PNM - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the PNM Resources Second Quarter 2022 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 Lisa Goodman, Executive Director of Investor Relations. ahead. go Please,

Lisa Goodman

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

President and Officer, Don Tarry, Joining me Chairman Resources’ Eden. Operating PNM Financial and CEO, Lisa Senior Chief Vice and today are; Pat Chief Officer, Vincent-Collawn; President and

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

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

Pat Vincent-Collawn

Good Lisa. us Today and special. thank morning, you today. for joining everyone is you, Thank

financial you Day easy. On White Slide National IPA in to Day Ongoing the at don’t year, compared coming come You Wine increased know, results. choice to our pick earnings second the quarter $X.XX. or Day. Cookie X, Day, get to start National celebrate us; National Chip during with want last Chocolate National And the with I I’ll

guidance about and both the XXXX. more Lisa talk our considerations. affirming for guidance Don are and We detailed results and will XXXX

you Eden Chief and announced Tarry have and of roles we leadership part merger already Don I this President their newest from of finance an the Mexico years. with file in Financial over to their promotion role. of in Lisa President for New Vice congratulate been Operating will our and team at organization During Senior Chief Tomorrow, Many appeal. the the them and the on met Officer. Both second of quarter, Court brief Officer, have to we team, Supreme integral last XX reply them our the our

oral requested hear waiting be we’ve if consideration. this the any the grants know, we’ll for to arguments, Court is request. no hear timeframe you hear their arguments nor court and As for to the Court oral requirement There

interviews also to for is New candidate the As a have this first seven the is reminder, no initial expect XX-month of decision, in statutory there XX-month week, earlier from in of filing applications to will held selections appointing their for XXth. to will Xth The Committee list continue be least and and a will The reviewed January Xst. and be November three must candidates, year. be provide November seated Senate. interviews Committee need by Xth, October, five appointments the Commissioners at to end Commissioners and its care process published Committee The Finalist for the timeframe schedule, The prior Governor January. members will of also will According Mexico administrative the confirmed select and a ongoing. the our made will process Nominating These been Committee we of be and taking items. a individuals meeting announced to be appointment in held

begin to will roles in able acting confirmation. be they However, their while pending

and than I PNM’s on when XXX% XXXX. from on half total coal the XXth. to of generation than point, Unit highlights X and Juan PNM service resources of of less will by ESG some full from and Don TNMP, the September cover is our a on over next retired updates Station XXth. be it will the turn for Generating the of be big June of will more Slide Unit We goal X. quick I carbon-free, comprise that our exit This moving retirement towards plant our San At carbon-free XX% step closes Before X on generation will in step portfolio, coal,

have initiative. also other EPRI a number utilities of Climate joined in We READi

of way increasing physical climate grow These impacts we will year, types is allow and grid investments the resilience processes it and to from This each in strength of consistent critical. become face grid prevalent a throughout has state great prioritize today’s in of customers adaptive Mexico the that expand model into New develop we collaboration business. in development our As leverage announced education risk our with solutions a the the challenges, planning to economic University our internship June goal serve best a partnerships climate of partnership more and will challenges. that to the integrate and us of increasingly are terms practice a the as and with new information and to expertise programs different science-based We organizations efforts. the

keep committed employed internship, our coalition graduates businesses state. in create In state the across for opportunities addition we students building own in college to to and skilled universities employment a to the of equitable

cyber Military those Mexico one opportunities the continued for was critical efforts to access. to These infrastructure, focused not intended personnel otherwise of resources was first out programs cybersecurity. We further participants instruction the have The are assessments. College programs as leveraging may own on tribal Department and while provided Innovative building also grants vulnerability and military partnered community have to to of cybersecurity their to their who training Defense defend available exercises a bring utility We carried state. on and and event with utility event with Training, with Community together the Central Readiness telecom in tribal experts. New a part military of brought the assessment

for tribal to As the Internet become to the and Data motivated of were bring the grow in we particularly program and to important increasingly Communications one tribal utilities state. communities thrive,

Report. website, will turn where can we have With our for Sustainability on our our to support You Don templates read reporting I about over our update. operations initiatives communities broader recently that, and more for it an updated in Annual tribal ESG

Don Tarry

our an energy transition. and clean start on good Pat on X, Thanks, everyone. morning, Slide I’ll update with

transition, our first the exit been to than and step phase support has environmental by impacted considered customer plan for of more benefits. The provide coal, was to Each transition. rates achieve designed carefully also of from our communities this balance our

We continue to to leader a clean support energy the out be and laid Transition New Act. the Mexico’s direction goal Energy follow in

end Unit X the mentioned, Juan June. Generating at of As of Station the Pat we retired San

to XXth planned ensure have through running keep our get through X to We season. we summer peak Unit September

some you power by we acknowledging a the team give the these our resources training Juan the utility and Act we who control to to Mexico will other contribution cost to without July, pertaining been rate Supreme support I offset our to by Juan for the been the phenomenal these meet gone from resolution. and are decades. bonds customer and There our pandemic, rate work keeping deferring and be again the want Since Juan teams pre-funded New that monitoring merger to needs, a pass put are priority, we with regulatory any plenty and have New parties our billion to rising time serving customers, demand. made the provide reductions done the June will retirement of San San after to customers. to not we this that review has Energy dollars. occasions special workers times. our for our of benefits rates top portions and required new the agreements the customers has of difficult Despite since days New XXXX, plants Commission to the great retirement of to thanks allowed Also, us to commitment. separate San teams. Mexico are a of Transition is at aid support the to closure. that to doing remember once facilitate ordered review adequate general partially last This significant us Our have to in cost up working not rate a running, kept have the customer first rate and current back that lag Court the plan, and mine. PNM increases these of in system January agree plant investments consideration a the defer out pieces the been have impacted to to to wanted impacted job, of review funding customers of rate have for still and Energy challenged to completed communities rates. are ensuring tied meantime, our By this our employees review. made have who rate the XXXX, severance been and I In earlier reclamation towards last But rates place decommissioning stipulation has onset we Transition these them and Overall, credit In our needed don’t of been December the when in resets has $X mine that amounts any the investments over Act overall year part until and issues to and were to since the the Mexico was through of file those of a without

process. end the Supreme process pause a expected does Court the credits of appealed period, but in under will the credits requested New a the the rates have which statutory appeal to once XXXX. the the by We rate implemented, to The we’ve is meantime. in credits The are request court monthly and new for the customer begun time Mexico the appeal during have order is implement not stay consideration January to and stay also

Corners Mexico plant exit full complete to energy oral the the mid-June the and under from transition continue also final also clean coal. is of an Supreme arguments The change of also this filed This time. appeal We in the from significant with Court. case. will the to our industry’s to briefing is We case New XXXX our pursue end exit request schedule most under Four our in at

for it thing environment do to is communities, our this continue and also We know path. down and that our shareholders, right the will customers, our we the

and guidance turning growth guidance in This year been are significant Industrial have was Now, in running so customer-specific on the impact of slightly a slightly delayed of load by ahead our expectations at a growth growth to primary service there’s reasons. is from On Commercial The customers. our little growth expectations. delay. for has this positive for Slide driver kilowatt Residential our XXXX. PNM, growth hour area, by per expectations and chain for earnings our a X, behind rate, customers load These other not supply lowest note,

then but normal. with cooler temperatures milder heating quickly than April, warmed We was June. Temperature than in weather earlier up in the in season rain quarter May, in usual. welcomed came Second some soared ending

slower customers the future. development The the kept load we first is years peak had growing rooftop use to inquiries the July, efficiency our additional of for and expansions, attract since days is requires and we’ve past new and to saying increased hit the level as that several total for hundred-degree from been PNM have investments a state several rate, current the and economic what demonstrates potential ended system on of on time continue the move XXXX. – of the meet the – efforts growing businesses, peak This As quarter PNM a significant. energy relocations, solar seeing system and system stretch at a demand

higher second had load in area. several set In and above These communities quarter. is expansion load the Gulf and the Coast significant above temperatures Mexico, as impacts to economy New and Weather Unlike were new Texas TNMP. Both West peaks and rise for continue the spurs base the a Texas volumetric through expectations load Texas, growing in and in our demand of new peak North pushed to customers our crypto temperatures demand-based new in were system reported. normal TNMP in system quarter. quarter, Texas mining the June. July Turning

San the Supreme I filings Juan year. talked and Mexico also of filings to jurisdiction. I’ll in Court. appeals PNM, key update Four in and already X, the Corners our we filings the upcoming New upcoming have merger, at each wanted about to you the second At on Turning cover regulatory Slide half

the for investments as corresponding to communication application automated related our we cybersecurity We granting that that with associated March. of Commission Grid to filing system, restoration control a customer portal, indicated time October. planning prepare we The more the include Grid In This Commission, networks, Commission are was a efforts originally five-year multi-year times, well Mod and preparing by Mod to outage as in make requested reducing in were automated scheduled these horizon. and a communications plan would covering was the and supportive measures. enhanced a filing meters

plan filing. file to test update rate we We based December, plan XXXX. will next look future then our to a our align with in quarter And investment on year general of to review PNM’s

you We filing be more made, information but future the the since base can of year test in our recovery will XXXX. share rate to once expect it’s primary last about driver made filing

On rate this to recover the At TNMP, base rates we a business, on continue additional progress our effective update, that formula are this year’s the transmission FERC transmission $XX year. rate. of continues And under side recovering agenda investments June in the million new became with of PNM for Xst. FERC we regulatory an

well in March, of Xst. in in approved interim and settlement, of on of the filing would million rates replacement over a walk associated for positive of the this of turn to requested the of third another meters Settlement be growth this for million an on approval filed we and September. as associated quarter transmission an meters Following cost also with impacts with continued TNMP On for needed through guidance recovery to the these of Lisa recovery deferred our base. these distribution parties of is maintain increase and investment. considerations our for April. transmission part to and Texas our implementation service our and resulting service to deferred in We $XX based the going rates this filing made are things Overall, we second marks annual with expand $XX.X recovery settlement, expenses increase on we agreement also Regulatory transmission our XX% I’m forward. been a the Economic implementation filing. infrastructure. This continues and filing new of XXXX and in July September expect Principle year Environment and on In this years, of and taxes to successful for have settlement a earnings Based rate investments net reaching The in reached cost filings. going previous filing implemented recovery AMS our XXXX, recovery first for of next to until

Lisa Eden

Spirit second quarter increased our in the year. rate relief The from outage TCOS due load high-level I’m Don. year-over-year transmission detailed the and DCOS XX, filings. PNM decreased to Slide of are $X.XX higher than compared second realized pick margins, to Increased the Western and you, results the Thank for going the including to in drivers Trust up Decommissioning the costs. year-over-year offset O&M, were performance our on available along more and planned prior with higher TNMP with $X.XX contract, quarter. by including appendix. market weather

higher At at both depreciation company interest of seeing increased new and tax Corporate, property investments rates addition, debt. our the impacts parent outstanding In PNM TNMP expenses. and on we’re

be closing of merger off to still intended this is at paid reminder, AVANGRID. our with and was a As debt the

for a the rate part million exposure To year. we remainder in to of of of the current mitigate entered created We some interest have be exposure. expense which by to the environment, $XXX driver swaps, expect limit will continue interest the the

results within to Turning earnings Historically, for can are by strength top XX, room half on in weather. annual and to of we the quarters any far, any and we have our our two unexpected quarter our seen cost our range of guidance changes, what XXXX. has half Based increases significant we’re affirming the for our XXXX. barring generated and significantly impacted so be targeting cover consolidated for in third Slide the consolidated past provided XXXX earnings The has guidance.

updated expectations for first distribution have In actual quarterly the and year earnings of for to the half. we reflect XXXX half addition, the our revised for second

T&D XX, maintaining our Slide on capital we’re to also current Turning focused plan infrastructure.

As effectively work a mentioned and the teams to as continue inflation to last necessary impacts chain most our we we investment later Don shifting plan monitor this that will Mod and indicated our current quarter, Grid year. are maintain we plans. supply allow to file and projects

filing when quarter plan third will our results. this report we capital We update with

be will we always, of As the impact. customer mindful

EPS Our through plans to XXXX. annual support continue X% growth

our of mechanisms. growth rate through and the forward-looking majority rate rate the base TNMP recovered With formula FERC

We changing conditions. of track remaining results a flexible adaptable have strong record and and to delivering market

over ways current we With to turn Pat. our the in back shareholder that, strategic will it As our always, environment and direction continue communities focus losing navigate deliver to and sight that of results. on goals I’ll supports and without to long-term customers

Pat Vincent-Collawn

Thank you, Lisa.

the responsible retirement to this have through summers are whether heat. you up Before and Safety let’s some it work who keep San fellow top our Juan, crew keep hot been of for systems and my I the to values, open the to field is I’d an like add and members up for incredibly in or Dave, those their for questions, running to that one at core our in teams working it our questions. safe priority in office. open thanks

Operator

question-and-answer Levine We first session. ahead. now Ryan Citi. begin [Operator Instructions] comes go The the from will question Please with

Ryan Levine

morning. Good was – hoping I

Pat Vincent-Collawn

Good Ryan. morning,

Ryan Levine

off was hoping terms the start I in Hi. of IRA. to

You then proposed pending know as merger? you outlook how into both do see standalone your impacting business a case the core and also legislation the

Pat Vincent-Collawn

Well, going national which before day I you Don question, Ryan, do, to that have are Okay. answer but celebrate? we

Ryan Levine

sound pretty all good They to me.

Pat Vincent-Collawn

What a diplomat.

Okay. Over to Don.

Don Tarry

and billion in beneficial. Absolutely, Mexico. morning. I’m a see we chocolate Texas, Mexico so chip Good in threshold have don’t territories we service mean Hey, I I’ll I’ll guy, I below mean that the go about New very so Ryan. specifically Obviously, we’re talk dollars, New cookie New Mexico, that our route. and it issue.

to past really in with associated longer-term, we you sits know and in one and law for transmission get the beneficial. passed a prices tax to benefit they of the that of and customers, solar how of that allows a of third credits, PTC probably PTC the we perspective the benefits specifically the we’ve so from up may in wind tax that. be customers. normalization, utilities caught some doesn’t benefits opportunities look in But and in Any as of also development these with relates relate first part’s through the that allowing participate these to, as potential couple more change, the New like for explained and provides And type benefits Mexico to that the solar development, it’s good get lower

capacity ITC an being to battery, is self-select the it normalization to be with able the of as do utility ITC allows side, benefit perspective. being On to too, us from the and a able on because out tax well competitive

I in and finding those is essence, would be big this. utility most positive on areas think So the you’re very

Pat Vincent-Collawn

and Yeah and here things those Pedro merger that said, overall but AVANGRID. continue well some solicitations. AVANGRID’s think renewables. corporate resource benefits, having and with the up I utility for be lot renewable of of from Ryan, we’ll storage storage more And a even discuss benefits as ownership those are and I’ll let line we’ve got Don very potential

forward looking we’re to passing – tax the Congress. package IRA, me, that So excuse new

Ryan Levine

that. I speak to deployment, considerations I’m more incremental Thank you of may hearing for the larger guess the to to If partner follow-up the are the you. rationale strategic or minuses and on other capital correctly, pluses there that transaction? capitalized proposed with any entity opportunities you furthers and that see

Pat Vincent-Collawn

in continue tax the credits just energy to not think in clean access remains carbon mostly same to of rationale the transition only help the better and I terms strategic to but and these merger the that think I – capitalized technology No, the for reductions US. transaction, Ryan, think help I the

Ryan Levine

Okay. question. taking for my Thanks

Pat Vincent-Collawn

you. Thank

Operator

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

Paul Fremont

Good morning.

Pat Vincent-Collawn

Paul. morning, Good

Paul Fremont

Really, two morning. this questions

expect the securitization has timing bonds? The issue when of with question we to would first to you do

Pat Vincent-Collawn

going celebrate, Okay. And Wine you Paul? And to to I’m National celebrate what Day. going are

Paul Fremont

The end of quarter earnings? second

Don Tarry

Yeah.

Pat Vincent-Collawn

there bet IPA I might And there. an be involved in

Don is going Okay, securitization. talk about Don. to

Don Tarry

the rates morning, clearly, But goes into and align I Supreme securitization evaluate has expect be we the going appeal. through January Court mean, Good Paul. to process that and as been with for to XXXX. effect, to our plan of the it continue we’ll be to new securitization continue will

Paul Fremont

Okay.

I liability delaying sort actually changes and of Is guess interest issuance? between track there mean, costs any I potential issue maybe proposal to there a on in So the was a that. when you the follow-up in now bonds.

Don Tarry

know. You

we going file, We comes have do have I we you analyses And and through do move reports again, you’re can to that, so. that things know the have right, know to we from all one need do us think but that to to we protect as you to reports October we there’s we first the – position that us, forward Xst. we’re downside

Paul Fremont

Great.

equity Is there that other is on it the to the The Is same? the planned equity I any planned since had issuance. beginning question of update year?

Pat Vincent-Collawn

to who Eden, a person, is answer going Lisa National Day is question. IPA And that

Lisa Eden

Paul. you. Hi, Thank

assumed right million line not XXXX, that in yeah, So, have end still equity the with and $XXX plans our to issue our plans in equity by we We changed. we of up have are of will Paul. that,

Paul Fremont

And far any can under us you any update? year-to-date? issued a so you give Have

Lisa Eden

we have No, and not.

putting think in that process looking that so and Paul something that’s of I an year. of we place, you’re the the do the to at right? we’re to end referring in are And ATM, still

Paul Fremont

Great.

think I Thanks. questions – it for that’s me. for

Pat Vincent-Collawn

Paul. Thanks,

Don Tarry

Thanks, Paul.

Operator

any I [Operator to session. would Vincent-Collawn, concludes over CEO, back for Instructions]. conference remarks. our This like to closing the turn Pat question-and-answer

Pat Vincent-Collawn

all the joining hope Day summer coming many enjoy celebrate of look you for you whichever you and I and Thank evening. you you, We this you months. hope in your choose other of the to us last morning. this Day thank seeing enjoy Stay Dave to safe. or National forward

Operator

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

disconnect. now may You

TXNM Energy (TXNM) 7 Aug 222022 Q2 Earnings call transcript