PNM Resources
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PNM Beefs Up Capex Plans Through 2027

Oct. 30, 2023
Growth and regulatory mechanism updates in Texas are a big driver of the increase to $600M annually.

The leaders of PNM Resources Inc. are ramping up by roughly $340 million plans to renovate and add to the company’s networks in the next two years and sketched out preliminary plans to invest another $2.3 billion in 2026 and 2027.

Underpinning the new capital spending plans for the parent of PNM in New Mexico and TNMP in Texas are annual rate base growth averaging 10.6% through 2027—with TNMP forecast to grow more than 14% per year—as well as the ability to pull forward some investments in Texas, where lawmakers this year passed a series of measures incentivizing infrastructure investments.

Speaking to analysts after reporting PNM’s third-quarter earnings Oct. 27, Chair and CEO Pat Vincent-Collawn and her leadership team outlined the following capex updates:

Spending on transmission and distribution projects this year is now expected to be a shade more than $1.1 billion, up from $1.03 billion three years. Both the PNM and TNMP subsidiaries are in line to receive about $25 million more than previously projected.

Plans for 2024 and 2025 have been ramped up significantly: Next year, Vincent-Collawn and her team plan to put to work $1.17 billion, a 29% increase from their previous estimate of $907 million of which TNMP ($496 million versus $381 million) accounts for the largest piece. The PNM team also has added to its plans $96 million for 60 MW of owned battery storage investments that need regulatory approval.

For 2025, PNM’s investment plans now total nearly $1.25 billion versus $866 million three months ago. The company’s New Mexico operations are slated to get $513 million of that (versus $452 million in the previous forecast) while the company’s Texas network stands to get $508 million (versus $325 million previously).

The PNM executive team also wants to boost investments in generation: Their plan three months ago called for a total of $119 million in 2024 and 2025 but that figure now is forecast to be $173 million and is to be followed by another $142 million in the ensuing two years. The goal is to add 100 MW of solar energy through power purchase agreements and 250 MW of battery storage capacity through energy storage agreements.

CFO Lisa Eden said many of the new investments being contemplated will (in North Texas and the Gulf Coast) replace substations, wood poles for steel ones and add circuits and feeders. Across the company, Eden said, transmission work will focus on adding points of interconnection on higher voltage lines. On the flip side, PNM’s executives have pushed back by a year some grid modernization investments such as advanced metering technology.

Albuquerque-based PNM posted a third-quarter net profit of $42.9 million, which was down from $127 million in the same period of 2022 because of a one-time charge related to rate credits due to the company’s closure of the San Juan Generation Station. Excluding that item, ongoing net earnings rose to $133 million. A hot summer drove usage higher during the quarter but weather-adjusted total retail load slipped 0.7% at PNM and 0.8% at TNMP.

Shares of PNM (Ticker: PNM) fell Oct. 27 in line with the broader market and were off another 0.8% to about $42.60 on the afternoon of Oct. 30. Over the past six months, they have fallen about 11%, trimming the company’s market capitalization to roughly $3.7 billion.

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