Asset Retirement Obligations

12 Months Ended

Dec. 31, 2022

Asset Retirement Obligation Disclosure [Abstract]

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:


	PNMR		PNM		TNMP
	(In thousands)
Liability at December 31, 2019	$	181,962	$	181,081	$	881
Liabilities incurred	—		—		—
Liabilities settled	(1,444)		(1,192)		(252)
Accretion expense	11,310		11,236		74
Revisions to estimated cash flows(1)	(8,407)		(8,407)		—
Liability at December 31, 2020	183,421		182,718		703
Liabilities incurred	1,781		1,781		—
Liabilities settled	(142)		(142)		—
Accretion expense	9,308		9,248		60
Revisions to estimated cash flows(2)	39,778		39,778		—
Liability at December 31, 2021	234,146		233,383		763
Liabilities incurred	—		—		—
Liabilities settled	—		—		—
Accretion expense	10,767		10,702		65
Revisions to estimated cash flows(3)	(21,536)		(21,536)		—
Liability at December 31, 2022	$	223,377	$	222,549	$	828

(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.