The leaders of PNM Resources Inc. say they expect new possible investments to emerge from a new Electric Reliability Council of Texas planning push that this summer will include a reliability report focused on the Permian Basin region of West Texas.
President and COO Don Tarry told analysts last week, after PNM Resources reported a first-quarter net profit of $47.2 million, that recently updated projections for load growth in West Texas forecast “substantial growth” above past forecasts, particularly from customers not tied to the oil and gas sector. At a recent ERCOT public meeting, the body’s President and CEO, Pablo Vegas, said the roughly 40 GW of newly estimated demand over the next five to seven years calls for his team to enter “a new era” of planning.
It's too early to talk about specific new dollars for PNM Resources’ Texas-New Mexico Power unit, Tarry said, because the Public Utility Commission of Texas will assess ERCOT’s report on the Permian this summer.
“We have to wait to see what comes out in July and then how the PUCT deals with it,” Tarry said on a conference call. “But there are opportunities for incremental investments as you look at the load that’s expected in that area.”
'A very constructive legislative cycle in Texas'
For more on regulatory changes that are enabling faster infrastructure investments in the Lone Star State, see our story from last August.
Already underway for TNMP is a roughly $100 million transmission line improvement project in Pecos County, southwest of Odessa. ERCOT in February approved the company’s plan, which Tarry said is one of the biggest single projects on PNM Resources’ current docket, and the PUCT is expected to approve the new line early next year.
Tarry, PNM Resources’ Chairman and CEO Pat Vincent-Collawn and their team have estimated TNMP’s capital spending budget at $524 million in 2024 and at an average of $579 million annually through 2028. During that time, the utility’s rate base is expected to grow at an average of nearly 13% per year. Finishing 2028 at $3.9 billion. (In addition to part of West Texas, TNMP’s service area also includes sections of the Dallas and Houston regions.)
Facing similarly strong growth trends in Texas is Sempra, the owner of Oncor Electric Delivery Co. as well as San Diego Gas & Electric Co. and Southern California Gas Co. In reporting their Q1 earnings May 7, Sempra executives said Oncor finished the first quarter with 781 generation and large transmission point-of-interconnection requests in its queue, which was up 20% from a year earlier.
Oncor leaders, whose work services 98 Texas counties, this week also filed a three-year system resiliency plan. If approved, Oncor would spend more than $3 billion during that time, with modernization and hardening (about $1.8 billion) and wildfire mitigation ($900 million) getting the bulk of the dollars.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.