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Regulatory Assets and Liabilities
12 Months Ended
Dec. 31, 2022
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.
 
PNMTNMP
 December 31,December 31,
 2022202120222021
Assets:(In thousands)
Current:
FPPAC$8,904 $7,130 $— $— 
NMPRC hedging plan 9,429 1,591 — — 
Transmission cost recovery factor
— — — 3,906 
Energy efficiency costs— — 1,932 2,158 
18,333 8,721 1,932 6,064 
PNMTNMP
December 31,December 31,
2022202120222021
Assets (Continued):(In thousands)
Non-Current:
SJGS - ETA (1)
$343,238 $51,975 $— $— 
SJGS - non-ETA (2)
26,296 43 — — 
Shutdown of SJGS Units 2 and 394,677 100,954 — — 
SJGS replacement resources8,312 8,269 — — 
EIM13,102 7,028 — — 
Loss on reacquired debt15,323 17,249 26,317 27,615 
Pension and OPEB(3)
187,182 165,006 21,558 17,924 
Deferred income taxes67,621 68,687 9,193 9,505 
AMS surcharge— — 6,254 12,507 
AMS retirement and other costs— — 12,591 12,286 
Deferred COVID-19 costs5,664 6,896 1,053 — 
Other2,526 2,874 5,779 5,440 
763,941 428,981 82,745 85,277 
Total regulatory assets$782,274 $437,702 $84,677 $91,341 
PNMTNMP
December 31,December 31,
2022202120222021
Liabilities:
Current:
Renewable energy rider, including excess return$(5,076)$(5,989)$— $— 
Energy efficiency costs(2,837)(2,327)— — 
Transmission cost recovery factor— — (9,089)— 
(7,913)(8,316)(9,089)— 
Non-Current:
Cost of removal(238,903)(294,193)(97,030)(73,029)
Deferred income taxes(301,493)(321,976)(94,994)(107,250)
PVNGS ARO— (1,215)— — 
Renewable energy tax benefits
(15,610)(16,756)— — 
Accelerated depreciation SNCRs(3)
— (16,331)— — 
Pension and OPEB— (2,376)(4,518)(6,099)
COVID-19 cost savings(900)(900)— — 
Other(83)(83)(1,671)(1,185)
(556,989)(653,830)(198,213)(187,563)
Total regulatory liabilities$(564,902)$(662,146)$(207,302)$(187,563)
(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.