Earnings call transcript Q1 2023

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Operator

Good day and welcome to the PNM Resources First Quarter 2023 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to Lisa Goodman. ahead. go Please

Lisa Goodman

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

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

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

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

call I to turn the over that, With Pat. will

Pat Vincent-Collawn

Thank Resources. on Astronaut for And everyone, you Astronaut and you, day National special is PNM National Day a us Day. us joining at Lisa. here Good for morning, today thank

the of commanded astronaut space first Directors, shuttle, and One our mission Sid Hispanic He of Endeavor. the U.S. the space born Board Gutierrez, is commander. first Hispanic

results our in first I'm company slide quarter, going with coming last this Ongoing financial to year at and So earnings to on during compared start updates. morning $X.XX. increased the X

in Lisa on XXXX will continued business. managing standalone our more affirming We guidance focus for a detail. are cover the financials our with

Regulation for motion establish Xth, Mexico If love”. the to court companies to case would to dismiss case remand, with granted, take the for companies let to Xth. request returned with case respond up commission's This to our update, the AVANGRID. and input New Public court the On hurry me no at Court need can't is file the managed the for to our commission March by parties a motion the case for process the a schedule. a be jurisdiction. our and to other could joined merger hearing Supremes reconsideration saying, the level. the procedural remand our intervening back include commission. “You Supreme requesting commission assignment motion motion or The in For deadline responses the Mexico called start from was could and New The as Commission then the April to There it in examiner of is the strategic

Last path the with agreement. for included regulatory the month, agreed forward should merger This extension our time proceedings. three expected provide we additional further and in month clarity an to AVANGRID timeframe on

the sale process from AEP investments. or have sales Development, corporate a also has You unregulated an we renewable proceeds assets seen our may have This significant NMRD. portfolio have built a our XX-XX New of but provide our attractive that earnings for for joint contributor venture, and we within of regulated segment, other and been funding begun Renewable will Mexico not

With that, it over I'm going to Don. to turn

Don Tarry

Thank six growth slide on load everyone. by you, good our service I'll and Pat, with morning, area. start

estimate quarter load slower an this growth compared prior and grew expect and while albeit to the X.X%, the some quarter, from larger of customers. our PNM, in at residential continues commercial provided first ramp-up At annual customers to year include industrial the our

from the to of second see which that New demand-based At of were days experienced half the the mining experienced TNMP, in market first the similar first customers to we has quarter, colder crypto temperatures in entered than XXXX. Mexico XXXX. quarter growth level degree normal of in continue

in percentages Otherwise, the service each than year-over-year usage growth continue normal typically and these XXXX. will the see quarter a continue the of first expect comparable low customer first of double-digit temperatures across Texas, in quarter period third volume we to part we temperatures colder in quarter. a type XXXX first We year until is this quarter our Milder territory. in the of to of compared to quarter reach reduced

another to Royal resources our facility and batteries line XX% we large carbon-free at is reach at connected Generating scale meet line of year, turning first summer of on the Now, battery in of to will come for one load is summer These on PNM after. cover The new a solar storage are I when XXX X, slide with our to soon is following of the available that things will megawatt May following XXX the operational month will of XX projects this Station. retirement to megawatt typically, year, coming Juan generation bringing year year. are this this the this also help megawatts quarter. and Energy facility couple facility expect The highlights for be our San we and capacity This our to up on end start needs. heat storage Project the the

with our XXX with capacity, along XXX are Next mandates. do of well rates year, to standards Palo customer our carbon-free of inflation. during storage. on to we solar transition, plan this, while megawatts renew Mexico, battery paired Verde way that projects to and Juan, New high a are lease along megawatts approved add meeting San energy the for In The replace a expired New portfolio able affordable, even Act, Transition another to keeping we Energy with of clean our because period we were Mexico's goals final of

about in a this talk in review, minutes. which more rate I'll current our few see can You

owned At costly New Commission our of storage the XX owned past, feeders. production. are Mexico upgrades new to add this from megawatts solar a the distribution to solar feeder or more performing week, This battery with In two current required filed PNM utility each at locations, existing these we the would've of overloaded feeders facilities. adding

of to battery This adding more X plus overloaded an it system. proposing provides site. battery distribution system are renewable We and connected our to the the each to energy also for our option cost The capacity clean the at energy, lowest supports it resilience. alternative benefits capacity accommodates our storage option and matches feeders, install transition, supporting battery reliability megawatts enhanced of solving

alternative the to plan. and of This proposed the already one our in be are year. are technology goals. way that to commission we These cost is our using June new decision asked operational evolving solutions available needs before T&D carbon-free of facilities the and expect next for batteries efficient part capital We’ve of year provide grid end to meet reach

NMRD. Mexico. was created talk to joint our allow in partnership XXXX us renewable to to sale compete of The wanted space XX-XX resources announced about New non-regulated also in provide in I to

six opportunities. energy will with we’ve summer, portfolio operate the megawatts New goals. These on the would of with Over is sense with regulated transaction to the investment support projects end other years, by today's work in XXX the of year. put side. increased in coming expect portfolio contracted funds built regulated portfolio and our to needed utilities, This renewable renewables to along of sell another to development We and state's XX a the continue last line this on Mexico, megawatts the And close to clean market. the attractive this the it support makes

heard PNM recent on the TNMP. abandonment and the end arguments Court on through of March you the our proposed securitization walk at I'll regulatory Mexico proceedings X, and Corners updates plant. key Supreme The New at oral of slide Four On

New Commission completed with application in March. hearings on the also We Mexico our grid modernization

September, months from of quarter. final approval the project we recovery our recommended until coming in in but requested the decision reminder, hearing of season. a issuing As anticipate timing the a commission summer by plan order the We the delayed examiner after peak the and third our requested a July,

had And lastly hearings previously the The from XX at to overall to XXXX would the typical moved were the suspension for months, our hearings been and rate anticipated expanded June September. accordingly. PNM, we change be rescheduled period

January to than of to continue impact to customer projected implement rates the XXXX We with in of bills expect less X%. new

to our implemented filing approval month, from first this base. September. to recover in expect of make $XXX our and April typically reductions quarter Western annual to in increased substantial to million the $XXX transmission another XXXX Imbalance $XX to the July in base from Market at customers We of these continues customers. program rates be We rate also to XXXX a recovery The filing recovery The expect and of rate savings cost Energy September. first million providing totaled EIM has customer rates we the expect and $XX million our to are reasonable TNMP, clean energy receive transition, an of already distribution for savings keeping along filing be These transmission customers, in second to million through XXXX At our benefits. with affordable. flow annual of implemented provided beginning filed another rates be and

With turn Lisa. over it that, I'll to

Lisa Eden

good you, XX Don, in the a summary Thank first morning, earnings. and the with slide I'll on everyone. of year-over-year start quarter changes

per $X.XX first of transmission colder in margins February. continued prices to At power during demand quarter were of market the XXXX months and and QX, higher $X.XX higher share January to PNM, the reflect compared in Earnings quarter the of seen XXXX. particularly first system in

load the increased our growth. PNM changes Usage and not investments several yet up both recovery. last Lower from portfolio the rates. transmission at with TNMP lag that offset TNMP higher from investments years due also regulatory over generation in associated are to and costs distribution new was

by utility tax investments, earnings to our with last in mentioned, spending. PNM, year. rates and interest the also our load our by increase customers to similar compared to At residential were at weather Market the higher trust along partially quarter TNMP, O&M crypto to first for was at to and mostly mining reduced corporate. decommissioning and new on offset offset Don year addition with performance for As quarter These last interest due our rate-based drove higher depreciation, the in increases load expenses commercial was increases at temperatures. planned property milder growth associated

update $X.XX. in driven the range were Turning margins, which with on Higher earnings the slide increase an year. I'll rest market of guidance quarter to in our XXXX $X.XX fluctuate our to of affirming transmission can the provide assumptions for We're XX, the largely by demand. first

We provided reflecting quarterly the distribution, our an of the updated earnings for also year. have expectations rest

and million hedges for $X into now total XXXX, XXXX more entered rate favorable March. swaps billion fell rates lock have through in of additional through period. yields We dollars in a $XXX this to when September We added of hedged interest

$XXX to further have rate interest swaps total XXXX to added a variable our exposure. We million also for reduce of

the stock, by option under or for equity ATM year sales we cash took forward settle agreements issue our next to agreement to into later also this shares. year be program. settlement by the issuing of We issuing without have these entering able steps later can can We this the

about to equating current million The equity, X reflect agreements million forward approximately $XX shares. sales of

dilution issued We will are later any the those year. in actually shares EPS not see until impact on

the We the have our million or ability to accessing could through we to needs market ATM $XXX program means. another consider more traditional the for under sell XXXX, equity meet

Overall, earnings our targeted navigate support growing interest we remain position capital to good support a in rate the investment current needs, to and environment financial X% growth.

over With turn I'll that, back to Pat. it

Pat Vincent-Collawn

Thanks, Lisa.

Before programs New it peak I'd new Mexico everything for open utilities completing all after recognize who and bringing Texas summer bring like forward to in questions, for preparing teams equipment do. up to and you windstorms, customers. I you expanding customers, projects our season, our for new to and Thank repairing every moving service to day, spring are

Jason, for please it let's open up questions.

Operator

from first question Mizuho. Our comes from [Operator Instructions] Please Crowdell go ahead. Anthony you. Thank

Anthony Crowdell

Good morning, team. Day. Astronaut Happy

Pat Vincent-Collawn

you. you. Thank morning. Good Thank

Lisa Eden

morning. Good

Don Tarry

morning. Good

Pat Vincent-Collawn

“can’t Hey, ask right now XXth. think the two quick for didn't if love” I The and hurry hold But is, July music, well questions, the the until could It I transactions Supreme Pat. also unnoticed. Court. extension played just Supremes, with go One

approval, those to there like the perspective? do And back, hearings look a Court remanded was and was hearing so, something, no case could calendar when the you the that more something with the with on maybe remains a bookends from of case obviously But of back. it it time the the take that thought then maybe or process if involves if what once extended quickest Supreme depends gets that

Pat Vincent-Collawn

without just back Anthony, to seeing it focused sending because getting the it commission this examiner. we on they then can alone are hearing what does, right now, the level do at and their

when from Supremes. are it we what get to happens So, see wait going back just the and we

Anthony Crowdell

right Do then, But, question. the I XXth the where extension you you reword July maybe achievable could current the is that believe if of and from cheat date now stand?

Pat Vincent-Collawn

until to going we We are from any going get in the not my it Supremes. to back wait even answer. change word I'm

Anthony Crowdell

if a non-merger extended, which viable, what still and Meaning, but the question, make same of I the when you equity talk transaction at -- a the can is it's the I Perfect. do And decision XXXX? scenario delayed then, of you scenario, point thing? if another non-merger -- shot take about at like the just approval would in a think maybe to

Pat Vincent-Collawn

I’m I’ve since repartee going Don to I'm witty morning, answer that. use going Terry let this -- my to

Don Tarry

good Happy Anthony, morning. Friday.

manage and way We to are that business continue to we it's way the will focused business, on standalone a continuing continue that too. operate it it and fund like

would So, out we put is year they those focused again, executed you and on we expect us by But as at to. of what the delivering million exist. there the on look are managing that. will $XX we’ve opportunities $XXX the of and continue million that end to And results we

Anthony Crowdell

queue. the Great. I'll taking my back in and Thanks for question jump

Pat Vincent-Collawn

Anthony. Thanks, Okay.

Operator

ahead. from from Our Julien go next question Please Bank of America. comes Dumoulin-Smith

Julien Dumoulin-Smith

the you, Friday with de me try music But that let Good morning, Thank said, team. Anthony I'm of instead again. this surprised here. Cinco Hey. referenced hold guys. Mayo

subject a hit little me Let more here. stale

limitation it obviously as on just related as issuing you that talked your of of to about commentary there the NMRD Just prepared and here, today where first? remarks doing sense on so? AEP What's within sale any your current it asset the pending book well. that, pursuing And what stock, deal here that any to then, stands And given in is the about timeline talked timeline? it value about about

Pat Vincent-Collawn

outer have turn I that Don, been, the is you'd thought like you to place it Astronaut like before National Day, space. not because over only Julien, is I

down buy come Galactic. a can Virgin on here you So, and ticket

ahead. Don, go So,

Don Tarry

likely on of have Hey. we it end Good assets. equity based on what those value be. gain an morning, the expect that, tell million on I would anticipation On NMRD, of we you, close currently Julien. expect the We the would $XXX our market And to would year. in would by a

Julien Dumoulin-Smith

it. Got

can drive the that deal? a out, where just that maybe the that I considering bit, and little then, would any comes speak timing needs? around And then mean, any Okay. you equity probably for considerations your future there, timing to

Don Tarry

we and Yes. at to program at -- we beyond. look we walked of XXXX fund We capital our -- and as kind look mentioned, our would look of it through forward, some XXXX when into it, like I past

to So, side of I then monetize way is, the the it's be great about able to that's be to and it a it utilize think business. think to in regulated mechanism able the

Julien Dumoulin-Smith

fairly investments like speaking the that for And -- modestly you you I all. it. battery side. XX the Can it. Got that would have you it sized, was seems that sorry, this of you about think renewable guys be owned megawatts said talk by it on you're go But [Ph] pursuing

Don Tarry

it, And you us of the well distribution No. us resilience, us need it's helps helps accomplish some Julien, helps exists, of capacity different it’s the as several opportunity of that It side then and it. It's owned. saturation to really that too. the on that utility type non-wire -- to us overcome for business. helps grid solar when

Julien Dumoulin-Smith

Indeed.

what is having strategy indicator perhaps considering utility regulatory rate changes leading within XX I this lot broader a that therein front. of having base, I a and fact, to in on the a megawatts owned if of In mean, especially, extent the can, infrastructure

Don Tarry

forth. prioritize We that this run We biggest as challenges would pilot is and into problem. of so had see same There that the feeders the kind feeders other the program. a

provide would forward capacity we reasonable a on a opportunity, So, to see to that's going an at a to this basis. cost non-wire as solution as grid customers both our

we'll yes, continue to explore So that.

Julien Dumoulin-Smith

on my that up? and tried. word much that look, vis-à-vis can I close then, on pal there's to emphasis this of July remanded? right, But different Excellent. could about which interject word offer cetera, you not just materialize some again, use being several how rehearing you -- see would extent the But to out -- XXth, permutations -- on see itself your process, want it playing sort there's process. if and you to how understand I that say Anything or I that expectations this, I you et is And of you here. suppose the the you to extent rehearing I but there mean, which put

Don Tarry

Yes.

process I Court Supreme timeline. based I in -- not first Pat's to Julien, And answer the wait in And So, need at and to that book I their think think that's that's on it's we the is think, step now, for their the right decision's any what to alludes decision. trying question.

don't we input we it would expect be want we case. developed I from comes would think expect once Court, -- proceedings commission, would get those Supreme front that And process the different parties to from in on to in all the of and remanded we expect if commission. the by the proceedings those due back,

work it'll way through. its so, And

Julien Dumoulin-Smith

All dynamic the and out to well, that tandem? exists same right. about just Four Fair talk there's enough. Corners And pending That's for right? there real no ability the as in

Don Tarry

We had Corners, no Yes. their it's Four so. oral on Court's And we'll there ruling ruling, is Supreme and the in timetable as quarter arguments and for and this their now wait area. in well,

Julien Dumoulin-Smith

guys. Thank enough. you, fair Okay,

Pat Vincent-Collawn

Thank you, you when Spaceport. we’re us looking forward come know -- to let

Operator

from comes Our Please ahead. question from next Citi. Levine go Ryan

Ryan Levine

In sales that to within more offset terms of now possibility? as that's non-deal capital, be scenario, a maybe the other there asset assets are equity portfolio and any monetized a your in issuances strategically, could why strategy,

Don Tarry

On a NMRD, venture. it's joint

yesterday so of those side our monetize both parties and is and a us opportunity And found as business. regulated in heard as invest AEP, the you great to well,

it's So, when partnership. a a you JV, are in

same lot monetizing XX% the both JV way. the And partners. And monetizing a than decision JV so, for of the XXX% come you better of to the is

that I question. answers of kind that So, think

in business, operating regulated quite when of one we Mexico. have really those gone, Texas are a well. in think we both are one and And I is New have them what

I though to mean, see our core us monetizing business. we So, any that's don't there. assets

Ryan Levine

would and a lot as you? the kind minority marketplace. go growth of help to core move business, basis, fund and the something utility to the sales Is forward against regulated recognizing Courts way has In been there if you of it's that in commission a that other a on consider

Pat Vincent-Collawn

we that's a we're now, with and under what are Right AVANGRID getting merger agreement done. on focused

where that's So we going. are

Ryan Levine

then the Okay. business. back core And to

that better you front In or material How the crypto growth that plan? on how for demand. of maybe forecast, And earnings positioned low much to is 'XX 'XX the are relative you outlook? terms highlight

Lisa Eden

Lisa. Ryan, hi. -- So, This is

our at going TNMP, load. within growth terms the impact. you load. And guidance is that before. low then remember, you crypto In do for on a And update 'XX a impact, forward from we smaller earnings forth we much as know, really an But are of DCRA put large filing, range in the it's

Ryan Levine

for Thanks the taking Great. questions.

Operator

Our Jonathan Fargo. ahead. question Instructions] comes [Operator from from Wells next Reeder go Please

Jonathan Reeder

team. of sale the needs the are in of in needs wanted clear, questions morning, just to million 'XX beyond, doesn't be Good fund but helps that just NMRD, equity rather I my A it accurate? then Hey. 'XX But answered. any planned displace lot of of and $XXX already is

Pat Vincent-Collawn

Yes, Jonathan.

Our is year. million that with asset up Even this still objective sale. $XXX to to issue

Jonathan Reeder

Okay, great.

any economies taking Court is honest, Supreme do do the does energy long. so remain anything seemed Just to be of ex fairly but parte request have you new compliance? Pat, it insight wondering, straightforward why it with as to have to I kind mean,

Pat Vincent-Collawn

No.

the the the Paso El of if has criticized really this. fact that thoughtfully commission have the process. consideration with of on look this if week, you case commission about focus it they came due to lack process wants you due due to but that I And is they and back mean, saw think criticized where for process. sure court they’re I at making really more this do

everybody's sure consider And et it think statute, they specific want So, under I filings. cetera, cetera. remand think remand back they when make it back, they et do about carefully to they that,

new recognize think that general economy noise. I they energy is So, in the

Jonathan Reeder

Sorry.

cut You there at the out end…

Pat Vincent-Collawn

Sorry.

that I the recognizes economy think noise. that energy is just the court new

Jonathan Reeder

take schedule? have. has it would once least back apple Okay, at at the long try maybe them like procedural great. to hopefully the its in And sense, how others it then, take the to hands, like PRC to kind that Any of for another issue bite

Pat Vincent-Collawn

I'll That one, answer.

to think, the to, have will when if get things have procedural the probably started. I the they'll the wait court think You a relatively you but days, issue procedural come remand, Right? XX quickly. I quickly schedule issues schedule -- to

Jonathan Reeder

will hopefully based date, Okay. or the the like by kind when And schedule further. having look hand, consider July that of of then, guess, it I on they not that's kind to XXth, in what whether extend board

Pat Vincent-Collawn

hurry can’t Jonathan, You love, or mergers.

Jonathan Reeder

right. appreciate I questions my today. you All taking

Operator

Mizuho. next question Please The comes from from ahead. Fremont Paul go

Pat Vincent-Collawn

something is want there us? tell you Paul, to

Paul Fremont

what? Like

Pat Vincent-Collawn

next the was Paul said Fremont Mizuho. It at from question

Paul Fremont

Well old habits die hard.

Pat Vincent-Collawn

our maybe were news to break I going just thought some Okay. call. on you

Paul Fremont

Real an they there that Ladenburg. no, on quick realized -- NMRD, us you EBITDA number share question you XXXX? in can No, is that that with

Lisa Eden

There it's haven't out million. EBITDA number. income put We and with is associated net this, $X.X

bottom penny Paul. to the So, it's about a line,

Don Tarry

then, that And as sites have opportunities would six well I Paul, well too. as there's that development add too,

kind it's whole of So, package a deal.

that So, that those are it's currently are sites there's some -- the under well. as then sites development and development

Pat Vincent-Collawn

additional year well. did coming reflect the megawatts not earnings last summer And on this XX that's as

Paul Fremont

have is put other a had proceedings case agreement place? in seek in settlement the try previously If were the then, I the you in merger settlement ‘XX. that in the a remand And to to commission, to Court agreement Supreme back question that would you and place the had

Pat Vincent-Collawn

until we the that court. on from comment going not get back it we're Paul,

Paul Fremont

my That’s only other Great. question. Thanks.

Pat Vincent-Collawn

Thank you, Paul.

Operator

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

Pat Vincent-Collawn

or Thank us safe. beer, And all joining you, all morning. you And your Jason. soon. you be Bye. this margaritas de for thank you Talk Cinco please, Mayo have to as

Operator

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

You disconnect. may now

TXNM Energy (TXNM) 5 May 232023 Q1 Earnings call transcript