PNM - Earnings call transcript Q3 2019

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Operator

Good day and welcome to the PNM Resources Q3 2019 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Lisa Goodman, Director of Investor Relations. Please go ahead.

Lisa Goodman

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

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

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

of as Resources' current XX-K, a affecting XX-Q, Form and For reports the filed SEC. annual with please our quarterly reports future factors discussion on Form on Form well refer on to X-K detailed PNM as reports results,

will that to call the With Pat. over turn I

Pat Vincent-Collawn

congratulations our Lisa, call. also you. Thank on today. Day Good National for For everyone. appointment today of Investor to and earnings Relations. happy We're morning, you, Thank you us Your Pets joining for third Director quarter all on very your Cook It's

Dinner is Thursday. next And some website National say its National Men Day say Men Make Dinner Day, Make others

four. it day Slide whatever is So on But gentlemen preparing. begin start let's

year. third to the compared earnings the quarter the Ongoing share earnings earnings of GAAP quarter in of compared of reflect in $X.X share of in per quarter third $X.XX per to Our XXXX earnings of $X.X third last $X.XX XXXX.

a provide to $X.XX We on financials are will guidance the minutes. Chuck affirming further few our details $X.XX. of in

that higher terms reflects growth TNMP, In PNM peak highlights across TNMP. another and of at Texas. At both reflecting get all-time this the quarter, continues system temperatures increased record loads the our of

million of of front on were annual system its implemented transmission XXXX approved filing and filed September for second was investments this rates $XX increase cost its and in On These the million. key filing across $X.X XX, TNMP regulatory recovery September. in by revenues will

received Line New Western In This New Commission XXXX. The PNM, the New the only key is Regulation in Transmission the across line leader. further capacity for the project renewables. of Spirit a a move to significant megawatts not for approvals energy in further encourages XXX FERC to it plans and Mexico and will in investment acquire Mexico Mexico's have clean but investment energy from to both PNM is Public wind be investments state a

to where for it path in case asked of costs our should to abandonment Juan along Generating schedule on resources. continuing continue We provide through Station schedule. exit Transition the the The this new on this energy Through cleaner docket and commission's plant parties the replace the whether the the is procedural to of San energy Energy financing law securitization with apply filing. the brief Act, the state and

the loss the weigh to on of an although to provide these at on Mexico before the ask petition Court parties court other the time. declined to and PNM issue briefs, in court this New the applicability the Supreme opinion

here ETA their filings lot area more interveners out Groups are about the X; a case representing check is then that the community. included applied, San our by whether laid benefit securitization funds On X's. there positions should that in not or filed red Juan notice the we've in on Slide you'll the green the marks concerned be

the through the used impact Energy Transition a schedule ultimately clearly take Court. the that is resources provide of and for abandonment community to to and with to moving the groups a severance intended consistent Several trading, commission Act, were Juan Supreme of back legislative financial be procedural for pass case is the part will order -- If economic Hearing understand, it are ETA not funds. order. the Job that supporting to of development effort resources the the the environmental was San recommendation and we filing. and Examiner it The to

Slide the of to on customers to X; for PNM procedural available tribal schedule and touch expect At Turning decision voluntary SolarDirect the regulatory the we on agenda. other I'll to next filing municipalities, the and year. few along move first governments a continues quarter of the subscription in our Program updates large solar

megawatt approval also first the dockets. expect our other PPA. the XXXX plan, the a for There the XXX wind are quarter on no pending We of for decision renewable updates includes request in which other

with I'll at Chuck over the numbers. it a turn to look for So that, detailed

Chuck Eldred

morning I'll and results getting everyone. recap started we quarter this refresh Thank you, capital from our get our plans. into a with good Pat, before

with start Let's slide eight.

second both temperatures Pat earlier, This As temperatures the in TNMP. mentioned and PNM higher load quarter. earnings low welcome increased change in following at our record a was

some we ease the cost we on months put a As the to that of able plans a were up in few result, place reduction ago.

We $X.XX. our guidance continue midpoint of target to at the

drivers to increases at rates as were key second the result because [Phonetic] of and rate, property in partially these consolidated implementation TNMP. result cost our corporate effective our increased of a at phase, the other taxpayer, appendix, $X.XX businesses, PNM from a depreciation up Corporate higher that as tax we are year. by you rates and timing the that benefit offset influenced TNMP results increases expense tax increased this and capital segment and are by detailed taxes of was from earnings the of investments. implementation XXXX both of note of at in At the All are the and began will included base PNM January, continue the

continue then $X.XX Slide services. as professional Weather of expect the to see New class flat over by last have of in job service cooling industrial Mexico's but around as than of sector on primary driver and increase articles basis, degree classes education largely Weather-adjusted the PNM, guidance was is by job come companies higher and in the by Weather the these newspaper to a and have X.X%. X%, days Now we case for we growth the increased implement our the across residential efficiency turning private one a third as as recent programs. growth hospitality and nation, health jobs Load at also This and load X, leisure offset in highest followed primarily load PNM in and the services, our was year. and increase customer quarter business energy In EPS year. to territory. were a are range steady in year-to-date with sector we and the At being increased this to XX% to reduced commercial last PNM growth touted top

expecting quarter, nation at Load evidence to As growth the to by timing I increased expectations we in increased a and customers the degree than these a increased interconnections of we basis, load of see lead to already last by projected X.X% year. some over we of on expectations year-to-date $X.XX the XX% at the will were changes in days indicated base bring to factor on to third load we online the midpoint full-year continues in our range account but for coming results the TNMP these this Weather guidance X% last our X% Demand reduced of have In quarter months. still has Cooling Texas, $X.XX. EPS demand the be prior range this, and system. year, for higher our year.

demand of percentages not these because but the utilization any types In the low load base changes an of impacted increased given significantly monitor in system. as quarter the to indicator customers, of do charged our percentage EPS by T&D rate is of we

peak they continued for years, As infrastructure this further consecutive our mentioned need several Pat investment and hit demonstrates new TNMP a for Texas. in have as system

capital turn Slide this Let's impacts plans. updated our see to how to investment XX

is XXXX through just has increase TNMP. projects previous year of five from Our by million an driven This capital at is to reliability billion. plan last $X.X $XXX our and over system increased plan

XXXX, be here XX upgraded KB to substations some West growth For are [Phonetic] A from and North, TNMP's KB of to key Texas example, region. the projects. in will transmission in in lines support group XXX

to line compatible that be with current network new in continue power need support service be will the with capabilities a beyond our transmission XXX gas-fired begin call Coast, Growth West increased and for In and studies to continue completed XXXX. capacity transmission the through of the KB particularly in contingency the which interconnection XXXX also Texas performed we XXXX. of growth, increased And and Gulf meters infrastructure transmission plant. support reliability for regional territory extensive drives in issues help ERCOT -- AMI upgrade Texas. the has will investments to of replacement in

studies. increased response our at in investments those have to TNMP We

a use we recover TNMP years our and investment significantly mechanism the of several to TCOS last have we the Over increased investments capital year. of made level twice in have transmission

rate we return have to ROE; for on completed sides at cost a X.XX% our to allowing that TCOS, mechanism and allowed capital both the earn use look we'll structure Now the now XX% of general business. the TNMP A&D case

remains plan and then Western power with was quarter for our line Commission. with million Spirit $XXX FERC recently by capital that consistent the both the transmission replacement approved million $XXX PNM last and for shown Juan San Mexico

our with enhanced resources at plan business that and this investments growth other run services to of our annual Under to rate -- rate addition allocate and along physically provide continue to security, and investments to we compound TNMP, physical In a allow grows smoothly PNM to cyber at technological X.X%. base customers.

addition have $XXX in the and million to TNMP to million and to looking our of our XX, shown have that increased $XXX We're amounts turning of million $XXX capital up earnings [Phonetic] timing balanced investment mid-XXXX. to Slide exact options will power been of $XXX be a leads and brings converts at projecting reflects TNMP equity and by issuance in capital plan, Now we increased for fund four mandatory five block in optimized. This structure. sale maintain currently year on million additional instrument equity total type the the

we on San successful our delay General support Rate second strengthen earnings power to the filing outcome to X% of early growth of quarter continue As potential target. abandonment December focus planning keep X% of too XXXX. in at our delivering to we The Juan a Case TNMP replacement and the estimates the our addition earnings dockets, are

ratings credit our equity grade and executing while our We creating continue value. balancing focus to preserving and shareholder of plan need the investment on

to back Pat, it I'll turn you. over

Pat Vincent-Collawn

Chuck. Thanks,

to some of Before company doing. that been for questions, I with up up things great has I open it want the wrap

education. Miguel Our have cleaner portfolio. plans that's San revenues from can to along completion celebrated the with county generation megawatts customers value moving that, Energy garnered retail support serve of be to tax to our the and that of support boosting San replace Last used see who to portfolio the XX the Center solar a Juan infrastructure Solar in to for we week those

in financial The this only our awarded assisted PNM and pay of across of up customers making to on past company vitality. bills, to part our a of from PNM industry This New month. efforts. efforts [Phonetic] our energy their recognition Resources our well that is quarters efficiency our volunteered other grants restoration Foundation from live, headed at and event earning and droves fund are of a Dallas our support not assistance the more employees education, employees also low-income aid speaks Texas in place Public than and mantra. week, our quarter, play. Neighbor to making to type following this a so I'm service team three and of variety restoration economic for crews largest weekend, our of in Mexico Service last Tornado agencies. STEM Good happen to electric proud some that TNMP in services $X and better Mexico in and things million This committed It's TNMP. annual role receive through a to invaluable where these my be This and swept And our California's to in support work the Texas crews communities but core New PNM XX

for up it So Sara, let's open questions. please

Operator

session. Dumoulin-Smith [Operator question Instructions] Lynch. of Bank with will begin go ahead. the now Our Merrill We Julien Please comes from question-and-answer first America

Alex Morgan

question. in This Hi, cases. Alex PNM if a My the of is you're this my taking about actually good planning at Morgan rate and on Good Julien. is was at in first going calling wondering end for morning. for rate Mexico I question morning. case New Thanks year. for

Chuck Eldred

Alex. Yes,

comments my to the of that in As delay I case mentioned would quarter. look until second part that early we rate

Alex Morgan

that issuance but Okay, for versus XXXX. clarity clarity said I about we thank much. is you that should for the block there. incrementally exactly more then, was little not just hoping I the know so was timing potentially Is out And be yet, just something for the ATM. bit around little a a I you of thinking looking

Chuck Eldred

-- you potential the Yes, deck, what appendix, our you that if our the you'll reference in we needs reflected year, in equity we slide footnote, if block show equity those would is and look you was for an have plan that, amount forward can the of think we be see each at if this you to earnings years. continue we on number on the sale, each power drawdown right, about

in your just you'll reference, details. So page and the the earnings earnings XX, power get and in go slide footnote power to eight

Alex Morgan

today. all you. Thank That great. Okay, -- that's questions I that the have

Pat Vincent-Collawn

Alex. you, Thank

Operator

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

Ali Agha

Thank Good you. morning.

are incremental of any, there up, those customer parameters, are rate you the at those TNMP -- that First projects you all those factoring at that CapEx dialing impacts of constraints fairly -- at question, in had this looking locked numbers. comfortably all terms as in any all any within are in I a look

Chuck Eldred

Yes, request into have we our we're into our TCOS that plans customers, recover ERCOT to issues all in studies comfortable, our the mechanisms built it's concerns no file demands and is very investments. or the we'll and DCOS locked provided and through and so order they're

Ali Agha

And it. to ETA the there but statements, any where currently and from the then public interveners commissioners been thoughts Okay. with have some out the are, laid what's stand. or how all I And about further thinking discussions on are other back where latest regards commissioners the applicability clarity know you forth.

Pat Vincent-Collawn

Ali, it's Pat.

think that a until are with briefs until I filed, the waiting they're comes Hearing Examiner all out the recommendation.

they're line is of So have -- until into thinking, sight don't what then we it really as should which be.

Ali Agha

to or event regards the completed you approval embark that triggering before that I that equity, have puts sort for regulatory thinking of how Chuck. a are looking on to right now? that finally, see. And particular is With or you about any you're program

Chuck Eldred

Now, are of Board a just have to the so regis statements when equity. the all it's we in authorizations -- SEC filed already we decide issue matter

Ali Agha

thinking point view. more Right, a of regulatory I from from was

Chuck Eldred

there no issues front the No, at all. regulatory there is no, on is

Ali Agha

you. Thank I see.

Chuck Eldred

No, -- no additional steps no at all.

Pat Vincent-Collawn

Thank, Ali.

Ali Agha

thanks. yes, Yes,

Operator

from comes ahead. with question Fremont Mizuho go next USA. Our Paul Securities Please

Paul Fremont

Thank the are the you the and at you legislature opposed in an Albuquerque Journal people -- guess they're also that the are there article very to in Act Energy all scheduled. Can I in much. hearing discuss some there is Transition -- that

up Senate Can I think next Cervantes week in of in the sort Transition bring thoughts what you with -- Committee ETA. us your on what and are their are. date Energy Act with just to concerns the the

Pat Vincent-Collawn

low Generating as price San gas -- natural you is main Juan that's kind natural few a of a and like Yes, the folks, of group small, some are Station something like they coal renewables. that it's pretty the the compelling and revised down there the environmental powering -- regulations know, that, the shutting future, is composed because of reason of called low kind is the and don't industry

about So any we're that. concerned not of particularly

Paul Fremont

any staff plant. proposal Great. has at been the the there reaction adopt San that And Carbon you Capture then to Juan technology

Pat Vincent-Collawn

technology think is in of looked in at best that what at had everybody not I've write-up that is expensive. really one lot I There Paul back pretty a the scale, technology and XXXX. been the understands well. it I reaction has it's seen think this reaction not that We about, to summarizes proven the you

we file and conclusions As now go on resource matter our through we're the and a it to the fact, of came and updating numbers same as plan.

reaction. no really So

Paul Fremont

or the of do last being two, necessarily the before going you not on before see with my you now? has issues then the forward any linked question NMPRC clarity would need right equity And

Chuck Eldred

other Those linked, don't are we need not any regulatory approvals.

Paul Fremont

dollars no, Regulatory no, I'm in spending Yes, in -- I terms about New didn't talking mean of Mexico. the

words, portfolio So different is... of power other replacement terms in in they're options there

Chuck Eldred

No, no.

be what need the that we kinds say are decisions I timing projects driven business if have for we'll equity think -- flexibility pipeline not credit prioritized in that they I'd and the no, shareholder -- are around so other the need with decisions. because and needed they no you to said if worked we're in you're it to and suggesting we are made. value, plan to in, we meet think but appropriate is certainly some maintain cap of our and what provide by to metrics our structure timing equity it's those --

Paul Fremont

Great, thank you much. very

Pat Vincent-Collawn

Paul. Thanks,

Operator

Please ahead. next go Our from question ISI. Evercore Gordon Greg with comes

Greg Gordon

I from wife, I need already basis cook so to a regular have my on special a for holiday don't that.

Pat Vincent-Collawn

to That's, yes. you. Congratulations Well, yes,

Chuck Eldred

make all say that us but You shouldn't bad. look you Greg,

Greg Gordon

here in regulators to not next the complex taking the early governor the that. know So It action to the legislature situation be complicated the want New also you're year legislature regard them. -- follow for and set look, has a I sounds governor guidelines in and [Indecipherable] that Mexico, contemplating like to might in seem With the that some the

So talk -- what can mean, in law the them worst-case way I or the then against --the commission they in did scenario about hearing and a from one of you're does another. fact go where, -- structures you

going that's You're move plant to down and renewables. ahead the with deploying shutting the

financing be B? the So what would altered of plan

Pat Vincent-Collawn

be question that but in into initiative clear will is discussion there going the or to that -- that's if truly sure appointed they how that Commission go to are they that, aren't couple think do how the ballot commission start for defines that consolidated applies Chuck around financing governance be be what the we and with with there needs There constitutionally not first Yes, the of making was anything the we second whether some that, so decides XXXX. about the discussion helpful to they to let structured is docket. is of will that Greg, of legislators reform as ready exactly that to the opposed done go passing. some out things. applies of part trying they be resolution on enact Supreme the the that of put the part. to anything, the talk Maybe legislation legislatively opened do can filed of turns the that a application bifurcated and when some I'll would we of the that said think PRC that discussing on Court, to public don't that commissioners be also -- our are as argued It because timing parties abandonment to Act Energy Ultimately, comes Transition would and in the previously application they very people very act the the a when that the qualifications

applies to go ETA until would A does law and position constitutional change been application law our no all apply X, miss to provision we're that court really case, in filing, new since and our was the that pending of parts application to it. there back of confident it law applied, affecting a so the July being province that we position that's the we the -- cannot that that consolidated on firm has

So I'll you that's part, let Chuck talk to about.

Chuck Eldred

Yes.

about show considering. that debt of Obviously, have to prioritizing if thinking capital think you issue kind replacement issue order Greg, into -- timing and support the but have sensitivities. we look power. we we were Pat's We to the we're a securitization you don't very that like we'd would we did in some additional you power equity flexibility other comfortable capital and of So the of right reinvestment projects because feel equity the we at have so the downside position, and scenarios and earnings how to apply talking about it's when another point, if

to earnings reflected of will -- if think within that very a lot is there's way. our potential appropriate of different and we it strongly the to view feel apply we the ways the it that think it of just address but and plans about business doesn't achieving we securitization, So continue time, our well

Greg Gordon

Take guys. you, Thank care.

Pat Vincent-Collawn

made Greg. Thanks, dinner for what you forward report at We're to on looking EEI.

Chuck Eldred

You of for all us, Greg. can cut

Operator

follow-up question next [Operator Our Ali Agha. is Instructions] a from

Ali Agha

clarification. one Chuck, Thanks. just

rate a of case the sometimes or in quarter lag in we pushback. from comments of you year-end mentioned XXXX as How you next middle think for the your result back that that should to push New As year. about Mexico second regulatory

Chuck Eldred

have the Well, for January been we in effective case December that XXXX. new rate would the date filed

So case of then we if XXXX, -- early of in that XXXX a we'd the so file just early rate have quarter XXXX. second fact look we at at effective in quarter second

at from with standpoint all to So and commission we timing given and cases rate the that it's the pile ETA we the focus the need appropriate our just we this replacement pending we don't in point, power it's on have have on another case. think

is of case some towards So the making sure this more our that allow we -- for approach really judged rate to timing early planning.

Ali Agha

you. Got

temporary, see but annual we'll in on the issue So be timing track. back by impact be then you and that 'XX, will the should 'XX, just

Pat Vincent-Collawn

Correct.

Chuck Eldred

Correct, that's right.

Ali Agha

Got you. Thank you.

Pat Vincent-Collawn

You're welcome.

Operator

session. would the question-and-answer ahead. go to turn This like concludes Pat Vincent-Collawn, the I conference Please Officer. to Executive Chief over back

Pat Vincent-Collawn

make again, your feel Sara. to you. this joining at whether thank please Enjoy or have for dinner safe it weekend you all see you, Thank us a all at morning. bring pictures we you EEI. Thank free pets, And will EEI and you your for us someone making

Operator

Thank today's conference now attending concluded. has presentation. The for you

disconnect. You may now

TXNM Energy (TXNM) 1 Nov 192019 Q3 Earnings call transcript