New Mexico Commission’s Recommended Decision Disregards State Energy Transition Act, Penalizes PNM for Exiting Coal

ALBUQUERQUE, N.M., June 20, 2022 /PRNewswire/ — Listening to Examiners of the New Mexico Public Regulation Fee (NMPRC) issued a Really useful Resolution disregarding the state’s Vitality Transition Act and arbitrarily penalizing Public Service Firm of New Mexico (PNM), a wholly-owned subsidiary of PNM Assets, Inc. (NYSE: PNM) associated to its retirement of the San Juan Producing Station (San Juan).

The Really useful Resolution requires an instantaneous discount to buyer charges associated to the retirement of San Juan, eliminating PNM’s potential to get better prices essential to help the transition to carbon free vitality till new buyer base charges are carried out. PNM has been deferring this new fee implementation for the advantage of prospects since 2020. The advice would penalize PNM for deferral of the speed evaluation and could be straight opposite to the Vitality Transition Act and inconsistent with the prior NMPRC financing order, which was beforehand challenged and upheld by the New Mexico Supreme Court docket.

“This suggestion is especially discouraging as a result of it disregards the Vitality Transition Act and its inherent balancing of stakeholder pursuits, retroactively stripping away the built-in protections for utilities to encourage the exit from coal whereas ignoring the prevailing safeguards that forestall the utility from overcharging prospects,” stated Pat Vincent-Collawn, PNM Assets’ Chairman and CEO. “We now have repeatedly deferred our deliberate fee filings to keep away from growing buyer payments throughout the world pandemic for the advantage of prospects. This suggestion would arbitrarily penalize the utility for exiting coal and placing buyer pursuits first in our decision-making.”

The discount to buyer charges within the Really useful Resolution is cited as needed to stop double restoration. The Vitality Transition Act particularly protects towards double restoration, which might happen if PNM continued to gather charges based mostly on the price of San Juan and, on the identical time, collected fees for the licensed securitization bonds. PNM has sought to keep away from this example by aligning the timing of recent buyer fee implementation with the issuance of the securitization bonds, in order that San Juan is barely recovered below both base charges or securitization fees at any cut-off date. When PNM agreed to delay its basic fee evaluation, the securitization bond issuance was additionally delayed to particularly keep away from restoration of each fees.

The Really useful Resolution, if carried out, would as an alternative take away restoration of prices from base charges earlier than securitization bond fees are collected.  This absence of restoration would disregard the provisions of the Vitality Transition Act, NMPRC financing order and previous NMPRC observe.

PNM has not filed for a basic fee evaluation in six years and has been carrying the prices of great infrastructure investments not included in buyer charges. To keep away from growing buyer charges throughout the evolving world pandemic, PNM deferred its authentic plans to file a basic fee evaluation within the first half of 2020. These plans had been additional deferred, on the request of events, as a part of a stipulated settlement within the PNM Assets and Avangrid merger proceedings. The deliberate timing for the securitization bonds and corresponding buyer fees was additionally shifted to stay aligned with the implementation of recent charges and keep away from any extra San Juan restoration.

PNM’s present plans for a basic fee evaluation submitting in December 2022, in step with the stipulated settlement within the PNM Assets and Avangrid merger proceedings, take into consideration the fee reductions from the abandonment, securitization and alternative of the San Juan Producing Station, lowering the affect on buyer payments. Beneath the arbitrary suggestion, the whole credit anticipated to be issued over 2022 and 2023 would lead to an roughly $130 million pre-tax, non-recurring discount to revenues. The speed credit would expire with the implementation of up to date base charges anticipated in January 2024 following the final fee evaluation, leading to greater buyer invoice impacts from six years of infrastructure investments.

PNM and different events could have a chance to file any exceptions to the Really useful Resolution. The NMPRC is predicted to evaluation the case and difficulty its determination earlier than Unit 1 of the San Juan Producing Station retires on June 30, 2022. Unit 4 is scheduled to retire on September 30, 2022.

Extra supplies pertaining to the appliance and suggestion can be found at https://www.pnmresources.com/traders/rates-and-filings.aspx.

Background:

PNM Assets (NYSE: PNM) is an vitality holding firm based mostly in Albuquerque, N.M., with 2021 consolidated working revenues of $1.8 billion. By means of its regulated utilities, PNM and TNMP, PNM Assets supplies electrical energy to roughly 800,000 houses and companies in New Mexico and Texas. PNM serves its prospects with a various mixture of era and bought energy sources totaling 3.2 gigawatts of capability, with a objective to attain 100% emissions-free vitality by 2040. For extra info, go to the corporate’s web site at www.PNMResources.com.

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Statements made on this information launch for PNM Assets, Inc. (“PNMR”), Public Service Firm of New Mexico (“PNM”), or Texas-New Mexico Energy Firm (“TNMP”) (collectively, the “Firm”) that relate to future occasions or expectations, projections, estimates, intentions, targets, targets, and techniques, together with the unaudited monetary outcomes and earnings steering, are made pursuant to the Non-public Securities Litigation Reform Act of 1995. Readers are cautioned that every one forward-looking statements are based mostly upon present expectations and estimates and apply solely as of the date of this report. PNMR, PNM, and TNMP assume no obligation to replace this info. As a result of precise outcomes could differ materially from these expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP warning readers to not place undue reliance on these statements. PNMR’s, PNM’s, and TNMP’s enterprise, monetary situation, money circulation, and working outcomes are influenced by many components, which are sometimes past their management, that may trigger precise outcomes to vary from these expressed or implied by the forward-looking statements. Moreover, there are dangers and uncertainties in reference to the proposed acquisition of us by AVANGRID which can adversely have an effect on our enterprise, future alternatives, staff and customary inventory, together with with out limitation, (i) the anticipated timing and chance of completion of the pending Merger, together with the timing, receipt and phrases and circumstances of any remaining required governmental and regulatory approvals of the pending Merger that might scale back anticipated advantages or trigger the events to desert the transaction, (ii) the incidence of any occasion, change or different circumstances that might give rise to the termination of the Merger Settlement, (iii) the chance that the events could not be capable of fulfill the circumstances to the proposed Merger in a well timed method or in any respect, and (iv) the chance that the proposed transaction might have an antagonistic impact on the power of PNMR to retain and rent key personnel and preserve relationships with its prospects and suppliers, and on its working outcomes and companies usually. For a dialogue of danger components and different vital components affecting forward-looking statements, please see the Firm’s Type 10-Ok, Type 10-Q filings and the knowledge included within the Firm’s Types 8-Ok with the Securities and Alternate Fee, which components are particularly integrated by reference herein.        

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SOURCE PNM Assets, Inc.