PNM - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the PNM Resources Third Quarter Conference Call. All participants will be in listen-only mode [Operator Instructions] After today's presentation, there will be an opportunity to ask questions [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jimmie Blotter, Director of Investor Relations. Please go ahead.

Jimmie Blotter

Thank you, Anita. joining XXXX morning earnings for Resources the everyone quarter third conference thank us for this PNM And call. at available Please this note our are conference for website on call and that other supporting the pnmresources.com. presentation documents

Joining me President Pat Officer, President and team. Vincent-Collawn our as Vice Resources well Eldred, Executive other Chief and executive members our of CEO, Chuck and are today PNM Chairman, Financial as several management

the the to turn to you over to provided that need be I should remind based Resources of litigation the Reform pursuant call no Pat, that Act We to this considered some and of all PNM assumes upon of statements Before that update the information securities statements are morning information. expectations this current XXXX. estimates, obligation I forward-looking you forward-looking caution private and

For please discussion And Form Reports on I results, turn reports well call affecting refer future the with will PNM Form as to Form XX-K, a Resources' Annual of Pat. the SEC. and reports filed with to quarterly as on current detailed that, factors XX-Q, X-K over our on

Pat Vincent-Collawn

you, Thank morning thank and for us Good today. everyone joining you Jimmie.

costume of today's to As it's know nearly got Halloween, what our on call. you tell going means you that we've which some But I'm all going action for course not are. costumes

in hints, got few a it. prepared put However, have our may throughout we remarks

visit EEI. us Okay. But the to if you at have you're guess to correctly, going

of expectations in to last retail over numbers rates year results a our Let's pay financial basis increase PNM on and for a of on GAAP basis. an an the these check the $X.XX in the because third full third our in begin right Earnings few $X.XX for represented All year at primarily on were minutes. higher system. to details implemented four of XXXX quarter slide with the These of the results. XXXX and quarter for ongoing improvement

settlement through walk current we're current to could in effective slide PNMs this August period XXXX, five is X, rate agenda. as First, In generate turn January. new the completed The to current the recommended regulatory the rates our means and details let's which be January decision. suspension to were on in of early examiners hearings as hearing case awaiting case

keep the in ability months hold However, of to recommended the this this We of in in that see commission months, to new suspension period to these additional hearing weeks and the implementation by to the then mind case expect suspension by the maintains examiner That could period case XXXX. the two would delay sometime their extend March which rates two year. from coming the a decision commission. goes earlier

integrated plan will subsequently to parties number procedural next by at player. concerns that Juan protest required she Moving expressed the order to expected impact generating the the to The in by and resource power present The XXXX the has examiner filed in was RFP scheduling. proposed in file the case of December resources. has indicated was scope Xth the of breach a for replacement shutdown as range parties parties any process San hearing from July, to station PNM's economic that filed of the regional on

approval approval plan. IRP retirement to involve of additions would and based in filing. the an require the Juan generation when participation This generating coal of presents Keep reminder a station the our of process not generation San in Therefore closure mind the the XXXX coal period. As in customers agreement free for coal current resources and XXXX. plan participation or supply resource current on with commission corners from XX-year the expires commission agreement it's the after PNM's four exit station generating in the that is the a does separate most in cost-effective expire full apply portfolio portfolio

and New filing settlement December order future part to required of and step end expect in sometime the In first generating were the BART Mexico, quarter station decision XXXX. this approved The in San held smart a week. in Juan PNM implement hearing filing in required case the of the earlier of hearings commission the before by comp to of in XXXX, with our XXXX. is supplemental a the on As still our of this commission next make proceeding by meters recommended is we the examiner then to

net benefit June adoption of this increase we've we've a In provides recommended month. as of were for plans, this seen and in customers system earlier provides Our this technology in renewable in Texas, to hearings liability. and year, financial received September, the case the completed to filed examiner's decision hearing that PNM a shows opportunities

is The is there filing utilities, in filings, no year's the the calls and are Mexico's this period our XXMegaWatts resources if utilized with portfolio shareholder The of the to As our grounds meet annual PNM identified risking that and there our advantage restart should Mexico PPA PPA but bidder this self-build dimming by wind with result extending price obtained was bidders. sites, XX% amend hearing Energy we place. to included owned solar, factors, This has would XX-day approved process amount renewable rejected of you megawatts right recommended the including the by provide site of We RFP addition have the cost the of would repowering the because Center, already to recent to only evidence disapproval of requirements In site, controlled would in strongly that as process our that projects, contract bids also decision, renewable meet with necessary PPA the repowering, over The diversity to recommended the same term. recommended that all solar the amendment proposal start of escalation examiner XX access XX-day currently we've know, a power. geothermal this unlawful utility hearing RFT standard. for proposal for process existing property. Not required Wind our to at unfair our proposal PPA uncompetitive. RFPs process, and recommendation by this taking our in examiner recommendation, XXXX PNM of and more previous is XX-day a an Because insufficient. to New our the capital. reduce disagree the a time to that portfolio with received. on than a consistent, performance The New process where the standard. she the RFPs, the other

recommendation. also with this We disagreed

must consider benefits consideration A final order our to oral than file this We exceptions. by at arguments we've issued order it XX. to of our will proposal proposed. We've the to responses a support that, be as of that ever due by later will to next afternoon, in presented beyond present November cost, the commission. draft our Xth. commission exceptions the the November step for and inclusion are provides the the After allow for hopeful solar, us be We're is commission not asked carefully the exception lowest

financial benefits small Our sites, develop and owned turnkey the size. ability developers local to not developing have practice of PNM acquire projects, do that or

likely cover performance only of the supports five geothermal Mexico, would of increases same in utilization XX megawatts New Mexico. economy local Southwest It's the operational sites less this panels. supports five local with Our operation, sites the economy, the clouds at separate time. the also in not The all but location New the

in On a to docket, their rate substantially the small, the promising increase the as initial with the is to facility currently such operational production a New simplify, about without New advancement opportunity owners customers, the serves to the held standardized output. While increase transparency the a its support to Mexico the the discuss Mexico opened party's from of But having ROE commission million solutions $XX methodology. and to facility workshop proposed was on invest technology, resource the of the risks. intension facility geothermal and the as in docket, In intend by of positions great re-input September cases.

continue As comments, in move do forward. agree to the proposed not desire the parties was express strong items, necessarily to evidence previously but filed on a

October favor our to scheduled on decision. to our no for a decision this immediately arguments statutory is after expect not determine in certain items of Xth. are to be the Additional up commission August After completed, do renewing will arguments. Supreme court Court workshops and prior scheduled There an These on the XX. November arguments November Court next ruled to appropriate request rate in workshops timeframe oral we general the oral appeal Xth Supreme the and been from steps. Monday, for the from rule case, for it have are XXXX, oral the In case,

to In in be to decisions or the being commission addition, rates. implemented before regular commission modification back that remember will any the sent

general plan XXXX. filing and reflects of of year the one Now XXXX filing investments to year-end switching rates. transmission was case. for additional million mid-September transmission in second This to TCOS that TNMP, capture our of We TCOS add base to through through fillings June approved prior to rate implement will the in and investments of annual made a recovery an increase $X.X rate early XXXX at in be our

until January Rates May, the be to over see at year any the won't make that, May We case for expected in in case, next Rocket the case then me it to filed XXXX. Remember excuse we detailed rate to of typical able are not calendar second general during at year. rate additional of become TCOS XXXX I'd to so look file XXXX like still are on general general filling TNMP the that the man case the a Eldred rate rate is resolved, you turn we period. once our numbers. effective track next with until to With fillings test would general

Charles Eldred

morning, good and everyone. Pat you, Thank

Beginning information walking PNM per was start $X.XX me TNMP quarterly XXXX. new with provide forecast. on on our share $X.XX. indicted in flat we and of of was a earnings three quarter of compared details guidance Pat was and the up introduce results, another corporate seven, $X.XX, with capital our quarter had ongoing some Let as you $X.XX strong slide to through

relatively to tracking guidance remain shows be near the metro than is average. stable. slide Moving the to in details, still for to we positive Albuquerque contain national eight economic year-to-date The see area low of rate but on load employment the conditions be Albuquerque we the are basis a range. Overall, middle for lower growth, PNMs

see customer X.X%. at also We year-to-date growth

the the growth impacts stay private largely successful systems programs presence economy. any in volume Harvey TNMP the us believe bio solar for growth is of At primarily down as low that with any we revenue been will been XXXX this as our of guidance However have to the well in offset economy energy offset leads combination metric by X%. Hurricane flat to range strength a from efficiency

to expand X.X% continue We growth our businesses service for in quarter. see move in the of territory, and customer resulted people

end As the investments capital that at capital load the tracking of forecasts range toward for the support the economic a is we upper growth review result, XXXX. additional the will see TNMP. When you guidance

to X of revenues last turning contracts. that TNM Now relief XXXX new is at related and formula guidance impact transmission increase $X.XX for June rate related increase transmission $X.XX. for on a year-to-date slide to in was year. of we earnings by the guidance Higher the third-party $X.XX the earnings in expected third-party deferred and of of $X.XX the $X.XX nine quarter contracts release implemented had When updated under new of rates each drivers, year the increased by to full the we year October by

last track the align savings The expenses reduction to cost case we our of compared by We our couple implemented contributed that year $X.XX with exceed to last revenue in quarter our the a of third transmission for on to we in recovered are facts. with business expectations last rate year.

trust compared AFUDC down look increased going the to warmer these last in the impact to being Unit higher increased labor stock can by list and gains O&M price market quarter market hedged the a earnings a earnings. continue in of last the a Together result of sales than each Verde other Palo the see by the year, $X.XX. you two-item Verde This escalations earnings If up. show expenses $X.XX and reduction general increases, X further increased decommissioning summer earnings third year. $X.XX and temperatures results benefits $X.XX. you strong Nuclear quarter while and of Palo of to

as year-to-date last on of NDT have be we for quarter been the quarter year. Third year-to-date of and than last was up as to $X.XX than originally our gains third while to NDT fourth quarter be not than $X.XX. a basis the year year. was higher we expected, lower for are expect coming strong year it the $X.XX do Guidance last better

President of improvement we that PNM last recall We you will to and Trump's If able these year year election, significant before of were reductions that also that savings significant we showed guidance assumed of year. games. this another the interest not and end has both end boundary have this market year. following, as year last benefit by financings the interest to the we related catalyst capture some like expected from rate result in expense occurred

Milder significantly to another $X.XX. by ambition tax customers. result investments the of the distribution relief TCOS our increased the a XXXX portion of was that $X.XX and It's The important reduced our in the tax I quarter supporting Consequently, an of $X.XX. property transmission QX strengthening by due system. which as our result in And property and this demand The added one territory. not Hurricane continued $X.XX load in FERC investments Load, temperatures load earnings impacted to the load of $X.XX. economy service compared recognize and Rate already as higher reduced earlier. to by $X.XX increased was about also expected. earnings Harvey. was depreciation As is a of by as to EPS by a penny combination moving earnings QX during than the expense XXXX. filings based generation represented to result discussed contract Navopache growing continued Depreciation I've $X.XX the a increases from that a half expense load of discussed TNMP, was lower of

the $X.XX to primarily short-term Finally, additional company and at other, our corporate we of rates. year related had holding rising expense interest interest this

As rising future rate year a entered have the interest I exposure floating mentioned that fix to rate this limiting hedging the portion last agreement of our quarter, into debt rates. for we

turning for XXXX. slide range Now eleven, our guidance to we are affirming

quarter, last as to we in come have Although, range. at of expect discussed top the we do the

we year. expect from been I in the the of nine mentioned year. the the NDT of has the expected we year, performance quarter the has but a transmission earlier, end this the of at strong first last As stronger than market conditions months of fourth as saw benefited don't

substation areas and improved for have spending additional vegetation well management needs maintenance on We quarter as on O&M like of as fourth the programs and service. focusing customer

PNM story. years From Harvey, the an years, Hurricane been the those remains quarter. an sure by our to year, celebrate to first foundation we disaster grants this make of foundation During own fourth additional integral in next has Centennial in for including Texas PNM's support employees. resources to part strong make To XXX impacted our XXX expect donation relief the to

Please as issue the the Stock we're As going New save at host a XXXX as at December well In we on of to XXXX. expect all and potential result, Xth. updated in guidance leading to as through earnings these Exchange of the XXXX. come top we an the range York December, will items the power for for view XXXX guidance date,

conference the on the and also in if you're meeting call We sending next not able meeting invitations week. join webcast for person access, will be provide to

As the on will X. following dividend also will a meeting the December decision review reminder, their board and in the December announce board

commission supports consolidated targeted base X.X% capital in capital of today includes XX, the positive Supreme under the Verde case The slide items XXXX annual the perspective from going X forecast. evolves system growth of investment up strong our to base Palo turning reliability. X.X%. management to investment. allocation confident for XX.X% growth and and rate is looks our New From the providing in significant the end PNM that there where Court Texas producing XXXX to like network updated growth overall level Mexico outcomes a The as rate rate the range we're XXXX the of capital spending improving portfolio that rate of addition transmission from to loan in high the the It XXXX. sustainable AMI. results forecast annual focused it approval appeal high again is clearing capital growth compound, at in on rate is energy, XXXX of and increase growth we're generation brings an base. the a assumes Now although unit to compound to to our The lower, capital [indiscernible] out the

As more capital I've already this shared growth strong with business. you, allocating continues a result as we're the to

the faster These continue increased increase. which customer growth, security customer At due aging residential our visibility, by robust of The throughout serve. the fortunate resulting significant Texas, year in in customer projects. and reliability territory we Although, requests, ongoing T&D data with territory large restorations continues modernizing to to more infrastructure new in of has course business. our expected that demand next to spread affecting allow to we forecast for businesses expect we maintain increase to northern greatest new their have increases housing And all investments the growth various region, strength and that that as we're area. core companies capital to our and the especially in West interconnection equipment. service grow, Dallas-Fort in additional replacing corporate is areas had systems. accommodate and our Worth have the more state, PNM, In should Gulf in will result system, facility the automated area in and service a growth expansion of are XX industrial in This will headquarters, growth in analytics, continues projects part relocate the for commercial construction low,

to to percentage to XXXX, in with of would proceed new California. development Juan is a replacement support our added power the become category renewables is system plans which ramping are capital, have units growing in to gas customers, projects, to transmitting been flexible significantly in track Overall, coal customers new we've as sizable to up that Mexico. serving transmission power At we third-party be expect slide systems. and that renewable the on getting we benefits to The PNM, more this on some New for San shown expect also We investors make of XXXX free. that expansion our

will the more there and through. work we for be much process The assets specific is that done receive to identify for regulatory San used go However, replacements. approval as Juan, to be

expect until next It replacement later analyze to additional us summer resources. proposal. will a RFP, today take for We the

We following forecast power portfolio. the RFP, expect to use to refine introduce capital replacement our the the for including outcome the at our storage in potential resource

also forecast will in Consequently, the to XXXX. capital is be our the XX million utility the case. and hearing order note testimony. Finally, some owning in for permits XXXX in and provide dollars It's were examiner's the the cost. AMI. company. their the recommendation support I solar us asking to in that at to If described This our the Pat a justify There the XX% in we've include forecast we've solar a XX approve to included the megawatts important of position renewable states portfolio any customer disagree the the our interveners XXXX with lowest solar value most These in constructed benefit capital recommendation standard. included and are added AMI note commission local plant environmental this to resources energy We in strongly particularly we're approved, by filing. project. does system this and approximately spend the by in necessary XXXX XXXX, is included not of that were having plans. to that renewable will meet

our This the investments the rate in In CAGR rate Palo base. higher permitted us growth the system in last rates. you addition, recovery our addition at continue some we rate recall, mind, to to collecting to allow funding XXXX of Keep - filing and of expected base in is Overall, cash be our to depreciation growth. to interest if were X% of PNM begin unit the X Verde rate comes our through X% XXXX. base from that

no owned the required X, in the Verde cash As we're our we've further to free energy Dedicating to delivering funded. energy will earnings these already that carbon available to assets addition, accretive. transformation be consistently it supports Palo is customers clean jurisdiction, there undergoing,

going XXXX using As growth a we're XXXX earnings result, on X% base XXXX, as from to targeting the year.

is growth. expect slightly line that to provide dividend earnings we to the timeframe over above In same growth the addition, in the

this will We discuss in December. when further, guidance issue we

on wrap to XX, debt Turning upcoming slide up discussion refinancing. I'll liquidity brief with the in

We available strong continue the liquidity to upcoming to with us managing debt have maturities.

maintaining key investment are metrics keeping ratings. appropriate sometimes including now, our credit For solid and objectives

it that will the take to important So, we strong us out. a program measured to be for capital approach laid fund

issue beginning a are result, XXXX, needed use to as investments weight aftermarket we As Support target earnings we solid position flexible, are TNPM providing ongoing X% good through to transform PNM. to the our generation and structure. Overall, balance an and the needed fund while in program equity maintaining plan cash the grade efficient in growth the the XXXX ratings. to expenditures at growth that portfolio low-cost at

I'll be over to We with to look equity continue man to time December turn for in EEI updates. issuance committed Pat. Rocket forward That at for Thank through connecting and you financial and comments it concludes again our your for many back XXXX. my today. to We no

Pat Vincent-Collawn

for Thanks those Chuck. explosive comments,

customers Florida landfall resulted rain customers flooding and to our sidelined restoration to is with us crews New were our and any Not make after the did I employees Before and of own a headed from efforts. and of these employees TNMP by our generosity throughout of to Harvey's thank only employees for the and remarkable truly were line after Texas hurricane safety outages. also incredible remarks, extraordinary that astonishing. by that aide example prepared without and heavy quickly truly incidents our in turnaround our efforts storm values. restoration mobilization and state additional again team dedication Harvey. provide in our crews the severe across on in I I wrap to the to first preparation our impacted our our and to Mexico to right want as you the response living bring of our The donations We after Hurricane to relief afterwards back operations crews assist would like The company up share efforts. to serving Red-Cross allowed donations our

should discussed With opportunities earlier, on fourth the I with commission regulatory York, developments. in and you quarter December bring recommended talk have guidance November a and PNM's us As decision orders of we EEI in items. will to outstanding our couple New about any significant

are up fake which Operator, We be forward and from open to like away things us again it looking tax today. getting actual about news of joining talking released Xst. all for this Thank November the let's for will plans questions. on you

Operator

Thank you.

will begin question-and-answer Instruction}. the now [Operator session. We

The ahead. Partners. today Evercore first go comes Please Gordon from question with Greg

Greg Gordon

number that morning earnings good going Mexico rate are aggregate a I is the to little Thanks, on down and but bit increase to growth what having be the CAGR to here, am X% think from it am sorry look brain the I you the is breeze gone this higher guys. why a of CapEx base pretty appreciate despite I in a if but you update. and prior rate X% likes clear

Charles Eldred

Greg. Yes,

had if for for to this generation of if in of part PNM capital capital number you we go XXXX, look you think of the investments. and back I details were a the

a had One and leases. that the two million was unit we peaking $XX XX the solar to build we megawatts of power referred have we that like

in that XXXX had will at you $XXX total million. dollars the if had we So,

number. So, that's up really XXXX pushing the

then if at in and XXXX bounces if you and to if to you XXXX can slice CAGR, to different to you look I look at a at want way be XXXX this to So, it, CAGR. - you about roughly up you X.X% you guess look ways, XXXX but were it were to to you any one X.X% at but way back X.X%

you where T&D by more money but a for higher are more is to add we the next out it San bit numbers that XXXX, investing T&D at that's of of moving So, that can see look to clearly in Juan on Palo see had if in business can think closing expansion you I that look generations these out slide, several reflect it's fuel. nuclear its side really years we the and the into you in build influence continued the today little and generation the down makes the parties renewable generation on and Verde PNM lack begins California. investment to and generation that also third core on are investing us a to come And the the support

So, slice that it detail, that bottom-line XXXX little work up, of on bit. that again, I year invested different there some ways the is is you the had is with to in we we'll think distorting but in generation a probably

Greg Gordon

in Mexico. awesome obviously questions, spending spending also Great, and think is of more thank that's taxes at you. gone up Couple is the up PNP, you do in the tremendous growth

footnote the little give and things explain XX bit a AMI spend cause the million a some for detail. million, $XX number million increase XX at to full but looking in lose $XX this will us the of doubt you other doesn't $XX yield that more Your the of the would have that

Charles Eldred

And PNM to are again. referring you

Greg Gordon

load the Yes. like so would up a PNM is but just no - understanding growths, there is of better spending why.

Charles Eldred

Okay. Yeah,

expansion million of the back lower AG go monetization we in XXXX is $XX $XXX to every in about to that's we has really built and a would in I that's to are that capital out to got have place being So million system have XXXX the lot to again good million infrastructure related California. is transmission in XXXX; in Mexico PNM. what which There supporting the we dollars move that's party a energy $XXX third been when at the from considerable is manner renewable that about XXXX referred

fact have So, our are is don't we have we invest we where I to the need emphasis but a lot the growth, on relative reliable in that the load think of to generation. putting

Greg Gordon

the what's facilitate Then being the to rate capital recovery that's exports. mechanism for used

Charles Eldred

haven't what going saw to plans our any are Well, rare are cases; you forward? announced need as really we

Greg Gordon

export of to that up - Yeah, because wouldn't California that. pay being customers built if power New the Mexico that won't presume capital

Charles Eldred

so between business. there and side of of out so right that's an really the sectors, is allocation FERC the driven Right, the

Pat Vincent-Collawn

FERC, And formulated on got FERC rates. goes we formulated so have the rate part at to

Greg Gordon

Perfect, Okay, that explains that. I will move on.

You you your have be? of your aspirational you would where at what's on the us that XX power earnings sense page could guys give given look - slide great

Charles Eldred

Right.

Greg Gordon

Why in if given you be have deployment that increase capital It just higher? changed, significant hasn't opportunities? shouldn't the your

Charles Eldred

do that Yeah, way we'll update information updated get first really capital earnings to the we we and potential Greg, is all haven't here - through the the you guidance when then December we that, XXXX. half in

working So comfortable a Palo very but we additional brings you base. all the in little in that added earnings It detail CAGR we on to will that targeting give December. plans, that with growth I the are transparency rate slide higher am showing the we you bit than being through X are X% through working Verde our the the numbers

Pat Vincent-Collawn

come will us give in New a We to reason see Greg. you York,

Greg Gordon

Are but coming you to see same thing? me,

Pat Vincent-Collawn

just show off We to that. move

Greg Gordon

and might said the increase to is thing to use some can capital be that you program equity but final only - you require XX that that? The clear, just post market

Charles Eldred

correct. That's

funding growth. the to of really on it's not the size structure the flexibility, obviously capital small is that our announcing and that cap haven't any for We based for growth or we amounts equity to balance plans necessary see needs the give us into any structure of drive some

that ensure funding structure with for in metric capital sales solid So, that we credit also balance for we to position objectives and to of can setting maintain grades the investment that our ourselves that growth. support are flexibility

Greg Gordon

to But again, start you to after that think you don't doing XXXX? need

Charles Eldred

post really are that see need in all. to we is XXXX and XXXX XXXX-XXXX start it is gets all don't we good, It looking in the make that. when Not commitment we timeframe No. No, any we

Greg Gordon

guys. you thank Great,

Charles Eldred

you. Okay, thank

Operator

question with comes next The Kim Capital Please from Markets. go Insoo RBC ahead.

Insoo Kim

Hey, May Good assumed you morning. both the of with mentioned, guys. guys through be AMI filing up that X% growth EPS the starting XXXX and does that taken renewable approved? that on

Charles Eldred

our on growth. not target moving have AMI and basically with at a X% current plans still which capital in to here we earnings is is put in the is it our we No, renewables there it's indicative pieces that therefore the continue the our and as included we include not growth,

Insoo Kim

similar then growth I Understood. for on when assume years. you that XX do past, about are range in and ratio earnings a just it lumpy think of again be of lumpiness. the the on that basis, at earnings you into And because just slightly payout bit thinking kind the could next in a it's that the tied to based range dividend or when trajectory XX And that to then is higher there couple that lower higher forward? was going moving to said you your CAGR How end the of be half guys been

Charles Eldred

after we see we've have we and right to feel We'll as payout those Yeah. good meeting. to board the in begin We ratio. certainly that as see not point, growth the move to we ratio growth payout becoming is we'll the December a higher some lower provide path our yet we're down then XX% type our transparency for at good company profile and as And the in The business to discussion profile the outlook growth past stable dividend that long And the with on decisions. to more supported a business. that the the more really with said profile the where some times and as in in now. make of reflect that earnings XX% level. before for many continue but normalized growth position

Insoo Kim

trending that X% looking of year. again last Got for TNMP at the near But to like of low it. range kind you forecast. Could higher a low growth it customer being type year site on growth growth trending of as you're that what When seeing reconcile like kind to and I was not robust. trends, are help what customer that below book guys the the you end you seems is guys X%

Charles Eldred

based. where And We a cause of I demand number Yeah, that's it's at of that's on Again, that's stage. in material are projections demand growth. really Texas. anything of customers we we're part west any driven see concerns our the don't lot customer and and that of think adding this just a

a good allocation. portion that's that So of

information a growth by that to some talk about Okay of little and region.

around were budget, the upwards years, capital getting in have an XX% West Texas we but North the you the bit up example. begins couple in XXXX to pick allocation then if it think just for and and to to quite in XXXX we're a about that off in XX% Texas next as So tails XXXX.

of not a number of invest to provide comfort load West that of level story driving Texas is has continue regions see continues in we but us and into customers the its growth really T&D. to for it's still more demand of So the to right now, overall, each own those

Insoo Kim

I out I to really, out Got a guys really And giving. all okay. were a it, figure you I had. That's cost trying did what batch had

See So looking finding actually. to forward soon. you

Charles Eldred

based gave said? you you out a we couple ideas We Can throw there on of what answer.

Insoo Kim

that's biased news, you think I things. one. did I stuff closely, the so usually I might have with other listened But not Well about fake am say these

Charles Eldred

and going the we're quiz Well scripts at look go so to back you.

Pat Vincent-Collawn

have put a comments little more. we'll to And so, those

Charles Eldred

We'll find wasn't some Rocket either. have way man obvious have for And you. some We'll there. pictures to good

Insoo Kim

you. Thank Bye.

Operator

ahead. question with comes SunTrust. next Ali Agha go The Please from

Ali Agha

good Hey, morning.

Charles Eldred

Ali. Hey,

Ali Agha

Hey.

expenses there that heard sort forward to to the some the expenses, point? in suggesting going high are end. First to items that keep fund. question, you expenses it Chuck of have may of of are you there pull The separately are But perhaps better this And you I know some gains at than I pulling high in that you ahead 'XX year going you quarter. is right, you cetera. the Can you end doing the just from much et foundation transmission wanted range, talked that number budgeted. you clarify the the forward I about investment or you're If fourth kept clarify mentioned you're

Charles Eldred

to we we need management some look maintain These of are readings. mentioned not can expenses I aspects my to the in we would invest other that what vegetation to like we opportunity foundation. the to little on we're things sure as find in around, business. make we're a bit that the we move more top just have an to trying stay And I and feel But it it's at of trying

what and is So it it on XXXX. it's focusing is

Ali Agha

really incremental you Okay perhaps so, funding otherwise. you may it's foundation range the that within say that budgeted originally to have not the the for keeps fair

Charles Eldred

to fund fourth details of the through quarter. some through didn't the plans as we are - that foundation working of we the had we just just We go

Pat Vincent-Collawn

last with company, the Remember Ali, foundation anniversary made of the we a XXXth it's our donation time our of we the foundation to big was anniversary XXXth and so about during been the part celebration. XXth as talking so that this have is the anniversary

Ali Agha

that probably your is say to through clear you months I the the fourth the trended the question would above you keep are above plan perhaps to high way be guess how I about ear the think nine see, at that you in are quarter fair through range to expenses the a but that you just year. have is fair end extra trending the and of otherwise trending some

Charles Eldred

calculate for just are can it quarter at you based fourth be what the in and we the shown we Ali, on confident we year-to-date continue range. of and end Yeah top earnings to allocations be what the will

Ali Agha

your CAGR that PV earned earnings base, on flip does what assume CAGR on ROEE Separately improvement plan, base the CapEx X an so EPS, revised be on or north just rate X with to CAGR. percentage X.X to I of rate in the that rise X.X

Charles Eldred

asset as rate Palo X.X net have that cetera, on X, in we percent. into Verde capital will the supposed Verde and costs obviously mentioned our to getting depreciation moving a X.X so statement result I higher CAGR going et that Palo base is is X in EPS the rate base return where income to Well to

are we point. we still through this but X% the target as I comfortable the at we where am are are numbers, working financial So the plans, with the comfortable

Ali Agha

XX so assuming Yeah, unless and you ROE understood rest pushes earned but the for the up the I are of as well.

Charles Eldred

have business ROE, need to close on its earnings XXXX that to our so assume for have going for decision what we test we case always No, at T&D we that the waiting allowed decision penny of case a May to rate we in a that was year will manage get XXXX the get and we end that we're filed that XXXX. the known historically and rate rate on case

again in it in December we have potential, lab the will that always associated to earnings tour our were see an execution what risk the So with that we or but what business our we we abilities you profile execute if to layout show then and plan. like on looks will plans own returns the earnings

Ali Agha

that clarify comes that in decision CAGR, your Court X% and also as Right out are in to Supreme you favor assuming well?

Charles Eldred

and decisions as out Court point, of we to are, items the see what potentially prior oral relative we're and prospectus we the year point and get too Supreme to continue lot be those some growth. X% have and about to what commission talked ongoing have end to have and outcomes arguments just that focus at appealable of to has are, say comes at our rather the target could occur then earnings just decisions what but but we'll Yeah, and this wait see and whether having to those this to the we'll we we close the I'd So, the wait will feel

Ali Agha

Regardless of decision. Court Supreme the

Charles Eldred

but where comfortable target. and with things to see that wait I We out, come have am

Ali Agha

again it would look how high-level the roughly talked think just in you've blessing of should laid you commission that basis, out, say about would but how would-be locked that et CapEx Last that? question CapEx, at and we that or little the a is either opposition you CapEx not on cetera profile on require and one when about has that do much

Charles Eldred

a pretty have for investments rate been shift forward. T&D Well, type as to more does any we PNM plan talked this have and over of period straight is case to of already cases we have TNMP will possibility very likely which five-year there have about rate

a with investments our comfortable prudent. We always are is being capital

think to for invest capital our of in we solid necessary view regardless of all and from of these some of how prudent, We our feel views So, conclusions business. on the how commission their very that business. the issues comes towards are inappropriate is the we and

Ali Agha

when this have you next finished? in New is the Mexico, one would after us, rate told be case, potential And

Charles Eldred

We case XXXX. haven't to have in But rate the settlement mind, due talked we that about no that. case keep rate is

Ali Agha

it. you. Oh! yeah. Got Thank

Charles Eldred

Okay.

Operator

go Smith, ahead. comes of Dumoulin Please Bank with The America. from Julien next question

Unidentified Analyst

Julien. for I question. I'll it [ph] Nick actually And short is this morning, promise one keep to good guys, Hey

Charles Eldred

Okay, just I'm okay. you, scaring that's

Unidentified Analyst

the But, you listed provide in you on color I'm on sorry budget could any if you had ahead decision, Just were your touched hearing already. how obviously this those the week, expectations out on of AMI, this here?

Pat Vincent-Collawn

I Yeah, a does that customers you AMI, you that sense, do make to when readers. benefit issue hear struggling to the think meter losing but financial provide it up is everyone end

actually job, takes years then training three Although, of the and to and on no did this the meter severance in one when readers, Union Texas, do off, because found is it some the and light that, job we got Board. here all

cause balance that a could it's loss, I job high. potentially So, that little unemployment just of something rates doing think

how hearing So, try say should soon. know goes, to all we but we

Charles Eldred

because certainly you, I know were have the you remind coverage, to budget, from to AMI the months orders. the new going to just final put now, said and commission Nick we've guys capital in till we are the for

want AMI record So, just comfortable in certainly put have position and budget very, the such investing very commission, as until capital this is time. out, nothing new in our in our here. we're position pointed not to in our for We're of to but that we going of the

Unidentified Analyst

then the And much CapEx, actually GRC million, given on filing, just effects the lot. here. $XXX just that how a requires of quick TNMP TCOS Thanks a

Charles Eldred

first quarter at I the don't have don't will of announced TNMP. that of this details that some additional we've revenues a provide for think, any but filing But of TCOS point. next have actually filing, we TCOS will year, we slight

Unidentified Analyst

it, thanks. Got

Charles Eldred

during that provide to December try I'll the But, guidance.

Unidentified Analyst

Fair enough. Thank you.

Pat Vincent-Collawn

you. Thank

Operator

Please comes ahead. Wells with next Fargo. question The from Jonathan Reeder, go

Jonathan Reeder

the in California the FERC renewable, to Hey, of The PNM, kick CapEx and relates checkout, out I'm make T&D to sure so correct? further clear. power going that and I'm just projects to to big that's horse XXXX, XXXX -

Charles Eldred

correct. that's Yes,

Jonathan Reeder

in the alluded decision And is? Pat, you what recommended prepared the examiner the you've hearing to and rational I for rate kind remark timing of the Can that, pending in case. repeat the guess

Pat Vincent-Collawn

which examiner the extra But up has that. on - commission And shortly they months not were to hang decision not together, hearing the as think, have want especially quickly, us so a give they did and a appropriately decision the an I for make remember if the that should get settlement in it took process. jammed two an you thinking Yeah, earlier to did far.

the little as busy very right they the of now. a take a quickly now. put very, on to get is everything and have expect We longer, know, pretty even has makes it consider you Christmas, because world In want January them going commission perfect we would a it but week the time Because, rates filing. commission we to then EEI, on before So, may any that Xth. before It scheduled. just holiday in decision

Charles Eldred

transition in valuation as in is recall, with with XXXX, a approach phased XXXX rata And least to Jonathan, because XXXX. just you this a being about a it year, for talked pro rate at we case, the full rates a

and is So, if to just that it, amount. maximum XXXX. they year, have on delay they could transition But as be we're anticipating focus took a if $X.XX, the XXXX much as we'll

Pat Vincent-Collawn

January during sometimes, and going March of rates next the So, year.

Charles Eldred

any want you Georgia, Notre chance? Do by talk to Dame about and

Jonathan Reeder

hoping the so for well rest tag but Not teams game, do both - much

Charles Eldred

we Notre is the not moving so right at charts, so point. Dame bad Well, are, this it's up

Jonathan Reeder

think ranking I I but… the right again, our shrink of Cautiously it we optimistic. is game even the though our wasn't It terms best now, on in schedule supporting guess lost

Charles Eldred

have That's great way, that's could but gone watch, to game a point right. for One either sure. it was

Jonathan Reeder

base? know. you updated the not I EEI if Based question using I see increase could. assuming CapEx, rates in that settlement as a to am dependent just New the the last the for up dressing needing as let how is football approved One Mexico Indeed. Notre Dan you do PNM to on

Charles Eldred

about the million similar accumulative less increase but that's itself this which settlement rate was for around talked - than basis. XX% rate is revenue We've throughout $XX the increase requirement, on a was around what

as increases So, can, to potentially but of we there we that. size that always was announced to about additional and a be going we'll XXXX, really try increase reasonable out forward and the beyond and to freeze rate a great increase as with try rate we the sensitive keep in anything if did have XXXX timeframe depreciation the we

Jonathan Reeder

maybe is beginning mid-single-digit to end? to just new think you still on annual plan we're mean that appears I certainly I increases you've that there said manage there beginning Are really try before think to

Charles Eldred

Yes, beyond that's that, and you reasonable and expectation. but challenging that's particularly much we very sensitivity staff know think we that's very get a multi-year a that's have

Jonathan Reeder

Okay. Thanks. you guys. See

Charles Eldred

you. see We'll Okay.

Operator

Mizuho next Elizabeth The from Securities. ahead. question Guynn Please go with comes

Paul Fremont

a Paul it's Hi, Fremont.

Charles Eldred

Paul. Hi,

Paul Fremont

annual Hi, is what's the the X% that compound - attached I rate didn't growth for what year growth? base

Charles Eldred

XXXX to XXXX timeframe... The

Paul Fremont

Okay.

So year is at to end the the this you year? base what comment of essentially

Charles Eldred

from year XXXX yes. is going and XXXX sorry to I'm XXXX No, base that XXXX, a

Paul Fremont

So XXXX XXXX. ending

Charles Eldred

That's correct.

Paul Fremont

combination CapEx with of to Great. us have of looking would a of…? sort like at give in or respect equity, And XX% be then can equity give debt with debt to idea was XX of funding you can an you any respect to level guidance XX% or the you post sort

Charles Eldred

but I details, at amount is We're we that of rebalance as work the cap looking program as equity and the wouldn't we're see Yes, can through credit still it working to structure to a and and be metrics TPNM the growth look the need significant as equity. a we used as necessary. that it sure way way opportunities our

and the we that give to the work of So, needed. equity flexibility use idea filed an what doesn't us that the and plan that way we three-year also to side we cap business we'll and I we balancing out we fund but how all to plan of put if that, and just is mean look at a to options that being have reasonable with. as And structure trying

Paul Fremont

maybe you Okay. then can maintain want guys rating agency of maybe would for And purposes? FFO that level a we on to get, to targeted debt

Charles Eldred

to of then know XX the within But much of we to we're of our an them consistent The moving and maintaining know rating. and feedback all grade moving moving go credit indication analyzing to I the with very and of range net aware want we certainly objectives what analyst are, have be and investment and communications pieces you range analyst has as lot into again credit. going that think range is XX former are there are

Paul Fremont

that question spend solar investment? from XXXX your at last the when in then much how renewable numbers, And of is me look CapEx the and I is that XXXX

Charles Eldred

million megawatts XX solar solar that the and $XX XX is the XX investment. and is Yeah,

Paul Fremont

Okay.

that So other related to to some things of talked you the solar that's of all that's the about? none related

Charles Eldred

correct. That's

Paul Fremont

Okay.

think it. I much. Thank you that's very

Pat Vincent-Collawn

You're keep going now? alias to going under

Paul Fremont

out Yes, us as to one the long absolutely. fills the registration the get into as she yes call, who is

Pat Vincent-Collawn

call We'll you Lizzy.

Charles Eldred

Okay, Lizzy.

Operator

go Consulting. with Joong Research next question Auvila Lasan comes ahead. from So Please

Lasan Joong

to just wanted Thank [indiscernible]. you. know I if

Pat Vincent-Collawn

No comments.

Lasan Joong

You sing?

Charles Eldred

I Do what?

Lasan Joong

know how even you to Do sing?

Charles Eldred

I can't but... No, sing,

Lasan Joong

go John. to Elton going as You're

Charles Eldred

Well, that's you meeting our in we'll so exactly figure know what out. that's rocket song, one You theme that have a room, man that

Lasan Joong

why Just big August that that largely deal trend in comes report the any coming of back there continuing Mexico why growth? the reasons kind But a through mean it as efficiency which you other point green in New the I of you see loan a tricky. there any so. little through and the future, see going went they this better you over. what any or in one is is of you is going Are Can negative said last reasons are eight, still than shoots us is mentioned New give near in I seen light on if years Brazil or Mexico? X% do up coming GP we've nine you energy at

Pat Vincent-Collawn

not number especially our efficiency always one which a one they West lighting, Yeah, many the load in case reasons South the conditioning. what it standards residential to the thought hard New on side, did. energy got in the hit air is we LEDs. transition, places in number I got anyone And load think one the Because did the is light Mexico is we bulb of with cheaper, the quicker as lot LEDs than

got pretty lighting the us quickly. So

fruit customers a low the kicking urgent to commercials much construction standards has off, of the of kicking, energy focusing hanging this. constructing, the efficiency care have don't seeing been the here, is what now there when lot think starting but I really the start always standards efficiency you are impact what also you're new in in. to energy I see get as and commercial are call industrial We starting on are would do taken in I think have

I efficiency here. just life energy of a is think way

the... of In terms

Lasan Joong

efficiency energy halt? see don't coming kind grinding of you to But

Pat Vincent-Collawn

I down a to I halt, the slowing trend think little bit. don't a coming see grinding

are there a gets efficiency cycle generation rate think So little employing XXXX, here. all us the drive were where growth Mexico I in But are horizon, don't there new we energy doesn't have us down a seeing as pretty kind generation line if - like utilities halt. but again don't development to our but energy do see customer strong around think X.X just the bit gets and But utilities kept and vibe. are see better slope - what to you that a think is picking that pipeline. other seeing Obviously, much is that new here to up this look year, back I are XXXX from growth out I at not a our stuff, be, had of would coming some little I the is folks, we're really I but town whole we seeing. our favor, New in and he economic more also this is with than that's impact some coming grinding we effort electrification, we that we're construction is the there economy, seeing of conscious there planning more part to EV of that way in of

use Our per most then it making customer, utilities seeing a customer up. decreasing because are growth

hasn't strong. growth customer Our been

Lasan Joong

of to last $X.XX XXXX about leave performance question, that to you XX% guidance, PNM it's since top your previous year. $X.XX off fourth from question, and a Okay. Last hasn't get $X.XX a kind decrease fourth quarter seen means picking under quarter

- Any going give making Given kind out last year, trace additional how number a get on us be figure get as I information number? strong to other to the a number. you for easy it's why XX-type can't maybe as a to as you provided that not to can it to

Charles Eldred

we're at quarter looking spend system maintenance. money vegetation some trying management fourth the in and mentioned, I as to Lasan on additional

to as some fourth So through XXX-year, quarter Pat - the contribution additional additional been cost have on Centennial we the of go to we the foundation planned have also we pointed out, earnings. spending. there And that given planning that that is in then will foundation which

different So bit fourth there from a last that quarter is year. the little this spending in additional year

a some fourth that's as of the so on numbers probably that missing you're quarter. And on of result

Lasan Joong

I'm kind just and of part what of The the is registration foundation --. on. Why touching part Yeah of donation not it. it

Charles Eldred

you're outage quarter. So, four well. maybe in And that's corner that an up has not as where probably too picking fourth

Lasan Joong

might Okay. be And that extraordinary it. that foundation part an certainly of item? be will But the donation,

Charles Eldred

through that's earnings. funded No, right

Lasan Joong

a earnings be ongoing issue? But funded would That's Japanese. that net to

Charles Eldred

how that's done and in consistent we the we're And past.

be what as us to to important consistent it's in we've to So past. very done the

Lasan Joong

you. got I

was that's Okay. Thank you what I also. much. missing very

Charles Eldred

Okay, thank you.

Pat Vincent-Collawn

Well, all happy EEI Halloween you Halloween. again you that us safe thank of guard. over joining at hope We morning. to in hope this you. and you see Thank a you so have all week everyone for our can a We you just see

Operator

is conference concluded. attending Thank you for today's presentation. This now

You may now disconnect.

TXNM Energy (TXNM) 27 Oct 172017 Q3 Earnings call transcript