Senior Unsecured Notes | |||||||
Tax Act | Federal tax reform legislation enacted on December 22, 2017, commonly referred to as the Tax Cuts and Jobs Act | |||||||
TCEQ | Texas Commission on Environmental Quality | |||||||
TCOS | Transmission Cost of Service | |||||||
TECA | Texas Electric Choice Act | |||||||
Tenth Circuit | United States Court of Appeals for the Tenth Circuit | |||||||
TEP | Transportation Electrification Program | |||||||
TNMP | Texas-New Mexico Power Company and Subsidiaries | |||||||
TNMP 2021 Bonds | TNMP’s First Mortgage Bonds to be issued under the TNMP 2021 Bond Purchase Agreement | |||||||
TNMP 2021 Bond Purchase Agreement | TNMP’s Agreement for the sale of TNMP’s 2021 First Mortgage Bonds | |||||||
TNMP 2022 Bonds | TNMP's First Mortgage Bonds to be issued under the TNMP 2022 Bond Purchase Agreement |
TNMP 2022 Bond Purchase Agreement | TNMP's Agreement for the sale of an aggregate $160.0 million of TNMP's 2022 Bonds | |||||||
TNMP FMBs | TNMP’s aggregate $750.0 Million of outstanding 2014 to 2020 First Mortgage Bonds | |||||||
TNMP Revolving Credit Facility | TNMP’s $75.0 Million Secured Revolving Credit Facility | |||||||
TNP | TNP Enterprises, Inc. and Subsidiaries | |||||||
Tri-State | Tri-State Generation and Transmission Association, Inc. | |||||||
TSAs | Transmission Service Agreements | |||||||
Tucson | Tucson Electric Power Company | |||||||
UAMPS | Utah Associated Municipal Power Systems | |||||||
U.S. | The Unites States of America | |||||||
US Supreme Court | United States Supreme Court | |||||||
Valencia | Valencia Energy Facility | |||||||
VIE | Variable Interest Entity | |||||||
WACC | Weighted Average Cost of Capital | |||||||
Western Spirit Line | An approximately 150-mile 345-kV transmission line that PNM purchased in December 2021 | |||||||
Westmoreland | Westmoreland Coal Company | |||||||
WFB LOC Facility | Letter of credit arrangements with Wells Fargo Bank, N.A., entered into in August 2020 | |||||||
WRA | Western Resource Advocates | |||||||
WSJ | Westmoreland San Juan, LLC, an indirect wholly-owned subsidiary of Westmoreland | |||||||
WSJ LLC | Westmoreland San Juan, LLC, a subsidiary of Westmoreland Mining Holdings, LLC, and current owner of SJCC | |||||||
WSPP | Western Systems Power Pool |
2022 | 2021 | 2020 | |||||||||||||||
(Megawatts) | |||||||||||||||||
Summer | 2,139 | 1,968 | 1,974 | ||||||||||||||
Winter | 1,526 | 1,518 | 1,460 |
Generation | Percent of | |||||||||||||||||||||||||
Capacity | Generation | |||||||||||||||||||||||||
Type | Name | Location | (MW) | Capacity | ||||||||||||||||||||||
Coal | Four Corners | Fruitland, New Mexico | 200 | 7.5 | % | |||||||||||||||||||||
Gas | Reeves Station | Albuquerque, New Mexico | 146 | 5.6 | % | |||||||||||||||||||||
Gas | Afton (combined cycle) | La Mesa, New Mexico | 235 | 8.8 | % | |||||||||||||||||||||
Gas | Lordsburg | Lordsburg, New Mexico | 85 | 3.2 | % | |||||||||||||||||||||
Gas | Luna (combined cycle) | Deming, New Mexico | 190 | 7.1 | % | |||||||||||||||||||||
Gas/Oil | Rio Bravo | Albuquerque, New Mexico | 149 | 5.6 | % | |||||||||||||||||||||
Gas | Valencia | Belen, New Mexico | 155 | 5.8 | % | |||||||||||||||||||||
Gas | La Luz | Belen, New Mexico | 41 | 1.5 | % | |||||||||||||||||||||
Gas-fired resources | 1,001 | 37.6 | % | |||||||||||||||||||||||
Nuclear | PVNGS | Wintersburg, Arizona | 402 | 1 | 15.1 | % | ||||||||||||||||||||
Solar | PNM-owned solar | Twenty-four sites in New Mexico | 158 | 6.0 | % | |||||||||||||||||||||
Solar | NMRD-owned solar | Los Lunas, New Mexico | 130 | 4.9 | % | |||||||||||||||||||||
Solar | Solar Direct | Rio Arriba County, New Mexico | 50 | 1.9 | % | |||||||||||||||||||||
Solar | Route 66 | Cibola County, New Mexico | 50 | 1.9 | % | |||||||||||||||||||||
Wind | New Mexico Wind | House, New Mexico | 200 | 7.5 | % | |||||||||||||||||||||
Wind | Red Mesa Wind | Seboyeta, New Mexico | 102 | 3.8 | % | |||||||||||||||||||||
Wind | Casa Mesa Wind | House, New Mexico | 50 | 1.9 | % | |||||||||||||||||||||
Wind | La Joya Wind I | Torrance, New Mexico | 166 | 6.2 | % | |||||||||||||||||||||
Wind | La Joya Wind II | Torrance, New Mexico | 140 | 5.3 | % | |||||||||||||||||||||
Geothermal | Lightning Dock Geothermal | Lordsburg, New Mexico | 11 | 0.4 | % | |||||||||||||||||||||
Renewable resources | 1,057 | 39.8 | % | |||||||||||||||||||||||
2,660 | 100.0 | % |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Purchased under long-term PPAs | |||||||||||
MWh | 3,179,472 | 3,107,696 | |||||||||
Cost per MWh | $ | 37.45 | $ | 33.95 | |||||||
Other purchased power | |||||||||||
Total MWh (1) | 5,645,918 | 2,510,263 | |||||||||
Cost per MWh | $ | 67.15 | $ | 45.97 |
Plant | Operator | 2022 | 2021 | |||||||||||||||||
SJGS | PNM | 82.1% | 74.2% | |||||||||||||||||
Four Corners | APS | 83.2% | 66.1% | |||||||||||||||||
PVNGS | APS | 90.7% | 91.7% |
Coal | Nuclear | Gas | |||||||||||||||||||||||||||||||||
Percent of Generation | Average Cost | Percent of Generation | Average Cost | Percent of Generation | Average Cost | ||||||||||||||||||||||||||||||
2022 | 36.7 | % | $ | 2.97 | 35.4 | % | $ | 0.73 | 23.9 | % | $ | 7.61 | |||||||||||||||||||||||
2021 | 44.3 | % | $ | 3.02 | 34.8 | % | $ | 0.68 | 16.8 | % | $ | 6.02 | |||||||||||||||||||||||
PNMR | PNM | TNMP | |||||||||||||||
Corporate (1) | 419 | — | — | ||||||||||||||
PNM | 751 | 751 | — | ||||||||||||||
TNMP | 367 | — | 367 | ||||||||||||||
Total | 1,537 | 751 | 367 |
Name | Age | Office | Initial Effective Date | |||||||||||||||||
P. K. Collawn | 64 | Chairman and Chief Executive Officer | May 2022 | |||||||||||||||||
Chairman, President, and Chief Executive Officer | January 2012 | |||||||||||||||||||
J. D. Tarry | 52 | President and Chief Operating Officer | May 2022 | |||||||||||||||||
Senior Vice President and Chief Financial Officer | January 2020 | |||||||||||||||||||
Vice President, Controller and Treasurer | September 2018 | |||||||||||||||||||
Vice President, Finance and Controller | February 2017 | |||||||||||||||||||
E. A. Eden | 56 | Senior Vice President, Chief Financial Officer and Treasurer | May 2022 | |||||||||||||||||
Vice President and Treasurer | February 2021 | |||||||||||||||||||
P. V. Apodaca | 71 | Senior Vice President, General Counsel, and Secretary | January 2010 | |||||||||||||||||
R. N. Darnell | 65 | Senior Vice President, Public Policy | January 2012 | |||||||||||||||||
Approval Date | Percent Increase | |||||||
February 2022 | 6.1 | % | ||||||
December 2022 | 5.8 | % |
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||
Net earnings attributable to PNMR | $ | 169.5 | $ | 195.8 | $ | (26.3) | |||||||||||
Average diluted common and common equivalent shares | 86.2 | 86.1 | 0.1 | ||||||||||||||
Net earnings attributable to PNMR per diluted share | $ | 1.97 | $ | 2.27 | $ | (0.30) |
Change | |||||
2022/2021 | |||||
(In millions) | |||||
PNM | $ | (52.1) | |||
TNMP | 28.4 | ||||
Corporate and Other | (2.5) | ||||
Net change | $ | (26.3) |
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(In millions) | |||||||||||||||||
Gross margin | $ | 516.4 | $ | 466.1 | $ | 50.3 | |||||||||||
Energy production costs | 147.3 | 143.9 | 3.4 | ||||||||||||||
Transmission and distribution costs | 58.3 | 49.8 | 8.5 | ||||||||||||||
Depreciation and amortization | 180.8 | 170.4 | 10.4 | ||||||||||||||
Utility margin | $ | 902.8 | $ | 830.2 | $ | 72.6 | |||||||||||
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(In millions) | |||||||||||||||||
Electric operating revenues | $ | 1,766.8 | $ | 1,362.0 | $ | 404.8 | |||||||||||
Cost of energy | 864.0 | 531.8 | 332.2 | ||||||||||||||
Utility margin | 902.8 | 830.2 | 72.6 | ||||||||||||||
Operating expenses | 460.5 | 438.4 | 22.1 | ||||||||||||||
Depreciation and amortization | 180.8 | 170.4 | 10.4 | ||||||||||||||
Operating income | 261.5 | 221.5 | 40.0 | ||||||||||||||
Other income (deductions) | (62.2) | 28.4 | (90.6) | ||||||||||||||
Interest charges | (61.1) | (51.4) | (9.7) | ||||||||||||||
Segment earnings before income taxes | 138.2 | 198.6 | (60.4) | ||||||||||||||
Income (taxes) | (19.2) | (27.0) | 7.8 | ||||||||||||||
Valencia non-controlling interest | (15.1) | (15.5) | 0.4 | ||||||||||||||
Preferred stock dividend requirements | (0.5) | (0.5) | — | ||||||||||||||
Segment earnings | $ | 103.4 | $ | 155.5 | $ | (52.1) |
Year Ended December 31, | Percent Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(Gigawatt hours, except customers) | |||||||||||||||||
Residential | 3,368.0 | 3,339.5 | 0.9 | % | |||||||||||||
Commercial | 3,605.0 | 3,500.4 | 3.0 | ||||||||||||||
Industrial | 1,770.0 | 1,592.3 | 11.2 | ||||||||||||||
Public authority | 219.9 | 226.1 | (2.7) | ||||||||||||||
Economy service (1) | 554.2 | 504.7 | 9.8 | ||||||||||||||
Other sales for resale (2) | 7,413.3 | 5,447.9 | 36.1 | ||||||||||||||
16,930.4 | 14,610.9 | 15.9 | % | ||||||||||||||
Average retail customer (thousands) | 543.6 | 540.0 | 0.7 | % |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Gross margin: | (In millions) | ||||||||||
Utility margin (see below) | $ | 72.6 | |||||||||
Depreciation and amortization (see below) | (10.4) | ||||||||||
Higher plant maintenance costs at gas fired plants and PVNGS, partially offset by lower costs at Four Corners and the retirement of SJGS | (2.0) | ||||||||||
Higher employee related and outside service expenses, excluding administrative costs | (6.6) | ||||||||||
Higher transmission line maintenance and rights-of-way expense including for the Western Spirit Line | (3.9) | ||||||||||
Other | 0.6 | ||||||||||
Net Change | $ | 50.3 |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Utility margin: | (In millions) | ||||||||||
Retail customer usage/load – Weather normalized retail KWh sales increased 2.4% for commercial customers and 6.5% for industrial customers, which was partially offset by decreased sales to residential customers of 0.7% | $ | 4.1 | |||||||||
Weather – Cooler winter weather and warmer summer weather in 2022; heating degree days were 20.8% higher and cooling degree days were 3.3% higher in 2022 | 7.1 | ||||||||||
Transmission – Increase primarily due to higher revenues from the addition of new customers including on the Western Spirit Line, higher formula transmission rates, and higher volumes | 65.2 | ||||||||||
Unregulated margin – Increased revenues driven by a higher price and lower cost of energy associated with 65MW of SJGS Unit 4 | 8.5 | ||||||||||
Rate credits – NMPRC ordered rate credits, removing all costs of SJGS Unit 1 from rates (See Note 17) | (1.2) | ||||||||||
FERC ordered time-value refunds (See Note 17) | (8.1) | ||||||||||
Other | (3.0) | ||||||||||
Net Change | $ | 72.6 |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Operating expenses: | (In millions) | ||||||||||
Higher plant maintenance costs at gas fired plants and PVNGS, partially offset by lower costs at Four Corners and the retirement of SJGS | $ | 2.0 | |||||||||
Higher property taxes due to increases in utility plant in service including the Western Spirit Line partially offset by favorable settlement of property values | 2.1 | ||||||||||
Higher employee related and outside service expenses | 18.3 | ||||||||||
Higher transmission line maintenance and rights-of-way expense including for the Western Spirit Line | 3.9 | ||||||||||
2021 non-retail credit loss | (1.0) | ||||||||||
2021 regulatory disallowance resulting from the PVNGS Leased Interest Abandonment Application (Note 17) | (1.3) | ||||||||||
Higher regulatory disallowance due to change in estimated write-offs associated with SJGS BART determination and ownership restructuring | 0.9 | ||||||||||
Decreased costs associated with the accelerated recovery of SNCRs on SJGS Units 1 and 4 | (2.5) | ||||||||||
Other | (0.3) | ||||||||||
Net Change | $ | 22.1 |
Depreciation and amortization: | |||||||||||
Increased utility plant in service including the Western Spirit Line | $ | 13.7 | |||||||||
Lower depreciation due to the retirement of SJGS | (3.9) | ||||||||||
Other | 0.6 | ||||||||||
Net Change | $ | 10.4 |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Other income (deductions): | (In millions) | ||||||||||
Decreased performance on investment securities in the NDT and coal mine reclamation trusts | $ | (95.2) | |||||||||
Lower non-service pension costs | 1.5 | ||||||||||
Lower trust expenses partially offset by lower interest income related to investment securities in the NDT and coal mine reclamation trusts | 1.0 | ||||||||||
Lower charitable contributions in 2022 | 1.7 | ||||||||||
Carrying charges on payments under the ETA for SJGS made in advance of the Energy Transition Bonds (Note 17) | 0.7 | ||||||||||
Other | (0.3) | ||||||||||
Net Change | $ | (90.6) |
Interest charges: | |||||||||||
Refinancing of $160.0 million of SUNs in July 2021 | 2.3 | ||||||||||
Issuance of $150.0 million of SUNs in December 2021 | (3.8) | ||||||||||
Higher interest on term loans | (3.6) | ||||||||||
Interest on transmission customer deposits including the Western Spirit Transmission Line | (4.3) | ||||||||||
Other | (0.3) | ||||||||||
Net Change | $ | (9.7) |
Income (taxes): | |||||||||||
Lower segment earnings before income taxes | $ | 15.2 | |||||||||
Higher non-deductible compensation | (1.4) | ||||||||||
Lower amortization of federal excess deferred income taxes (Note 18) | (0.7) | ||||||||||
Adjustments for the closure of SJGS | (3.5) | ||||||||||
Other | (1.8) | ||||||||||
Net Change | $ | 7.8 |
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(In millions) | |||||||||||||||||
Gross margin | $ | 224.1 | $ | 182.9 | $ | 41.2 | |||||||||||
Transmission and distribution costs | 36.4 | 31.5 | 4.9 | ||||||||||||||
Depreciation and amortization | 98.3 | 90.4 | 7.9 | ||||||||||||||
Utility margin | $ | 358.8 | $ | 304.8 | $ | 54.0 | |||||||||||
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(In millions) | |||||||||||||||||
Electric operating revenues | $ | 482.7 | $ | 417.9 | $ | 64.8 | |||||||||||
Cost of energy | 123.9 | 113.1 | 10.8 | ||||||||||||||
Utility margin | 358.8 | 304.8 | 54.0 | ||||||||||||||
Operating expenses | 124.5 | 114.2 | 10.3 | ||||||||||||||
Depreciation and amortization | 98.3 | 90.4 | 7.9 | ||||||||||||||
Operating income | 136.0 | 100.1 | 35.9 | ||||||||||||||
Other income (deductions) | 8.7 | 5.4 | 3.3 | ||||||||||||||
Interest charges | (37.2) | (33.7) | (3.5) | ||||||||||||||
Segment earnings before income taxes | 107.4 | 71.8 | 35.6 | ||||||||||||||
Income (taxes) | (15.2) | (7.9) | (7.3) | ||||||||||||||
Segment earnings | $ | 92.3 | $ | 63.9 | $ | 28.4 |
Year Ended December 31, | Percentage Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
Volumetric load (1) (GWh) | |||||||||||||||||
Residential | 3,309.3 | 3,018.3 | 9.6 | % | |||||||||||||
Commercial and other | 49.1 | 39.9 | 23.1 | % | |||||||||||||
Total volumetric load | 3,358.4 | 3,058.2 | 9.8 | % | |||||||||||||
Demand-based load (2) (MW) | 24,543.1 | 21,176.9 | 15.9 | % | |||||||||||||
Average retail consumers (thousands) (3) | 267.9 | 263.5 | 1.7 | % |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Gross margin: | (In millions) | ||||||||||
Utility Margin (see below) | $ | 54.0 | |||||||||
Depreciation and amortization (see below) | (7.9) | ||||||||||
Higher employee related, outside services expenses, and vegetation management expenses, excluding administrative costs | (4.6) | ||||||||||
Other | (0.3) | ||||||||||
Net Change | $ | 41.2 |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Utility margin: | (In millions) | ||||||||||
Transmission rate relief/load – Transmission cost of service rate increases in March 2021, September 2021, March 2022, and September 2022 | $ | 19.6 | |||||||||
Distribution rate relief – Distribution cost of service rate increases in September 2021 and September 2022 | 13.5 | ||||||||||
Volumetric-based consumer usage/load – Weather normalized KWh sales increased 2.4%; the average number of volumetric consumers increased 2.7% | 1.0 | ||||||||||
Demand based consumer usage/load – Weather normalized demand-based MW sales for large commercial and industrial consumers excluding retail transmission customers increased 17.3% primarily due to new cryptocurrency loads | 10.7 | ||||||||||
Weather – Cooler winter weather and warmer summer weather in 2022; heating degree days were 30.1% higher and cooling degree days were 7.7% higher in 2022 | 7.6 | ||||||||||
Rate riders and other – Impacts of rate riders, including the transmission cost recovery factor, energy efficiency rider, and rate case expense rider which are partially offset in operating expense and depreciation and amortization | 1.6 | ||||||||||
Net Change | $ | 54.0 |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Operating expenses: | (In millions) | ||||||||||
Higher employee related, outside service expenses and vegetation management expenses | $ | 7.6 | |||||||||
Higher property tax due to increased utility plant in service | 2.8 | ||||||||||
Higher capitalization of administrative and general and other expenses due to higher construction expenditures | (1.2) | ||||||||||
Higher energy efficiency expense and rate case amortization which are offset in utility margin | 0.5 | ||||||||||
Other | 0.6 | ||||||||||
Net Change | $ | 10.3 |
Depreciation and amortization: | |||||||||||
Increased utility plant in service | $ | 8.2 | |||||||||
Decreased amortization related to rate riders offset in utility margin and other | (0.3) | ||||||||||
Net Change | $ | 7.9 |
Other income (deductions): | |||||||||||
AMS Reconciliation carrying charges (Note 17) | $ | 1.5 | |||||||||
Higher equity AFUDC | 1.2 | ||||||||||
Higher CIAC | 0.6 | ||||||||||
Net Change | $ | 3.3 |
Interest charges: | |||||||||||
Issuance of $65.0 million first mortgage bonds in 2021 | $ | (1.0) | |||||||||
Issuance of $65.0 million first mortgage bonds in 2022 | (1.7) | ||||||||||
Issuance of $95.0 million first mortgage bonds in 2022 | (1.5) | ||||||||||
Other | 0.7 | ||||||||||
Net Change | $ | (3.5) |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Income (taxes): | (In millions) | ||||||||||
Higher segment earnings before income taxes | $ | (7.5) | |||||||||
Other | 0.2 | ||||||||||
Net Change | $ | (7.3) |
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
(In millions) | |||||||||||||||||
Total revenues | $ | — | $ | — | $ | — | |||||||||||
Cost of energy | — | — | — | ||||||||||||||
Utility margin | — | — | — | ||||||||||||||
Operating expenses | (22.0) | (9.8) | (12.2) | ||||||||||||||
Depreciation and amortization | 25.7 | 23.3 | 2.4 | ||||||||||||||
Operating income (loss) | (3.7) | (13.5) | 9.8 | ||||||||||||||
Other income (deductions) | (1.0) | (0.7) | (0.3) | ||||||||||||||
Interest charges | (29.6) | (11.8) | (17.8) | ||||||||||||||
Segment earnings (loss) before income taxes | (34.3) | (25.9) | (8.4) | ||||||||||||||
Income (taxes) benefit | 8.2 | 2.3 | 5.9 | ||||||||||||||
Segment earnings (loss) | $ | (26.1) | $ | (23.6) | $ | (2.5) |
Year Ended December 31, 2022 | |||||||||||
Change | |||||||||||
Other income (deductions): | (In millions) | ||||||||||
Increase in donations and other contributions | $ | (0.2) | |||||||||
Other | (0.1) | ||||||||||
Net Change | $ | (0.3) |
Interest charges: | |||||||||||
Higher interest on term loans | $ | (19.0) | |||||||||
Repayment of PNMR 2018 SUNs in March 2021 | 2.0 | ||||||||||
Higher interest on short term borrowings | (0.8) | ||||||||||
Net Change | $ | (17.8) |
Income (taxes) benefits: | |||||||||||
Higher segment loss before income taxes | $ | 2.1 | |||||||||
Lower state income tax effective rate | 2.6 | ||||||||||
Lower non-deductible merger related costs | 0.9 | ||||||||||
Other | 0.3 | ||||||||||
Net Change | $ | 5.9 |
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
Net cash flows from: | (In millions) | ||||||||||||||||
Operating activities | $ | 567.3 | $ | 547.9 | $ | 19.4 | |||||||||||
Investing activities | (950.3) | (952.3) | 2.0 | ||||||||||||||
Financing activities | 386.0 | 357.6 | 28.4 | ||||||||||||||
Net change in cash and cash equivalents | $ | 3.0 | $ | (46.8) | $ | 49.8 |
Year Ended December 31, | Change | ||||||||||||||||
2022 | 2021 | 2022/2021 | |||||||||||||||
Cash (Outflows) for Utility Plant Additions | (In millions) | ||||||||||||||||
PNM: | |||||||||||||||||
Generation | $ | (62.8) | $ | (53.3) | $ | (9.5) | |||||||||||
Transmission and distribution | (349.4) | (527.4) | 178.0 | ||||||||||||||
Nuclear fuel | (21.3) | (21.5) | 0.2 | ||||||||||||||
(433.5) | (602.2) | 168.7 | |||||||||||||||
TNMP: | |||||||||||||||||
Transmission | (188.2) | (128.2) | (60.0) | ||||||||||||||
Distribution | (261.3) | (183.7) | (77.6) | ||||||||||||||
(449.5) | (311.9) | (137.6) | |||||||||||||||
Corporate and Other: | |||||||||||||||||
Computer hardware and software | (29.6) | (20.9) | (8.7) | ||||||||||||||
$ | (912.6) | $ | (935.0) | $ | 22.4 | ||||||||||||
Other Cash Flows from Investing Activities | |||||||||||||||||
Proceeds from sales of investment securities | $ | 526.4 | $ | 459.9 | $ | 66.5 | |||||||||||
Purchases of investment securities | (564.9) | (477.7) | (87.2) | ||||||||||||||
Distributions from NMRD | — | 0.6 | (0.6) | ||||||||||||||
Other, net | 0.8 | (0.1) | 0.9 | ||||||||||||||
$ | (37.7) | $ | (17.3) | $ | (20.4) | ||||||||||||
Net cash flows from investing activities | $ | (950.3) | $ | (952.3) | $ | 2.0 |
2023 | 2024-2027 | Total | |||||||||||||||
(In millions) | |||||||||||||||||
Construction expenditures | $ | 1,027.2 | $ | 3,574.9 | $ | 4,602.1 | |||||||||||
Dividends on PNMR common stock | 126.2 | 504.7 | 630.9 | ||||||||||||||
Dividends on PNM preferred stock | 0.5 | 2.1 | 2.6 | ||||||||||||||
Total capital requirements | $ | 1,153.9 | $ | 4,081.7 | $ | 5,235.6 |
Three Months Ended | Year Ended December 31 | |||||||||||||||||||||||||||||||||||||
December 31, 2022 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||
Range of Borrowings | Low | High | Low | High | Low | High | ||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||
PNM: | ||||||||||||||||||||||||||||||||||||||
PNM Revolving Credit Facility | $ | — | $ | 145.9 | $ | — | $ | 145.9 | $ | — | $ | 40.0 | ||||||||||||||||||||||||||
PNM New Mexico Credit Facility | — | 40.0 | — | 40.0 | — | 10.0 | ||||||||||||||||||||||||||||||||
TNMP Revolving Credit Facility | 0.4 | 36.7 | — | 100.0 | — | 70.0 | ||||||||||||||||||||||||||||||||
PNMR Revolving Credit Facility | 9.4 | 100.2 | — | 100.2 | — | 134.5 | ||||||||||||||||||||||||||||||||
PNMR Development Revolving Credit Facility | — | — | — | — | — | 40.0 |
PNMR | PNM | TNMP | |||||||||||||||
S&P | |||||||||||||||||
Issuer rating | BBB | BBB | BBB+ | ||||||||||||||
Senior secured debt | * | * | A | ||||||||||||||
Senior unsecured debt | BBB- | BBB | * | ||||||||||||||
Preferred stock | * | BB+ | * | ||||||||||||||
Moody’s | |||||||||||||||||
Issuer rating | Baa3 | Baa2 | Baa1 | ||||||||||||||
Senior secured debt | * | * | A2 | ||||||||||||||
Senior unsecured debt | Baa3 | Baa2 | * | ||||||||||||||
* Not applicable |
PNM | TNMP | PNMR Separate | PNMR Consolidated | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Financing capacity: | |||||||||||||||||||||||
Revolving Credit Facility | $ | 400.0 | $ | 100.0 | $ | 300.0 | $ | 800.0 | |||||||||||||||
PNM New Mexico Credit Facility | 40.0 | — | — | 40.0 | |||||||||||||||||||
Total financing capacity | $ | 440.0 | $ | 100.0 | $ | 300.0 | $ | 840.0 | |||||||||||||||
Amounts outstanding as of February 17, 2023: | |||||||||||||||||||||||
Revolving Credit Facility | $ | 142.3 | $ | 97.1 | $ | 50.1 | $ | 289.5 | |||||||||||||||
PNM New Mexico Credit Facility | 25.0 | — | — | 25.0 | |||||||||||||||||||
Letters of credit | — | — | 3.1 | 3.1 | |||||||||||||||||||
Total short-term debt and letters of credit | 167.3 | 97.1 | 53.2 | 317.6 | |||||||||||||||||||
Remaining availability as of February 17, 2023 | $ | 272.7 | $ | 2.9 | $ | 246.8 | $ | 522.4 | |||||||||||||||
Invested cash as of February 17, 2023 | $ | — | $ | — | $ | 0.9 | $ | 0.9 |
December 31, | |||||||||||
PNMR | 2022 | 2021 | |||||||||
PNMR common equity | 34.9 | % | 36.9 | % | |||||||
Preferred stock of subsidiary | 0.2 | 0.2 | |||||||||
Long-term debt | 64.9 | 62.9 | |||||||||
Total capitalization | 100.0 | % | 100.0 | % | |||||||
PNM | |||||||||||
PNM common equity | 48.7 | % | 50.9 | % | |||||||
Preferred stock | 0.3 | 0.3 | |||||||||
Long-term debt | 51.0 | 48.8 | |||||||||
Total capitalization | 100.0 | % | 100.0 | % | |||||||
TNMP | |||||||||||
Common equity | 50.6 | % | 50.6 | % | |||||||
Long-term debt | 49.4 | 49.4 | |||||||||
Total capitalization | 100.0 | % | 100.0 | % |
Rating (1) | Credit Risk Exposure(2) | Number of Counter-parties >10% | Net Exposure of Counter-parties >10% | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
External ratings: | ||||||||||||||||||||
Investment grade | $ | 52,014 | 1 | $ | 44,945 | |||||||||||||||
Non-investment grade | — | — | — | |||||||||||||||||
Split ratings | — | — | — | |||||||||||||||||
Internal ratings: | ||||||||||||||||||||
Investment grade | 1,848 | — | — | |||||||||||||||||
Non-investment grade | — | — | — | |||||||||||||||||
Total | $ | 53,862 | $ | 44,945 |
Variable Rate Debt | Weighted Average Interest Rate | Balance Outstanding | Capacity | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
Short-term Debt: | ||||||||||||||||||||
PNMR Revolving Credit Facility | 6.16 | % | $ | 50,100 | $ | 300,000 | ||||||||||||||
PNM Revolving Credit Facility | 5.90 | 142,300 | 400,000 | |||||||||||||||||
PNM New Mexico Credit Facility | 5.86 | 25,000 | 40,000 | |||||||||||||||||
TNMP Revolving Credit Facility | 5.54 | 97,100 | 100,000 | |||||||||||||||||
$ | 314,500 | $ | 840,000 | |||||||||||||||||
Long-term Debt: | ||||||||||||||||||||
PNMR 2021 Delayed-Draw Term Loan | 5.59 | % | $ | 1,000,000 | ||||||||||||||||
PNM 2021 Term Loan | 5.41 | 225,000 | ||||||||||||||||||
$ | 1,225,000 |
Page | ||||||||
Reports of Independent Registered Public Accounting Firm (PCAOB ID | ||||||||
PNM Resources, Inc. and Subsidiaries | ||||||||
Public Service Company of New Mexico and Subsidiaries | ||||||||
Texas-New Mexico Power Company and Subsidiaries | ||||||||
Supplementary Data: | ||||||||
/s/ Patricia K. Collawn | ||
Patricia K. Collawn, | ||
Chairman and Chief Executive Officer | ||
/s/ Elisabeth A. Eden | ||
Elisabeth A. Eden, | ||
Senior Vice President, Chief Financial Officer, and Treasurer | ||
/s/ Joseph D. Tarry | ||
Joseph D. Tarry, | ||
President and Chief Executive Officer | ||
/s/ Elisabeth A. Eden | ||
Elisabeth A. Eden, | ||
Senior Vice President, Chief Financial Officer, and Treasurer | ||
/s/ Joseph D. Tarry | ||
Joseph D. Tarry, | ||
Chief Executive Officer | ||
/s/ Elisabeth A. Eden | ||
Elisabeth A. Eden, | ||
Senior Vice President, Chief Financial Officer, and Treasurer | ||
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Electric Operating Revenues | $ | $ | $ | ||||||||||||||
Operating Expenses: | |||||||||||||||||
Cost of energy | |||||||||||||||||
Administrative and general | |||||||||||||||||
Energy production costs | |||||||||||||||||
Regulatory disallowances and restructuring costs | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Transmission and distribution costs | |||||||||||||||||
Taxes other than income taxes | |||||||||||||||||
Total operating expenses | |||||||||||||||||
Operating income | |||||||||||||||||
Other Income and Deductions: | |||||||||||||||||
Interest income | |||||||||||||||||
Gains (losses) on investment securities | ( | ||||||||||||||||
Other income | |||||||||||||||||
Other (deductions) | ( | ( | ( | ||||||||||||||
Net other income and (deductions) | ( | ||||||||||||||||
Interest Charges | |||||||||||||||||
Earnings before Income Taxes | |||||||||||||||||
Income Taxes | |||||||||||||||||
Net Earnings | |||||||||||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | ( | ( | ( | ||||||||||||||
Preferred Stock Dividend Requirements of Subsidiary | ( | ( | ( | ||||||||||||||
Net Earnings Attributable to PNMR | $ | $ | $ | ||||||||||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Net Earnings | $ | $ | $ | ||||||||||||||
Other Comprehensive Income: | |||||||||||||||||
Unrealized Gains on Available-for-Sale Securities: | |||||||||||||||||
Unrealized holding gains (losses) arising during the period, net of income tax (expense) benefit of $ | ( | ( | |||||||||||||||
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $ | ( | ( | ( | ||||||||||||||
Pension Liability Adjustment: | |||||||||||||||||
Experience gains (losses), net of income tax (expense) benefit of $ | ( | ||||||||||||||||
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $( | |||||||||||||||||
Fair Value Adjustment for Cash Flow Hedges: | |||||||||||||||||
Change in fair market value, net of income tax (expense) of $( | |||||||||||||||||
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $ | ( | ( | ( | ||||||||||||||
Total Other Comprehensive Income | |||||||||||||||||
Comprehensive Income | |||||||||||||||||
Comprehensive (Income) Attributable to Valencia Non-controlling Interest | ( | ( | ( | ||||||||||||||
Preferred Stock Dividend Requirements of Subsidiary | ( | ( | ( | ||||||||||||||
Comprehensive Income Attributable to PNMR | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||
Net earnings | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Deferred income tax expense | |||||||||||||||||
(Gains) losses on investment securities | ( | ( | |||||||||||||||
Stock based compensation expense | |||||||||||||||||
Regulatory disallowances and restructuring costs | |||||||||||||||||
Allowance for equity funds used during construction | ( | ( | ( | ||||||||||||||
Other, net | |||||||||||||||||
Changes in certain assets and liabilities: | |||||||||||||||||
Accounts receivable and unbilled revenues | ( | ( | ( | ||||||||||||||
Materials, supplies, and fuel stock | ( | ||||||||||||||||
Other current assets | ( | ||||||||||||||||
Other assets | |||||||||||||||||
Accounts payable | |||||||||||||||||
Accrued interest and taxes | ( | ||||||||||||||||
Other current liabilities | ( | ||||||||||||||||
Other liabilities | ( | ( | ( | ||||||||||||||
Net cash flows from operating activities | |||||||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Additions to utility and non-utility plant | ( | ( | ( | ||||||||||||||
Proceeds from sales of investment securities | |||||||||||||||||
Purchases of investment securities | ( | ( | ( | ||||||||||||||
Investments in NMRD | ( | ||||||||||||||||
Distributions from NMRD | |||||||||||||||||
Other, net | ( | ( | |||||||||||||||
Net cash flows used in investing activities | ( | ( | ( |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||
Revolving credit facilities borrowings (repayments), net | $ | $ | $ | ( | |||||||||||||
Long-term borrowings | |||||||||||||||||
Repayment of long-term debt | ( | ( | ( | ||||||||||||||
Issuance of common stock | |||||||||||||||||
Proceeds from stock option exercise | — | ||||||||||||||||
Awards of common stock | ( | ( | ( | ||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Valencia’s transactions with its owner | ( | ( | ( | ||||||||||||||
Transmission interconnection and security deposit arrangements | |||||||||||||||||
Refunds paid under transmission interconnection arrangements | ( | ( | ( | ||||||||||||||
Debt issuance costs and other, net | ( | ( | ( | ||||||||||||||
Net cash flows from financing activities | |||||||||||||||||
Change in Cash and Cash Equivalents | ( | ||||||||||||||||
Cash and Cash Equivalents at Beginning of Year | |||||||||||||||||
Cash and Cash Equivalents at End of Year | $ | $ | $ | ||||||||||||||
Supplemental Cash Flow Disclosures: | |||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | $ | ||||||||||||||
Income taxes paid (refunded), net | $ | ( | $ | $ | |||||||||||||
Supplemental schedule of noncash investing and financing activities: | |||||||||||||||||
(Increase) decrease in accrued plant additions | $ | $ | $ | ( | |||||||||||||
Contribution of utility plant to NMRD | $ | $ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
Unbilled revenues | |||||||||||
Other receivables | |||||||||||
Materials, supplies, and fuel stock | |||||||||||
Regulatory assets | |||||||||||
Prepaid assets | |||||||||||
Income taxes receivable | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Other Property and Investments: | |||||||||||
Investment securities | |||||||||||
Equity investment in NMRD | |||||||||||
Other investments | |||||||||||
Non-utility property, including financing leases | |||||||||||
Total other property and investments | |||||||||||
Utility Plant: | |||||||||||
Plant in service, held for future use, and to be abandoned | |||||||||||
Less accumulated depreciation and amortization | |||||||||||
Construction work in progress | |||||||||||
Nuclear fuel, net of accumulated amortization of $ | |||||||||||
Net utility plant | |||||||||||
Deferred Charges and Other Assets: | |||||||||||
Regulatory assets | |||||||||||
Goodwill | |||||||||||
Operating lease right-of-use assets, net of accumulated amortization | |||||||||||
Other deferred charges | |||||||||||
Total deferred charges and other assets | |||||||||||
$ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands, except share information) | |||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Short-term debt | $ | $ | |||||||||
Current installments of long-term debt | |||||||||||
Accounts payable | |||||||||||
Customer deposits | |||||||||||
Accrued interest and taxes | |||||||||||
Regulatory liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Dividends declared | |||||||||||
Transmission interconnection arrangement liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | |||||||||||
Deferred Credits and Other Liabilities: | |||||||||||
Accumulated deferred income taxes | |||||||||||
Regulatory liabilities | |||||||||||
Asset retirement obligations | |||||||||||
Accrued pension liability and postretirement benefit cost | |||||||||||
Operating lease liabilities | |||||||||||
Other deferred credits | |||||||||||
Total deferred credits and other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies (See Note 16) | |||||||||||
Cumulative Preferred Stock of Subsidiary | |||||||||||
without mandatory redemption requirements ($ | |||||||||||
Equity: | |||||||||||
PNMR common stockholders’ equity: | |||||||||||
Common stock ( | |||||||||||
Accumulated other comprehensive income (loss), net of income taxes | ( | ( | |||||||||
Retained earnings | |||||||||||
Total PNMR common stockholders’ equity | |||||||||||
Non-controlling interest in Valencia | |||||||||||
Total equity | |||||||||||
$ | $ |
Attributable to PNMR | Non- controlling Interest in Valencia | |||||||||||||||||||||||||||||||||||||
Total PNMR Common Stockholder’s Equity | ||||||||||||||||||||||||||||||||||||||
Common Stock | AOCI | Retained Earnings | Total Equity | |||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Net earnings before subsidiary preferred stock dividends | — | — | ||||||||||||||||||||||||||||||||||||
Total other comprehensive income | — | — | — | |||||||||||||||||||||||||||||||||||
Subsidiary preferred stock dividends | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Proceeds from stock option exercise | — | — | — | |||||||||||||||||||||||||||||||||||
Awards of common stock | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Issuance of common stock | ||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | ( | |||||||||||||||||||||||||||||||||||||
Net earnings before subsidiary preferred stock dividends | — | — | ||||||||||||||||||||||||||||||||||||
Total other comprehensive income | — | — | — | |||||||||||||||||||||||||||||||||||
Subsidiary preferred stock dividends | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Awards of common stock | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | |||||||||||||||||||||||||||||||||||||
Net earnings before subsidiary preferred stock dividends | — | — | ||||||||||||||||||||||||||||||||||||
Total other comprehensive income | — | — | — | |||||||||||||||||||||||||||||||||||
Subsidiary preferred stock dividends | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Awards of common stock | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | |||||||||||||||||||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | ( | $ | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Electric Operating Revenues | $ | $ | $ | ||||||||||||||
Operating Expenses: | |||||||||||||||||
Cost of energy | |||||||||||||||||
Administrative and general | |||||||||||||||||
Energy production costs | |||||||||||||||||
Regulatory disallowances and restructuring costs | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Transmission and distribution costs | |||||||||||||||||
Taxes other than income taxes | |||||||||||||||||
Total operating expenses | |||||||||||||||||
Operating income | |||||||||||||||||
Other Income and Deductions: | |||||||||||||||||
Interest income | |||||||||||||||||
Gains (losses) on investment securities | ( | ||||||||||||||||
Other income | |||||||||||||||||
Other (deductions) | ( | ( | ( | ||||||||||||||
Net other income and (deductions) | ( | ||||||||||||||||
Interest Charges | |||||||||||||||||
Earnings before Income Taxes | |||||||||||||||||
Income Taxes | |||||||||||||||||
Net Earnings | |||||||||||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | ( | ( | ( | ||||||||||||||
Net Earnings Attributable to PNM | |||||||||||||||||
Preferred Stock Dividends Requirements | ( | ( | ( | ||||||||||||||
Net Earnings Available for PNM Common Stock | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Net Earnings | $ | $ | $ | ||||||||||||||
Other Comprehensive Income (Loss): | |||||||||||||||||
Unrealized Gains on Available-for-Sale Securities: | |||||||||||||||||
Unrealized holding gains (losses) arising during the period, net of income tax (expense) benefit of $ | ( | ( | |||||||||||||||
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $ | ( | ( | ( | ||||||||||||||
Pension Liability Adjustment: | |||||||||||||||||
Experience gains (losses), net of income tax (expense) benefit of $ | ( | ||||||||||||||||
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $( | |||||||||||||||||
Total Other Comprehensive Income (Loss) | ( | ||||||||||||||||
Comprehensive Income | |||||||||||||||||
Comprehensive (Income) Attributable to Valencia Non-controlling Interest | ( | ( | ( | ||||||||||||||
Comprehensive Income Attributable to PNM | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||
Net earnings | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Deferred income tax expense | |||||||||||||||||
(Gains) losses on investment securities | ( | ( | |||||||||||||||
Regulatory disallowances and restructuring costs | |||||||||||||||||
Allowance for equity funds used during construction | ( | ( | ( | ||||||||||||||
Other, net | |||||||||||||||||
Changes in certain assets and liabilities: | |||||||||||||||||
Accounts receivable and unbilled revenues | ( | ( | ( | ||||||||||||||
Materials, supplies, and fuel stock | ( | ||||||||||||||||
Other current assets | ( | ||||||||||||||||
Other assets | |||||||||||||||||
Accounts payable | |||||||||||||||||
Accrued interest and taxes | ( | ( | |||||||||||||||
Other current liabilities | ( | ||||||||||||||||
Other liabilities | ( | ( | ( | ||||||||||||||
Net cash flows from operating activities | |||||||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Utility plant additions | ( | ( | ( | ||||||||||||||
Proceeds from sales of investment securities | |||||||||||||||||
Purchases of investment securities | ( | ( | ( | ||||||||||||||
Other, net | ( | ( | |||||||||||||||
Net cash flows used in investing activities | ( | ( | ( |
Year ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||
Revolving credit facilities borrowings (repayments), net | $ | $ | ( | $ | ( | ||||||||||||
Long-term borrowings | |||||||||||||||||
Repayment of long-term debt | ( | ( | ( | ||||||||||||||
Equity contribution from parent | |||||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Valencia’s transactions with its owner | ( | ( | ( | ||||||||||||||
Transmission interconnection and security deposit arrangements | |||||||||||||||||
Refunds paid under transmission interconnection arrangements | ( | ( | ( | ||||||||||||||
Debt issuance costs and other, net | ( | ( | |||||||||||||||
Net cash flows from financing activities | |||||||||||||||||
Change in Cash and Cash Equivalents | ( | ||||||||||||||||
Cash and Cash Equivalents at Beginning of Year | |||||||||||||||||
Cash and Cash Equivalents at End of Year | $ | $ | $ | ||||||||||||||
Supplemental Cash Flow Disclosures: | |||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | $ | ||||||||||||||
Income taxes paid (refunded), net | $ | $ | ( | $ | |||||||||||||
Supplemental schedule of noncash investing activities: | |||||||||||||||||
(Increase) decrease in accrued plant additions | $ | ( | $ | $ | ( |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
Unbilled revenues | |||||||||||
Other receivables | |||||||||||
Affiliate receivables | |||||||||||
Materials, supplies, and fuel stock | |||||||||||
Regulatory assets | |||||||||||
Prepaid assets | |||||||||||
Income taxes receivable | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Other Property and Investments: | |||||||||||
Investment securities | |||||||||||
Other investments | |||||||||||
Non-utility property, including financing leases | |||||||||||
Total other property and investments | |||||||||||
Utility Plant: | |||||||||||
Plant in service, held for future use, and to be abandoned | |||||||||||
Less accumulated depreciation and amortization | |||||||||||
Construction work in progress | |||||||||||
Nuclear fuel, net of accumulated amortization of $ | |||||||||||
Net utility plant | |||||||||||
Deferred Charges and Other Assets: | |||||||||||
Regulatory assets | |||||||||||
Goodwill | |||||||||||
Operating lease right-of-use assets, net of accumulated amortization | |||||||||||
Other deferred charges | |||||||||||
Total deferred charges and other assets | |||||||||||
$ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands, except share information) | |||||||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Short-term debt | $ | $ | |||||||||
Current installments of long-term debt | |||||||||||
Accounts payable | |||||||||||
Affiliate payables | |||||||||||
Customer deposits | |||||||||||
Accrued interest and taxes | |||||||||||
Regulatory liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Dividends declared | |||||||||||
Transmission interconnection arrangement liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | |||||||||||
Deferred Credits and Other Liabilities: | |||||||||||
Accumulated deferred income taxes | |||||||||||
Regulatory liabilities | |||||||||||
Asset retirement obligations | |||||||||||
Accrued pension liability and postretirement benefit cost | |||||||||||
Operating lease liabilities | |||||||||||
Other deferred credits | |||||||||||
Total deferred credits and liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies (See Note 16) | |||||||||||
Cumulative Preferred Stock | |||||||||||
without mandatory redemption requirements ($ | |||||||||||
Equity: | |||||||||||
PNM common stockholder’s equity: | |||||||||||
Common stock ( | |||||||||||
Accumulated other comprehensive income (loss), net of income taxes | ( | ( | |||||||||
Retained earnings | |||||||||||
Total PNM common stockholder’s equity | |||||||||||
Non-controlling interest in Valencia | |||||||||||
Total equity | |||||||||||
$ | $ |
Attributable to PNM | |||||||||||||||||||||||||||||||||||
Common Stock | AOCI | Retained Earnings | Total PNM Common Stockholder’s Equity | Non- controlling Interest in Valencia | Total Equity | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Net earnings | — | — | |||||||||||||||||||||||||||||||||
Total other comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
Dividends declared on preferred stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Equity contribution from parent | — | — | — | ||||||||||||||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance at December 31, 2020 | ( | ||||||||||||||||||||||||||||||||||
Net earnings | — | — | |||||||||||||||||||||||||||||||||
Total other comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
Dividends declared on preferred stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Equity contributions from parent | — | — | — | ||||||||||||||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | ||||||||||||||||||||||||||||||||||
Net earnings | — | — | |||||||||||||||||||||||||||||||||
Total other comprehensive income | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||
Dividends declared on preferred stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | ( | $ | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Electric Operating Revenues | $ | $ | $ | ||||||||||||||
Operating Expenses: | |||||||||||||||||
Cost of energy | |||||||||||||||||
Administrative and general | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Transmission and distribution costs | |||||||||||||||||
Taxes other than income taxes | |||||||||||||||||
Total operating expenses | |||||||||||||||||
Operating income | |||||||||||||||||
Other Income and Deductions: | |||||||||||||||||
Other income | |||||||||||||||||
Other (deductions) | ( | ( | ( | ||||||||||||||
Net other income and (deductions) | |||||||||||||||||
Interest Charges | |||||||||||||||||
Earnings before Income Taxes | |||||||||||||||||
Income Taxes | |||||||||||||||||
Net Earnings | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||
Net earnings | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Deferred income tax (benefit) | ( | ( | ( | ||||||||||||||
Allowance for equity funds used during construction and other, net | ( | ( | ( | ||||||||||||||
Changes in certain assets and liabilities: | |||||||||||||||||
Accounts receivable and unbilled revenues | ( | ( | ( | ||||||||||||||
Materials and supplies | ( | ( | ( | ||||||||||||||
Other current assets | ( | ( | ( | ||||||||||||||
Other assets | |||||||||||||||||
Accounts payable | |||||||||||||||||
Accrued interest and taxes | ( | ( | |||||||||||||||
Other current liabilities | |||||||||||||||||
Other liabilities | ( | ||||||||||||||||
Net cash flows from operating activities | |||||||||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Utility plant additions | ( | ( | ( | ||||||||||||||
Net cash flows used in investing activities | ( | ( | ( |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flow From Financing Activities: | |||||||||||||||||
Revolving credit facilities borrowings (repayments), net | $ | $ | $ | ( | |||||||||||||
Long-term borrowings | |||||||||||||||||
Transmission interconnection arrangements | |||||||||||||||||
Refunds paid under transmission interconnection arrangements | ( | ( | |||||||||||||||
Equity contribution from parent | |||||||||||||||||
Dividends paid | ( | ||||||||||||||||
Debt issuance costs and other, net | ( | ( | ( | ||||||||||||||
Net cash flows from financing activities | |||||||||||||||||
Change in Cash and Cash Equivalents | ( | ||||||||||||||||
Cash and Cash Equivalents at Beginning of Year | |||||||||||||||||
Cash and Cash Equivalents at End of Year | $ | $ | $ | ||||||||||||||
Supplemental Cash Flow Disclosures: | |||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | $ | ||||||||||||||
Income taxes paid, net | $ | $ | $ | ||||||||||||||
Supplemental schedule of noncash investing activities: | |||||||||||||||||
(Increase) decrease in accrued plant additions | $ | $ | ( | $ | ( | ||||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable | |||||||||||
Unbilled revenues | |||||||||||
Other receivables | |||||||||||
Materials and supplies | |||||||||||
Regulatory assets | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Other Property and Investments: | |||||||||||
Other investments | |||||||||||
Non-utility property, including financing leases | |||||||||||
Total other property and investments | |||||||||||
Utility Plant: | |||||||||||
Plant in service and plant held for future use | |||||||||||
Less accumulated depreciation and amortization | |||||||||||
Construction work in progress | |||||||||||
Net utility plant | |||||||||||
Deferred Charges and Other Assets: | |||||||||||
Regulatory assets | |||||||||||
Goodwill | |||||||||||
Operating lease right-of-use assets, net of accumulated amortization | |||||||||||
Other deferred charges | |||||||||||
Total deferred charges and other assets | |||||||||||
$ | $ |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands, except share information) | |||||||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Short-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Affiliate payables | |||||||||||
Accrued interest and taxes | |||||||||||
Regulatory liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | |||||||||||
Deferred Credits and Other Liabilities: | |||||||||||
Accumulated deferred income taxes | |||||||||||
Regulatory liabilities | |||||||||||
Asset retirement obligations | |||||||||||
Accrued pension liability and postretirement benefit cost | |||||||||||
Operating lease liabilities | |||||||||||
Other deferred credits | |||||||||||
Total deferred credits and other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies (See Note 16) | |||||||||||
Common Stockholder’s Equity: | |||||||||||
Common stock ($ | |||||||||||
Paid-in-capital | |||||||||||
Retained earnings | |||||||||||
Total common stockholder’s equity | |||||||||||
$ | $ |
Common Stock | Paid-in Capital | Retained Earnings | Total Common Stockholder’s Equity | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | |||||||||||||||||||
Net earnings | — | — | |||||||||||||||||||||
Equity contribution from parent | — | — | |||||||||||||||||||||
Dividends declared on common stock | — | — | ( | ( | |||||||||||||||||||
Balance at December 31, 2020 | |||||||||||||||||||||||
Net earnings | — | — | |||||||||||||||||||||
Equity contributions from parent | — | — | |||||||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||||||||
Net earnings | — | — | |||||||||||||||||||||
Equity contributions from parent | — | — | |||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ |
Year ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
PNM | |||||||||||||||||
Electric plant | % | % | % | ||||||||||||||
Common, intangible, and general plant | % | % | % | ||||||||||||||
TNMP | % | % | % |
PNMR | PNM | TNMP | |||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Coal | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Materials and supplies | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
2022 | PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Electric operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of energy | |||||||||||||||||||||||
Utility margin | |||||||||||||||||||||||
Other operating expenses | ( | ||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Other income (deductions) | ( | ( | ( | ||||||||||||||||||||
Interest charges | ( | ( | ( | ( | |||||||||||||||||||
Segment earnings (loss) before income taxes | ( | ||||||||||||||||||||||
Income taxes (benefit) | ( | ||||||||||||||||||||||
Segment earnings (loss) | ( | ||||||||||||||||||||||
Valencia non-controlling interest | ( | ( | |||||||||||||||||||||
Subsidiary preferred stock dividends | ( | ( | |||||||||||||||||||||
Segment earnings (loss) attributable to PNMR | $ | $ | $ | ( | $ | ||||||||||||||||||
At December 31, 2022: | |||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | |||||||||||||||||||
Goodwill | $ | $ | $ | $ |
2021 | PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Electric operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of energy | |||||||||||||||||||||||
Utility margin | |||||||||||||||||||||||
Other operating expenses | ( | ||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Other income (deductions) | ( | ||||||||||||||||||||||
Interest charges | ( | ( | ( | ( | |||||||||||||||||||
Segment earnings (loss) before income taxes | ( | ||||||||||||||||||||||
Income taxes (benefit) | ( | ||||||||||||||||||||||
Segment earnings (loss) | ( | ||||||||||||||||||||||
Valencia non-controlling interest | ( | ( | |||||||||||||||||||||
Subsidiary preferred stock dividends | ( | ( | |||||||||||||||||||||
Segment earnings (loss) attributable to PNMR | $ | $ | $ | ( | $ | ||||||||||||||||||
At December 31, 2021: | |||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | |||||||||||||||||||
Goodwill | $ | $ | $ | $ |
2020 | PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Electric operating revenues | $ | $ | $ | $ | |||||||||||||||||||
Cost of energy | |||||||||||||||||||||||
Utility margin | |||||||||||||||||||||||
Other operating expenses | ( | ||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||
Interest income (loss) | ( | ||||||||||||||||||||||
Other income (deductions) | ( | ||||||||||||||||||||||
Interest charges | ( | ( | ( | ( | |||||||||||||||||||
Segment earnings (loss) before income taxes | ( | ||||||||||||||||||||||
Income taxes (benefit) | ( | ||||||||||||||||||||||
Segment earnings (loss) | ( | ||||||||||||||||||||||
Valencia non-controlling interest | ( | ( | |||||||||||||||||||||
Subsidiary preferred stock dividends | ( | ( | |||||||||||||||||||||
Segment earnings (loss) attributable to PNMR | $ | $ | $ | ( | $ | ||||||||||||||||||
At December 31, 2020: | |||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | |||||||||||||||||||
Goodwill | $ | $ | $ | $ |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||
Gross margin | $ | $ | $ | $ | ||||||||||||||||||||||
Energy production costs | ||||||||||||||||||||||||||
Transmission and distribution costs | ||||||||||||||||||||||||||
Depreciation and amortization | 1 | |||||||||||||||||||||||||
Utility margin | $ | $ | $ | $ | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||
Gross margin | $ | $ | $ | $ | ||||||||||||||||||||||
Energy production costs | ||||||||||||||||||||||||||
Transmission and distribution costs | ||||||||||||||||||||||||||
Depreciation and amortization | 1 | |||||||||||||||||||||||||
Utility margin | $ | $ | $ | $ | ||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||
Gross margin | $ | $ | $ | $ | ||||||||||||||||||||||
Energy production costs | ||||||||||||||||||||||||||
Transmission and distribution costs | ||||||||||||||||||||||||||
Depreciation and amortization | 1 | |||||||||||||||||||||||||
Utility margin | $ | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
REP A | % | % | % | ||||||||||||||
REP B | % | % | % | ||||||||||||||
REP C | N/A | % | % |
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||
PNM | PNMR | ||||||||||||||||||||||||||||
Unrealized Gains on Available-for-Sale Securities | Pension Liability Adjustment | Total | Fair Value Adjustment for Cash Flow Hedges | Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
Amounts reclassified from AOCI (pre-tax) | ( | ( | ( | ( | |||||||||||||||||||||||||
Income tax impact of amounts reclassified | ( | ||||||||||||||||||||||||||||
Other OCI changes (pre-tax) | |||||||||||||||||||||||||||||
Income tax impact of other OCI changes | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Net after-tax change | ( | ||||||||||||||||||||||||||||
Balance at December 31, 2020 | ( | ( | ( | ( | |||||||||||||||||||||||||
Amounts reclassified from AOCI (pre-tax) | ( | ( | ( | ( | |||||||||||||||||||||||||
Income tax impact of amounts reclassified | ( | ||||||||||||||||||||||||||||
Other OCI changes (pre-tax) | ( | ||||||||||||||||||||||||||||
Income tax impact of other OCI changes | ( | ( | ( | ( | |||||||||||||||||||||||||
Net after-tax change | ( | ||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | ( | ( | ||||||||||||||||||||||||||
Amounts reclassified from AOCI (pre-tax) | ( | ( | |||||||||||||||||||||||||||
Income tax impact of amounts reclassified | ( | ( | ( | ||||||||||||||||||||||||||
Other OCI changes (pre-tax) | ( | ( | ( | ||||||||||||||||||||||||||
Income tax impact of other OCI changes | ( | ( | |||||||||||||||||||||||||||
Net after-tax change | ( | ( | |||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | ( | $ | ( | $ | $ | ( |
PNM | TNMP | PNMR Consolidated | ||||||||||||||||||
Year Ended December 31, 2022 | (In thousands) | |||||||||||||||||||
Electric Operating Revenues: | ||||||||||||||||||||
Contracts with customers: | ||||||||||||||||||||
Retail electric revenue | ||||||||||||||||||||
Residential | $ | $ | $ | |||||||||||||||||
Commercial | ||||||||||||||||||||
Industrial | ||||||||||||||||||||
Public authority | ||||||||||||||||||||
Economy energy service | ||||||||||||||||||||
Transmission | ||||||||||||||||||||
Wholesale energy sales | ||||||||||||||||||||
Miscellaneous | ||||||||||||||||||||
Total revenues from contracts with customers | ||||||||||||||||||||
Alternative revenue programs | ( | ( | ||||||||||||||||||
Other electric operating revenues | ||||||||||||||||||||
Total Electric Operating Revenues | $ | $ | $ | |||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||
Electric Operating Revenues: | ||||||||||||||||||||
Contracts with customers: | ||||||||||||||||||||
Retail electric revenue | ||||||||||||||||||||
Residential | $ | $ | $ | |||||||||||||||||
Commercial | ||||||||||||||||||||
Industrial | ||||||||||||||||||||
Public authority | ||||||||||||||||||||
Economy energy service | ||||||||||||||||||||
Transmission | ||||||||||||||||||||
Wholesale energy sales | ||||||||||||||||||||
Miscellaneous | ||||||||||||||||||||
Total revenues from contracts with customers | ||||||||||||||||||||
Alternative revenue programs | ( | ( | ||||||||||||||||||
Other electric operating revenues | ||||||||||||||||||||
Total Electric Operating Revenues | $ | $ | $ | |||||||||||||||||
PNM | TNMP | PNMR Consolidated | ||||||||||||||||||
Year Ended December 31, 2020 | (In thousands) | |||||||||||||||||||
Electric Operating Revenues: | ||||||||||||||||||||
Contracts with customers: | ||||||||||||||||||||
Retail electric revenue | ||||||||||||||||||||
Residential | $ | $ | $ | |||||||||||||||||
Commercial | ||||||||||||||||||||
Industrial | ||||||||||||||||||||
Public authority | ||||||||||||||||||||
Economy energy service | ||||||||||||||||||||
Transmission | ||||||||||||||||||||
Wholesale energy sales | ||||||||||||||||||||
Miscellaneous | ||||||||||||||||||||
Total revenues from contracts with customers | ||||||||||||||||||||
Alternative revenue programs | ( | ( | ( | |||||||||||||||||
Other electric operating revenues | ||||||||||||||||||||
Total Electric Operating Revenues | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Net Earnings Attributable to PNMR | $ | $ | $ | ||||||||||||||
Average Number of Common Shares: | |||||||||||||||||
Outstanding during year | |||||||||||||||||
Vested awards of restricted stock | |||||||||||||||||
Average Shares – Basic | |||||||||||||||||
Dilutive Effect of Common Stock Equivalents: | |||||||||||||||||
PNMR 2020 Forward Equity Sale Agreements | |||||||||||||||||
Stock options and restricted stock | |||||||||||||||||
Average Shares – Diluted | |||||||||||||||||
Net Earnings Attributable to PNMR Per Share of Common Stock: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Dividends Declared per Common Share | $ | $ | $ |
December 31, | ||||||||||||||
Short-term Debt | 2022 | 2021 | ||||||||||||
(In thousands) | ||||||||||||||
PNM: | ||||||||||||||
PNM Revolving Credit Facility | $ | $ | ||||||||||||
PNM New Mexico Credit Facility | ||||||||||||||
TNMP Revolving Credit Facility | ||||||||||||||
PNMR: | ||||||||||||||
PNMR Revolving Credit Facility | ||||||||||||||
$ | $ |
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
PNM Debt | ||||||||||||||||||||||||||
Senior Unsecured Notes, Pollution Control Revenue Bonds: | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
Senior Unsecured Notes: | ||||||||||||||||||||||||||
PNM 2021 $ | ||||||||||||||||||||||||||
PNM 2022 | ||||||||||||||||||||||||||
Less current maturities | ||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
TNMP Debt | ||||||||||||||||||||||||||
First Mortgage Bonds: | ||||||||||||||||||||||||||
( | ( | |||||||||||||||||||||||||
( | ( | |||||||||||||||||||||||||
Less current maturities | ||||||||||||||||||||||||||
( | ( | |||||||||||||||||||||||||
PNMR Debt | ||||||||||||||||||||||||||
PNMR 2021 Delayed-Draw Term Loan due May 2025 | ||||||||||||||||||||||||||
Less current maturities | ||||||||||||||||||||||||||
Total Consolidated PNMR Debt | ||||||||||||||||||||||||||
Less current maturities | ||||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( |
PNMR | PNM | TNMP | PNMR Consolidated | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
2023 | $ | $ | $ | $ | |||||||||||||||||||
2024 | |||||||||||||||||||||||
2025 | |||||||||||||||||||||||
2026 | |||||||||||||||||||||||
2027 | |||||||||||||||||||||||
Thereafter | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
PNM | TNMP | PNMR Consolidated | PNM | TNMP | PNMR Consolidated | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Operating leases: | |||||||||||||||||||||||||||||||||||
Operating lease assets, net of amortization | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Current portion of operating lease liabilities | |||||||||||||||||||||||||||||||||||
Long-term portion of operating lease liabilities |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
PNM | TNMP | PNMR Consolidated | PNM | TNMP | PNMR Consolidated | ||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||
Financing leases: | |||||||||||||||||||||||||||||||||||
Non-utility property | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Accumulated depreciation | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Non-utility property, net | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
PNM | TNMP | PNMR Consolidated | PNM | TNMP | PNMR Consolidated | ||||||||||||||||||||||||||||||
Weighted average remaining lease term (years): | |||||||||||||||||||||||||||||||||||
Operating leases | |||||||||||||||||||||||||||||||||||
Financing leases | |||||||||||||||||||||||||||||||||||
Weighted average discount rate: | |||||||||||||||||||||||||||||||||||
Operating leases | % | % | % | % | % | % | |||||||||||||||||||||||||||||
Financing leases | % | % | % | % | % | % |
Year Ended December 31, 2022 | |||||||||||||||||
PNM | TNMP | PNMR Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Amounts capitalized | ( | ( | ( | ||||||||||||||
Total operating lease expense | |||||||||||||||||
Financing lease cost: | |||||||||||||||||
Amortization of right-of-use assets | |||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
Amounts capitalized | ( | ( | ( | ||||||||||||||
Total financing lease expense | |||||||||||||||||
Variable lease expense | |||||||||||||||||
Short-term lease expense (1) | |||||||||||||||||
Total lease expense for the period | $ | $ | $ |
Year Ended December 31, 2021 | |||||||||||||||||
PNM | TNMP | PNMR Consolidated | |||||||||||||||
(In thousands) | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Amounts capitalized | ( | ( | ( | ||||||||||||||
Total operating lease expense | |||||||||||||||||
Financing lease cost: | |||||||||||||||||
Amortization of right-of-use assets | |||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
Amounts capitalized | ( | ( | ( | ||||||||||||||
Total financing lease expense | |||||||||||||||||
Variable lease expense | |||||||||||||||||
Short-term lease expense | |||||||||||||||||
Total lease expense for the period | $ | $ | $ |
Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||
PNM | TNMP | PNMR Consolidated | PNM | TNMP | PNMR Consolidated | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||||||||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Operating cash flows from financing leases | |||||||||||||||||||||||||||||||||||
Financing cash flows from financing leases | |||||||||||||||||||||||||||||||||||
Non-cash information related to right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||||||||||||||||||||
Operating leases | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Financing leases |
As of December 31, 2022 | |||||||||||||||||||||||||||||||||||
PNM | TNMP | PNMR Consolidated | |||||||||||||||||||||||||||||||||
Financing | Operating | Financing | Operating | Financing | Operating | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
2023 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
2024 | |||||||||||||||||||||||||||||||||||
2025 | |||||||||||||||||||||||||||||||||||
2026 | |||||||||||||||||||||||||||||||||||
2027 | |||||||||||||||||||||||||||||||||||
Later years | |||||||||||||||||||||||||||||||||||
Total minimum lease payments | |||||||||||||||||||||||||||||||||||
Less: Imputed interest | |||||||||||||||||||||||||||||||||||
Lease liabilities as of December 31, 2022 | $ | $ | $ | $ | $ | $ |
Economic Hedges | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Other current assets | $ | $ | |||||||||
Other deferred charges | |||||||||||
Other current liabilities | ( | ( | |||||||||
Other deferred credits | |||||||||||
( | ( | ||||||||||
Net | $ | ( | $ | ( | |||||||
Year ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Equity securities: | ||||||||||||||||||||
Net gains (losses) from equity securities sold | $ | ( | $ | $ | ||||||||||||||||
Net gains (losses) from equity securities still held | ( | ( | ||||||||||||||||||
Total net gains (losses) on equity securities | ( | |||||||||||||||||||
Available-for-sale debt securities: | ||||||||||||||||||||
Net gains (losses) on debt securities | ( | ( | ||||||||||||||||||
Net gains (losses) on investment securities | $ | ( | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Proceeds from sales | $ | $ | $ | ||||||||||||||
Gross realized gains | $ | $ | $ | ||||||||||||||
Gross realized (losses) | $ | ( | $ | ( | $ | ( |
Fair Value | |||||
(In thousands) | |||||
Within 1 year | $ | ||||
After 1 year through 5 years | |||||
After 5 years through 10 years | |||||
After 10 years through 15 years | |||||
After 15 years through 20 years | |||||
After 20 years | |||||
$ |
GAAP Fair Value Hierarchy | |||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unrealized Gains | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Corporate stocks, common | |||||||||||||||||||||||
Corporate stocks, preferred | |||||||||||||||||||||||
Mutual funds and other | |||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
U.S. government | $ | ||||||||||||||||||||||
International government | |||||||||||||||||||||||
Municipals | |||||||||||||||||||||||
Corporate and other | |||||||||||||||||||||||
$ | $ | $ | $ |
December 31, 2021 | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Corporate stocks, common | |||||||||||||||||||||||
Corporate stocks, preferred | |||||||||||||||||||||||
Mutual funds and other | |||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
U.S. government | $ | ||||||||||||||||||||||
International government | |||||||||||||||||||||||
Municipals | |||||||||||||||||||||||
Corporate and other | |||||||||||||||||||||||
$ | $ | $ | $ |
Carrying Amount | Fair Value | ||||||||||
December 31, 2022 | (In thousands) | ||||||||||
PNMR | $ | $ | |||||||||
PNM | $ | $ | |||||||||
TNMP | $ | $ | |||||||||
December 31, 2021 | |||||||||||
PNMR | $ | $ | |||||||||
PNM | $ | $ | |||||||||
TNMP | $ | $ |
GAAP Fair Value Hierarchy | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||||||||
December 31, 2022 | (In thousands) | ||||||||||||||||
PNM Pension Plan | |||||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||||
Investments categorized within fair value hierarchy | $ | $ | $ | ||||||||||||||
Uncategorized investments | |||||||||||||||||
Total Master Trust Investments | $ | ||||||||||||||||
TNMP Pension Plan | |||||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||||
Investments categorized within fair value hierarchy | $ | $ | $ | ||||||||||||||
Uncategorized investments | |||||||||||||||||
Total Master Trust Investments | $ | ||||||||||||||||
PNM OPEB Plan | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Equity securities: | |||||||||||||||||
Mutual funds | |||||||||||||||||
$ | $ | $ | |||||||||||||||
TNMP OPEB Plan | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Equity securities: | |||||||||||||||||
Mutual funds | |||||||||||||||||
$ | $ | $ |
GAAP Fair Value Hierarchy | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||||||||
December 31, 2021 | (In thousands) | ||||||||||||||||
PNM Pension Plan | |||||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||||
Investments categorized within fair value hierarchy | $ | $ | $ | ||||||||||||||
Uncategorized investments | |||||||||||||||||
Total Master Trust Investments | $ | ||||||||||||||||
TNMP Pension Plan | |||||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||||
Investments categorized within fair value hierarchy | $ | $ | $ | ||||||||||||||
Uncategorized investments | |||||||||||||||||
Total Master Trust Investments | $ | ||||||||||||||||
PNM OPEB Plan | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Equity securities: | |||||||||||||||||
Mutual funds | |||||||||||||||||
$ | $ | $ | |||||||||||||||
TNMP OPEB Plan | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Equity securities: | |||||||||||||||||
Mutual funds | |||||||||||||||||
$ | $ | $ |
GAAP Fair Value Hierarchy | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||||||||
December 31, 2022 | (In thousands) | ||||||||||||||||
PNMR Master Trust | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Equity securities: | |||||||||||||||||
Corporate stocks, common | |||||||||||||||||
Corporate stocks, preferred | |||||||||||||||||
Mutual funds and other | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. government | |||||||||||||||||
International government | |||||||||||||||||
Municipals | |||||||||||||||||
Corporate and other | |||||||||||||||||
Total investments categorized within fair value hierarchy | $ | $ | |||||||||||||||
Uncategorized investments: | |||||||||||||||||
$ | |||||||||||||||||
GAAP Fair Value Hierarchy | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||||||||
December 31, 2021 | (In thousands) | ||||||||||||||||
PNMR Master Trust | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Equity securities: | |||||||||||||||||
Corporate stocks, common | |||||||||||||||||
Corporate stocks, preferred | |||||||||||||||||
Mutual funds and other | |||||||||||||||||
Fixed income securities: | |||||||||||||||||
U.S. government | |||||||||||||||||
International government | |||||||||||||||||
Municipals | |||||||||||||||||
Corporate and other | |||||||||||||||||
Total investments categorized within fair value hierarchy | $ | $ | |||||||||||||||
Uncategorized investments: | |||||||||||||||||
$ |
Results of Operations | |||||||||||||||||
Year Ended December 31 | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Operating revenues | $ | $ | $ | ||||||||||||||
Operating expenses | |||||||||||||||||
Earnings attributable to non-controlling interest | $ | $ | $ |
Financial Position | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Current assets | $ | $ | |||||||||
Net property, plant and equipment | |||||||||||
Total assets | |||||||||||
Current liabilities | |||||||||||
Owners’ equity – non-controlling interest | $ | $ |
PNM | TNMP | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
PBO at beginning of year | $ | $ | $ | $ | |||||||||||||||||||
Service cost | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Actuarial (gain) | ( | ( | ( | ( | |||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
Settlements | ( | ( | |||||||||||||||||||||
PBO at end of year | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | |||||||||||||||||||||||
Actual return on plan assets | ( | ( | |||||||||||||||||||||
Employer contributions | |||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
Settlements | ( | ( | |||||||||||||||||||||
Fair value of plan assets at end of year | |||||||||||||||||||||||
Funded status – asset (liability) for pension benefits | $ | ( | $ | ( | $ | ( | $ |
PNM | TNMP | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Discount rates | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Demographic experience | ( | ( | ( | ||||||||||||||||||||
Mortality rate | |||||||||||||||||||||||
Other assumptions and experience | |||||||||||||||||||||||
$ | ( | $ | ( | $ | ( | $ | ( |
PNM | TNMP | ||||||||||
(In thousands) | |||||||||||
Amounts in AOCI not yet recognized in net periodic benefit cost (income) at beginning of year | $ | $ | |||||||||
Experience loss | |||||||||||
Regulatory asset (liability) adjustment | ( | ( | |||||||||
Amortization recognized in net periodic benefit (income) | ( | ||||||||||
Amounts in AOCI not yet recognized in net periodic benefit cost at end of year | $ | $ | |||||||||
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
PNM | |||||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Amortization of net loss | |||||||||||||||||
Amortization of prior service cost | ( | ||||||||||||||||
Net periodic benefit cost | $ | $ | $ | ||||||||||||||
TNMP | |||||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Amortization of net loss | |||||||||||||||||
Amortization of prior service cost | |||||||||||||||||
Settlement loss | |||||||||||||||||
Net periodic benefit cost | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
PNM | 2022 | 2021 | 2020 | ||||||||||||||
Discount rate for determining December 31 PBO | % | % | % | ||||||||||||||
Discount rate for determining net periodic benefit cost | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % | ||||||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
TNMP | |||||||||||||||||
Discount rate for determining December 31 PBO | % | % | % | ||||||||||||||
Discount rate for determining net periodic benefit cost | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % | ||||||||||||||
Rate of compensation increase | N/A | N/A | N/A |
PNM | TNMP | ||||||||||
(In thousands) | |||||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 - 2032 |
PNM | TNMP | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
APBO at beginning of year | $ | $ | $ | $ | |||||||||||||||||||
Service cost | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Participant contributions | |||||||||||||||||||||||
Actuarial (gain) | ( | ( | ( | ( | |||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
Curtailment loss | |||||||||||||||||||||||
APBO at end of year | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | |||||||||||||||||||||||
Actual return on plan assets | ( | ( | |||||||||||||||||||||
Employer contributions | |||||||||||||||||||||||
Participant contributions | |||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
Fair value of plan assets at end of year | |||||||||||||||||||||||
Funded status – asset | $ | $ | $ | $ |
PNM | TNMP | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Discount rates | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Claims, contributions, and demographic experience | ( | ( | ( | ( | |||||||||||||||||||
Assumed participation rate | |||||||||||||||||||||||
Mortality rate | |||||||||||||||||||||||
Dental trend assumption | ( | ||||||||||||||||||||||
$ | ( | $ | ( | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
PNM | |||||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Amortization of net loss | |||||||||||||||||
Curtailment loss | $ | $ | $ | ||||||||||||||
Net periodic benefit (income) | $ | ( | $ | ( | $ | ( | |||||||||||
TNMP | |||||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Amortization of net (gain) | ( | ( | ( | ||||||||||||||
Net periodic benefit (income) | $ | ( | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||||||||
PNM | 2022 | 2021 | 2020 | ||||||||||||||
Discount rate for determining December 31 APBO | % | % | % | ||||||||||||||
Discount rate for determining net periodic benefit cost | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % | ||||||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
TNMP | |||||||||||||||||
Discount rate for determining December 31 APBO | % | % | % | ||||||||||||||
Discount rate for determining net periodic benefit cost | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % | ||||||||||||||
Rate of compensation increase | N/A | N/A | N/A |
PNM | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Health care cost trend rate assumed for next year | % | % | |||||||||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | % | % | |||||||||
Year that the rate reaches the ultimate trend rate |
PNM | TNMP | ||||||||||
(In thousands) | |||||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 - 2032 |
PNM | TNMP | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
PBO at beginning of year | $ | $ | $ | $ | |||||||||||||||||||
Service cost | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Actuarial (gain) | ( | ( | ( | ( | |||||||||||||||||||
Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
PBO at end of year – funded status | |||||||||||||||||||||||
Less current liability | |||||||||||||||||||||||
Non-current liability | $ | $ | $ | $ |
December 31, 2022 | |||||||||||
PNM | TNMP | ||||||||||
(In thousands) | |||||||||||
Amount in AOCI not yet recognized in net periodic benefit cost at beginning of year | $ | $ | |||||||||
Experience (gain) | ( | ( | |||||||||
Regulatory asset adjustment | |||||||||||
Amortization recognized in net periodic benefit (income) | ( | ||||||||||
Amount in AOCI not yet recognized in net periodic benefit cost at end of year | $ | $ | |||||||||
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
PNM | |||||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Amortization of net loss | |||||||||||||||||
Amortization of prior service cost | |||||||||||||||||
Net periodic benefit cost | $ | $ | $ | ||||||||||||||
TNMP | |||||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost | |||||||||||||||||
Amortization of net loss | |||||||||||||||||
Amortization of prior service cost | |||||||||||||||||
Net periodic benefit cost | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
PNM | 2022 | 2021 | 2020 | ||||||||||||||
Discount rate for determining December 31 PBO | % | % | % | ||||||||||||||
Discount rate for determining net periodic benefit cost | % | % | % | ||||||||||||||
Long-term rate of return on plan assets | N/A | N/A | N/A | ||||||||||||||
Rate of compensation increase | N/A | N/A | N/A | ||||||||||||||
TNMP | |||||||||||||||||
Discount rate for determining December 31 PBO | % | % | % | ||||||||||||||
Discount rate for determining net periodic benefit cost | % | % | % | ||||||||||||||
Long-term rate of return on plan assets | N/A | N/A | N/A | ||||||||||||||
Rate of compensation increase | N/A | N/A | N/A |
PNM | TNMP | ||||||||||
(In thousands) | |||||||||||
2023 | $ | $ | |||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 - 2032 |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
PNMR | |||||||||||||||||
401(k) plan | $ | $ | $ | ||||||||||||||
Non-qualified plan | $ | ( | $ | $ | |||||||||||||
PNM | |||||||||||||||||
401(k) plan | $ | $ | $ | ||||||||||||||
Non-qualified plan | $ | ( | $ | $ | |||||||||||||
TNMP | |||||||||||||||||
401(k) plan | $ | $ | $ | ||||||||||||||
Non-qualified plan | $ | ( | $ | $ |
Year Ended December 31, | ||||||||||||||||||||
Excess Tax Benefits (Deficiencies) | 2022 | 2021 | 2020 | |||||||||||||||||
(In thousands) | ||||||||||||||||||||
PNM | $ | ( | $ | $ | ||||||||||||||||
TNMP | ( | |||||||||||||||||||
PNMR | ( |
Year Ended December 31, | ||||||||||||||||||||
Restricted Shares and Performance-Based Shares | 2022 | 2021 | 2020 | |||||||||||||||||
Expected quarterly dividends per share | $ | $ | $ | |||||||||||||||||
Risk-free interest rate | % | % | ||||||||||||||||||
Market-Based Shares (1) | ||||||||||||||||||||
Dividend yield | N/A | % | % | |||||||||||||||||
Expected volatility | N/A | % | % | |||||||||||||||||
Risk-free interest rate | N/A | % | % |
Restricted Stock | ||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | |||||||||||||
Outstanding at December 31, 2021 | $ | |||||||||||||
Granted | ||||||||||||||
Released | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Outstanding at December 31, 2022 | $ |
Year Ended December 31, | ||||||||||||||||||||
Restricted Stock | 2022 | 2021 | 2020 | |||||||||||||||||
Weighted-average grant date fair value | $ | $ | $ | |||||||||||||||||
Total fair value of restricted shares that vested (in thousands) | $ | $ | $ | |||||||||||||||||
Stock Options | ||||||||||||||||||||
Total intrinsic value of options exercised (in thousands) | $ | $ | $ | |||||||||||||||||
PNM | TNMP | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Assets: | (In thousands) | ||||||||||||||||||||||
Current: | |||||||||||||||||||||||
FPPAC | $ | $ | $ | $ | |||||||||||||||||||
NMPRC hedging plan | |||||||||||||||||||||||
Transmission cost recovery factor | |||||||||||||||||||||||
Energy efficiency costs | |||||||||||||||||||||||
PNM | TNMP | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Assets (Continued): | (In thousands) | ||||||||||||||||||||||
Non-Current: | |||||||||||||||||||||||
SJGS - ETA (1) | $ | $ | $ | $ | |||||||||||||||||||
SJGS - non-ETA (2) | |||||||||||||||||||||||
Shutdown of SJGS Units 2 and 3 | |||||||||||||||||||||||
SJGS replacement resources | |||||||||||||||||||||||
EIM | |||||||||||||||||||||||
Loss on reacquired debt | |||||||||||||||||||||||
Pension and OPEB(3) | |||||||||||||||||||||||
Deferred income taxes | |||||||||||||||||||||||
AMS surcharge | |||||||||||||||||||||||
AMS retirement and other costs | |||||||||||||||||||||||
Deferred COVID-19 costs | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total regulatory assets | $ | $ | $ | $ | |||||||||||||||||||
PNM | TNMP | ||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Current: | |||||||||||||||||||||||
Renewable energy rider, including excess return | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Energy efficiency costs | ( | ( | |||||||||||||||||||||
Transmission cost recovery factor | ( | ||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||
Non-Current: | |||||||||||||||||||||||
Cost of removal | ( | ( | ( | ( | |||||||||||||||||||
Deferred income taxes | ( | ( | ( | ( | |||||||||||||||||||
PVNGS ARO | ( | ||||||||||||||||||||||
Renewable energy tax benefits | ( | ( | |||||||||||||||||||||
Accelerated depreciation SNCRs(3) | ( | ||||||||||||||||||||||
Pension and OPEB | ( | ( | ( | ||||||||||||||||||||
COVID-19 cost savings | ( | ( | |||||||||||||||||||||
Other | ( | ( | ( | ( | |||||||||||||||||||
( | ( | ( | ( | ||||||||||||||||||||
Total regulatory liabilities | $ | ( | $ | ( | $ | ( | $ | ( |
Station (Type) | Plant in Service | Accumulated Depreciation(1) | Construction Work in Progress | Composite Interest | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
PVNGS (Nuclear) | $ | $ | $ | % | |||||||||||||||||||
Four Corners Units 4 and 5 (Coal) | $ | $ | $ | % | |||||||||||||||||||
Luna (Gas) | $ | $ | $ | % |
PNMR | PNM | TNMP | |||||||||||||||
(In thousands) | |||||||||||||||||
Liability at December 31, 2019 | $ | $ | $ | ||||||||||||||
Liabilities incurred | |||||||||||||||||
Liabilities settled | ( | ( | ( | ||||||||||||||
Accretion expense | |||||||||||||||||
Revisions to estimated cash flows(1) | ( | ( | |||||||||||||||
Liability at December 31, 2020 | |||||||||||||||||
Liabilities incurred | |||||||||||||||||
Liabilities settled | ( | ( | |||||||||||||||
Accretion expense | |||||||||||||||||
Revisions to estimated cash flows(2) | |||||||||||||||||
Liability at December 31, 2021 | |||||||||||||||||
Liabilities incurred | |||||||||||||||||
Liabilities settled | |||||||||||||||||
Accretion expense | |||||||||||||||||
Revisions to estimated cash flows(3) | ( | ( | |||||||||||||||
Liability at December 31, 2022 | $ | $ | $ |
Year Ended | Annual Revenues | |||||||
(In millions) | ||||||||
2020 | $ | |||||||
2021 | ||||||||
2022 |
Net Increase (decrease) | ||||||||
(In thousands) | ||||||||
Current Assets: | ||||||||
Inventory | $ | ( | ||||||
Utility Plant: | ||||||||
Net utility plant | ( | |||||||
Deferred Charges and Other Assets: | ||||||||
Regulatory assets - ETA (1) | ||||||||
Regulatory assets - Non-ETA (2) | ||||||||
Deferred Credits and Other Liabilities: | ||||||||
Regulatory liabilities (3) | ( | |||||||
$ |
Effective Date | Aggregate Collection Amount | Performance Bonus | ||||||||||||
(In millions) | ||||||||||||||
March 1, 2020 | $ | $ | ||||||||||||
March 1, 2021 | ||||||||||||||
March 1, 2022 |
Effective Date | Approved Increase in Rate Base | Annual Increase in Revenue | ||||||||||||
(In millions) | ||||||||||||||
March 27, 2020 | $ | $ | ||||||||||||
October 7, 2020 | ||||||||||||||
March 12, 2021 | ||||||||||||||
September 20, 2021 | ||||||||||||||
March 25, 2022 | ||||||||||||||
September 22, 2022 |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Current federal income tax | $ | $ | $ | ||||||||||||||
Current state income tax | |||||||||||||||||
Deferred federal income tax | |||||||||||||||||
Deferred state income tax | |||||||||||||||||
Amortization of accumulated investment tax credits | ( | ( | ( | ||||||||||||||
Total income taxes | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Federal income tax at statutory rates | $ | $ | $ | ||||||||||||||
Amortization of accumulated investment tax credits | ( | ( | ( | ||||||||||||||
Amortization of excess deferred income tax | ( | ( | ( | ||||||||||||||
Flow-through of depreciation items | |||||||||||||||||
(Earnings) attributable to non-controlling interest in Valencia | ( | ( | ( | ||||||||||||||
State income tax, net of federal (benefit) | |||||||||||||||||
Allowance for equity funds used during construction | ( | ( | ( | ||||||||||||||
Regulatory recovery of prior year impairments of state net operating loss carryforward, including amortization | |||||||||||||||||
Allocation of tax (benefit) related to stock compensation awards | ( | ( | |||||||||||||||
Non-deductible compensation | |||||||||||||||||
Transaction costs | |||||||||||||||||
Other | |||||||||||||||||
Total income taxes | $ | $ | $ |
Effective tax rate | % | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Net operating loss | $ | $ | |||||||||
Regulatory liabilities related to income taxes | |||||||||||
Federal tax credit carryforwards | |||||||||||
Regulatory disallowances | |||||||||||
Other | |||||||||||
Total deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and plant related | ( | ( | |||||||||
Investment tax credit | ( | ( | |||||||||
Regulatory assets related to income taxes | ( | ( | |||||||||
Pension | ( | ( | |||||||||
Regulatory asset for shutdown of SJGS Units 2 and 3 | ( | ( | |||||||||
Regulatory asset SJGS investment | ( | ||||||||||
Other | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net accumulated deferred income tax liabilities | $ | ( | $ | ( | |||||||
Year Ended | |||||
December 31, 2022 | |||||
(In thousands) | |||||
Net change in deferred income tax liability per above table | $ | ||||
Change in tax effects of income tax related regulatory assets and liabilities | ( | ||||
Amortization of excess deferred income tax | ( | ||||
Tax effect of mark-to-market adjustments | ( | ||||
Tax effect of excess pension liability | ( | ||||
Adjustment for uncertain income tax positions | |||||
Reclassification of unrecognized tax benefits | ( | ||||
Other | ( | ||||
Deferred income tax | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Current federal income tax (benefit) | $ | ( | $ | $ | |||||||||||||
Current state income tax (benefit) | ( | ( | |||||||||||||||
Deferred federal income tax | |||||||||||||||||
Deferred state income tax | |||||||||||||||||
Amortization of accumulated investment tax credits | ( | ( | ( | ||||||||||||||
Total income taxes | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Federal income tax at statutory rates | $ | $ | $ | ||||||||||||||
Amortization of accumulated investment tax credits | ( | ( | ( | ||||||||||||||
Amortization of excess deferred income tax | ( | ( | ( | ||||||||||||||
Flow-through of depreciation items | |||||||||||||||||
(Earnings) attributable to non-controlling interest in Valencia | ( | ( | ( | ||||||||||||||
State income tax, net of federal (benefit) | |||||||||||||||||
Allowance for equity funds used during construction | ( | ( | ( | ||||||||||||||
Regulatory recovery of prior year impairment of state net operating loss carryforward, net of amortization | |||||||||||||||||
Allocation of tax (benefit) related to stock compensation awards | ( | ( | |||||||||||||||
Non-deductible compensation | |||||||||||||||||
Transaction costs | |||||||||||||||||
Other | ( | ( | |||||||||||||||
Total income taxes | $ | $ | $ |
Effective tax rate | % | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Net operating loss | $ | $ | |||||||||
Regulatory liabilities related to income taxes | |||||||||||
Federal tax credit carryforwards | |||||||||||
Regulatory disallowance | |||||||||||
Other | |||||||||||
Total deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and plant related | ( | ( | |||||||||
Investment tax credit | ( | ( | |||||||||
Regulatory assets related to income taxes | ( | ( | |||||||||
Pension | ( | ( | |||||||||
Regulatory asset for shutdown of SJGS Units 2 and 3 | ( | ( | |||||||||
Regulatory asset SJGS investment | ( | ||||||||||
Other | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net accumulated deferred income tax liabilities | $ | ( | $ | ( | |||||||
Year Ended | |||||
December 31, 2022 | |||||
(In thousands) | |||||
Net change in deferred income tax liability per above table | $ | ||||
Change in tax effects of income tax related regulatory assets and liabilities | ( | ||||
Amortization of excess deferred income tax | ( | ||||
Tax effect of mark-to-market adjustments | |||||
Tax effect of excess pension liability | ( | ||||
Adjustment for uncertain income tax positions | |||||
Reclassification of unrecognized tax benefits | ( | ||||
Deferred income tax | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Current federal income tax | $ | $ | $ | ||||||||||||||
Current state income tax | |||||||||||||||||
Deferred federal income tax (benefit) | ( | ( | ( | ||||||||||||||
Deferred state income tax (benefit) | ( | ( | ( | ||||||||||||||
Total income taxes | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Federal income tax at statutory rates | $ | $ | $ | ||||||||||||||
Amortization of excess deferred income tax | ( | ( | ( | ||||||||||||||
State income tax, net of federal (benefit) | |||||||||||||||||
Allocation of tax (benefit) related to stock compensation awards | ( | ( | |||||||||||||||
Non-deductible compensation | |||||||||||||||||
Transaction costs | ( | ||||||||||||||||
Other | ( | ( | |||||||||||||||
Total income taxes | $ | $ | $ |
Effective tax rate | % | % | % |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Regulatory liabilities related to income taxes | $ | $ | |||||||||
Other | |||||||||||
Total deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and plant related | ( | ( | |||||||||
Regulatory assets related to income taxes | ( | ( | |||||||||
Loss on reacquired debt | ( | ( | |||||||||
Pension | ( | ( | |||||||||
AMS | ( | ( | |||||||||
Other | ( | ( | |||||||||
Total deferred tax liabilities | ( | ( | |||||||||
Net accumulated deferred income tax liabilities | $ | ( | $ | ( | |||||||
Year Ended | |||||
December 31, 2022 | |||||
(In thousands) | |||||
Net change in deferred income tax liability per above table | $ | ||||
Change in tax effects of income tax related regulatory assets and liabilities | ( | ||||
Amortization of excess deferred income tax | ( | ||||
Other | ( | ||||
Deferred income tax (benefits) | $ | ( |
PNMR | PNM | TNMP | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ||||||||||||||
Additions based on tax positions related to 2020 | |||||||||||||||||
Additions for tax positions of prior years | |||||||||||||||||
Settlement payments | |||||||||||||||||
Balance at December 31, 2020 | |||||||||||||||||
Additions based on tax positions related to 2021 | |||||||||||||||||
Additions for tax positions of prior years | |||||||||||||||||
Settlement payments | |||||||||||||||||
Balance at December 31, 2021 | |||||||||||||||||
Additions based on tax positions related to 2022 | |||||||||||||||||
Additions (reductions) for tax positions of prior years | ( | ( | |||||||||||||||
Settlement payments | |||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ |
PNMR | PNM | TNMP | |||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2022: | |||||||||||||||||
Federal tax credit carryforwards | $ | $ | $ | ||||||||||||||
Compensation expense | $ | $ | $ | ||||||||||||||
December 31, 2021: | |||||||||||||||||
Federal tax credit carryforwards | $ | $ | $ | ||||||||||||||
Compensation expense | $ | $ | $ | ||||||||||||||
December 31, 2020: | |||||||||||||||||
State tax credit carryforwards | $ | ( | $ | $ | |||||||||||||
Compensation expense | $ | $ | $ | ||||||||||||||
PNMR | PNM | TNMP | |||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2022: | |||||||||||||||||
Federal tax credit carryforwards | $ | $ | $ | ||||||||||||||
Compensation expense | $ | $ | $ | ||||||||||||||
December 31, 2021: | |||||||||||||||||
Federal tax credit carryforwards | $ | $ | $ | ||||||||||||||
Compensation expense | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Services billings: | |||||||||||||||||
PNMR to PNM | $ | $ | $ | ||||||||||||||
PNMR to TNMP | |||||||||||||||||
PNM to TNMP | |||||||||||||||||
TNMP to PNMR | |||||||||||||||||
TNMP to PNM | |||||||||||||||||
PNMR to NMRD | |||||||||||||||||
Renewable energy purchases: | |||||||||||||||||
PNM from NMRD | |||||||||||||||||
Interconnection and facility study billings: | |||||||||||||||||
PNM to NMRD | |||||||||||||||||
PNM to PNMR | |||||||||||||||||
PNMR to PNM | |||||||||||||||||
NMRD to PNM | |||||||||||||||||
Interest billings: | |||||||||||||||||
PNMR to PNM | |||||||||||||||||
PNM to PNMR | |||||||||||||||||
PNMR to TNMP | |||||||||||||||||
Income tax sharing payments: | |||||||||||||||||
PNMR to TNMP | |||||||||||||||||
PNMR to PNM | |||||||||||||||||
PNM to PNMR | |||||||||||||||||
TNMP to PNMR |
December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Operating revenues | $ | $ | $ | ||||||||||||||
Operating expenses | |||||||||||||||||
Net earnings | $ | $ | $ |
Financial Position | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Current assets | $ | $ | |||||||||
Net property, plant, and equipment | |||||||||||
Non-current assets | |||||||||||
Total assets | |||||||||||
Current liabilities | |||||||||||
Non-current liabilities | |||||||||||
Owners’ equity | $ | $ |
Year ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Operating Revenues | $ | $ | $ | ||||||||||||||
Operating Expenses | |||||||||||||||||
Operating (loss) | ( | ( | ( | ||||||||||||||
Other Income and Deductions: | |||||||||||||||||
Equity in earnings of subsidiaries | |||||||||||||||||
Other income (loss) | ( | ||||||||||||||||
Net other income and (deductions) | |||||||||||||||||
Interest Charges | |||||||||||||||||
Earnings Before Income Taxes | |||||||||||||||||
Income Tax (Benefit) | ( | ( | ( | ||||||||||||||
Net Earnings | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||
Net Cash Flows From Operating Activities | $ | ( | $ | ( | $ | ( | |||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Utility plant additions | |||||||||||||||||
Investments in subsidiaries | ( | ( | ( | ||||||||||||||
Cash dividends from subsidiaries | |||||||||||||||||
Net cash flows from investing activities | ( | ( | |||||||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||
Short-term borrowings (repayments) -affiliate, net | ( | ||||||||||||||||
Revolving credit facility borrowings (repayments), net | ( | ( | |||||||||||||||
Long-term borrowings | |||||||||||||||||
Repayment of long-term debt | ( | ( | |||||||||||||||
Issuance of common stock | |||||||||||||||||
Proceeds from stock option exercise | |||||||||||||||||
Awards of common stock | ( | ( | ( | ||||||||||||||
Dividends paid | ( | ( | ( | ||||||||||||||
Other, net | ( | ( | ( | ||||||||||||||
Net cash flows from financing activities | ( | ||||||||||||||||
Change in Cash and Cash Equivalents | ( | ( | |||||||||||||||
Cash and Cash Equivalents at Beginning of Period | |||||||||||||||||
Cash and Cash Equivalents at End of Period | $ | $ | $ | ||||||||||||||
Supplemental Cash Flow Disclosures: | |||||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | $ | ||||||||||||||
Income taxes paid (refunded), net | $ | ( | $ | $ | |||||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
(In thousands) | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Intercompany receivables | |||||||||||
Derivative instruments | |||||||||||
Income taxes receivable | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
Investment in subsidiaries | |||||||||||
Other long-term assets | |||||||||||
Total long-term assets | |||||||||||
$ | $ | ||||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Short-term debt | |||||||||||
Short-term debt-affiliate | |||||||||||
Accrued interest and taxes | |||||||||||
Dividends declared | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Common stock ( | |||||||||||
Accumulated other comprehensive income (loss), net of income taxes | ( | ( | |||||||||
Retained earnings | |||||||||||
Total common stockholders’ equity | |||||||||||
$ | $ |
Additions | Deductions | ||||||||||||||||||||||||||||||||||
Description | Balance at beginning of year | Charged to costs and expenses | Charged to other accounts | Write-offs and other | Balance at end of year | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Allowance for credit losses, year ended December 31: | |||||||||||||||||||||||||||||||||||
2020 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
2022 | $ | $ | $ | $ | $ |
Additions | Deductions | ||||||||||||||||||||||||||||||||||
Description | Balance at beginning of year | Charged to costs and expenses | Charged to other accounts | Write-offs and other | Balance at end of year | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Allowance for credit losses, year ended December 31: | |||||||||||||||||||||||||||||||||||
2020 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
2022 | $ | $ | $ | $ | $ |
Additions | Deductions | |||||||||||||||||||||||||||||||
Description | Balance at beginning of year | Charged to costs and expenses | Charged to other accounts | Write-offs and other | Balance at end of year | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Allowance for credit losses, year ended December 31: | ||||||||||||||||||||||||||||||||
2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2021 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2022 | $ | $ | $ | $ | $ |
(a) - 1. | See Index to Financial Statements under Part II, Item 8. | |||||||
(a) - 2. | Financial Statement Schedules for the years 2020, 2019, and 2018 are omitted for the reason that they are not required or the information is otherwise supplied under Part II, Item 8. | |||||||
(a) - 3. | Exhibits: |
Exhibit No. | Description of Exhibit | Filed as Exhibit: | Registrant (s) File No: | |||||||||||||||||
Plan of Acquisition, reorganization, liquidation or succession | ||||||||||||||||||||
2.1 | 2.1 to PNMR's Current Report on Form 8-K filed October 21, 2020 | 1-32462 PNMR | ||||||||||||||||||
2.2 | 2.1 to PNMR’s Current Report on Form 8-K filed January 3, 2022 | 1-32462 PNMR | ||||||||||||||||||
Articles of Incorporation and By-laws | ||||||||||||||||||||
3.1 | 3.1 to PNMR’s Current Report on Form 8-K filed November 21, 2008 | 1-32462 PNMR | ||||||||||||||||||
3.2 | 3.1.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 | 1-6986 PNM | ||||||||||||||||||
3.3 | 3.1.2 to TNMP’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 | 2-97230 TNMP | ||||||||||||||||||
3.4 | 3.4 to PNMR’s Current Report on Form 8-K filed October 25, 2017 | 1-32462 PNMR | ||||||||||||||||||
3.5 | 3.5 to PNM’s Current Report on Form 8-K filed July 1, 2022 | 1-6986 PNM | ||||||||||||||||||
3.6 | 3.6 to TNMP’s Current Report on Form 8-K filed June 20, 2013 | 2-97230 TNMP | ||||||||||||||||||
Securities Instruments‡ | ||||||||||||||||||||
PNMR | ||||||||||||||||||||
4.1 | 4.1 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2019 | 1-32462 PNMR | ||||||||||||||||||
4.2 | 10.2 to PNMR’s Current Report on Form 8-K filed March 31, 2005 | 1-32462 PNMR | ||||||||||||||||||
4.3 | 4.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 | 1-32462 PNMR | ||||||||||||||||||
PNM | ||||||||||||||||||||
4.4 | 4.2 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2019 | 1-6986 PNM | ||||||||||||||||||
4.5 | 4.4 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 | 1-6986 PNM | ||||||||||||||||||
4.6 | 4.6.4 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 | 1-6986 PNM | ||||||||||||||||||
4.7 | 10.1 to PNM’s Current Report on Form 8-K/A filed July 29, 2010 | 1-6986 PNM | ||||||||||||||||||
4.8 | 10.2 to PNM’s Current Report on Form 8-K/A filed July 29, 2010 | 1-6986 PNM | ||||||||||||||||||
4.9 | 4.2 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 | 1-6986 PNM | ||||||||||||||||||
4.10 | 4.1 to PNM’s Current Report on Form 8-K filed September 27, 2016 | 1-6986 PNM | ||||||||||||||||||
4.11 | 4.1 to PNM’s Registration Statement No. 333-53367 | 333-53367 PNM | ||||||||||||||||||
4.12 | 4.3 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 | 1-6986 PNM | ||||||||||||||||||
4.13 | 4.2 to PNM’s Current Report on Form 8-K filed August 11, 2015 | 1-6986 PNM | ||||||||||||||||||
TNMP | ||||||||||||||||||||
4.14 | 4.1 to TNMP’s Current Report on Form 8-K filed March 27, 2009 | 2-97230 TNMP | ||||||||||||||||||
4.15 | 4.4 to TNMP’s Quarterly Report Form 10-Q for the quarter ended June 30, 2011 | 2-97230 TNMP | ||||||||||||||||||
4.16 | 4.1 to TNMP’s Current Report on Form 8-K filed April 3, 2013 | 2-97230 TNMP | ||||||||||||||||||
4.17 | 4.1 to TNMP’s Current Report on Form 8-K filed June 27, 2014 | 2-97230 TNMP | ||||||||||||||||||
4.18 | 4.1 to TNMP’s Current Report on Form 8-K filed February 10, 2016 | 2-97230 TNMP | ||||||||||||||||||
4.19 | 4.1 to TNMP’s Current Report on Form 8-K filed August 24, 2017 | 2-97230 TNMP | ||||||||||||||||||
4.20 | 4.1 to TNMP’s Current Report on Form 8-K filed July 2, 2018 | 2-97230 TNMP | ||||||||||||||||||
4.21 | 4.1 to TNMP's Current Report on Form 8-K filed March 29, 2019 | 2-97230 TNMP | ||||||||||||||||||
4.22 | 4.1 to TNMP's Current Report on Form 8-K filed July 1, 2019 | 2-97230 TNMP | ||||||||||||||||||
4.23 | 4.1 to TNMP's Current Report on Form 8-K filed April 24, 2020 | 2-97230 TNMP | ||||||||||||||||||
4.24 | 4.1 to TNMP's Current Report on Form 8-K filed July 15, 2020 | 2-97230 TNMP | ||||||||||||||||||
4.25 | 4.1 to TNMP’s Current Report on Form 8-K filed August 16, 2021 | 2-97230 TNMP | ||||||||||||||||||
4.26 | 4.1 to TNMP’s Current Report on Form 8-K filed May 16, 2022 | 2-97230 TNMP | ||||||||||||||||||
4.27 | 4.3 to TNMP’s Current Report on Form 8-K filed May 16, 2022 | 2-97230 TNMP | ||||||||||||||||||
4.28 | 4.1 to TNMP’s Current Report on Form 8-K filed July 28, 2022 | 2-97230 TNMP | ||||||||||||||||||
Material Contracts | ||||||||||||||||||||
10.1 | 10.1 to PNMR’s Current Report on Form 8-K filed November 10, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.2 | 10.1 to PNMR’s Current Report on Form 8-K filed May 24, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.3 | 10.2 to PNMR’s Current Report on Form 8-K filed May 24, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.4 | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
10.5 | 10.4 to PNM’s Current Report on Form 8-K filed May 24, 2022 | 1-6986 PNM | ||||||||||||||||||
10.6 | Filed herewith | 1-6986 PNM | ||||||||||||||||||
10.7 | 10.1 to PNM’s Current Report on Form 8-K filed August 5, 2022 | 1-6986 PNM | ||||||||||||||||||
10.8 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 | 1-6986 PNM | ||||||||||||||||||
10.9 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 | 1-6986 PNM | ||||||||||||||||||
10.10 | 10.1 to PNM’s Current Report on Form 8-K filed July 14, 2021 | 1-6986 PNM | ||||||||||||||||||
10.11 | 10.1 to PNM’s Current Report on Form 8-K filed September 23, 2021 | 1-6986 PNM | ||||||||||||||||||
10.12 | 10.18 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-6986 PNM | ||||||||||||||||||
10.13 | 10.1 to TNMP’s Current Report on For 8-K filed March 11, 2022 | 2-97230 TNMP | ||||||||||||||||||
10.14 | 10.1 to TNMP’s Current Report on For 8-K filed May 16, 2022 | 2-97230 TNMP | ||||||||||||||||||
10.15 | 10.1 to TNMP’s Current Report on Form 8-K filed December 10, 2013 | 2-97230 TNMP | ||||||||||||||||||
10.16 | 10.1 to TNMP’s Current Report on Form 8-K filed December 21, 2015 | 2-97230 TNMP | ||||||||||||||||||
10.17 | 10.1 to TNMP’s Current Report on Form 8-K filed June 14, 2017 | 2-97230 TNMP | ||||||||||||||||||
10.18 | 10.1 to TNMP’s Current Report on Form 8-K filed July 2, 2018 | 2-97230 TNMP | ||||||||||||||||||
10.19 | 10.3 to TNMP’s Annual Report on Form 10-K for the year ended December 31, 2018 | 2-97230 TNMP | ||||||||||||||||||
10.20 | 10.1 to TNMP’s Current Report on Form 8-K filed April 24, 2020 | 2-97230 TNMP | ||||||||||||||||||
10.21 | 10.2 to TNMP’s Current Report on Form 8-K filed July 14, 2021 | 2-97230 TNMP | ||||||||||||||||||
10.22 | 10.9 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 2-97230 TNMP | ||||||||||||||||||
10.23** | 10.8 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.24** | 4.3 to PNMR’s Form S-8 Registration Statement filed May 15, 2014 | 333-195974 PNMR | ||||||||||||||||||
10.25** | 99.1 to PNMR’s Current Report on Form 8-K filed December 15, 2015 | 1-32462 PNMR | ||||||||||||||||||
10.26** | 10.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||||||||||||||||
10.27** | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.28** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.29** | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.30** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 | 1-32462 PNMR | ||||||||||||||||||
10.31** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.32** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 | 1-32462 PNMR | ||||||||||||||||||
10.33** | 10.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.34** | 10.4 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.35** | 10.9 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.36** | 10.6 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.37** | 10.5 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.38** | 10.3 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.39** | 10.5 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.40** | 10.4 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.41** | 10.6 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.42** | 10.5 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.43** | 10.7 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.44** | 10.4 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.45** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.46** | 10.4 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.47** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.48** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.49** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.50** | 10.1 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||||||||||||||||
10.51** | 10.4.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2014 | 1-32462 PNMR | ||||||||||||||||||
10.52** | 10.1 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.53** | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 | 1-32462 PNMR | ||||||||||||||||||
10.54** | 10.5 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||||||||||||||||
10.55** | 10.4 to PNMR’s Current Report on Form 8-K filed March 1, 2011 | 1-32462 PNMR | ||||||||||||||||||
10.56** | 10.7 to PNMR’s Current Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||||||||||||||||
10.57** | 10.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||||||||||||||||
10.58** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 | 1-32462 PNMR | ||||||||||||||||||
10.59** | 10.1.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2014 | 1-32462 PNMR | ||||||||||||||||||
10.60** | 10.7 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 | 1-32462 PNMR | ||||||||||||||||||
10.61** | 10.7 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.62** | 10.6 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||||||||||||||||
10.63** | 10.53 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.64** | 10.3 to PNMR’s Current Report on Form 8-K filed October 21, 2020 | 1-32462 PNMR | ||||||||||||||||||
10.65** | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
10.66** | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
10.67** | 10.24.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 | 333-32170 PNMR | ||||||||||||||||||
10.68** | 10.27 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2004. | 333-32170 PNMR | ||||||||||||||||||
10.69** | 10.5 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 | 1-32462 PNMR | ||||||||||||||||||
10.70** | 10.10 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2008 | 1-32462 PNMR | ||||||||||||||||||
10.71** | 10.15 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2008 | 1-32462 PNMR | ||||||||||||||||||
10.72** | 10.5 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2011 | 1-32462 PNMR | ||||||||||||||||||
10.73** | 10.61 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2021 | 1-32462 PNMR | ||||||||||||||||||
10.74** | 10.8 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 333-32170 PNMR | ||||||||||||||||||
10.75** | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 | 1-32462 PNMR | ||||||||||||||||||
10.76 | Supplemental Indenture of Lease dated as of July 19, 1966 between PNM and other participants in the Four Corners Project and the Navajo Indian Tribal Council | 4-D to PNM’s Registration Statement No. 2-26116 | 2-26116 PNM | |||||||||||||||||
10.77 | 10.1.1 to PNM’s Annual Report on Form 10-K for year ended December 31, 1995 | 1-6986 PNM | ||||||||||||||||||
10.78 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 | 1-6986 PNM | ||||||||||||||||||
10.79 | 10.2 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 | 1-6986 PNM | ||||||||||||||||||
10.80 | Arizona Nuclear Power Project Participation Agreement among PNM and Arizona Public Service Company, Salt River Project Agricultural Improvement and Power District, Tucson Gas & Electric Company and El Paso Electric Company, dated August 23, 1973 | 5-T to PNM’s Registration Statement No. 2-50338 | 2-50338 PNM | |||||||||||||||||
10.81 | Amendments No. 1 through No. 6 to Arizona Nuclear Power Project Participation Agreement | 10.8.1 to PNM’s Annual Report on Form 10-K for year ended December 31, 1991 | 1-6986 PNM | |||||||||||||||||
10.82 | Amendment No. 7 effective April 1, 1982, to the Arizona Nuclear Power Project Participation Agreement (refiled) | 10.8.2 to PNM’s Annual Report on Form 10-K for year ended December 31, 1991 | 1-6986 PNM | |||||||||||||||||
10.83 | 10.58 to PNM’s Annual Report on Form 10-K for year ended December 31, 1993 | 1-6986 PNM | ||||||||||||||||||
10.84 | 10.8.4 to PNM’s Annual Report of the Registrant on Form 10-K for year ended December 31, 1994 | 1-6986 PNM | ||||||||||||||||||
10.85 | 10.8.5 to PNM’s Annual Report of the Registrant on Form 10-K for year ended December 31, 1995 | 1-6986 PNM | ||||||||||||||||||
10.86 | Amendment No. 12 to Arizona Nuclear Power Project Participation Agreement dated June 14, 1988, and effective August 5, 1988 | 19.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1990 | 1-6986 PNM | |||||||||||||||||
10.87 | Amendment No. 13 to the Arizona Nuclear Power Project Participation Agreement dated April 4, 1990, and effective June 15, 1991 | 10.8.10 to PNM’s Annual Report on Form 10-K for the year ended December 31, 1990 | 1-6986 PNM | |||||||||||||||||
10.88 | 10.8.9 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2000 | 1-6986 PNM | ||||||||||||||||||
10.89 | 10.1 to PNM’s Current Report on Form 8-K filed March 1, 2011 | 1-6986 PNM | ||||||||||||||||||
10.90 | 10.3 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 | 1-6986 PNM | ||||||||||||||||||
10.91 | 10.22 to PNM’s Annual Report on Form 10-K for year ended December 31, 1996 | 1-6986 PNM | ||||||||||||||||||
10.92 | 10.1 to PNM’s Current Report on Form 8-K filed March 18, 2014 | 1-6986 PNM | ||||||||||||||||||
10.93 | 10.68 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 | 1-6986 PNM | ||||||||||||||||||
10.94 | 10.68.1 to PNM’s Annual Report on Form 10-K for year ended December 31, 1997 | 1-6986 PNM | ||||||||||||||||||
10.95 | 10.68.2 to PNM’s Annual Report on Form 10-K for year ended December 31, 2003 | 1-6986 PNM | ||||||||||||||||||
10.96 | 10.86 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2002 | 1-6986 PNM | ||||||||||||||||||
10.97 | 10.134 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 | 1-32462 PNMR/ TNMP | ||||||||||||||||||
Subsidiaries | ||||||||||||||||||||
21 | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
Auditor Consents | ||||||||||||||||||||
23.1 | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
23.2 | Filed herewith | 1-6986 PNM | ||||||||||||||||||
Officer Certifications | ||||||||||||||||||||
31.1 | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
31.2 | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
31.3 | Filed herewith | 1-6986 PNM | ||||||||||||||||||
31.4 | Filed herewith | 1-6986 PNM | ||||||||||||||||||
31.5 | Filed herewith | 2-97230 TNMP | ||||||||||||||||||
31.6 | Filed herewith | 2-97230 TNMP | ||||||||||||||||||
32.1 | Filed herewith | 1-32462 PNMR | ||||||||||||||||||
32.2 | Filed herewith | 1-6986 PNM | ||||||||||||||||||
32.3 | Filed herewith | 2-97230 TNMP | ||||||||||||||||||
Additional Exhibits | ||||||||||||||||||||
99.1 | 99.14 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 | 1-6986 PNM | ||||||||||||||||||
99.2 | 99.19 to PNM’s Annual Report on Form 10-K for year ended December 31, 2013 | 1-6986 PNM | ||||||||||||||||||
99.3 | 10.6 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 | 1-6986 PNM | ||||||||||||||||||
XBRL Exhibits | ||||||||||||||||||||
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the Inline XBRL document | Filed herewith | 1-32462 PNMR/PNM/ TNMP | |||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith | 1-32462 PNMR/PNM/ TNMP | |||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | 1-32462 PNMR/PNM/ TNMP | |||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | 1-32462 PNMR/PNM/ TNMP | |||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | 1-32462 PNMR/PNM/ TNMP | |||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | 1-32462 PNMR/PNM/ TNMP | |||||||||||||||||
104 | Cover Page Inline XBRL File (included in Exhibits 101) | Filed herewith | 1-32462 PNMR/PNM/ TNMP |
PNM RESOURCES, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | February 28, 2023 | By | /s/ P. K. Collawn | |||||||||||
P. K. Collawn | ||||||||||||||
Chairman and Chief Executive Officer |
Signature | Capacity | Date | |||||||||
/s/ P. K. Collawn | Principal Executive Officer and Chairman of the Board | February 28, 2023 | |||||||||
P. K. Collawn | |||||||||||
Chairman and Chief Executive Officer | |||||||||||
/s/ E. A. Eden | Principal Financial Officer | February 28, 2023 | |||||||||
E. A. Eden | |||||||||||
Senior Vice President, Chief Financial Officer, and | |||||||||||
Treasurer | |||||||||||
/s/ H. E. Monroy | Principal Accounting Officer | February 28, 2023 | |||||||||
H. E. Monroy | |||||||||||
Vice President and Corporate Controller | |||||||||||
/s/ V.A. Bailey | Director | February 28, 2023 | |||||||||
V.A. Bailey | |||||||||||
/s/ N.P. Becker | Director | February 28, 2023 | |||||||||
N. P. Becker | |||||||||||
/s/ E. R. Conley | Director | February 28, 2023 | |||||||||
E. R. Conley | |||||||||||
/s/ A. J. Fohrer | Director | February 28, 2023 | |||||||||
A. J. Fohrer | |||||||||||
/s/ S. M. Gutierrez | Director | February 28, 2023 | |||||||||
S. M. Gutierrez | |||||||||||
/s/ J.A. Hughes | Director | February 28, 2023 | |||||||||
J.A. Hughes | |||||||||||
/s/ M. T. Mullarkey | Director | February 28, 2023 | |||||||||
M. T. Mullarkey | |||||||||||
/s/ D. K. Schwanz | Director | February 28, 2023 | |||||||||
D. K. Schwanz | |||||||||||
PUBLIC SERVICE COMPANY OF NEW MEXICO | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | February 28, 2023 | By | /s/ J. D. Tarry | |||||||||||
J. D. Tarry | ||||||||||||||
President and Chief Executive Officer |
Signature | Capacity | Date | |||||||||
/s/ J. D. Tarry | Principal Executive Officer and Director | February 28, 2023 | |||||||||
J. D. Tarry | |||||||||||
President and Chief Executive Officer | |||||||||||
/s/ E. A. Eden | Principal Financial Officer and Director | February 28, 2023 | |||||||||
E. A. Eden | |||||||||||
Senior Vice President, Chief Financial Officer, and | |||||||||||
Treasurer | |||||||||||
/s/ H. E. Monroy | Principal Accounting Officer | February 28, 2023 | |||||||||
H. E. Monroy | |||||||||||
Vice President, Regulatory, and | |||||||||||
Corporate Controller | |||||||||||
/s/ P. K. Collawn | Chairman of the Board | February 28, 2023 | |||||||||
P. K. Collawn | |||||||||||
/s/ R. N. Darnell | Director | February 28, 2023 | |||||||||
R. N. Darnell | |||||||||||
/s/ M. P. Mertz | Director | February 28, 2023 | |||||||||
M. P. Mertz |
TEXAS-NEW MEXICO POWER COMPANY | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | February 28, 2023 | By | /s/ J. D. Tarry | |||||||||||
J. D. Tarry | ||||||||||||||
Chief Executive Officer |
Signature | Capacity | Date | |||||||||
/s/ J. D. Tarry | Principal Executive Officer and Director | February 28, 2023 | |||||||||
J. D. Tarry | |||||||||||
Chief Executive Officer | |||||||||||
/s/ E. A. Eden | Principal Financial Officer and Director | February 28, 2023 | |||||||||
E. A. Eden | |||||||||||
Senior Vice President, Chief Financial Officer, and | |||||||||||
Treasurer | |||||||||||
/s/ H. E. Monroy | Principal Accounting Officer | February 28, 2023 | |||||||||
H. E. Monroy | |||||||||||
Vice President and Corporate Controller | |||||||||||
/s/ P. K. Collawn | Chairman of the Board | February 28, 2023 | |||||||||
P. K. Collawn | |||||||||||
/s/ R. N. Darnell | Director | February 28, 2023 | |||||||||
R. N. Darnell | |||||||||||
/s/ M. P. Mertz | Director | February 28, 2023 | |||||||||
M. P. Mertz | |||||||||||
/s/ J. N. Walker | Director | February 28, 2023 | |||||||||
J. N. Walker |
Retention Date | Retention Bonus Amount | |||||||
Retention Bonus 1 | Closing Date of Transaction | $105,000.00 | ||||||
Retention Bonus 2 | First anniversary of Closing Date of Transaction | $52,500.00 | ||||||
Retention Bonus 3 | Second anniversary of Closing Date of Transaction | $52,500.00 |
4839-3978-6706.1 |
Retention Date | Retention Bonus Amount | |||||||
Retention Bonus 1 | January 15, 2023 | $70,000.00 | ||||||
Retention Bonus 2 | January 15, 2024 | $70,000.00 | ||||||
Retention Bonus 3 | January 15, 2025 | $70,000.00 |
4872-0405-2488.2 |
4872-0405-2488.2 |
4872-0405-2488.2 |
4872-0405-2488.2 |
Date: | February 28, 2023 | By: | /s/ Patricia K. Collawn | ||||||||||||||
Patricia K. Collawn | |||||||||||||||||
Chairman and Chief Executive Officer | |||||||||||||||||
PNM Resources, Inc. |
Date: | February 28, 2023 | By: | /s/ Elisabeth A. Eden | ||||||||||||||
Elisabeth A. Eden | |||||||||||||||||
Senior Vice President, Chief Financial Officer and | |||||||||||||||||
Treasurer | |||||||||||||||||
PNM Resources, Inc. |
Date: | February 28, 2023 | By: | /s/ Joseph D. Tarry | ||||||||||||||
Joseph D. Tarry | |||||||||||||||||
President and Chief Executive Officer | |||||||||||||||||
Public Service Company of New Mexico |
Date: | February 28, 2023 | By: | /s/ Elisabeth A. Eden | ||||||||||||||
Elisabeth A. Eden | |||||||||||||||||
Senior Vice President, Chief Financial Officer and | |||||||||||||||||
Treasurer | |||||||||||||||||
Public Service Company of New Mexico |
Date: | February 28, 2023 | By: | /s/ Joseph D. Tarry | ||||||||||||||
Joseph D. Tarry | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
Texas-New Mexico Power Company |
Date: | February 28, 2023 | By: | /s/ Elisabeth A. Eden | ||||||||||||||
Elisabeth A. Eden | |||||||||||||||||
Senior Vice President, Chief Financial Officer and | |||||||||||||||||
Treasurer | |||||||||||||||||
Texas-New Mexico Power Company |
Date: | February 28, 2023 | By: | /s/ Patricia K. Collawn | ||||||||||||||
Patricia K. Collawn | |||||||||||||||||
Chairman and Chief Executive Officer | |||||||||||||||||
PNM Resources, Inc. | |||||||||||||||||
By: | /s/ Elisabeth A. Eden | ||||||||||||||||
Elisabeth A. Eden | |||||||||||||||||
Senior Vice President, Chief Financial Officer and | |||||||||||||||||
Treasurer | |||||||||||||||||
PNM Resources, Inc. |
Date: | February 28, 2023 | By: | /s/ Joseph D. Tarry | ||||||||||||||
Joseph D. Tarry | |||||||||||||||||
President and Chief Executive Officer | |||||||||||||||||
Public Service Company of New Mexico | |||||||||||||||||
By: | /s/ Elisabeth A. Eden | ||||||||||||||||
Elisabeth A. Eden | |||||||||||||||||
Senior Vice President, Chief Financial Officer and | |||||||||||||||||
Treasurer | |||||||||||||||||
Public Service Company of New Mexico |
Date: | February 28, 2023 | By: | /s/ Joseph D. Tarry | ||||||||||||||
Joseph D. Tarry | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
Texas-New Mexico Power Company | |||||||||||||||||
By: | /s/ Elisabeth A. Eden | ||||||||||||||||
Elisabeth A. Eden | |||||||||||||||||
Senior Vice President, Chief Financial Officer and | |||||||||||||||||
Treasurer | |||||||||||||||||
Texas-New Mexico Power Company |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Auditor [Line Items] | |
Auditor Name | KPMG LLP |
Auditor Firm ID | 185 |
Auditor Location | Albuquerque, New Mexico |
Public Service Company of New Mexico | |
Auditor [Line Items] | |
Auditor Name | KPMG LLP |
Auditor Firm ID | 185 |
Auditor Location | Albuquerque, New Mexico |
Texas-New Mexico Power Company | |
Auditor [Line Items] | |
Auditor Name | KPMG LLP |
Auditor Firm ID | 185 |
Auditor Location | Albuquerque, New Mexico |
Consolidated Statements of Comprehensive Income (Loss) - PNMR (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | |||
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit | $ 490 | $ 478 | $ (5,736) |
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit) | 972 | 2,480 | 2,412 |
Pension liability adjustment, income tax expense (benefit) | 1,159 | (3,076) | (1,562) |
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, income tax expense | (1,804) | (2,120) | (2,108) |
Change in fair market value, income tax (expense) benefit | (3,121) | (458) | (323) |
Reclassification adjustment for losses included in net earnings, income tax expense (benefit) | $ 299 | $ 229 | $ 442 |
Consolidated Statements of Changes in Equity - PNM - USD ($) $ in Thousands |
Total |
Total Stockholders' Equity |
Common Stock |
AOCI |
Retained Earnings |
Non- controlling Interest in Valencia |
Public Service Company of New Mexico |
Public Service Company of New Mexico
Total Stockholders' Equity
|
Public Service Company of New Mexico
Common Stock
|
Public Service Company of New Mexico
AOCI
|
Public Service Company of New Mexico
Retained Earnings
|
Public Service Company of New Mexico
Non- controlling Interest in Valencia
|
---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2019 | $ 1,741,750 | $ 1,678,698 | $ 1,150,552 | $ (99,377) | $ 627,523 | $ 63,052 | $ 1,512,431 | $ 1,449,379 | $ 1,264,918 | $ (99,055) | $ 283,516 | $ 63,052 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net earnings | 187,316 | 173,303 | 173,303 | 14,013 | 160,014 | 146,001 | 146,001 | 14,013 | ||||
Total other comprehensive income | 20,194 | 20,194 | 20,194 | 20,544 | 20,544 | 20,544 | ||||||
Subsidiary preferred stock dividends | (528) | (528) | (528) | (528) | (528) | (528) | ||||||
Equity contribution from parent | 230,000 | 230,000 | 230,000 | |||||||||
Dividends declared on common stock | (101,591) | (101,591) | (101,591) | (40,653) | (40,653) | (40,653) | ||||||
Valencia’s transactions with its owner | (18,056) | (18,056) | (18,056) | (18,056) | ||||||||
Ending Balance at Dec. 31, 2020 | 2,108,474 | 2,049,465 | 1,429,941 | (79,183) | 698,707 | 59,009 | 1,863,752 | 1,804,743 | 1,494,918 | (78,511) | 388,336 | 59,009 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net earnings | 211,847 | 196,357 | 196,357 | 15,490 | 171,559 | 156,069 | 156,069 | 15,490 | ||||
Total other comprehensive income | 7,247 | 7,247 | 7,247 | 6,575 | 6,575 | 6,575 | ||||||
Subsidiary preferred stock dividends | (528) | (528) | (528) | (528) | (528) | (528) | ||||||
Equity contribution from parent | 53,000 | 53,000 | 53,000 | |||||||||
Dividends declared on common stock | (84,333) | (84,333) | (84,333) | (60,000) | (60,000) | (60,000) | ||||||
Valencia’s transactions with its owner | (19,094) | (19,094) | (19,094) | (19,094) | ||||||||
Ending Balance at Dec. 31, 2021 | 2,222,929 | 2,167,524 | 1,429,257 | (71,936) | 810,203 | 55,405 | 2,015,264 | 1,959,859 | 1,547,918 | (71,936) | 483,877 | 55,405 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net earnings | 185,180 | 170,058 | 170,058 | 15,122 | 119,020 | 103,898 | 103,898 | 15,122 | ||||
Total other comprehensive income | 5,888 | 5,888 | 5,888 | (2,399) | (2,399) | (2,399) | ||||||
Subsidiary preferred stock dividends | (528) | (528) | (528) | (528) | (528) | (528) | ||||||
Dividends declared on common stock | (150,855) | (150,855) | (150,855) | (153,500) | (153,500) | (153,500) | ||||||
Valencia’s transactions with its owner | (17,533) | (17,533) | (17,533) | (17,533) | ||||||||
Ending Balance at Dec. 31, 2022 | $ 2,244,926 | $ 2,191,932 | $ 1,429,102 | $ (66,048) | $ 828,878 | $ 52,994 | $ 1,960,324 | $ 1,907,330 | $ 1,547,918 | $ (74,335) | $ 433,747 | $ 52,994 |
Consolidated Statements of Earnings - TNMP - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Electric Operating Revenues | $ 2,249,555 | $ 1,779,873 | $ 1,523,012 |
Operating Expenses: | |||
Administrative and general | 227,149 | 230,292 | 216,334 |
Depreciation and amortization | 304,853 | 284,107 | 275,612 |
Transmission and distribution costs | 94,684 | 81,335 | 77,943 |
Taxes other than income taxes | 92,989 | 86,008 | 81,526 |
Total operating expenses | 1,855,795 | 1,471,720 | 1,237,731 |
Operating income | 393,760 | 308,153 | 285,281 |
Other Income and Deductions: | |||
Other income | 21,601 | 20,200 | 19,973 |
Other (deductions) | (13,881) | (18,559) | (18,732) |
Net other income and (deductions) | (54,542) | 33,153 | 37,063 |
Interest Charges | 127,908 | 96,877 | 114,392 |
Earnings before Income Taxes | 211,310 | 244,429 | 207,952 |
Income Taxes | 26,130 | 32,582 | 20,636 |
Texas-New Mexico Power Company | |||
Electric Operating Revenues | 482,730 | 417,853 | 383,178 |
Operating Expenses: | |||
Cost of energy and production costs | 123,928 | 113,067 | 102,074 |
Administrative and general | 49,592 | 47,820 | 44,811 |
Depreciation and amortization | 98,316 | 90,440 | 87,799 |
Transmission and distribution costs | 36,406 | 31,489 | 28,409 |
Taxes other than income taxes | 38,521 | 34,919 | 31,632 |
Total operating expenses | 346,763 | 317,735 | 294,725 |
Operating income | 135,967 | 100,118 | 88,453 |
Other Income and Deductions: | |||
Other income | 10,641 | 7,176 | 8,546 |
Other (deductions) | (1,988) | (1,768) | (1,718) |
Net other income and (deductions) | 8,653 | 5,408 | 6,828 |
Interest Charges | 37,192 | 33,735 | 30,388 |
Earnings before Income Taxes | 107,428 | 71,791 | 64,893 |
Income Taxes | 15,161 | 7,912 | 6,308 |
Net earnings | $ 92,267 | $ 63,879 | $ 58,585 |
Consolidated Balance Sheets - TNMP (Parenthetical) - $ / shares |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Company common stockholders’ equity: | ||
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares outstanding (in shares) | 85,834,874 | 85,834,874 |
Texas-New Mexico Power Company | ||
Company common stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 10 | $ 10 |
Common stock, shares authorized (in shares) | 12,000,000 | 12,000,000 |
Common stock, shares issued (in shares) | 6,358 | 6,358 |
Common stock, shares outstanding (in shares) | 6,358 | 6,358 |
Consolidated Statements of Changes in Common Stockholder's Equity - TNMP - USD ($) $ in Thousands |
Total |
Retained Earnings |
Texas-New Mexico Power Company |
Texas-New Mexico Power Company
Common Stock
|
Texas-New Mexico Power Company
Paid-in Capital
|
Texas-New Mexico Power Company
Retained Earnings
|
---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2019 | $ 754,627 | $ 64 | $ 614,166 | $ 140,397 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 58,585 | 58,585 | ||||
Equity contribution from parent | 71,000 | 71,000 | ||||
Dividends declared on common stock | $ (101,591) | $ (101,591) | (58,534) | (58,534) | ||
Ending Balance at Dec. 31, 2020 | 825,678 | 64 | 685,166 | 140,448 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 63,879 | 63,879 | ||||
Equity contribution from parent | 52,000 | 52,000 | ||||
Dividends declared on common stock | (84,333) | (84,333) | ||||
Ending Balance at Dec. 31, 2021 | 2,167,524 | 941,557 | 64 | 737,166 | 204,327 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 92,267 | 92,267 | ||||
Equity contribution from parent | 68,000 | 68,000 | ||||
Dividends declared on common stock | (150,855) | $ (150,855) | ||||
Ending Balance at Dec. 31, 2022 | $ 2,191,932 | $ 1,101,824 | $ 64 | $ 805,166 | $ 296,594 |
Summary of the Business and Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Business and Significant Accounting Policies | Summary of the Business and Significant Accounting Policies Nature of Business PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s primary subsidiaries are PNM and TNMP. PNM is a public utility with regulated operations primarily engaged in the generation, transmission, and distribution of electricity. TNMP is a wholly-owned subsidiary of TNP, which is a holding company that is wholly-owned by PNMR. TNMP provides regulated transmission and distribution services in Texas. PNMR’s common stock trades on the New York Stock Exchange under the symbol PNM. On October 20, 2020, PNMR, Avangrid, and Merger Sub, entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Merger Sub will merge with and into PNMR (the “Merger”), with PNMR surviving the Merger as a wholly-owned subsidiary of Avangrid. See Note 22. Financial Statement Preparation and Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated. The Notes to Consolidated Financial Statements include disclosures for PNMR, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to PNMR, PNM, and TNMP. Discussions regarding only PNMR, PNM, or TNMP are so indicated. Certain amounts in the 2021 and 2020 Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2022 financial statement presentation. GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events accordingly. Principles of Consolidation The Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia (Note 10). PNM owns undivided interests in jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants. PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include intercompany loans, interest and income tax sharing payments, as well as equity transactions, and interconnection billings. All intercompany transactions and balances have been eliminated. See Note 20. Accounting for the Effects of Certain Types of Regulation The Company maintains its accounting records in accordance with the uniform system of accounts prescribed by FERC and adopted by the NMPRC and PUCT. Certain of the Company’s operations are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to the regulated operations. Regulators may assign costs to accounting periods that differ from accounting methods applied by non-regulated utilities. When it is probable that regulators will permit recovery of costs through future rates, costs are deferred as regulatory assets that otherwise would be expensed. Likewise, regulatory liabilities are recognized when it is probable that regulators will require refunds through future rates or when revenue is collected for expenditures that have not yet been incurred. GAAP also provides for the recognition of revenue and regulatory assets and liabilities associated with “alternative revenue programs” authorized by regulators. Such programs allow the utility to adjust future rates in response to past activities or completed events, if certain criteria are met. Regulatory assets and liabilities are amortized into earnings over the authorized recovery period. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Information on regulatory assets and regulatory liabilities is contained in Note 13. In some circumstances, regulators allow a requested increase in rates to be implemented, subject to refund, before the regulatory process has been completed and a decision rendered by the regulator. When this occurs, the Company assesses the possible outcomes of the rate proceeding. The Company records a provision for refund to the extent the amounts being collected, subject to refund, exceed the amount the Company determines is probable of ultimately being allowed by the regulator. Cash and Restricted Cash Cash deposits received and held for a period of time that are restricted to a specific purpose, under the terms of their effective agreements, are considered restricted cash. Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. At December 31, 2022 and 2021 there was no restricted cash for PNMR, PNM, and TNMP. Utility Plant Utility plant is stated at original cost and includes capitalized payroll-related costs such as taxes, pension, other fringe benefits, administrative costs, and AFUDC, where authorized by rate regulation, or capitalized interest. Repairs, including major maintenance activities, and minor replacements of property are expensed when incurred, except as required by regulators for ratemaking purposes. Major replacements are charged to utility plant. Gains, losses, and costs to remove resulting from retirements or other dispositions of regulated property in the normal course of business are credited or charged to accumulated depreciation. PNM and TNMP may receive reimbursements, referred to as CIAC, from customers to pay for all or part of certain construction projects to the extent the project does not benefit regulated customers in general. PNM and TNMP account for these reimbursements as offsets to utility plant additions based on the requirements of the NMPRC, FERC, and PUCT. Due to the PUCT’s regulatory treatment of CIAC reimbursements, TNMP also receives a financing component that is recognized as other income on the Consolidated Statements of Earnings. Under the NMPRC regulatory treatment, PNM typically does not receive a financing component. Depreciation and Amortization PNM’s provision for depreciation and amortization of utility plant, other than nuclear fuel, is based upon straight-line rates approved by the NMPRC and FERC. Amortization of nuclear fuel is based on units-of-production. TNMP’s provision for depreciation and amortization of utility plant is based upon straight-line rates approved by the PUCT. Depreciation and amortization of non-utility property, including right-of-use assets for finance leases as discussed in Note 8, is computed based on the straight-line method. The provision for depreciation of certain equipment is allocated between operating expenses and construction projects based on the use of the equipment. Average straight-line rates used were as follows:
Allowance for Funds Used During Construction As provided by the FERC uniform systems of accounts, AFUDC is charged to regulated utility plant for construction projects. This allowance is designed to enable a utility to capitalize financing costs during periods of construction of property subject to rate regulation. It represents the cost of borrowed funds (allowance for borrowed funds used during construction or “debt AFUDC”) and a return on other funds (allowance for equity funds used during construction or “equity AFUDC”). The debt AFUDC is recorded in interest charges and the equity AFUDC is recorded in other income on the Consolidated Statements of Earnings. For the years ended December 31, 2022, 2021, and 2020, PNM recorded $3.7 million, $3.4 million, and $3.0 million of debt AFUDC at annual rates of 1.70%, 1.70%, and 2.40% and $9.3 million, $9.9 million, and $7.0 million of equity AFUDC at annual rates of 4.26%, 4.94%, and 3.42%. For the years ended December 31, 2022, 2021, and 2020, TNMP recorded $3.4 million, $1.6 million, and $2.1 million of debt AFUDC at rates of 2.25%, 1.80%, and 2.20% and $4.5 million, $3.3 million, and $4.3 million of equity AFUDC at rates of 2.99%, 3.67%, and 4.42%. Materials, Supplies, and Fuel Stock Materials and supplies relate to transmission, distribution, and generating assets. Materials and supplies are charged to inventory when purchased and are expensed or capitalized as appropriate when issued. Materials and supplies are valued using an average costing method. Coal is valued using a rolling weighted average costing method that is updated based on the current period cost per ton. Average cost is equal to net realizable value under the ratemaking process. Inventories consisted of the following at December 31:
Investments PNM holds investment securities in the NDT for the purpose of funding its share of the decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines that served SJGS and continue to serve Four Corners (Note 16). Investments (both equity and available-for-sale debt securities) are measured at fair value on a quarterly basis with changes in fair value for equity securities recognized in earnings for that period. Since third party investment managers have sole discretion over the purchase and sale of the securities (under general guidelines and targets provided by management), PNM records an impairment, as a realized loss, for any available-for-sale debt security that has a fair value which is less than cost at the end of each quarter. For the years ended December 31, 2022, 2021 and 2020, PNM recorded impairment losses on the available-for-sale debt securities of $25.8 million, $(0.7) million and $3.2 million. No gains or losses are deferred as regulatory assets or liabilities. See Notes 3 and 9. All investments are held in PNM’s name and are in the custody of major financial institutions. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in other income and deductions. As discussed above, PNM immediately records an impairment loss for any available-for-sale debt security that has a fair value that is less than its carrying value. As a result, the Company has no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings. Equity Method Investment PNMR accounts for its investment in NMRD using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations. PNMR records as income its percentage share of earnings or loss of NMRD and carries its investment at cost, adjusted for its share of undistributed earnings or losses. See Note 21. Goodwill The Company does not amortize goodwill. Goodwill is evaluated for impairment annually, or more frequently if events and circumstances indicate that the goodwill might be impaired. See Note 19. Asset Impairment Tangible long-lived assets and right-of-use assets associated with leases are evaluated in relation to the estimated future undiscounted cash flows to assess recoverability when events and circumstances indicate that the assets might be impaired. Revenue Recognition See Note 4 for a discussion of electric operating revenues. Accounts Receivable and Allowance for Credit Losses See Note 4 for a discussion of accounts receivable and the allowance for credit losses. Amortization of Debt Acquisition Costs Discount, premium, and expense related to the issuance of long-term debt are amortized over the lives of the respective issues. Gains and losses incurred upon the early retirement of long-term debt are recognized in other income or other deductions, except for amounts recoverable through NMPRC, FERC, or PUCT regulation, which are recorded as regulatory assets or liabilities and amortized over the lives of the respective issues. Unamortized premium, discount, and expense related to long-term debt are reflected as part of the related liability on the Consolidated Balance Sheets. Derivatives The Company records derivative instruments, including energy contracts, on the balance sheet as either an asset or liability measured at their fair value. Changes in the derivatives’ fair value are recognized in earnings unless specific hedge accounting criteria are met. PNM also records certain commodity derivative transactions recoverable through NMPRC regulation as regulatory assets or liabilities. See Note 9. The Company treats all forward commodity purchases and sales contracts subject to unplanned netting or “book-out” by the transmission provider as derivative instruments subject to mark-to-market accounting. GAAP provides guidance on whether realized gains and losses on derivative contracts not held for trading purposes should be reported on a net or gross basis and concludes such classification is a matter of judgment that depends on the relevant facts and circumstances. See Note 4. Decommissioning and Reclamation Costs PNM is only required to recognize and measure decommissioning liabilities for tangible long-lived assets for which a legal obligation exists. Nuclear decommissioning costs and related accruals are based on periodic site-specific estimates of the costs for removing all radioactive and other structures at PVNGS and are dependent upon numerous assumptions, including estimates of future decommissioning costs at current price levels, inflation rates, and discount rates. PNM’s accruals for PVNGS Units 1, 2, and 3, including portions held under leases, have been made based on such estimates, the guidelines of the NRC, and the PVNGS license periods. PNM records its share of the SJGS decommissioning obligation as an ARO on its Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. See Note 16. In connection with both the SJGS and Four Corners coal supply agreements, the owners are required to reimburse the mining companies for the cost of contemporaneous reclamation, as well as the costs for final reclamation of the coal mines. The reclamation costs are based on periodic site-specific studies that estimate the costs to be incurred in the future and are dependent upon numerous assumptions, including estimates of future reclamation costs at current price levels, inflation rates, and discount rates. PNM considers the contemporaneous reclamation costs part of the cost of its delivered coal costs. See Note 16 for a discussion of reclamation costs. Environmental Costs The normal operations of the Company involve activities and substances that expose the Company to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and may be imposed without regard to fault, or may be imposed for past acts, even though the past acts may have been lawful at the time they occurred. The Company records its environmental liabilities when site assessments or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. The Company reviews its sites and measures the liability by assessing a range of reasonably likely costs for each identified site using currently available information and the probable level of involvement and financial condition of other potentially responsible parties. These estimates are based on assumptions regarding the costs for site investigations, remediation, operations and maintenance, monitoring, and site closure. The ultimate cost to clean up the Company’s identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process. Amounts recorded for environmental expense in the years ended December 31, 2022, 2021, and 2020, as well as the amounts of environmental liabilities at December 31, 2022 and 2021, were insignificant. Pension and Other Postretirement Benefits See Note 11 for a discussion of pension and postretirement benefits expense, including a discussion of the actuarial assumptions. Stock-Based Compensation See Note 12 for a discussion of stock-based compensation expense. Income Taxes Income taxes are recognized using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. All deferred taxes are reflected as non-current on the Consolidated Balance Sheets. Current NMPRC, FERC, and PUCT approved rates include the tax effects of the majority of these differences. Rate-regulated enterprises are required to record deferred income taxes for temporary differences accorded flow-through treatment at the direction of a regulatory commission. The resulting deferred tax assets and liabilities are recorded based on the expected cash flow to be reflected in future rates. Because the NMPRC, FERC, and the PUCT have consistently permitted the recovery of tax effects previously flowed-through earnings, the Company has established regulatory assets and liabilities offsetting such deferred tax assets and liabilities. The Company recognizes only the impact of tax positions that, based on their merits, are more likely than not to be sustained upon an IRS audit. The Company defers investment tax credits and amortizes them over the estimated useful lives of the assets. See Note 18 for additional information, including a discussion of the impacts of the Tax Act. The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before taxes. Certain unusual or infrequently occurring items, as well as adjustments due to enactment of new tax laws, have been excluded from the estimated annual effective tax rate calculation. Lease Commitments See Note 8 for a discussion of lease commitments. New Accounting Pronouncements Information concerning a recently issued accounting pronouncement that has not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting this standard by its required effective date. Accounting Standards Update 2022-03 - Fair Value Measurement (Topic 820): Fair Value Measurements of Equity Securities Subject to Contractual Sale Restrictions In June 2022, the FASB issued ASU 2022-03 clarifying that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the security and, therefore, is not considered in measuring fair value. The amendment also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. Disclosure requirements from the amendment include disclosure of the fair value of equity securities subject to contractual sale restrictions that are reflected in the balance sheet; the nature and remaining duration of the restriction(s); and the circumstances that could cause a lapse in the restriction(s). ASU 2022-03 is effective for the Company beginning January 1, 2024 with early adoption for both interim and annual periods being permitted. ASU 2022-03 is to be applied prospectively with any adjustments recognized in earnings and disclosed on the date of adoption.
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Segment Information |
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Segment Information | Segment Information The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided. PNM PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, as well as providing transmission services to third parties. The sale of electricity includes the asset optimization of PNM’s jurisdictional capacity as well as the capacity excluded from retail rates through 2022. FERC has jurisdiction over wholesale power and transmission rates. TNMP TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities. Corporate and Other The Corporate and Other segment includes PNMR holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other. Eliminations of intercompany transactions are reflected in the Corporate and Other segment. PNMR SEGMENT INFORMATION The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.
Non-GAAP Financial Measures The Company defines utility margin as electric operating revenues less cost of energy. Cost of energy consists primarily of fuel and purchase power costs for PNM and costs charged by third-party transmission providers for TNMP. The Company believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since substantially all such costs are offset in revenues as fuel and purchase power costs are passed through to customers under PNM’s FPPAC and third-party transmission costs are passed on to consumers through TNMP’s transmission cost recovery factor. Utility margin is not a financial measure required to be presented and is considered a non-GAAP measure. PNM and TNMP do not intend for utility margin to represent any financial measure as defined by GAAP; however, the calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP. Reconciliations between utility margin and gross margin are presented below.
1 Corporate and Other depreciation and amortization represents corporate level activities that are billed at cost and reflected as general and administrative expenses at PNM and TNMP and therefore are not a component of gross margin or utility margin. See Note 1. Major Customers PNM’s participation in EIM, operated by CAISO, accounted for approximately 24% and 11% of electric operating revenues during the years ended December 31, 2022 and 2021. These revenues are passed on to customers under PNM’s FPPAC with no impact to net earnings. No individual PNM customer accounted for more than 10% during the year ended December 31, 2020. Two REPs accounted for more than 10% of the electric operating revenues of TNMP during the year ended December 31, 2022 and three REPs during the years ended December 31, 2021 and 2020 as follows:
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) AOCI reports a measure for accumulated changes in equity that result from transactions and other economic events other than transactions with shareholders. Information regarding AOCI is as follows:
The Consolidated Statements of Earnings include pre-tax amounts reclassified from AOCI related to Unrealized Gains on Available-for-Sale Debt Securities in gains (losses) on investment securities, related to Pension Liability Adjustment in other (deductions), and related to Fair Value Adjustment for Cash Flow Hedges in interest charges. The income tax impacts of all amounts reclassified from AOCI are included in income taxes in the Consolidated Statements of Earnings.
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Electric Operating Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric Operating Revenues | Electric Operating Revenues 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 reductions to credit losses of $(2.3) million and $(1.1) million in the years ended December 31, 2022 and 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 17. 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 years ended December 31, 2022 and 2021, PNM recorded zero and $1.0 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. 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 December 31, 2022 and will seek recovery in a general rate case. Revenue Recognition Retail electric operating revenues are recorded in the period of energy delivery, which includes estimated amounts for service rendered but unbilled at the end of each accounting period. The determination of the energy sales billed to individual retail customers is based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading and the corresponding unbilled revenue are estimated. Unbilled electric revenue is estimated based on daily generation volumes, estimated customer usage by class, line losses, historical trends and experience, applicable customer rates or by using AMS data where available. Amounts billed are generally due within the next month. The Company does not incur incremental costs to obtain contracts for its energy services. PNM’s wholesale electricity sales are recorded as electric operating revenues and wholesale electricity purchases are recorded as costs of energy sold. Derivative contracts that are subject to unplanned netting are recorded net in earnings. A “book-out” is the planned or unplanned netting of off-setting purchase and sale transactions. A book-out is a transmission mechanism to reduce congestion on the transmission system or administrative burden. For accounting purposes, a book-out is the recording of net revenues upon the settlement of a derivative contract. Unrealized gains and losses on derivative contracts that are not designated for hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power and fuel supply agreements, used to hedge generation assets and purchased power costs. Changes in the fair value of economic hedges are reflected in results of operations, with changes related to economic hedges on sales included in operating revenues and changes related to economic hedges on purchases included in cost of energy sold. See Note 9. The Company has collaborative arrangements related to its interest in SJGS, Four Corners, PVNGS, and Luna. The Company has determined that during the years ended December 31, 2022, 2021, and 2020 none of the joint owners in its collaborative arrangements were customers under Topic 606. The Company will continue to evaluate transactions between collaborative arrangement participants in future periods under the revenue recognition standard. PNM and TNMP recognize revenue as they satisfy performance obligations, which typically occurs as the customer or end-user consumes the electric service provided. Electric services are typically for a bundle of services that are distinct and transferred to the end-user in one performance obligation measured by KWh or KW. Electric operating revenues are recorded in the period of energy delivery, including estimated unbilled amounts. The Company has elected to exclude all sales and similar taxes from revenue. Revenue from contracts with customers is recorded based upon the total authorized tariff or market price at the time electric service is rendered, including amounts billed under arrangements qualifying as an Alternative Revenue Program (“ARP”). ARP arrangements are agreements between PNM or TNMP and its regulator that allow PNM or TNMP to adjust future rates in response to past activities or completed events, if certain criteria are met. ARP revenues are required to be reported separately from contracts with customers. ARP revenues in a given period include the recognition of “originating” ARP revenues (i.e. when the regulator-specific conditions are met) in the period, offset by the reversal of ARP revenues when billed to customers. Sources of Revenue Additional information about the nature of revenues is provided below. Additional information about matters affecting PNM’s and TNMP’s regulated revenues is provided in Note 17. Revenue from Contracts with Customers PNM NMPRC Regulated Retail Electric Service – PNM provides electric generation, transmission, and distribution service to its rate-regulated customers in New Mexico. PNM’s retail electric service territory covers a large area of north central New Mexico, including the cities of Albuquerque, Rio Rancho, and Santa Fe, and certain areas of southern New Mexico. Customer rates for retail electric service are set by the NMPRC and revenue is recognized as energy is delivered to the customer. PNM invoices customers on a monthly basis for electric service and generally collects billed amounts within one month. Transmission Service to Third Parties – PNM owns transmission lines that are interconnected with other utilities in New Mexico, Texas, Arizona, Colorado, and Utah. Transmission customers receive service for the transmission of energy owned by the customer utilizing PNM’s transmission facilities. Customers generally receive transmission services, which are regulated by FERC, from PNM through PNM’s Open Access Transmission Tariff (“OATT”) or a specific contract. Customers are billed based on capacity and energy components on a monthly basis. In December 2021, PNM completed the purchase of the Western Spirit Line and services under related transmission agreements were initiated using an incremental rate, approved by FERC, that are separate from the formula rate mechanism. Wholesale Energy Sales – PNM engages in activities to optimize its existing jurisdictional assets and long-term power agreements through spot market, hour-ahead, day-ahead, week-ahead, month-ahead, and other sales of excess generation not required to fulfill retail load and contractual commitments. PNM began participating in the EIM in 2021. The EIM is a real-time wholesale energy trading market operated by the CAISO that enables participating electric utilities to buy and sell energy. The NMPRC granted PNM authority to seek recovery of costs associated with joining the EIM, which have been included in the 2024 Rate Change and to pass the benefits of participating in EIM to customers through the FPPAC. PNM’s participation in EIM has significantly increased Electric operating revenues which are passed on to customers under PNM’s FPPAC with no impact to net earnings. Beginning on January 1, 2018, PNM acquired a 65 MW interest in SJGS Unit 4, which was held as merchant plant as ordered by the NMPRC. PNM sold power from 36 MW of this capacity to a third party at a fixed price that was recorded as revenue from contracts with customers. PNM was obligated to deliver power under this arrangement only when SJGS Unit 4 was operating. In May 2022, PNM executed a new agreement to sell 50 MW of that capacity to a third party for the period from July 1, 2022 through September 30, 2022 on a system-contingent basis. TNMP PUCT Regulated Retail Electric Service – TNMP provides transmission and distribution services in Texas under the provisions of TECA and the Texas Public Utility Regulatory Act. TNMP is subject to traditional cost-of-service regulation with respect to rates and service under the jurisdiction of the PUCT and certain municipalities. TNMP’s transmission and distribution activities are solely within ERCOT and not subject to traditional rate regulation by FERC. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service territory. Revenue is recognized as energy is delivered to the consumer. TNMP invoices REPs on a monthly basis and is generally paid within a month. TCOS – TNMP is a transmission service provider that is allowed to recover its TCOS through a network transmission rate that is approved by the PUCT. TCOS customers are other utilities that receive service for the transmission of energy owned by the customer utilizing TNMP’s transmission facilities. Alternative Revenue Programs The Company defers certain costs and records certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. ARP revenues, which are discussed above, include recovery or refund provisions under PNM’s renewable energy rider and true-ups to PNM’s formula transmission rates; TNMP’s AMS surcharge, transmission cost recovery factor, and the impacts of the PUCT’s January 25, 2018 order regarding the change in the federal corporate income tax rate; and the energy efficiency incentive bonus at both PNM and TNMP. Regulatory assets and liabilities are recognized for the difference between ARP revenues and amounts billed under those programs. Regulatory assets and liabilities are amortized into earnings as amounts are billed. TNMP’s 2018 Rate Case integrated AMS costs into base rates beginning January 1, 2019. These costs are being amortized into earnings as alternative revenues over a period of five years. Other Electric Operating Revenues Other electric operating revenues consist primarily of PNM’s economic hedges that meet the definition of a derivative, and are therefore not considered revenue from contracts with customers. Derivative revenues include gains and losses representing changes in fair value (Note 9) and settlements from sales of electricity under forward sales contracts. 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 ARP revenues and other revenues.
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 Consolidated Balance Sheets, net of allowance for credit losses, includes $151.4 million and $94.9 million at December 31, 2022 and 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 was $11.9 million at December 31, 2022 and $0.6 million at December 31, 2021, and is included in Other deferred charges on the Consolidated Balance Sheets. 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.
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Earnings and Dividends Per Share |
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Earnings and Dividends Per Share | Earnings and Dividends Per Share Dual presentation of basic and diluted earnings per share has been presented in the Consolidated Statements of Earnings of PNMR. Information regarding the computation of earnings per share and dividends per share is as follows:
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Stockholders' Equity |
12 Months Ended |
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Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock and Equity Contributions On December 15, 2020 PNMR physically settled all shares under the PNMR 2020 Forward Equity Sale Agreements by issuing 6.2 million shares to the forward purchasers at a price of $45.805 per share, aggregating net proceeds of $283.1 million. In addition, PNMR recorded a net $0.1 million for equity issuance costs reimbursed by the lead underwriter. Following this settlement, no shares of PNMR’s common stock remain subject to future settlement under the PNMR 2020 Forward Equity Sale Agreements. PNMR, PNM, and TNMP did not issue any common stock during the years ended December 31, 2022 and 2021. Neither PNM nor TNMP issued any common stock during the year ended December 31, 2020. PNMR funded zero, $53.0 million, and $230.0 million of cash equity contributions to PNM in 2022, 2021, and 2020, respectively. PNMR also funded $68.0 million, $52.0 million, and $71.0 million of cash equity contributions to TNMP in 2022, 2021, and 2020, respectively. PNMR offered shares of PNMR common stock through the PNMR Direct Plan. As required by the Merger Agreement, effective November 2, 2020, PNMR entered into the Second Amendment to the Third Amended and Restated PNM Resources, Inc. Direct Plan (the “PNMR Direct Plan”), which among other matters, terminated the right to purchase shares of PNMR common stock under the PNMR Direct Plan with respect to any cash dividends and optional cash investments not received by noon Eastern Time on November 17, 2020. No purchases of shares of PNMR common stock under the PNMR Direct Plan may occur after November 18, 2020. The shares of PNMR common stock utilized in the PNMR Direct Plan were offered under a SEC shelf registration statement that expired in March 2021. Dividends on Common Stock The declaration of common dividends by PNMR is dependent upon a number of factors, including the ability of PNMR’s subsidiaries to pay dividends. PNMR’s primary sources of dividends are its operating subsidiaries. PNM declared and paid cash dividends to PNMR of $153.5 million, $60.0 million, and $40.7 million in 2022, 2021, and 2020, respectively. TNMP declared and paid cash dividends to PNMR of zero, zero, and $58.5 million in 2022, 2021, and 2020, respectively. The NMPRC has placed certain restrictions on the ability of PNM to pay dividends to PNMR, including the restriction that PNM cannot pay dividends that cause its debt rating to fall below investment grade. The NMPRC provisions allow PNM to pay dividends, with at least 15 days prior notice, from current earnings, which is determined on a rolling four quarter basis, or from equity contributions previously made by PNMR. The Federal Power Act also imposes certain restrictions on dividends by public utilities. Debt-to-capitalization ratio requirements, as discussed in Note 7, remain at less than or equal to 65% for PNM and TNMP and less than or equal to 70% for PNMR. These debt-to-capitalization ratio requirements could limit the amounts of dividends that could be paid. PNM also has other financial covenants that limit the transfer of assets, through dividends or other means, including a requirement to obtain the approval of certain financial counterparties to transfer more than five percent of PNM’s assets. As of December 31, 2022, none of the numerical tests would restrict the payment of dividends from the retained earnings of PNM or TNMP, and the 70% debt-to-capitalization covenant would restrict the payment of dividends by PNMR to $255.8 million. In addition, the ability of PNMR to declare dividends is dependent upon the extent to which cash flows will support dividends, the availability of retained earnings, financial circumstances and performance, current and future regulatory decisions, Congressional and legislative acts, and economic conditions. Conditions imposed by the NMPRC or PUCT, future growth plans and related capital requirements, and business considerations may also affect PNMR’s ability to pay dividends. Under the terms of the Merger Agreement, PNMR has agreed not to declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its equity securities, or make any other actual, constructive or deemed distribution in respect of any equity securities (except (i) PNMR may continue the declaration and payment of planned regular quarterly cash dividends on PNMR common stock for each quarterly period ended after the date of the Merger Agreement, which for any fiscal quarter in 2023 shall not exceed $0.3675, with usual record and payment dates in accordance with past dividend practice, and (ii) for any cash dividend or cash distribution by a wholly-owned subsidiary of PNMR to PNMR or another wholly-owned subsidiary of PNMR). Preferred Stock PNM’s cumulative preferred shares outstanding bear dividends at 4.58% per annum. PNM preferred stock does not have a mandatory redemption requirement, but may be redeemed, at PNM’s option, at 102% of the stated value plus accrued dividends. The holders of the PNM preferred stock are entitled to payment before the holders of common stock in the event of any liquidation or dissolution or distribution of assets of PNM. In addition, PNM’s preferred stock is not entitled to a sinking fund and cannot be converted into any other class of stock of PNM. PNMR and TNMP have no preferred stock outstanding. The authorized shares of PNMR and TNMP preferred stock are 10 million shares and 1 million shares, respectively.
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Financing |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing | Financing The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities or refinance other debt. Each of the Company’s revolving credit facilities, term loans, and other debt agreements contains a single financial covenant that requires the maintenance of a debt-to-capitalization ratio. For the PNMR agreements this ratio must be maintained at less than or equal to 70%, and for the PNM and TNMP agreements this ratio must be maintained at less than or equal to 65%. The Company’s revolving credit facilities, term loans, and other debt agreements generally also contain customary covenants, events of default, cross-default provisions, and change-of-control provisions. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual informational financing filing and short-term financing plan with the NMPRC. Financing Activities PNMR At December 31, 2020, PNMR had $300.0 million aggregate principal amount of 3.25% SUNs outstanding (the “PNMR 2018 SUNs”), which were set to mature on March 9, 2021. As discussed below, on March 9, 2021, PNMR utilized $220.0 million of capacity under the PNMR 2020 Delayed-Draw Term Loan as well as $80.0 million in borrowings under the PNMR Revolving Credit Facility to repay the PNMR 2018 SUNs. At December 31, 2020, PNMR had $65.0 million outstanding under the PNMR Development Term Loan that was amended to reduce the balance from $90.0 million to $65.0 million. On May 18, 2021, the $65.0 million PNMR Development Term Loan was repaid using proceeds from the PNMR 2021 Delayed-Draw Term Loan discussed below. At December 31, 2020, PNMR had $150.0 million outstanding under the PNMR 2019 Term Loan. On May 18, 2021, the $150.0 million PNMR 2019 Term Loan was repaid using proceeds from the PNMR 2021 Delayed-Draw Term Loan discussed below. On December 21, 2020, PNMR entered into a $150.0 million term loan agreement (the “PNMR 2020 Term Loan”), between PNMR and U.S. Bank National Association, as sole lender. Proceeds from the PNMR 2020 Term Loan were used to repay the $50.0 million PNMR 2018 Two-Year Term Loan and for other corporate purposes. On May 18, 2021, the PNMR 2020 Term Loan was repaid with proceeds from the PNMR 2021 Delayed-Draw Term Loan discussed below. On December 22, 2020, PNMR entered into a $300.0 million delayed-draw term loan agreement (the “PNMR 2020 Delayed-Draw Term Loan”), among PNMR, the lenders party thereto, and MUFG Bank, Ltd., as administrative agent. Initially PNMR drew $80.0 million to refinance existing indebtedness and for other corporate purposes. PNMR used the remaining $220.0 million of capacity from the PNMR 2020 Delayed-Draw Term Loan to repay an equivalent amount of the PNMR 2018 SUNs. On May 18, 2021, the $300.0 million outstanding under the PNMR 2020 Delayed-Draw Term Loan was repaid with proceeds from the PNMR 2021 Delayed-Draw Term Loan discussed below. On May 18, 2021, PNMR entered into the PNMR 2021 Delayed-Draw Term Loan, among PNMR, the lenders party thereto, and Wells Fargo Bank, N.A., as administrative agent. Initially PNMR drew $850.0 million to repay and terminate existing indebtedness, including the $150.0 million PNMR 2019 Term Loan, the $300.0 million PNMR 2020 Delayed-Draw Term Loan, the $150.0 million PNMR 2020 Term Loan, the $65.0 million PNMR Development Term Loan, and $40.0 million in borrowings under the PNMR Development Revolving Credit Facility. Additionally, PNMR repaid $92.1 million in borrowings under the PNMR Revolving Credit Facility. On December 2, 2021, PNMR drew an additional $50.0 million under the PNMR 2021 Delayed-Draw Term Loan. On January 24, 2022, PNMR drew the remaining $100.0 million available under the PNMR 2021 Delayed-Draw Term Loan. On May 20, 2022, PNMR amended and restated the PNMR 2021 Delayed-Draw Term Loan, extending its maturity to May 18, 2025. The PNMR 2021 Delayed-Draw Term Loan provides for assignment of the term loan to Avangrid upon completion of the Merger. Draws on the PNMR 2021 Delayed-Draw Term Loan bear interest at a variable rate, which was 5.37% at December 31, 2022. On November 10, 2022, PNMR entered into a distribution agreement with BofA Securities, Inc., MUFG Securities Americas Inc. and Wells Fargo Securities, LLC, as sales agents and Bank of America, N.A., MUFG Securities EMEA plc and Wells Fargo Bank, N.A., as forward purchasers, pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $200.0 million of its common stock, no par value, through the sales agents (the “PNMR 2022 ATM Program”). Sales of the shares made pursuant to the distribution agreement, if any, may be made in “at the market offerings” as defined in Rule 415 of the Securities Act. Actual sales will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of PNMR’s common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. PNMR did not initially receive any proceeds upon the execution of this agreement. The Company also may enter into forward stock purchase transactions, in which forward purchasers may borrow from third parties and, through a sales agent, sell a number of shares equal to the number of shares of the Company’s common stock to hedge the agreement. Except in certain specified circumstances, PNMR has the option to elect physical, cash, or net share settlement of the forward stock purchase transactions. The Company will not receive any proceeds from the sale of borrowed shares of common stock by a forward seller. The Company expects to receive proceeds from the sale of shares directly or upon future physical settlement(s), in which case, the Company will expect to receive, subject to certain adjustments, aggregate net cash proceeds at settlement equal to the number of shares underlying the relevant forward agreement, multiplied by the relevant forward sale price. On March 2, 2022, PNMR filed a shelf registration that provides for the issuance of various types of debt and equity securities. The PNMR shelf registration statement expires in March 2025. PNM At December 31, 2020, PNM had a $40.0 million outstanding term loan agreement (the “PNM 2019 $40.0 million Term Loan”), between PNM and Bank of America, N.A. as sole lender and administrative agent. On June 18, 2021, the $40.0 million PNM 2019 Term Loan was repaid using proceeds from the PNM 2021 Term Loan discussed below. At December 31, 2020, PNM had outstanding PCRBs aggregating $100.3 million, that were issued in the weekly mode (the “PNM Floating Rate PCRBs”). The PNM Floating Rate PCRBs bore interest at rates that were reset weekly, giving investors the option to return the PCRBs for remarketing to new investors upon 7 days' notice. On October 1, 2021, PNM converted the PNM Floating Rate PCRBs to a fixed rate period and successfully remarketed them to new investors (the “PNM 2021 Fixed Rate PCRBs”). The PNM 2021 Fixed Rate PCRBs now bear interest at 0.875% and are subject to mandatory tender on October 1, 2026. At December 31, 2020, PNM had $146.0 million of outstanding PCRBs with a final maturity of April 1, 2033. These PCRBs were subject to mandatory tender on October 1, 2021, and were successfully remarketed to new investors on that date. The $146.0 million PCRBs bear interest at a fixed rate of 2.15% until their final maturity. At December 31, 2021, PNM had $80.0 million aggregate principal amount of its 2.59% senior unsecured notes outstanding, due July 15, 2033, and $80.0 million aggregate principal amount of its 3.14% senior unsecured notes outstanding, due July 15, 2041 (the “PNM 2021 SUNs”). The PNM 2021 SUNs were offered and issued to institutional investors in private placement transactions on July 14, 2021 under the PNM 2021 Note Purchase Agreement. Proceeds from the PNM 2021 SUNs were used to repay the total amount of $160.0 million of PNM's 5.35% SUNs, at par, earlier than their scheduled maturity of October 1, 2021. The PNM 2021 Note Purchase Agreement includes the customary covenants discussed above. In the event of a change of control, PNM will be required to offer to prepay the PNM 2021 SUNs at par. Although there are customary change of control provisions in the PNM debt agreements, the change of control provisions in these agreements, including the PNM 2021 Note Purchase Agreement, are not triggered by the closing of the Merger. PNM has the right to redeem any or all of the PNM 2021 SUNs prior to their maturities, subject to payment of a customary make-whole premium. At December 31, 2021, PNM had $50.0 million aggregate principal amount of its 2.29% senior unsecured notes outstanding, due December 30, 2031, and another $100.0 million aggregate principal amount of its 2.97% senior unsecured notes outstanding, due December 30, 2041 (the “PNM September 2021 SUNs”). The PNM September 2021 SUNs were offered and issued to institutional investors in private placement transactions on December 2, 2021 under the PNM September 2021 Note Purchase Agreement. Proceeds from the PNM September 2021 SUNs were used for funding of capital expenditures, including the purchase of the Western Spirit Line, repayment of existing indebtedness, and for general corporate purposes. The PNM September 2021 Note Purchase Agreement includes the customary covenants discussed above. In the event of a change of control, PNM will be required to offer to prepay the PNM September 2021 SUNs at par. Although there are customary change of control provisions in the PNM debt agreements, the change of control provisions in these agreements, including the PNM September 2021 Note Purchase Agreement, are not triggered by the closing of the Merger. PNM has the right to redeem any or all of the PNM September 2021 SUNs prior to their maturities, subject to payment of a customary make-whole premium. On June 18, 2021, PNM entered into a $75.0 million outstanding term loan (the “PNM 2021 Term Loan”) between PNM and Bank of America, N.A., as lender. The PNM 2021 Term Loan was used to repay the PNM 2019 $40.0 million Term Loan and for other corporate purposes. On August 5, 2022, the PNM 2021 Term Loan was prepaid without penalty with proceeds from the PNM 2022 Delayed-Draw Term Loan discussed below. At December 31, 2021, PNM had $104.5 million PCRBs outstanding with a mandatory remarketing date of June 1, 2022, consisting of $36.0 million at 1.05% issued by the Maricopa County, Arizona Pollution Control Corporation with a final maturity of January 2038; $37.0 million at 2.125% issued by the City of Farmington, New Mexico with a final maturity of June 2040; $11.5 million at 1.20% issued by the City of Farmington, New Mexico with a final maturity of June 2040; and $20.0 million at 2.45% issued by the City of Farmington, New Mexico with a final maturity of September 2042. On June 1, 2022, PNM remarketed to new investors the $36.0 million and $37.0 million series in the tax-exempt market at 3.00% with a mandatory put date of June 1, 2024. PNM purchased and redeemed the remaining two series of PCRBs, totaling $31.5 million, on June 1, 2022. On August 5, 2022, PNM entered into a $225.0 million delayed-draw term loan agreement (the "PNM 2022 Delayed-Draw Term Loan"), among PNM, the lender parties thereto, and Royal Bank of Canada, as administrative agent. PNM initially drew $180.0 million to repay the $75.0 million PNM 2021 Term Loan ahead of its December 2022 maturity and for other corporate purposes. On September 30, 2022, PNM drew the remaining $45.0 million and used the proceeds for general corporate purposes. Draws on the PNM 2022 Delayed-Draw Term Loan bear interest at a variable rate, which was 5.09% at December 31, 2022 and must be repaid on or before February 5, 2024. PNM has a shelf registration statement, which will expire in May 2023, with capacity for the issuance of up to $650.0 million of senior unsecured notes. TNMP On July 14, 2021, TNMP entered into the TNMP 2021 Bond Purchase Agreement with institutional investors for the sale of $65.0 million aggregate principal amount of the TNMP 2021 Bonds offered in private placement transactions. On August 16, 2021, TNMP issued all $65.0 million of the TNMP 2021 Bonds at 2.44% with a maturity of August 15, 2035, and used the proceeds to repay existing debt and for other corporate purposes. The TNMP 2021 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indenture governing the TNMP 2021 Bonds. The terms of the supplemental indenture governing the TNMP 2021 Bonds include the customary covenants discussed above. In the event of a change of control, TNMP will be required to offer to prepay the TNMP 2021 Bonds at par. However, the definition of change of control in the supplemental indenture governing the TNMP 2021 Bonds will not be triggered by the closing of the Merger. TNMP has the right to redeem any or all of the TNMP 2021 Bonds prior to their maturity, subject to payment of a customary make-whole premium. On April 27, 2022, TNMP entered into an agreement (the "TNMP 2022 Bond Purchase Agreement") with institutional investors for the sale of $160.0 million aggregate principal amount of two series of TNMP first mortgage bonds (the "TNMP 2022 Bonds") offered in private placement transactions. TNMP issued the first series of $65.0 million of the TNMP 2022 Bonds on May 12, 2022, at a 4.13% interest rate, due May 12, 2052, and the second series of $95.0 million of the TNMP 2022 Bonds on July 28, 2022, at a 3.81% interest rate, due July 28, 2032. The proceeds were used to repay borrowings under the TNMP Revolving Credit Facility and for other corporate purposes. The TNMP 2022 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indenture governing the TNMP 2022 Bonds. The terms of the supplemental indentures governing the TNMP 2022 Bonds include the customary covenants discussed above. In the event of a change of control, TNMP will be required to offer to prepay the TNMP 2022 Bonds at par. However, the definition of change of control in the supplemental indentures governing the TNMP 2022 Bonds will not be triggered by the close of the Merger. TNMP has the right to redeem any or all of the TNMP 2022 Bonds prior to their maturity, subject to payment of a customary make-whole premium. Merger Related Financing Activities On October 20, 2020, the execution of the Merger Agreement constituted a “Change of Control” under certain PNMR, TNMP and PNMR Development debt agreements. Under each of the specified debt agreements, a “Change of Control” constitutes an “Event of Default,” pursuant to which the lender parties thereto have the right to accelerate the indebtedness under the debt agreements. The definition of Change of Control under the PNM debt agreements and PNM note purchase agreements was not triggered by the execution of the Merger Agreement. On October 26, 2020, PNMR, TNMP and PNMR Development entered into amendment agreements with the lender parties thereto to amend the definition of “Change of Control” such that the entry into the Merger Agreement would not constitute a Change of Control and to waive the Event of Default arising from entry into the Merger Agreement. On September 15, 2021, PNMR and TNMP and the lender parties further amended the definition of “Change of Control” in the PNMR Revolving Credit Facility and the TNMP Revolving Credit Facility such that the closing of the Merger does not constitute a Change of Control under those facilities. The Change of Control provisions in the PNM debt agreements, PNM note purchase agreements, TNMP 2021 Bond Purchase Agreement, and TNMP 2022 Bond Purchase Agreement are not triggered by the closing of the Merger and did not require amendment. The documents governing TNMP's aggregate $750.0 million of outstanding 2014 to 2020 First Mortgage Bonds (“TNMP FMBs”) obligated TNMP to offer, within 30 business days following the signing of the Merger Agreement, to prepay those $750.0 million outstanding TNMP FMBs at 100% of the principal amount, plus accrued and unpaid interest thereon, but without any make-whole amount or other premium. TNMP made such offer to prepay the TNMP FMBs in accordance with the terms of the TNMP FMBs, and none of the holders of the TNMP FMBs accepted TNMP’s offer. The documents governing the 2014 to 2020 TNMP FMBs require TNMP to make another offer, within 30 business days of closing of the Merger, to prepay those $750.0 million outstanding TNMP FMBs at par. TNMP will make such offer to prepay the $750.0 million outstanding 2014 to 2020 TNMP FMBs in accordance with the terms of the TNMP FMBs; however, holders of the TNMP FMBs are not required to tender their TNMP FMBs and may accept or reject such offer to prepay. The TNMP FMBs are not registered under the Securities Act and may not be offered or sold in the United States absent registration or applicable exemption from registration requirements and applicable state laws. The information in this Annual Report on Form 10-K is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. Similar to the offer to prepay made after signing the Merger Agreement, the post-Merger closing offer to prepay the TNMP FMBs will be made only pursuant to an offer to prepay, which will set forth the terms and conditions of the offer to prepay. Interest Rate Hedging Activities In 2017, PNMR entered into three separate four-year hedging agreements that effectively established fixed interest rates of 1.926%, 1.823%, and 1.629%, plus customary spreads over LIBOR, subject to change if there is a change in PNMR’s credit rating, for three separate tranches, each of $50.0 million, of its variable rate debt. These fixed interest rate hedging agreements expired according to their terms in 2021. On May 2, 2022, PNMR entered into two separate 20-month hedging agreements for $150.0 million and $200.0 million, to hedge an equal amount of its variable rate debt, whereby it effectively established a fixed interest rate of 2.65%. On May 20, 2022, PNMR entered into a third 19-month hedging agreement for $100.0 million to hedge an equal amount of its variable rate debt, whereby it effectively established a fixed interest rate of 2.52%. On September 30, 2022, PNMR entered into two separate 15-month hedging agreements for $100.0 million each, totaling $200.0 million, to hedge an equal amount of its variable rate debt, whereby it effectively established fixed interest rates of 4.17% and 4.18%. On October 31, 2022, PNMR entered into two additional 14-month hedging agreements for $100.0 million each, totaling $200.0 million, to hedge an equal amount of its variable rate debt, whereby it effectively established fixed interest rates of 4.66% and 4.65%. All of the hedging agreements discussed above establish the fixed rate indicated, plus a customary spread over SOFR, which is subject to change if there is a change in PNMR's credit rating. These hedge agreements are accounted for as cash flow hedges and had fair values of $11.1 million that were included in Other current assets on the Consolidated Balance Sheet at December 31, 2022. As discussed in Note 3, changes in the fair value of the cash flow hedges were deferred in AOCI and amounts reclassified to the Consolidated Statement of Earnings were recorded in interest charges. The fair values were determined using Level 2 inputs under GAAP, including using forward SOFR curves under the mid-market convention to discount cash flows over the remaining term of the agreements. Borrowing Arrangements Between PNMR and its Subsidiaries PNMR has intercompany loan agreements with its subsidiaries. Individual subsidiary loan agreements vary in amount up to $150.0 million and have either reciprocal or non-reciprocal terms. Interest charged to the subsidiaries is equivalent to interest paid by PNMR on its short-term borrowings or the money-market interest rate if PNMR does not have any short-term borrowings outstanding. All balances outstanding under intercompany loan agreements are eliminated upon consolidation. See Note 1. PNM and TNMP had no borrowings from PNMR at December 31, 2022 and 2021. PNMR Development had no short-term borrowings outstanding from PNMR at December 31, 2022 and 2021. PNMR had $5.3 million and $6.4 million in short-term borrowings outstanding from PNMR Development at December 31, 2022 and 2021. Short-term Debt and Liquidity Currently, the PNMR Revolving Credit Facility has a financing capacity of $300.0 million and the PNM Revolving Credit Facility has a financing capacity of $400.0 million. On May 20, 2022, both PNMR and PNM extended the facilities to October 31, 2024, with two one-year extension options that, if exercised, would extend the maturity through October 2026, subject to approval by a majority of the lenders. On January 26, 2023, PNMR and PNM exercised one of the one-year extension options extending their maturities through October 2025; provided that, effective November 1, 2024, the amount of the PNMR Revolving Credit Facility will adjust to $285.0 million and the PNM Revolving Credit Facility will adjust to $380.0 million because one lender in each facility failed to agree to the one-year extension through October 2025. Also on May 20, 2022, the $40.0 million PNM New Mexico Credit Facility was extended to May 20, 2026. At December 31, 2021, the TNMP Revolving Credit Facility had a financing capacity of $75.0 million, secured by $75.0 million aggregate principal amount of TNMP first mortgage bonds. On March 11, 2022, the TNMP Revolving Credit Facility was amended to extend the maturity to September 23, 2024, with two one-year extension options that, if exercised, would extend the maturity to September 23, 2026, subject to approval by a majority of the lenders. The amended TNMP Revolving Credit Facility also contained an accordion feature that would allow TNMP to increase the size of the revolver from $75.0 million to $100.0 million, subject to certain conditions. On May 13, 2022, TNMP exercised the accordion feature and increased the capacity of the TNMP Revolving Credit Facility to $100.0 million, secured by $100.0 million aggregate principal amount of TNMP first mortgage bonds. On January 26, 2023, TNMP exercised one of the one-year extension options on its credit facility, which extended the maturity to September 23, 2025. PNMR Development had a $40.0 million revolving credit facility that was terminated on May 18, 2021. Variable interest rates under the PNMR, PNM, and TNMP revolving credit facilities are based on SOFR. Short-term debt outstanding consists of:
In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $3.4 million, zero, and zero at December 31, 2022, that reduce the available capacity under their respective revolving credit facilities. In addition, PNMR had $30.3 million of letters of credit outstanding under the WFB LOC Facility. At December 31, 2022, interest rates on outstanding borrowings were 5.90% for the PNMR Revolving Credit Facility, 5.67% for the PNM Revolving Credit Facility, 5.68% for the PNM New Mexico Credit Facility, and 5.29% for the TNMP Revolving Credit Facility. Long-Term Debt Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
Reflecting mandatory tender dates, long-term debt maturities as of December 31, 2022, are follows:
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Lease Commitments |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Commitments | Lease Commitments The Company enters into various lease agreements to meet its business needs and to satisfy the needs of its customers. The Company accounts for contracts that convey the use and control of identified assets for a period of time as leases. The Company classifies leases as operating or financing by evaluating the terms of the lease agreement. Agreements under which the Company is likely to utilize substantially all of the economic value or life of the asset or that the Company is likely to own at the end of the lease term, either through purchase or transfer of ownership, are classified as financing leases. Leases not meeting these criteria are accounted for as operating leases. Agreements under which the Company is a lessor are insignificant. PNMR, PNM, and TNMP determine present value for their leases using their incremental borrowing rates at the commencement date of the lease or, when readily available, the rate implicit in the agreement. The Company leases office buildings, vehicles, and other equipment. In addition, PNM leases interests in PVNGS and certain rights-of-way agreements that are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the Consolidated Balance Sheets by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Consolidated Statements of Earnings. PVNGS In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expires in January 2024. The annual lease payments during the renewal periods aggregated $16.5 million for PVNGS Unit 1 and $1.6 million for Unit 2. The terms of each of the extended leases do not provide for additional renewal options beyond their currently scheduled expiration dates. PNM had the option to purchase the assets underlying each of the extended leases at their fair market value or to return the lease interests to the lessors on the expiration dates. On June 11, 2020, PNM provided notice to the lessors and the NMPRC of its intent to return the assets underlying in both the PVNGS Unit 1 and Unit 2 leases upon their expiration in January 2023 and 2024. Although PNM elected to return the assets underlying the extended leases, PNM retains certain obligations related to PVNGS, including costs to decommission the facility. PNM depreciates its capital improvements related to the extended leases using NMPRC approved rates through the end of the NRC license period for each unit, which expire in June 2045 for Unit 1 and in June 2046 for Unit 2. Upon expiration of the leases PNM will cease depreciation and as authorized by the NMPRC create a regulatory asset for the associated remaining undepreciated investments. On April 5, 2021, PNM and SRP entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to SRP certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2, which SRP has agreed to acquire from the lessors upon termination of the existing leases. The transaction between PNM and SRP received all necessary approvals, including NRC approval for the transfer of the associated possessory licenses to SRP at the end of the term of each of the respective leases. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $17.7 million for PNM-owned assets and $17.3 million for nuclear fuel. See Notes 16 and 17 for information on other PVNGS matters including the PVNGS Leased Interest Abandonment Application which includes NMPRC authorization to create regulatory assets for the associated remaining undepreciated investments. PNM is exposed to loss under the remaining PVNGS lease arrangements upon the occurrence of certain events that PNM does not consider reasonably likely to occur. Under certain circumstances (for example, the NRC issuing specified violation orders with respect to PVNGS or the occurrence of specified nuclear events), PNM would be required to make specified payments to the lessors and take title to the leased interests. If such an event had occurred as of December 31, 2022, amounts due to the lessors under the circumstances described above would be up to $14.1 million, payable on January 13, 2023, in addition to the scheduled lease payments due on that date. Land Easements and Rights-of-Ways Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2022 payment for the amount due under the Navajo Nation right-of-way lease was $7.9 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019, are considered variable lease payments. PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Consolidated Statement of Earnings over their term. As of December 31, 2022 and 2021, the unamortized balance of these rights-of-ways was $54.6 million and $53.4 million. During the years ended December 31, 2022, 2021, and 2020, PNM recognized amortization expense associated with these agreements of $3.8 million, $3.7 million, and $4.4 million. Fleet Vehicles and Equipment Fleet vehicle and equipment leases commencing on or after January 1, 2019, are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018, are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At December 31, 2022, residual value guarantees on fleet vehicle and equipment leases are $1.0 million, $1.2 million, and $2.2 million for PNM, TNMP, and PNMR Consolidated. Information related to the Company’s operating leases recorded on the Consolidated Balance Sheets is presented below:
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019, as financing leases. Information related to the Company’s financing leases recorded on the Consolidated Balance Sheets is presented below:
Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
Information for the components of lease expense is as follows:
(1) Includes expense of $2.7 million for the twelve months ended December 31, 2022 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are offset with insurance reimbursements of $2.7 million for the twelve months ended December 31, 2022.
(1) Includes expense of $2.5 million for the twelve months ended December 31, 2021 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are partially offset with insurance reimbursements of $1.8 million for the twelve months ended December 31, 2021. Supplemental cash flow information related to the Company’s leases is as follows:
Capitalized lease costs are reflected as investing activities on the Company’s Consolidated Statements of Cash Flows for the twelve months ended December 31, 2022 and 2021. Future expected lease payments are shown below:
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Lease Commitments | Lease Commitments The Company enters into various lease agreements to meet its business needs and to satisfy the needs of its customers. The Company accounts for contracts that convey the use and control of identified assets for a period of time as leases. The Company classifies leases as operating or financing by evaluating the terms of the lease agreement. Agreements under which the Company is likely to utilize substantially all of the economic value or life of the asset or that the Company is likely to own at the end of the lease term, either through purchase or transfer of ownership, are classified as financing leases. Leases not meeting these criteria are accounted for as operating leases. Agreements under which the Company is a lessor are insignificant. PNMR, PNM, and TNMP determine present value for their leases using their incremental borrowing rates at the commencement date of the lease or, when readily available, the rate implicit in the agreement. The Company leases office buildings, vehicles, and other equipment. In addition, PNM leases interests in PVNGS and certain rights-of-way agreements that are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the Consolidated Balance Sheets by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Consolidated Statements of Earnings. PVNGS In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expires in January 2024. The annual lease payments during the renewal periods aggregated $16.5 million for PVNGS Unit 1 and $1.6 million for Unit 2. The terms of each of the extended leases do not provide for additional renewal options beyond their currently scheduled expiration dates. PNM had the option to purchase the assets underlying each of the extended leases at their fair market value or to return the lease interests to the lessors on the expiration dates. On June 11, 2020, PNM provided notice to the lessors and the NMPRC of its intent to return the assets underlying in both the PVNGS Unit 1 and Unit 2 leases upon their expiration in January 2023 and 2024. Although PNM elected to return the assets underlying the extended leases, PNM retains certain obligations related to PVNGS, including costs to decommission the facility. PNM depreciates its capital improvements related to the extended leases using NMPRC approved rates through the end of the NRC license period for each unit, which expire in June 2045 for Unit 1 and in June 2046 for Unit 2. Upon expiration of the leases PNM will cease depreciation and as authorized by the NMPRC create a regulatory asset for the associated remaining undepreciated investments. On April 5, 2021, PNM and SRP entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to SRP certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2, which SRP has agreed to acquire from the lessors upon termination of the existing leases. The transaction between PNM and SRP received all necessary approvals, including NRC approval for the transfer of the associated possessory licenses to SRP at the end of the term of each of the respective leases. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $17.7 million for PNM-owned assets and $17.3 million for nuclear fuel. See Notes 16 and 17 for information on other PVNGS matters including the PVNGS Leased Interest Abandonment Application which includes NMPRC authorization to create regulatory assets for the associated remaining undepreciated investments. PNM is exposed to loss under the remaining PVNGS lease arrangements upon the occurrence of certain events that PNM does not consider reasonably likely to occur. Under certain circumstances (for example, the NRC issuing specified violation orders with respect to PVNGS or the occurrence of specified nuclear events), PNM would be required to make specified payments to the lessors and take title to the leased interests. If such an event had occurred as of December 31, 2022, amounts due to the lessors under the circumstances described above would be up to $14.1 million, payable on January 13, 2023, in addition to the scheduled lease payments due on that date. Land Easements and Rights-of-Ways Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2022 payment for the amount due under the Navajo Nation right-of-way lease was $7.9 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019, are considered variable lease payments. PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Consolidated Statement of Earnings over their term. As of December 31, 2022 and 2021, the unamortized balance of these rights-of-ways was $54.6 million and $53.4 million. During the years ended December 31, 2022, 2021, and 2020, PNM recognized amortization expense associated with these agreements of $3.8 million, $3.7 million, and $4.4 million. Fleet Vehicles and Equipment Fleet vehicle and equipment leases commencing on or after January 1, 2019, are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018, are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At December 31, 2022, residual value guarantees on fleet vehicle and equipment leases are $1.0 million, $1.2 million, and $2.2 million for PNM, TNMP, and PNMR Consolidated. Information related to the Company’s operating leases recorded on the Consolidated Balance Sheets is presented below:
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019, as financing leases. Information related to the Company’s financing leases recorded on the Consolidated Balance Sheets is presented below:
Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
Information for the components of lease expense is as follows:
(1) Includes expense of $2.7 million for the twelve months ended December 31, 2022 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are offset with insurance reimbursements of $2.7 million for the twelve months ended December 31, 2022.
(1) Includes expense of $2.5 million for the twelve months ended December 31, 2021 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are partially offset with insurance reimbursements of $1.8 million for the twelve months ended December 31, 2021. Supplemental cash flow information related to the Company’s leases is as follows:
Capitalized lease costs are reflected as investing activities on the Company’s Consolidated Statements of Cash Flows for the twelve months ended December 31, 2022 and 2021. Future expected lease payments are shown below:
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Fair Value of Derivative and Other Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative and Other Financial Instruments | Fair Value of Derivative and Other Financial InstrumentsFair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is based on current market quotes as available and is supplemented by modeling techniques and assumptions made by the Company to the extent quoted market prices or volatilities are not available. External pricing input availability varies based on commodity location, market liquidity, and term of the agreement. Valuations of derivative assets and liabilities take into account nonperformance risk, including the effect of counterparties’ and the Company’s credit risk. The Company regularly assesses the validity and availability of pricing data for its derivative transactions. Although the Company uses its best judgment in estimating the fair value of these instruments, there are inherent limitations in any estimation technique. Energy Related Derivative Contracts Overview The primary objective for the use of commodity derivative instruments, including energy contracts, options, swaps, and futures, is to manage price risk associated with forecasted purchases of energy and fuel used to generate electricity, as well as managing anticipated generation capacity in excess of forecasted demand from existing customers. PNM’s energy related derivative contracts manage commodity risk. PNM is required to meet the demand and energy needs of its customers. PNM is exposed to market risk for the needs of its customers not covered under the FPPAC. In 2021, PNM entered into three agreements to purchase power from third parties at a fixed price in order to ensure that customer demand during the 2022 summer peak load period was met. Two of the agreements, the purchase of 85 MW from June through September 2022 and the purchase of 40 MW for the full year of 2022, were not considered derivatives because there were no notional amounts due to the unit-contingent nature of the agreements. The third agreement for the purchase of 150 MW firm power in June and September 2022 met the definition of an economic hedge described below and was accounted for accordingly. In June and December 2022, PNM entered into agreements to purchase power from third parties in order to ensure that customer demand during the 2023 summer peak load is met. The agreements for the purchase of 35 MW and 25 MW from June 1, 2023 through September 30, 2023 were not considered a derivative because there was no notional amount due to the unit-contingent nature of one agreement and the other qualified for a normal purchase, normal sale scope exception. In the third and fourth quarters of 2022, PNM entered into several additional agreements to purchase power from third parties in order to ensure that customer demand during the 2023 summer peak load is met. These agreements are primarily derivative agreements and are accounted for as such. For additional information related to 2023 summer peak resource adequacy, see Note 17. PNM was exposed to market risk for its 65 MW interest in SJGS Unit 4, which was held as merchant plant as ordered by the NMPRC from January 1, 2018 until September 30, 2022. PNM entered into agreements to sell power from 36 MW of that capacity to a third party at a fixed price for the period January 1, 2018 through June 30, 2022, subject to certain conditions. Under these agreements, PNM was obligated to deliver 36 MW of power only when SJGS Unit 4 was operating. In May 2022, PNM executed a new agreement to sell 50 MW of that capacity to a third party for the period from July 1, 2022 through September 30, 2022 on a system-contingent basis. These agreements were not considered derivatives because there was no notional amount due to the unit-contingent nature of the transactions. PNM and Tri-State had a hazard sharing agreement that expired in May 2022. Under this agreement, each party sold the other party 100 MW of capacity and energy from a designated generation resource on a unit contingent basis, subject to certain performance guarantees. The agreement was accounted for as a commodity derivative. In May 2022, PNM and Tri-State entered into another hazard sharing agreement that existed on a unit contingent basis through September 30, 2022, however this agreement did not include a performance guarantee. As a result, this agreement was not considered a derivative. Both the purchases and sales are made at the same market index price. This agreement served to reduce the magnitude of each party’s single largest generating hazard and assist in enhancing the reliability and efficiency of their respective operations. PNM passed the sales and purchases through to customers under PNM’s FPPAC. PNM’s operations are managed primarily through a net asset-backed strategy, whereby PNM’s aggregate net open forward contract position is covered by its forecasted excess generation capabilities or market purchases. PNM could be exposed to market risk if its generation capabilities were to be disrupted or if its load requirements were to be greater than anticipated. If all or a portion of load requirements were required to be covered as a result of such unexpected situations, commitments would have to be met through market purchases. TNMP does not enter into energy related derivative contracts. Commodity Risk Marketing and procurement of energy often involve market risks associated with managing energy commodities and establishing positions in the energy markets, primarily on a short-term basis. PNM routinely enters into various derivative instruments such as forward contracts, option agreements, and price basis swap agreements to economically hedge price and volume risk on power commitments and fuel requirements and to minimize the effect of market fluctuations. PNM monitors the market risk of its commodity contracts in accordance with approved risk and credit policies. Unusually cold weather in February 2021 resulted in higher-than-expected natural gas and purchased power costs. PNM mitigated the impacts from the cold weather by securing gas supplies in advance, engaging in market purchases when lower prices were available, and adjusting plant operation of its gas units to minimize reliance on higher-priced gas supplies. PNM estimates the impact of the cold weather conditions in the first quarter of 2021 resulted in approximately $20 million of additional natural gas costs and approximately $8 million in additional purchased power costs. These fuel increases are passed through to customers under the FPPAC. Accounting for Derivatives Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2022, 2021, and 2020, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flow hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC. Changes in the fair value of instruments covered by its FPPAC are recorded as regulatory assets and liabilities. PNM has no trading transactions. Commodity Derivatives PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Consolidated Balance Sheets:
Certain of PNM’s commodity derivative instruments in the above table are subject to master netting agreements whereby assets and liabilities could be offset in the settlement process. PNM does not offset fair value and cash collateral for derivative instruments under master netting arrangements and the above table reflects the gross amounts of fair value assets and liabilities for commodity derivatives. Included in the table above are equal amounts of current assets and current liabilities aggregating zero at December 31, 2022 and $0.5 million at December 31, 2021 resulting from PNM’s hazard sharing arrangements with Tri-State that ended May 2022. The hazard sharing arrangements were net-settled upon delivery. As discussed above, PNM’s most recent hazard sharing agreement with Tri-State was not considered a derivative. As discussed above, PNM has NMPRC-approved guidelines for hedging arrangements to manage fuel and purchased power costs related to customers covered by its FPPAC. The table above includes $9.8 million in current assets and $19.2 million of current liabilities related to these arrangements at December 31, 2022 and $0.2 million in current assets and $1.8 million of current liabilities at December 31, 2021 with changes in fair value recorded as regulatory assets and regulatory liabilities. See Note 13. At December 31, 2022 and 2021, PNM had no amounts recognized for the legal right to reclaim cash collateral. However, amounts posted as cash collateral under margin arrangements were $10.5 million at December 31, 2022 and $0.5 million at December 31, 2021. These amounts are included in other current assets on the Consolidated Balance Sheets. Obligations to return cash collateral were $0.2 million at December 31, 2022 and $0.9 million at December 31, 2021. Cash collateral amounts are included on the Consolidated Balance Sheets in other current liabilities. The changes in the fair value of commodity derivative instruments that are considered economic hedges had no impact on PNM’s net earnings during the years ended December 31, 2022 and 2021. Commodity derivatives also had no impact on OCI for the periods presented. PNM’s net buy (sell) volume positions for energy were 432,200 MWh and 122,400 MWh at December 31, 2022 and 2021. PNM had no open gas commodity volume positions at December 31, 2022 and 2021. PNM has contingent requirements to provide collateral under commodity contracts having an objectively determinable collateral provision that are in net liability positions and are not fully collateralized with cash. In connection with managing its commodity risks, PNM enters into master agreements with certain counterparties. If PNM is in a net liability position under an agreement, some agreements provide that the counterparties can request collateral if PNM’s credit rating is downgraded; other agreements provide that the counterparty may request collateral to provide it with “adequate assurance” that PNM will perform; and others have no provision for collateral. Contractual liability represents those commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. Cash collateral posted under these contracts does not reflect letters of credit under the Company’s revolving credit facilities that may have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchase and normal sale, offset by existing collateral and by any offsets available under master netting agreements, including both assets and liability positions. At December 31, 2022, PNM had $15.3 million of contractual liability, zero posted cash collateral, and $13.1 million of net exposure related to these contingent requirements for contracts in a net liability position. At December 31, 2021, PNM had no such contracts in a net liability position. Non-Derivative Financial Instruments The carrying amounts reflected on the Consolidated Balance Sheets approximate fair value for cash, receivables, and payables due to the short period of maturity. Investment securities are carried at fair value. Investment securities consist of PNM assets held in the NDT for its share of decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners. See Note 16. At December 31, 2022 and 2021, the fair value of investment securities included $325.3 million and $394.5 million for the NDT, $14.7 million and zero for the SJGS decommissioning trust, and $77.5 million and $68.6 million for the coal mine reclamation trusts. PNM records a realized loss as an impairment for any available-for-sale debt security that has a fair value that is less than its carrying value. As a result, the Company has no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings. Gains and losses recognized on the Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table:
The proceeds and gross realized gains and losses on the disposition of securities held in the NDT and coal mine reclamation trusts are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold. Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $(25.8) million, $0.7 million, and $(3.2) million for the years ended December 31, 2022, 2021 and 2020.
At December 31, 2022, the available-for-sale debt securities held by PNM, had the following final maturities:
Fair Value Disclosures The Company determines the fair values of its derivative and other financial instruments based on the hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. For investment securities, Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market values based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. The valuation of Level 3 investments, when applicable, requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The Company has no Level 3 investments as of December 31, 2022 and 2021. Management of the Company independently verifies the information provided by pricing services. Items recorded at fair value by PNM on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale securities.
The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Consolidated Balance Sheets are presented below:
The carrying amount and fair value of the Company’s other investments presented on the Consolidated Balance Sheets are not material and not shown in the above table. Investments Held by Employee Benefit Plans As discussed in Note 11, PNM and TNMP have trusts that hold investment assets for their pension and other postretirement benefit plans. The fair value of the assets held by the trusts impacts the determination of the funded status of each plan but the assets are not reflected on the Company’s Consolidated Balance Sheets. Both the PNM Pension Plan and the TNMP Pension Plan hold units of participation in the PNM Resources, Inc. Master Trust (the “PNMR Master Trust”), which was established for the investment of assets of the pension plans. The PNM Pension Plan’s investment allocation targets in 2022 consist of 35% equities, 15% alternative investments (both of which are considered return generating), and 50% fixed income. The TNMP Pension Plan’s investment allocation targets in 2022 consist of 16% equities, 14% alternative investments (both of which are considered return generating), and 70% fixed income. GAAP provides a practical expedient that allows the net asset value per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Fair values for alternative investments held by the PNMR Master Trust are valued using this practical expedient. Investments for which fair value is measured using that practical expedient are not required to be categorized within the fair value hierarchy. Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For level 2 fair values, the pricing provider predominately uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value as of year-end. Fair value prices for Level 2 corporate term loans predominately use the market approach which uses bid side market values based upon hierarchy information for specific securities or securities with similar characteristics. Alternative investments include private equity funds, hedge funds, and real estate funds. The private equity funds are not voluntarily redeemable. These investments are realized through periodic distributions occurring over a 10 to 15 years term after the initial investment. The real estate funds and hedge funds may be voluntarily redeemed but are subject to redemption provisions that may result in the funds not being redeemable in the near term. Audited financial statements are received for each fund and are reviewed by the Company annually. The valuation of alternative investments requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The significant unobservable inputs include estimates of liquidation value, current operating performance, and future expectations of performance. Neither the employee benefit plans nor the PNMR Master Trust have any Level 3 investments as of December 31, 2022 or 2021. The fair values of investments held by the employee benefit plans are as follows:
The fair values of investments in the PNMR Master Trust are as follows:
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Variable Interest Entities |
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Variable Interest Entities | Variable Interest Entities How an enterprise evaluates and accounts for its involvement with variable interest entities, focuses primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a variable interest entity (“VIE”). This evaluation requires continual reassessment of the primary beneficiary of a VIE. Valencia PNM has a PPA to purchase all of the electric capacity and energy from Valencia, a 155 MW natural gas-fired power plant near Belen, New Mexico, through May 2028. A third party built, owns, and operates the facility while PNM is the sole purchaser of the electricity generated. PNM is obligated to pay fixed operation and maintenance and capacity charges in addition to variable operation and maintenance charges under this PPA. For the years ended December 31, 2022, 2021, and 2020, PNM paid $19.5 million, $19.8 million, and $20.0 million for fixed charges and $1.9 million, $1.9 million, and $1.4 million for variable charges. PNM does not have any other financial obligations related to Valencia. The assets of Valencia can only be used to satisfy its obligations and creditors of Valencia do not have any recourse against PNM’s assets. During the term of the PPA, PNM has the option, under certain conditions, to purchase and own up to 50% of the plant or the VIE. The PPA specifies that the purchase price would be the greater of 50% of book value reduced by related indebtedness or 50% of fair market value. PNM sources fuel for the plant, controls when the facility operates through its dispatch, and receives the entire output of the plant, which factors directly and significantly impact the economic performance of Valencia. Therefore, PNM has concluded that the third-party entity that owns Valencia is a VIE and that PNM is the primary beneficiary of the entity since PNM has the power to direct the activities that most significantly impact the economic performance of Valencia and will absorb the majority of the variability in the cash flows of the plant. As the primary beneficiary, PNM consolidates Valencia in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of Valencia are included in the Consolidated Financial Statements of PNM although PNM has no legal ownership interest or voting control of the VIE. The assets and liabilities of Valencia are set forth below and are not shown separately on the Consolidated Balance Sheets. The owner’s equity and net income of Valencia are considered attributable to non-controlling interest. Summarized financial information for Valencia is as follows:
Westmoreland San Juan Mining, LLC As discussed in the subheading Coal Supply in Note 16, PNM purchased coal for SJGS under the SJGS CSA. PNM and Westmoreland also entered into agreements under which CCR disposal and mine reclamation services for SJGS would be provided. On October 9, 2018, Westmoreland filed a Current Report on Form 8-K with the SEC announcing it had filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. On March 15, 2019, Westmoreland emerged from Chapter 11 bankruptcy as a privately held company owned and operated by a group of its former creditors. Under the reorganization, the assets of SJCC were sold to Westmoreland San Juan Mining, LLC (“WSJ LLC”), a subsidiary of Westmoreland Mining Holdings, LLC. As successor entity to SJCC, WSJ LLC assumed all rights and obligations of SJCC including obligations to PNM under the SJGS CSA and to PNMR under letter of credit support agreements. See Note 16. PNMR issued $30.3 million in letters of credit to facilitate the issuance of reclamation bonds required in order for SJCC to mine coal to be supplied to SJGS. As discussed above, WSJ LLC assumed the rights and obligations of SJCC, including obligations to PNMR for the letters of credit. The letters of credit support results in PNMR having a variable interest in WSJ LLC since PNMR is subject to possible loss in the event performance by PNMR is required under the letters of credit support. PNMR considers the possibility of loss under the letters of credit support to be remote since the purpose of posting the bonds is to provide assurance that WSJ LLC performs the required reclamation of the mine site in accordance with applicable regulations and the reclamation services agreement provides WSJ LLC the ability to recover the cost of reclamation. Additionally, much of the mine reclamation activities are being performed after the SJGS CSA expired on September 30, 2022. As discussed in Note 16, each of the SJGS participants has established and actively fund trusts to meet future reclamation obligations. WSJ LLC is considered a VIE. PNMR’s analysis of its arrangements with WSJ LLC concluded that WSJ LLC had the ability to direct its mining operations and reclamation services, which are the factors that most significantly impact the economic performance of WSJ LLC. Other than PNM being able to ensure that coal was supplied in adequate quantities and of sufficient quality to provide the fuel necessary to operate SJGS in a normal manner and monitoring of reclamation activities, the mining operations and reclamation services were solely under the control of WSJ LLC, including developing mining and reclamation plans, hiring of personnel, and incurring operating and maintenance expenses. Neither PNMR nor PNM had any ability to direct or influence the mining operation or reclamation activities. PNM’s involvement through the SJGS CSA and the reclamation services agreement is a protective right rather than a participating right and WSJ LLC still has the power to direct the activities that most significantly impact the economic performance of WSJ LLC. The SJGS CSA required WSJ LLC to deliver coal to fuel SJGS in exchange for payment of a set price per ton, which escalated over time for inflation. The reclamation services agreement requires WSJ LLC to perform reclamation services at a base price per activity, which escalates over time for inflation. If WSJ LLC had been able to mine or perform reclamation services more efficiently than anticipated, its economic performance would improve. Conversely, if WSJ LLC had not been able to mine or does not perform reclamation services as efficiently as anticipated, its economic performance would be negatively impacted. Accordingly, PNMR believes WSJ LLC is the primary beneficiary and, therefore, WSJ LLC is not consolidated by either PNMR or PNM. The amounts outstanding under the letters of credit support continue to be PNMR’s maximum exposure to loss from the VIE at December 31, 2022.
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Pension and Other Postretirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits PNMR and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). PNMR maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of the periodic cost or income to the extent included in retail rates (a “prepaid pension asset”). Participants in the PNM Plans include eligible employees and retirees of PNMR and PNM. Participants in the TNMP Plans include eligible employees and retirees of TNMP. The PNM pension plan was frozen at the end of 1997 with regard to new participants, salary levels, and benefits. Through December 31, 2007, additional credited service could be accrued under the PNM pension plan up to a limit determined by age and service. The TNMP pension plan was frozen at December 31, 2005 with regard to new participants, salary levels, and benefits. A plan sponsor is required to (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Unrecognized prior service costs and unrecognized gains or losses are required to be recorded in AOCI and subsequently amortized. To the extent the amortization of these items will ultimately be recovered or returned through future rates, PNM and TNMP record the costs as a regulatory asset or regulatory liability. The amortization of these incurred costs is included as pension and postretirement benefit periodic cost or income in subsequent years. The Company maintains trust funds for the pension and OPEB plans from which benefits are paid to eligible employees and retirees. The Company’s funding policy is to make contributions to the trusts, as determined by an independent actuary, that comply with minimum guidelines of the Employee Retirement Income Security Act and the IRC. Information concerning the fair value of investments is contained in Note 9. The Company has in place a policy that defines the investment objectives, establishes performance goals of asset managers, and provides procedures for the manner in which investments are to be reviewed. The plans implement investment strategies to achieve the following objectives: •Implement investment strategies commensurate with the risk that the Corporate Investment Committee deems appropriate to meet the obligations of the pension plans and OPEB plans, minimize the volatility of expense, and account for contingencies •Transition asset mix over the long-term to a higher proportion of high-quality fixed income investments as the plans’ funded statuses improve Management is responsible for the determination of the asset target mix and the expected rate of return. The target asset allocations are determined based on consultations with external investment advisors. The expected long-term rate of return on pension and postretirement plan assets is calculated on the market-related value of assets. Actual gains and losses on pension and OPEB plan assets are recognized in the market-related value of assets equally over a period of not more than five years, which reduces year-to-year volatility. For the PNM Plans and TNMP Plans, the market-related value of assets is equal to the prior year’s market-related value of assets adjusted for contributions, benefit payments and investment gains and losses that are within a corridor of plus or minus 4.0% around the expected return on market value. Gains and losses that are outside the corridor are amortized over five years. Pension Plans For defined benefit pension plans, including the executive retirement plans, the PBO represents the actuarial present value of all benefits attributed by the pension benefit formula to employee service rendered prior to that date using assumptions regarding future compensation levels. The ABO represents the PBO without considering future compensation levels. Since the pension plans are frozen, the PBO and ABO are equal. The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:
Actuarial (gain) loss results from changes in:
The following table presents pre-tax information about net actuarial (gain) loss in AOCI as of December 31, 2022.
The following table presents the components of net periodic benefit cost (income):
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost (income). Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost (income) would be affected.
The assumed discount rate for determining the PBO was determined based on a review of long-term high-grade bonds and management’s expectations. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the PBO. Factors that are considered include, but are not limited to, historic returns on plan assets, current market information on long-term returns (e.g., long-term bond rates) and current and target asset allocations between asset categories. If all other factors were to remain unchanged, a 1% decrease in the expected long-term rate of return would cause PNM’s and TNMP’s 2023 net periodic benefit cost to increase $4.6 million and $0.5 million (analogous changes would result from a 1% increase). The actual rate of return for the PNM and TNMP pension plans was (21.28)% and (23.03)% for the year ended December 31, 2022. The Company’s long-term pension investment strategy is to invest in assets whose interest rate sensitivity is correlated with the pension liability. The Company uses an investment strategy, known as Liability Driven Investing, that increases the liability matching investments as the funded status of the pension plans improve. The Company’s investment allocation targets consist of 35% equities, 15% alternative investments (both of which are considered return generating), and 50% liability matching securities that are primarily bonds and other fixed income investments. Equity investments are primarily in domestic securities that include large-, mid-, and small-capitalization companies. The pension plans have a 13% targeted allocation to equities of companies domiciled primarily in developed countries outside of the U.S. The equity investments category includes actively managed domestic equity securities that are benchmarked against a variety of style indices. Fixed income investments are primarily corporate bonds of companies from diversified industries and government securities. Alternative investments include investments in hedge funds, real estate funds, and private equity funds. The private equity funds are structured as multi-manager multi-strategy fund of funds to achieve a diversified position in these asset classes. The hedge funds use multi- strategies that pursue various absolute return strategies such as relative value, merger arbitrage, event driven equities, and structured credit. The real estate investments are commingled real estate portfolios that invest in a diversified portfolio of assets including commercial property and multi-family housing. See Note 9 for fair value information concerning assets held by the pension plans. The following pension benefit payments are expected to be paid:
Based on current law, funding requirements, and estimates of portfolio performance, the Company does not expect to make any cash contributions to the pension plans in 2023 through 2026. PNM expects to make a contribution of $0.4 million in 2027. TNMP does not expect to make any cash contributions in 2027. The funding assumptions were developed using discount a rate of 5.75%. Actual amounts to be funded in the future will be dependent on the actuarial assumptions at that time, including the appropriate discount rates. PNM and TNMP may make additional contributions at their discretion. Other Postretirement Benefit Plans For postretirement benefit plans, the APBO is the actuarial present value of all future benefits attributed under the terms of the postretirement benefit plan to employee service rendered to date. The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:
As of December 31, 2022, the fair value of plan assets exceeds the APBO for both PNM’s and TNMP’s OPEB Plans and the resulting net asset is presented in other deferred charges on the Consolidated Balance Sheets. Actuarial (gain) loss results from changes in:
In the year ended December 31, 2022, actuarial losses of $12.7 million were recorded as adjustments to regulatory assets for the PNM OPEB plan. For the TNMP OPEB plan, actuarial losses of $1.1 million were recorded as adjustments to regulatory liabilities. The following table presents the components of net periodic benefit cost (income):
The following significant weighted-average assumptions were used to determine the APBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the APBO and net periodic benefit cost would be affected.
The assumed discount rate for determining the APBO was determined based on a review of long-term high-grade bonds and management’s expectations. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the APBO. Factors that are considered include, but are not limited to, historic returns on plan assets, current market information on long-term returns (e.g., long-term bond rates), and current and target asset allocations between asset categories. If all other factors were to remain unchanged, a 1% decrease in the expected long-term rate of return would cause PNM’s and TNMP’s 2023 net periodic benefit cost to increase $0.8 million and $0.1 million (analogous changes would result from a 1% increase). The actual rate of return for the PNM and TNMP OPEB plans was (24.5)% and (27.9)% for the year ended December 31, 2022. The following table shows the assumed health care cost trend rates for the PNM OPEB plan:
TNMP’s exposure to cost increases in the OPEB plan is minimized by a provision that limits TNMP’s share of costs under the plan. Costs of the plan in excess of the limit, which was reached at the end of 2001, are wholly borne by the participants. As a result, a one-percentage-point change in assumed health care cost trend rates would have no effect on either the net periodic expense or the year-end APBO. Effective January 1, 2018, the PNM OPEB plan was amended to limit the annual increase in the Company’s costs to 5%. Increases in excess of the limit are born by the PNM OPEB plan participants. The Company’s OPEB plans invest in a portfolio that is diversified by asset class and style strategies. The OPEB plans generally use the same pension fixed income and equity investment managers and utilize the same overall investment strategy as described above for the pension plans, except there is no allocation to alternative investments. The OPEB plans have a target asset allocation of 30% equities and 70% fixed income. See Note 9 for fair value information concerning assets held by the other postretirement benefit plans. The following OPEB payments, which reflect expected future service and are net of participant contributions, are expected to be paid:
PNM and TNMP made no cash contributions to the OPEB trusts in 2022 or 2021 and PNM and TNMP do not expect to make cash contributions to the OPEB trusts in 2023-2027. However, a portion of the disbursements attributable to the OPEB trust are paid by PNM and are therefore considered to be contributions to the PNM OPEB plan. Payments by PNM on behalf of the PNM OPEB plan are expected to be $0.2 million in 2023 and $9.0 million in 2024-2027. Executive Retirement Programs For the executive retirement programs, the following table presents information about the PBO and funded status of the plans:
The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2022.
The following table presents the components of net periodic benefit cost:
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost would be affected.
The assumed discount rate for determining the PBO was determined based on a review of long-term high-grade bonds and management’s expectations. The impacts of changes in assumptions or experience were not significant. Disbursements under the executive retirement program, funded by PNM and TNMP, which are considered to be contributions to the plan were $1.3 million and $0.1 million in the year ended December 31, 2022 and $1.3 million and $0.1 million for the year ended December 31, 2021. The following executive retirement plan payments, which reflect expected future service, are expected:
Other Retirement Plans PNMR sponsors a 401(k) defined contribution plan for eligible employees, including those of its subsidiaries. PNMR’s contributions to the 401(k) plan consist of a discretionary matching contribution equal to 75% of the first 6% of eligible compensation contributed by the employee on a before-tax basis. PNMR also makes a non-matching contribution ranging from 3% to 10% of eligible compensation based on the eligible employee’s age. PNMR also provides executive deferred compensation benefits through an unfunded, non-qualified plan. The purpose of this plan is to permit certain key employees of PNMR who participate in the 401(k) defined contribution plan to defer compensation and receive credits without reference to the certain limitations on contributions. A summary of expenses for these other retirement plans is as follows:
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation PNMR has various stock-based compensation programs, including stock options, restricted stock, and performance shares granted under the Performance Equity Plan (“PEP”). Although certain PNM and TNMP employees participate in the PNMR plans, PNM and TNMP do not have separate employee stock-based compensation plans. The Company has not awarded stock options since 2010 and all employee stock options expired or were exercised in February 2020. Certain restricted stock awards are subject to achieving performance or market targets. Other awards of restricted stock are only subject to time vesting requirements. Restricted stock expected to be awarded under the PEP for performance periods ending after 2023 no longer have market targets. Performance Equity Plan The PEP provides for the granting of non-qualified stock options, restricted stock rights, performance shares, performance units, and stock appreciation rights to officers, key employees, and non-employee members of the Board. Restricted stock under the PEP refers to awards of stock subject to vesting, performance, or market conditions rather than to shares with contractual post-vesting restrictions. Generally, the awards vest ratably over three years from the grant date of the award. However, awards with performance or market conditions vest upon satisfaction of those conditions. In addition, plan provisions provide that upon retirement, participants become 100% vested in certain stock awards. The vesting period for awards of restricted stock to non-employee members of the Board is one year. The total number of shares of PNMR common stock subject to all awards under the PEP, as approved by PNMR’s shareholders in May 2014, may not exceed 13.5 million shares, subject to adjustment and certain share counting rules set forth in the PEP. This current share pool is charged five shares for each share subject to restricted stock or other full value award. Source of Shares The source of shares for exercised stock options and vested restricted stock is shares acquired on the open market by an independent agent, rather than newly issued shares. Accounting for Stock Awards The stock-based compensation expense related to restricted stock awards without performance or market conditions to participants that are retirement eligible on the grant date is recognized immediately at the grant date and is not amortized. Compensation expense for other such awards is amortized to compensation expense over the shorter of the requisite vesting period or the period until the participant becomes retirement eligible. Compensation expense for performance-based shares is recognized ratably over the performance period as required service is provided and is adjusted periodically to reflect the level of achievement expected to be attained. Compensation expense related to market-based shares is recognized ratably over the measurement period, regardless of the actual level of achievement, provided the employees meet their service requirements. Total compensation expense for stock-based payment arrangements recognized by PNMR for the years ended December 31, 2022, 2021, and 2020 was $7.9 million, $9.4 million, and $8.1 million. Stock compensation expense of $5.3 million, $6.4 million, and $5.5 million was charged to PNM and $2.6 million, $3.0 million, and $2.6 million was charged to TNMP. At December 31, 2022, PNMR had unrecognized compensation expense related to stock awards of $4.6 million, which is expected to be recognized over an average of 1.54 years. PNMR receives a tax deduction for the value of restricted stock at the vesting date. To the extent the tax deduction exceeds the Company’s cumulative expense related to a stock award, an excess tax benefit is recorded. When the cumulative expense exceeds the tax deduction, a tax deficiency is recorded. All excess tax benefits and deficiencies are recorded to tax expense and classified as operating cash flows when used to reduce taxes payable.
TNMP used excess tax benefits to reduce income taxes payable and the benefit was reflected in cash flows from operating activities. The benefit of excess tax benefits at PNM and PNMR will be reflected in operating cash flows when they reduce income taxes payable. The grant date fair value for restricted stock and stock awards with Company internal performance targets is determined based on the market price of PNMR common stock on the date of the agreements reduced by the present value of future dividends that will not be received prior to vesting. The grant date fair value is applied to the total number of shares that are anticipated to vest, although the number of performance shares that ultimately vest cannot be determined until after the performance periods end. The grant date fair value of stock awards with market targets is determined using Monte Carlo simulation models, which provide grant date fair values that include an expectation of the number of shares to vest at the end of the measurement period. The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:
(1) Restricted stock expected to be awarded under the PEP for performance periods ending after 2023 no longer have market targets. The following table summarizes activity in restricted stock awards including performance-based and market-based shares:
PNMR’s current stock-based compensation program provides for performance and market targets through 2023 and performance targets through 2024. Included as granted and released in the table above are 92,343 previously awarded shares that were earned for the 2019 - 2021 performance measurement period and ratified by the Board in February 2022 (based upon achieving market targets at below “maximum” levels). Excluded from the above table are 100,991 previously awarded shares that were earned for the 2020 - 2022 performance measurement period and ratified by the Board in February 2023 (based upon achieving market targets at above “target”, below “maximum” levels). Also excluded from the table above are 144,175 and 150,050 shares for the three-year performance periods ending in 2023 and 2024 that will be awarded if all performance and/or market criteria are achieved at maximum levels and all executives remain eligible. The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares, and stock options:
At December 31, 2019, the aggregate intrinsic value of stock options outstanding, all of which were exercisable, was less than $0.1 million. All the outstanding options were exercised or expired in February 2020.
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Regulatory Assets and Liabilities |
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Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities The operations of PNM and TNMP are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to its regulated operations. Regulatory assets represent probable future recovery of previously incurred costs that will be collected from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are to be credited to customers through the ratemaking process. Regulatory assets and liabilities reflected in the Consolidated Balance Sheets are presented below.
(1) Amounts approved for recovery through the Energy Transition Charge, see Note 17 (2) Authorized to be recorded as regulatory assets for certain other abandonment costs that are not specifically addressed under the provisions of the ETA, see Note 17 (3) Reclassified to the SJGS - ETA regulatory asset after shutdown of SJGS in 2022 The Company’s regulatory assets and regulatory liabilities are reflected in rates charged to customers or have been addressed in a regulatory proceeding. The Company does not receive or pay a rate of return on the following regulatory assets and regulatory liabilities (and their remaining amortization periods): SJGS non-ETA, SJGS replacement resources, EIM, PVNGS ARO, and deferred COVID-19 costs (to be determined in the 2024 Rate Change); deferred income taxes (over the remaining life of the taxable item, up to the remaining life of utility plant); pension and OPEB costs (through 2039); costs recoverable under the ETA (over the securitization period). The Company is permitted, under rate regulation, to accrue and record a regulatory liability for the estimated cost of removal and salvage associated with certain of its assets through depreciation expense. Actuarial losses and prior service costs for pension plans are required to be recorded in AOCI; however, to the extent authorized for recovery through the regulatory process these amounts are recorded as regulatory assets or liabilities. Based on prior regulatory approvals, the amortization of these amounts will be included in the Company’s rates. Based on a current evaluation of the various factors and conditions that are expected to impact future cost recovery, the Company believes that future recovery of its regulatory assets is probable.
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Construction Program and Jointly-Owned Electric Generating Plants |
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Construction Program and Jointly-Owned Electric Generating Plants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction Program and Jointly-Owned Electric Generating Plants | Construction Program and Jointly-Owned Electric Generating Plants PNM is a participant in jointly-owned power plant projects. The participation agreement for SJGS expired on September 30, 2022. The primary operating or participation agreements for the other joint projects expire in July 2041 for Four Corners, December 2046 for Luna, and November 2047 for PVNGS. PNM’s expenditures for additions to utility plant were $433.5 million in 2022, including expenditures on jointly-owned projects. TNMP does not participate in the ownership or operation of any generating plants, but incurred expenditures for additions to utility plant of $449.5 million during 2022. On a consolidated basis, PNMR’s expenditures for additions to utility plant were $912.6 million in 2022. Joint Projects Under the agreements for the jointly-owned projects, PNM has an undivided interest in each asset and liability of the project and records its pro-rata share of each item in the corresponding asset and liability account on PNM’s Consolidated Balance Sheets. Likewise, PNM records its pro-rata share of each item of operating and maintenance expenses for its jointly-owned plants within the corresponding operating expense account in its Consolidated Statements of Earnings. PNM is responsible for financing its share of the capital and operating costs of the joint projects. At December 31, 2022, PNM’s interests and investments in jointly-owned generating facilities are:
(1) Includes cost of removal. Palo Verde Nuclear Generating Station PNM is a participant in the three units of PVNGS with APS (the operating agent), SRP, EPE, SCE, SCPPA, and The Department of Water and Power of the City of Los Angeles. PNM had a 10.2% undivided interest in PVNGS, with portions of its interests in Units 1 and 2 held under leases. In January 2023, leased capacity of 104 MW in PVNGS Unit 1 expired and the rights to the capacity were acquired by SRP from the lessors. Subsequently, PNM’s interest in PVNGS represents 7.6%. See Note 8 for additional information concerning the PVNGS leases. Operation of each of the three PVNGS units requires an operating license from the NRC. Currently the operating licenses for the plants for 20 years through June 2045 for Unit 1, April 2046 for Unit 2, and November 2047 for Unit 3. Four Corners Power Plant PNM is a participant in two units of Four Corners with APS (the operating agent), an affiliate of APS, SRP, and Tucson. PNM has a 13.0% undivided interest in Units 4 and 5 of Four Corners. The Four Corners plant site is located on land within the Navajo Nation and is subject to an easement from the federal government. APS, on behalf of the Four Corners participants, negotiated amendments to an existing agreement with the Navajo Nation, which extends the owners’ right to operate the plant on the site to July 2041. See Notes 16 and 17 for additional information about Four Corners. Luna Energy Facility Luna is a combined-cycle power plant near Deming, New Mexico. Luna is owned equally by PNM, Tucson, and Samchully Power & Utilities 1, LLC. The operation and maintenance of the facility has been contracted to North American Energy Services.
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Asset Retirement Obligations |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations 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 68% 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:
(1) 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. (2) Reflects impacts of newly approved remediation ordinance in San Juan county requiring the full demolition of SJGS. See Note 16. (3) Reflects a decrease of $21.5 million related to an updated SJGS decommissioning study.
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Overview There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory proceedings in the normal course of its business. See Note 17. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows. With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. The Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, or commitments will have a material effect on its financial condition, results of operations, or cash flows. Commitments and Contingencies Related to the Environment PVNGS Decommissioning Funding The costs of decommissioning a nuclear power plant are substantial. PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS, including portions under leases both during and after termination of the leases. PNM has a program for funding its share of decommissioning costs for PVNGS, including portions held under leases. The nuclear decommissioning funding program is invested in equities and fixed income instruments in qualified and non-qualified trusts. PNM funded $1.3 million for each of the years ended December 31, 2022, 2021 and 2020 into the qualified trust funds. The fair value of the trusts at December 31, 2022 and 2021 was $325.3 million and $394.5 million. See Note 17 for additional discussion of PNM’s PVNGS Lease Abandonment Application. Nuclear Spent Fuel and Waste Disposal Nuclear power plant operators are required to enter into spent fuel disposal contracts with the DOE that require the DOE to accept and dispose of all spent nuclear fuel and other high-level radioactive wastes generated by domestic power reactors. Although the Nuclear Waste Policy Act required the DOE to develop a permanent repository for the storage and disposal of spent nuclear fuel by 1998, the DOE announced that it would not be able to open the repository by 1998 and sought to excuse its performance of these requirements. In November 1997, the DC Circuit issued a decision preventing the DOE from excusing its own delay but refused to order the DOE to begin accepting spent nuclear fuel. Based on this decision and the DOE’s delay, a number of utilities, including APS (on behalf of itself and the other PVNGS owners, including PNM), filed damages actions against the DOE in the Court of Federal Claims. The lawsuits filed by APS alleged that damages were incurred due to DOE’s continuing failure to remove spent nuclear fuel and high-level waste from PVNGS. In August 2014, APS and the DOE entered into a settlement agreement that established a process for the payment of claims for costs incurred through December 31, 2019. APS has accepted the DOE’s extensions of the settlement agreement for recovery of costs incurred through December 31, 2025. Under the settlement agreement, APS must submit claims annually for payment of allowable costs. PNM records estimated claims on a quarterly basis. The benefit from the claims is passed through to customers under the FPPAC to the extent applicable to NMPRC regulated operations. PNM estimates that it will incur approximately $59.6 million (in 2019 dollars) for its share of the costs related to the on-site interim storage of spent nuclear fuel at PVNGS during the term of the operating licenses. PNM accrues these costs as a component of fuel expense as the nuclear fuel is consumed. At December 31, 2022 and 2021, PNM had a liability for interim storage costs of $12.0 million and $13.0 million, which is included in other deferred credits. PVNGS has sufficient capacity at its on-site Independent Spent Fuel Storage Installation (“ISFSI”) to store all of the nuclear fuel that will be irradiated during the initial operating license period, which ends in December 2027. Additionally, PVNGS has sufficient capacity at its on-site ISFSI to store a portion of the fuel that will be irradiated during the period of extended operation, which ends in November 2047. If uncertainties regarding the U.S. government’s obligation to accept and store spent fuel are not favorably resolved, APS will evaluate alternative storage solutions that may obviate the need to expand the ISFSI to accommodate all of the fuel that will be irradiated during the period of extended operation. The Energy Transition Act In 2019, the Governor signed into New Mexico state law Senate Bill 489, known as the Energy Transition Act (“ETA”). The ETA became effective as of June 14, 2019 and sets a statewide standard that requires investor-owned electric utilities to have specified percentages of their electric-generating portfolios be from renewable and zero-carbon generating resources. The ETA requires utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. The ETA also allows for the recovery of undepreciated investments and decommissioning costs related to qualifying EGUs that the NMPRC has required be removed from retail jurisdictional rates, provided replacement resources to be included in retail rates have lower or zero-carbon emissions. The ETA requires the NMPRC to review and approve utilities’ annual renewable portfolio plans to ensure compliance with the RPS. The ETA also directs the New Mexico Environmental Improvement Board to adopt standards of performance that limit CO2 emissions to no more than 1,100 lbs per MWh beginning January 1, 2023 for new or existing coal-fired EGUs with original installed capacities exceeding 300 MW. The ETA provides for a transition from fossil-fuel generation resources to renewable and other carbon-free resources through certain provisions relating to the abandonment of coal-fired generating facilities. These provisions include the use of energy transition bonds, which are designed to be highly rated bonds that can be issued to finance certain costs of abandoning coal-fired facilities that are retired prior to January 1, 2023, for facilities operated by a “qualifying utility,” or prior to January 1, 2032 for facilities that are not operated by a qualifying utility. The amount of energy transition bonds that can be issued to recover abandonment costs is limited to the lesser of $375.0 million or 150% of the undepreciated investment of the facility as of the abandonment date. Proceeds provided by energy transition bonds must be used only for purposes related to providing utility service to customers and to pay energy transition costs (as defined by the ETA). These costs may include plant decommissioning and coal mine reclamation costs, provided those costs have not previously been recovered from customers or disallowed by the NMPRC or by a court order. Proceeds from energy transition bonds may also be used to fund severances for employees of the retired facility and related coal mine and to promote economic development, education and job training in areas impacted by the retirement of the coal-fired facilities. Energy transition bonds must be issued under a NMPRC approved financing order, are secured by “energy transition property,” are non-recourse to the issuing utility, and are repaid by a non-bypassable charge paid by all customers of the issuing utility. These customer charges are subject to an adjustment mechanism designed to provide for timely and complete payment of principal and interest due under the energy transition bonds. The ETA also provides that utilities must obtain NMPRC approval of competitively procured replacement resources that shall be evaluated based on their cost, economic development opportunity, ability to provide jobs with comparable pay and benefits to those lost upon retirement of the facility and that do not exceed emissions thresholds specified in the ETA. In determining whether to approve replacement resources, the NMPRC must give preference to resources with the least environmental impacts, those with higher ratios of capital costs to fuel costs, and those located in the school district of the abandoned facility. The ETA also provides for the procurement of energy storage facilities and gives utilities discretion to maintain, control, and operate these systems to ensure reliable and efficient service. The ETA has and will have a significant impact on PNM’s future generation portfolio, including PNM’s retirement of SJGS in 2022 and the planned Four Corners exit in 2024 (subject to regulatory approval). PNM cannot predict the full impact of the ETA or the outcome of its pending and potential future generating resource abandonment and replacement resource filings with the NMPRC. See additional discussion in Note 17 of PNM’s SJGS and Four Corners Abandonment Applications. The Clean Air Act Regional Haze In 1999, EPA developed a regional haze program and regional haze rules under the CAA. The rule directs each of the 50 states to address regional haze. Pursuant to the CAA, states are required to establish goals for improving visibility in national parks and wilderness areas (also known as Class I areas) and to develop long-term strategies for reducing emissions of air pollutants that cause visibility impairment in their own states and for preventing degradation in other states. States must establish a series of interim goals to ensure continued progress by adopting a new SIP every ten years. In the first SIP planning period, states were required to conduct BART determinations for certain covered facilities, including utility boilers, built between 1962 and 1977 that have the potential to emit more than 250 tons per year of visibility impairing pollution. If it was demonstrated that the emissions from these sources caused or contributed to visibility impairment in any Class I area, BART must have been installed by the beginning of 2018. For all future SIP planning periods, states must evaluate whether additional emissions reduction measures may be needed to continue making reasonable progress toward natural visibility conditions. In 2017, EPA published revisions to the regional haze rule in the Federal Register. The new rule delayed the due date for the next cycle of SIPs from 2019 to 2021, altered the planning process that states must employ in determining whether to impose “reasonable progress” emission reduction measures, and gave new authority to federal land managers to seek additional emission reduction measures outside of the states’ planning process. Finally, the rule made several procedural changes to the regional haze program, including changes to the schedule and process for states to file 5-year progress reports. EPA’s new rule was challenged by numerous parties. On January 19, 2018, EPA filed a motion to hold the case in abeyance in light of several letters issued by EPA on January 17, 2018 to grant various petitions for reconsideration of the 2017 rule revisions. EPA’s decision to revisit the 2017 rule is not a determination on the merits of the issues raised in the petitions. On December 20, 2018, EPA released a new guidance document on tracking visibility progress for the second planning period. EPA is allowing states discretion to develop SIPs that may differ from EPA’s guidance as long as they are consistent with the CAA and other applicable regulations. On August 20, 2019, EPA finalized the draft guidance that was previously released as a companion to the regional haze rule revisions, and EPA clarified that guidance in a memorandum issued on July 8, 2021. SIPs for the second planning period were due in July 2021, which deadline NMED was unable to meet. NMED is currently preparing its SIP for the second compliance period and has notified PNM that it will not be required to submit a regional haze four-factor analysis for SJGS since PNM retired its share of SJGS in 2022. On April 7, 2022, EPA announced its intent to make findings by August 31, 2022 of the states that have failed to submit regional haze implementation plans for the second planning period and directed states to file their plans by August 15, 2022 to avoid inclusion in that finding. Despite that announcement, on April 13, 2022, four environmental groups sued EPA in the U.S. District Court for the Northern District of California seeking to compel EPA to issue a finding that 34 states failed to submit regional haze SIPs for the second planning period. On August 30, 2022, EPA published in the Federal Register an official "Finding of Failure to Submit" for states, including New Mexico, that have not yet submitted a round 2 regional haze SIP. This action by EPA starts a 2-year clock for it to issue a Federal Implementation Plan (FIP). NMED’s current timeline indicates the proposed SIP will be submitted to EPA by October 2023. Carbon Dioxide Emissions In 2015, EPA established standards to limit CO2 emissions from power plants, including (1) Carbon Pollution Standards for new, modified, and reconstructed power plants; and (2) the Clean Power Plan for existing power plants. Multiple states, utilities, and trade groups filed petitions for review in the DC Circuit to challenge both the Carbon Pollution Standards for new sources and the Clean Power Plan for existing sources in separate cases. Challengers successfully petitioned the US Supreme Court for a stay of the Clean Power Plan. However, before the DC Circuit could issue an opinion regarding either the Carbon Pollution Standards or the Clean Power Plan, the Trump Administration asked that the case be held in abeyance while the rules were reevaluated, which was granted. In 2019, EPA repealed the Clean Power Plan, promulgated the ACE Rule, and revised the implementing regulations for all emission guidelines. EPA set the BSER for existing coal-fired power plants as heat rate efficiency improvements based on a range of “candidate technologies” that can be applied inside the fence-line of an individual facility. The DC Circuit issued an order that granted motions by various petitioners, including industry groups and EPA, to dismiss the cases challenging the Clean Power Plan as moot due to EPA’s issuance of the ACE Rule. The ACE Rule was also challenged, and on January 19, 2021, the DC Circuit issued an opinion in American Lung Association and American Public Health Association v. EPA, et al., finding that EPA misinterpreted the CAA when it determined that the language of Section 111 unambiguously barred consideration of emissions reduction options that were not applied at the source. As a result, the court vacated the ACE Rule and remanded the record back to the EPA for further consideration consistent with the court’s opinion. While the DC Circuit rejected the ACE Rule, it did not reinstate the Clean Power Plan. EPA filed a motion seeking a partial stay of the mandate as to the repeal of the Clean Power Plan, to ensure the court’s order will not render effective the now out-of-date Clean Power Plan. On February 22, 2021, the U.S. Court of Appeals for the DC Circuit granted EPA’s motion, indicating that it would withhold issuance of the mandate with respect to the repeal of the Clean Power Plan until EPA responds to the court’s remand in a new rulemaking action. On October 29, 2021, the US Supreme Court granted four petitions for writs of certiorari of the D.C. Circuit’s decision, and on June 30, 2022, the US Supreme Court held that the "generation shifting" approach in the Clean Power Plan exceeded the powers granted to EPA by Congress, though the Court did not address the related issue of whether Section 111 of the CAA only authorizes EPA to require measures that can be implemented entirely within the fenceline at an individual source. Of broader significance in administrative law, the Court expressly invoked the major question doctrine as a basis for rejecting EPA's statutory interpretation. The basic principle of the major question doctrine is that, if an agency seeks to decide an issue of "vast economic or political significance," its action must be supported by clear statutory authorization. In cases where there is no authority, courts need not defer to the agency's statutory interpretation. The decision sets legal precedent for future rulemakings by EPA and other federal regulatory agencies whereby the agencies' authority may be limited based upon similar reasoning. The litigation over the Carbon Pollution Standards remains held in abeyance but could be reactivated by the parties upon a determination by the court that the Biden Administration is unlikely to finalize the revisions proposed in 2018 and that reconsideration of the rule has concluded. EPA has commenced the rulemaking process under section 111 to establish new emission guidelines for CO2 emissions from existing power plants. The agency indicates that it plans to publish a draft rule in April 2023 and a final rule in June 2024. On January 27, 2021, President Biden signed an extensive Executive Order aimed at addressing climate change concerns domestically and internationally. The order is intended to build on the initial climate-related actions the Biden Administration took on January 20, 2021. It addresses a wide range of issues, including establishing climate change concerns as an essential element of U.S. foreign and security policy, identifying a process to determine the U.S. INDC under the Paris Agreement, and establishing a Special Presidential Envoy for Climate that will sit on the National Security Council. On April 22, 2021, at the Earth Day Summit, as part of the U.S.’s re-entry into the Paris Agreement, President Biden unveiled the goal to cut U.S. emissions by 50% - 52% from 2005 levels by 2030, nearly double the GHG emissions reduction target set by the Obama Administration. The 2030 goal joins President Biden’s other climate goals which include a carbon pollution-free power sector by 2035 and a net-zero emissions economy by no later than 2050. PNM’s review of the GHG emission reductions standards that may occur as a result of legislation or regulation under the Biden Administration and in response to the court’s ruling on the ACE Rule is ongoing. PNM cannot predict the impact these standards may have on its operations or a range of the potential costs of compliance, if any. National Ambient Air Quality Standards (“NAAQS”) The CAA requires EPA to set NAAQS for pollutants reasonably anticipated to endanger public health or welfare. EPA has set NAAQS for certain pollutants, including NOx, SO2, ozone, and particulate matter. NOX Standard – In 2018, EPA published the final rule to retain the current primary health-based NOx standards of which NO2 is the constituent of greatest concern and is the indicator for the primary NAAQS. EPA concluded that the current 1-hour and annual primary NO2 standards are requisite to protect public health with an adequate margin of safety. The rule became effective on May 18, 2018. The State of New Mexico has attained the current NOx NAAQS standards. SO2 Standard – In 2019, EPA announced its final decision to retain, without changes, the primary health-based NAAQS for SO2. Specifically, EPA will retain the current 1-hour standard for SO2, which is 75 parts per billion, based on the 3-year average of the 99th percentile of daily maximum 1-hour SO2 concentrations. On March 26, 2021, EPA published in the Federal Register the initial air quality designations for all remaining areas not yet designated under the 2010 SO2 Primary NAAQS. This is EPA’s fourth and final set of actions to designate areas of the U.S. for the 2010 SO2 NAAQS. All areas of New Mexico have been designated attainment/unclassifiable through four rounds of designations by EPA. Ozone Standard – In 2015, EPA finalized the new ozone NAAQS and lowered both the primary and secondary 8-hour standard from 75 to 70 parts per billion. With ozone standards becoming more stringent, fossil-fueled generation units will come under increasing pressure to reduce emissions of NOx and volatile organic compounds since these are the pollutants that form ground-level ozone. On July 13, 2020, EPA proposed to retain the existing ozone NAAQS based on a review of the full body of currently available scientific evidence and exposure/risk information. EPA finalized its decision to retain the ozone NAAQS in a notice published on December 31, 2020 making it immediately effective. The Center for Biological Diversity filed a lawsuit on February 25, 2021, challenging the decision to retain the existing ozone standard. In response to lawsuits brought by states and environmental groups, on October 29, 2021, EPA filed a motion in the DC Circuit indicating it will reconsider the 2020 ozone NAAQS. In April 2022, EPA released an External Review Draft Policy Assessment for the reconsideration of the ozone NAAQS, in which EPA Staff recommended that EPA retain the existing primary and secondary ozone NAAQS. EPA is targeting the end of 2023 to complete this reconsideration. In 2015, EPA proposed a rule revising its Exceptional Events Rule, which outlines the requirements for excluding air quality data (including ozone data) from regulatory decisions if the data is affected by events outside an area’s control. The proposed rule is important in light of the more stringent ozone NAAQS final rule since western states like New Mexico and Arizona are subject to elevated background ozone transport from natural local sources, such as wildfires and stratospheric inversions, and transported via winds from distant sources in other regions or countries. EPA finalized the rule on October 3, 2016 and released related guidance in 2018 and 2019 to help implement its new exceptional events policy. During 2017 and 2018, EPA released rules establishing area designations for ozone. In those rules, San Juan County, New Mexico, where Four Corners is located, is designated as attainment/unclassifiable and only a small area in Doña Ana County, New Mexico is designated as marginal non-attainment. Although Afton Generating Station is located in Doña Ana County, it is not located within the small area designated as non-attainment for the 2015 ozone standard. The rule became effective May 8, 2018. On November 22, 2019, EPA issued findings that several states, including New Mexico, had failed to submit interstate transport SIPs for the 2015 8-hour ozone NAAQS. In response, in December 2019, NMED published the Public Review Draft of the New Mexico 2013 NAAQS Good Neighbor SIP that demonstrates that there are no significant contributions from New Mexico to downwind problems in meeting the federal ozone standard. NMED has responsibility for bringing the small area in Doña Ana County designated as marginal/non-attainment for ozone into compliance and will look at all sources of NOx and volatile organic compounds. NMED has submitted the required elements for the Sunland Park Ozone Non-attainment Area SIP. This includes a transportation conformity demonstration, a 2017 baseline emissions inventory and emissions statement, and an amendment to the state's Non-attainment Permitting rules at 20.2.79 New Mexico Administrative Code to conform to EPA's SIP Requirements Rule for 2015 Q3 NAAQS (i.e., “implementation rule”). The SIP elements had staggered deadlines and were done in three submissions: (1) the transportation conformity demonstration was completed by the El Paso Metropolitan Planning Organization on behalf of New Mexico in 2019, which is responsible for transportation planning in that area, and the submission received concurrence from EPA and the Federal Highway Administration; (2) the emissions inventory and statement SIP was submitted to EPA in September 2020; and (3) the Non-attainment New Source Review SIP was submitted to EPA on August 10, 2021. On October 15, 2021, EPA proposed to approve New Mexico's SIP to meet the emissions inventory and statement requirements of the CAA for the Sunland Park Ozone Non-Attainment Area. PNM does not believe there will be material impacts to its facilities because of NMED’s non-attainment designation of the small area within Doña Ana County. Until EPA approves attainment designations for the Navajo Nation and releases a proposal to implement the revised ozone NAAQS, PNM is unable to predict what impact the adoption of these standards may have on Four Corners. With respect to EPA’s reconsideration of the 2020 decision to retain the 2015 ozone standards, it is expected to be completed by the end of 2023. PNM cannot predict the outcome of this matter. PM Standard – On January 30, 2020, EPA published in the Federal Register a notice announcing the availability of a final Policy Assessment for the Review of the NAAQS for Particulate Matter (the “PA”). The 2020 final PA was prepared as part of the review of the primary and secondary PM NAAQS. In the 2020 final PA, EPA recommended lowering the primary annual PM 2.5 standard to between 8 µg/m3 and 10 µg/m3. However, on April 30, 2020, EPA published a proposed rule to retain the current standards for PM due to uncertainties in the data relied upon in the 2020 final PA and EPA published a notice of that final action on December 18, 2020, making it immediately effective. On January 14, 2021, several states and New York City filed a petition for review in the DC Circuit, challenging EPA’s final rule retaining the current primary and secondary PM NAAQS and a similar lawsuit was filed by the Center for Biological Diversity in the DC Circuit. On June 10, 2021, EPA announced that it will reconsider the previous administration’s December 2020 decision to retain the current primary and secondary PM NAAQS and on October 8, 2021, EPA announced the release of a new draft PA stating that available scientific evidence and technical information indicate that the current standards may not be adequate to protect public health and welfare, as required by the CAA. On June 1, 2022, EPA issued a new final PA that likewise indicates current standards may not be adequate and that available scientific evidence could support lowering the standards. On January 6, 2023, EPA announced a proposal to lower the annual fine particulate matter standard to between 9-10 µg/m3 but retain the rest of its PM standards, including the current daily fine particulate matter standard, the daily coarse particulate matter standard, and the secondary PM standards. Although the proposal focuses on the range of 9-10 µg/m3, EPA requests comment on a range between 8-11 µg/m3, but that range does not include the current annual standard of 12 µg/m3, indicating EPA will not consider retaining the current standard. Comments on the proposal will be due 60 days after publication in the Federal Register, and EPA’s current regulatory agenda indicates EPA plans to finalize the proposal in August 2023. PNM cannot predict the impacts of the outcome of future rulemaking. Cooling Water Intake Structures In 2014, EPA issued a rule establishing national standards for certain cooling water intake structures at existing power plants and other facilities under the Clean Water Act to protect fish and other aquatic organisms by minimizing impingement mortality (the capture of aquatic wildlife on intake structures or against screens) and entrainment mortality (the capture of fish or shellfish in water flow entering and passing through intake structures). To minimize impingement mortality, the rule provides operators of facilities, such as Four Corners, seven options for meeting Best Technology Available (“BTA”) standards for reducing impingement. The permitting authority must establish the BTA for entrainment on a site-specific basis, taking into consideration an array of factors, including endangered species and social costs and benefits. Affected sources must submit source water baseline characterization data to the permitting authority to assist in the determination. Compliance deadlines under the rule are tied to permit renewal and will be subject to a schedule of compliance established by the permitting authority. EPA has indicated that it is contemplating a December 31, 2023 compliance deadline. With respect to SJGS, no material changes will result given the shutdown of the plant in September of 2022. In 2018, several environmental groups sued EPA Region IX in the U.S. Court of Appeals for the Ninth Circuit Court over EPA’s failure to timely reissue the Four Corners NPDES permit. The petitioners asked the court to issue a writ of mandamus compelling EPA Region IX to take final action on the pending NPDES permit by a reasonable date. EPA subsequently reissued the NPDES permit. The permit did not contain conditions related to the cooling water intake structure rule, as EPA determined that the facility has achieved BTA for both impingement and entrainment by operating a closed-cycle recirculation system. Several environmental groups filed a petition for review with EPA’s Environmental Appeals Board (“EAB”) concerning the reissued permit. The environmental groups alleged that the permit was reissued in contravention of several requirements under the Clean Water Act and did not contain required provisions concerning certain revised ELG, existing-source regulations governing cooling-water intake structures, and effluent limits for surface seepage and subsurface discharges from coal-ash disposal facilities. EPA withdrew the Four Corners NPDES permit in order to examine issues raised by the environmental groups. Withdrawal of the permit moots the appeal pending before the EAB. EAB thereafter dismissed the environmental groups’ appeal. EPA issued an updated NPDES permit in 2019. The permit was once again appealed to the EAB and was stayed before the effective date. Oral argument was heard on September 3, 2020. The EAB issued an order denying the petition for review on September 30, 2020. The denial was based on the EAB’s determination that the petitioners had failed to demonstrate that review of the permit was warranted on any of the grounds presented in the petition. Thereafter, the Regional Administrator of the EPA signed a notice of final permit decision, and the NPDES permit was issued on November 9, 2020. The permit became effective December 1, 2020 and will expire on November 30, 2025. On January 22, 2021, the environmental groups filed a petition for review of the EAB's decision with the U.S. Court of Appeals for the Ninth Circuit. The September 2019 permit remains in effect pending this appeal. On March 21, 2022, EPA provided notice in the Federal Register of a proposed settlement agreement with the environmental groups. The parties subsequently executed the settlement agreement as of May 2, 2022. Under the settlement, the associated case was administratively closed through September 6, 2023, during which time a third-party consultant will spend 12 months sampling discharges from Four Corners and EPA will spend three months completing an analysis. PNM cannot predict whether the analysis to be conducted under the settlement agreement will result in changes to the NPDES permit, but does not anticipate that it will have a material impact on PNM’s financial position, results of operations, or cash flows. Effluent Limitation Guidelines In 2013, EPA published proposed revised wastewater ELG establishing technology-based wastewater discharge limitations for fossil fuel-fired electric power plants. EPA signed the final Steam Electric ELG rule in 2015. The final rule, which became effective on January 4, 2016, phased in the new, more stringent requirements in the form of effluent limits for arsenic, mercury, selenium, and nitrogen for wastewater discharged from wet scrubber systems and zero discharge of pollutants in ash transport water that must be incorporated into plants’ NPDES permits. The 2015 rule required each plant to comply between 2018 and 2023 depending on when it needs a new or revised NPDES permit. The Steam Electric ELG rule was challenged in the U.S. Court of Appeals for the Fifth Circuit by numerous parties. In 2017, EPA signed a notice indicating its intent to reconsider portions of the rule, and the Fifth Circuit issued an order severing the issues under reconsideration and holding the case in abeyance as to those issues. However, the court allowed challenges to other portions of the rule to proceed. In 2019, the Fifth Circuit granted those challenges and issued an opinion vacating several portions of the rule, specifically those related to legacy wastewater and leachate, for which the court deemed the standards selected by EPA arbitrary and capricious. In 2017, EPA published a final rule for postponement of certain compliance dates. The rule postponed the earliest date on which compliance with the ELG for these waste streams would be required from November 1, 2018 until November 1, 2020. In 2019, EPA published a proposed rule revising the original ELG while maintaining the compliance dates. On October 13, 2020, EPA published in the Federal Register the final Steam Electric ELG and standards for the Steam Electric Power Generating Point Source Category, revising the final 2015 guidelines for both flue gas desulfurization wastewater and bottom ash transport water. The rule requires compliance with new limits as soon as possible on or after October 13, 2021, but no later than December 31, 2025. On August 3, 2021, EPA published notice that it will undertake a supplemental rulemaking to revise the ELG after completing its review of the rules reconsidered in 2020. As part of this process, EPA will determine whether more stringent limitations and standards are appropriate. EPA intends to publish a proposed rule in early 2023. Reeves Station discharges cooling tower blowdown to a publicly owned treatment plant and no longer holds an NPDES permit; therefore, it is expected that no requirements will be imposed. See “Cooling Water Intake Structures” above for additional discussion of Four Corners’ current NPDES permit. Four Corners may be required to change equipment and operating practices affecting boilers and ash handling systems, as well as change its waste disposal techniques during the next NPDES permit renewal in 2023. PNM is unable to predict the outcome of these matters or a range of the potential costs of compliance. Santa Fe Generating Station PNM and NMED are parties to agreements under which PNM has installed a remediation system to treat water from a City of Santa Fe municipal supply well and an extraction well to address gasoline contamination in the groundwater at the site of PNM’s former Santa Fe Generating Station and service center. A 2008 NMED site inspection report states that neither the source nor extent of contamination at the site has been determined and that the source may not be the former Santa Fe Generating Station. During 2013 and 2014, PNM and NMED collected additional samples that showed elevated concentrations of nitrate and volatile organic compounds in some of the monitoring wells at the site. In addition, one monitoring well contained free-phase hydrocarbon products. PNM collected a sample of the product for “fingerprint” analysis. The results of this analysis indicated the product was a mixture of older and newer fuels. The presence of newer fuels in the sample suggests the hydrocarbon product likely originated from off-site sources. In 2015, PNM and NMED entered into a memorandum of understanding to address changing groundwater conditions at the site under which PNM agreed to continue hydrocarbon investigation under the supervision of NMED. Qualified costs are eligible for payment through the New Mexico Corrective Action Fund (“CAF”), which is administered by the NMED Petroleum Storage Tank Bureau. In 2019, PNM received notice from NMED that an abatement plan for the site is required to address concentrations of previously identified compounds, unrelated to those discussed above, found in the groundwater. NMED approved PNM’s abatement plan proposal, which covers field work and reporting. Field work related to the investigation under both the CAF and abatement plan requirements was completed and activities and findings associated with the field work were presented in two separate reports and released to stakeholders in early 2020. Subsequent field work was completed in July 2020 and two reports were released supporting PNM’s contention that off-site sources have impacted, and are continuing to impact, the local groundwater in the vicinity of the former Santa Fe Generating Station. PNM submitted work plans to NMED in January 2021 for review and approval. In December 2021, NMED approved both workplans and work is underway. These activities were completed by the end of 2022 and a report will be submitted to the NMED. The City of Santa Fe has stopped operating its well at the site, which is needed for PNM’s groundwater remediation system to operate. As a result, PNM has stopped performing remediation activities at the site. However, PNM’s monitoring and other abatement activities at the site are ongoing and will continue until the groundwater meets applicable federal and state standards or until the NMED determines remediation is not required, whichever is earlier. PNM is not able to assess the duration of this project or estimate the impact on its obligations if PNM is required to resume groundwater remediation activities at the site. PNM is unable to predict the outcome of these matters. Coal Combustion Residuals Waste Disposal CCRs consisting of fly ash, bottom ash, and gypsum generated from coal combustion and emission control equipment at SJGS are currently disposed of in the surface mine pits adjacent to the plant. SJGS does not operate any CCR impoundments or landfills. The NMMMD currently regulates mine reclamation activities at the San Juan mine, including placement of CCRs in the surface mine pits, with federal oversight by the OSM. APS disposes of CCRs in ponds and dry storage areas at Four Corners. Ash management at Four Corners is regulated by EPA and the New Mexico State Engineer’s Office. EPA’s final coal ash rule, which became effective in 2015, included a non-hazardous waste determination for coal ash and sets minimum criteria for existing and new CCR landfills and surface impoundments. In 2016, the Water Infrastructure Improvements for the Nation Act (the “WIIN Act”) was signed into law to address critical water infrastructure needs in the U.S. and contains a number of provisions related to the CCR rules. Among other things, the WIIN Act allows, but does not require, states to develop and submit CCR permit programs for EPA approval, provides flexibility for states to incorporate EPA’s final rule for CCRs or develop other criteria that are at least as protective as EPA’s final rule, and requires EPA to approve state permit programs within 180 days of submission by the state. Because states are not required to implement their own CCR permit programs, EPA will implement the permit program in states that choose not to implement a program, subject to Congressional funding. Until permit programs are in effect, EPA has authority to directly enforce the CCR rule. For facilities located within the boundaries of Native American reservations, such as the Navajo Nation where Four Corners is located, EPA is required to develop a federal permit program regardless of appropriated funds. In 2018, EPA published a rule that constitutes “Phase One, Part One” of its ongoing reconsideration and revision of the April 17, 2015, CCR rule. The final Phase One, Part One rule includes two types of revisions. The first revision extended the deadline to allow EGUs with unlined impoundments or that fail to meet the uppermost aquifer requirement to continue to receive coal ash until October 31, 2020. This deadline was again extended by subsequent amendments. The rule also authorized a “Participating State Director” or EPA to approve suspension of groundwater monitoring requirements and to issue certifications related to the location restrictions, design criteria, groundwater monitoring, remedy selection and implementation. The rule also modified groundwater protection standards for certain constituents, which include cobalt, molybdenum, lithium, and lead without a maximum contamination level. In 2019, EPA published a second round of revisions, which are commonly referred to as the “Phase Two” revisions. Phase Two proposed revisions to reporting and accessibility to public information, the “CCR piles” and “beneficial use” definitions and the requirements for management of CCR piles. EPA has reopened and extended the Phase Two comment period several times. EPA has not yet finalized provisions in Phase Two related to beneficial use of CCR and CCR piles. This activity is on EPA’s long-term agenda, which means EPA has no plans to address these issues in the next 12 months. Since promulgating its Phase Two proposal, EPA has finalized two other rules addressing various CCR rule provisions. In 2019, EPA promulgated its proposed Holistic Approach to Closure Part A (“Part A”), which proposed a new deadline of August 31, 2020, for companies to initiate closure of unlined CCR impoundments. In accordance with the DC Circuit Court of Appeals’ vacatur of portions of the CCR Rule, Part A also proposed changing the classification of compacted soil-lined or clay-lined surface impoundments from “lined” to “unlined”. In addition, Part A delineated a process for owners/operators to submit requests for alternative closure deadlines based on lack of alternate disposal capacity. EPA issued the final Part A, which became effective on September 28, 2020. This rule finalized the classification of soil-lined and clay-lined surface impoundments as unlined, thus, triggering closure or retrofit requirements for those impoundments. The final Part A also gave operators of unlined impoundments until April 11, 2021 to cease receipt of waste at these units and initiate closure. On March 3, 2020, EPA issued the proposed Holistic Approach to Closure Part B (“Part B”), which delineated the process for owners/operators to submit alternate liner demonstrations for clay-lined surface impoundments that could otherwise meet applicable requirements. Part B also proposed regulations addressing beneficial use for closure of surface impoundments. EPA issued the final Part B rule, which became effective on December 14, 2020. This rule did not include beneficial use of CCR for closure, which EPA explains will be addressed in subsequent rulemaking actions. EPA intends to issue several other rulemakings covering legacy ponds and finalizing parts of previously proposed rules, including a final rule in August 2023 on remaining Part B issues regarding closure options and annual reporting. On February 20, 2020, EPA published a proposed rule establishing a federal permitting program for the handling of CCR within the boundaries of Native American reservations and in states without their own federally authorized state programs. Permits for units within the boundaries of Native American reservations would be due 18 months after the effective date of the rule. Per the Fall 2022 Regulatory Agenda EPA will issue a final rule in August 2023. EPA is coordinating with the affected permits for the three facilities with CCR disposal units located on Native American lands. PNM cannot predict the outcome of EPA’s rule making activity or the outcome of any related litigation, and whether or how such a ruling would affect operations at Four Corners. The CCR rule does not cover mine placement of coal ash. OSM is expected to publish a proposed rule covering mine placement in the future and will likely be influenced by EPA’s rule and the determination by EPA that CCRs are non-hazardous. PNM cannot predict the outcome of OSM’s proposed rulemaking regarding CCR regulation, including mine placement of CCRs, or whether OSM’s actions will have a material impact on PNM’s operations, financial position, or cash flows. Based upon the requirements of the final Part A CCR rule, PNM conducted a CCR assessment at SJGS and made minor modifications at the plant to ensure that there are no facilities that would be considered impoundments or landfills under the rule. PNM would seek recovery from its retail customers of all CCR costs for jurisdictional assets that are ultimately incurred. Utilities that own or operate CCR disposal units, such as those at Four Corners, as indicated above, were required to collect sufficient groundwater sampling data to initiate a detection monitoring program. Four Corners completed the analysis for its CCR disposal units, which identified several units that will need corrective action or will need to cease operations and initiate closure by April 11, 2021. As part of this assessment, Four Corners will continue to gather additional groundwater data and perform remedial evaluations. At this time, PNM does not anticipate its share of the cost to complete these corrective actions to close the CCR disposal units, or to gather and perform remedial evaluations on groundwater at Four Corners, will have a significant impact on its operations, financial position, or cash flows. Other Commitments and Contingencies Coal Supply SJGS The coal requirements for SJGS were supplied by WSJ LLC. In addition to coal delivered to meet the needs of SJGS, PNM prepaid the San Juan mine owner and operator, WSJ LLC, for certain coal mined but not yet delivered to the plant site. At December 31, 2022 and 2021, prepayments for coal, which were included in prepaid assets, amounted to zero and $20.4 million. In conjunction with the activities undertaken to comply with the CAA for SJGS, PNM and the other owners of SJGS evaluated alternatives for the supply of coal to SJGS. On July 1, 2015, PNM and Westmoreland entered into a new coal supply agreement (the “SJGS CSA”), pursuant to which Westmoreland, through its indirectly wholly-owned subsidiary SJCC, agreed to supply all of the coal requirements of SJGS through June 30, 2022. PNM and Westmoreland also entered into agreements under which CCR disposal and mine reclamation services for SJGS would be provided. As discussed in Note 10, WSJ LLC assumed the rights and obligations of SJCC under the SJGS CSA and the agreements for CCR disposal and mine reclamation services. Pricing under the SJGS CSA was primarily fixed, with adjustments to reflect changes in general inflation and takes into account that WSJ LLC has been paid for coal mined but not delivered. Substantially all of SJGS’ coal costs were passed through the FPPAC. On February 17, 2022, PNM and WSJ LLC entered into an amendment to extend the SJGS CSA through September 30, 2022, which FERC accepted on March 24, 2022. The SJGS CSA amendment provided for a fixed price increase of $5.00 per ton, beginning April 1, 2022, which passed through the FPPAC. See additional discussion of PNM’s SJGS Abandonment Application and summer peak resource adequacy in Note 17. The SJGS Restructuring Agreement set forth terms under which PNM acquired the coal inventory, including coal mined but not delivered, of the exiting SJGS participants as of January 1, 2016, and supplied coal to the SJGS exiting participants for the period from January 1, 2016 through December 31, 2017, and supplied coal to the SJGS remaining participants over the term of the SJGS CSA. In connection with certain mining permits relating to the operation of the San Juan mine, the San Juan mine owner was required to post reclamation bonds of $118.7 million with the NMMMD. In order to facilitate the posting of reclamation bonds by sureties on behalf of the San Juan mine owner, PNMR entered into the WFB LOC Facility under which letters of credit aggregating $30.3 million have been issued. Four Corners APS purchases all of Four Corners’ coal requirements from NTEC, an entity owned by the Navajo Nation, under the Four Corners CSA that expires in 2031. The coal comes from reserves located within the Navajo Nation. The contract provides for pricing adjustments over its term based on economic indices. PNM's share of the coal costs is being recovered through the FPPAC. In connection with the exit of Four Corners, PNM would make payments totaling $75.0 million to NTEC for relief from its obligations under the coal supply agreements for Four Corners after December 31, 2024. PNM is not proposing to recover the $75.0 million from ratepayers and, if approved, would not be recovered through the FPPAC. See Note 17 for additional information on PNM's Four Corners Abandonment Application. NTEC contracted with Bisti Fuels Company, LLC, a subsidiary of The North American Coal Corporation, for management and operation of the mine. Under the Four Corners CSA, NTEC had the right, after a specified period, to request approval from the Four Corners owners to replace Bisti Fuels Company as mine manager with NTEC’s internal resources and perform all or some mine management functions. APS granted approval on behalf of the owners on June 16, 2021, subject to certain credit assurance requirements. On June 17, 2021, NTEC notified The North American Coal Corporation that the contract mining agreement between Bisti Fuels Company and NTEC was terminated effective September 30, 2021. NTEC assumed direct operations at Navajo Mine on October 1, 2021. Coal Mine Reclamation As indicated under Coal Combustion Residuals Waste Disposal above, SJGS currently disposes of CCRs in the surface mine pits adjacent to the plant and Four Corners disposes of CCRs in ponds and dry storage areas. In conjunction with the proposed shutdown of SJGS Units 2 and 3 and to comply with the BART requirements of the CAA, periodic updates to the coal mine reclamation study were requested by the SJGS participants. These updates have included adjustments to reflect the shutdown of SJGS, the terms of the reclamation services agreement with WSJ LLC, and changes to reflect the requirements of the 2015 San Juan mine permit plan. In late 2020, a mine reclamation cost study was completed for the mine that serves SJGS and in December 2020, PNM remeasured its liability, which resulted in an increase in the overall reclamation costs of $3.6 million, due primarily to higher inflationary factors. As a result, PNM recorded a less than $0.1 million decrease in the liability at December 31, 2020 related to the underground mine and a decrease to the regulatory assets on the Consolidated Balance Sheets and recorded a $3.6 million increase in the liability associated with the surface mine as regulatory disallowances and restructuring costs on the Consolidated Statements of Earnings. PNM’s estimate of the costs necessary to reclaim the mine that serves SJGS is subject to many assumptions, including the timing of reclamation, generally accepted practices at the time reclamation activities occur, and the then current inflation and discount rates. PNM cannot predict the ultimate cost to reclaim the mine that serves SJGS and would seek to recover all costs related to reclaiming the underground mine from its customers but could be exposed to additional loss related to surface mine reclamation. A coal mine reclamation study for the mine that serves Four Corners was issued in 2019. The study reflected operation of the mine through 2031, the term of the Four Corners CSA. As discussed in Note 17, PNM remains responsible for its share of costs associated with mine reclamation under the Four Corners Purchase and Sale Agreement with NTEC. NTEC and PNM will complete a reclamation study in 2024 providing the final mine reclamation cost estimate on the date of ownership transfer. PNM will make its final reclamation payment to NTEC based on the reclamation study in 2024 and will have no further obligations regarding the mine reclamation after 2024. PNM determined that events and circumstances regarding Four Corners, including the Four Corners Purchase and Sale Agreement with NTEC and the Four Corners Abandonment Application and subsequent appeal of the NMPRC decision, indicated that it is more likely than not that PNM’s share of Four Corners coal mine reclamation obligation would be settled in 2024, rather than 2031. As of December 31, 2020, PNM remeasured its Four Corners coal mine reclamation liability and recorded a decrease to the liability of $2.5 million on the Consolidated Balance Sheets and a decrease to regulatory disallowances and restructuring costs on the Consolidated Statement of Earnings. Based on the most recent estimates, PNM’s remaining payments for mine reclamation, in future dollars, are estimated to be $67.7 million for the surface mines at both SJGS and Four Corners and $33.3 million for the underground mine at SJGS as of December 31, 2022. At December 31, 2022 and 2021, liabilities, in current dollars, of $62.6 million and $67.4 million for surface mine reclamation and $28.2 million and $27.9 million for underground mine reclamation were recorded in other deferred credits. Under the terms of the SJGS CSA, PNM and the other SJGS owners are obligated to compensate WSJ LLC for all reclamation costs associated with the supply of coal from the San Juan mine. The SJGS owners entered into a reclamation trust funds agreement to provide funding to compensate WSJ LLC for post-term reclamation obligations. The trust funds agreement requires each owner to enter into an individual trust agreement with a financial institution as trustee, create an irrevocable reclamation trust, and periodically deposit funds into the reclamation trust for the owner’s share of the mine reclamation obligation. Deposits, which are based on funding curves, must be made on an annual basis. PNM funded $10.0 million in 2022, $5.2 million in 2021, and $3.2 million in 2020. Based on PNM’s reclamation trust fund balance at December 31, 2022, the current funding curves indicate PNM’s required contributions to its reclamation trust fund would be zero in each of the years 2023, 2024, and 2025. Under the Four Corners CSA, PNM is required to fund its share of estimated final reclamation costs in annual installments into an irrevocable escrow account solely dedicated to the final reclamation cost of the surface mine at Four Corners. PNM contributed $2.4 million in 2022, $2.2 million in 2021, and $2.0 million in 2020 and anticipates providing additional funding of $2.1 million in each of the years 2023 and 2024. As discussed above, under the terms of the Four Corners Purchase and Sale Agreement with NTEC, PNM will make its final reclamation payment to NTEC based on the reclamation study in 2024 and will have no further obligations regarding the mine reclamation. PNM recovers from retail customers reclamation costs associated with the underground mine. However, the NMPRC has capped the amount that can be collected from retail customers for final reclamation of the surface mines at $100.0 million for both SJGS and Four Corners. If future estimates increase the liability for surface mine reclamation, the excess would be expensed at that time. The impacts of changes in New Mexico state law as a result of the enactment of the ETA and regulatory determinations made by the NMPRC may also affect PNM’s financial position, results of operations, and cash flows. See additional discussion regarding PNM’s SJGS and Four Corners Abandonment Applications in Note 17. PNM is currently unable to determine the outcome of these matters or the range of possible impacts. SJGS Decommissioning On November 9, 2021, the San Juan County Commission approved the Coal-Fired Electricity Generating Facility Demolition and Remediation Ordinance (“Ordinance 121”), requiring the full demolition of SJGS upon its complete and permanent closure. Ordinance 121 required the SJGS owners to submit a proposed demolition and remediation plan no later than three months after SJGS was retired. The SJGS owners submitted its decommissioning and remediation plan on December 28, 2022. In connection with restructuring of the SJGS ownership on December 31, 2017, PNM and the other SJGS owners entered into the San Juan Decommissioning and Trust Funds Agreement, which requires PNM to fund its ownership share of final decommissioning costs into an irrevocable trust. Under the agreement, PNM made an initial funding of $14.7 million in December 2022. The amount and timing of additional trust funding is subject to revised decommissioning cost studies and agreement among the SJGS owners. PNM has posted a surety bond in the amount of $46.0 million in connection with certain environmental decommissioning obligations and must maintain the bond or other financial assurance until those obligations are satisfied. The surety bond only represents a liability if PNM fails to deliver on its contractual liability. For information regarding the impact of Ordinance 121 on PNM’s SJGS decommissioning ARO see Note 15. PNM records its share of the SJGS decommissioning obligation as an ARO on its Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. In the third quarter of 2022, a new decommissioning cost study was completed, which required PNM to remeasure its SJGS decommissioning ARO. The new study resulted in an estimated decrease to PNM’s share of the decommissioning obligation of $21.1 million, which was recorded in September 2022. Additional information concerning the Company's SJGS decommissioning ARO is contained in Note 15. City of Farmington Opposition to Closure of SJGS On September 21, 2022, the City of Farmington ("Farmington") filed a lawsuit and requested injunctive relief in order to force the other SJGS owners to convey SJGS to Farmington and suspend decommissioning. The case was initiated in the 11th Judicial District Court in San Juan County, New Mexico, but was moved to federal district court. Subsequently, the San Juan Project Participation Agreement ("SJPPA") expired by its express terms on September 30, 2022. Farmington voluntarily dismissed its complaint and request for injunctive relief on October 6, 2022. The parties were then engaged in arbitration in accordance with the SJPPA terms. On September 30, 2022, PNM filed a notice of cancellation of the SJPPA with FERC. On October 4, 2022, Farmington filed a protest to PNM’s notice of cancellation and requested a hearing. On October 20, 2022, PNM filed a motion requesting the FERC reject Farmington's request for hearing or alternatively hold the cancellation filing in abeyance while arbitration proceeds. Subsequently, The Incorporated County of Los Alamos, New Mexico, the City of Anaheim, California, M-S-R Public Power Agency, Southern California Public Power Authority, Tri-State and Tucson Electric Power Company filed at FERC in support of PNM's notice of cancellation of the SJPPA so that decommissioning can proceed. On December 19, 2022, FERC accepted PNM’s notice of cancellation of the SJPPA with an effective date of October 1, 2022, and denied Farmington’s request for hearing. On December 20, 2022, Farmington notified PNM that it had decided to withdraw from the arbitration process. PVNGS Liability and Insurance Matters Public liability for incidents at nuclear power plants is governed by the Price-Anderson Nuclear Industries Indemnity Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both commercial sources and an industry-wide retrospective payment plan. In accordance with this act, the PVNGS participants are insured against public liability exposure for a nuclear incident up to $13.7 billion per occurrence. PVNGS maintains the maximum available nuclear liability insurance in the amount of $450 million, which is provided by American Nuclear Insurers. The remaining $13.2 billion is provided through a mandatory industry-wide retrospective assessment program. If losses at any nuclear power plant covered by the program exceed the accumulated funds, PNM could be assessed retrospective premium adjustments. Based on PNM’s 10.2% interest in each of the three PVNGS units, as of December 31, 2022, PNM’s maximum potential retrospective premium assessment per incident for all three units is $42.1 million, with a maximum annual payment limitation of $6.2 million. After the expiration of the PVNGS Unit 1 leases in January 2023, PNM’s maximum potential retrospective premium assessment per incident for all three units is $31.2 million, with a maximum annual payment limitation of $4.7 million, to be adjusted periodically for inflation. The PVNGS participants maintain insurance for damage to, and decontamination of, property at PVNGS in the aggregate amount of $2.8 billion, a substantial portion of which must first be applied to stabilization and decontamination. These coverages are provided by Nuclear Electric Insurance Limited (“NEIL”). The primary policy offered by NEIL contains a sublimit of $2.25 billion for non-nuclear property damage. If NEIL’s losses in any policy year exceed accumulated funds, PNM is subject to retrospective premium adjustments of $5.4 million as of December 31, 2022, for each retrospective premium assessment declared by NEIL’s Board of Directors due to losses. After the expiration of the PVNGS Unit 1 leases in January 2023, PNM is subject to retrospective premium adjustments of $5.1 million. The insurance coverages discussed in this and the previous paragraph are subject to certain policy conditions, sublimits, and exclusions. Navajo Nation Allottee Matters In 2012, 43 landowners filed a notice of appeal with the Bureau of Indian Affairs (“BIA”) appealing a March 2011 decision of the BIA Regional Director regarding renewal of a right-of-way for a PNM transmission line. The landowners claim to be allottees, members of the Navajo Nation, who pursuant to the Dawes Act of 1887, were allotted ownership in land carved out of the Navajo Nation and allege that PNM is a rights-of-way grantee with rights-of-way across the allotted lands and are either in trespass or have paid insufficient fees for the grant of rights-of-way or both. The allottees generally allege that they were not paid fair market value for the right-of-way, that they were denied the opportunity to make a showing as to their view of fair market value, and thus denied due process. The allottees filed a motion to dismiss their appeal with prejudice, which was granted in 2014. Subsequent to the dismissal, PNM received a letter from counsel on behalf of what appears to be a subset of the 43 landowner allottees involved in the appeal, notifying PNM that the specified allottees were revoking their consents for renewal of right of way on six specific allotments. In 2015, PNM received a letter from the BIA Regional Director identifying ten allotments with rights-of-way renewals that were previously contested. The letter indicated that the renewals were not approved by the BIA because the previous consent obtained by PNM was later revoked, prior to BIA approval, by the majority owners of the allotments. It is the BIA Regional Director’s position that PNM must re-obtain consent from these landowners. PNM filed a condemnation action in the NM District Court regarding the approximately 15.49 acres of land at issue. The allottees filed a separate complaint against PNM for federal trespass. On December 1, 2015, the court ruled that PNM could not condemn two of the five allotments at issue based on the Navajo Nation’s fractional interest in the land. PNM filed a motion for reconsideration of this ruling, which was denied. In 2016, the Tenth Circuit granted PNM’s petition to appeal the December 1, 2015 ruling. Both matters have been consolidated. Oral argument before the Tenth Circuit was heard on January 17, 2017. In 2017, the Tenth Circuit affirmed the district court. PNM filed a motion for reconsideration en banc with the Tenth Circuit, which was denied. The NM District Court stayed the case based on the Navajo Nation’s acquisition of interests in two additional allotments and the unresolved ownership of the fifth allotment due to the owner’s death. PNM filed its petition for writ of certiorari with the US Supreme Court, which was denied. The underlying litigation continues in the NM District Court. In, 2019, several individual allottees filed a motion for partial summary judgment on the issue of trespass. The Court held a hearing on the motion on June 18, 2019 and took the motion under advisement. In the fourth quarter of 2022, the parties executed a settlement agreement and the court, after a hearing on the matter, entered the stipulated order. The court has retained jurisdiction to ensure compliance with the settlement agreement. Under the settlement agreement, PNM made payments of $1.5 million to the landowners. Texas Winter Storm In mid-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 the delivery of electricity in its service territory and did not experience significant outages on its system outside of the ERCOT directed curtailments. Various regulatory and governmental entities are conducting, or have announced they may conduct, inquiries, investigations and other reviews of the Texas winter storm event. Entities that have announced that they plan to conduct or are conducting such inquiries, investigations and other reviews include FERC, NERC, Texas Reliability Entity Inc., ERCOT, the Texas Legislature, the Texas Attorney General, the PUCT, and the Galveston County District Attorney. Further, lawsuits have been filed against various market participants relating to the power outages resulting from the Texas winter storm. TNMP has been named in two suits. As a utility operating during the Texas winter storm event, there is a risk TNMP could be named in additional lawsuits in the future. TNMP intends to vigorously defend itself against any claims that might be raised. TNMP deferred bad debt expense from defaulting REPs to a regulatory asset which totaled $0.8 million at both December 31, 2022, and December 31, 2021, and will seek recovery in a general rate case. At this time, the Company does not expect significant financial impacts related to this event, however, it cannot predict the outcome of such matters or the impact on the ERCOT market.
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Regulatory and Rate Matters |
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Regulatory and Rate Matters | Regulatory and Rate Matters The Company is involved in various regulatory matters, some of which contain contingencies that are subject to the same uncertainties as those described in Note 16. PNMR Merger Regulatory Proceedings On October 20, 2020, PNMR, Avangrid and Merger Sub entered into the Merger Agreement pursuant to which Merger Sub will merge with and into PNMR, with PNMR surviving the Merger as a wholly-owned subsidiary of Avangrid. Among other conditions, consummation of the Merger is subject to receipt of all required regulatory approvals. In 2021, five federal agencies and the PUCT completed their reviews and approved the Merger, with the NMPRC as the only regulatory agency yet to approve the Merger. The original application before the NMPRC was filed in November 2020. For additional information on the Merger regulatory proceedings, including supplemental regulatory filings that were required due to the Merger Agreement being amended in January 2022, see Note 22. PNM New Mexico General Rate Case 2024 Rate Change On December 5, 2022, PNM filed an application with the NMPRC for a general increase in retail electric rates. The requested change primarily reflects investments in transmission and distribution infrastructure, largely offset by cost reductions resulting from PNM’s transition to lower-cost, clean generation resources. Key aspects of PNM’s request are: •Recovery on total rate base of $2.7 billion, based on a calendar year 2024 FTY. •An increase of $63.8 million in retail non-fuel revenues •ROE of 10.25% •Drivers of revenue deficiency ◦Needed investments in transmission, distribution, and generation facilities for six years of operations, covering 2019 through 2024. In particular, PNM is focused on expanding and improving its aging infrastructure to provide the underlying infrastructure crucial to a successful energy transition and to support distribution generation. ◦Cost reductions from closing SJGS and the expiration of 114 MW leased PVNGS capacity. ◦Lower-cost replacements for SJGS and PVNGS using renewable energy purchases and battery storage systems. Some of these costs will be reflected in PNM’s requested base rates, while energy purchases will flow through PNM’s FPPAC. ◦Updated depreciation rates, including new terminal dates, for natural gas plants to align with the Company’s 2040 carbon-free portfolio goal. ◦Proposed customer-oriented services, such as fee-free payment options, and increased payment location options to address the needs of customers. ◦Increasing operating costs reflecting six years of inflation, including the impacts of today’s current high inflation and the expenses that come with providing quality electric service to customers. Distribution maintenance increases also are necessary to enhance vegetation management programs to protect lines and support wildfire mitigation efforts. PNM has endeavored to keep operating costs below inflationary levels. ◦Increased energy sales and customer loads since PNM’s last filing help cover the increased cost of doing business as PNM continues the energy transition. ◦Overall cost of capital based on PNM’s actual regulatory capital structure of 52% equity / 48% debt, reflecting the increase in the ROE that shareholders require to fund new investments in PNM’s system, which is partially offset by lower cost of debt. •Proposed ratemaking treatment of PVNGS Leased Interest and testimony supporting the prudence of PNM’s decisions to renew the five leases and repurchase 64.1 MW of PVNGS Unit 2 capacity regarding PVNGS; see PVNGS Lease Abandonment Application below. •Proposed return of the unamortized unprotected portion of excess deferred federal income taxes to customers over a five-year period, beginning when rates from the case go into effect. •Time-of-Day pilot proposal with the objective of incentivizing customers, through price signals, to use energy during the day when renewable generation is abundant. On December 14, 2022, the NMPRC suspended PNM’s advice notice in the case for a period of nine months beginning January 4, 2023 and appointed hearing examiners. On January 6, 2023, the hearing examiners issued an order setting out a procedural schedule with a hearing to begin June 20, 2023. On February 3, 2023, the hearing examiners issued a recommended decision recommending extension of the statutory suspension period for an additional three months. PNM is unable to predict the outcome of this matter. On January 3, 2023, a joint motion and brief for accounting order was filed with the NMPRC. NM AREA, Staff, WRA, Bernalillo County, NEE, and CCAE (the “Joint Movants”) jointly filed the motion which asked that the NMPRC issue an accounting order for the purpose of requiring PNM to create a regulatory liability to track the costs associated with the retirement of SJGS which are currently embedded in base rates. The Joint Movants requested that the NMPRC order PNM to track all costs associated with the running and management of SJGS totaling $98.3 million annually and requested that the accounting order require PNM to create a regulatory liability to track the SJGS costs from the time Unit 1 and Unit 4 were abandoned, July 1, 2022, and October 1, 2022, respectively, until the date new rates are put into effect, and for any other relief the NMPRC deems is just and reasonable. On February 3, 2023, the hearing examiners issued an order requiring PNM to create a pure accounting order regulatory liability that tracks cost of SJGS which are currently embedded in base rates. On February 6, 2023, PNM filed a motion to permit interlocutory appeal of the hearing examiners order requiring PNM to create a pure accounting order regulatory liability. On February 10, 2023, the hearing examiners issued an order denying PNM’s interlocutory appeal and clarified that the accounting order only required PNM to track the costs of SJGS. On February 14, 2023, NM AREA, Staff, WRA, ABCWUA, and CCAE filed a joint motion for clarification of the hearing examiners accounting order. For additional discussion on the retirement of SJGS and the associated accounting impacts see SJGS Abandonment Application discussion below. Renewable Energy Portfolio Standard As discussed in Note 16, the ETA amends the REA including removal of diversity requirements and certain customer caps and exemptions relating to the application of the RPS under the REA. The REA provides for streamlined proceedings for approval of utilities’ renewable energy procurement plans, assures that utilities recover costs incurred consistent with approved procurement plans, and requires the NMPRC to establish a RCT for the procurement of renewable resources to prevent excessive costs being added to rates. The ETA sets a RCT of $60 per MWh using an average annual levelized resource cost basis. PNM makes renewable procurements consistent with the NMPRC approved plans and recovers certain renewable procurement costs from customers through the renewable energy rider billed on a KWh basis. Included in PNM’s approved procurement plans are the following renewable energy resources: •158 MW of PNM-owned solar-PV facilities •A PPA through 2044 for the output of New Mexico Wind, having a current aggregate capacity of 200 MW, and a PPA through 2035 for the output of Red Mesa Wind, having an aggregate capacity of 102 MW •A PPA through 2040 for 140 MW of output from La Joya Wind II •A PPA through 2042 for the output of the Lightning Dock Geothermal facility with a current capacity of 11 MW •Solar distributed generation, aggregating 239.1 MW at December 31, 2022, owned by customers or third parties from whom PNM purchases any net excess output and RECs On June 1, 2021 PNM filed its 2022 renewable energy procurement plan which proposed to collect $66.9 million for the year. PNM did not propose any new procurements in the plan, but proposed to retire a small number of RECs in 2022 from resources that had not been previously approved as part of the RPS plan. The NMPRC assigned this matter to a hearing examiner and a hearing was held on September 30, 2021. On October 15, 2021, NMPRC Staff and PNM jointly filed the post-hearing brief stating that pending issues to the case had been resolved with PNM agreeing to certain compliance provisions. On October 30, 2021, the hearing examiner issued a recommended decision recommending approval of PNM’s filing. On November 17, 2021, the NMPRC issued a final order adopting the recommended decision. The 2022 renewable energy procurement plan became effective on January 1, 2022. On June 1, 2022, PNM filed its renewable energy procurement plan for 2023 which proposed to collect $61.0 million for the year. PNM did not propose any new resource procurements, and the plan states that existing projects will meet the applicable RPS standards of 2023. A hearing was held September 8, 2022, briefs were filed September 23, 2022, and response briefs were filed September 28, 2022. On October 18, 2022, the hearing examiners issued a recommended decision recommending approval of all PNM's requests. On November 9, 2022, the NMPRC issued a final order adopting the recommended decision. The 2023 renewable energy procurement plan became effective on January 1, 2023. The following sets forth PNM’s revenues recorded for the renewable energy rider:
Under the renewable rider, if PNM’s earned rate of return on jurisdictional equity in a calendar year, adjusted for items not representative of normal operations, exceeds the NMPRC-approved rate by 0.5%, PNM is required to refund the excess to customers during May through December of the following year. PNM slightly exceeded this limitation in 2022 and accordingly, recorded a current regulatory liability on the Consolidated Balance Sheets and a reduction to electric operating revenues in the Consolidated Statement of Earnings as of and for the period ending December 31, 2022. PNM did not exceed the limitation in 2021. The NMPRC currently has an open inquiry docket into the continued use of renewable riders by New Mexico utilities. PNM is unable to predict the outcome of the NMPRC’s inquiry. Energy Efficiency and Load Management Program Costs and Incentives/Disincentives The New Mexico Efficient Use of Energy Act (“EUEA”) requires public utilities to achieve specified levels of energy savings and to obtain NMPRC approval to implement energy efficiency and load management programs. The EUEA requires the NMPRC to remove utility disincentives to implementing energy efficiency and load management programs and to provide incentives for such programs. The NMPRC has adopted a rule to implement this act. PNM’s costs to implement approved programs and incentives are recovered through a rate rider. During the 2019 New Mexico legislative session, the EUEA was amended to, among other things, include a decoupling mechanism for disincentives, preclude a reduction to a utility’s ROE based on approval of disincentive or incentive mechanisms, establish energy savings targets for the period 2021 through 2025, and require that annual program funding be 3% to 5% of an electric utility’s annual customer bills excluding gross receipt taxes, franchise and right-of-way access fees, provided that a customer’s annual cost not exceed seventy-five thousand dollars. On April 15, 2020, PNM filed an application for energy efficiency and load management programs to be offered in 2021, 2022, and 2023. The proposed program portfolio consists of twelve programs with a total annual budget of $31.4 million in 2021, $31.0 million in 2022, and $29.6 million in 2023. The application also sought approval of an annual base incentive of 7.1% of the portfolio budget if PNM were to achieve energy savings of at least 80 GWh in a year. The proposed incentive would increase if PNM is able to achieve savings greater than 94 GWh in a year. The application also proposed an advanced metering infrastructure (“AMI”) pilot program, which included the installation of 5,000 AMI meters at a cost of $2.9 million. PNM proposed the pilot program to comply with an NMPRC order denying PNM’s February 2016 application to replace its existing customer metering equipment with AMI. PNM did not recommend the AMI pilot program due to the limited cost-effective benefits under a pilot structure. On September 17, 2020, the hearing examiner in the case issued a recommended decision recommending that PNM's proposed energy efficiency and load management program be approved, with the exception of the proposed AMI pilot program. On October 28, 2020, the NMPRC issued an order adopting the recommended decision in its entirety. On April 15, 2022, PNM filed an advice notice which reconciles the actual 2021 energy efficiency profit incentive collections with the profit incentive authorized by the NMPRC resulting in an additional $0.3 million incentive to be collected through the energy efficiency rider during the remainder of 2022. The additional incentive was authorized for 2021 because annual energy savings for the year exceeded 94 GWh. PNM began collecting the incentive effective May 31, 2022. 2020 Decoupling Petition As discussed above, the legislature amended the EUEA to, among other things, include a decoupling mechanism for disincentives. On May 28, 2020, PNM filed a petition for approval of a rate adjustment mechanism that would decouple the rates of its residential and small power rate classes. Decoupling is a rate design principle that severs the link between the recovery of fixed costs of the utility through volumetric charges. On July 13, 2020, NEE, ABCWUA, the City of Albuquerque, and Bernalillo County filed motions to dismiss the petition on the grounds that approving PNM’s proposed rate adjustment mechanism outside of a general rate case would result in retroactive ratemaking and piecemeal ratemaking. The motions to dismiss also alleged that PNM’s proposed rate adjustment mechanism is inconsistent with the EUEA. On October 2, 2020, PNM requested an order to vacate the public hearing, scheduled to begin October 13, 2020, and staying the proceeding until the NMPRC decides whether to entertain a petition to issue a declaratory order resolving the issues raised in the motions to dismiss. On October 7, 2020, the hearing examiner approved PNM's request to stay the proceeding and vacate the public hearing and required PNM to file a petition for declaratory order by October 30, 2020. On October 30, 2020, PNM filed a petition for declaratory order asking the NMPRC to issue an order finding that full revenue decoupling is authorized by the EUEA. On November 4, 2020, ABCWUA and Bernalillo County jointly filed a competing petition asking the NMPRC to issue a declaratory order on the EUEA’s requirements related to disincentives. On November 24, 2020, the NMAG requested that the NMPRC deny both petitions for declaratory orders and instead address disincentives under the EUEA in a rulemaking. On March 17, 2021, the NMPRC issued an order granting the petitions for declaratory order, commencing a declaratory order proceeding to address the petitions, denying the NMAG’s request to initiate a rulemaking, and appointing a hearing examiner to preside over the declaratory order proceeding. On January 14, 2022, the hearing examiner issued a recommended decision recommending the NMPRC find that the EUEA does not mandate the NMPRC to authorize or approve a full decoupling mechanism, defining full decoupling as limited to energy efficiency and load management measures and programs. The recommended decision also states that a utility may request approval of a rate adjustment mechanism to remove regulatory disincentives to energy efficiency and load management measures and programs through a stand-alone petition, as part of the utility’s triennial energy efficiency application or a general rate case and that PNM is not otherwise precluded from petitioning for a rate adjustment mechanism prior to its next general rate case. Finally, the recommended decision stated that the EUEA does not permit the NMPRC to reduce a utility’s ROE based on approval of a disincentive removal mechanism founded on removing regulatory disincentives to energy efficiency and load management measures and programs. The recommended decision does not specifically prohibit a downward adjustment to a utility’s capital structure, based on approval of a disincentive removal mechanism. On April 27, 2022, the NMPRC issued an order adopting the recommended decision in its entirety. On May 24, 2022, PNM filed a notice of appeal with the NM Supreme Court. On June 23, 2022, PNM and other parties filed Statement of Issues with the NM Supreme Court. On September 6, 2022, PNM and other parties filed Briefs in Chief with the NM Supreme Court. On October 21, 2022, NEE filed Answer Briefs with the NM Supreme Court. PNM cannot predict the outcome of this matter. FPPAC Continuation Application NMPRC rules require public utilities to file an application to continue using their FPPAC every four years. On June 17, 2022, PNM filed the required continuation application and requested that its FPPAC be continued without modification. On July 21, 2022, the NMPRC issued an order requiring Staff to file a response to PNM's application and set certain procedural dates. On August 4, 2022, Staff filed a response to PNM's application stating that while PNM’s filing demonstrates that PNM’s FPPAC meets the requirements of NMPRC rules, it would support a hearing if the NMPRC desires one. On October 26, 2022, the NMPRC appointed a hearing examiner and a hearing is scheduled to begin April 24, 2023. On December 30, 2022, the hearing examiner issued an order requiring briefing on consolidation of this case into the 2024 Rate Change and PNM and other parties filed responses to the order on January 6, 2023. On January 27, 2023, the hearing examiner issued a recommended decision recommending that the FPPAC Continuation Application be consolidated into the 2024 Rate Change. On January 5, 2023, ABCWUA, Bernalillo County, CCAE, NEE, and WRA filed a joint motion to expand the scope of the case to include a prudence review. PNM cannot predict the outcome of this matter. Integrated Resource Plans NMPRC rules require that investor-owned utilities file an IRP every three years. The IRP is required to cover a 20-year planning period and contain an action plan covering the first four years of that period. On September 14, 2022, the NMPRC adopted revisions to the IRP Rule. The final order revamps and modernizes the planning process to accommodate increased stakeholder involvement. The IRP Rule establishes a collaborative facilitated process for a utility and stakeholders to agree on a statement of need for potential new or additional resources, as well as an action plan to guide procurement or development of resources to meet the stated need. A most-cost-effective portfolio of resources shall be derived from the statement of need analysis. The statement of need and action plan must be accepted before the utility begins the resource solicitation process pursuant to the IRP Rule. Following acceptance of the statement of need and action plan, a utility will provide the NMPRC and intervenors drafts of the request for proposals (“RFP”) and a timeline for issuing, receiving, evaluating, and ranking bids. The NMPRC will then appoint an Independent Monitor (“IM”) to oversee the RFP process, which allows for parties and the IM to comment on the RFP consistency with the IRP, after which the utility issues the RFP. Within 75 days of receiving bids the utility shall provide the IM with results including pricing and non-price evaluation criteria, ranking of bids, chosen portfolio and alternatives that also meet the needs; the IM then rules on the fairness of the RFP execution. Acceptance of the statement of need and action plan will not constitute a finding of prudency or pre-approval of costs associated with the additional resources. Following the RFP and IM processes, the utility may apply approvals, and any costs incurred to implement the action plan will be considered in a general rate case and/or resource acquisition proceeding. On October 14, 2022, PNM and other investor-owned utilities filed motions for rehearing with the NMPRC. On October 26, 2022, the NMPRC issued an order partially granting and partially denying certain aspects of PNM's and the other investor-owned utilities' motions for rehearing. On November 2, 2022, the NMPRC adopted an amended IRP Rule. On December 2, 2022, PNM filed an appeal with the NM Supreme Court of the NMPRC’s final order which adopted revisions to the IRP Rule. On January 3, 2023, PNM and two other investor-owned utilities filed statements of issues with the NM Supreme Court. PNM cannot predict the outcome of this matter. Abandonment Applications made under the ETA As discussed in Note 16, the ETA sets a statewide standard that requires investor-owned electric utilities to have specified percentages of their electric-generating portfolios be from renewable and zero-carbon generating resources. SJGS Abandonment Application On July 1, 2019, PNM filed a Consolidated Application for the Abandonment and Replacement of SJGS and Related Securitized Financing Pursuant to the ETA (the “SJGS Abandonment Application”). The SJGS Abandonment Application sought NMPRC approval to retire PNM’s share of SJGS after the existing coal supply and participation agreements end in June 2022, for approval of replacement resources, and for the issuance of energy transition bonds. PNM’s application proposed several replacement resource scenarios. The SJGS Abandonment Application also included a request to issue approximately $361 million of energy transition bonds (the “Securitized Bonds”). PNM’s request for the issuance of Securitized Bonds included approximately $283 million of forecasted undepreciated investments in SJGS at June 30, 2022, an estimated $28.6 million for plant decommissioning and coal mine reclamation costs, approximately $9.6 million in upfront financing costs, and approximately $20.0 million for job training and severance costs for affected employees. Proceeds from the Securitized Bonds would also be used to fund approximately $19.8 million for economic development in the Four Corners area. On July 10, 2019, the NMPRC issued an order requiring the SJGS Abandonment Application be considered in two proceedings: one addressing SJGS abandonment and related financing, and the other addressing replacement resources. Hearings on the abandonment and securitized financing proceedings were held in December 2019 and hearings on replacement resources were held in January 2020. On February 21, 2020, the hearing examiners issued two recommended decisions recommending approval of PNM’s proposed abandonment of SJGS, subject to approval of replacement resources, and approval of PNM’s proposed financing order to issue Securitized Bonds. The hearing examiners recommended that PNM be authorized to abandon SJGS by June 30, 2022, and to record regulatory assets for certain other abandonment costs that are not specifically addressed under the provisions of the ETA to preserve its ability to recover the costs in a future general rate case. The hearing examiners recommended that this authority only extend to the deferral of the costs and it not be an approval of any ratemaking treatment. The hearing examiners also recommended PNM be authorized to issue Securitized Bonds of up to $361 million and establish a rate rider to collect non-bypassable customer charges for repayment of the bonds and be subject to bi-annual adjustments (the “Energy Transition Charge”). The hearing examiners recommended an interim rate rider adjustment upon the start date of the Energy Transition Charge to provide immediate credits to customers for the full value of PNM’s revenue requirement related to SJGS until those reductions are reflected in base rates. In addition, the hearing examiners recommended PNM be granted authority to establish regulatory assets to recover costs that PNM will pay prior to the issuance of the Securitized Bonds, including costs associated with the bond issuances as well as for severances, job training, economic development, and workforce training. On April 1, 2020, the NMPRC unanimously approved the hearing examiners’ recommended decisions regarding the abandonment of SJGS and the related securitized financing under the ETA. On April 10, 2020, CFRE and NEE filed a notice of appeal with the NM Supreme Court of the NMPRC’s approval of PNM’s request to issue securitized financing under the ETA. On January 10, 2022, the NM Supreme Court issued its decision rejecting CFRE’s and NEE’s constitutional challenges to the ETA and affirmed the NMPRC final order. In March 2020, PNMR and PNM recorded obligations of $9.4 million and $8.1 million for estimated severances, $8.9 million for obligations to fund severances and other costs of WSJ LLC employees and to fund $19.8 million to state agencies for economic development and workforce training. The total amount recorded for these estimates in 2021 was $36.9 million and $36.0 million reflected in other current liabilities and $36.9 million as a corresponding deferred regulatory asset on PNMR's and PNM's Consolidated Balance Sheets at December 31, 2021. In 2022, PNM made payments of $6.6 million for severances, $8.9 million for obligations to fund severances and other costs of WSJ LLC employees and funded the $19.8 million to state agencies and PNMR's and PNM's Consolidated Balance Sheets at December 31, 2022 reflects other current liabilities of $0.7 million and deferred regulatory assets of $37.2 million. In addition, PNM recorded $1.6 million as Regulatory disallowance and restructuring costs on PNMR's and PNM's Consolidated Statements of Earnings for PNM's non-retail share of estimated severance in the year ended December 31, 2022. On September 29, 2022, SJGS was removed from service and as a result, PNM made the following adjustments reflected on the Consolidated Balance Sheets as of December 31, 2022:
(1) To be recovered through the Energy Transition Charge, which includes undepreciated investments of $274.9 million and plant decommissioning of $14.5 million, previously reflected in Net utility plant. (2) Authorized to be recorded as regulatory assets for certain other abandonment costs that are not specifically addressed under the provisions of the ETA to preserve its ability to recover the costs in a future general rate case, which includes obsolete inventory of $6.4 million and plant decommissioning of $16.2 million, previously reflected in Net utility plant. (3) Includes cost of removal and accelerated depreciation of SNCRs. On July 29, 2020, the NMPRC issued an order approving resource selection criteria identified in the ETA that would include PPAs for 650 MW of solar and 300 MW of battery storage. On September 28, 2020, PNM filed an application for approval of the final executed contracts for the replacement resources, which was approved by the NMPRC on December 2, 2020. On October 14, 2022, PNM filed a motion for approval of amendments on a 200 MW solar PPA combined with the 100 MW battery storage agreement, as well as a letter agreement with the project developer providing payments to PNM for delay damages. The amendments included price increases on both the solar PPA and battery storage agreement and the commercial operation date extension to May 2024. No party filed objections and the amendments were deemed approved. On February 28, 2022, WRA and CCAE filed a joint motion for order to show cause and enforce financing order and supporting brief, which requests that the NMPRC order PNM to show cause why its rates should not be reduced at the time SJGS is abandoned and to otherwise enforce the NMPRC’s April 1, 2020 final order. On March 14, 2022, PNM filed its response to the joint motion to show cause refuting the movants' claims that the ETA and April 1, 2020 financing order require Securitized Bonds be issued at the time of abandonment and that rates be reduced upon abandonment as not being legally supportable. The movants filed joint replies on March 24, 2022. In response, on March 30, 2022, the NMPRC issued an order appointing hearing examiners to conduct a hearing, if necessary, and to issue a recommended decision to address the issues raised by the motion. PNM filed testimony on April 20, 2022, and a hearing was held on May 23, 2022. On June 17, 2022, the hearing examiners issued a recommended decision requesting the NMPRC issue an order that would require PNM to: •Revise its rates to remove all of the costs of SJGS Unit 1 by issuing rate credits of $21.1 million on an annual basis, to customers by July 1, 2022 •Revise its rates again, to remove all costs of SJGS Unit 1, Unit 4, and common facilities by increasing the rate credits to $98.3 million on an annual basis, by October 1, 2022 •Transfer payments due and owing to the Indian Affairs Fund, Economic Development Assistance Fund, and the Displaced Workers Assistance Fund within 30 days of the abandonment of SJGS Unit 1 •Include (in its next rate case application) an explanation and defense of the prudence in the timing of the issuance of Securitized Bonds beyond the abandonment dates and what actions were taken to protect customers from interest rate increases occurring as well as the continued marketability of the Securitized Bonds issued Following the filing of exceptions and responses, on June 29, 2022, the NMPRC issued its final order adopting and approving the recommended decision in its entirety with certain additions. The additions to the final order include requirements for PNM file a report, no later than October 15, 2022, that contains a record of all of its costs incurred in the show cause proceeding so that the prudence of those costs will be known and be subject to review in PNM's future rate case and that the prudency review shall include a compliance filing to enable a review of the prudence of PNM's decision to delay bond issuance beyond the dates of the SJGS abandonment. On June 29, 2022, PNM filed an Emergency Motion and Supporting Brief for Stay with the NMPRC ("PNM's NMPRC Emergency Motion"). On June 30, 2022, PNM filed a Notice of Appeal and an Emergency Motion for Partial Interim Stay of the NMPRC's Final Order with the NM Supreme Court ("PNM's NM Supreme Court Emergency Motion"). On July 12, 2022, several parties filed responses to PNM's NMPRC Emergency Motion. On July 21, 2022, the NMPRC adopted an order denying PNM's NMPRC Emergency Motion. Subsequently, on July 25, 2022, PNM filed another emergency motion seeking an immediate and ongoing stay from the NM Supreme Court for the pendency of the appeal. In the interim, PNM began issuing rate credits effective July 31, 2022. On July 28, 2022, PNM made payments totaling $19.8 million to the Indian Affairs Fund, Economic Development Assistance Fund, and the Displaced Workers Assistance Fund. On September 2, 2022, the NM Supreme Court issued an order granting PNM's July 25, 2022 motion for partial stay and as a result PNM suspended issuing rate credits. On October 11, 2022, WRA filed a motion for emergency oral argument in PNM's NM Supreme Court Emergency Motion. On October 14, 2022, PNM made its required compliance filing under the NMPRC's June 29, 2022 final order. On November 1, 2022, the NM Supreme Court issued an order continuing the partial stay of the rate credits during the pendency of the appeal. On November 15, 2022, PNM filed a supplemental compliance filing to its October 14, 2022 compliance filing. On November 21, 2022, NEE filed a motion for rehearing and to lift the stay and WRA, CCAE, Prosperity Works, the NMAG and Bernalillo County filed a joint motion for rehearing with the NM Supreme Court in PNM’s appeal of the NMPRC’s final order in the SJGS financing order to show cause. On December 22, 2022, the NM Supreme Court issued an order denying the motions for rehearing. PNM cannot predict the outcome of this matter. As required under GAAP, PNM evaluated the consequences of the NMPRC's June 29, 2022 order and the related NM Supreme Court appeal and order granting the stay, as well as the subsequent motions and the hearing examiners order filed in the 2024 Rate Change. Specifically, PNM assessed the likelihood PNM would be required to establish a regulatory liability for the benefit of the rate credits and the associated carrying charge during the pendency of the stay. These evaluations indicate that it is reasonably possible that PNM would be successful on the issues it was appealing and defending at the NMPRC, and therefore, no loss or regulatory liability has been recorded as of December 31, 2022. The amount of any such loss to be recorded would depend on the ultimate outcome of the appeal, however based on amounts currently included in base rates, discussed above, PNM estimates the potential loss as of December 31, 2022 to be $28.7 million. Four Corners Abandonment Application On November 1, 2020, PNM entered into the Four Corners Purchase and Sale Agreement with NTEC, pursuant to which PNM agreed to sell its 13% ownership interest (other than certain transmission assets) in Four Corners to NTEC. The sale is contingent upon NMPRC approval and is expected to close by the end of 2024. In connection with the sale, PNM would make payments of $75.0 million to NTEC for relief from its obligations under the coal supply agreement for Four Corners after December 31, 2024. Pursuant to the Four Corners Purchase and Sale Agreement, PNM would retain its current plant decommissioning and coal mine reclamation obligations. PNM made an initial payment to NTEC of $15.0 million in November 2020, subject to refund with interest upon termination of the Four Corners Purchase and Sale Agreement prior to closing. Under the terms of the Four Corners Purchase and Sale Agreement, upon receipt of the NMPRC approval, PNM would make a final payment of $60.0 million. The initial $15.0 million payment is recorded in other deferred charges on the Consolidated Balance Sheet as of December 31, 2022 and 2021. On January 8, 2021, PNM filed the Four Corners Abandonment Application, which sought NMPRC approval to exit PNM’s share of Four Corners as of December 31, 2024, and issuance of approximately $300 million of Securitized Bonds as provided by the ETA. PNM’s request for the issuance of Securitized Bonds included approximately $272 million of forecasted undepreciated investments in Four Corners at December 31, 2024, an estimated $4.6 million for plant decommissioning costs, an estimated $7.3 million in upfront financing costs, and an estimated $16.5 million for economic development in the Four Corners area. PNM intends to submit a separate application for NMPRC approval of a replacement resource portfolio following NMPRC action on this application. On March 15, 2021, PNM filed an amended application and supplemental testimony for the approval of the abandonment and transfer of Four Corners and issuance of a financing order pursuant to the ETA and a motion to withdraw the January 8, 2021 Four Corners Application. The amended application and supplemental testimony provided additional information to support PNM's request to abandon its interest in Four Corners and transfer that interest to NTEC, and also provided additional detail explaining how the proposed sale and abandonment provides a net public benefit. On November 12, 2021, the hearing examiner issued a recommended decision recommending approval of the Four Corners Abandonment Application and the corresponding request for issuance of securitized financing. On December 15, 2021, the NMPRC issued a final order rejecting the hearing examiner’s recommended decision and denying approval of the Four Corners Abandonment Application and the corresponding request for issuance of securitized financing. In its order, the NMPRC concluded that PNM needed to conduct a review of the actual replacement resource portfolio and determined that the record was insufficient to determine the prudence of PNM’s investments in Four Corners. On December 22, 2021, PNM filed a notice of appeal with the NM Supreme Court of the NMPRC decision to deny the application. On January 21, 2022, PNM filed a statement of issues outlining the arguments for appeal asserting, among other things, that the NMPRC misinterpreted and improperly applied the ETA in concluding that the NMPRC needed to review the actual replacement resource portfolio before authorizing abandonment and that the NMPRC improperly deferred the issue of prudence with respect to certain of PNM’s investments in Four Corners, where other parties were given the opportunity to present evidence and failed to demonstrate PNM was imprudent in its decisions. On March 24, 2022, PNM filed its Brief in Chief and answer briefs were filed on May 9, 2022. On June 17, 2022, PNM filed its Consolidated Reply Brief. The NM Supreme Court has scheduled oral arguments to be held on March 27, 2023. GAAP requires a loss be recognized when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. As of December 31, 2022, PNM evaluated the NMPRC order in the Four Corners Abandonment Application and determined it was reasonably possible that PNM would be successful in recovery of its undepreciated investment in a future proceeding. Therefore, no loss has been recorded. The financial impact of an early exit of Four Corners and the NMPRC approval process is influenced by many factors outside of PNM’s control, including the overall political and economic conditions of New Mexico. See additional discussion of the ETA in Note 16. PNM cannot predict the outcome of these matters. PVNGS Leased Interest Abandonment Application On April 2, 2021, PNM filed the PVNGS Leased Interest Abandonment Application, an application for the sale and transfer of related assets, and approval to procure new resources. As discussed in Note 8, PNM had Leased Interest under five separate leases that were approved and certificated by the predecessor agency to the NMPRC in the 1980s. Four of the five leases for 104 MW of Leased Interest terminated in January 2023, while the remaining lease for 10 MW of Leased Interest terminates in January 2024. Associated with the Leased Interest are certain PNM-owned assets and nuclear fuel that are necessary for the ongoing operation and maintenance of the Leased Interest and integration of the Leased Interest generation to the transmission network. PNM determined that there will be net benefits to its customers to return the Leased Interest to the lessors in conformity with the leases, sell and transfer the related PNM-owned assets, and to replace the Leased Interest with new resources. In the application, PNM requested NMPRC authorization to decertify and abandon its Leased Interest and to create regulatory assets for the associated remaining undepreciated investments with consideration of cost recovery of the undepreciated investments in a future rate case. PNM also sought NMPRC approval to sell and transfer the PNM-owned assets and nuclear fuel supply associated with the Leased Interest to SRP, which will be acquiring the Leased Interest from the lessors upon termination of the existing leases. In addition, PNM sought NMPRC approval for a 150 MW solar PPA combined with a 40 MW battery storage agreement, and a stand-alone 100 MW battery storage agreement to replace the Leased Interest. To ensure system reliability and load needs are met in 2023, when a majority of the leases expire, PNM also requested NMPRC approval for a 300 MW solar PPA combined with a 150 MW battery storage agreement. PNM's application sought a six-month regulatory time frame. On April 21, 2021, the NMPRC issued an order assigning a hearing examiner and stated PNM's request to abandon the Leased Interest does not have any statutory or rule time limitation and the six-month limit in which the NMPRC must issue an order regarding the request for approvals of the solar PPAs and battery storage agreements does not begin until after the NMPRC acts on the abandonment request. The NMPRC’s April 21, 2021, order also stated that issues reserved to a separate proceeding in the NM 2015 Rate Case regarding the decision to permanently disallow recovery of certain future decommissioning costs related to PVNGS Units 1 and 2 shall be addressed in this case and PNM shall file testimony addressing the issue. On June 28, 2021, NEE and CCAE jointly filed a motion to dismiss a portion of the application claiming that since PNM's request to abandon the Leased Interest was filed after PNM had already provided irrevocable notice it would not acquire the Leased Interest, abandonment is no longer required. On July 28, 2021, the hearing examiner issued a recommended decision on NEE's and CCAE's joint motion to dismiss, recommending dismissal of PNM's requests for approval to abandon and decertify the Leased Interest; dismissal of PNM's request for approval to sell and transfer the related assets; and dismissal of PNM's request to create regulatory assets for the associated remaining undepreciated investments, but did not preclude PNM seeking recovery of the costs in a general rate case in which the test year period includes the time period in which PNM incurs such costs. The hearing examiner's recommended decision further provides that PNM's request for replacement and system reliability resources and the decision to permanently disallow recovery of certain future decommissioning costs related to PVNGS Units 1 and 2 should remain within the scope of this case. On August 25, 2021, the NMPRC issued an order granting portions of the July 28, 2021 recommended decision that were not contested related to dismissal of PNM's request for approval to abandon and decertify the Leased Interest and dismissal of PNM's request for approval to sell and transfer the related assets. In addition, the order bifurcated the issue of approval for the two PPAs and three battery storage agreements into a separate docket so it may proceed expeditiously. On September 8, 2021, the NMPRC issued an order on the remaining issues in the recommended decision. The order found that PNM's request for a regulatory asset to record costs associated with obtaining an abandonment order should be dismissed. However, the requests for regulatory assets associated with the remaining undepreciated investments should be addressed at an evidentiary hearing. On September 20, 2021, ABCWUA, Bernalillo County, NEE, and the NMAG filed a joint motion to reconsider the September 8, 2021 NMPRC order. Also, on September 20, 2021, PNM filed a motion for rehearing of the September 8, 2021 order stating that certain requirements of the order would lead to compromising PNM's First Amendment rights. On October 6, 2021, the NMPRC issued an order granting the motions for reconsideration and vacated the September 8, 2021 order, without specifically addressing issues raised in the motions. On November 1, 2022, ABCWUA, Bernalillo County, CCAE, NEE, NM AREA, the NMAG, WRA, and Staff filed a joint motion for an accounting order to require PNM to track in a regulatory liability, all costs associated with the PVNGS Leased Interests that will be abandoned in January 2023 and January 2024 that are still being collected in rates, which PNM opposes. On November 18, 2022, the NMPRC issued its order on joint motion for an accounting order requiring PNM to establish a regulatory liability to track and account for, upon termination of the PVNGS leases, all costs currently borne by ratepayers associated with those leases during pendency of the 2024 Rate Change, subject to a determination of ratemaking treatment. In addition, PNM may establish a regulatory asset account to record undepreciated investment for improvements to the Unit 1 and Unit 2 Leased Interests upon termination of the leases, and to record cost differences in the proceeds from SRP for the sale of the PVNGS Leased Assets and the actual book value. Recovery of these items will be determined in the 2024 Rate Change. In the 2024 Rate Change, PNM must also address unresolved issues including whether PNM’s decision to renew the five leases and repurchase 64.1 MW of PVNGS Unit 2 capacity exposed ratepayers to additional financial liability beyond that to which they would otherwise have been exposed, and whether PNM should be denied recovery of future decommissioning expenses as a remedy for imprudence. See 2024 Rate Change discussion above. PNM is evaluating the consequences of the NMPRC's November 18, 2022 order, as required under GAAP, and whether it should establish a regulatory liability in 2023 to account for revenue collected from ratepayers during the pendency of the 2024 Rate Change. In addition, PNM is evaluating whether it should establish a regulatory asset account to record undepreciated investment for improvements to the Unit 1 and Unit 2 Leased Interests upon termination of the leases in January 2023 and 2024. The hearing on the two PPAs and three battery storage agreements was held on November 12 and 15, 2021 and December 3, 2021 and post-hearing briefing was completed on January 18, 2022. On February 14, 2022, the hearing examiner issued a recommended decision recommending the NMPRC approve the 150 MW solar PPA combined with a 40 MW battery storage agreement, the stand-alone 100 MW battery storage agreement, and the 300 MW solar PPA combined with a 150 MW battery storage agreement. On February 16, 2022, the NMPRC adopted an order approving the recommended decision. On April 15, 2022, PNM made a compliance filing with the NMPRC in which it updated the NMPRC on the status of the PPAs and the battery storage agreements listed above. On June 16, 2022, PNM made a second compliance filing on the status of PPAs and battery storage agreements notifying the NMPRC that none of the developers of the two PPAs and three battery storage agreements have moved forward under the terms of the agreements approved by the NMPRC on February 16, 2022, and none of the replacement resource projects would be operational in 2023. All five projects will have significant delays and price increases as evidenced in the current alternative offers from the developers. PNM entered into amendments to the 300 MW solar PPA combined with a 150 MW battery storage agreement and proposed those amendments to the NMPRC for approval in a filing with the NMPRC on June 24, 2022. PNM determined the terms offered by the 150 MW solar PPA combined with a 40 MW battery storage agreement and the stand-alone 100 MW battery storage agreement are not satisfactory in comparison with other potential projects that might be utilized instead, and PNM did not support the proposed amendments to those agreements in the June 24, 2022 filing. No party filed objections following PNM's June 24, 2022 filing and pursuant to the NMPRC's February 16, 2022 order the 300 MW solar PPA combined with 150 MW battery storage agreement and the decision not to proceed with the other agreements, are deemed approved. On September 2, 2022, PNM entered into amendments to the 150 MW battery storage agreement to increase the capacity to 300 MW and proposed those amendments to the NMPRC for approval. On September 8, 2022, the NMPRC issued an order to extend the 10-day period for filing for an additional two days. No party filed objections within 12 days following PNM's September 2, 2022 filing and pursuant to the NMPRC's February 16, 2022 order the 300 MW solar battery storage agreement was deemed approved. PNM anticipates these facilities will be in service in 2024. In addition to approval by the NMPRC, PNM and SRP received NRC approval for the transfer of the associated possessory licenses at the end of the term of each of the respective leases. Summer Peak Resource Adequacy Throughout 2021 and continuing into 2022, PNM provided notices of delays and status updates to the NMPRC for the approved SJGS replacement resource projects. All four project developers had notified PNM that completion of the projects would be delayed and no longer available for most, if any of the 2022 summer peak load period. The delays in the SJGS replacement resources, coupled with the abandonment of SJGS Units 1 and 4 presented a risk that PNM would have insufficient operational resources to meet the 2022 summer peak to reliably serve its customers if PNM was unable to find additional generation resources. PNM entered into three agreements to purchase power from third parties in the second half of 2021 to minimize potential impacts to customers; the purchase of 85 MW, unit contingent from Four Corners for June through September of 2022; the purchase of 150 MW, firm power in June and September 2022; and the purchase of 40 MW, unit contingent from PVNGS Unit 3 for the full year of 2022. Even after accounting for these additional contracts, PNM projected a very low system reserve margin during the 2022 summer peak. As a result, on February 17, 2022, PNM filed a Notice and Request for Modification to or Variance from Abandonment Date for SJGS Unit 4 with the NMPRC. The filing provided notice that PNM had obtained agreement from the SJGS owners and WSJ LLC to extend operation of Unit 4 until September 30, 2022. SJGS Unit 4 provided 327 MW of capacity and improved PNM’s projected system reserve margin. On February 23, 2022, the NMPRC issued an order finding that PNM did not require NMPRC approval to extend operation of SJGS Unit 4 for an additional three-month period. The NMPRC’s order states that issues regarding the prudence or reasonableness of the decisions made, actions taken by PNM, and recoverability of costs related to the continued operation of SJGS Unit 4, including fuel costs collected through PNM’s FPPAC, shall be subject to review in a future proceeding. On February 25, 2022, an amended San Juan Project Participation Agreement was filed with FERC. On March 18, 2022, PNM filed its compliance notice updating its January 26, 2022 compliance notice indicating that 65 MW of SJGS Unit 4 owned as a deregulated merchant resource would be available to PNM retail operations on a system contingent basis, which further increased PNM's projected system reserve margin during the 2022 summer peak. On March 24, 2022, FERC accepted the amended SJGS participation agreement. While PNM experienced a new system peak retail load of 2,139 MW on July 19, 2022, PNM’s generation resources performed sufficiently with no significant challenges to resource adequacy during the 2022 summer peak season. PNM faces similar concerns in the summer of 2023 as a result of continued delays in the SJGS replacement resources as well as delays in replacement resources for the PVNGS leased capacity that expires in January 2023. As discussed above, PNM has made a number of compliance filings with the NMPRC on the status of the SJGS and PVNGS leased capacity interest replacement resources. On January 30, 2023, PNM informed the NMPRC that it had provided written notice to one of the SJGS replacement resource developers for 100 MW solar PPA and a 30 MW battery storage agreement of an event of seller default and of early termination and as a result the project would not proceed. In the second half of 2022, PNM entered into agreements totaling 270 MW of firm power purchases for June through September 2023, and the purchase of 40 MW of firm capacity at PVNGS for all twelve months of 2023, providing PNM with a projected system reserve margin with a range of 10.3% to 6.0% for the 2023 summer peak period. PNM continues to evaluate other potential firm power agreements with various providers, as well as all potential short-term resource options to address these resource adequacy concerns. PNM is unable to predict the outcome of this matter. Grid Modernization Application On October 3, 2022, in compliance with New Mexico Grid Modernization Statute, PNM filed its Grid Modernization Application with the NMPRC. The projects included in the Grid Modernization Application improve customers’ ability to customize their use of energy and ensure that customers, including low-income customers, are a top priority and will benefit consistent with the Grid Modernization Statute. PNM’s proposal to modernize its electricity grid through infrastructure and technology improvements also increases the efficiency, reliability, resilience, and security of PNM’s electric system. PNM's application seeks approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy. PNM's application requested NMPRC approval by July 1, 2023 for PNM's grid modernization plan in addition to approval of PNM's proposed Grid Modernization Rider by September 1, 2023. The proposed Grid Modernization Rider would recover capital costs, operating expenses, and taxes associated with the investments included in the Grid Modernization Application. PNM also requested authorization to create related regulatory assets and liabilities, permitting PNM to record costs incurred for the development and implementation of PNM’s plan between the requested approval of the application on July 1, 2023, and the implementation of the Grid Modernization Rider by September 1, 2023; undepreciated investments associated with legacy meters being replaced with AMI meters; and over- or under-collection of costs through the Grid Modernization Rider. In addition, PNM requested approval of the proposed format of an Opt-Out Consent Form and methodology to determine PNM’s proposed cost-based opt-out fees, which includes a one-time fee and a monthly fee. On October 25, 2022, the hearing examiner issued a procedural schedule with a hearing to begin March 20, 2023. PNM is unable to predict the outcome of this matter. COVID-19 Regulatory Matters On June 24, 2020, the NMPRC issued an order authorizing all public utilities regulated by the NMPRC to create a regulatory asset to defer incremental costs related to COVID-19, including increases to bad debt expense incurred during the period beginning March 11, 2020 through the termination of the Governor of New Mexico’s emergency executive order. The NMPRC order requires public utilities creating regulatory assets to pursue all federal, state, or other subsidies available, to record a regulatory liability for all offsetting cost savings resulting from the COVID-19 pandemic, and allows PNM to request recovery in future ratemaking proceedings. As a result, PNM has deferred bad debt expense related to COVID-19 of $5.7 million and $6.9 million in regulatory assets on the Consolidated Balance Sheets at December 31, 2022 and 2021. Although PNM is seeking recovery for the increase in bad debt expense resulting from COVID-19 through a regulatory asset in the 2024 Rate Change, it no longer intends to seek recovery of other incremental costs related to the pandemic and therefore, reversed regulatory assets of $2.7 million previously deferred at December 31, 2020. In addition, PNM has cost savings related to COVID-19 of $0.9 million in regulatory liabilities on the Consolidated Balance Sheets at both December 31, 2022 and 2021. The Community Solar Act In June 2021, the Community Solar Act established a program that allows for the development of community solar facilities and provides customers of a qualifying utility with the option of accessing solar energy produced by a community solar facility in accordance with the Community Solar Act. The NMPRC is charged with administering the Community Solar Act program, establishing a total maximum capacity of 200 MW community solar (applicable until November 2024) facilities and allocating proportionally to the New Mexico electric investor-owned utilities and participating cooperatives. As required under the Community Solar Act, the NMPRC opened a docket on May 12, 2021 to adopt rules to establish a community solar program no later than April 1, 2022. On June 15, 2021, the NMPRC issued an order which required utilities provide a notice to all future applicants and to any likely applicants that, until the effective date of the NMPRC's rules in this area the NMPRC's existing interconnection rules and manual remain in place until amended or replaced by the NMPRC, and further, that a place in a utility's applicant queue for interconnection does not and will not provide any advantage for selection as a community solar project. PNM has provided the required notices. On October 27, 2021, the NMPRC adopted an order issuing a NOPR starting the formal process for adoption of rules pursuant to the Community Solar Act. On March 30, 2022, the NMPRC issued an order that adopted a rule on the administration of the Community Solar Act program. The rule requires utilities to file proposed community solar tariffs with the NMPRC within 60 days from the publication of the rule. A number of motions for rehearing and requests for clarification were filed between April 7 and May 2, 2022. On May 18, 2022, the NMPRC issued an order partially granting motions for rehearing, reconsideration and clarification and staying implementation pending further rulemaking. On June 16, 2022, PNM requested clarification related to the existing interconnection queue, which would not delay implementation of the Community Solar Act program. On July 12, 2022, the NMPRC provided notice of publication of its final rule in the New Mexico Register, starting the 60-day clock for utilities to file their proposed community solar tariffs, forms, and other relevant agreements. On September 14, 2022, PNM filed Community Solar tariffs. On October 12, 2022, the NMPRC issued an order to suspend PNM's and two other investor-owned utilities tariffs and required the utilities to file information Staff has identified as necessary for a complete evaluation of the tariffs but did not appoint a hearing examiner or schedule a public hearing. Another investor-owned utility has filed an appeal with the NM Supreme Court seeking review of the NMPRC’s decisions. On November 16, 2022, PNM filed its Community Solar tariff which establishes the Community Solar bill credit to be applied to an eligible retail customer of PNM who is a subscriber to a community solar facility. On December 23, 2022, PNM filed an updated Community Solar tariff under protest and filed a motion for clarification, suspension, and timely hearing on PNM’s Community Solar tariff. On January 18, 2023, the NMPRC suspended PNM’s Community Solar tariff. PNM cannot predict the outcome of the pending matters. Formula Transmission Rates PNM charges wholesale electric transmission service customers using a formula rate mechanism pursuant to which wholesale transmission service rates are calculated annually in accordance with an approved formula. The formula reflects a ROE of 10% and includes updating cost of service components, including investment in plant and operating expenses, based on information contained in PNM’s annual financial report filed with FERC, as well as including projected large transmission capital projects to be placed into service in the following year. The projections included are subject to true-up in the following year formula rate. Certain items, including changes to return on equity and depreciation rates, require a separate filing to be made with FERC before being included in the formula rate. On June 1, 2022, PNM submitted an informational filing regarding the annual update to FERC. The new rates are effective June 1, 2022 through May 31, 2023. On April 21, 2022, FERC instituted a show cause proceeding under Section 206 of the Federal Power Act to investigate the justness and reasonableness of PNM's transmission formula rate protocols. The order directs PNM, within 60 days to revise its formula rate protocols to provide interested parties the information necessary to understand and evaluate the implementation of the formula rate for both the correctness of inputs and calculations, and the reasonableness and prudence of the costs to be recovered in the formula rate or show cause why it should not be required to do so. On June 21, 2022, PNM submitted a compliance filing pursuant to FERC's April 21, 2022 order, which proposes modifications to its formula rate protocols to enhance and provide greater transparency to its customers as well as fix other ministerial issues. On August 12, 2022, FERC Staff issued a deficiency letter to PNM's June 21, 2022 compliance filing seeking minor adjustments and additional clarity. On September 9, 2022, PNM filed a response to FERC's deficiency letter making adjustments to its June 21, 2022 proposal and providing additional clarity. On September 23, 2022, the DOE filed comments to PNM's deficiency letter response. On October 13, 2022, PNM responded to comments raised by the DOE. On November 8, 2022, FERC issued an order accepting PNM’s proposed tariff revisions, effective June 22, 2022, as requested, thereby terminating the April 21, 2022 proceeding under section 206 of the Federal Power Act. This matter is now concluded. FERC Compliance PNM conducted a comprehensive internal review of its filings with FERC regarding the potential timely filing of certain agreements that contained deviations from PNM’s standard form of service agreement in its OATT and assessing any applicable FERC waivers or refund requirements. Upon completion of the comprehensive review, PNM identified service agreements containing provisions that do not conform to the standard form of agreement on file with FERC. On March 18 and March 21, 2022, PNM filed applications with FERC requesting acceptance of certain agreements as well as rejection of other service agreements and further requesting that FERC not assess time-value refunds on the accepted agreements. On May 17, 2022, FERC issued two delegated letter orders accepting the service agreements and requiring PNM to pay the time-value refunds on the revenues it received on unaffiliated, late-filed, service agreements which contained language alleged to be non-conforming. On June 16, 2022, PNM filed two requests for rehearing on the two proceedings. In the first proceeding, PNM argues that FERC has failed to address PNM's request for waiver of unlawful time-value refunds requiring PNM to pay its customers approximately $7 million, for a ministerial error. In this proceeding, PNM waived the requirement for a customer to reimburse PNM for line losses and limited the rollover rights of another customer, which was not specifically addressed under the OATT. In the second proceeding, PNM argues that FERC's assessment of approximately $28 million in unlawful, time-value refunds is in error and FERC failed to address the substantive arguments regarding why the agreements do not materially deviate from the OATT and as such were not required to be filed with FERC. In this proceeding, PNM had non-material deviations to certain provisions of the service agreements which were consistent with the OATT. Also on June 16, 2022, FERC granted PNM's request for a 75-day extension for PNM to issue refunds and an additional 30 days thereafter to prepare and file refund reports. On July 18, 2022, FERC issued two notices of denial of rehearing by operations of law and providing for further consideration. On July 29, 2022, PNM filed two separate petitions for reviews of the FERC's May 17, 2022 delegated letter orders, with the DC Court of Appeals. On August 23, 2022, FERC granted PNM's request for a 45-day extension for PNM to issue refunds and an additional 30 days thereafter to prepare and file refund reports. On August 30, 2022, FERC filed with the DC Court of Appeals to consolidate the proceedings and hold the petitions for review in abeyance until the earlier of (i) the issuance of the rehearing orders or (ii) October 30, 2022. PNM filed another motion, which was granted by FERC, for extension to issue time value refunds to December 1, 2022, with reports due on January 3, 2023. On November 21, 2022, FERC issued an order on rehearing that required PNM to pay its customers approximately $8.1 million in time-value refunds. On November 28, 2022, PNM filed an unopposed motion for voluntary dismissal with the United States Court of Appeals for the District of Columbia of its petitions for review, which was granted on December 22, 2022. In the fourth quarter of 2022, PNM made payments totaling $8.1 million to customers which were recorded as a reduction to electric operating revenues on the Consolidated Statements of Earnings. This matter is now concluded. FERC Order 864 In November 2019, FERC issued Order No. 864, which required public utility transmission providers with transmission formula rates to revise those rates to account for changes resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). PNM had already made revisions to its formula rate to account for Tax Act changes, and, as a result of the Order, PNM proposed additional changes to its formula rate to implement the remaining requirements of the Order. In July 2022, FERC issued an order finding that PNM had predominantly complied with the requirements, but set aside certain matters for settlement and hearing procedures. PNM is unable to determine the outcome of this matter. TNMP Energy Efficiency TNMP recovers the costs of its energy efficiency programs through an energy efficiency cost recovery factor (“EECRF”), which includes projected program costs, under or over collected costs from prior years, rate case expenses, and performance bonuses (if the programs exceed mandated savings goals). The following sets forth TNMP’s EECRF increases:
On May 27, 2022, TNMP filed its request to adjust the EECRF to reflect changes in costs for 2023. The total amount requested was $7.4 million, which includes a performance bonus of $1.9 million based on TNMP's energy efficiency achievements in the 2021 plan year. On August 24, 2022, a unanimous stipulation and settlement was filed with the PUCT to recover $7.3 million in 2023, including the performance bonus of $1.9 million. On October 6, 2022, the PUCT approved the unanimous stipulation. Transmission Cost of Service Rates TNMP can update its TCOS rates twice per year to reflect changes in its invested capital although updates are not allowed while a general rate case is in process. Updated rates reflect the addition and retirement of transmission facilities, including appropriate depreciation, federal income tax and other associated taxes, and the approved rate of return on such facilities. The following sets forth TNMP’s recent interim transmission cost rate increases:
On January 23, 2023, TNMP filed an application to further update its transmission rates, which would increase revenues by $19.4 million annually, based on an increase in rate base of $150.5 million. The application is pending before the PUCT. Periodic Distribution Rate Adjustment PUCT rules permit interim rate adjustments to reflect changes in investments in distribution assets. Distribution utilities may file for a periodic rate adjustment between April 1 and April 8 of each year as long as the electric utility is not earning more than its authorized rate of return using weather-normalized data. Utilities are limited to four periodic interim distribution rate adjustments between general rate cases. On April 5, 2021, TNMP filed its 2021 DCOS that requested an increase in TNMP annual distribution revenue requirement of $14.0 million based on an increase in rate base of $104.5 million. On July 1, 2021, TNMP reached a unanimous settlement agreement with parties that would authorize TNMP to collect an increase in annual distribution revenues of $13.5 million beginning in September 2021, which was approved by the PUCT. On April 5, 2022, TNMP filed its 2022 DCOS that requested an increase in TNMP annual distribution revenue requirement of $9.7 million based on an increase in rate base of $100.7 million. TNMP reached a unanimous settlement agreement in principle with parties that would authorize TNMP to collect an increase in annual distribution revenues of $6.8 million. The reduction from the filed increase reflects removal of AMS technological upgrades from the current year's DCOS revenue requirement, but allows for deferral of operating costs to a regulatory asset, along with carrying charges. The regulatory asset and AMS technological upgrades can be included in future DCOS or general rate filings. On July 18, 2022, the ALJ issued an order approving interim rates based on an increase in the annual distribution revenue requirement of $6.8 million, effective September 1, 2022. On November 3, 2022, the PUCT approved the unanimous settlement. AMS Reconciliation On July 14, 2021, TNMP filed a request with the PUCT to consider and approve its final reconciliation of the costs spent on the deployment of AMS from April 1, 2018 through December 31, 2018 of $9.0 million and approve appropriate carrying charges until full collection. On September 13, 2021, the PUCT Staff filed a recommendation for approval of TNMP's application for substantially all costs from April 1, 2018 through December 31, 2018. On February 10, 2022, the PUCT approved substantially all costs included in TNMP's AMS reconciliation application. TNMP will include recovery of these costs and associated carrying charges in a future general rate proceeding.
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Federal Income Tax Reform In 2017, comprehensive changes in U.S. federal income taxes were enacted through legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made many significant modifications to the tax laws, including reducing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Tax Act also eliminated federal bonus depreciation for utilities, limited interest deductibility for non-utility businesses and limited the deductibility of officer compensation. During 2020, the IRS issued final regulations related to certain officer compensation and, in January 2021, issued final regulations on interest deductibility that provide a 10% “de minimis” exception that allows entities with predominantly regulated activities to fully deduct interest expenses. In addition, in 2020, the IRS finalized regulations interpreting Tax Act amendments to depreciation provisions of the Internal Revenue Code (“IRC”) that allowed the Company to claim a bonus depreciation deduction on certain construction projects placed in service subsequent to the third quarter of 2017. As a result of the change in the federal income tax rate, the Company re-measured and adjusted its deferred tax assets and liabilities as of December 31, 2017. The portion of that adjustment not related to PNM’s and TNMP’s regulated activities was recorded as a reduction in net deferred tax assets and an increase in income tax expense. The portion related to PNM’s and TNMP’s regulated activities was recorded as a reduction in net deferred tax liabilities and an increase in regulatory liabilities. Beginning February 2018, PNM’s NM 2016 Rate Case reflected the reduction in the federal corporate income tax rate, including amortization of excess deferred federal and state income taxes. In accordance with the order in that case, PNM is returning the protected portion of excess deferred federal income taxes to customers over the average remaining life of plant in service as of December 31, 2017 and the unprotected portion of excess deferred federal income taxes to customers over a period of approximately twenty-three years. In the 2024 Rate Change, PNM has proposed returning the unamortized unprotected portion of excess deferred federal income taxes to customers over a five-year period, beginning when rates from the case go into effect. Excess deferred state income taxes were returned to customers over a three-year period, which concluded in the first quarter of 2021. The approved settlement in the TNMP 2018 Rate Case includes a reduction in customer rates to reflect the impacts of the Tax Act beginning on January 1, 2019. PNMR, PNM, and TNMP amortized federal and state excess deferred income taxes of $23.6 million, $14.4 million, and $9.2 million in 2022. PNMR PNMR’s income taxes consist of the following components:
PNMR’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
The components of PNMR’s net accumulated deferred income tax liability were:
The following table reconciles the change in PNMR’s net accumulated deferred income tax liability to the deferred income tax included in the Consolidated Statement of Earnings:
PNM PNM’s income taxes (benefit) consist of the following components:
PNM’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
The components of PNM’s net accumulated deferred income tax liability were:
The following table reconciles the change in PNM’s net accumulated deferred income tax liability to the deferred income tax included in the Consolidated Statement of Earnings:
TNMP TNMP’s income taxes consist of the following components:
TNMP’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the periods shown. The differences are attributable to the following factors:
The components of TNMP’s net accumulated deferred income tax liability were:
The following table reconciles the change in TNMP’s net accumulated deferred income tax liability to the deferred income tax (benefit) included in the Consolidated Statement of Earnings:
Other Disclosures The Company is required to recognize only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority. A reconciliation of unrecognized tax benefits is as follows:
Included in the balance of unrecognized tax benefits at December 31, 2022 are $13.6 million, $10.6 million, and $0.2 million that, if recognized, would affect the effective tax rate for PNMR, PNM, and TNMP. The Company does not anticipate that any unrecognized tax expenses or unrecognized tax benefits will be reduced or settled in 2023. PNMR, PNM, and TNMP had no estimated interest income or expense related to income taxes for the years ended December 31, 2022, 2021, and 2020. There was no accumulated accrued interest receivable or payable related to income taxes as of December 31, 2022 and 2021. The Company files a federal consolidated and several consolidated and separate state income tax returns. The tax years prior to 2019 are closed to examination by either federal or state taxing authorities other than Arizona. The tax years prior to 2018 are closed to examination by Arizona taxing authorities. Other tax years are open to examination by federal and state taxing authorities and net operating loss carryforwards are open to examination for the years in which the carryforwards are utilized. At December 31, 2022, the Company has $382.0 million of federal net operating loss carryforwards that expire beginning in 2034 and $123.8 million of federal tax credit carryforwards that expire beginning in 2023. State net operating losses expire beginning in 2035 and vary from federal due to differences between state and federal tax law. The proposed Merger may impact the Company’s ability to utilize its federal net operating loss and tax credit carryforwards. In 2008, fifty percent bonus tax depreciation was enacted as a temporary two-year stimulus measure as part of the Economic Stimulus Act of 2008. Bonus tax depreciation in various forms has been extended since that time, including by the Protecting Americans from Tax Hikes Act of 2015. The 2015 act extended and phased-out bonus tax depreciation through 2019. As discussed above, the Tax Act eliminated bonus depreciation for utilities effective September 28, 2017. However, in 2020 the IRS issued regulations interpreting Tax Act amendments to depreciation provisions of the IRC which allowed the Company to claim a bonus depreciation deduction on certain construction projects placed in service after the third quarter of 2017. As a result of the net operating loss carryforwards for income tax purposes created by bonus depreciation, certain tax carryforwards were not expected to be utilized before their expiration. In addition, as a result of Tax Act changes to the deductibility of officer compensation, certain deferred tax benefits related to compensation are not expected to be realized. The Company has impaired the deferred tax assets for tax carryforwards which are not expected to be utilized and for compensation that is not expected to be deductible. The Company earns investment tax credits for construction or purchase of eligible property. The Company uses the deferral method of accounting for these investment tax credits. Impairments of tax attributes after reflecting the expiration of carryforwards under applicable tax laws, net of federal tax benefit, for 2020 through 2022 are as follows:
The tax effect of compensation that is not expected to be deductible and impairments of unexpired tax credits are reflected as a valuation allowance against deferred tax assets. The reserve balances, after reflecting expiration of carryforwards under applicable tax laws, at December 31, 2022 and 2021 are as follows:
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Goodwill |
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Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The excess purchase price over the fair value of the assets acquired and the liabilities assumed by PNMR for its 2005 acquisition of TNP was recorded as goodwill and was pushed down to the businesses acquired. In 2007, the TNMP assets that were included in its New Mexico operations, including goodwill, were transferred to PNM. PNMR’s reporting units that currently have goodwill are PNM and TNMP. The Company evaluates its goodwill for impairment annually at the reporting unit level or more frequently if circumstances indicate that the goodwill may be impaired. Application of the impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, and determination of the fair value of each reporting unit. In certain circumstances an entity may perform a qualitative analysis to conclude that the goodwill of a reporting unit is not impaired. Under a qualitative assessment an entity considers macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events affecting a reporting unit, as well as whether a sustained decrease (both absolute and relative to its peers) in share price has occurred. An entity considers the extent to which each of the adverse events and circumstances identified could affect the comparison of a reporting unit’s fair value with its carrying amount. An entity places more weight on the events and circumstances that most affect a reporting unit’s fair value or the carrying amount of its net assets. An entity also considers positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity evaluates, on the basis of the weight of evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative analysis is not required if, after assessing events and circumstances, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount. In other circumstances, an entity may perform a quantitative analysis to reach the conclusion regarding impairment with respect to a reporting unit. An entity may choose to perform a quantitative analysis without performing a qualitative analysis and may perform a qualitative analysis for certain reporting units, but a quantitative analysis for others. The first step of the quantitative impairment test requires an entity to compare the fair value of the reporting unit with its carrying value, including goodwill. If as a result of this analysis, the entity concludes there is an indication of impairment in a reporting unit having goodwill, the entity is required to perform the second step of the impairment analysis, determining the amount of goodwill impairment to be recorded. The amount is calculated by comparing the implied fair value of the goodwill to its carrying amount. This exercise would require the entity to allocate the fair value determined in step one to the individual assets and liabilities of the reporting unit. Any remaining fair value would be the implied fair value of goodwill on the testing date. To the extent the recorded amount of goodwill of a reporting unit exceeds the implied fair value determined in step two, an impairment loss would be reflected in results of operations. PNMR periodically updates its quantitative analysis for both PNM and TNMP. The use of a quantitative approach in a given period is not necessarily an indication that a potential impairment has been identified under a qualitative approach. When PNMR performs a quantitative analysis for PNM or TNMP, a discounted cash flow methodology is primarily used to estimate the fair value of the reporting unit. This analysis requires significant judgments, including estimations of future cash flows, which is dependent on internal forecasts, estimations of long-term growth rates for the business, and determination of appropriate weighted average cost of capital for the reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value and the conclusion of impairment. When PNMR performs a qualitative or quantitative analysis for PNM or TNMP, PNMR considers market and macroeconomic factors including changes in growth rates, changes in the WACC, and changes in discount rates. PNMR also evaluates its stock price relative to historical performance, industry peers, and to major market indices, including an evaluation of PNMR’s market capitalization relative to the carrying value of its reporting units. For its annual evaluations performed as of April 1, 2020, PNMR performed a qualitative analysis for the PNM reporting unit and a quantitative analysis for the TNMP reporting unit. In addition to the typical considerations discussed above, the qualitative analysis considered changes in PNM’s expectations of future financial performance since the April 1, 2018 quantitative analysis as well as the 2019 qualitative analysis. The April 1, 2018 quantitative evaluations indicated the fair value of the PNM reporting unit, which has goodwill of $51.6 million, exceeded its carrying value by approximately 19%. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2020 carrying value of PNM exceeded its fair value. Using the methods and considerations discussed above, the 2020 quantitative analysis indicated the fair value of the TNMP reporting unit, which has goodwill of $226.7 million, exceeded its carrying value by approximately 38%. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2020 carrying value of TNMP exceeded its fair value. For its annual evaluations performed as of April 1, 2021, PNMR performed a qualitative analysis for both the PNM and TNMP reporting units. In addition to the typical considerations discussed above, the qualitative analysis considered changes in the Company's expectations of future financial performance since the April 1, 2018 quantitative analysis performed for PNM and qualitative analyses through April 1, 2020, as well as the quantitative analysis performed for TNMP at April 1, 2020. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2021 carrying values of PNM and TNMP exceeded their fair value. For its annual evaluations performed as of April 1, 2022, PNMR performed a qualitative analysis for both the PNM and TNMP reporting units. In addition to the typical considerations discussed above, the qualitative analysis considered changes in the Company’s expectations of future financial performance since the April 1, 2018 quantitative analysis and the previous qualitative analyses through April 1, 2021 performed for PNM, as well as the April 1, 2020 quantitative analysis and the previous qualitative analyses performed for TNMP. This analysis considered Company specific events such as the Merger, potential impacts of legal and regulatory matters discussed in Notes 16 and 17, including potential outcomes in PNM’s 2024 Rate Change, PNM’s San Juan Abandonment Application, PNM’s Four Corners Abandonment Application, PNM’s PVNGS Leased Interest Abandonment Application and other potential impacts of changes in PNM’s resource needs based on PNM’s 2020 IRP. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2022 carrying values of PNM and TNMP exceeded their fair value. Since the April 1, 2022 annual evaluation, there have been no events or indications that the fair values of the reporting units with recorded goodwill have decreased below their carrying values.
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions PNMR, PNM, TNMP, and NMRD are considered related parties, as is PNMR Services Company, a wholly-owned subsidiary of PNMR that provides corporate services to PNMR and its subsidiaries in accordance with shared services agreements. These services are billed at cost on a monthly basis to the business units. In addition, PNMR provides construction and operations and maintenance services to NMRD, a 50% owned subsidiary of PNMR Development (Note 21), and PNM purchases renewable energy from certain NMRD-owned facilities at a fixed price per MWh of energy produced. PNM also provides interconnection services to PNMR Development and NMRD. PNMR files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between PNMR and each of its affiliated companies. These agreements provide that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to PNMR. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from PNMR to the extent that PNMR is able to utilize those benefits. See Note 7 for information on intercompany borrowing arrangements. The table below summarizes the nature and amount of related party transactions of PNMR, PNM and TNMP:
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Equity Method Investment |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | Equity Method Investment In September 2017, PNMR Development and AEP OnSite Partners created NMRD to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. PNMR Development and AEP OnSite Partners each have a 50% ownership interest in NMRD. At December 31, 2022, NMRD’s renewable energy capacity in operation is 135.1 MW, which includes 130 MW of solar-PV facilities to supply energy to the Meta data center located within PNM’s service territory, 1.9 MW to supply energy to Columbus Electric Cooperative located in southwest New Mexico, 2.0 MW to supply energy to the Central New Mexico Electric Cooperative, and 1.2 MW of solar-PV facilities to supply energy to the City of Rio Rancho, New Mexico. PNMR accounts for its investment in NMRD using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations. PNMR records as income its percentage share of earnings or loss of NMRD and carries its investment at cost, adjusted for its share of undistributed earnings or losses. During 2022, 2021, and 2020 PNMR Development and AEP OnSite Partners each made cash contributions of zero, zero, and $23.3 million to NMRD for its construction activities. In February 2021, NMRD paid both PNMR Development and AEP OnSite Partners a dividend of $3.0 million. PNMR Development’s cumulative equity in earnings of NMRD as of March 31, 2021 was $2.4 million and is presented as cash flows from operating activities on the Consolidated Statement of Cash Flows for the twelve months ending December 31, 2021. The portion of the dividend in excess of PNMR Development’s cumulative equity earnings of NMRD amounting to $0.6 million is presented as cash flows from investing activities. PNMR presents its share of net earnings from NMRD in other income on the Consolidated Statements of Earnings. Summarized financial information for NMRD is as follows:
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Merger |
12 Months Ended |
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Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Merger | Merger On October 20, 2020, PNMR, Avangrid, and Merger Sub, entered into the Merger Agreement pursuant to which Merger Sub will merge with and into PNMR, with PNMR surviving the Merger as a wholly-owned subsidiary of Avangrid. Pursuant to the Merger Agreement, each issued and outstanding share of PNMR common stock at the Effective Time will be converted into the right to receive $50.30 in cash. The proposed Merger has been unanimously approved by the Boards of Directors of PNMR, Avangrid and Merger Sub and approved by PNMR shareholders at the Special Meeting of Shareholders held on February 12, 2021. The Merger Agreement provided that it may be terminated by each of PNMR and Avangrid under certain circumstances, including if the Effective Time shall not have occurred by the January 20, 2022 End Date; however, either PNMR or Avangrid could extend the End Date to April 20, 2022 if all conditions to closing have been satisfied other than the obtaining of all required regulatory approvals. As discussed below, on December 8, 2021, the NMPRC issued an order rejecting the stipulation agreement relating to the Merger. In light of the NMPRC ruling, on January 3, 2022, PNMR, Avangrid and Merger Sub entered into an Amendment to the Merger Agreement pursuant to which PNMR and Avangrid agreed to extend the End Date to April 20, 2023. The Merger is subject to certain regulatory approvals, including from the NMPRC. The Joint Applicants to the NMPRC application and a number of intervening parties had entered into an amended stipulation and agreement in the Joint Application for approval of Merger pending before the NMPRC. An evidentiary hearing was held in August 2021. On November 1, 2021, a Certification of Stipulation was issued by the hearing examiner, which recommended against approval of the amended stipulation. On December 8, 2021, the NMPRC issued an order adopting the Certification of Stipulation, rejecting the amended stipulation reached by the parties. On January 3, 2022, PNMR and Avangrid filed a notice of appeal with the NM Supreme Court. On February 2, 2022, PNMR and Avangrid filed a statement of issues outlining the argument for appeal. On April 7, 2022, PNMR and Avangrid filed their Brief in Chief with the NM Supreme Court. Answer briefs from the NMPRC were filed on June 14, 2022, and response briefs were filed on August 5, 2022. With respect to other regulatory proceedings related to the Merger, in 2021 PNMR received clearances for the Merger from the FTC under the HSR Act, CFIUS, the FCC, FERC, the PUCT, and the NRC. As a result of the delay in closing of the Merger due to the need to obtain NMPRC approval, PNMR and Avangrid were required to make a new filing under the HSR Act and request extensions of approvals previously received from the FCC and NRC. PNM has received approval from the NRC through May 25, 2023, and the FCC through September 5, 2023. On February 8, 2023, PNM submitted an extension with the FTC under the HSR Act and on February 10, 2023, a request for extension was submitted to the NRC. No additional approvals are required from CFIUS, FERC or the PUCT. Consummation of the Merger remains subject to the satisfaction or waiver of certain customary closing conditions, including, without limitation, the absence of any material adverse effect on PNMR, the receipt of required regulatory approval from the NMPRC, and the agreements relating to the divestiture of Four Corners being in full force and effect and all applicable regulatory filings associated therewith being made. The agreement relating to the divestiture of Four Corners has been entered into and is in full effect and related filings have been made with the NMPRC. The Merger Agreement provides for certain customary termination rights. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain specified circumstances (including if Avangrid terminates the Merger Agreement due to a change in recommendation of the Board or if PNMR terminates the Merger Agreement to accept a superior proposal (as defined in the Merger Agreement) and in either case prior to PNMR’s shareholder having approved the Merger), PNMR will be required to pay Avangrid a termination fee of $130.0 million. In addition, the Merger Agreement provides that (i) if the Merger Agreement is terminated by either party due to a failure of a regulatory closing condition and such failure is the result of Avangrid’s breach of its regulatory covenants or (ii) Avangrid fails to effect the closing when all closing conditions have been satisfied and it is otherwise obligated to do so under the Merger Agreement, then, in either such case, upon termination of the Merger Agreement, Avangrid will be required to pay PNMR a termination fee of $184.0 million as the sole and exclusive remedy. Upon the termination of the Merger Agreement under certain specified circumstances involving a breach of the Merger Agreement, either PNMR or Avangrid will be required to reimburse the other party’s reasonable and documented out-of-pocket fees and expenses up to $10.0 million (which amount will be credited toward, and offset against, the payment of any applicable termination fee).
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Schedule I - Condensed Financial Information of Parent Company |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule I - Condensed Financial Information of Parent Company | SCHEDULE I PNM RESOURCES, INC. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF EARNINGS
SCHEDULE I PNM RESOURCES, INC. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF CASH FLOWS
SCHEDULE I PNM RESOURCES, INC. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEETS
See Notes 7, 8, 11, and 16 for information regarding commitments, contingencies, and maturities of long-term debt.
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Schedule II - Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II PNM RESOURCES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. VALUATION AND QUALIFYING ACCOUNTS
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Summary of the Business and Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Financial Statement Preparation and Presentation | Financial Statement Preparation and Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated. The Notes to Consolidated Financial Statements include disclosures for PNMR, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to PNMR, PNM, and TNMP. Discussions regarding only PNMR, PNM, or TNMP are so indicated. Certain amounts in the 2021 and 2020 Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2022 financial statement presentation. GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events accordingly.
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Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia (Note 10). PNM owns undivided interests in jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants. PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include intercompany loans, interest and income tax sharing payments, as well as equity transactions, and interconnection billings. All intercompany transactions and balances have been eliminated.
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Accounting for the Effects of Certain Types of Regulation | Accounting for the Effects of Certain Types of Regulation The Company maintains its accounting records in accordance with the uniform system of accounts prescribed by FERC and adopted by the NMPRC and PUCT. Certain of the Company’s operations are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to the regulated operations. Regulators may assign costs to accounting periods that differ from accounting methods applied by non-regulated utilities. When it is probable that regulators will permit recovery of costs through future rates, costs are deferred as regulatory assets that otherwise would be expensed. Likewise, regulatory liabilities are recognized when it is probable that regulators will require refunds through future rates or when revenue is collected for expenditures that have not yet been incurred. GAAP also provides for the recognition of revenue and regulatory assets and liabilities associated with “alternative revenue programs” authorized by regulators. Such programs allow the utility to adjust future rates in response to past activities or completed events, if certain criteria are met. Regulatory assets and liabilities are amortized into earnings over the authorized recovery period. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Information on regulatory assets and regulatory liabilities is contained in Note 13. In some circumstances, regulators allow a requested increase in rates to be implemented, subject to refund, before the regulatory process has been completed and a decision rendered by the regulator. When this occurs, the Company assesses the possible outcomes of the rate proceeding. The Company records a provision for refund to the extent the amounts being collected, subject to refund, exceed the amount the Company determines is probable of ultimately being allowed by the regulator.
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Cash and Restricted Cash | Cash and Restricted Cash Cash deposits received and held for a period of time that are restricted to a specific purpose, under the terms of their effective agreements, are considered restricted cash. Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. At December 31, 2022 and 2021 there was no restricted cash for PNMR, PNM, and TNMP.
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Utility Plant | Utility Plant Utility plant is stated at original cost and includes capitalized payroll-related costs such as taxes, pension, other fringe benefits, administrative costs, and AFUDC, where authorized by rate regulation, or capitalized interest. Repairs, including major maintenance activities, and minor replacements of property are expensed when incurred, except as required by regulators for ratemaking purposes. Major replacements are charged to utility plant. Gains, losses, and costs to remove resulting from retirements or other dispositions of regulated property in the normal course of business are credited or charged to accumulated depreciation. PNM and TNMP may receive reimbursements, referred to as CIAC, from customers to pay for all or part of certain construction projects to the extent the project does not benefit regulated customers in general. PNM and TNMP account for these reimbursements as offsets to utility plant additions based on the requirements of the NMPRC, FERC, and PUCT. Due to the PUCT’s regulatory treatment of CIAC reimbursements, TNMP also receives a financing component that is recognized as other income on the Consolidated Statements of Earnings. Under the NMPRC regulatory treatment, PNM typically does not receive a financing component.
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Depreciation and Amortization | Depreciation and AmortizationPNM’s provision for depreciation and amortization of utility plant, other than nuclear fuel, is based upon straight-line rates approved by the NMPRC and FERC. Amortization of nuclear fuel is based on units-of-production. TNMP’s provision for depreciation and amortization of utility plant is based upon straight-line rates approved by the PUCT. Depreciation and amortization of non-utility property, including right-of-use assets for finance leases as discussed in Note 8, is computed based on the straight-line method. The provision for depreciation of certain equipment is allocated between operating expenses and construction projects based on the use of the equipment. |
Allowance for Funds Used During Construction | Allowance for Funds Used During Construction As provided by the FERC uniform systems of accounts, AFUDC is charged to regulated utility plant for construction projects. This allowance is designed to enable a utility to capitalize financing costs during periods of construction of property subject to rate regulation. It represents the cost of borrowed funds (allowance for borrowed funds used during construction or “debt AFUDC”) and a return on other funds (allowance for equity funds used during construction or “equity AFUDC”). The debt AFUDC is recorded in interest charges and the equity AFUDC is recorded in other income on the Consolidated Statements of Earnings.
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Materials, Supplies, and Fuel Stock | Materials, Supplies, and Fuel StockMaterials and supplies relate to transmission, distribution, and generating assets. Materials and supplies are charged to inventory when purchased and are expensed or capitalized as appropriate when issued. Materials and supplies are valued using an average costing method. Coal is valued using a rolling weighted average costing method that is updated based on the current period cost per ton. Average cost is equal to net realizable value under the ratemaking process. |
Investments | Investments PNM holds investment securities in the NDT for the purpose of funding its share of the decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines that served SJGS and continue to serve Four Corners (Note 16). Investments (both equity and available-for-sale debt securities) are measured at fair value on a quarterly basis with changes in fair value for equity securities recognized in earnings for that period. Since third party investment managers have sole discretion over the purchase and sale of the securities (under general guidelines and targets provided by management), PNM records an impairment, as a realized loss, for any available-for-sale debt security that has a fair value which is less than cost at the end of each quarter. For the years ended December 31, 2022, 2021 and 2020, PNM recorded impairment losses on the available-for-sale debt securities of $25.8 million, $(0.7) million and $3.2 million. No gains or losses are deferred as regulatory assets or liabilities. See Notes 3 and 9. All investments are held in PNM’s name and are in the custody of major financial institutions. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in other income and deductions. As discussed above, PNM immediately records an impairment loss for any available-for-sale debt security that has a fair value that is less than its carrying value. As a result, the Company has no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings.
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Equity Method Investment | Equity Method InvestmentPNMR accounts for its investment in NMRD using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations. PNMR records as income its percentage share of earnings or loss of NMRD and carries its investment at cost, adjusted for its share of undistributed earnings or losses. |
Goodwill | Goodwill The Company does not amortize goodwill. Goodwill is evaluated for impairment annually, or more frequently if events and circumstances indicate that the goodwill might be impaired. |
Asset Impairment | Asset Impairment Tangible long-lived assets and right-of-use assets associated with leases are evaluated in relation to the estimated future undiscounted cash flows to assess recoverability when events and circumstances indicate that the assets might be impaired.
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Amortization of Debt Acquisition Costs | Amortization of Debt Acquisition Costs Discount, premium, and expense related to the issuance of long-term debt are amortized over the lives of the respective issues. Gains and losses incurred upon the early retirement of long-term debt are recognized in other income or other deductions, except for amounts recoverable through NMPRC, FERC, or PUCT regulation, which are recorded as regulatory assets or liabilities and amortized over the lives of the respective issues. Unamortized premium, discount, and expense related to long-term debt are reflected as part of the related liability on the Consolidated Balance Sheets.
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Derivatives | Derivatives The Company records derivative instruments, including energy contracts, on the balance sheet as either an asset or liability measured at their fair value. Changes in the derivatives’ fair value are recognized in earnings unless specific hedge accounting criteria are met. PNM also records certain commodity derivative transactions recoverable through NMPRC regulation as regulatory assets or liabilities. See Note 9. The Company treats all forward commodity purchases and sales contracts subject to unplanned netting or “book-out” by the transmission provider as derivative instruments subject to mark-to-market accounting. GAAP provides guidance on whether realized gains and losses on derivative contracts not held for trading purposes should be reported on a net or gross basis and concludes such classification is a matter of judgment that depends on the relevant facts and circumstances.Accounting for Derivatives Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2022, 2021, and 2020, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flow hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC. Changes in the fair value of instruments covered by its FPPAC are recorded as regulatory assets and liabilities. PNM has no trading transactions.
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Decommissioning and Reclamation Costs | Decommissioning and Reclamation Costs PNM is only required to recognize and measure decommissioning liabilities for tangible long-lived assets for which a legal obligation exists. Nuclear decommissioning costs and related accruals are based on periodic site-specific estimates of the costs for removing all radioactive and other structures at PVNGS and are dependent upon numerous assumptions, including estimates of future decommissioning costs at current price levels, inflation rates, and discount rates. PNM’s accruals for PVNGS Units 1, 2, and 3, including portions held under leases, have been made based on such estimates, the guidelines of the NRC, and the PVNGS license periods. PNM records its share of the SJGS decommissioning obligation as an ARO on its Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. See Note 16. In connection with both the SJGS and Four Corners coal supply agreements, the owners are required to reimburse the mining companies for the cost of contemporaneous reclamation, as well as the costs for final reclamation of the coal mines. The reclamation costs are based on periodic site-specific studies that estimate the costs to be incurred in the future and are dependent upon numerous assumptions, including estimates of future reclamation costs at current price levels, inflation rates, and discount rates. PNM considers the contemporaneous reclamation costs part of the cost of its delivered coal costs.
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Environmental Costs | Environmental Costs The normal operations of the Company involve activities and substances that expose the Company to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and may be imposed without regard to fault, or may be imposed for past acts, even though the past acts may have been lawful at the time they occurred. The Company records its environmental liabilities when site assessments or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. The Company reviews its sites and measures the liability by assessing a range of reasonably likely costs for each identified site using currently available information and the probable level of involvement and financial condition of other potentially responsible parties. These estimates are based on assumptions regarding the costs for site investigations, remediation, operations and maintenance, monitoring, and site closure. The ultimate cost to clean up the Company’s identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process.
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Income Taxes | Income Taxes Income taxes are recognized using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. All deferred taxes are reflected as non-current on the Consolidated Balance Sheets. Current NMPRC, FERC, and PUCT approved rates include the tax effects of the majority of these differences. Rate-regulated enterprises are required to record deferred income taxes for temporary differences accorded flow-through treatment at the direction of a regulatory commission. The resulting deferred tax assets and liabilities are recorded based on the expected cash flow to be reflected in future rates. Because the NMPRC, FERC, and the PUCT have consistently permitted the recovery of tax effects previously flowed-through earnings, the Company has established regulatory assets and liabilities offsetting such deferred tax assets and liabilities. The Company recognizes only the impact of tax positions that, based on their merits, are more likely than not to be sustained upon an IRS audit. The Company defers investment tax credits and amortizes them over the estimated useful lives of the assets. See Note 18 for additional information, including a discussion of the impacts of the Tax Act. The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before taxes. Certain unusual or infrequently occurring items, as well as adjustments due to enactment of new tax laws, have been excluded from the estimated annual effective tax rate calculation.
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New Accounting Pronouncements | New Accounting Pronouncements Information concerning a recently issued accounting pronouncement that has not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting this standard by its required effective date. Accounting Standards Update 2022-03 - Fair Value Measurement (Topic 820): Fair Value Measurements of Equity Securities Subject to Contractual Sale Restrictions In June 2022, the FASB issued ASU 2022-03 clarifying that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the security and, therefore, is not considered in measuring fair value. The amendment also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. Disclosure requirements from the amendment include disclosure of the fair value of equity securities subject to contractual sale restrictions that are reflected in the balance sheet; the nature and remaining duration of the restriction(s); and the circumstances that could cause a lapse in the restriction(s). ASU 2022-03 is effective for the Company beginning January 1, 2024 with early adoption for both interim and annual periods being permitted. ASU 2022-03 is to be applied prospectively with any adjustments recognized in earnings and disclosed on the date of adoption.
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Segment Information | The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided. PNM PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, as well as providing transmission services to third parties. The sale of electricity includes the asset optimization of PNM’s jurisdictional capacity as well as the capacity excluded from retail rates through 2022. FERC has jurisdiction over wholesale power and transmission rates. TNMP TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities. Corporate and Other The Corporate and Other segment includes PNMR holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other. Eliminations of intercompany transactions are reflected in the Corporate and Other segment.
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Revenue Recognition | Retail electric operating revenues are recorded in the period of energy delivery, which includes estimated amounts for service rendered but unbilled at the end of each accounting period. The determination of the energy sales billed to individual retail customers is based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading and the corresponding unbilled revenue are estimated. Unbilled electric revenue is estimated based on daily generation volumes, estimated customer usage by class, line losses, historical trends and experience, applicable customer rates or by using AMS data where available. Amounts billed are generally due within the next month. The Company does not incur incremental costs to obtain contracts for its energy services. PNM’s wholesale electricity sales are recorded as electric operating revenues and wholesale electricity purchases are recorded as costs of energy sold. Derivative contracts that are subject to unplanned netting are recorded net in earnings. A “book-out” is the planned or unplanned netting of off-setting purchase and sale transactions. A book-out is a transmission mechanism to reduce congestion on the transmission system or administrative burden. For accounting purposes, a book-out is the recording of net revenues upon the settlement of a derivative contract. Unrealized gains and losses on derivative contracts that are not designated for hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power and fuel supply agreements, used to hedge generation assets and purchased power costs. Changes in the fair value of economic hedges are reflected in results of operations, with changes related to economic hedges on sales included in operating revenues and changes related to economic hedges on purchases included in cost of energy sold. See Note 9. The Company has collaborative arrangements related to its interest in SJGS, Four Corners, PVNGS, and Luna. The Company has determined that during the years ended December 31, 2022, 2021, and 2020 none of the joint owners in its collaborative arrangements were customers under Topic 606. The Company will continue to evaluate transactions between collaborative arrangement participants in future periods under the revenue recognition standard. PNM and TNMP recognize revenue as they satisfy performance obligations, which typically occurs as the customer or end-user consumes the electric service provided. Electric services are typically for a bundle of services that are distinct and transferred to the end-user in one performance obligation measured by KWh or KW. Electric operating revenues are recorded in the period of energy delivery, including estimated unbilled amounts. The Company has elected to exclude all sales and similar taxes from revenue. Revenue from contracts with customers is recorded based upon the total authorized tariff or market price at the time electric service is rendered, including amounts billed under arrangements qualifying as an Alternative Revenue Program (“ARP”). ARP arrangements are agreements between PNM or TNMP and its regulator that allow PNM or TNMP to adjust future rates in response to past activities or completed events, if certain criteria are met. ARP revenues are required to be reported separately from contracts with customers. ARP revenues in a given period include the recognition of “originating” ARP revenues (i.e. when the regulator-specific conditions are met) in the period, offset by the reversal of ARP revenues when billed to customers. Sources of Revenue Additional information about the nature of revenues is provided below. Additional information about matters affecting PNM’s and TNMP’s regulated revenues is provided in Note 17. Revenue from Contracts with Customers PNM NMPRC Regulated Retail Electric Service – PNM provides electric generation, transmission, and distribution service to its rate-regulated customers in New Mexico. PNM’s retail electric service territory covers a large area of north central New Mexico, including the cities of Albuquerque, Rio Rancho, and Santa Fe, and certain areas of southern New Mexico. Customer rates for retail electric service are set by the NMPRC and revenue is recognized as energy is delivered to the customer. PNM invoices customers on a monthly basis for electric service and generally collects billed amounts within one month. Transmission Service to Third Parties – PNM owns transmission lines that are interconnected with other utilities in New Mexico, Texas, Arizona, Colorado, and Utah. Transmission customers receive service for the transmission of energy owned by the customer utilizing PNM’s transmission facilities. Customers generally receive transmission services, which are regulated by FERC, from PNM through PNM’s Open Access Transmission Tariff (“OATT”) or a specific contract. Customers are billed based on capacity and energy components on a monthly basis. In December 2021, PNM completed the purchase of the Western Spirit Line and services under related transmission agreements were initiated using an incremental rate, approved by FERC, that are separate from the formula rate mechanism. Wholesale Energy Sales – PNM engages in activities to optimize its existing jurisdictional assets and long-term power agreements through spot market, hour-ahead, day-ahead, week-ahead, month-ahead, and other sales of excess generation not required to fulfill retail load and contractual commitments. PNM began participating in the EIM in 2021. The EIM is a real-time wholesale energy trading market operated by the CAISO that enables participating electric utilities to buy and sell energy. The NMPRC granted PNM authority to seek recovery of costs associated with joining the EIM, which have been included in the 2024 Rate Change and to pass the benefits of participating in EIM to customers through the FPPAC. PNM’s participation in EIM has significantly increased Electric operating revenues which are passed on to customers under PNM’s FPPAC with no impact to net earnings. Beginning on January 1, 2018, PNM acquired a 65 MW interest in SJGS Unit 4, which was held as merchant plant as ordered by the NMPRC. PNM sold power from 36 MW of this capacity to a third party at a fixed price that was recorded as revenue from contracts with customers. PNM was obligated to deliver power under this arrangement only when SJGS Unit 4 was operating. In May 2022, PNM executed a new agreement to sell 50 MW of that capacity to a third party for the period from July 1, 2022 through September 30, 2022 on a system-contingent basis. TNMP PUCT Regulated Retail Electric Service – TNMP provides transmission and distribution services in Texas under the provisions of TECA and the Texas Public Utility Regulatory Act. TNMP is subject to traditional cost-of-service regulation with respect to rates and service under the jurisdiction of the PUCT and certain municipalities. TNMP’s transmission and distribution activities are solely within ERCOT and not subject to traditional rate regulation by FERC. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service territory. Revenue is recognized as energy is delivered to the consumer. TNMP invoices REPs on a monthly basis and is generally paid within a month. TCOS – TNMP is a transmission service provider that is allowed to recover its TCOS through a network transmission rate that is approved by the PUCT. TCOS customers are other utilities that receive service for the transmission of energy owned by the customer utilizing TNMP’s transmission facilities. Alternative Revenue Programs The Company defers certain costs and records certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. ARP revenues, which are discussed above, include recovery or refund provisions under PNM’s renewable energy rider and true-ups to PNM’s formula transmission rates; TNMP’s AMS surcharge, transmission cost recovery factor, and the impacts of the PUCT’s January 25, 2018 order regarding the change in the federal corporate income tax rate; and the energy efficiency incentive bonus at both PNM and TNMP. Regulatory assets and liabilities are recognized for the difference between ARP revenues and amounts billed under those programs. Regulatory assets and liabilities are amortized into earnings as amounts are billed. TNMP’s 2018 Rate Case integrated AMS costs into base rates beginning January 1, 2019. These costs are being amortized into earnings as alternative revenues over a period of five years. Other Electric Operating Revenues Other electric operating revenues consist primarily of PNM’s economic hedges that meet the definition of a derivative, and are therefore not considered revenue from contracts with customers. Derivative revenues include gains and losses representing changes in fair value (Note 9) and settlements from sales of electricity under forward sales contracts.
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Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit LossesAccounts 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. |
Fair Value of Derivatives | The Company determines the fair values of its derivative and other financial instruments based on the hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. For investment securities, Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market values based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. The valuation of Level 3 investments, when applicable, requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The Company has no Level 3 investments as of December 31, 2022 and 2021. Management of the Company independently verifies the information provided by pricing services. |
Variable Interest Entities | How an enterprise evaluates and accounts for its involvement with variable interest entities, focuses primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a variable interest entity (“VIE”). This evaluation requires continual reassessment of the primary beneficiary of a VIE. |
Pension and Other Postretirement Benefits | PNMR and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). PNMR maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of the periodic cost or income to the extent included in retail rates (a “prepaid pension asset”). Participants in the PNM Plans include eligible employees and retirees of PNMR and PNM. Participants in the TNMP Plans include eligible employees and retirees of TNMP. The PNM pension plan was frozen at the end of 1997 with regard to new participants, salary levels, and benefits. Through December 31, 2007, additional credited service could be accrued under the PNM pension plan up to a limit determined by age and service. The TNMP pension plan was frozen at December 31, 2005 with regard to new participants, salary levels, and benefits. A plan sponsor is required to (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Unrecognized prior service costs and unrecognized gains or losses are required to be recorded in AOCI and subsequently amortized. To the extent the amortization of these items will ultimately be recovered or returned through future rates, PNM and TNMP record the costs as a regulatory asset or regulatory liability. The amortization of these incurred costs is included as pension and postretirement benefit periodic cost or income in subsequent years. The Company maintains trust funds for the pension and OPEB plans from which benefits are paid to eligible employees and retirees. The Company’s funding policy is to make contributions to the trusts, as determined by an independent actuary, that comply with minimum guidelines of the Employee Retirement Income Security Act and the IRC. Information concerning the fair value of investments is contained in Note 9. The Company has in place a policy that defines the investment objectives, establishes performance goals of asset managers, and provides procedures for the manner in which investments are to be reviewed. The plans implement investment strategies to achieve the following objectives: •Implement investment strategies commensurate with the risk that the Corporate Investment Committee deems appropriate to meet the obligations of the pension plans and OPEB plans, minimize the volatility of expense, and account for contingencies •Transition asset mix over the long-term to a higher proportion of high-quality fixed income investments as the plans’ funded statuses improve Management is responsible for the determination of the asset target mix and the expected rate of return. The target asset allocations are determined based on consultations with external investment advisors. The expected long-term rate of return on pension and postretirement plan assets is calculated on the market-related value of assets. Actual gains and losses on pension and OPEB plan assets are recognized in the market-related value of assets equally over a period of not more than five years, which reduces year-to-year volatility. For the PNM Plans and TNMP Plans, the market-related value of assets is equal to the prior year’s market-related value of assets adjusted for contributions, benefit payments and investment gains and losses that are within a corridor of plus or minus 4.0% around the expected return on market value. Gains and losses that are outside the corridor are amortized over five years.
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Commitments and Contingencies | There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory proceedings in the normal course of its business. See Note 17. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows. With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. The Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, or commitments will have a material effect on its financial condition, results of operations, or cash flows.
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Summary of the Business and Significant Accounting Policies (Tables) |
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Schedule of Average Rates Used Allocated Between Depreciation Expense and Construction Expense Projects Based on Use of Equipment | Average straight-line rates used were as follows:
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Schedule of Inventory | Inventories consisted of the following at December 31:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segments | The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.
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Public Utilities General Disclosures | Reconciliations between utility margin and gross margin are presented below.
1 Corporate and Other depreciation and amortization represents corporate level activities that are billed at cost and reflected as general and administrative expenses at PNM and TNMP and therefore are not a component of gross margin or utility margin. See Note 1.
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Schedule of Major Customers | Two REPs accounted for more than 10% of the electric operating revenues of TNMP during the year ended December 31, 2022 and three REPs during the years ended December 31, 2021 and 2020 as follows:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income | Information regarding AOCI is as follows:
The following table presents pre-tax information about net actuarial (gain) loss in AOCI as of December 31, 2022.
The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2022.
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Electric Operating Revenues (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects ARP revenues and other revenues.
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Earnings and Dividends Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Earnings per Share and Dividends per Share | Information regarding the computation of earnings per share and dividends per share is as follows:
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Financing (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt | Short-term debt outstanding consists of:
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Schedule of Long-term Debt Instruments | Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
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Schedule of Maturities of Long-term Debt | Reflecting mandatory tender dates, long-term debt maturities as of December 31, 2022, are follows:
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Lease Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities, Lessee | Information related to the Company’s operating leases recorded on the Consolidated Balance Sheets is presented below:
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019, as financing leases. Information related to the Company’s financing leases recorded on the Consolidated Balance Sheets is presented below:
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Lease, Cost | Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
Information for the components of lease expense is as follows:
(1) Includes expense of $2.7 million for the twelve months ended December 31, 2022 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are offset with insurance reimbursements of $2.7 million for the twelve months ended December 31, 2022.
(1) Includes expense of $2.5 million for the twelve months ended December 31, 2021 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are partially offset with insurance reimbursements of $1.8 million for the twelve months ended December 31, 2021. Supplemental cash flow information related to the Company’s leases is as follows:
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Finance Lease, Liability, Maturity | Future expected lease payments are shown below:
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Lessee, Operating Lease, Liability, Maturity | Future expected lease payments are shown below:
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Fair Value of Derivative and Other Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Commodity Derivatives | PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Consolidated Balance Sheets:
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Schedule of Realized Gain (Loss) | Gains and losses recognized on the Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table:
Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $(25.8) million, $0.7 million, and $(3.2) million for the years ended December 31, 2022, 2021 and 2020.
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Investments Classified by Contractual Maturity Date | At December 31, 2022, the available-for-sale debt securities held by PNM, had the following final maturities:
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Schedule of Instruments Presented by Level of Hierarchy | Items recorded at fair value by PNM on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale securities.
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Summary of Carrying Amounts and Fair Value of Instruments | The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Consolidated Balance Sheets are presented below:
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Schedule of Investments Held by the Employee Benefit Plans | The fair values of investments held by the employee benefit plans are as follows:
The fair values of investments in the PNMR Master Trust are as follows:
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Variable Interest Entities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information for Noncontrolling Interest | Summarized financial information for Valencia is as follows:
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Pension and Other Postretirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures | The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:
The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:
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Schedule of Assumptions Used | Actuarial (gain) loss results from changes in:
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost (income). Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost (income) would be affected.
Actuarial (gain) loss results from changes in:
The following significant weighted-average assumptions were used to determine the APBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the APBO and net periodic benefit cost would be affected.
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost would be affected.
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Reclassification out of Accumulated Other Comprehensive Income | Information regarding AOCI is as follows:
The following table presents pre-tax information about net actuarial (gain) loss in AOCI as of December 31, 2022.
The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2022.
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Schedule of Net Benefit Costs | The following table presents the components of net periodic benefit cost (income):
The following table presents the components of net periodic benefit cost (income):
The following table presents the components of net periodic benefit cost:
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Schedule of Expected Benefit Payments | The following pension benefit payments are expected to be paid:
The following executive retirement plan payments, which reflect expected future service, are expected:
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Schedule of Health Care Cost Trend Rates | The following table shows the assumed health care cost trend rates for the PNM OPEB plan:
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Schedule of Net Funded Status | For the executive retirement programs, the following table presents information about the PBO and funded status of the plans:
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Summary of Expenses for Other Retirement Plans | A summary of expenses for these other retirement plans is as follows:
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Proceeds Received and Tax Benefit from Share-based Payment Awards | All excess tax benefits and deficiencies are recorded to tax expense and classified as operating cash flows when used to reduce taxes payable.
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Summary of Awards | The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:
(1) Restricted stock expected to be awarded under the PEP for performance periods ending after 2023 no longer have market targets. The following table summarizes activity in restricted stock awards including performance-based and market-based shares:
The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares, and stock options:
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Regulatory Assets and Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Assets and Liabilities | Regulatory assets and liabilities reflected in the Consolidated Balance Sheets are presented below.
(1) Amounts approved for recovery through the Energy Transition Charge, see Note 17 (2) Authorized to be recorded as regulatory assets for certain other abandonment costs that are not specifically addressed under the provisions of the ETA, see Note 17 (3) Reclassified to the SJGS - ETA regulatory asset after shutdown of SJGS in 2022
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Construction Program and Jointly-Owned Electric Generating Plants (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction Program and Jointly-Owned Electric Generating Plants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interests and Investments in Jointly-Owned Generating Facilities | At December 31, 2022, PNM’s interests and investments in jointly-owned generating facilities are:
(1) Includes cost of removal.
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Asset Retirement Obligations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Asset Retirement Obligations | A reconciliation of the ARO liabilities is as follows:
(1) 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. (2) Reflects impacts of newly approved remediation ordinance in San Juan county requiring the full demolition of SJGS. See Note 16. (3) Reflects a decrease of $21.5 million related to an updated SJGS decommissioning study.
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Regulatory and Rate Matters Regulatory and Rate Matters (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Renewable Energy Rider | The following sets forth PNM’s revenues recorded for the renewable energy rider:
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Schedule of Rate Increases for Transmission Costs | The following sets forth TNMP’s EECRF increases:
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Public Utilities, Property, Plant And Equipment, Plant Abandonment, Amortization of Present Value of Regulated Asset For Plant Abandonment | On September 29, 2022, SJGS was removed from service and as a result, PNM made the following adjustments reflected on the Consolidated Balance Sheets as of December 31, 2022:
(1) To be recovered through the Energy Transition Charge, which includes undepreciated investments of $274.9 million and plant decommissioning of $14.5 million, previously reflected in Net utility plant. (2) Authorized to be recorded as regulatory assets for certain other abandonment costs that are not specifically addressed under the provisions of the ETA to preserve its ability to recover the costs in a future general rate case, which includes obsolete inventory of $6.4 million and plant decommissioning of $16.2 million, previously reflected in Net utility plant. (3) Includes cost of removal and accelerated depreciation of SNCRs.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | PNMR’s income taxes consist of the following components:
PNM’s income taxes (benefit) consist of the following components:
TNMP’s income taxes consist of the following components:
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Schedule of Effective Income Tax Rate Reconciliation | PNMR’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
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Components of Deferred Tax Assets and Liabilities | The components of PNMR’s net accumulated deferred income tax liability were:
The components of PNM’s net accumulated deferred income tax liability were:
The components of TNMP’s net accumulated deferred income tax liability were:
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Reconciliation of Accumulated Deferred Income Tax Liability to Deferred Income Tax Benefit | The following table reconciles the change in PNMR’s net accumulated deferred income tax liability to the deferred income tax included in the Consolidated Statement of Earnings:
The following table reconciles the change in PNM’s net accumulated deferred income tax liability to the deferred income tax included in the Consolidated Statement of Earnings:
The following table reconciles the change in TNMP’s net accumulated deferred income tax liability to the deferred income tax (benefit) included in the Consolidated Statement of Earnings:
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Reconciliation of Unrecognized Tax Benefits (Expenses) | A reconciliation of unrecognized tax benefits is as follows:
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Tax Carryforward, Impairments, net of Federal Tax Benefit | Impairments of tax attributes after reflecting the expiration of carryforwards under applicable tax laws, net of federal tax benefit, for 2020 through 2022 are as follows:
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Summary of Tax Credit Carryforwards | The reserve balances, after reflecting expiration of carryforwards under applicable tax laws, at December 31, 2022 and 2021 are as follows:
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Related Party Transactions (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The table below summarizes the nature and amount of related party transactions of PNMR, PNM and TNMP:
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Equity Method Investment (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | PNMR presents its share of net earnings from NMRD in other income on the Consolidated Statements of Earnings. Summarized financial information for NMRD is as follows:
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Segment Information - Major Customers (Details) - Customer Concentration Risk - Electric operating revenues |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Customer One | |||
Concentration Risk [Line Items] | |||
Concentration risk | 24.00% | 11.00% | |
Texas-New Mexico Power Company | REP A | |||
Concentration Risk [Line Items] | |||
Concentration risk | 27.00% | 23.00% | 21.00% |
Texas-New Mexico Power Company | REP B | |||
Concentration Risk [Line Items] | |||
Concentration risk | 20.00% | 19.00% | 18.00% |
Texas-New Mexico Power Company | REP C | |||
Concentration Risk [Line Items] | |||
Concentration risk | 10.00% | 11.00% |
Electric Operating Revenues - Narrative (Details) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2022
USD ($)
MW
|
Dec. 31, 2021
USD ($)
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May 31, 2022
MW
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Jan. 01, 2019 |
Jan. 01, 2018
MW
|
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Contract with Customers, Asset and Liability [Roll Forward] | |||||
Allowance for credit loss | $ (2.3) | $ (1.1) | |||
Other receivables, allowance for credit loss | 0.0 | 1.0 | |||
Capitalized contract cost, amortization period | 5 years | ||||
Contract assets | 11.9 | 0.6 | |||
Texas-New Mexico Power Company | |||||
Contract with Customers, Asset and Liability [Roll Forward] | |||||
Regulatory assets from defaulting REP's | $ 0.8 | ||||
Public Service Company of New Mexico | |||||
Contract with Customers, Asset and Liability [Roll Forward] | |||||
Expected exposure to market risk (in megawatts) | MW | 65 | 65 | |||
Power to be sold to third party (in megawatts) | MW | 36 | 50 | 36 | ||
Contract with customers, net | $ 151.4 | $ 94.9 |
Earnings and Dividends Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Earnings Per Share [Abstract] | |||
Net Earnings Attributable to PNMR | $ 169,530 | $ 195,829 | $ 172,775 |
Average Number of Common Shares: | |||
Outstanding during year (in shares) | 85,835 | 85,835 | 79,941 |
Vested awards of restricted stock (in shares) | 287 | 235 | 216 |
Average Shares – Basic (in shares) | 86,122 | 86,070 | 80,157 |
Dilutive Effect of Common Stock Equivalents: | |||
PNMR 2020 Forward Equity Sale Agreements (in shares) | 0 | 0 | 106 |
Stock options and restricted stock (in shares) | 47 | 41 | 40 |
Average Shares – Diluted (in shares) | 86,169 | 86,111 | 80,303 |
Net Earnings Attributable to PNMR Per Share of Common Stock: | |||
Basic (in dollars per share) | $ 1.97 | $ 2.28 | $ 2.16 |
Diluted (in dollars per share) | 1.97 | 2.27 | 2.15 |
Dividends Declared per Common Share (in dollars per share) | $ 1.41 | $ 1.33 | $ 1.25 |
Financing - Schedule of Short-Term Debt (Details) - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Short-term Debt [Line Items] | ||
Short-term debt | $ 232,000,000 | $ 62,700,000 |
PNM | ||
Short-term Debt [Line Items] | ||
Short-term debt | 185,900,000 | 7,400,000 |
Texas-New Mexico Power Company | ||
Short-term Debt [Line Items] | ||
Short-term debt | 36,700,000 | 400,000 |
PNM Revolving Credit Facility | PNM | ||
Short-term Debt [Line Items] | ||
Short-term debt | 145,900,000 | 7,400,000 |
Financing capacity | 400,000,000 | |
PNM New Mexico Credit Facility | PNM | ||
Short-term Debt [Line Items] | ||
Short-term debt | 40,000,000 | 0 |
TNMP Revolving Credit Facility | Texas-New Mexico Power Company | ||
Short-term Debt [Line Items] | ||
Short-term debt | 36,700,000 | 400,000 |
Financing capacity | 75,000,000 | |
PNMR Revolving Credit Facility | ||
Short-term Debt [Line Items] | ||
Short-term debt | 9,400,000 | $ 54,900,000 |
Financing capacity | $ 300,000,000 |
Financing - Long-term Debt Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Long-term Debt, by Maturity [Abstract] | ||
2023 | $ 185,000 | |
2024 | 503,000 | |
2025 | 1,354,000 | |
2026 | 160,345 | |
2027 | 60,000 | |
Thereafter | 1,815,198 | |
Total | 4,077,543 | $ 3,699,043 |
PNMR | ||
Long-term Debt, by Maturity [Abstract] | ||
2023 | 0 | |
2024 | 0 | |
2025 | 1,000,000 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total | 1,000,000 | 900,000 |
Public Service Company of New Mexico | ||
Long-term Debt, by Maturity [Abstract] | ||
2023 | 185,000 | |
2024 | 423,000 | |
2025 | 354,000 | |
2026 | 100,345 | |
2027 | 0 | |
Thereafter | 947,000 | |
Total | 2,009,345 | 1,890,845 |
Texas-New Mexico Power Company | ||
Long-term Debt, by Maturity [Abstract] | ||
2023 | 0 | |
2024 | 80,000 | |
2025 | 0 | |
2026 | 60,000 | |
2027 | 60,000 | |
Thereafter | 868,198 | |
Total | $ 1,068,198 | $ 908,198 |
Lease Commitments - Operating Lease Balance Sheet Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating leases: | ||
Operating lease assets, net of amortization | $ 55,982 | $ 79,511 |
Current portion of operating lease liabilities | 18,781 | 27,218 |
Long-term portion of operating lease liabilities | 41,336 | 55,993 |
Public Service Company of New Mexico | ||
Operating leases: | ||
Operating lease assets, net of amortization | 52,556 | 73,903 |
Current portion of operating lease liabilities | 17,239 | 25,278 |
Long-term portion of operating lease liabilities | 39,633 | 52,552 |
Texas-New Mexico Power Company | ||
Operating leases: | ||
Operating lease assets, net of amortization | 3,426 | 5,264 |
Current portion of operating lease liabilities | 1,543 | 1,882 |
Long-term portion of operating lease liabilities | $ 1,703 | $ 3,155 |
Lease Commitments - Schedule of Weighted Average Remaining Lease Terms and Discount Rates (Details) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Weighted average remaining lease term (years): | ||
Operating leases | 6 years 5 months 23 days | 5 years 5 months 8 days |
Financing leases | 3 years 8 months 4 days | 4 years 2 months 12 days |
Weighted average discount rate: | ||
Operating leases | 4.00% | 3.99% |
Financing leases | 3.44% | 2.65% |
Public Service Company of New Mexico | ||
Weighted average remaining lease term (years): | ||
Operating leases | 6 years 8 months 26 days | 5 years 7 months 6 days |
Financing leases | 3 years 11 months 26 days | 4 years 3 months 18 days |
Weighted average discount rate: | ||
Operating leases | 4.01% | 3.99% |
Financing leases | 3.36% | 2.60% |
Texas-New Mexico Power Company | ||
Weighted average remaining lease term (years): | ||
Operating leases | 2 years 1 month 28 days | 2 years 10 months 24 days |
Financing leases | 3 years 4 months 20 days | 4 years 1 month 20 days |
Weighted average discount rate: | ||
Operating leases | 3.94% | 3.98% |
Financing leases | 3.53% | 2.71% |
Fair Value of Derivative and Other Financial Instruments - Overview and Commodity Derivatives (Details) - PNM - Designated as hedging instrument - Commodity Contract - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Other current assets | $ 9,780 | $ 684 |
Other deferred charges | 0 | 0 |
Derivative asset | 9,780 | 684 |
Other current liabilities | (19,209) | (2,275) |
Other deferred credits | 0 | 0 |
Derivative liability | (19,209) | (2,275) |
Net | $ (9,429) | $ (1,591) |
Fair Value of Derivative and Other Financial Instruments - Investment in NDT and Gross Realized Losses (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Equity securities: | |||
Net gains (losses) from equity securities sold | $ (6,940) | $ 8,738 | $ 5,861 |
Net gains (losses) from equity securities still held | (38,025) | (442) | 17,707 |
Total net gains (losses) on equity securities | (44,965) | 8,296 | 23,568 |
Available-for-sale debt securities: | |||
Net gains (losses) on debt securities | (33,392) | 8,554 | (1,969) |
Net gains (losses) on investment securities | (78,357) | 16,850 | 21,599 |
Public Service Company of New Mexico | |||
Available-for-sale debt securities: | |||
Proceeds from sales | 526,448 | 459,867 | 590,998 |
Gross realized gains | 22,071 | 39,408 | 35,904 |
Gross realized (losses) | $ (36,623) | $ (22,815) | $ (28,817) |
Fair Value of Derivative and Other Financial Instruments - Maturities of Securities (Details) - PNMR and PNM $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Available-for-Sale | |
Within 1 year | $ 40,339 |
After 1 year through 5 years | 67,426 |
After 5 years through 10 years | 70,608 |
After 10 years through 15 years | 15,571 |
After 15 years through 20 years | 12,825 |
After 20 years | 32,211 |
Debt securities, available-for-sale | $ 238,980 |
Pension and Other Postretirement Benefits - Assumed Health Care Cost Trend Rates and Impact of a One-Percentage-Point Change in Assumed Health Care Cost Trend Rates (Details) - Public Service Company of New Mexico - Other Postretirement Benefits |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract] | ||
Health care cost trend rate assumed for next year | 6.25% | 6.00% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.75% | 4.75% |
Year that the rate reaches the ultimate trend rate | 2029 | 2027 |
Stock-Based Compensation - Excess Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Public Service Company of New Mexico | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Excess tax benefits | $ (65) | $ 564 | $ 279 |
Texas-New Mexico Power Company | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Excess tax benefits | (26) | 224 | 112 |
PNMR | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Excess tax benefits | $ (91) | $ 788 | $ 391 |
Stock-Based Compensation - Weighted Average Assumptions (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restricted Shares and Performance-Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected quarterly dividends per share (in dollars per share) | $ 0.3475 | $ 0.3275 | $ 0.3075 |
Risk-free interest rate | 1.46% | 0.32% | 0.72% |
Market-Based Shares (1) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.29% | 0.72% | |
Dividend yield | 2.76% | 2.51% | |
Expected volatility | 33.69% | 19.41% |
Commitments and Contingencies - PVNGS Decommissioning Funding (Details) - Public Service Company of New Mexico - Palo Verde Nuclear Generating Station - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Public Utilities, General Disclosures [Line Items] | |||
Funding for decommissioning costs in qualified and non-qualified trust funds | $ 1.3 | $ 1.3 | $ 1.3 |
Estimated market value of trusts for decommissioning costs | $ 325.3 | $ 394.5 |
Commitments and Contingencies - Nuclear Spent Fuel and Waste Disposal (Details) - Public Service Company of New Mexico - Palo Verde Nuclear Generating Station - Nuclear spent fuel and waste disposal - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2019 |
---|---|---|---|
Loss Contingencies [Line Items] | |||
Estimate of possible loss | $ 59.6 | ||
Other deferred credits | |||
Loss Contingencies [Line Items] | |||
Liability for interim storage costs | $ 12.0 | $ 13.0 |
Commitments and Contingencies - Santa Fe Generating Station (Details) |
1 Months Ended | 24 Months Ended | |
---|---|---|---|
Jul. 20, 2020
numberOfAMIMeter
|
Oct. 31, 2019
numberOfAMIMeter
|
Dec. 31, 2014
monitoringWell
|
|
Commitments and Contingencies Disclosure [Abstract] | |||
Number of monitoring wells containing free-phase hydrocarbon products | monitoringWell | 1 | ||
Number of field work reports | numberOfAMIMeter | 2 | 2 |
Commitments and Contingencies - San Juan County Decommissioning Ordinance (Details) - Coal-Fired Electricity Generating Facility Demolition And Remediation Ordinance - San Juan Generating Station - Public Service Company of New Mexico - USD ($) $ in Millions |
Nov. 09, 2021 |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|---|
Public Utilities, General Disclosures [Line Items] | |||
Initial funding requirement | $ 14.7 | ||
Surety bond | $ 46.0 | ||
Decrease in decommissioning obligation | $ 21.1 |
Commitments and Contingencies - Navajo National Allottee Matters (Details) - Public Service Company of New Mexico $ in Millions |
1 Months Ended | 3 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 29, 2022
USD ($)
|
Sep. 30, 2012
land_owner
|
Dec. 31, 2022
USD ($)
allotment_parcel
|
Dec. 01, 2015
allotment_parcel
|
Jul. 13, 2015
a
|
Jan. 22, 2015
allotment_parcel
|
|
Loss Contingencies [Line Items] | ||||||
Payments for legal settlements | $ | $ 19.8 | |||||
Navajo Nation Allottee Matters | ||||||
Loss Contingencies [Line Items] | ||||||
Number of landowners involved in the appeal | land_owner | 43 | |||||
Number of allotments where landowners are revoking rights of way renewal consents (in allotment parcels) | 6 | |||||
Allotments with right-of-way renewals not previously contested (in allotment parcels) | 10 | |||||
Acres of land at issue (in acres) | a | 15.49 | |||||
Number of allotment parcels that cannot be condemned | 2 | |||||
Number of allotment parcels at issue | 5 | |||||
Payments for legal settlements | $ | $ 1.5 |
Commitments and Contingencies - Texas Winter Storm (Details) - Texas-New Mexico Power Company $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022
USD ($)
lawsuit
|
Dec. 31, 2021
USD ($)
|
|
Loss Contingencies [Line Items] | ||
Regulatory asset, allowance for credit loss | $ | $ 0.8 | $ 0.8 |
Number of law suits | lawsuit | 2 |
Regulatory and Rate Matters - Renewable Energy Rider (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Public Service Company of New Mexico | Renewable energy rider, including excess return | NMPRC | |||
Public Utilities, General Disclosures [Line Items] | |||
Revenue from renewable energy rider | $ 60.3 | $ 61.7 | $ 56.4 |
Regulatory and Rate Matters - Schedule of Change in Balance Sheet Related to Discontinued Services (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Sep. 29, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current Assets: | ||||
Inventory | $ (6,430) | $ 8,528 | $ (1,356) | $ (11,512) |
Utility Plant: | ||||
Net utility plant | (382,798) | |||
Deferred Charges and Other Assets: | ||||
Regulatory assets - ETA | 289,381 | |||
Regulatory assets - Non-ETA | 22,593 | |||
Deferred Credits and Other Liabilities: | ||||
Regulatory liabilities | (77,254) | |||
Net increase (decrease) | $ 0 | |||
Undepreciated investments | 274,900 | |||
Investments, plant decommissioning | 14,500 | |||
Obsolete inventory | 6,400 | |||
Inventory, plant decommissioning | $ 16,200 |
Regulatory and Rate Matters - Four Corners Abandonment Application (Details) - Four Corners - Public Service Company of New Mexico - USD ($) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Jan. 08, 2021 |
Nov. 01, 2020 |
Nov. 30, 2020 |
|
Public Utilities, General Disclosures [Line Items] | |||
Payments for relief from obligations | $ 75.0 | $ 15.0 | |
Final payment for relief from obligations | 60.0 | ||
Initial payment for relief from obligations | $ 15.0 | ||
Request issuance of energy transition bonds | $ 300.0 | ||
Forecasted undepreciated investment | 272.0 | ||
Plant decommissioning and coal mine reclamation costs | 4.6 | ||
Upfront financing costs | 7.3 | ||
Proceeds from securitization bonds | $ 16.5 | ||
Public Service Company of New Mexico | |||
Public Utilities, General Disclosures [Line Items] | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 13.00% |
Regulatory and Rate Matters - Grid Modernization Application (Details) - Public Service Company of New Mexico $ in Millions |
Oct. 03, 2022
USD ($)
|
---|---|
Public Utilities, General Disclosures [Line Items] | |
Grid modernization investment | $ 344 |
Grid modernization, initial term | 6 years |
Grid modernization term | 11 years |
Regulatory and Rate Matters - Schedule of Transmission Cost of Service Rates (Details) - TNMP - USD ($) $ in Millions |
10 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 22, 2022 |
Mar. 25, 2022 |
Sep. 20, 2021 |
Mar. 12, 2021 |
Oct. 07, 2020 |
Mar. 27, 2020 |
Dec. 31, 2022 |
Feb. 28, 2022 |
Feb. 28, 2021 |
|
Energy efficiency costs | |||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||
Aggregate Collection Amount | $ 7.2 | $ 5.9 | $ 5.9 | ||||||
Performance Bonus | $ 2.3 | $ 1.0 | $ 0.8 | ||||||
Transmission Cost of Service Rates | |||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||
Approved Increase in Rate Base | $ 36.0 | $ 95.6 | $ 41.2 | $ 112.6 | $ 10.8 | $ 59.2 | |||
Annual Increase in Revenue | $ 5.3 | $ 14.2 | $ 6.3 | $ 14.1 | $ 2.0 | $ 7.8 |
Regulatory and Rate Matters - TNMP Narrative (Details) - Texas-New Mexico Power Company - USD ($) $ in Millions |
Jan. 23, 2023 |
Jul. 18, 2022 |
Apr. 05, 2022 |
Jul. 01, 2021 |
Apr. 05, 2021 |
Sep. 24, 2022 |
May 27, 2022 |
---|---|---|---|---|---|---|---|
Public Utilities, General Disclosures [Line Items] | |||||||
Energy efficiency cost recovery factor, requested change amount | $ 7.4 | ||||||
Energy efficiency cost recovery factor, requested performance bonus | $ 1.9 | $ 1.9 | |||||
Energy efficiency cost recovery factor, settlement amount | $ 7.3 | ||||||
Requested increase annual distribution revenue requirement | $ 6.8 | $ 9.7 | $ 13.5 | $ 14.0 | |||
Incremental distribution investments | $ 104.5 | ||||||
Increase in rate base | $ 100.7 | ||||||
Subsequent Event | |||||||
Public Utilities, General Disclosures [Line Items] | |||||||
Requested increase annual distribution revenue requirement | $ 19.4 | ||||||
Incremental distribution investments | $ 150.5 |
Regulatory and Rate Matters - AMS Reconciliation (Details) $ in Millions |
9 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Texas-New Mexico Power Company | |
Public Utilities, General Disclosures [Line Items] | |
Costs of deployment | $ 9.0 |
Income Taxes - Federal Income Tax Reform (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2022 |
Dec. 31, 2018 |
|
Income Taxes [Line Items] | |||
Federal and state excess deferred income taxes | $ 23.6 | ||
Public Service Company of New Mexico | |||
Income Taxes [Line Items] | |||
Federal and state excess deferred income taxes | 14.4 | ||
TNMP | |||
Income Taxes [Line Items] | |||
Federal and state excess deferred income taxes | $ 9.2 | ||
NMPRC | |||
Income Taxes [Line Items] | |||
Proposed term for providing benefits to customers related to reduction in state corporate tax | 3 years | 23 years |
Goodwill (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Apr. 01, 2020 |
Apr. 01, 2018 |
---|---|---|---|---|---|
Schedule of Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill | $ 278,297 | $ 278,297 | $ 278,297 | ||
Texas-New Mexico Power Company | |||||
Schedule of Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill | 226,665 | 226,665 | $ 226,700 | ||
Percentage of fair value in excess of carrying amount | 38.00% | ||||
Public Service Company of New Mexico | |||||
Schedule of Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill | $ 51,632 | $ 51,632 | $ 51,600 | ||
Percentage of fair value in excess of carrying amount | 19.00% |
Equity Method Investment - Summarized Financial Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Statement [Abstract] | |||
Operating Revenues | $ 2,249,555 | $ 1,779,873 | $ 1,523,012 |
Balance Sheet Related Disclosures [Abstract] | |||
Net property, plant, and equipment | 372,988 | 248,856 | |
Total assets | 9,257,377 | 8,666,885 | 7,939,854 |
Total PNMR common stockholders’ equity | 2,191,932 | 2,167,524 | |
NMRD | |||
Income Statement [Abstract] | |||
Operating Revenues | 12,505 | 12,738 | 10,366 |
Operating expenses | 9,591 | 9,733 | 7,476 |
Net earnings | 2,914 | 3,005 | $ 2,890 |
Balance Sheet Related Disclosures [Abstract] | |||
Current assets | 8,357 | 10,729 | |
Net property, plant, and equipment | 169,440 | 166,495 | |
Non-current assets | 9,631 | 2,289 | |
Total assets | 187,428 | 179,513 | |
Current liabilities | 5,822 | 824 | |
Non-current liabilities | 366 | 373 | |
Total PNMR common stockholders’ equity | $ 181,240 | $ 178,316 |
Merger (Details) - Forecast - Merger Agreement - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Business Acquisition [Line Items] | ||
Business combination, cash right per common share (in dollars per share) | $ 50.30 | |
Out-of-pocket fees and expenses reimbursement | $ 10.0 | |
PNMR | ||
Business Acquisition [Line Items] | ||
Termination fees | 130.0 | |
Avangrid | ||
Business Acquisition [Line Items] | ||
Termination fees | $ 184.0 |
Schedule I - Condensed Financial Information of Parent Company - Statements of Earnings (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Condensed Financial Statements, Captions [Line Items] | |||
Operating Revenues | $ 2,249,555 | $ 1,779,873 | $ 1,523,012 |
Operating Expenses | 1,855,795 | 1,471,720 | 1,237,731 |
Operating income | 393,760 | 308,153 | 285,281 |
Other Income and Deductions: | |||
Other income | 21,601 | 20,200 | 19,973 |
Net other income and (deductions) | (54,542) | 33,153 | 37,063 |
Interest Charges | 127,908 | 96,877 | 114,392 |
Earnings before Income Taxes | 211,310 | 244,429 | 207,952 |
Income taxes (benefit) | 26,130 | 32,582 | 20,636 |
PNM Resources | |||
Condensed Financial Statements, Captions [Line Items] | |||
Operating Revenues | 0 | 0 | 0 |
Operating Expenses | 6,199 | 15,044 | 28,299 |
Operating income | (6,199) | (15,044) | (28,299) |
Other Income and Deductions: | |||
Equity in earnings of subsidiaries | 197,860 | 221,004 | 211,291 |
Other income | 663 | 362 | (269) |
Net other income and (deductions) | 198,523 | 221,366 | 211,022 |
Interest Charges | 30,430 | 11,986 | 19,078 |
Earnings before Income Taxes | 161,894 | 194,336 | 163,645 |
Income taxes (benefit) | (7,636) | (1,493) | (9,130) |
Net earnings | $ 169,530 | $ 195,829 | $ 172,775 |
Schedule I - Condensed Financial Information of Parent Company - Balance Sheets Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares outstanding (in shares) | 85,834,874 | 85,834,874 |
PNM Resources | ||
Condensed Financial Statements, Captions [Line Items] | ||
Accumulated depreciation | $ 17,721 | $ 16,585 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 85,834,874 | 85,834,874 |
Common stock, shares outstanding (in shares) | 85,834,874 | 85,834,874 |
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