Commission File Number | Names of Registrants, State of Incorporation, Address Of Principal Executive Offices and Telephone Number | I.R.S. Employer Identification No. | ||
001-32462 | PNM Resources, Inc. (A New Mexico Corporation) 414 Silver Ave. SW Albuquerque, New Mexico 87102-3289 (505) 241-2700 | 85-0468296 | ||
001-06986 | Public Service Company of New Mexico (A New Mexico Corporation) 414 Silver Ave. SW Albuquerque, New Mexico 87102-3289 (505) 241-2700 | 85-0019030 | ||
002-97230 | Texas-New Mexico Power Company (A Texas Corporation) 577 N. Garden Ridge Blvd. Lewisville, Texas 75067 (972) 420-4189 | 75-0204070 |
Registrant | Title of Each Class | Name of Each Exchange on Which Registered | ||
PNM Resources, Inc. | Common Stock, no par value | New York Stock Exchange |
Registrant | Title of Each Class | |
Public Service Company of New Mexico | 1965 Series, 4.58% Cumulative Preferred Stock | |
($100 stated value without sinking fund) |
PNM Resources, Inc. (“PNMR”) | YES ü | NO | ||
Public Service Company of New Mexico (“PNM”) | YES | NO ü | ||
Texas-New Mexico Power Company (“TNMP”) | YES | NO ü |
PNMR | YES | NO ü | ||
PNM | YES | NO ü | ||
TNMP | YES ü | NO |
PNMR | YES ü | NO | ||
PNM | YES ü | NO | ||
TNMP | YES | NO ü |
PNMR | YES ü | NO | ||
PNM | YES ü | NO | ||
TNMP | YES ü | NO |
Large accelerated filer | Accelerated filer | Non-accelerated filer (Do not check if a smaller reporting company) | Smaller reporting company | Emerging growth company | |||||||||||
PNMR | ü | ||||||||||||||
PNM | ü | ||||||||||||||
TNMP | ü |
PNMR | 79,653,624 | |
PNM | 39,117,799 | |
TNMP | 6,358 |
Page | |||
PART I | |||
ITEM 1. BUSINESS | |||
OPERATIONS AND REGULATION | |||
EMPLOYEES | |||
ITEM 1A. RISK FACTORS | |||
ITEM 1B. UNRESOLVED STAFF COMMENTS | |||
ITEM 2. PROPERTIES | |||
ITEM 3. LEGAL PROCEEDINGS | |||
ITEM 4. MINE SAFETY DISCLOSURES | |||
PART II | |||
ITEM 5. MARKET FOR PNMR’S COMMON EQUITY, RELATED STOCKHOLDER | |||
MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES | |||
ITEM 6. SELECTED FINANCIAL DATA | |||
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |||
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK | |||
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | |||
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING | |||
AND FINANCIAL DISCLOSURE | |||
ITEM 9A. CONTROLS AND PROCEDURES | |||
ITEM 9B. OTHER INFORMATION | |||
PART III | |||
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERANCE | |||
ITEM 11. EXECUTIVE COMPENSATION | |||
ITEM 12. SECURITY OWNERSIP OF CERTAIN BENEFICIAL OWNERS AND | |||
MANAGEMENT AND RELATED STOCKHOLDER MATTERS | |||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR | |||
INDEPENDENCE | |||
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES | |||
PART IV | |||
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | |||
ITEM 16. FORM 10-K SUMMARY | |||
Definitions: | ||
2014 IRP | PNM’s 2014 IRP | |
2017 IRP | PNM’s 2017 IRP | |
ABCWUA | Albuquerque Bernalillo County Water Utility Authority | |
ABO | Accumulated Benefit Obligation | |
AEP OnSite Partners | AEP OnSite Partners, LLC, a subsidiary of American Electric Power, Inc. | |
Afton | Afton Generating Station | |
AFUDC | Allowance for Funds Used During Construction | |
ALJ | Administrative Law Judge | |
AMI | Advanced Metering Infrastructure | |
AMS | Advanced Meter System | |
Anaheim | City of Anaheim, California | |
AOCI | Accumulated Other Comprehensive Income | |
APBO | Accumulated Postretirement Benefit Obligation | |
APS | Arizona Public Service Company, the operator and a co-owner of PVNGS and Four Corners | |
ARO | Asset Retirement Obligation | |
ASU | Accounting Standards Update | |
August 2016 RD | Recommended Decision in PNM’s NM 2015 Rate Case issued by the Hearing Examiner on August 4, 2016 | |
BART | Best Available Retrofit Technology | |
BDT | Balanced Draft Technology | |
BHP | BHP Billiton, Ltd | |
Board | Board of Directors of PNMR | |
BSER | Best system of emission reduction technology | |
BTMU | MUFG Bank Ltd., formerly the Bank of Tokyo-Mitsubishi UFJ, Ltd. | |
BTMU Term Loan | NM Capital’s $125.0 Million Unsecured Term Loan | |
BTU | British Thermal Unit | |
CAA | Clean Air Act | |
Casa Mesa Wind | Casa Mesa Wind Energy Center | |
CCN | Certificate of Convenience and Necessity | |
CCR | Coal Combustion Residuals | |
CIAC | Contributions in Aid of Construction | |
CO2 | Carbon Dioxide | |
CSA | Coal Supply Agreement | |
CTC | Competition Transition Charge | |
DC Circuit | United States Court of Appeals for the District of Columbia Circuit | |
DOE | United States Department of Energy | |
DOI | United States Department of Interior | |
EGU | Electric Generating Unit | |
EIM | California Independent System Operator Western Energy Imbalance Market | |
EIS | Environmental Impact Study | |
EPA | United States Environmental Protection Agency | |
EPE | El Paso Electric Company | |
ERCOT | Electric Reliability Council of Texas | |
ESA | Endangered Species Act | |
Exchange Act | Securities Exchange Act of 1934 | |
Farmington | The City of Farmington, New Mexico | |
FASB | Financial Accounting Standards Board | |
FERC | Federal Energy Regulatory Commission |
FIP | Federal Implementation Plan | |
Four Corners | Four Corners Power Plant | |
FPL | FPL Energy New Mexico Wind, LLC | |
FPPAC | Fuel and Purchased Power Adjustment Clause | |
FTY | Future Test Year | |
GAAP | Generally Accepted Accounting Principles in the United States of America | |
GHG | Greenhouse Gas Emissions | |
GWh | Gigawatt hours | |
IBEW | International Brotherhood of Electrical Workers | |
IRP | Integrated Resource Plan | |
IRS | Internal Revenue Service | |
ISFSI | Independent Spent Fuel Storage Installation | |
KW | Kilowatt | |
KWh | Kilowatt Hour | |
La Luz | La Luz Generating Station | |
LIBOR | London Interbank Offered Rate | |
Lightning Dock Geothermal | Lightning Dock geothermal power facility, also known as the Dale Burgett Geothermal Plant | |
Lordsburg | Lordsburg Generating Station | |
Los Alamos | The Incorporated County of Los Alamos, New Mexico | |
Luna | Luna Energy Facility | |
MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
MMBTU | Million BTUs | |
Moody’s | Moody’s Investor Services, Inc. | |
MSR | M-S-R Public Power Agency | |
MW | Megawatt | |
MWh | Megawatt Hour | |
NAAQS | National Ambient Air Quality Standards | |
Navajo Acts | Navajo Nation Air Pollution Prevention and Control Act, Navajo Nation Safe Drinking Water Act, and Navajo Nation Pesticide Act | |
NDT | Nuclear Decommissioning Trusts for PVNGS | |
NEC | Navopache Electric Cooperative, Inc. | |
NEE | New Energy Economy | |
NEPA | National Environmental Policy Act | |
NERC | North American Electric Reliability Corporation | |
New Mexico Wind | New Mexico Wind Energy Center | |
NM 2015 Rate Case | Request for a General Increase in Electric Rates Filed by PNM on August 27, 2015 | |
NM 2016 Rate Case | Request for a General Increase in Electric Rates Filed by PNM on December 7, 2016 | |
NM Capital | NM Capital Utility Corporation, an unregulated wholly-owned subsidiary of PNMR | |
NM District Court | United States District Court for the District of New Mexico | |
NM Supreme Court | New Mexico Supreme Court | |
NMAG | New Mexico Attorney General | |
NMED | New Mexico Environment Department | |
NMIEC | New Mexico Industrial Energy Consumers Inc. | |
NMMMD | The Mining and Minerals Division of the New Mexico Energy, Minerals and Natural Resources Department | |
NMPRC | New Mexico Public Regulation Commission | |
NMRD | NM Renewable Development, LLC, owned 50% each by PNMR Development and AEP OnSite Partners, LLC | |
NOx | Nitrogen Oxides | |
NOPR | Notice of Proposed Rulemaking |
NPDES | National Pollutant Discharge Elimination System | |
NRC | United States Nuclear Regulatory Commission | |
NSPS | New Source Performance Standards | |
NSR | New Source Review | |
NTEC | Navajo Transitional Energy Company, LLC, an entity owned by the Navajo Nation | |
OCI | Other Comprehensive Income | |
OPEB | Other Post-Employment Benefits | |
OSM | United States Office of Surface Mining Reclamation and Enforcement | |
PBO | Projected Benefit Obligation | |
PCRBs | Pollution Control Revenue Bonds | |
PNM | Public Service Company of New Mexico and Subsidiaries | |
PNM 2014 New Mexico Credit Facility | PNM’s $50.0 Million Unsecured Revolving Credit Facility | |
PNM 2014 Term Loan | PNM’s $175.0 Million Unsecured Term Loan | |
PNM 2016 Term Loan | PNM’s $175.0 Million Unsecured Term Loan | |
PNM 2017 New Mexico Credit Facility | PNM’s $40.0 Million Unsecured Revolving Credit Facility | |
PNM 2017 Senior Unsecured Note Agreement | PNM’s Agreement for the sale of Senior Unsecured Notes, aggregating $450.0 million | |
PNM 2017 Term Loan | PNM’s $200.0 Million Unsecured Term Loan | |
PNM 2018 SUNs | PNM’s Senior Unsecured Notes issued under the PNM 2017 Senior Unsecured Note Agreement | |
PNM 2019 Term Loan | PNM’s $250.0 million Unsecured Term Loan | |
PNM Multi-draw Term Loan | PNM’s $125.0 Million Unsecured Multi-draw Term Loan Facility | |
PNM Revolving Credit Facility | PNM’s $400.0 Million Unsecured Revolving Credit Facility | |
PNMR | PNM Resources, Inc. and Subsidiaries | |
PNMR 2015 Term Loan | PNMR’s $150.0 Million Three-Year Unsecured Term Loan that matured on March 9, 2018 | |
PNMR 2016 One-Year Term Loan | PNMR’s $100.0 Million One-Year Unsecured Term Loan that matured on December 14, 2018 | |
PNMR 2016 Two-Year Term Loan | PNMR’s $100.0 Million Two-Year Unsecured Term Loan that matured on December 21, 2018 | |
PNMR 2018 One-Year Term Loan | PNMR’s $150.0 Million One-Year Unsecured Term Loan | |
PNMR 2018 Two-Year Term Loan | PNMR’s $50.0 Million Two-Year Unsecured Term Loan | |
PNMR Development | PNMR Development and Management Company, an unregulated wholly-owned subsidiary of PNMR | |
PNMR Development Revolving Credit Facility | PNMR Development’s $25.0 million Unsecured Revolving Credit Facility | |
PNMR Development Term Loan | PNMR Development’s $90.0 Million Unsecured Term Loan | |
PNMR Revolving Credit Facility | PNMR’s $300.0 Million Unsecured Revolving Credit Facility | |
PNMR Term Loan | PNMR’s $150.0 Million One-Year Unsecured Term Loan that matured on December 21, 2016 | |
PPA | Power Purchase Agreement | |
PSA | Power Sales Agreement | |
PSD | Prevention of Significant Deterioration | |
PUCT | Public Utility Commission of Texas | |
PV | Photovoltaic | |
PVNGS | Palo Verde Nuclear Generating Station |
RCRA | Resource Conservation and Recovery Act | |
RCT | Reasonable Cost Threshold | |
REA | New Mexico’s Renewable Energy Act of 2004 | |
REC | Renewable Energy Certificates | |
Red Mesa Wind | Red Mesa Wind Energy Center | |
REP | Retail Electricity Provider | |
RFP | Request For Proposal | |
Rio Bravo | Rio Bravo Generating Station, formerly known as Delta | |
RMC | Risk Management Committee | |
ROE | Return on Equity | |
RPS | Renewable Energy Portfolio Standard | |
RSIP | Revised State Implementation Plan | |
S&P | Standard and Poor’s Ratings Services | |
SCE | Southern California Edison Company | |
SCPPA | Southern California Public Power Authority | |
SCR | Selective Catalytic Reduction | |
SEC | United States Securities and Exchange Commission | |
SIP | State Implementation Plan | |
SJCC | San Juan Coal Company | |
SJGS | San Juan Generating Station | |
SJGS CSA | San Juan Generating Station Coal Supply Agreement | |
SJGS RA | San Juan Project Restructuring Agreement | |
SJPPA | San Juan Project Participation Agreement | |
SNCR | Selective Non-Catalytic Reduction | |
SO2 | Sulfur Dioxide | |
SPS | Southwestern Public Service Company | |
SRP | Salt River Project | |
Tax Act | Federal tax reform legislation enacted on December 22, 2017, commonly referred to as the Tax Cuts and Jobs Act | |
TCEQ | Texas Commission on Environmental Quality | |
TECA | Texas Electric Choice Act | |
Tenth Circuit | United States Court of Appeals for the Tenth Circuit | |
TNMP | Texas-New Mexico Power Company and Subsidiaries | |
TNMP 2018 Term Loan | TNMP’s $35.0 Million Unsecured Term Loan | |
TNMP 2019 Bonds | TNMP’s First Mortgage Bonds to be issued under the TNMP 2019 Bond Purchase Agreement | |
TNMP 2019 Bond Purchase Agreement | TNMP’s Agreement to Issue an Aggregate of $305.0 Million in First Mortgage Bonds in 2019 | |
TNMP Revolving Credit Facility | TNMP’s $75.0 Million Secured Revolving Credit Facility | |
TNP | TNP Enterprises, Inc. and Subsidiaries | |
Tri-State | Tri-State Generation and Transmission Association, Inc. | |
Tucson | Tucson Electric Power Company | |
UAMPS | Utah Associated Municipal Power Systems | |
UG-CSA | Underground Coal Sales Agreement for San Juan Generating Station | |
US Supreme Court | United States Supreme Court | |
Valencia | Valencia Energy Facility | |
VIE | Variable Interest Entity | |
WACC | Weighted Average Cost of Capital | |
WEG | WildEarth Guardians | |
Westmoreland | Westmoreland Coal Company | |
Westmoreland Loan | $125.0 Million of funding provided by NM Capital to WSJ | |
WSJ | Westmoreland San Juan, LLC, an indirect wholly-owned subsidiary of Westmoreland | |
WSPP | Western Systems Power Pool |
ITEM 1. | BUSINESS |
• | Earning authorized returns on its regulated businesses |
• | Delivering at or above industry-average earnings and dividend growth |
• | Maintaining solid investment grade credit ratings |
• | Maintaining strong employee safety, plant performance, and system reliability |
• | Delivering a superior customer experience |
• | Demonstrating environmental stewardship in business operations, including reducing CO2 emissions |
• | Supporting the communities in their service territories |
• | PNMR: www.pnmresources.com |
• | PNM: www.pnm.com |
• | TNMP: www.tnmp.com |
• | Corporate Governance Principles |
• | Code of Ethics (Do the Right Thing – Principles of Business Conduct) |
• | Charters of the Audit and Ethics Committee, Nominating and Governance Committee, Compensation and Human Resources Committee, and Finance Committee |
• | Restated Articles of Incorporation and Bylaws |
2018 | 2017 | 2016 | ||||||
(Megawatts) | ||||||||
Summer | 1,885 | 1,843 | 1,908 | |||||
Winter | 1,351 | 1,289 | 1,376 |
Generation | |||||||
Capacity | |||||||
Type | Name | Location | (MW) | ||||
Coal | SJGS | Waterflow, New Mexico | 562 | ||||
Coal | Four Corners | Fruitland, New Mexico | 200 | ||||
Gas | Reeves Station | Albuquerque, New Mexico | 154 | ||||
Gas | Afton (combined cycle) | La Mesa, New Mexico | 230 | ||||
Gas | Lordsburg | Lordsburg, New Mexico | 80 | ||||
Gas | Luna (combined cycle) | Deming, New Mexico | 189 | ||||
Gas/Oil | Rio Bravo | Albuquerque, New Mexico | 138 | ||||
Gas | Valencia | Belen, New Mexico | 158 | ||||
Gas | La Luz | Belen, New Mexico | 40 | ||||
Nuclear | PVNGS | Wintersburg, Arizona | 402 | ||||
Solar | PNM-owned solar | Fifteen sites in New Mexico | 107 | ||||
Solar | NMRD-owned solar | Los Lunas, New Mexico | 30 | ||||
Wind | New Mexico Wind | House, New Mexico | 204 | ||||
Wind | Red Mesa Wind | Seboyeta, New Mexico | 102 | ||||
Wind | Casa Mesa Wind | House, New Mexico | 50 | ||||
Geothermal | Lightning Dock Geothermal | Lordsburg, New Mexico | 15 | ||||
2,661 |
Unit MW Capacity and Ownership Interests | |||||||||||||||||
Prior to Restructuring | After Restructuring | ||||||||||||||||
Unit 1 | Unit 2 | Unit 3 | Unit 4 | Unit 1 | Unit 4 | ||||||||||||
Capacity (MW) | 340 | 340 | 497 | 507 | 340 | 507 | |||||||||||
PNM (1) | 50.000 | % | 50.000 | % | 50.000 | % | 38.457 | % | 50.000 | % | 77.297 | % | |||||
Tucson | 50.000 | 50.000 | — | — | 50.000 | — | |||||||||||
SCPPA | — | — | 41.800 | — | — | — | |||||||||||
Tri-State | — | — | 8.200 | — | — | — | |||||||||||
MSR | — | — | — | 28.800 | — | — | |||||||||||
Anaheim | — | — | — | 10.040 | — | — | |||||||||||
Farmington | — | — | — | 8.475 | — | 8.475 | |||||||||||
Los Alamos | — | — | — | 7.200 | — | 7.200 | |||||||||||
UAMPS | — | — | — | 7.028 | — | 7.028 | |||||||||||
Total | 100.000 | % | 100.000 | % | 100.000 | % | 100.000 | % | 100.000 | % | 100.000 | % |
Plant | Operator | 2018 | 2017 | 2016 | ||||
SJGS | PNM | 71.4% | 84.1% | 76.5% | ||||
Four Corners | APS | 61.7% | 50.6% | 62.0% | ||||
PVNGS | APS | 88.6% | 91.9% | 91.4% |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Purchased under long-term PPAs | |||||||||||
MWh | 1,626,300 | 1,574,716 | 1,211,852 | ||||||||
Cost per MWh | $ | 32.49 | $ | 29.02 | $ | 28.26 | |||||
Other purchased power | |||||||||||
Total MWh | 444,347 | 445,464 | 502,893 | ||||||||
Cost per MWh | $ | 41.46 | $ | 31.74 | $ | 27.78 |
Coal | Nuclear | Gas and Oil | ||||||||||||||||||
Percent of Generation | Average Cost | Percent of Generation | Average Cost | Percent of Generation | Average Cost | |||||||||||||||
2018 | 44.7 | % | $ | 2.60 | 34.1 | % | $ | 0.58 | 18.5 | % | $ | 2.43 | ||||||||
2017 | 56.5 | % | $ | 2.16 | 31.9 | % | $ | 0.64 | 9.2 | % | $ | 3.02 | ||||||||
2016 | 54.1 | % | $ | 2.34 | 31.6 | % | $ | 0.71 | 11.8 | % | $ | 2.80 |
• | PVNGS Decommissioning Funding |
• | Nuclear Spent Fuel and Waste Disposal |
• | Environmental Matters under the caption “The Clean Air Act” |
• | WEG v. OSM NEPA Lawsuit |
• | Navajo Nation Environmental Issues |
• | Cooling Water Intake Structures |
• | Effluent Limitation Guidelines |
• | Santa Fe Generating Station |
• | Environmental Matters under the caption “Coal Combustion Residuals Waste Disposal” |
• | Environmental Matters under the caption “Coal Supply” |
PNMR | PNM | TNMP | ||||||
Corporate (1) | 389 | — | — | |||||
PNM | 938 | 938 | — | |||||
TNMP | 365 | — | 365 | |||||
Total | 1,692 | 938 | 365 |
• | The ability of PNM and TNMP to recover costs and earn allowed returns in regulated jurisdictions, including the impacts of the NMPRC orders in PNM’s NM 2015 Rate Case, the appeal of that order, the NM 2016 Rate Case and related deferral of the issue of PNM’s prudence of continuation of participation in Four Corners to PNM’s next general rate case and recovery of PNM’s investments in that plant, any actions resulting from PNM’s December 2018 Compliance Filing, which indicates PNM intends to retire its share of SJGS in 2022 (subject to future NMPRC approval), and/or the conclusions reached in PNM’s 2017 IRP (collectively, the “Regulatory Proceedings”) and the impact on service levels for PNM customers if the ultimate outcomes do not provide for the recovery of costs of operating and capital expenditures, as well as other impacts of federal or state regulatory and judicial actions |
• | The ability of the Company to successfully forecast and manage its operating and capital expenditures, including aligning expenditures with the revenue levels resulting from the ultimate outcomes of the Regulatory Proceedings and supporting forecasts utilized in future test year rate proceedings |
• | Uncertainty surrounding the status of PNM’s participation in jointly-owned generation projects, including the 2022 scheduled expiration of the operational and fuel supply agreements for SJGS, the outcome of PNM’s December 2018 Compliance Filing, the results of PNM’s 2017 IRP filing, which indicates that PNM’s customers would benefit from PNM’s exit from Four Corners in 2031, including regulatory recovery of undepreciated investments in the event the NMPRC orders generating facilities be retired |
• | Uncertainty regarding the requirements and related costs of decommissioning power plants and reclamation of coal mines supplying certain power plants, as well as the ability to recover those costs from customers, including the potential impacts of the ultimate outcomes of the Regulatory Proceedings |
• | The impacts on the electricity usage of customers and consumers due to performance of state, regional, and national economies, energy efficiency measures, weather, seasonality, alternative sources of power, advances in technology, and other changes in supply and demand |
• | Uncertainty regarding what actions PNM may take with respect to the generating capacity in PVNGS Units 1 and 2 that is under lease at the expiration of the lease terms in 2023 and 2024, or upon the occurrence of certain specified events, as well as the related treatment for ratemaking purposes by the NMPRC |
• | The Company’s ability to access the financial markets in order to provide financing to repay or refinance debt as it comes due, as well as for ongoing operations and construction expenditures, including disruptions in the capital or credit markets, actions by ratings agencies, and fluctuations in interest rates, including any negative impacts that could result from the ultimate outcomes of the Regulatory Proceedings |
• | The risks associated with completion of generation, transmission, distribution, and other projects |
• | The potential unavailability of cash from PNMR’s subsidiaries due to regulatory, statutory, or contractual restrictions or subsidiary earnings or cash flows |
• | The performance of generating units, transmission systems, and distribution systems, which could be negatively affected by operational issues, fuel quality and supply issues, unplanned outages, extreme weather conditions, wildfires, terrorism, cybersecurity breaches, and other catastrophic events, as well the costs the Company may incur to repair its facilities and/or the liabilities the Company may incur to third parties in connection with such issues |
• | State and federal regulation or legislation relating to environmental matters and renewable energy requirements, the resultant costs of compliance, and other impacts on the operations and economic viability of PNM’s generating plants |
• | State and federal regulatory, legislative, executive, and judicial decisions and actions on ratemaking, tax, including the impacts and related uncertainties of tax reform enacted in 2017, and other matters |
• | Risks related to climate change, including potential financial risks resulting from climate change litigation and legislative and regulatory efforts to limit GHG |
• | Employee workforce factors, including cost control efforts and issues arising out of collective bargaining agreements and labor negotiations with union employees |
• | Variability of prices and volatility and liquidity in the wholesale power and natural gas markets |
• | Changes in price and availability of fuel and water supplies, including the ability of the mines supplying coal to PNM’s coal-fired generating units and the companies involved in supplying nuclear fuel to provide adequate quantities of fuel |
• | Regulatory, financial, and operational risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainties |
• | The risk that FERC rulemakings or lack of additional capacity during peak hours may negatively impact the operation of PNM’s transmission system |
• | The impacts of decreases in the values of marketable securities maintained in trusts to provide for decommissioning, reclamation, pension benefits, and other postretirement benefits, including potential increased volatility resulting from international developments |
• | Uncertainty surrounding counterparty performance and credit risk, including the ability of counterparties to supply fuel and perform reclamation activities and impacts to financial support provided to facilitate the coal supply at SJGS |
• | The effectiveness of risk management regarding commodity transactions and counterparty risk |
• | The outcome of legal proceedings, including the extent of insurance coverage |
• | Changes in applicable accounting principles or policies |
• | Costs of asset construction for generation, transmission, and distribution systems necessary to provide electric service, including new generation and transmission resources, as well as the cost to remove and retire existing assets |
• | Environmental compliance expenditures |
• | The regulatory mandate to acquire power from renewable resources |
• | Increased regulation related to nuclear safety |
• | Increased interest costs to finance capital investments |
• | Depreciation |
• | Changing customer behaviors, including increased emphasis on energy efficiency measures and utilization of alternative sources of power |
• | Rate design that is not driven by economics, which could influence customer behavior |
• | Unfavorable economic conditions |
• | Reductions in costs of self-generation energy resources and energy efficiency technology |
• | Reduced new sources of demand |
• | Unpredictable weather patterns |
• | Rates charged by PNM and TNMP |
• | Rates charged by REPs utilizing TNMP’s facilities to deliver power |
• | Energy efficiency initiatives |
• | Availability and cost of alternative sources of power |
• | National, regional, or local economic conditions |
• | Federally-mandated base closures or significant curtailment of the activities at the bases or national laboratories |
• | Closure of industrial facilities or significant curtailment of their activities |
• | The ability to obtain adequate supplies of nuclear fuel and water |
• | The ability to dispose of spent nuclear fuel |
• | Decommissioning of the plant (see above) |
• | Securing the facilities against possible terrorist attacks |
• | Unscheduled outages due to equipment failures |
• | The extent to which cash flows will support dividends |
• | The Company’s financial circumstances and performance |
• | Decisions of the NMPRC and PUCT in various regulatory cases currently pending or that may be docketed in the future, including the outcome of appeals of those decisions |
• | Conditions imposed by the NMPRC, PUCT, or Federal Power Act |
• | The effect of federal regulatory decisions and legislative acts |
• | Economic conditions in the United States and in the Company’s service areas |
• | Future growth plans and the related capital requirements |
• | Other business considerations |
• | An economic recession |
• | Declines in the health of the banking sector generally, or the failure of specific banks who are parties to the Company’s credit facilities |
• | Deterioration in the overall health of the utility industry |
• | The bankruptcy of an unrelated energy company |
• | War, terrorist attacks, or cybersecurity attacks, or threatened attacks |
• | Authorization for the Board to issue PNMR’s preferred stock in series and to fix rights and preferences of the series (including, among other things, voting rights and preferences with respect to dividends and other matters) |
• | Advance notice procedures with respect to any proposal other than those adopted or recommended by the Board |
• | Provisions specifying that only a majority of the Board, the chairman of the Board, the chief executive officer, or holders of at least one-tenth of all of PNMR’s shares entitled to vote may call a special meeting of shareholders |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
• | The Clean Air Act – Regional Haze – NEE Complaint |
• | The Clean Air Act – Regional Haze – December 2018 Compliance Filing |
• | The Clean Air Act – Regional Haze – Four Corners – Four Corners Federal Agency Lawsuit |
• | WEG v. OSM NEPA Lawsuit |
• | Navajo Nation Environmental Issues |
• | Santa Fe Generating Station |
• | Coal Combustion Residuals Waste Disposal |
• | Continuous Highwall Mining Royalty Rate |
• | PVNGS Water Supply Litigation |
• | San Juan River Adjudication |
• | Rights-of-Way Matter |
• | Navajo Nation Allottee Matters |
• | PNM – New Mexico 2015 Rate Case |
• | PNM – Renewable Portfolio Standard |
• | PNM – Renewable Energy Rider |
• | PNM – Energy Efficiency and Load Management |
• | PNM – Integrated Resource Plans |
• | PNM – Cost Recovery Related to Joining the EIM |
• | PNM – Facebook, Inc. Data Center Project |
• | TNMP – Transmission Cost of Service Rates |
ITEM 4. | MINE SAFETY DISCLOSURES |
Name | Age | Office | Initial Effective Date | |||
P. K. Collawn | 60 | Chairman, President, and Chief Executive Officer | January 2012 | |||
C. N. Eldred | 65 | Executive Vice President and Chief Financial Officer | July 2007 | |||
P. V. Apodaca | 67 | Senior Vice President, General Counsel, and Secretary | January 2010 | |||
R. N. Darnell | 61 | Senior Vice President, Public Policy | January 2012 | |||
C. M. Olson | 61 | Senior Vice President, Utility Operations | February 2018 | |||
Vice President, Utility Operations | December 2016 | |||||
Vice President, Generation – PNM | November 2012 | |||||
J. D. Tarry | 48 | Vice President, Controller and Treasurer | September 2018 | |||
Vice President, Finance and Controller | February 2017 | |||||
Vice President, Corporate Controller, and Chief Information Officer | April 2015 | |||||
Vice President, Customer Service and Chief Information Officer | May 2012 |
ITEM 5. | MARKET FOR PNMR’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
ITEM 6. | SELECTED FINANCIAL DATA |
PNM RESOURCES, INC. AND SUBSIDIARIES | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(In thousands except per share amounts and ratios) | |||||||||||||||||||
Total Operating Revenues | $ | 1,436,613 | $ | 1,445,003 | $ | 1,362,951 | $ | 1,439,082 | $ | 1,435,853 | |||||||||
Net Earnings | $ | 101,282 | $ | 95,419 | $ | 131,896 | $ | 31,078 | $ | 130,909 | |||||||||
Net Earnings Attributable to PNMR | $ | 85,642 | $ | 79,874 | $ | 116,849 | $ | 15,640 | $ | 116,254 | |||||||||
Net Earnings Attributable to PNMR per Common Share | |||||||||||||||||||
Basic | $ | 1.07 | $ | 1.00 | $ | 1.47 | $ | 0.20 | $ | 1.46 | |||||||||
Diluted | $ | 1.07 | $ | 1.00 | $ | 1.46 | $ | 0.20 | $ | 1.45 | |||||||||
Cash Flow Data | |||||||||||||||||||
Net cash flows from operating activities | $ | 428,226 | $ | 523,462 | $ | 408,283 | $ | 395,045 | $ | 414,876 | |||||||||
Net cash flows from investing activities | $ | (475,724 | ) | $ | (466,163 | ) | $ | (699,375 | ) | $ | (544,528 | ) | $ | (485,329 | ) | ||||
Net cash flows from financing activities | $ | 45,646 | $ | (58,847 | ) | $ | 242,392 | $ | 175,431 | $ | 96,194 | ||||||||
Total Assets | $ | 6,865,551 | $ | 6,646,103 | $ | 6,471,080 | $ | 6,009,328 | $ | 5,790,237 | |||||||||
Long-Term Debt, including current installments | $ | 2,670,111 | $ | 2,437,645 | $ | 2,392,712 | $ | 2,091,948 | $ | 1,962,385 | |||||||||
Common Stock Data | |||||||||||||||||||
Market price per common share at year end | $ | 41.09 | $ | 40.45 | $ | 34.30 | $ | 30.57 | $ | 29.63 | |||||||||
Book value per common share at year end | $ | 21.20 | $ | 21.28 | $ | 21.04 | $ | 20.78 | $ | 21.61 | |||||||||
Tangible book value per share at year end | $ | 17.70 | $ | 17.79 | $ | 17.55 | $ | 17.28 | $ | 18.12 | |||||||||
Average number of common shares outstanding – diluted | 80,012 | 80,141 | 80,132 | 80,139 | 80,279 | ||||||||||||||
Dividends declared per common share | $ | 1.0850 | $ | 0.9925 | $ | 0.9025 | $ | 0.8200 | $ | 0.7550 | |||||||||
Capitalization | |||||||||||||||||||
PNMR common stockholders’ equity | 38.6 | % | 40.9 | % | 41.1 | % | 44.0 | % | 46.6 | % | |||||||||
Preferred stock of subsidiary, without mandatory redemption requirements | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | ||||||||||||||
Long-term debt | 61.1 | 58.8 | 58.6 | 55.7 | 53.1 | ||||||||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
PNM RESOURCES, INC. AND SUBSIDIARIES | |||||||||||||||||||
COMPARATIVE OPERATING STATISTICS | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(In thousands) | |||||||||||||||||||
PNM Revenues | |||||||||||||||||||
Residential | $ | 433,009 | $ | 419,105 | $ | 395,490 | $ | 427,958 | $ | 411,412 | |||||||||
Commercial | 408,333 | 408,354 | 394,150 | 437,279 | 428,085 | ||||||||||||||
Industrial | 61,119 | 58,851 | 56,650 | 75,308 | 73,002 | ||||||||||||||
Public authority | 21,688 | 23,604 | 23,174 | 26,202 | 25,278 | ||||||||||||||
Economy service | 26,764 | 30,645 | 31,121 | 35,132 | 39,123 | ||||||||||||||
Transmission | 54,280 | 45,932 | 34,267 | 33,216 | 38,284 | ||||||||||||||
Firm-requirements wholesale | — | 4,468 | 22,497 | 31,263 | 38,313 | ||||||||||||||
Other sales for resale (1), (2) | 76,168 | 101,897 | 70,375 | 63,195 | 82,508 | ||||||||||||||
Mark-to-market activity | (1,051 | ) | 1,317 | (1,645 | ) | (5,270 | ) | 5,996 | |||||||||||
Other miscellaneous (2) | 14,098 | 10,057 | 9,834 | 6,912 | 5,913 | ||||||||||||||
Alternative revenue programs (3) | (2,443 | ) | — | — | — | — | |||||||||||||
Total PNM Revenues | $ | 1,091,965 | $ | 1,104,230 | $ | 1,035,913 | $ | 1,131,195 | $ | 1,147,914 | |||||||||
TNMP Revenues | |||||||||||||||||||
Residential | $ | 130,288 | $ | 126,587 | $ | 124,462 | $ | 120,771 | $ | 114,826 | |||||||||
Commercial | 111,261 | 106,503 | 103,174 | 102,956 | 99,701 | ||||||||||||||
Industrial | 17,317 | 18,140 | 17,427 | 16,316 | 15,049 | ||||||||||||||
Other miscellaneous | 81,583 | 89,543 | 81,975 | 67,844 | 58,363 | ||||||||||||||
Alternative revenue programs (3) | 4,199 | — | — | — | — | ||||||||||||||
Total TNMP Revenues | $ | 344,648 | $ | 340,773 | $ | 327,038 | $ | 307,887 | $ | 287,939 |
PNM MWh Sales | ||||||||||||||
Residential | 3,250,560 | 3,136,066 | 3,189,527 | 3,185,363 | 3,169,071 | |||||||||
Commercial | 3,814,659 | 3,774,417 | 3,831,295 | 3,800,472 | 3,874,292 | |||||||||
Industrial | 879,308 | 850,914 | 875,109 | 957,308 | 984,130 | |||||||||
Public authority | 241,238 | 250,500 | 249,860 | 246,496 | 251,187 | |||||||||
Economy service | 667,288 | 722,501 | 805,733 | 796,430 | 758,629 | |||||||||
Firm-requirements wholesale (1) | — | 87,600 | 429,345 | 444,495 | 527,597 | |||||||||
Other sales for resale (2) | 2,525,220 | 3,632,137 | 2,899,322 | 2,110,947 | 2,271,480 | |||||||||
Total PNM MWh Sales | 11,378,273 | 12,454,135 | 12,280,191 | 11,541,511 | 11,836,386 | |||||||||
TNMP MWh Sales | ||||||||||||||
Residential | 3,094,965 | 2,936,291 | 2,933,938 | 2,912,019 | 2,802,768 | |||||||||
Commercial | 3,186,788 | 2,793,263 | 2,742,366 | 2,654,102 | 2,583,664 | |||||||||
Industrial | 3,681,480 | 3,202,528 | 2,976,800 | 2,804,919 | 2,708,151 | |||||||||
Other | 100,300 | 94,767 | 98,596 | 100,999 | 102,118 | |||||||||
Total TNMP MWh Sales | 10,063,533 | 9,026,849 | 8,751,700 | 8,472,039 | 8,196,701 |
PNM RESOURCES, INC. AND SUBSIDIARIES | |||||||||||||||||||
COMPARATIVE OPERATING STATISTICS | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
PNM Customers | |||||||||||||||||||
Residential | 470,192 | 465,950 | 462,921 | 459,353 | 455,907 | ||||||||||||||
Commercial | 57,000 | 56,655 | 56,357 | 56,107 | 55,853 | ||||||||||||||
Industrial | 236 | 239 | 247 | 250 | 249 | ||||||||||||||
Economy service | 1 | 1 | 1 | 1 | 1 | ||||||||||||||
Other sales for resale | 39 | 36 | 36 | 39 | 39 | ||||||||||||||
Other | 932 | 931 | 887 | 908 | 911 | ||||||||||||||
Total PNM Customers | 528,400 | 523,812 | 520,449 | 516,658 | 512,960 | ||||||||||||||
TNMP Consumers | |||||||||||||||||||
Residential | 210,696 | 207,788 | 204,744 | 202,359 | 199,963 | ||||||||||||||
Commercial | 40,508 | 39,814 | 39,817 | 39,014 | 38,033 | ||||||||||||||
Industrial | 88 | 82 | 66 | 70 | 70 | ||||||||||||||
Other | 1,924 | 1,948 | 1,993 | 2,018 | 2,044 | ||||||||||||||
Total TNMP Consumers | 253,216 | 249,632 | 246,620 | 243,461 | 240,110 | ||||||||||||||
PNM Generation Statistics | |||||||||||||||||||
Net Capability – MW, including PPAs (1) | 2,661 | 2,580 | 2,791 | 2,787 | 2,707 | ||||||||||||||
Coincidental Peak Demand – MW | 1,885 | 1,843 | 1,908 | 1,889 | 1,878 | ||||||||||||||
Average Fuel Cost per MMBTU | $ | 1.808 | $ | 1.704 | $ | 1.821 | $ | 2.168 | $ | 2.415 | |||||||||
BTU per KWh of Net Generation | 10,193 | 10,396 | 9,975 | 10,456 | 10,422 | ||||||||||||||
(1) Amounts are reflective of the shutdown of SJGS Units 2 and 3 in December 2017 and restructured ownership of SJGS Unit 4 as of December 31, 2017. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Earning authorized returns on regulated businesses |
• | Delivering at or above industry-average earnings and dividend growth |
• | Maintaining solid investment grade credit ratings |
• | Maintaining strong employee safety, plant performance, and system reliability |
• | Delivering a superior customer experience |
• | Demonstrating environmental stewardship in business operations, including reducing CO2 emissions |
• | Supporting the communities in their service territories |
• | A ROE of 9.575%, compared to the 10.5% requested by PNM |
• | Inclusion of the January 2016 purchase of the assets underlying three leases of capacity, totaling 64.1 MW, of PVNGS Unit 2 (Note 8) at an initial rate base value of $83.7 million, compared to PNM’s request for recovery of the fair market value purchase price of $163.3 million; and disallowance of the recovery of the undepreciated costs of capitalized improvements made during the period the 64.1 MW was being leased by PNM, which costs totaled $43.8 million when the order was issued |
• | Disallowance of the recovery of any future contributions for PVNGS decommissioning costs related to the 64.1 MW of capacity in PVNGS Unit 2 purchased in January 2016 and the 114.6 MW of the leased capacity in PVNGS Units 1 and 2 that were extended for eight years beginning January 15, 2015 and 2016 (Note 8) |
• | Disallowance of recovery of the costs associated with converting SJGS Units 1 and 4 to BDT, which is required by the NSR permit for SJGS (Note 16); PNM’s share of the costs of installing the BDT equipment was $52.3 million, $40.0 million of which PNM requested be included in rate base in the NM 2015 Rate Case |
• | Disallowance of recovery of the full fair market value purchase price of the 64.1 MW of capacity in PVNGS Unit 2 purchased in January 2016 |
• | Disallowance of the recovery of the undepreciated costs of capitalized improvements made during the period the 64.1 MW of capacity was leased by PNM |
• | Disallowance of recovery of future contributions for PVNGS decommissioning attributable to 64.1 MW of purchased capacity and the 114.6 MW of capacity under the extended leases |
• | Disallowance of recovery of the costs of converting SJGS Units 1 and 4 to BDT |
• | The NMPRC allowing PNM to recover the costs of the lease extensions for the 114.6 MW of PVNGS Units 1 and 2 and any of the purchase price for the 64.1 MW in PVNGS Unit 2 |
• | The NMPRC allowing PNM to recover the costs incurred under the new coal supply contract for Four Corners |
• | The revised method to collect PNM’s fuel and purchased power costs under the FPPAC |
• | The final rate design |
• | The NMPRC allowing PNM to include the “prepaid pension asset” in rate base |
• | Implementation of the modifications in PNM’s resource portfolio, which were previously approved by the NMPRC as part of the SJGS regional haze compliance plan (see below and Note 16) |
• | Infrastructure investments, including environmental upgrades at Four Corners |
• | Declines in forecasted energy sales due to successful energy efficiency programs and other economic factors |
• | Updates in the FERC/retail jurisdictional allocations |
• | A revenue increase totaling $62.3 million, with an initial increase of $32.3 million beginning January 1, 2018 and the remaining increase beginning January 1, 2019 |
• | A ROE of 9.575%, compared to the 10.125% requested by PNM |
• | Full recovery of PNM’s investment in SCRs at Four Corners with a debt-only return |
• | An agreement to not implement non-fuel base rate changes, other than changes related to PNM’s rate riders, with an effective date prior to January 1, 2020 |
• | An agreement to adjust the January 2019 increase for certain changes in federal corporate tax laws and to true-up PNM’s cost of debt |
• | Returning to customers over a three-year period the benefit of the reduction in the New Mexico corporate income tax rate to the extent attributable to PNM’s retail operations |
• | PNM would perform a cost benefit analysis in its 2020 IRP of the impact of a possible early exit from Four Corners in 2024 and 2028 |
Approval Date | Percent Increase | ||
December 2015 | 10 | % | |
December 2016 | 10 | % | |
December 2017 | 9 | % | |
December 2018 | 9 | % |
• | Retiring PNM’s share of SJGS in 2022 after the expiration of the current operating and coal supply agreements would provide long-term cost savings for PNM’s customers |
• | PNM exiting its ownership interest in Four Corners after its current coal supply agreement expires in 2031 would also provide long-term cost savings for customers |
• | The best mix of new resources to replace the retired coal generation would include solar energy and flexible natural gas-fired peaking capacity; the mix could include energy storage if the economics support it and wind energy provided additional transmission capacity becomes available |
• | Significant increases in future wind energy supplies will likely require new transmission capacity to be built from eastern New Mexico to PNM’s service territory |
• | PNM should retain the currently leased capacity in PVNGS, which would avoid replacement with carbon-emitting generation |
• | PNM should continue to develop and implement energy efficiency and demand management programs |
• | PNM should assess the costs and benefits of participating in the California Independent System Operator Western Energy Imbalance Market |
• | PNM should analyze its current Reeves Station to consider possible technology improvements to phase out the older generators and replace them with new, more flexible supplies or energy storage |
• | Developing strategies to provide reliable and affordable power while transforming PNM’s generation resources to a cleaner energy portfolio by reducing CO2 emissions |
• | Preparing PNM’s system to meet New Mexico’s increasing renewable energy resources as cost-effectively as possible |
• | Increasing energy efficiency participation |
• | PNM was granted a CCN to acquire an additional 132 MW in SJGS Unit 4 as a jurisdictional resource to serve New Mexico customers effective January 1, 2018; PNM is prohibited from seeking recovery of any undepreciated investment in the 132 MW interest in the event SJGS Unit 4 is abandoned |
• | PNM was granted a CCN for 134 MW of PVNGS Unit 3 as a jurisdictional resource to serve New Mexico customers beginning January 1, 2018 |
• | PNM was authorized to acquire 65 MW of SJGS Unit 4 as merchant utility plant |
• | PNM was required to make a filing with the NMPRC no later than December 31, 2018 to determine the extent to which SJGS should continue serving PNM’s retail customers’ needs after June 30, 2022. PNM’s filing was required to be made before PNM entered into a binding commitment to extend the SJGS CSA beyond its scheduled June 30, 2022 expiration date but after PNM had received firm pricing and other terms for the extended supply of coal to SJGS, unless PNM does not propose to pursue an extended SJGS CSA. See additional discussion in Note 16 and below under December 2018 Compliance Filing. |
Year Ended December 31, | Change | ||||||||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | |||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||
Net earnings attributable to PNMR | $ | 85.6 | $ | 79.9 | $ | 116.8 | $ | 5.8 | $ | (37.0 | ) | ||||||||
Average diluted common and common equivalent shares | 80.0 | 80.1 | 80.1 | (0.1 | ) | — | |||||||||||||
Net earnings attributable to PNMR per diluted share | $ | 1.07 | $ | 1.00 | $ | 1.46 | $ | 0.07 | $ | (0.46 | ) |
Change | |||||||
2018/2017 | 2017/2016 | ||||||
(In millions) | |||||||
PNM | $ | (17.2 | ) | $ | (5.0 | ) | |
TNMP | 16.0 | (6.1 | ) | ||||
Corporate and Other | 7.0 | (25.9 | ) | ||||
Net change | $ | 5.8 | $ | (37.0 | ) |
Year Ended December 31, | Change | ||||||||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | |||||||||||||||
(In millions) | |||||||||||||||||||
Electric operating revenues | $ | 1,092.0 | $ | 1,104.2 | $ | 1,035.9 | $ | (12.2 | ) | $ | 68.3 | ||||||||
Cost of energy | 314.0 | 321.7 | 299.7 | (7.7 | ) | 22.0 | |||||||||||||
Utility margin | 777.9 | 782.6 | 736.2 | (4.7 | ) | 46.4 | |||||||||||||
Operating expenses | 481.0 | 414.5 | 407.9 | 66.5 | 6.6 | ||||||||||||||
Depreciation and amortization | 151.9 | 147.0 | 133.4 | 4.9 | 13.6 | ||||||||||||||
Operating income | 145.0 | 221.1 | 194.8 | (76.1 | ) | 26.3 | |||||||||||||
Other income (deductions) | (4.2 | ) | 30.6 | 25.5 | (34.8 | ) | 5.1 | ||||||||||||
Interest charges | (76.5 | ) | (82.7 | ) | (87.5 | ) | 6.2 | 4.8 | |||||||||||
Segment earnings (loss) before income taxes | 64.4 | 169.0 | 132.9 | (104.6 | ) | 36.1 | |||||||||||||
Income (taxes) benefit | 6.0 | (81.6 | ) | (40.9 | ) | 87.6 | (40.7 | ) | |||||||||||
Valencia non-controlling interest | (15.1 | ) | (15.0 | ) | (14.5 | ) | (0.1 | ) | (0.5 | ) | |||||||||
Preferred stock dividend requirements | (0.5 | ) | (0.5 | ) | (0.5 | ) | — | — | |||||||||||
Segment earnings (loss) | $ | 54.7 | $ | 71.9 | $ | 76.9 | $ | (17.2 | ) | $ | (5.0 | ) |
Year Ended December 31, | Change | |||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | ||||||||||
(Gigawatt hours, except customers) | ||||||||||||||
Residential | 3,250.6 | 3,136.1 | 3,189.5 | 114.5 | (53.4 | ) | ||||||||
Commercial | 3,814.7 | 3,774.4 | 3,831.3 | 40.3 | (56.9 | ) | ||||||||
Industrial | 879.3 | 850.9 | 875.1 | 28.4 | (24.2 | ) | ||||||||
Public authority | 241.2 | 250.5 | 249.9 | (9.3 | ) | 0.6 | ||||||||
Economy service (1) | 667.3 | 722.5 | 805.7 | (55.2 | ) | (83.2 | ) | |||||||
Firm-requirements wholesale (2) | — | 87.6 | 429.3 | (87.6 | ) | (341.7 | ) | |||||||
Other sales for resale (3) | 2,525.2 | 3,632.1 | 2,899.3 | (1,106.9 | ) | 732.8 | ||||||||
11,378.3 | 12,454.1 | 12,280.2 | (1,075.8 | ) | 174.0 | |||||||||
Average retail customer (thousands) | 526.3 | 522.0 | 518.6 | 4.3 | 3.4 |
(1) | PNM purchases energy for a large customer on the customer’s behalf and delivers the energy to the customer’s location through PNM’s transmission system. PNM charges the customer for the cost of the energy as a direct pass through to the customer with only a minor impact in utility margin resulting from providing ancillary services. |
(2) | Decrease in 2018 and 2017 reflects the loss of NEC as a wholesale generation customer. |
(3) | Decrease in 2018 reflects that PVNGS Unit 3 is included as a New Mexico jurisdictional resource beginning January 1, 2018 rather than as a merchant plant in 2017, partially offset by sales from PNM’s 65 MW merchant interest in SJGS Unit 4 (Note 16). |
Year Ended December 31, 2018 | |||||
Change | |||||
Utility margin: | (In millions) | ||||
Rate relief – Additional revenue due to rate increase approved by the NMPRC effective February 1, 2018 (Note 17) | $ | 4.7 | |||
Customer usage/load – Weather normalized retail KWh sales increased 0.6%, due to increased sales to residential, commercial, and industrial customers | 3.9 | ||||
Weather – Warmer weather in 2018; cooling degree days were 13.4% higher and heating degree days were 32.4% higher | 11.1 | ||||
Transmission – The addition of new customers and higher revenues under formula transmission rates | 9.5 | ||||
Wholesale contracts – Loss of NEC as a wholesale generation customer (Note 17) | (2.3 | ) | |||
Unregulated margin – Primarily related to loss of PVNGS Unit 3 wholesale power sales | (26.9 | ) | |||
PVNGS Unit 3 third party transmission costs – Transmission of power to serve New Mexico retail customers | (6.9 | ) | |||
Net unrealized economic hedges – Primarily related to 2017 hedges of PVNGS Unit 3 power sales and sales to NEC | 2.9 | ||||
Other | (0.7 | ) | |||
Net Change | $ | (4.7 | ) |
Year Ended December 31, 2018 | |||||
Change | |||||
Operating expenses: | (In millions) | ||||
Higher plant maintenance and other costs primarily at SJGS, Four Corners and PVNGS | $ | 17.1 | |||
Increased costs associated with additional 132 MW of SJGS Unit 4 and accelerated recovery of SNCRs on SJGS Units 1 and 4 | 15.5 | ||||
Increased costs associated with 65 MW of SJGS Unit 4 held as merchant plant beginning January 1, 2018 (Note 16) | 6.0 | ||||
Higher property taxes due to increases in utility plant in service and higher assessed property values | 2.7 | ||||
Higher employee related, outside service, and vegetation management expenses | 2.6 | ||||
Higher bad debt expense | 0.7 | ||||
Lower capitalized administrative and general expenses due to lower construction spending in 2018 | 2.3 | ||||
Cost savings resulting from the retirement of SJGS Units 2 and 3 | (17.8 | ) | |||
2017 Training costs associated with new software implementation | (1.1 | ) | |||
2017 regulatory disallowance due to the NMPRC’s January 17, 2018 order in PNM’s NM 2016 Rate Case (Note 17) | (27.9 | ) | |||
Regulatory disallowance resulting from the NMPRC’s September 28, 2016 order in PNM’s NM 2015 Rate Case (Note 17) | 0.9 | ||||
2018 regulatory disallowance associated with 132 MW and restructuring costs associated with 65 MW of SJGS Unit 4 (Note 16) | 35.0 | ||||
Regulatory disallowance due to changes in estimated write-offs associated with the SJGS BART determination and ownership restructuring (Note 16) | 4.0 | ||||
2018 increase in estimated coal mine reclamation costs associated with ownership restructuring (Note 16) | 27.3 | ||||
Other | (0.8 | ) | |||
Net Change | $ | 66.5 |
Year Ended December 31, 2018 | |||||
Change | |||||
Depreciation and amortization: | (In millions) | ||||
Increased utility plant in service | $ | 9.0 | |||
Lower depreciation resulting from the retirement of SJGS Units 2 and 3, partially offset by amortization of the associated regulatory asset (Note 16) | (4.5 | ) | |||
Other | 0.4 | ||||
Net Change | $ | 4.9 |
Other income (deductions): | |||||
2018 losses compared to 2017 gains on investment securities in the NDT and coal mine reclamation trusts, including the impact of a new accounting pronouncement (Note 9) | $ | (44.3 | ) | ||
Lower equity AFUDC | (0.5 | ) | |||
2017 interest income from third party transmission service provider due to FERC ruling | (1.0 | ) | |||
Lower non-service components of pension and OPEB expense | 4.3 | ||||
Higher interest income and lower trust expenses related to investment securities in the NDT and coal mine reclamation trusts | 6.1 | ||||
Other | 0.6 | ||||
Net Change | $ | (34.8 | ) |
Interest charges: | |||||
Lower interest on $350.0 million of PNM 2018 SUNs refinanced in May 2018 | $ | 9.6 | |||
Lower interest on $100.0 million of PNM 2018 SUNs refinanced in August 2018 | 1.3 | ||||
Lower interest on $57.0 million of PCRBs refinanced in June 2017 | 0.5 | ||||
Higher interest on term loan agreements | (2.2 | ) | |||
Interest on deposit by PNMR Development for potential transmission interconnection which is offset in Corporate and Other (Note 7) | (2.4 | ) | |||
Lower debt AFUDC | (0.2 | ) | |||
Other | (0.4 | ) | |||
Net Change | $ | 6.2 |
Income taxes: | |||||
Decrease due to reduction in corporate income tax rate and lower segment earnings before income taxes | $ | 46.0 | |||
Change in excess deferred income taxes due to reduction in federal corporate income tax rate | 29.2 | ||||
Amortization of excess deferred income taxes, as ordered by the NMPRC in the NM 2016 Rate Case (Note 17) | 19.8 | ||||
Impacts of decrease in equity AFUDC | (0.1 | ) | |||
Regulatory recovery of prior year impairments of state net operating loss carryforwards due to NMPRC orders in PNM rate cases (Note 17) (net of amortization) | (3.6 | ) | |||
Reversal of deferred items related to the retirement of SJGS Units 2 and 3 | (1.6 | ) | |||
2017 impacts of phased-in reduction in New Mexico corporate income tax rates | (1.2 | ) | |||
Decrease in excess tax benefits related to stock compensation awards (Note 12) | (0.7 | ) | |||
Impairments of state NOL carryforwards | 0.9 | ||||
Impairments, valuation allowances, and non-deductible compensation | (1.1 | ) | |||
Net Change | $ | 87.6 |
Year Ended December 31, 2017 | |||||
Change | |||||
Utility margin: | (In millions) | ||||
Rate relief – Additional revenue due to rate increase approved by the NMPRC on September 28, 2016 and certain fuel costs being passed through the FPPAC | $ | 51.9 | |||
Customer usage/load – PNM’s weather normalized retail KWh sales decreased 0.9%, due to decreased sales to residential, commercial, and industrial customers | (5.9 | ) | |||
Weather – Milder weather; heating degree days were 8.9% lower, partially offset by higher cooling degree days of 2.0% | (3.8 | ) | |||
Leap Year – Decrease in revenue due to additional day in 2016 | (1.6 | ) | |||
Transmission – Higher revenues under formula transmission rates and the addition of new customers | 12.1 | ||||
Wholesale contracts – Primarily due to NEC (Note 17) | (7.8 | ) | |||
Unregulated margin – Higher hedged prices for PVNGS Unit 3 power sales | 3.9 | ||||
Rate riders – Includes renewable energy and energy efficiency riders, which are partially offset in operating expenses, depreciation and amortization, and interest charges | (1.9 | ) | |||
Net unrealized economic hedges – Losses related to hedges of NEC power sales, partially offset by gains related to hedges of PVNGS | (1.3 | ) | |||
Other | 0.8 | ||||
Net Change | $ | 46.4 |
Year Ended December 31, 2017 | |||||
Change | |||||
Operating expenses: | (In millions) | ||||
2017 regulatory disallowance due to the NMPRC’s January 17, 2018 order in PNM’s NM 2016 Rate Case (Note 17) | $ | 27.9 | |||
Regulatory disallowances due to the NMPRC’s September 28, 2016 order in PNM’s NM 2015 Rate Case (Note 17) | (8.1 | ) | |||
Regulatory disallowances due to change in estimated write-offs associated with the SJGS BART determination and ownership restructuring (Note 16) | (7.8 | ) | |||
Lower plant maintenance costs at SJGS, Four Corners, and PVNGS, partially offset by increased costs at gas-fired plants | (3.8 | ) | |||
Implementation of process improvement initiatives in 2016 associated with reducing future costs | (3.7 | ) | |||
Lower employee related expenses and outside consulting costs | (3.4 | ) | |||
Lower rent expense associated with PVNGS leases (Note 8) | (0.9 | ) | |||
Higher capitalized administrative and general expenses due to higher construction spending | (1.7 | ) | |||
Higher allocated corporate depreciation, primarily related to computer software | 5.4 | ||||
Training costs associated with new software implementation | 1.1 | ||||
Contribution to the PNM Resources Foundation | 1.0 | ||||
Higher property taxes due to increased utility plant in service | 0.9 | ||||
Higher environmental expenses | 0.5 | ||||
Other | (0.8 | ) | |||
Net Change | $ | 6.6 |
Year Ended December 31, 2017 | |||||
Change | |||||
Depreciation and amortization: | (In millions) | ||||
Higher depreciation rates approved by the NMPRC in PNM’s 2015 NM Rate Case, including the impacts of impairments (Note 16) | $ | 6.1 | |||
Increased utility plant in service | 6.8 | ||||
Other | 0.7 | ||||
Net Change | $ | 13.6 |
Other income (deductions): | |||||
Higher gains on investment securities in the NDT and coal mine reclamation trusts | $ | 7.6 | |||
Higher equity AFUDC, primarily due to increased levels of construction expenditures | 4.5 | ||||
Interest income from third party transmission service provider due to FERC ruling | 1.0 | ||||
Lower income from “refined coal” (a third-party pre-treatment process); income is now passed through to customers as ordered in PNM’s NM 2015 Rate Case | (3.8 | ) | |||
2016 interest income from IRS, net of related expenses (Note 18) | (2.9 | ) | |||
Higher non-service components of pension and OPEB expense | (1.8 | ) | |||
Other | 0.5 | ||||
Net Change | $ | 5.1 |
Interest charges: | |||||
Lower interest on $146.0 million of PCRBs refinanced in September 2016 | $ | 2.6 | |||
Lower interest on $57.0 million of PCRBs refinanced in June 2017 | 0.6 | ||||
Lower short-term debt borrowings | 0.8 | ||||
Higher debt AFUDC as a result of higher construction spending | 1.0 | ||||
Other | (0.2 | ) | |||
Net Change | $ | 4.8 |
Income taxes: | |||||
Increase due to higher segment earnings before income taxes | $ | (13.8 | ) | ||
Impacts of increase in equity AFUDC | 1.7 | ||||
Regulatory recovery of prior year impairments of state net operating loss carryforwards due to NMPRC orders in PNM rate cases (Note 17) (net of amortization) | 0.3 | ||||
Impacts of phased-in reduction in New Mexico corporate income tax rates | 2.0 | ||||
Decrease due to excess tax benefits related to stock compensation awards (Note 12) | 1.7 | ||||
Impairments of state NOL carryforwards | (0.9 | ) | |||
Impact of change in federal corporate income tax rate | (29.6 | ) | |||
Other impairments and valuation allowances | (2.1 | ) | |||
Net Change | $ | (40.7 | ) |
Year Ended December 31, | Change | ||||||||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | |||||||||||||||
(In millions) | |||||||||||||||||||
Electric operating revenues | $ | 344.6 | $ | 340.8 | $ | 327.0 | $ | 3.8 | $ | 13.8 | |||||||||
Cost of energy | 85.7 | 85.8 | 80.9 | (0.1 | ) | 4.9 | |||||||||||||
Utility margin | 259.0 | 255.0 | 246.2 | 4.0 | 8.8 | ||||||||||||||
Operating expenses | 96.3 | 98.2 | 93.4 | (1.9 | ) | 4.8 | |||||||||||||
Depreciation and amortization | 66.2 | 63.1 | 61.1 | 3.1 | 2.0 | ||||||||||||||
Operating income | 96.5 | 93.6 | 91.6 | 2.9 | 2.0 | ||||||||||||||
Other income (deductions) | 4.1 | 3.6 | 3.2 | 0.5 | 0.4 | ||||||||||||||
Interest charges | (32.1 | ) | (30.1 | ) | (29.3 | ) | (2.0 | ) | (0.8 | ) | |||||||||
Segment earnings before income taxes | 68.5 | 67.1 | 65.5 | 1.4 | 1.6 | ||||||||||||||
Income (taxes) | (16.9 | ) | (31.5 | ) | (23.8 | ) | 14.6 | (7.7 | ) | ||||||||||
Segment earnings | $ | 51.6 | $ | 35.6 | $ | 41.7 | $ | 16.0 | $ | (6.1 | ) |
Year Ended December 31, | Percentage Change | |||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | ||||||||||
Volumetric load (1) (GWh) | ||||||||||||||
Residential | 3,095.0 | 2,936.6 | 2,933.9 | 5.4 | % | 0.1 | % | |||||||
Commercial and other | 32.2 | 34.0 | 42.4 | (5.3 | )% | (19.8 | )% | |||||||
Total volumetric load | 3,127.2 | 2,970.6 | 2,976.3 | 5.3 | % | (0.2 | )% | |||||||
Demand-based load (2) (MW) | 18,181.2 | 16,599.5 | 15,564.8 | 9.5 | % | 6.6 | % | |||||||
Average retail consumers (thousands) (3) | 251.6 | 248.3 | 245.3 | 1.3 | % | 1.2 | % |
(1) | Volumetric load consumers are billed on KWh usage. |
(2) | Demand-based load includes consumers billed on a monthly KW peak and also includes retail transmission customers that are primarily billed under rate riders. |
(3) | TNMP provides transmission and distribution services to REPs that provide electric service to customers in TNMP’s service territories. The number of consumers above represents the customers of these REPs. Under TECA, consumers in Texas have the ability to choose any REP to provide energy. |
Year Ended December 31, 2018 | |||||
Change | |||||
Utility margin: | (In millions) | ||||
Rate relief – Transmission cost of service rate increases in March and September of 2017 and March of 2018 | $ | 3.9 | |||
Retail customer usage/load – Weather normalized retail KWh sales increased 3.2%, primarily related to the residential class; the average number of retail consumers increased 1.3% | 2.0 | ||||
Demand based customer usage/load – Higher demand-based revenues for large commercial and industrial retail consumers; billed demand, excluding retail transmission customers, increased 6.8% | 4.4 | ||||
Rate riders – Impacts of rate riders, including the AMS surcharge, CTC surcharge, energy efficiency rider, and transmission cost recovery factor, which are partially offset in depreciation and amortization | (2.6 | ) | |||
Weather – Milder weather in 2017; heating degree days were 49.1% higher in 2018 | 1.3 | ||||
Revenue subject to refund - Amounts deferred for the impact of the reduction in the federal corporate income tax rate (Note 17) | (5.4 | ) | |||
Other | 0.4 | ||||
Net Change | $ | 4.0 |
Year Ended December 31, 2018 | |||||
Change | |||||
Operating expenses: | (In millions) | ||||
Higher allocated corporate depreciation, primarily related to computer software | $ | 0.8 | |||
Higher employee related expenses | 2.1 | ||||
Training costs associated with new software implementation in 2017 | (0.4 | ) | |||
Higher capitalized administrative and general expenses due to higher construction spending in 2018 | (3.7 | ) | |||
Regulatory recovery authorized in the PUCT’s December 20, 2018 approval of TNMP’s 2018 Rate Case (Note 17) | (0.7 | ) | |||
Net Change | $ | (1.9 | ) |
Depreciation and amortization: | |||||
Increased utility plant in service | $ | 4.2 | |||
Reduced CTC amortization and AMS depreciation | (1.1 | ) | |||
Net Change | $ | 3.1 |
Other income (deductions): | |||||
Higher equity AFUDC | $ | 1.4 | |||
Lower CIAC | (0.8 | ) | |||
Other | (0.1 | ) | |||
Net Change | $ | 0.5 |
Year Ended December 31, 2018 | |||||
Change | |||||
Interest charges: | (In millions) | ||||
Increase due to the issuance of $60.0 million of long-term debt in August 2017 | $ | (1.3 | ) | ||
Increase due to the issuance of $60.0 million of long-term debt in June 2018 | (1.2 | ) | |||
Increase due to the issuance of $35.0 million term loan in 2018 | (0.4 | ) | |||
Higher debt AFUDC | 1.1 | ||||
Other | (0.2 | ) | |||
Net Change | $ | (2.0 | ) |
Income taxes: | |||||
Decrease due to reduction in corporate income tax rate, partially offset by higher segment earnings before income taxes | $ | 9.1 | |||
Change in excess deferred income taxes due to reduction in federal corporate income tax rate | 7.9 | ||||
Decrease in excess tax benefits related to stock compensation awards (Note 12) | (0.2 | ) | |||
Impairments, valuations allowances, and non-deductible compensation | (2.2 | ) | |||
Net Change | $ | 14.6 |
Year Ended December 31, 2017 | |||||
Change | |||||
Utility margin: | (In millions) | ||||
Rate relief – Transmission cost of service rate increases in March and September of 2017 and 2016 | $ | 6.7 | |||
Retail customer usage/load – Weather normalized retail KWh sales increased 1.2%, primarily related to the residential class; the average number of retail consumers increased 1.2% | 0.6 | ||||
Demand based customer usage/load – Higher demand-based revenues for large commercial and industrial retail consumers; billed demand, excluding retail transmission customers, increased 4.0% | 2.5 | ||||
Wholesale transmission load – Increased coincidental peak load for third-party transmission customers | 1.3 | ||||
Rate riders – Impacts of rate riders, including the AMS surcharge, CTC surcharge, energy efficiency rider, and transmission cost recovery factor, which are partially offset in operating expenses, depreciation and amortization, and interest charges | (1.4 | ) | |||
Weather – Milder weather in 2017; heating degree days were 13.1% lower | (0.8 | ) | |||
Other | (0.1 | ) | |||
Net Change | $ | 8.8 |
Year Ended December 31, 2017 | |||||
Change | |||||
Operating expenses: | (In millions) | ||||
Higher allocated corporate depreciation, primarily related to computer software | $ | 1.9 | |||
Higher outside consulting costs, including vegetation management | 2.8 | ||||
Higher property taxes due to increased utility plant in service | 1.4 | ||||
Higher employee related expenses | 0.4 | ||||
Training costs associated with new software implementation | 0.4 | ||||
Higher capitalized administrative and general expenses due to higher construction spending in 2017 | (1.3 | ) | |||
2016 lease abandonment costs associated with building consolidation efforts | (1.0 | ) | |||
Other | 0.2 | ||||
Net Change | $ | 4.8 |
Depreciation and amortization: | |||||
Increased utility plant in service | $ | 3.0 | |||
Reduced CTC amortization and AMS depreciation | (1.0 | ) | |||
Net Change | $ | 2.0 |
Other income (deductions): | |||||
Higher CIAC | $ | 0.2 | |||
2016 interest income from IRS, net of related expenses (Note 18) | (0.3 | ) | |||
Other | 0.5 | ||||
Net Change | $ | 0.4 |
Interest charges: | |||||
Increase due to the issuance of $60.0 million of long-term debt in February 2016 | $ | (0.2 | ) | ||
Increase due to the issuance of $60.0 million of long-term debt in August 2017 | (0.7 | ) | |||
Higher debt AFUDC | 0.3 | ||||
Other | (0.2 | ) | |||
Net Change | $ | (0.8 | ) |
Income taxes: | |||||
Increase due to higher segment earnings before income taxes | $ | (0.5 | ) | ||
Decrease due to excess tax benefits related to stock compensation awards (Note 12) | 0.6 | ||||
Impact of change in federal corporate income tax rate | (7.9 | ) | |||
Other | 0.1 | ||||
Net Change | $ | (7.7 | ) |
Year Ended December 31, | Change | ||||||||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | |||||||||||||||
(In millions) | |||||||||||||||||||
Total revenues | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Cost of energy | — | — | — | — | — | ||||||||||||||
Utility margin | — | — | — | — | — | ||||||||||||||
Operating expenses | (17.7 | ) | (22.1 | ) | (12.8 | ) | 4.4 | (9.3 | ) | ||||||||||
Depreciation and amortization | 23.1 | 21.8 | 14.5 | 1.3 | 7.3 | ||||||||||||||
Operating income (loss) | (5.5 | ) | 0.4 | (1.7 | ) | (5.9 | ) | 2.1 | |||||||||||
Other income (deductions) | 0.4 | 4.2 | 10.4 | (3.8 | ) | (6.2 | ) | ||||||||||||
Interest charges | (18.7 | ) | (14.8 | ) | (11.8 | ) | (3.9 | ) | (3.0 | ) | |||||||||
Segment earnings (loss) before income taxes | (23.8 | ) | (10.3 | ) | (3.2 | ) | (13.5 | ) | (7.1 | ) | |||||||||
Income (taxes) benefit | 3.1 | (17.3 | ) | 1.5 | 20.4 | (18.8 | ) | ||||||||||||
Segment earnings (loss) | $ | (20.6 | ) | $ | (27.6 | ) | $ | (1.7 | ) | $ | 7.0 | $ | (25.9 | ) |
Year ended December 31, 2018 | |||||
Change | |||||
Other income (deductions): | (In millions) | ||||
Decrease in interest income on the Westmoreland Loan (Note 16) | $ | (5.0 | ) | ||
Decrease in donations and community involvement expenses | 0.4 | ||||
Equity in net earnings of NMRD | 0.5 | ||||
Other | 0.3 | ||||
Net Change | $ | (3.8 | ) |
Interest charges: | |||||
Issuance of $300.0 million PNMR 2018 SUNs in March 2018 | $ | (8.5 | ) | ||
Increase in interest expense on the PNMR 2016 Two-Year Term Loan | (0.7 | ) | |||
Issuance of $90.0 million PNMR Development 2018 Term Loan in November 2018 | (0.3 | ) | |||
Higher short-term borrowings and interest rates | (0.8 | ) | |||
Repayment of $150.0 million PNMR 2015 Term Loan in March 2018 | 2.4 | ||||
Elimination of intercompany interest (Note 7) | 2.4 | ||||
Repayment of the BTMU Term Loan in May 2018 | 1.6 | ||||
Net Change | $ | (3.9 | ) |
Income taxes: | |||||
Increase in tax benefit due to higher segment losses before income taxes, partially offset by lower federal corporate income tax rate | $ | 2.0 | |||
Change in excess deferred income taxes due to reduction in federal corporate income tax rate | 16.6 | ||||
Other impairments and valuation allowances | 1.1 | ||||
Other | 0.7 | ||||
Net Change | $ | 20.4 |
Year ended December 31, 2017 | |||||
Change | |||||
Other income (deductions): | (In millions) | ||||
Decrease in interest income on the Westmoreland Loan (Note 16) | $ | (3.7 | ) | ||
2016 interest income from IRS, net of related expenses (Note 18) | (0.8 | ) | |||
Increase in donations, including the PNM Resources Foundation | (1.5 | ) | |||
Other | (0.2 | ) | |||
Net Change | $ | (6.2 | ) |
Interest charges: | |||||
Issuance of the $100.0 million 2016 Two-Year Term Loan in December 2016 | $ | (2.0 | ) | ||
Issuance of the $100.0 million 2016 One-Year Term Loan in December 2016 | (1.9 | ) | |||
Higher short-term borrowings and interest rates | (2.4 | ) | |||
Repayment of a $150.0 million PNMR term loan in December 2016 | 2.0 | ||||
Decrease in interest expense on the BTMU Loan (Note 7) | 1.2 | ||||
Other | 0.1 | ||||
Net Change | $ | (3.0 | ) |
Income taxes: | |||||
Increase in benefit due to change in segment (earnings) loss before income taxes | $ | 2.7 | |||
Impact of change in federal corporate income tax rate | (20.0 | ) | |||
Other impairments and valuation allowances | (1.1 | ) | |||
Other | (0.4 | ) | |||
Net Change | $ | (18.8 | ) |
Year Ended December 31, | Change | ||||||||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | |||||||||||||||
(In millions) | |||||||||||||||||||
Net cash flows from: | |||||||||||||||||||
Operating activities | $ | 428.2 | $ | 523.5 | $ | 408.3 | $ | (95.3 | ) | $ | 115.2 | ||||||||
Investing activities | (475.7 | ) | (466.2 | ) | (699.4 | ) | (9.5 | ) | 233.2 | ||||||||||
Financing activities | 45.6 | (58.8 | ) | 242.4 | 104.4 | (301.2 | ) | ||||||||||||
Net change in cash and cash equivalents | $ | (1.9 | ) | $ | (1.5 | ) | $ | (48.7 | ) | $ | (0.4 | ) | $ | 47.2 |
Year Ended December 31, | Change | ||||||||||||||||||
2018 | 2017 | 2016 | 2018/2017 | 2017/2016 | |||||||||||||||
Cash (Outflows) for Utility Plant Additions | (In millions) | ||||||||||||||||||
PNM: | |||||||||||||||||||
Generation | $ | (55.3 | ) | $ | (74.4 | ) | $ | (84.3 | ) | $ | 19.1 | $ | 9.9 | ||||||
Transmission and distribution | (163.1 | ) | (173.4 | ) | (127.2 | ) | 10.3 | (46.2 | ) | ||||||||||
Purchase of previously leased capacity in PVNGS Unit 2 | — | — | (163.3 | ) | — | 163.3 | |||||||||||||
Four Corners SCRs | (7.6 | ) | (34.9 | ) | (40.9 | ) | 27.3 | 6.0 | |||||||||||
Nuclear fuel | (29.6 | ) | (26.4 | ) | (29.8 | ) | (3.2 | ) | 3.4 | ||||||||||
(255.6 | ) | (309.1 | ) | (445.5 | ) | 53.5 | 136.4 | ||||||||||||
TNMP: | |||||||||||||||||||
Transmission | (87.5 | ) | (60.7 | ) | (71.5 | ) | (26.8 | ) | 10.8 | ||||||||||
Distribution | (135.9 | ) | (83.5 | ) | (39.4 | ) | (52.4 | ) | (44.1 | ) | |||||||||
AMS | — | (1.3 | ) | (11.6 | ) | 1.3 | 10.3 | ||||||||||||
(223.4 | ) | (145.5 | ) | (122.5 | ) | (77.9 | ) | (23.0 | ) | ||||||||||
Corporate and Other: | |||||||||||||||||||
Computer hardware and software | (22.1 | ) | (19.9 | ) | (31.0 | ) | (2.2 | ) | 11.1 | ||||||||||
PNMR Development utility plant additions | — | (25.9 | ) | (1.1 | ) | 25.9 | (24.8 | ) | |||||||||||
(22.1 | ) | (45.8 | ) | (32.1 | ) | 23.7 | (13.7 | ) | |||||||||||
$ | (501.1 | ) | $ | (500.4 | ) | $ | (600.1 | ) | $ | (0.7 | ) | $ | 99.7 | ||||||
Cash Inflows (Outflows) on the Westmoreland Loan | |||||||||||||||||||
Loan origination | $ | — | $ | — | $ | (122.3 | ) | $ | — | $ | 122.3 | ||||||||
Principal payments | 56.6 | 38.4 | 30.0 | 18.2 | 8.4 | ||||||||||||||
$ | 56.6 | $ | 38.4 | $ | (92.3 | ) | $ | 18.2 | $ | 130.7 | |||||||||
Cash Inflows (Outflows) Related to NMRD | |||||||||||||||||||
Investments in NMRD | $ | (9.0 | ) | $ | (4.1 | ) | $ | — | $ | (4.9 | ) | $ | (4.1 | ) | |||||
Disbursements from NMRD | — | $ | 12.4 | — | (12.4 | ) | 12.4 | ||||||||||||
$ | (9.0 | ) | $ | 8.3 | $ | — | $ | (17.3 | ) | $ | 8.3 | ||||||||
Other Cash Flows from Investing Activities | |||||||||||||||||||
Proceeds from sales of investment securities | $ | 984.5 | $ | 637.5 | $ | 522.6 | $ | 347.0 | $ | 114.9 | |||||||||
Purchases from sales of investment securities | (1,007.0 | ) | (650.3 | ) | (538.4 | ) | (356.7 | ) | (111.9 | ) | |||||||||
Return of principal on PVNGS lessor notes | — | — | 8.5 | — | (8.5 | ) | |||||||||||||
Other, net | 0.3 | 0.4 | 0.2 | (0.1 | ) | 0.2 | |||||||||||||
$ | (22.2 | ) | $ | (12.4 | ) | $ | (7.1 | ) | $ | (9.8 | ) | $ | (5.3 | ) | |||||
$ | (475.7 | ) | $ | (466.1 | ) | $ | (699.5 | ) | $ | (9.6 | ) | $ | 233.4 |
• | In 2016, PNMR borrowed $100.0 million under the PNMR One-Year Term Loan (included in short-term borrowings) and $100.0 million under the PNMR Two-Year Loan and repaid the PNMR Term Loan with the proceeds |
• | In 2016, PNM borrowed $175.0 million under the PNM 2016 Term Loan and repaid the PNM Multi-draw Term Loan with the proceeds |
• | NM Capital received net proceeds of $122.5 million under the $125.0 million BTMU Term Loan in 2016 and utilized the proceeds to provide funds for the Westmoreland Loan; in accordance with the BTMU Term Loan agreement, NM Capital made principal payments of $50.1 million in 2018, $42.1 million in 2017 and $32.8 million in 2016 |
• | In 2017, PNM borrowed $200.0 million under the PNM 2017 Term Loan and repaid the PNM 2016 Term Loan with the proceeds |
• | PNM successfully remarketed PCRBs of $57.0 million in 2017 and $146.0 million in 2016 |
• | TNMP issued $60.0 million of 3.85% first mortgage bonds in 2018, $60.0 million of 3.22% first mortgage bonds in 2017, and $60.0 million of 3.53% first mortgage bonds in 2016 |
• | In 2018, PNMR issued $300.0 million aggregate principal amount of 3.250% SUNs and used the proceeds to repay the $150.0 million PNMR 2015 Term Loan and to reduce short-term borrowings |
• | In 2018, PNM issued $450.0 million of SUNs and repaid $350.0 million of 7.95% SUNs and $100.0 million of 7.50% SUNs |
• | In 2018, TNMP borrowed $35.0 million under the TNMP 2018 Term Loan and used the proceeds to reduce short-term borrowings and for general corporate purposes |
• | In 2018, PNMR Development borrowed $90.0 million under the PNMR Development Term Loan |
• | In 2018, PNMR borrowed $150.0 million under the PNMR 2018 One-Year Term Loan and used the proceeds to repay the PNMR 2016 One-Year Term Loan, a portion of the PNMR 2016 Two-Year Term Loan, and for general corporate purposes |
• | In 2018, PNMR borrowed $50.0 million under the PNMR 2018 Two-Year Term Loan and used the proceeds to repay the remaining amount of the PNMR 2016 Two-Year Term Loan and for general corporate purposes |
• | Short-term borrowings decreased $119.5 million in 2018 compared to an increase of $18.3 million in 2017 compared to an increase of $86.5 million in 2016, resulting in a net decrease in cash flows from financing activities of $137.8 in 2018 and $68.2 million in 2017 |
• | In 2018, PNMR had net amounts received under transmission interconnection arrangements of $1.2 million compared to net amounts repaid in 2017 of $9.4 million compared to net amounts received in 2016 of $4.3 million |
• | Ability to earn a fair return on equity |
• | Results of operations |
• | Ability to obtain required regulatory approvals |
• | Conditions in the financial markets |
• | Credit ratings |
• | Upgrading generation resources, including expenditures for compliance with environmental requirements and for renewable energy resources |
• | Expanding the electric transmission and distribution systems |
• | Purchasing nuclear fuel |
2019 | 2020-2023 | Total | |||||||||
(In millions) | |||||||||||
Construction expenditures | $ | 605.3 | $ | 2,103.4 | $ | 2,708.7 | |||||
Capital contributions to NMRD | 29.6 | 33.8 | 63.4 | ||||||||
Dividends on PNMR common stock | 92.4 | 369.6 | 462.0 | ||||||||
Dividends on PNM preferred stock | 0.5 | 2.1 | 2.6 | ||||||||
Total capital requirements | $ | 727.8 | $ | 2,508.9 | $ | 3,236.7 |
Three Months Ended | Year Ended December 31 | |||||||||||||||||||||||||||||||
December 31, 2018 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||
Range of Borrowings | Low | High | Low | High | Low | High | Low | High | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
PNM: | ||||||||||||||||||||||||||||||||
PNM Revolving Credit Facility | $ | — | $ | 32.4 | $ | — | $ | 64.2 | $ | — | $ | 65.0 | $ | — | $ | 135.0 | ||||||||||||||||
PNM New Mexico facilities (1) | — | 10.0 | — | 20.0 | — | 26.0 | — | 50.0 | ||||||||||||||||||||||||
TNMP Revolving Credit Facility | 12.0 | 34.5 | — | 73.9 | — | 53.0 | — | 70.0 | ||||||||||||||||||||||||
PNMR Revolving Credit Facility | 20.0 | 142.8 | 20.0 | 210.0 | 111.8 | 235.3 | 40.0 | 179.5 | ||||||||||||||||||||||||
PNMR Development Revolving Credit Facility | 6.0 | 24.5 | — | 24.5 | — | — | — | — |
PNMR | PNM | TNMP | |||
S&P | |||||
Issuer rating | BBB+ | BBB+ | BBB+ | ||
Senior secured debt | * | * | A | ||
Senior unsecured debt | BBB | BBB+ | * | ||
Preferred stock | * | BBB- | * | ||
Moody’s | |||||
Issuer rating | Baa3 | Baa2 | A3 | ||
Senior secured debt | * | * | A1 | ||
Senior unsecured debt | Baa3 | Baa2 | * | ||
* Not applicable |
PNM | TNMP | PNMR Separate | PNMR Development | PNMR Consolidated | |||||||||||||||
(In millions) | |||||||||||||||||||
Financing capacity: | |||||||||||||||||||
Revolving credit facility | $ | 400.0 | $ | 75.0 | $ | 300.0 | $ | 25.0 | $ | 800.0 | |||||||||
PNM 2017 New Mexico Credit Facility | 40.0 | — | — | — | 40.0 | ||||||||||||||
Total financing capacity | $ | 440.0 | $ | 75.0 | $ | 300.0 | $ | 25.0 | $ | 840.0 | |||||||||
Amounts outstanding as of February 22, 2019: | |||||||||||||||||||
Revolving credit facility | $ | — | $ | 37.5 | $ | 45.3 | $ | 10.9 | $ | 93.7 | |||||||||
PNM 2017 New Mexico Credit Facility | 10.0 | — | — | — | 10.0 | ||||||||||||||
Letters of credit | 2.5 | 0.1 | 4.7 | — | 7.3 | ||||||||||||||
Total short-term debt and letters of credit | 12.5 | 37.6 | 50.0 | 10.9 | 111.0 | ||||||||||||||
Remaining availability as of February 22, 2019 | $ | 427.5 | $ | 37.4 | $ | 250.0 | $ | 14.1 | $ | 729.0 | |||||||||
Invested cash as of February 22, 2019 | $ | 18.1 | $ | — | $ | 0.9 | $ | — | $ | 19.0 |
PVNGS Units 1&2 | |||
(In thousands) | |||
2019 | $ | 18,131 | |
2020 | 18,131 | ||
2021 | 18,131 | ||
2022 | 18,131 | ||
2023 | 9,884 | ||
Thereafter | 818 | ||
Total | $ | 83,226 |
Payments Due | ||||||||||||||||||||
Contractual Obligations | 2019 | 2020-2021 | 2022-2023 | 2024 and Thereafter | Total | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Long-term debt (a) | $ | 372,302 | $ | 881,345 | $ | 112,000 | $ | 1,300,698 | $ | 2,666,345 | ||||||||||
Interest on long-term debt (b) | 97,566 | 162,545 | 121,488 | 634,641 | 1,016,240 | |||||||||||||||
Operating leases (c) | 27,544 | 51,430 | 42,157 | 42,109 | 163,240 | |||||||||||||||
Transmission service arrangements | 8,011 | 15,665 | 10,460 | 7,358 | 41,494 | |||||||||||||||
Coal contracts (d) | 116,537 | 223,377 | 119,176 | 303,166 | 762,256 | |||||||||||||||
Coal mine decommissioning (e) (f) | 13,303 | 32,184 | 39,198 | 58,198 | 142,883 | |||||||||||||||
Nuclear decommissioning funding requirements (f) | 2,637 | 5,274 | 5,274 | 7,771 | 20,956 | |||||||||||||||
SJGS decommissioning funding requirements | — | — | 14,670 | — | 14,670 | |||||||||||||||
Outsourcing | 5,848 | 6,089 | 5,247 | — | 17,184 | |||||||||||||||
Pension and retiree medical (g) | 1,768 | 3,068 | 2,885 | — | 7,721 | |||||||||||||||
Equity contributions to NMRD(h) | 29,647 | 33,769 | — | — | 63,416 | |||||||||||||||
Construction expenditures (i) | 605,340 | 1,145,062 | 958,302 | — | 2,708,704 | |||||||||||||||
Total (j) | $ | 1,280,503 | $ | 2,559,808 | $ | 1,430,857 | $ | 2,353,941 | $ | 7,625,109 |
(a) | Represents total long-term debt, excluding unamortized discounts, premiums, and issuance costs (Note 7) |
(b) | Represents interest payments during the period |
(c) | The operating lease amounts exclude expected future payments of $18.5 million that could be avoided if the leases were returned and the lessor is able to recover the estimated market value of the equipment from third parties and include payments under the PVNGS leases through their expiration dates; see Off-Balance Sheet Arrangements above, Note 8, and Note 10 |
(d) | Represents certain minimum payments that may be required under the coal contracts in effect on December 31, 2018 if no deliveries are taken for SJGS and Four Corners and other minimum payments due for Four Corners |
(e) | Includes funding of trusts for post-term reclamation related to the mines serving SJGS and Four Corners (Note 16) |
(f) | These obligations represent funding based on the current rate of return on investments |
(g) | The Company only forecasts funding for its pension and retiree medical plans for the next five years |
(h) | Represents commitments to fund NMRD for its contractual construction obligations |
(i) | Represents forecasted construction expenditures, including nuclear fuel, under which substantial commitments have been made; the Company only forecasts capital expenditures for the next five years; see Capital Requirements above and Note 14 |
(j) | PNMR is unable to reasonably estimate the timing of liability for uncertain income tax positions (Note 18) in individual years due to uncertainties in the timing of the effective settlement of tax positions and, therefore, PNMR’s liability of $10.2 million is not reflected in this table; amounts PNM is obligated to pay Valencia are not included above since Valencia is consolidated by PNM in accordance with GAAP, as discussed in Note 10; no amounts are included above for the New Mexico Wind, Lightning Dock Geothermal, Red Mesa Wind, and Casa Mesa Wind PPAs, and the Tri-State hazard sharing agreement since there are no minimum payments required under those agreements |
December 31, | |||||
PNMR | 2018 | 2017 | |||
PNMR common equity | 38.6 | % | 40.9 | % | |
Preferred stock of subsidiary | 0.3 | 0.3 | |||
Long-term debt | 61.1 | 58.8 | |||
Total capitalization | 100.0 | % | 100.0 | % | |
PNM | |||||
PNM common equity | 45.6 | % | 46.0 | % | |
Preferred stock | 0.4 | 0.4 | |||
Long-term debt | 54.0 | 53.6 | |||
Total capitalization | 100.0 | % | 100.0 | % | |
TNMP | |||||
Common equity | 53.9 | % | 56.9 | % | |
Long-term debt | 46.1 | 43.1 | |||
Total capitalization | 100.0 | % | 100.0 | % |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
• | Establishing policies regarding risk exposure levels and activities in each of the business segments |
• | Approving the types of derivatives entered into for hedging |
• | Reviewing and approving hedging risk activities |
• | Establishing policies regarding counterparty exposure and limits |
• | Authorizing and delegating transaction limits |
• | Reviewing and approving controls and procedures for derivative activities |
• | Reviewing and approving models and assumptions used to calculate mark-to-market and market risk exposure |
• | Proposing risk limits to the Board’s Finance Committee for its approval |
• | Reporting to the Board’s Audit and Finance Committees on these activities |
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Economic Hedges | (In thousands) | ||||||
Sources of fair value gain (loss): | |||||||
Net fair value at beginning of period | $ | (94 | ) | $ | 2,885 | ||
Amount realized on contracts delivered during period | 102 | (2,640 | ) | ||||
Changes in fair value | (102 | ) | (235 | ) | |||
Net mark-to-market change recorded in earnings | — | (2,875 | ) | ||||
Net change recorded as regulatory liability | — | (104 | ) | ||||
Net fair value at end of period | $ | (94 | ) | $ | (94 | ) |
Rating (1) | Credit Risk Exposure(2) | Number of Counter-parties >10% | Net Exposure of Counter-parties >10% | ||||||||
(Dollars in thousands) | |||||||||||
External ratings: | |||||||||||
Investment grade | $ | 6,234 | 1 | $ | 1,303 | ||||||
Non-investment grade | 1 | — | — | ||||||||
Split ratings | — | — | — | ||||||||
Internal ratings: | |||||||||||
Investment grade | 4,759 | 2 | 3,513 | ||||||||
Non-investment grade | — | — | — | ||||||||
Total | $ | 10,994 | $ | 4,816 |
(1) | The rating “Investment Grade” is for counterparties, or a guarantor, with a minimum S&P rating of BBB- or Moody’s rating of Baa3. The category “Internal Ratings – Investment Grade” includes those counterparties that are internally rated as investment grade in accordance with the guidelines established in the Company’s credit policy. |
(2) | The Credit Risk Exposure is the gross credit exposure, including long-term contracts (other than firm-requirements wholesale customers and the Tri-State hazard sharing agreement), forward sales, and short-term sales. The gross exposure captures the amounts from receivables/payables for realized transactions, delivered and unbilled revenues, and mark-to-market gains/losses. Gross exposures can be offset according to legally enforceable netting arrangements but are not reduced by posted credit collateral. At December 31, 2018, PNMR held $1.0 million of cash collateral to offset its credit exposure. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page | ||
PNM Resources, Inc. and Subsidiaries | ||
Public Service Company of New Mexico and Subsidiaries | ||
Texas-New Mexico Power Company and Subsidiaries | ||
Supplementary Data: | ||
/s/ Patricia K. Collawn |
Patricia K. Collawn, |
Chairman, President, and Chief Executive Officer |
/s/ Charles N. Eldred |
Charles N. Eldred |
Executive Vice President and |
Chief Financial Officer |
/s/ Patricia K. Collawn |
Patricia K. Collawn, |
President and Chief Executive Officer |
/s/ Charles N. Eldred |
Charles N. Eldred |
Executive Vice President and |
Chief Financial Officer |
/s/ Patricia K. Collawn |
Patricia K. Collawn, |
Chief Executive Officer |
/s/ Charles N. Eldred |
Charles N. Eldred |
Executive Vice President and |
Chief Financial Officer |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands, except per share amounts) | |||||||||||
Electric Operating Revenues | |||||||||||
Contracts with customers | $ | 1,359,740 | $ | 1,321,023 | $ | 1,277,594 | |||||
Alternative revenue programs | 1,756 | 15,779 | 16,035 | ||||||||
Other electric operating revenue | 75,117 | 108,201 | 69,322 | ||||||||
Total electric operating revenues | 1,436,613 | 1,445,003 | 1,362,951 | ||||||||
Operating Expenses: | |||||||||||
Cost of energy | 399,726 | 407,479 | 380,596 | ||||||||
Administrative and general | 188,470 | 177,791 | 184,774 | ||||||||
Energy production costs | 149,477 | 137,450 | 146,187 | ||||||||
Regulatory disallowances and restructuring costs | 65,598 | 27,036 | 15,011 | ||||||||
Depreciation and amortization | 241,188 | 231,942 | 209,110 | ||||||||
Transmission and distribution costs | 76,434 | 71,576 | 66,227 | ||||||||
Taxes other than income taxes | 79,673 | 76,690 | 76,321 | ||||||||
Total operating expenses | 1,200,566 | 1,129,964 | 1,078,226 | ||||||||
Operating income | 236,047 | 315,039 | 284,725 | ||||||||
Other Income and Deductions: | |||||||||||
Interest income | 15,540 | 15,916 | 22,293 | ||||||||
Gains (losses) on investment securities | (17,176 | ) | 27,161 | 19,517 | |||||||
Other income | 17,586 | 19,515 | 17,796 | ||||||||
Other (deductions) | (15,696 | ) | (24,247 | ) | (20,524 | ) | |||||
Net other income and deductions | 254 | 38,345 | 39,082 | ||||||||
Interest Charges | 127,244 | 127,625 | 128,633 | ||||||||
Earnings before Income Taxes | 109,057 | 225,759 | 195,174 | ||||||||
Income Taxes | 7,775 | 130,340 | 63,278 | ||||||||
Net Earnings | 101,282 | 95,419 | 131,896 | ||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (15,112 | ) | (15,017 | ) | (14,519 | ) | |||||
Preferred Stock Dividend Requirements of Subsidiary | (528 | ) | (528 | ) | (528 | ) | |||||
Net Earnings Attributable to PNMR | $ | 85,642 | $ | 79,874 | $ | 116,849 | |||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||
Basic | $ | 1.07 | $ | 1.00 | $ | 1.47 | |||||
Diluted | $ | 1.07 | $ | 1.00 | $ | 1.46 |
PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net Earnings | $ | 101,282 | $ | 95,419 | $ | 131,896 | |||||
Other Comprehensive Income (Loss): | |||||||||||
Unrealized Gains on Available-for-Sale Securities: | |||||||||||
Unrealized holding gains arising during the period, net of income tax (expense) of $(963), $(10,927), and $(304) | 2,827 | 17,233 | 474 | ||||||||
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $970, $6,816, and $8,639 | (2,849 | ) | (10,751 | ) | (13,500 | ) | |||||
Pension Liability Adjustment: | |||||||||||
Experience gains (losses), net of income tax (expense) benefit of $2,637, $(919), and $7,219 | (7,745 | ) | 2,699 | (11,282 | ) | ||||||
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(1,922), $(2,504), and $(2,148) | 5,646 | 3,948 | 3,356 | ||||||||
Fair Value Adjustment for Cash Flow Hedges: | |||||||||||
Change in fair market value, net of income tax (expense) benefit of $(145), $(388), and $341 | 425 | 612 | (533 | ) | |||||||
Reclassification adjustment for losses included in net earnings, net of income tax (benefit) of $(56), $(225), and $(298) | 160 | 356 | 466 | ||||||||
Total Other Comprehensive Income (Loss) | (1,536 | ) | 14,097 | (21,019 | ) | ||||||
Comprehensive Income | 99,746 | 109,516 | 110,877 | ||||||||
Comprehensive (Income) Attributable to Valencia Non-controlling Interest | (15,112 | ) | (15,017 | ) | (14,519 | ) | |||||
Preferred Stock Dividend Requirements of Subsidiary | (528 | ) | (528 | ) | (528 | ) | |||||
Comprehensive Income Attributable to PNMR | $ | 84,106 | $ | 93,971 | $ | 95,830 |
PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net earnings | $ | 101,282 | $ | 95,419 | $ | 131,896 | |||||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 275,641 | 268,194 | 242,033 | ||||||||
Deferred income tax expense | 8,019 | 130,528 | 63,805 | ||||||||
Net unrealized losses on commodity derivatives | — | 2,875 | 1,577 | ||||||||
(Gains) losses on investment securities | 17,176 | (27,161 | ) | (19,517 | ) | ||||||
Stock based compensation expense | 7,120 | 6,194 | 5,634 | ||||||||
Regulatory disallowances and restructuring costs | 65,598 | 27,036 | 15,011 | ||||||||
Allowance for equity funds used during construction | (10,404 | ) | (9,516 | ) | (4,949 | ) | |||||
Other, net | 3,529 | 2,329 | 3,060 | ||||||||
Changes in certain assets and liabilities: | |||||||||||
Accounts receivable and unbilled revenues | (8,702 | ) | (1,846 | ) | 2,543 | ||||||
Materials, supplies, and fuel stock | (5,331 | ) | 1,473 | (4,169 | ) | ||||||
Other current assets | 2,491 | 31,298 | (9,640 | ) | |||||||
Other assets | (840 | ) | (5,486 | ) | (42,864 | ) | |||||
Accounts payable | (20,714 | ) | 14,468 | 3,159 | |||||||
Accrued interest and taxes | 1,713 | (327 | ) | 3,345 | |||||||
Other current liabilities | 2,614 | (6,513 | ) | (12,509 | ) | ||||||
Other liabilities | (10,966 | ) | (5,503 | ) | 29,868 | ||||||
Net cash flows from operating activities | 428,226 | 523,462 | 408,283 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Additions to utility and non-utility plant | (501,213 | ) | (500,461 | ) | (600,076 | ) | |||||
Proceeds from sales of investment securities | 984,533 | 637,492 | 522,601 | ||||||||
Purchases of investment securities | (1,007,022 | ) | (650,284 | ) | (538,383 | ) | |||||
Return of principal on PVNGS lessor notes | — | — | 8,547 | ||||||||
Investments in NMRD | (9,000 | ) | (4,077 | ) | — | ||||||
Disbursements from NMRD | — | 12,415 | — | ||||||||
Investment in Westmoreland Loan | — | — | (122,250 | ) | |||||||
Principal repayments on Westmoreland Loan | 56,640 | 38,360 | 30,000 | ||||||||
Other, net | 338 | 392 | 186 | ||||||||
Net cash flows from investing activities | (475,724 | ) | (466,163 | ) | (699,375 | ) |
PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flows From Financing Activities: | |||||||||||
Short-term loan | 50,000 | — | 100,000 | ||||||||
Repayment of short-term loan | — | — | (150,000 | ) | |||||||
Revolving credit facilities borrowings (repayments), net | (119,500 | ) | 18,300 | 86,500 | |||||||
Long-term borrowings | 984,652 | 317,000 | 603,500 | ||||||||
Repayment of long-term debt | (750,162 | ) | (274,070 | ) | (303,793 | ) | |||||
Proceeds from stock option exercise | 963 | 1,739 | 7,028 | ||||||||
Awards of common stock | (12,635 | ) | (13,929 | ) | (15,451 | ) | |||||
Dividends paid | (84,961 | ) | (77,792 | ) | (70,623 | ) | |||||
Valencia’s transactions with its owner | (17,095 | ) | (17,742 | ) | (17,006 | ) | |||||
Amounts received under transmission interconnection arrangements | 4,060 | 11,879 | 7,171 | ||||||||
Refunds paid under transmission interconnection arrangements | (2,830 | ) | (21,290 | ) | (2,830 | ) | |||||
Other, net | (6,846 | ) | (2,942 | ) | (2,104 | ) | |||||
Net cash flows from financing activities | 45,646 | (58,847 | ) | 242,392 | |||||||
Change in Cash and Cash Equivalents | (1,852 | ) | (1,548 | ) | (48,700 | ) | |||||
Cash and Cash Equivalents at Beginning of Year | 3,974 | 5,522 | 54,222 | ||||||||
Cash and Cash Equivalents at End of Year | $ | 2,122 | $ | 3,974 | $ | 5,522 | |||||
Restricted Cash Included in Other Current Assets on Consolidated Balance Sheets: | |||||||||||
At beginning of period | $ | — | $ | 1,000 | $ | 8,171 | |||||
At end of period | $ | — | $ | — | $ | 1,000 | |||||
Supplemental Cash Flow Disclosures: | |||||||||||
Interest paid, net of amounts capitalized | $ | 119,308 | $ | 120,955 | $ | 115,043 | |||||
Income taxes paid (refunded), net | $ | 842 | $ | 625 | $ | (307 | ) | ||||
Supplemental schedule of noncash investing and financing activities: | |||||||||||
(Increase) decrease in accrued plant additions | $ | (11,502 | ) | $ | (25,261 | ) | $ | 18,345 | |||
Contribution of utility plant to NMRD | $ | 578 | $ | 24,829 | $ | — |
PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 2,122 | $ | 3,974 | |||
Accounts receivable, net of allowance for uncollectible accounts of $1,406 and $1,081 | 92,800 | 90,473 | |||||
Unbilled revenues | 57,092 | 54,055 | |||||
Other receivables | 11,369 | 17,582 | |||||
Current portion of Westmoreland Loan | — | 3,576 | |||||
Materials, supplies, and fuel stock | 71,834 | 66,502 | |||||
Regulatory assets | 4,534 | 2,933 | |||||
Commodity derivative instruments | 1,083 | 1,088 | |||||
Income taxes receivable | 7,965 | 6,879 | |||||
Other current assets | 53,725 | 47,358 | |||||
Total current assets | 302,524 | 294,420 | |||||
Other Property and Investments: | |||||||
Long-term portion of Westmoreland Loan | — | 53,064 | |||||
Investment securities | 328,242 | 323,524 | |||||
Equity investment in NMRD | 26,564 | 16,510 | |||||
Other investments | 297 | 503 | |||||
Non-utility property | 3,404 | 3,404 | |||||
Total other property and investments | 358,507 | 397,005 | |||||
Utility Plant: | |||||||
Plant in service and held for future use | 7,548,581 | 7,238,285 | |||||
Less accumulated depreciation and amortization | 2,604,177 | 2,592,692 | |||||
4,944,404 | 4,645,593 | ||||||
Construction work in progress | 194,427 | 245,933 | |||||
Nuclear fuel, net of accumulated amortization of $42,511 and $43,524 | 95,798 | 88,701 | |||||
Net utility plant | 5,234,629 | 4,980,227 | |||||
Deferred Charges and Other Assets: | |||||||
Regulatory assets | 598,930 | 600,672 | |||||
Goodwill | 278,297 | 278,297 | |||||
Commodity derivative instruments | 2,511 | 3,556 | |||||
Other deferred charges | 90,153 | 91,926 | |||||
Total deferred charges and other assets | 969,891 | 974,451 | |||||
$ | 6,865,551 | $ | 6,646,103 |
PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands, except share information) | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 235,900 | $ | 305,400 | |||
Current installments of long-term debt | — | 256,895 | |||||
Accounts payable | 112,170 | 121,383 | |||||
Customer deposits | 10,695 | 11,028 | |||||
Accrued interest and taxes | 65,156 | 62,357 | |||||
Regulatory liabilities | 9,446 | 2,309 | |||||
Commodity derivative instruments | 1,177 | 1,182 | |||||
Dividends declared | 23,231 | 21,240 | |||||
Other current liabilities | 54,678 | 53,850 | |||||
Total current liabilities | 512,453 | 835,644 | |||||
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | 2,670,111 | 2,180,750 | |||||
Deferred Credits and Other Liabilities: | |||||||
Accumulated deferred income taxes | 600,719 | 547,210 | |||||
Regulatory liabilities | 891,428 | 933,578 | |||||
Asset retirement obligations | 158,674 | 146,679 | |||||
Accrued pension liability and postretirement benefit cost | 100,375 | 94,003 | |||||
Commodity derivative instruments | 2,511 | 3,556 | |||||
Other deferred credits | 165,157 | 131,706 | |||||
Total deferred credits and other liabilities | 1,918,864 | 1,856,732 | |||||
Total liabilities | 5,101,428 | 4,873,126 | |||||
Commitments and Contingencies (See Note 16) | |||||||
Cumulative Preferred Stock of Subsidiary | |||||||
without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares) | 11,529 | 11,529 | |||||
Equity: | |||||||
PNMR common stockholders’ equity: | |||||||
Common stock (no par value; 120,000,000 shares authorized; issued and outstanding 79,653,624 shares) | 1,153,113 | 1,157,665 | |||||
Accumulated other comprehensive income (loss), net of income taxes | (108,684 | ) | (95,940 | ) | |||
Retained earnings | 643,953 | 633,528 | |||||
Total PNMR common stockholders’ equity | 1,688,382 | 1,695,253 | |||||
Non-controlling interest in Valencia | 64,212 | 66,195 | |||||
Total equity | 1,752,594 | 1,761,448 | |||||
$ | 6,865,551 | $ | 6,646,103 |
PNM RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||||||||||||||||||||
Attributable to PNMR | Non- controlling Interest in Valencia | |||||||||||||||||||||||
Total PNMR Common Stockholder’s Equity | ||||||||||||||||||||||||
Common Stock | AOCI | Retained Earnings | Total Equity | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Balance at December 31, 2015 | $ | 1,166,465 | $ | (71,432 | ) | $ | 559,780 | $ | 1,654,813 | $ | 71,407 | $ | 1,726,220 | |||||||||||
Net earnings before subsidiary preferred stock dividends | — | — | 117,377 | 117,377 | 14,519 | 131,896 | ||||||||||||||||||
Total other comprehensive income (loss) | — | (21,019 | ) | — | (21,019 | ) | — | (21,019 | ) | |||||||||||||||
Subsidiary preferred stock dividends | — | — | (528 | ) | (528 | ) | — | (528 | ) | |||||||||||||||
Dividends declared on common stock | — | — | (71,887 | ) | (71,887 | ) | — | (71,887 | ) | |||||||||||||||
Proceeds from stock option exercise | 7,028 | — | — | 7,028 | — | 7,028 | ||||||||||||||||||
Awards of common stock | (15,451 | ) | — | — | (15,451 | ) | — | (15,451 | ) | |||||||||||||||
Excess tax (shortfall) from stock-based payment arrangements | (15 | ) | — | — | (15 | ) | — | (15 | ) | |||||||||||||||
Stock based compensation expense | 5,634 | — | — | 5,634 | — | 5,634 | ||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | (17,006 | ) | (17,006 | ) | ||||||||||||||||
Balance at December 31, 2016, as originally reported | 1,163,661 | (92,451 | ) | 604,742 | 1,675,952 | 68,920 | 1,744,872 | |||||||||||||||||
Cumulative effect adjustment (Note 12) | — | — | 10,382 | 10,382 | — | 10,382 | ||||||||||||||||||
Balance at January 1, 2017, as adjusted | 1,163,661 | (92,451 | ) | 615,124 | 1,686,334 | 68,920 | 1,755,254 | |||||||||||||||||
Reclassification of stranded income taxes resulting from tax reform (Note 18) | — | (17,586 | ) | 17,586 | — | — | — | |||||||||||||||||
Net earnings before subsidiary preferred stock dividends | — | — | 80,402 | 80,402 | 15,017 | 95,419 | ||||||||||||||||||
Total other comprehensive income (loss) | — | 14,097 | — | 14,097 | — | 14,097 | ||||||||||||||||||
Subsidiary preferred stock dividends | — | — | (528 | ) | (528 | ) | — | (528 | ) | |||||||||||||||
Dividends declared on common stock | — | — | (79,056 | ) | (79,056 | ) | — | (79,056 | ) | |||||||||||||||
Proceeds from stock option exercise | 1,739 | — | — | 1,739 | — | 1,739 | ||||||||||||||||||
Awards of common stock | (13,929 | ) | — | — | (13,929 | ) | — | (13,929 | ) | |||||||||||||||
Stock based compensation expense | 6,194 | — | — | 6,194 | — | 6,194 | ||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | (17,742 | ) | (17,742 | ) | ||||||||||||||||
Balance at December 31, 2017, as originally reported | 1,157,665 | (95,940 | ) | 633,528 | 1,695,253 | 66,195 | 1,761,448 | |||||||||||||||||
Cumulative effect adjustment (Note 9) | — | (11,208 | ) | 11,208 | — | — | — | |||||||||||||||||
Balance at January 1, 2018, as adjusted | 1,157,665 | (107,148 | ) | 644,736 | 1,695,253 | 66,195 | 1,761,448 | |||||||||||||||||
Net earnings before subsidiary preferred stock dividends | — | — | 86,170 | 86,170 | 15,112 | 101,282 | ||||||||||||||||||
Total other comprehensive income (loss) | — | (1,536 | ) | — | (1,536 | ) | — | (1,536 | ) | |||||||||||||||
Subsidiary preferred stock dividends | — | — | (528 | ) | (528 | ) | — | (528 | ) | |||||||||||||||
Dividends declared on common stock | — | — | (86,425 | ) | (86,425 | ) | — | (86,425 | ) | |||||||||||||||
Proceeds from stock option exercise | 963 | — | — | 963 | — | 963 | ||||||||||||||||||
Awards of common stock | (12,635 | ) | — | — | (12,635 | ) | — | (12,635 | ) | |||||||||||||||
Stock based compensation expense | 7,120 | — | — | 7,120 | — | 7,120 | ||||||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | (17,095 | ) | (17,095 | ) | ||||||||||||||||
Balance at December 31, 2018 | $ | 1,153,113 | $ | (108,684 | ) | $ | 643,953 | $ | 1,688,382 | $ | 64,212 | $ | 1,752,594 |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Electric Operating Revenues | |||||||||||
Contracts with customers | $ | 1,019,291 | $ | 992,462 | $ | 963,158 | |||||
Alternative revenue programs | (2,443 | ) | 3,567 | 3,433 | |||||||
Other electric operating revenue | 75,117 | 108,201 | 69,322 | ||||||||
Total electric operating revenues | 1,091,965 | 1,104,230 | 1,035,913 | ||||||||
Operating Expenses: | |||||||||||
Cost of energy | 314,036 | 321,677 | 299,714 | ||||||||
Administrative and general | 173,178 | 163,892 | 162,469 | ||||||||
Energy production costs | 149,477 | 137,450 | 146,187 | ||||||||
Regulatory disallowances and restructuring costs | 66,339 | 27,036 | 15,011 | ||||||||
Depreciation and amortization | 151,866 | 147,017 | 133,447 | ||||||||
Transmission and distribution costs | 46,855 | 42,370 | 39,657 | ||||||||
Taxes other than income taxes | 45,181 | 43,709 | 44,598 | ||||||||
Total operating expenses | 946,932 | 883,151 | 841,083 | ||||||||
Operating income | 145,033 | 221,079 | 194,830 | ||||||||
Other Income and Deductions: | |||||||||||
Interest income | 13,089 | 8,454 | 10,173 | ||||||||
Gains (losses) on investment securities | (17,176 | ) | 27,161 | 19,517 | |||||||
Other income | 10,992 | 13,527 | 12,088 | ||||||||
Other (deductions) | (11,128 | ) | (18,556 | ) | (16,279 | ) | |||||
Net other income and (deductions) | (4,223 | ) | 30,586 | 25,499 | |||||||
Interest Charges | 76,458 | 82,697 | 87,469 | ||||||||
Earnings before Income Taxes | 64,352 | 168,968 | 132,860 | ||||||||
Income Taxes (Benefit) | (5,971 | ) | 81,555 | 40,922 | |||||||
Net Earnings | 70,323 | 87,413 | 91,938 | ||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (15,112 | ) | (15,017 | ) | (14,519 | ) | |||||
Net Earnings Attributable to PNM | 55,211 | 72,396 | 77,419 | ||||||||
Preferred Stock Dividends Requirements | (528 | ) | (528 | ) | (528 | ) | |||||
Net Earnings Available for PNM Common Stock | $ | 54,683 | $ | 71,868 | $ | 76,891 |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Net Earnings | $ | 70,323 | $ | 87,413 | $ | 91,938 | |||||
Other Comprehensive Income (Loss): | |||||||||||
Unrealized Gains on Available-for-Sale Securities: | |||||||||||
Unrealized holding gains arising during the period, net of income tax (expense) of $(963), $(10,927), and $(304) | 2,827 | 17,233 | 474 | ||||||||
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $970, $6,816, and $8,639 | (2,849 | ) | (10,751 | ) | (13,500 | ) | |||||
Pension Liability Adjustment: | |||||||||||
Experience gains (losses), net of income tax (expense) benefit of $2,637, $(919), and $7,219 | (7,745 | ) | 2,699 | (11,282 | ) | ||||||
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(1,922), $(2,504), and $(2,148) | 5,646 | 3,948 | 3,356 | ||||||||
Total Other Comprehensive Income (Loss) | (2,121 | ) | 13,129 | (20,952 | ) | ||||||
Comprehensive Income | 68,202 | 100,542 | 70,986 | ||||||||
Comprehensive (Income) Attributable to Valencia Non-controlling Interest | (15,112 | ) | (15,017 | ) | (14,519 | ) | |||||
Comprehensive Income Attributable to PNM | $ | 53,090 | $ | 85,525 | $ | 56,467 |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net earnings (loss) | $ | 70,323 | $ | 87,413 | $ | 91,938 | |||||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 182,355 | 180,500 | 166,047 | ||||||||
Deferred income tax expense | 3,334 | 82,549 | 53,119 | ||||||||
Net unrealized losses on commodity derivatives | — | 2,875 | 1,577 | ||||||||
(Gains) losses on investment securities | 17,176 | (27,161 | ) | (19,517 | ) | ||||||
Regulatory disallowances and restructuring costs | 66,339 | 27,036 | 15,011 | ||||||||
Allowance for equity funds used during construction | (8,173 | ) | (8,664 | ) | (4,163 | ) | |||||
Other, net | 3,395 | 2,615 | 3,046 | ||||||||
Changes in certain assets and liabilities: | |||||||||||
Accounts receivable and unbilled revenues | (7,959 | ) | (419 | ) | 4,769 | ||||||
Materials, supplies, and fuel stock | (6,238 | ) | 3,542 | (3,924 | ) | ||||||
Other current assets | (468 | ) | 31,775 | (6,044 | ) | ||||||
Other assets | 6,894 | 15,121 | (23,880 | ) | |||||||
Accounts payable | (14,290 | ) | 9,736 | 5,614 | |||||||
Accrued interest and taxes | (7,617 | ) | 21,523 | (9,601 | ) | ||||||
Other current liabilities | (17,975 | ) | (11,099 | ) | (12,136 | ) | |||||
Other liabilities | (3,761 | ) | (9,389 | ) | 20,119 | ||||||
Net cash flows from operating activities | 283,335 | 407,953 | 281,975 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Utility plant additions | (255,627 | ) | (309,142 | ) | (445,464 | ) | |||||
Proceeds from sales of investment securities | 984,533 | 637,492 | 522,601 | ||||||||
Purchases of investment securities | (1,007,022 | ) | (650,284 | ) | (538,383 | ) | |||||
Return of principal on PVNGS lessor notes | — | — | 8,547 | ||||||||
Other, net | 544 | 33 | 171 | ||||||||
Net cash flows from investing activities | (277,572 | ) | (321,901 | ) | (452,528 | ) |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flows From Financing Activities: | |||||||||||
Short-term borrowings (repayments), net | 2,600 | (21,200 | ) | 61,000 | |||||||
Short-term borrowings (repayments) - affiliate, net | 19,800 | — | — | ||||||||
Long-term borrowings | 450,000 | 257,000 | 321,000 | ||||||||
Repayment of long-term debt | (450,025 | ) | (232,000 | ) | (271,000 | ) | |||||
Equity contribution from parent | — | — | 28,142 | ||||||||
Valencia’s transactions with its owner | (17,095 | ) | (17,742 | ) | (17,006 | ) | |||||
Dividends paid | (77,904 | ) | (61,223 | ) | (4,670 | ) | |||||
Amounts received under transmission interconnection arrangements | 72,260 | 11,879 | 7,171 | ||||||||
Refunds paid under transmission interconnection arrangements | (2,830 | ) | (21,290 | ) | (2,830 | ) | |||||
Other, net | (3,592 | ) | (1,692 | ) | (1,239 | ) | |||||
Net cash flows from financing activities | (6,786 | ) | (86,268 | ) | 120,568 | ||||||
Change in Cash and Cash Equivalents | (1,023 | ) | (216 | ) | (49,985 | ) | |||||
Cash and Cash Equivalents at Beginning of Year | 1,108 | 1,324 | 51,309 | ||||||||
Cash and Cash Equivalents at End of Year | $ | 85 | $ | 1,108 | $ | 1,324 | |||||
Restricted Cash Included in Other Current Assets on Consolidated Balance Sheets: | |||||||||||
At beginning of period | $ | — | $ | 1,000 | $ | 8,171 | |||||
At end of period | $ | — | $ | — | $ | 1,000 | |||||
Supplemental Cash Flow Disclosures: | |||||||||||
Interest paid, net of amounts capitalized | $ | 73,029 | $ | 77,960 | $ | 82,514 | |||||
Income taxes paid (refunded), net | $ | 134 | $ | (23,391 | ) | $ | (967 | ) | |||
Supplemental schedule of noncash investing activities: | |||||||||||
(Increase) decrease in accrued plant additions | $ | (12,310 | ) | $ | (11,792 | ) | $ | 22,433 |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 85 | $ | 1,108 | |||
Accounts receivable, net of allowance for uncollectible accounts of $1,406 and $1,081 | 68,603 | 67,227 | |||||
Unbilled revenues | 47,113 | 43,869 | |||||
Other receivables | 10,650 | 14,541 | |||||
Affiliate receivables | 15,871 | 9,486 | |||||
Materials, supplies, and fuel stock | 67,097 | 60,859 | |||||
Regulatory assets | 4,534 | 2,139 | |||||
Commodity derivative instruments | 1,083 | 1,088 | |||||
Income taxes receivable | 12,850 | 3,410 | |||||
Other current assets | 42,433 | 39,904 | |||||
Total current assets | 270,319 | 243,631 | |||||
Other Property and Investments: | |||||||
Investment securities | 328,242 | 323,524 | |||||
Other investments | 91 | 283 | |||||
Non-utility property | 96 | 96 | |||||
Total other property and investments | 328,429 | 323,903 | |||||
Utility Plant: | |||||||
Plant in service and held for future use | 5,623,520 | 5,501,070 | |||||
Less accumulated depreciation and amortization | 2,006,266 | 2,029,534 | |||||
3,617,254 | 3,471,536 | ||||||
Construction work in progress | 134,221 | 204,079 | |||||
Nuclear fuel, net of accumulated amortization of $42,511 and $43,524 | 95,798 | 88,701 | |||||
Net utility plant | 3,847,273 | 3,764,316 | |||||
Deferred Charges and Other Assets: | |||||||
Regulatory assets | 460,903 | 459,239 | |||||
Goodwill | 51,632 | 51,632 | |||||
Commodity derivative instruments | 2,511 | 3,556 | |||||
Other deferred charges | 74,816 | 75,286 | |||||
Total deferred charges and other assets | 589,862 | 589,713 | |||||
$ | 5,035,883 | $ | 4,921,563 |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands, except share information) | |||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 42,400 | $ | 39,800 | |||
Short-term debt - affiliate | 19,800 | — | |||||
Current installments of long-term debt | — | 23 | |||||
Accounts payable | 75,114 | 77,094 | |||||
Affiliate payables | 164 | 22,875 | |||||
Customer deposits | 10,695 | 11,028 | |||||
Accrued interest and taxes | 35,767 | 33,945 | |||||
Regulatory liabilities | 5,975 | 784 | |||||
Commodity derivative instruments | 1,177 | 1,182 | |||||
Dividends declared | 132 | 132 | |||||
Other current liabilities | 31,799 | 31,633 | |||||
Total current liabilities | 223,023 | 218,496 | |||||
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | 1,656,490 | 1,657,887 | |||||
Deferred Credits and Other Liabilities: | |||||||
Accumulated deferred income taxes | 502,767 | 449,012 | |||||
Regulatory liabilities | 713,971 | 754,441 | |||||
Asset retirement obligations | 157,814 | 145,707 | |||||
Accrued pension liability and postretirement benefit cost | 92,981 | 86,124 | |||||
Commodity derivative instruments | 2,511 | 3,556 | |||||
Other deferred credits | 213,226 | 106,442 | |||||
Total deferred credits and liabilities | 1,683,270 | 1,545,282 | |||||
Total liabilities | 3,562,783 | 3,421,665 | |||||
Commitments and Contingencies (See Note 16) | |||||||
Cumulative Preferred Stock | |||||||
without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares) | 11,529 | 11,529 | |||||
Equity: | |||||||
PNM common stockholder’s equity: | |||||||
Common stock (no par value; 40,000,000 shares authorized; issued and outstanding 39,117,799 shares) | 1,264,918 | 1,264,918 | |||||
Accumulated other comprehensive income (loss), net of income taxes | (110,422 | ) | (97,093 | ) | |||
Retained earnings | 242,863 | 254,349 | |||||
Total PNM common stockholder’s equity | 1,397,359 | 1,422,174 | |||||
Non-controlling interest in Valencia | 64,212 | 66,195 | |||||
Total equity | 1,461,571 | 1,488,369 | |||||
$ | 5,035,883 | $ | 4,921,563 |
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||
Attributable to PNM | |||||||||||||||||||||||
Common Stock | AOCI | Retained Earnings | Total PNM Common Stockholder’s Equity | Non- controlling Interest in Valencia | Total Equity | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance at December 31, 2015 | $ | 1,236,776 | $ | (71,476 | ) | $ | 152,633 | $ | 1,317,933 | $ | 71,407 | $ | 1,389,340 | ||||||||||
Net earnings (loss) | — | — | 77,419 | 77,419 | 14,519 | 91,938 | |||||||||||||||||
Total other comprehensive income (loss) | — | (20,952 | ) | — | (20,952 | ) | — | (20,952 | ) | ||||||||||||||
Dividends declared on preferred stock | — | — | (528 | ) | (528 | ) | — | (528 | ) | ||||||||||||||
Equity contribution from parent | 28,142 | — | — | 28,142 | — | 28,142 | |||||||||||||||||
Dividends declared on common stock | — | — | (4,142 | ) | (4,142 | ) | — | (4,142 | ) | ||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | (17,006 | ) | (17,006 | ) | |||||||||||||||
Balance at December 31, 2016 | 1,264,918 | (92,428 | ) | 225,382 | 1,397,872 | 68,920 | 1,466,792 | ||||||||||||||||
Reclassification of stranded income taxes resulting from tax reform (Note 18) | — | (17,794 | ) | 17,794 | — | — | — | ||||||||||||||||
Net earnings | — | — | 72,396 | 72,396 | 15,017 | 87,413 | |||||||||||||||||
Total other comprehensive income (loss) | — | 13,129 | — | 13,129 | — | 13,129 | |||||||||||||||||
Dividends declared on preferred stock | — | — | (528 | ) | (528 | ) | — | (528 | ) | ||||||||||||||
Dividends declared on common stock | — | — | (60,695 | ) | (60,695 | ) | — | (60,695 | ) | ||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | (17,742 | ) | (17,742 | ) | |||||||||||||||
Balance at December 31, 2017, as originally reported | 1,264,918 | (97,093 | ) | 254,349 | 1,422,174 | 66,195 | 1,488,369 | ||||||||||||||||
Cumulative effect adjustment (Note 9) | — | (11,208 | ) | 11,208 | — | — | — | ||||||||||||||||
Balance at January 1, 2018, as adjusted | 1,264,918 | (108,301 | ) | 265,557 | 1,422,174 | 66,195 | 1,488,369 | ||||||||||||||||
Net earnings | — | — | 55,211 | 55,211 | 15,112 | 70,323 | |||||||||||||||||
Total other comprehensive income (loss) | — | (2,121 | ) | — | (2,121 | ) | — | (2,121 | ) | ||||||||||||||
Dividends declared on preferred stock | — | — | (528 | ) | (528 | ) | — | (528 | ) | ||||||||||||||
Dividends declared on common stock | — | — | (77,377 | ) | (77,377 | ) | — | (77,377 | ) | ||||||||||||||
Valencia’s transactions with its owner | — | — | — | — | (17,095 | ) | (17,095 | ) | |||||||||||||||
Balance at December 31, 2018 | $ | 1,264,918 | $ | (110,422 | ) | $ | 242,863 | $ | 1,397,359 | $ | 64,212 | $ | 1,461,571 |
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Electric Operating Revenues | |||||||||||
Contracts with customers | $ | 340,449 | $ | 328,561 | $ | 314,436 | |||||
Alternative revenue programs | 4,199 | 12,212 | 12,602 | ||||||||
Total electric operating revenues | 344,648 | 340,773 | 327,038 | ||||||||
Operating Expenses: | |||||||||||
Cost of energy | 85,690 | 85,802 | 80,882 | ||||||||
Administrative and general | 38,642 | 39,828 | 39,423 | ||||||||
Regulatory disallowances | (741 | ) | — | — | |||||||
Depreciation and amortization | 66,189 | 63,146 | 61,126 | ||||||||
Transmission and distribution costs | 29,579 | 29,206 | 26,570 | ||||||||
Taxes other than income taxes | 28,792 | 29,187 | 27,396 | ||||||||
Total operating expenses | 248,151 | 247,169 | 235,397 | ||||||||
Operating income | 96,497 | 93,604 | 91,641 | ||||||||
Other Income and Deductions: | |||||||||||
Other income | 5,487 | 4,994 | 4,629 | ||||||||
Other (deductions) | (1,422 | ) | (1,443 | ) | (1,427 | ) | |||||
Net other income and deductions | 4,065 | 3,551 | 3,202 | ||||||||
Interest Charges | 32,091 | 30,084 | 29,335 | ||||||||
Earnings before Income Taxes | 68,471 | 67,071 | 65,508 | ||||||||
Income Taxes | 16,880 | 31,512 | 23,836 | ||||||||
Net Earnings | $ | 51,591 | $ | 35,559 | $ | 41,672 |
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net earnings | $ | 51,591 | $ | 35,559 | $ | 41,672 | |||||
Adjustments to reconcile net earnings to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 68,078 | 64,939 | 62,866 | ||||||||
Regulatory disallowances | (741 | ) | — | — | |||||||
Deferred income tax expense | 1,780 | 27,275 | 12,662 | ||||||||
Allowance for equity funds used during construction and other, net | (2,048 | ) | (1,120 | ) | (772 | ) | |||||
Changes in certain assets and liabilities: | |||||||||||
Accounts receivable and unbilled revenues | (744 | ) | (1,427 | ) | (2,226 | ) | |||||
Materials and supplies | 907 | (2,069 | ) | (245 | ) | ||||||
Other current assets | 1,929 | (1,253 | ) | (621 | ) | ||||||
Other assets | (7,174 | ) | (20,967 | ) | (19,126 | ) | |||||
Accounts payable | (4,199 | ) | 2,419 | (2,040 | ) | ||||||
Accrued interest and taxes | 12,263 | (15,962 | ) | 12,690 | |||||||
Other current liabilities | 6,719 | (2,236 | ) | 298 | |||||||
Other liabilities | (6,610 | ) | 1,334 | 6,822 | |||||||
Net cash flows from operating activities | 121,751 | 86,492 | 111,980 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Utility plant additions | (223,448 | ) | (145,495 | ) | (122,518 | ) | |||||
Net cash flows from investing activities | (223,448 | ) | (145,495 | ) | (122,518 | ) |
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flow From Financing Activities: | |||||||||||
Short-term borrowings (repayments), net | 17,500 | — | (59,000 | ) | |||||||
Short-term borrowings (repayments) – affiliate, net | 100 | (4,600 | ) | (7,200 | ) | ||||||
Long-term borrowings | 95,000 | 60,000 | 60,000 | ||||||||
Equity contribution from parent | 30,000 | 50,000 | 50,000 | ||||||||
Dividends paid | (41,903 | ) | (44,389 | ) | (31,817 | ) | |||||
Other, net | (700 | ) | (979 | ) | (775 | ) | |||||
Net cash flows from financing activities | 99,997 | 60,032 | 11,208 | ||||||||
Change in Cash and Cash Equivalents | (1,700 | ) | 1,029 | 670 | |||||||
Cash and Cash Equivalents at Beginning of Year | 1,700 | 671 | 1 | ||||||||
Cash and Cash Equivalents at End of Year | $ | — | $ | 1,700 | $ | 671 | |||||
Supplemental Cash Flow Disclosures: | |||||||||||
Interest paid, net of amounts capitalized | $ | 28,629 | $ | 29,251 | $ | 26,766 | |||||
Income taxes paid, (refunded) net | $ | 4,266 | $ | 21,436 | $ | 660 | |||||
Supplemental schedule of noncash investing and financing activities: | |||||||||||
(Increase) decrease in accrued plant additions | $ | 1,810 | $ | (15,737 | ) | $ | (1,271 | ) |
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | — | $ | 1,700 | |||
Accounts receivable | 24,196 | 23,246 | |||||
Unbilled revenues | 9,979 | 10,186 | |||||
Other receivables | 1,721 | 2,860 | |||||
Affiliate receivables | 164 | 336 | |||||
Materials and supplies | 4,737 | 5,643 | |||||
Regulatory assets | — | 794 | |||||
Other current assets | 1,114 | 1,131 | |||||
Total current assets | 41,911 | 45,896 | |||||
Other Property and Investments: | |||||||
Other investments | 206 | 220 | |||||
Non-utility property | 2,240 | 2,240 | |||||
Total other property and investments | 2,446 | 2,460 | |||||
Utility Plant: | |||||||
Plant in service and plant held for future use | 1,686,119 | 1,504,778 | |||||
Less accumulated depreciation and amortization | 487,734 | 460,858 | |||||
1,198,385 | 1,043,920 | ||||||
Construction work in progress | 51,459 | 34,350 | |||||
Net utility plant | 1,249,844 | 1,078,270 | |||||
Deferred Charges and Other Assets: | |||||||
Regulatory assets | 138,027 | 141,433 | |||||
Goodwill | 226,665 | 226,665 | |||||
Other deferred charges | 6,284 | 6,046 | |||||
Total deferred charges and other assets | 370,976 | 374,144 | |||||
$ | 1,665,177 | $ | 1,500,770 |
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. CONSOLIDATED BALANCE SHEETS | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands, except share information) | |||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 17,500 | $ | — | |||
Short-term debt – affiliate | 100 | — | |||||
Accounts payable | 23,804 | 29,812 | |||||
Affiliate payables | 1,210 | 667 | |||||
Accrued interest and taxes | 41,882 | 29,619 | |||||
Regulatory liabilities | 3,471 | 1,525 | |||||
Other current liabilities | 2,861 | 2,450 | |||||
Total current liabilities | 90,828 | 64,073 | |||||
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs | 575,398 | 480,620 | |||||
Deferred Credits and Other Liabilities: | |||||||
Accumulated deferred income taxes | 136,238 | 126,415 | |||||
Regulatory liabilities | 177,458 | 179,137 | |||||
Asset retirement obligations | 860 | 793 | |||||
Accrued pension liability and postretirement benefit cost | 7,394 | 7,879 | |||||
Other deferred credits | 2,908 | 7,448 | |||||
Total deferred credits and other liabilities | 324,858 | 321,672 | |||||
Total liabilities | 991,084 | 866,365 | |||||
Commitments and Contingencies (See Note 16) | |||||||
Common Stockholder’s Equity: | |||||||
Common stock ($10 par value; 12,000,000 shares authorized; issued and outstanding 6,358 shares) | 64 | 64 | |||||
Paid-in-capital | 534,166 | 504,166 | |||||
Retained earnings | 139,863 | 130,175 | |||||
Total common stockholder’s equity | 674,093 | 634,405 | |||||
$ | 1,665,177 | $ | 1,500,770 |
Common Stock | Paid-in Capital | Retained Earnings | Total Common Stockholder’s Equity | ||||||||||||
(In thousands) | |||||||||||||||
Balance at December 31, 2015 | $ | 64 | $ | 404,166 | $ | 129,150 | $ | 533,380 | |||||||
Net earnings | — | — | 41,672 | 41,672 | |||||||||||
Equity contribution from parent | — | 50,000 | — | 50,000 | |||||||||||
Dividends declared on common stock | — | — | (31,817 | ) | (31,817 | ) | |||||||||
Balance at December 31, 2016 | 64 | 454,166 | 139,005 | 593,235 | |||||||||||
Net earnings | — | — | 35,559 | 35,559 | |||||||||||
Equity contributions from parent | — | 50,000 | — | 50,000 | |||||||||||
Dividends declared on common stock | — | — | (44,389 | ) | (44,389 | ) | |||||||||
Balance at December 31, 2017 | 64 | 504,166 | 130,175 | 634,405 | |||||||||||
Net earnings | — | — | 51,591 | 51,591 | |||||||||||
Equity contributions from parent | — | 30,000 | — | 30,000 | |||||||||||
Dividends declared on common stock | — | — | (41,903 | ) | (41,903 | ) | |||||||||
Balance at December 31, 2018 | $ | 64 | $ | 534,166 | $ | 139,863 | $ | 674,093 |
(1) | Summary of the Business and Significant Accounting Policies |
Year ended December 31 | ||||||||
2018 | 2017 | 2016 | ||||||
PNM | ||||||||
Electric plant | 2.40 | % | 2.52 | % | 2.33 | % | ||
Common, intangible, and general plant | 8.18 | % | 8.36 | % | 5.40 | % | ||
TNMP | 3.49 | % | 3.57 | % | 3.66 | % |
PNMR | PNM | TNMP | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Coal | $ | 22,777 | $ | 16,714 | $ | 22,777 | $ | 16,714 | $ | — | $ | — | |||||||||||
Materials and supplies | 49,057 | 49,788 | 44,320 | 44,145 | 4,737 | 5,643 | |||||||||||||||||
$ | 71,834 | $ | 66,502 | $ | 67,097 | $ | 60,859 | $ | 4,737 | $ | 5,643 |
(2) | Segment Information |
2018 | PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||
(In thousands) | |||||||||||||||
Electric operating revenues | $ | 1,091,965 | $ | 344,648 | $ | — | $ | 1,436,613 | |||||||
Cost of energy | 314,036 | 85,690 | — | 399,726 | |||||||||||
Utility margin | 777,929 | 258,958 | — | 1,036,887 | |||||||||||
Other operating expenses | 481,030 | 96,272 | (17,650 | ) | 559,652 | ||||||||||
Depreciation and amortization | 151,866 | 66,189 | 23,133 | 241,188 | |||||||||||
Operating income (loss) | 145,033 | 96,497 | (5,483 | ) | 236,047 | ||||||||||
Interest income | 13,089 | — | 2,451 | 15,540 | |||||||||||
Other income (deductions) | (17,312 | ) | 4,065 | (2,039 | ) | (15,286 | ) | ||||||||
Interest charges | (76,458 | ) | (32,091 | ) | (18,695 | ) | (127,244 | ) | |||||||
Segment earnings (loss) before income taxes | 64,352 | 68,471 | (23,766 | ) | 109,057 | ||||||||||
Income taxes (benefit) | (5,971 | ) | 16,880 | (3,134 | ) | 7,775 | |||||||||
Segment earnings (loss) | 70,323 | 51,591 | (20,632 | ) | 101,282 | ||||||||||
Valencia non-controlling interest | (15,112 | ) | — | — | (15,112 | ) | |||||||||
Subsidiary preferred stock dividends | (528 | ) | — | — | (528 | ) | |||||||||
Segment earnings (loss) attributable to PNMR | $ | 54,683 | $ | 51,591 | $ | (20,632 | ) | $ | 85,642 | ||||||
At December 31, 2018: | |||||||||||||||
Total Assets | $ | 5,035,883 | $ | 1,665,177 | $ | 164,491 | $ | 6,865,551 | |||||||
Goodwill | $ | 51,632 | $ | 226,665 | $ | — | $ | 278,297 |
2017 | PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||
Electric operating revenues | $ | 1,104,230 | $ | 340,773 | $ | — | $ | 1,445,003 | |||||||
Cost of energy | 321,677 | 85,802 | — | 407,479 | |||||||||||
Utility margin | 782,553 | 254,971 | — | 1,037,524 | |||||||||||
Other operating expenses | 414,457 | 98,221 | (22,135 | ) | 490,543 | ||||||||||
Depreciation and amortization | 147,017 | 63,146 | 21,779 | 231,942 | |||||||||||
Operating income | 221,079 | 93,604 | 356 | 315,039 | |||||||||||
Interest income | 8,454 | — | 7,462 | 15,916 | |||||||||||
Other income (deductions) | 22,132 | 3,551 | (3,254 | ) | 22,429 | ||||||||||
Interest charges | (82,697 | ) | (30,084 | ) | (14,844 | ) | (127,625 | ) | |||||||
Segment earnings (loss) before income taxes | 168,968 | 67,071 | (10,280 | ) | 225,759 | ||||||||||
Income taxes | 81,555 | 31,512 | 17,273 | 130,340 | |||||||||||
Segment earnings (loss) | 87,413 | 35,559 | (27,553 | ) | 95,419 | ||||||||||
Valencia non-controlling interest | (15,017 | ) | — | — | (15,017 | ) | |||||||||
Subsidiary preferred stock dividends | (528 | ) | — | — | (528 | ) | |||||||||
Segment earnings (loss) attributable to PNMR | $ | 71,868 | $ | 35,559 | $ | (27,553 | ) | $ | 79,874 | ||||||
At December 31, 2017: | |||||||||||||||
Total Assets | $ | 4,921,563 | $ | 1,500,770 | $ | 223,770 | $ | 6,646,103 | |||||||
Goodwill | $ | 51,632 | $ | 226,665 | $ | — | $ | 278,297 |
2016 | PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||
Electric operating revenues | $ | 1,035,913 | $ | 327,038 | $ | — | $ | 1,362,951 | |||||||
Cost of energy | 299,714 | 80,882 | — | 380,596 | |||||||||||
Utility margin | 736,199 | 246,156 | — | 982,355 | |||||||||||
Other operating expenses | 407,922 | 93,389 | (12,791 | ) | 488,520 | ||||||||||
Depreciation and amortization | 133,447 | 61,126 | 14,537 | 209,110 | |||||||||||
Operating income (loss) | 194,830 | 91,641 | (1,746 | ) | 284,725 | ||||||||||
Interest income | 10,173 | — | 12,120 | 22,293 | |||||||||||
Other income (deductions) | 15,326 | 3,202 | (1,739 | ) | 16,789 | ||||||||||
Interest charges | (87,469 | ) | (29,335 | ) | (11,829 | ) | (128,633 | ) | |||||||
Segment earnings (loss) before income taxes | 132,860 | 65,508 | (3,194 | ) | 195,174 | ||||||||||
Income taxes (benefit) | 40,922 | 23,836 | (1,480 | ) | 63,278 | ||||||||||
Segment earnings (loss) | 91,938 | 41,672 | (1,714 | ) | 131,896 | ||||||||||
Valencia non-controlling interest | (14,519 | ) | — | — | (14,519 | ) | |||||||||
Subsidiary preferred stock dividends | (528 | ) | — | — | (528 | ) | |||||||||
Segment earnings (loss) attributable to PNMR | $ | 76,891 | $ | 41,672 | $ | (1,714 | ) | $ | 116,849 | ||||||
At December 31, 2016: | |||||||||||||||
Total Assets | $ | 4,867,546 | $ | 1,383,223 | $ | 220,311 | $ | 6,471,080 | |||||||
Goodwill | $ | 51,632 | $ | 226,665 | $ | — | $ | 278,297 |
Year Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
REP A | 21 | % | 16 | % | 16 | % | ||
REP B | 15 | % | 11 | % | 11 | % | ||
REP C | 12 | % | 10 | % | 11 | % |
(3) | Accumulated Other Comprehensive Income (Loss) |
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||
PNM | PNMR | ||||||||||||||||||
Unrealized Gains on Available-for-Sale Securities | Pension Liability Adjustment | Total | Fair Value Adjustment for Cash Flow Hedges | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Balance at December 31, 2015 | $ | 17,346 | $ | (88,822 | ) | $ | (71,476 | ) | $ | 44 | $ | (71,432 | ) | ||||||
Amounts reclassified from AOCI (pre-tax) | (22,139 | ) | 5,504 | (16,635 | ) | 764 | (15,871 | ) | |||||||||||
Income tax impact of amounts reclassified | 8,639 | (2,148 | ) | 6,491 | (298 | ) | 6,193 | ||||||||||||
Other OCI changes (pre-tax) | 778 | (18,501 | ) | (17,723 | ) | (874 | ) | (18,597 | ) | ||||||||||
Income tax impact of other OCI changes | (304 | ) | 7,219 | 6,915 | 341 | 7,256 | |||||||||||||
Net after-tax change | (13,026 | ) | (7,926 | ) | (20,952 | ) | (67 | ) | (21,019 | ) | |||||||||
Balance at December 31, 2016 | 4,320 | (96,748 | ) | (92,428 | ) | (23 | ) | (92,451 | ) | ||||||||||
Amounts reclassified from AOCI (pre-tax) | (17,567 | ) | 6,452 | (11,115 | ) | 581 | (10,534 | ) | |||||||||||
Income tax impact of amounts reclassified | 6,816 | (2,504 | ) | 4,312 | (225 | ) | 4,087 | ||||||||||||
Other OCI changes (pre-tax) | 28,160 | 3,618 | 31,778 | 1,000 | 32,778 | ||||||||||||||
Income tax impact of other OCI changes | (10,927 | ) | (919 | ) | (11,846 | ) | (388 | ) | (12,234 | ) | |||||||||
Net after-tax change | 6,482 | 6,647 | 13,129 | 968 | 14,097 | ||||||||||||||
Reclassification of stranded income taxes to retained earnings (Note 18) | 2,367 | (20,161 | ) | (17,794 | ) | 208 | (17,586 | ) | |||||||||||
Balance at December 31, 2017, as originally reported | 13,169 | (110,262 | ) | (97,093 | ) | 1,153 | (95,940 | ) | |||||||||||
Cumulative effect adjustment (Note 9) | (11,208 | ) | — | (11,208 | ) | — | (11,208 | ) | |||||||||||
Balance at January 1, 2018, as adjusted | 1,961 | (110,262 | ) | (108,301 | ) | 1,153 | (107,148 | ) | |||||||||||
Amounts reclassified from AOCI (pre-tax) | (3,819 | ) | 7,568 | 3,749 | 216 | 3,965 | |||||||||||||
Income tax impact of amounts reclassified | 970 | (1,922 | ) | (952 | ) | (56 | ) | (1,008 | ) | ||||||||||
Other OCI changes (pre-tax) | 3,790 | (10,382 | ) | (6,592 | ) | 570 | (6,022 | ) | |||||||||||
Income tax impact of other OCI changes | (963 | ) | 2,637 | 1,674 | (145 | ) | 1,529 | ||||||||||||
Net after-tax change | (22 | ) | (2,099 | ) | (2,121 | ) | 585 | (1,536 | ) | ||||||||||
Balance at December 31, 2018 | $ | 1,939 | $ | (112,361 | ) | $ | (110,422 | ) | $ | 1,738 | $ | (108,684 | ) |
(4) | Electric Operating Revenues |
PNM | TNMP | PNMR Consolidated | ||||||||||
Year Ended December 31, 2018 | (In thousands) | |||||||||||
Electric Operating Revenues: | ||||||||||||
Contracts with customers: | ||||||||||||
Retail electric revenue | ||||||||||||
Residential | $ | 433,009 | $ | 130,288 | $ | 563,297 | ||||||
Commercial | 408,333 | 111,261 | 519,594 | |||||||||
Industrial | 61,119 | 17,317 | 78,436 | |||||||||
Public authority | 21,688 | 5,609 | 27,297 | |||||||||
Economy energy service | 26,764 | — | 26,764 | |||||||||
Transmission | 54,280 | 66,991 | 121,271 | |||||||||
Miscellaneous | 14,098 | 8,983 | 23,081 | |||||||||
Total revenues from contracts with customers | 1,019,291 | 340,449 | 1,359,740 | |||||||||
Alternative revenue programs | (2,443 | ) | 4,199 | 1,756 | ||||||||
Other electric operating revenues | 75,117 | — | 75,117 | |||||||||
Total Electric Operating Revenues | $ | 1,091,965 | $ | 344,648 | $ | 1,436,613 |
PNM | TNMP | PNMR Consolidated | ||||||||||
(In thousands) | ||||||||||||
Balance at December 31, 2017 | $ | 349 | $ | — | $ | 349 | ||||||
Consideration received in advance of service to be provided | 4,660 | 1,512 | 6,172 | |||||||||
Deferred revenue earned | (4,660 | ) | (1,512 | ) | (6,172 | ) | ||||||
Balance at December 31, 2018 | $ | 349 | $ | — | $ | 349 |
(5) | Earnings and Dividends Per Share |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands, except per share amounts) | |||||||||||
Net Earnings Attributable to PNMR | $ | 85,642 | $ | 79,874 | $ | 116,849 | |||||
Average Number of Common Shares: | |||||||||||
Outstanding during year | 79,654 | 79,654 | 79,654 | ||||||||
Vested awards of restricted stock | 236 | 237 | 104 | ||||||||
Average Shares – Basic | 79,890 | 79,891 | 79,758 | ||||||||
Dilutive Effect of Common Stock Equivalents: | |||||||||||
Stock options and restricted stock | 122 | 250 | 374 | ||||||||
Average Shares – Diluted | 80,012 | 80,141 | 80,132 | ||||||||
Net Earnings Attributable to PNMR Per Share of Common Stock: | |||||||||||
Basic | $ | 1.07 | $ | 1.00 | $ | 1.47 | |||||
Diluted | $ | 1.07 | $ | 1.00 | $ | 1.46 | |||||
Dividends Declared per Common Share | $ | 1.0850 | $ | 0.9925 | $ | 0.9025 |
(6) | Stockholders’ Equity |
Scheduled Funding Date | Maturity Date | Principal Amount | Interest Rate | ||||||
(In millions) | |||||||||
March 29, 2019 | March 29, 2034 | $ | 75.0 | 3.79 | % | ||||
March 29, 2019 | March 29, 2039 | 75.0 | 3.92 | % | |||||
March 29, 2019 | March 29, 2044 | 75.0 | 4.06 | % | |||||
225.0 | |||||||||
July 1, 2019 | July 1, 2029 | 80.0 | 3.60 | % | |||||
$ | 305.0 |
December 31, | ||||||||
Short-term Debt | 2018 | 2017 | ||||||
(In thousands) | ||||||||
PNM: | ||||||||
PNM Revolving Credit Facility | $ | 32,400 | $ | 39,800 | ||||
PNM 2017 New Mexico Credit Facility | 10,000 | — | ||||||
42,400 | 39,800 | |||||||
TNMP Revolving Credit Facility | 17,500 | — | ||||||
PNMR: | ||||||||
PNMR Revolving Credit Facility | 20,000 | 165,600 | ||||||
PNMR One-Year Term Loans(1) | 150,000 | 100,000 | ||||||
PNMR Development Revolving Credit Facility | 6,000 | — | ||||||
$ | 235,900 | $ | 305,400 |
December 31, 2018 | December 31, 2017 | |||||||||||||||
Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | |||||||||||||
(In thousands) | ||||||||||||||||
PNM Debt | ||||||||||||||||
Senior Unsecured Notes, Pollution Control Revenue Bonds: | ||||||||||||||||
1.875% due April 2033, mandatory tender - October 1, 2021 | $ | 146,000 | $ | 1,022 | $ | 146,000 | $ | 1,383 | ||||||||
6.25% due January 2038 | 36,000 | 216 | 36,000 | 228 | ||||||||||||
2.125% due June 2040, mandatory tender - June 1, 2022 | 37,000 | 314 | 37,000 | 404 | ||||||||||||
5.20% due June 2040, mandatory tender - June 1, 2020 | 40,045 | 62 | 40,045 | 105 | ||||||||||||
5.90% due June 2040 | 255,000 | 1,950 | 255,000 | 2,040 | ||||||||||||
6.25% due June 2040 | 11,500 | 88 | 11,500 | 92 | ||||||||||||
2.45% due September 2042, mandatory tender - June 1, 2022 | 20,000 | 119 | 20,000 | 153 | ||||||||||||
2.40% due June 2043, mandatory tender - June 1, 2020 | 39,300 | 146 | 39,300 | 243 | ||||||||||||
5.20% due June 2043, mandatory tender - June 1, 2020 | 21,000 | 31 | 21,000 | 53 | ||||||||||||
Senior Unsecured Notes: | ||||||||||||||||
7.95% due May 2018 | — | — | 350,000 | 272 | ||||||||||||
7.50% due August 2018 | — | — | 100,025 | 73 | ||||||||||||
5.35% due October 2021 | 160,000 | 455 | 160,000 | 617 | ||||||||||||
3.15% due May 2023 | 55,000 | 338 | — | — | ||||||||||||
3.45% due May 2025 | 104,000 | 666 | — | — | ||||||||||||
3.85% due August 2025 | 250,000 | 1,974 | 250,000 | 2,274 | ||||||||||||
3.68% due May 2028 | 88,000 | 581 | — | — | ||||||||||||
3.78% due August 2028 | 15,000 | 101 | — | — | ||||||||||||
3.93% due May 2033 | 38,000 | 256 | — | — | ||||||||||||
4.22% due May 2038 | 45,000 | 307 | — | — | ||||||||||||
4.50% due May 2048 | 20,000 | 138 | — | — | ||||||||||||
4.60% due August 2048 | 85,000 | 590 | — | — | ||||||||||||
PNM 2017 Term Loan due January 2019 | 200,000 | 1 | 200,000 | 23 | ||||||||||||
1,665,845 | 9,355 | 1,665,870 | 7,960 | |||||||||||||
Less current maturities | — | — | 25 | 2 | ||||||||||||
1,665,845 | 9,355 | 1,665,845 | 7,958 |
December 31, 2018 | December 31, 2017 | |||||||||||||||
Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | Principal | Unamortized Discounts, (Premiums), and Issuance Costs, net | |||||||||||||
(In thousands) | ||||||||||||||||
TNMP Debt | ||||||||||||||||
First Mortgage Bonds: | ||||||||||||||||
9.50% due April 2019 | 172,302 | 206 | 172,302 | 1,032 | ||||||||||||
6.95% due April 2043 | 93,198 | (17,347 | ) | 93,198 | (18,057 | ) | ||||||||||
4.03% due July 2024 | 80,000 | 580 | 80,000 | 686 | ||||||||||||
3.53% due February 2026 | 60,000 | 585 | 60,000 | 667 | ||||||||||||
3.22% due August 2027 | 60,000 | 494 | 60,000 | 552 | ||||||||||||
3.85% due June 2028 | 60,000 | 584 | — | — | ||||||||||||
TNMP 2018 Term Loan due July 2020 | 35,000 | — | — | — | ||||||||||||
560,500 | (14,898 | ) | 465,500 | (15,120 | ) | |||||||||||
Less current maturities | — | — | — | — | ||||||||||||
560,500 | (14,898 | ) | 465,500 | (15,120 | ) | |||||||||||
PNMR Debt | ||||||||||||||||
PNMR 2015 Term Loan due March 2018 | — | — | 150,000 | 12 | ||||||||||||
BTMU Term Loan | — | — | 50,137 | 1,001 | ||||||||||||
PNMR 2016 Two-Year Term Loan due December 2018 | — | — | 100,000 | 9 | ||||||||||||
PNMR 3.25% 2018 SUNs due March 2021 | 300,000 | 1,690 | — | — | ||||||||||||
PNMR Development Term Loan due November 2020 | 90,000 | 88 | — | — | ||||||||||||
PNMR 2018 Two-Year Term Loan due December 2020 | 50,000 | — | — | — | ||||||||||||
440,000 | 1,778 | 300,137 | 1,022 | |||||||||||||
Less current maturities | — | — | 257,268 | 396 | ||||||||||||
440,000 | 1,778 | 42,869 | 626 | |||||||||||||
Total Consolidated PNMR Debt | 2,666,345 | (3,765 | ) | 2,431,507 | (6,138 | ) | ||||||||||
Less current maturities | — | — | 257,293 | 398 | ||||||||||||
$ | 2,666,345 | $ | (3,765 | ) | $ | 2,174,214 | $ | (6,536 | ) |
PNMR | PNM | TNMP | PNMR Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
2019 | $ | — | $ | 200,000 | $ | 172,302 | $ | 372,302 | |||||||
2020 | 140,000 | 100,345 | 35,000 | 275,345 | |||||||||||
2021 | 300,000 | 306,000 | — | 606,000 | |||||||||||
2022 | — | 57,000 | — | 57,000 | |||||||||||
2023 | — | 55,000 | — | 55,000 | |||||||||||
Thereafter | — | 947,500 | 353,198 | 1,300,698 | |||||||||||
Total | $ | 440,000 | $ | 1,665,845 | $ | 560,500 | $ | 2,666,345 |
(8) | Lease Commitments |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
2018 | $ | 37,959 | $ | 33,085 | $ | 4,351 | |||||
2017 | $ | 35,972 | $ | 31,817 | $ | 3,570 | |||||
2016 | $ | 37,432 | $ | 32,843 | $ | 3,748 |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
2019 | $ | 31,772 | $ | 27,691 | $ | 3,664 | |||||
2020 | 30,404 | 27,000 | 3,102 | ||||||||
2021 | 29,012 | 26,462 | 2,324 | ||||||||
2022 | 28,175 | 26,217 | 1,795 | ||||||||
2023 | 18,868 | 17,447 | 1,279 | ||||||||
Later years | 43,489 | 42,329 | 1,150 | ||||||||
Total minimum lease payments | $ | 181,720 | $ | 167,146 | $ | 13,314 |
(9) | Fair Value of Derivative and Other Financial Instruments |
Economic Hedges | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Current assets | $ | 1,083 | $ | 1,088 | |||
Deferred charges | 2,511 | 3,556 | |||||
3,594 | 4,644 | ||||||
Current liabilities | (1,177 | ) | (1,182 | ) | |||
Long-term liabilities | (2,511 | ) | (3,556 | ) | |||
(3,688 | ) | (4,738 | ) | ||||
Net | $ | (94 | ) | $ | (94 | ) |
Economic Hedges | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Electric operating revenues | $ | (50 | ) | $ | 5,151 | $ | (53 | ) | |||
Cost of energy | (52 | ) | (5,386 | ) | (1,208 | ) | |||||
Total gain (loss) | $ | (102 | ) | $ | (235 | ) | $ | (1,261 | ) |
Economic Hedges | |||||
MMBTU | MWh | ||||
December 31, 2018 | 100,000 | — | |||
December 31, 2017 | 100,000 | — |
Year Ended December 31, 2018 | ||||
(In thousands) | ||||
Equity securities: | ||||
Net gains from equity securities sold | $ | 4,864 | ||
Net (losses) from equity securities still held | (10,523 | ) | ||
Total net (losses) on equity securities | (5,659 | ) | ||
Available-for-sale debt securities: | ||||
Net (losses) on debt securities | (11,517 | ) | ||
Net (losses) on investment securities | $ | (17,176 | ) |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Proceeds from sales | $ | 984,533 | $ | 637,492 | $ | 522,601 | |||||
Gross realized gains | $ | 19,358 | $ | 36,896 | $ | 46,116 | |||||
Gross realized (losses) | $ | (16,624 | ) | $ | (12,993 | ) | $ | (25,430 | ) |
Fair Value | |||
(In thousands) | |||
Within 1 year | $ | 12,488 | |
After 1 year through 5 years | 63,600 | ||
After 5 years through 10 years | 60,344 | ||
After 10 years through 15 years | 9,984 | ||
After 15 years through 20 years | 10,904 | ||
After 20 years | 48,418 | ||
$ | 205,738 |
GAAP Fair Value Hierarchy | |||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Unrealized Gains | |||||||||||||||
(In thousands) | |||||||||||||||||||
December 31, 2018 | |||||||||||||||||||
Cash and cash equivalents | $ | 11,472 | $ | 11,472 | $ | — | $ | — | |||||||||||
Equity securities: | |||||||||||||||||||
Corporate stocks, common | 32,997 | 32,997 | — | — | |||||||||||||||
Corporate stocks, preferred | 7,258 | 1,654 | 5,604 | — | |||||||||||||||
Mutual funds and other | 70,777 | 70,777 | — | — | |||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||
U.S. Government | 29,503 | 18,662 | 10,841 | — | $ | 1,098 | |||||||||||||
International Government | 8,435 | — | 8,435 | — | 90 | ||||||||||||||
Municipals | 53,642 | — | 53,642 | — | 489 | ||||||||||||||
Corporate and other | 114,158 | 588 | 111,414 | 2,156 | 923 | ||||||||||||||
$ | 328,242 | $ | 136,150 | $ | 189,936 | $ | 2,156 | $ | 2,600 | ||||||||||
Commodity derivative assets | $ | 3,594 | $ | — | $ | 3,594 | $ | — | |||||||||||
Commodity derivative liabilities | (3,688 | ) | — | (3,688 | ) | — | |||||||||||||
Net | $ | (94 | ) | $ | — | $ | (94 | ) | $ | — |
December 31, 2017 | |||||||||||||||||||
Available-for-sale securities | |||||||||||||||||||
Cash and cash equivalents | $ | 52,636 | $ | 52,636 | $ | — | $ | — | |||||||||||
Equity securities: | |||||||||||||||||||
Domestic value | 40,032 | 40,032 | — | — | $ | 4,011 | |||||||||||||
Domestic growth | 35,456 | 35,456 | — | — | 3,995 | ||||||||||||||
International and other | 45,867 | 42,332 | 3,535 | — | 6,810 | ||||||||||||||
Fixed income securities: | |||||||||||||||||||
U.S. Government | 34,317 | 33,645 | 672 | — | 273 | ||||||||||||||
Municipals | 48,076 | — | 48,076 | — | 1,225 | ||||||||||||||
Corporate and other | 67,140 | — | 67,140 | — | 1,714 | ||||||||||||||
$ | 323,524 | $ | 204,101 | $ | 119,423 | $ | — | $ | 18,028 | ||||||||||
Commodity derivative assets | $ | 4,644 | $ | — | $ | 4,644 | $ | — | |||||||||||
Commodity derivative liabilities | (4,738 | ) | — | (4,738 | ) | — | |||||||||||||
Net | $ | (94 | ) | $ | — | $ | (94 | ) | $ | — |
GAAP Fair Value Hierarchy | |||||||||||||||||||
Carrying Amount | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
December 31, 2018 | (In thousands) | ||||||||||||||||||
PNMR | |||||||||||||||||||
Long-term debt | $ | 2,670,111 | $ | 2,703,810 | $ | — | $ | 2,703,810 | $ | — | |||||||||
Other investments | $ | 297 | $ | 297 | $ | 297 | $ | — | $ | — | |||||||||
PNM | |||||||||||||||||||
Long-term debt | $ | 1,656,490 | $ | 1,668,736 | $ | — | $ | 1,668,736 | $ | — | |||||||||
Other investments | $ | 91 | $ | 91 | $ | 91 | $ | — | $ | — | |||||||||
TNMP | |||||||||||||||||||
Long-term debt | $ | 575,398 | $ | 597,236 | $ | — | $ | 597,236 | $ | — | |||||||||
Other investments | $ | 206 | $ | 206 | $ | 206 | $ | — | $ | — | |||||||||
December 31, 2017 | |||||||||||||||||||
PNMR | |||||||||||||||||||
Long-term debt | $ | 2,437,645 | $ | 2,554,836 | $ | — | $ | 2,554,836 | $ | — | |||||||||
Westmoreland Loan | $ | 56,640 | $ | 66,588 | $ | — | $ | — | $ | 66,588 | |||||||||
Other investments | $ | 503 | $ | 503 | $ | 503 | $ | — | $ | — | |||||||||
PNM | |||||||||||||||||||
Long-term debt | $ | 1,657,910 | $ | 1,727,135 | $ | — | $ | 1,727,135 | $ | — | |||||||||
Other investments | $ | 283 | $ | 283 | $ | 283 | $ | — | $ | — | |||||||||
TNMP | |||||||||||||||||||
Long-term debt | $ | 480,620 | $ | 527,563 | $ | — | $ | 527,563 | $ | — | |||||||||
Other investments | $ | 220 | $ | 220 | $ | 220 | $ | — | $ | — |
GAAP Fair Value Hierarchy | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
December 31, 2018 | (In thousands) | ||||||||||||||
PNM Pension Plan | |||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||
Investments categorized within fair value hierarchy | $ | 412,790 | $ | 139,673 | $ | 272,829 | $ | 288 | |||||||
Uncategorized investments | 76,874 | ||||||||||||||
Total Master Trust Investments | $ | 489,664 | |||||||||||||
TNMP Pension Plan | |||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||
Investments categorized within fair value hierarchy | $ | 45,283 | $ | 15,149 | $ | 30,101 | $ | 33 | |||||||
Uncategorized investments | 9,378 | ||||||||||||||
Total Master Trust Investments | $ | 54,661 | |||||||||||||
PNM OPEB Plan | |||||||||||||||
Cash and cash equivalents | $ | 190 | $ | 190 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
Mutual funds | 69,513 | 32,325 | 37,188 | — | |||||||||||
$ | 69,703 | $ | 32,515 | $ | 37,188 | $ | — | ||||||||
TNMP OPEB Plan | |||||||||||||||
Cash and cash equivalents | $ | 66 | $ | 66 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
Mutual funds | 8,725 | 3,723 | 5,002 | — | |||||||||||
$ | 8,791 | $ | 3,789 | $ | 5,002 | $ | — |
GAAP Fair Value Hierarchy | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
December 31, 2017 | (In thousands) | ||||||||||||||
PNM Pension Plan | |||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||
Investments categorized within fair value hierarchy | $ | 487,498 | $ | 140,218 | $ | 347,089 | $ | 191 | |||||||
Uncategorized investments | 74,768 | ||||||||||||||
Total Master Trust Investments | $ | 562,266 | |||||||||||||
TNMP Pension Plan | |||||||||||||||
Participation in PNMR Master Trust Investments: | |||||||||||||||
Investments categorized within fair value hierarchy | $ | 53,273 | $ | 15,244 | $ | 38,008 | $ | 21 | |||||||
Uncategorized investments | 10,260 | ||||||||||||||
Total Master Trust Investments | $ | 63,533 | |||||||||||||
PNM OPEB Plan | |||||||||||||||
Cash and cash equivalents | $ | 437 | $ | 437 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
International funds | 10,636 | — | 10,636 | — | |||||||||||
Domestic value | 10,816 | 10,816 | — | — | |||||||||||
Domestic growth | 6,710 | 6,710 | — | — | |||||||||||
Other funds | 31,660 | — | 31,660 | — | |||||||||||
Fixed income securities: | |||||||||||||||
Mutual funds | 20,918 | 20,918 | — | — | |||||||||||
$ | 81,177 | $ | 38,881 | $ | 42,296 | $ | — | ||||||||
TNMP OPEB Plan | |||||||||||||||
Cash and cash equivalents | $ | 149 | $ | 149 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
International funds | 1,597 | — | 1,597 | — | |||||||||||
Domestic value | 293 | 293 | — | — | |||||||||||
Domestic growth | 1,410 | 1,410 | — | — | |||||||||||
Other funds | 4,011 | — | 4,011 | — | |||||||||||
Fixed income securities: | |||||||||||||||
Mutual funds | 2,685 | 2,685 | — | — | |||||||||||
$ | 10,145 | $ | 4,537 | $ | 5,608 | $ | — |
GAAP Fair Value Hierarchy | |||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
December 31, 2018 | (In thousands) | ||||||||||||||
PNMR Master Trust | |||||||||||||||
Cash and cash equivalents | $ | 20,120 | $ | 20,120 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
Corporate stocks, common | 54,270 | 54,270 | — | — | |||||||||||
Corporate stocks, preferred | 874 | — | 874 | — | |||||||||||
Mutual funds and other | 143,517 | — | 143,517 | — | |||||||||||
— | — | — | — | ||||||||||||
Fixed income securities: | |||||||||||||||
U.S. government | 84,459 | 80,482 | 3,977 | — | |||||||||||
International government | 5,721 | — | 5,721 | — | |||||||||||
Municipals | 9,558 | — | 9,558 | — | |||||||||||
Corporate and other | 139,554 | (50 | ) | 139,283 | 321 | ||||||||||
Total investments categorized within fair value hierarchy | 458,073 | $ | 154,822 | $ | 302,930 | $ | 321 | ||||||||
Uncategorized investments: | |||||||||||||||
Private equity funds | 18,021 | ||||||||||||||
Hedge funds | 45,589 | ||||||||||||||
Real estate funds | 22,642 | ||||||||||||||
$ | 544,325 | ||||||||||||||
December 31, 2017 | |||||||||||||||
PNMR Master Trust | |||||||||||||||
Cash and cash equivalents | $ | 7,697 | $ | 7,697 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
International | 42,048 | — | 42,048 | — | |||||||||||
Domestic value | 37,026 | 37,026 | — | — | |||||||||||
Domestic growth | 19,136 | 19,136 | — | — | |||||||||||
Other funds | 25,099 | — | 25,099 | — | |||||||||||
Fixed income securities: | |||||||||||||||
Corporate | 215,535 | — | 215,323 | 212 | |||||||||||
U.S. Government | 117,572 | 91,603 | 25,969 | — | |||||||||||
Municipals | 11,438 | — | 11,438 | — | |||||||||||
Other funds | 65,220 | — | 65,220 | — | |||||||||||
Total investments categorized within fair value hierarchy | 540,771 | $ | 155,462 | $ | 385,097 | $ | 212 | ||||||||
Uncategorized investments: | |||||||||||||||
Private equity funds | 22,281 | ||||||||||||||
Hedge funds | 45,615 | ||||||||||||||
Real estate funds | 17,132 | ||||||||||||||
$ | 625,799 |
Fixed Income - Corporate | |||||||||||
PNMR Master Trust | PNM Pension | TNMP Pension | Total Master Trust | ||||||||
(In thousands) | |||||||||||
Balance at December 31, 2016 | $ | 352 | $ | 38 | $ | 390 | |||||
Actual return on assets sold during the period | 1 | — | 1 | ||||||||
Actual return on assets still held at period end | (7 | ) | (1 | ) | (8 | ) | |||||
Purchases | 92 | 10 | 102 | ||||||||
Sales | (247 | ) | (26 | ) | (273 | ) | |||||
Balance at December 31, 2017 | 191 | 21 | 212 | ||||||||
Actual return on assets sold during the period | (7 | ) | (1 | ) | (8 | ) | |||||
Actual return on assets still held at period end | (1 | ) | — | (1 | ) | ||||||
Purchases | 192 | 23 | 215 | ||||||||
Sales | (87 | ) | (10 | ) | (97 | ) | |||||
Balance at December 31, 2018 | $ | 288 | $ | 33 | $ | 321 |
(10) | Variable Interest Entities |
Results of Operations | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Operating revenues | $ | 21,025 | $ | 20,887 | $ | 20,371 | |||||
Operating expenses | (5,913 | ) | (5,870 | ) | (5,852 | ) | |||||
Earnings attributable to non-controlling interest | $ | 15,112 | $ | 15,017 | $ | 14,519 |
Financial Position | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Current assets | $ | 2,684 | $ | 2,688 | |||
Net property, plant and equipment | 62,066 | 64,109 | |||||
Total assets | 64,750 | 66,797 | |||||
Current liabilities | 538 | 602 | |||||
Owners’ equity – non-controlling interest | $ | 64,212 | $ | 66,195 |
(11) | Pension and Other Postretirement Benefits |
• | Implement investment strategies commensurate with the risk that the Corporate Investment Committee deems appropriate to meet the obligations of the pension plans and OPEB plans, minimize the volatility of expense, and account for contingencies |
• | Transition asset mix over the long-term to a higher proportion of high quality fixed income investments as the plans’ funded statuses improve |
PNM | TNMP | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||||
PBO at beginning of year | $ | 623,983 | $ | 621,751 | $ | 68,423 | $ | 67,061 | |||||||
Service cost | — | — | — | — | |||||||||||
Interest cost | 24,270 | 26,908 | 2,625 | 2,887 | |||||||||||
Actuarial (gain) loss | (41,025 | ) | 26,298 | (5,216 | ) | 3,050 | |||||||||
Benefits paid | (42,970 | ) | (50,974 | ) | (5,245 | ) | (4,575 | ) | |||||||
PBO at end of year | 564,258 | 623,983 | 60,587 | 68,423 | |||||||||||
Fair value of plan assets at beginning of year | 562,016 | 543,601 | 63,499 | 60,624 | |||||||||||
Actual return on plan assets | (29,068 | ) | 69,389 | (3,180 | ) | 7,450 | |||||||||
Employer contributions | — | — | — | — | |||||||||||
Benefits paid | (42,970 | ) | (50,974 | ) | (5,245 | ) | (4,575 | ) | |||||||
Fair value of plan assets at end of year | 489,978 | 562,016 | 55,074 | 63,499 | |||||||||||
Funded status – asset (liability) for pension benefits | $ | (74,280 | ) | $ | (61,967 | ) | $ | (5,513 | ) | $ | (4,924 | ) |
PNM | TNMP | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Discount rates | $ | (34,769 | ) | $ | 27,547 | $ | (4,278 | ) | $ | 3,528 | |||||
Demographic experience | 431 | (1,249 | ) | (301 | ) | (517 | ) | ||||||||
Mortality rate | (6,966 | ) | — | (705 | ) | — | |||||||||
Other assumptions and experience | 279 | — | 68 | 39 | |||||||||||
$ | (41,025 | ) | $ | 26,298 | $ | (5,216 | ) | $ | 3,050 |
PNM | TNMP | ||||||||||
December 31, 2018 | December 31, 2018 | ||||||||||
Prior service cost | Net actuarial (gain) loss | Net actuarial (gain) loss | |||||||||
(In thousands) | |||||||||||
Amounts in AOCI not yet recognized in net periodic benefit cost (income) at beginning of year | $ | (1,045 | ) | $ | 148,526 | $ | — | ||||
Experience (gain) loss | — | 22,728 | 1,926 | ||||||||
Regulatory asset (liability) adjustment | 1,045 | (13,571 | ) | (1,926 | ) | ||||||
Amortization recognized in net periodic benefit cost (income) | — | (7,409 | ) | — | |||||||
Amounts in AOCI not yet recognized in net periodic benefit cost (income) at end of year | $ | — | $ | 150,274 | $ | — | |||||
Amortization expected to be recognized in 2019 | $ | — | $ | 7,270 | $ | — |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
PNM | |||||||||||
Service cost | $ | — | $ | — | $ | — | |||||
Interest cost | 24,270 | 26,908 | 30,307 | ||||||||
Expected return on plan assets | (34,686 | ) | (33,803 | ) | (35,416 | ) | |||||
Amortization of net (gain) loss | 16,348 | 16,006 | 13,820 | ||||||||
Amortization of prior service cost | (965 | ) | (965 | ) | (965 | ) | |||||
Net periodic benefit cost | $ | 4,967 | $ | 8,146 | $ | 7,746 | |||||
TNMP | |||||||||||
Service cost | $ | — | $ | — | $ | — | |||||
Interest cost | 2,625 | 2,887 | 3,304 | ||||||||
Expected return on plan assets | (3,963 | ) | (3,779 | ) | (3,943 | ) | |||||
Amortization of net (gain) loss | 1,088 | 923 | 700 | ||||||||
Amortization of prior service cost | — | — | — | ||||||||
Net periodic benefit cost (income) | $ | (250 | ) | $ | 31 | $ | 61 |
Year Ended December 31, | ||||||||
PNM | 2018 | 2017 | 2016 | |||||
Discount rate for determining December 31 PBO | 4.65 | % | 4.05 | % | 4.51 | % | ||
Discount rate for determining net periodic benefit cost (income) | 4.05 | % | 4.51 | % | 5.29 | % | ||
Expected return on plan assets | 6.54 | % | 6.40 | % | 6.50 | % | ||
Rate of compensation increase | N/A | N/A | N/A | |||||
TNMP | ||||||||
Discount rate for determining December 31 PBO | 4.63 | % | 4.01 | % | 4.49 | % | ||
Discount rate for determining net periodic benefit cost (income) | 4.01 | % | 4.49 | % | 5.39 | % | ||
Expected return on plan assets | 6.57 | % | 6.40 | % | 6.50 | % | ||
Rate of compensation increase | N/A | N/A | N/A |
PNM | TNMP | ||||||
(In thousands) | |||||||
2019 | $ | 46,125 | $ | 5,137 | |||
2020 | 45,595 | 5,065 | |||||
2021 | 44,804 | 5,005 | |||||
2022 | 44,000 | 4,886 | |||||
2023 | 43,066 | 4,667 | |||||
2024 - 2028 | 199,157 | 21,075 |
PNM | TNMP | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||||
APBO at beginning of year | $ | 89,897 | $ | 94,269 | $ | 12,279 | $ | 12,830 | |||||||
Service cost | 83 | 96 | 134 | 143 | |||||||||||
Interest cost | 3,439 | 4,025 | 477 | 556 | |||||||||||
Participant contributions | 2,390 | 3,069 | 174 | 379 | |||||||||||
Actuarial (gain) loss | (12,206 | ) | (1,601 | ) | (2,213 | ) | (381 | ) | |||||||
Benefits paid | (8,298 | ) | (9,961 | ) | (787 | ) | (1,248 | ) | |||||||
APBO at end of year | 75,305 | 89,897 | 10,064 | 12,279 | |||||||||||
Fair value of plan assets at beginning of year | 80,356 | 72,694 | 10,002 | 8,544 | |||||||||||
Actual return on plan assets | (7,669 | ) | 14,222 | (988 | ) | 1,642 | |||||||||
Employer contributions | 2,924 | 332 | 343 | 685 | |||||||||||
Participant contributions | 2,390 | 3,069 | 174 | 379 | |||||||||||
Benefits paid | (8,298 | ) | (9,961 | ) | (787 | ) | (1,248 | ) | |||||||
Fair value of plan assets at end of year | 69,703 | 80,356 | 8,744 | 10,002 | |||||||||||
Funded status – asset (liability) | $ | (5,602 | ) | $ | (9,541 | ) | $ | (1,320 | ) | $ | (2,277 | ) |
PNM | TNMP | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | |||||||||||||||
Discount rates | $ | (4,076 | ) | $ | 3,536 | $ | (710 | ) | $ | 613 | |||||
Claims, contributions, and demographic experience | (3,174 | ) | (5,845 | ) | 72 | (994 | ) | ||||||||
Assumed participation rate | (4,040 | ) | — | (1,461 | ) | — | |||||||||
Mortality rate | (916 | ) | — | (114 | ) | — | |||||||||
Medical benefits | — | 1,425 | — | — | |||||||||||
Dental trend assumption | — | (717 | ) | — | — | ||||||||||
$ | (12,206 | ) | $ | (1,601 | ) | $ | (2,213 | ) | $ | (381 | ) |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
PNM | |||||||||||
Service cost | $ | 83 | $ | 96 | $ | 140 | |||||
Interest cost | 3,439 | 4,025 | 4,346 | ||||||||
Expected return on plan assets | (5,414 | ) | (5,230 | ) | (5,483 | ) | |||||
Amortization of net (gain) loss | 2,354 | 3,682 | 1,145 | ||||||||
Amortization of prior service credit | (1,664 | ) | (1,663 | ) | (30 | ) | |||||
Net periodic benefit cost (income) | $ | (1,202 | ) | $ | 910 | $ | 118 | ||||
TNMP | |||||||||||
Service cost | $ | 134 | $ | 143 | $ | 186 | |||||
Interest cost | 477 | 556 | 677 | ||||||||
Expected return on plan assets | (542 | ) | (456 | ) | (490 | ) | |||||
Amortization of net (gain) loss | (227 | ) | (79 | ) | (40 | ) | |||||
Amortization of prior service cost | — | — | — | ||||||||
Net periodic benefit cost (income) | $ | (158 | ) | $ | 164 | $ | 333 |
Year Ended December 31, | ||||||||
PNM | 2018 | 2017 | 2016 | |||||
Discount rate for determining December 31 APBO | 4.63 | % | 4.00 | % | 4.47 | % | ||
Discount rate for determining net periodic benefit cost | 4.00 | % | 4.47 | % | 5.34 | % | ||
Expected return on plan assets | 7.42 | % | 7.50 | % | 7.70 | % | ||
Rate of compensation increase | N/A | N/A | N/A | |||||
TNMP | ||||||||
Discount rate for determining December 31 APBO | 4.63 | % | 4.00 | % | 4.47 | % | ||
Discount rate for determining net periodic benefit cost | 4.00 | % | 4.47 | % | 5.34 | % | ||
Expected return on plan assets | 5.86 | % | 5.40 | % | 5.70 | % | ||
Rate of compensation increase | N/A | N/A | N/A |
PNM | |||||
December 31, | |||||
2018 | 2017 | ||||
Health care cost trend rate assumed for next year | 6.5 | % | 6.5 | % | |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.0 | % | 5.0 | % | |
Year that the rate reaches the ultimate trend rate | 2026 | 2024 |
PNM | |||||||
1-Percentage- Point Increase | 1-Percentage- Point Decrease | ||||||
(In thousands) | |||||||
Effect on total of service and interest cost | $ | 60 | $ | 100 | |||
Effect on APBO | $ | 1,158 | $ | (1,529 | ) |
PNM | TNMP | ||||||
(In thousands) | |||||||
2019 | $ | 7,365 | $ | 629 | |||
2020 | 7,309 | 653 | |||||
2021 | 7,029 | 674 | |||||
2022 | 6,653 | 699 | |||||
2023 | 6,351 | 714 | |||||
2024 - 2028 | 26,678 | 3,558 |
PNM | TNMP | ||||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||||
PBO at beginning of year | $ | 16,117 | $ | 16,212 | $ | 771 | $ | 787 | |||||||
Service cost | — | — | — | — | |||||||||||
Interest cost | 622 | 697 | 29 | 33 | |||||||||||
Actuarial (gain) loss | (508 | ) | 674 | (4 | ) | 44 | |||||||||
Benefits paid | (1,505 | ) | (1,466 | ) | (94 | ) | (93 | ) | |||||||
PBO at end of year – funded status | 14,726 | 16,117 | 702 | 771 | |||||||||||
Less current liability | 1,627 | 1,501 | 141 | 93 | |||||||||||
Non-current liability | $ | 13,099 | $ | 14,616 | $ | 561 | $ | 678 |
December 31, 2018 | |||||||
PNM | TNMP | ||||||
(In thousands) | |||||||
Amount in AOCI not yet recognized in net periodic benefit cost at beginning of year | $ | 2,450 | $ | — | |||
Experience (gain) loss | (508 | ) | 4 | ||||
Regulatory asset (liability) adjustment | 295 | (4 | ) | ||||
Amortization recognized in net periodic benefit cost (income) | (151 | ) | — | ||||
Amount in AOCI not yet recognized in net periodic benefit cost at end of year | $ | 2,086 | $ | — | |||
Amortization expected to be recognized in 2019 | $ | 133 | $ | — |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
PNM | |||||||||||
Service cost | $ | — | $ | — | $ | — | |||||
Interest cost | 622 | 697 | 812 | ||||||||
Amortization of net (gain) loss | 359 | 313 | 256 | ||||||||
Amortization of prior service cost | — | — | — | ||||||||
Net periodic benefit cost | $ | 981 | $ | 1,010 | $ | 1,068 | |||||
TNMP | |||||||||||
Service cost | $ | — | $ | — | $ | — | |||||
Interest cost | 29 | 33 | 40 | ||||||||
Amortization of net (gain) loss | 15 | 9 | 2 | ||||||||
Amortization of prior service cost | — | — | — | ||||||||
Net periodic benefit cost | $ | 44 | $ | 42 | $ | 42 |
Year Ended December 31, | ||||||||
PNM | 2018 | 2017 | 2016 | |||||
Discount rate for determining December 31 PBO | 4.66 | % | 4.05 | % | 4.51 | % | ||
Discount rate for determining net periodic benefit cost | 4.05 | % | 4.51 | % | 5.29 | % | ||
Long-term rate of return on plan assets | N/A | N/A | N/A | |||||
Rate of compensation increase | N/A | N/A | N/A | |||||
TNMP | ||||||||
Discount rate for determining December 31 PBO | 4.63 | % | 4.01 | % | 4.49 | % | ||
Discount rate for determining net periodic benefit cost | 4.01 | % | 4.49 | % | 5.39 | % | ||
Long-term rate of return on plan assets | N/A | N/A | N/A | |||||
Rate of compensation increase | N/A | N/A | N/A |
PNM | TNMP | ||||||
(In thousands) | |||||||
2019 | $ | 1,627 | $ | 141 | |||
2020 | 1,463 | 91 | |||||
2021 | 1,427 | 88 | |||||
2022 | 1,385 | 84 | |||||
2023 | 1,337 | 79 | |||||
2024 - 2028 | 5,792 | 301 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
PNMR | |||||||||||
401(k) plan | $ | 16,677 | $ | 16,452 | $ | 17,762 | |||||
Non-qualified plan | $ | 865 | $ | 3,702 | $ | 2,017 | |||||
PNM | |||||||||||
401(k) plan | $ | 12,052 | $ | 12,120 | $ | 13,397 | |||||
Non-qualified plan | $ | 621 | $ | 2,834 | $ | 1,535 | |||||
TNMP | |||||||||||
401(k) plan | $ | 4,625 | $ | 4,332 | $ | 4,365 | |||||
Non-qualified plan | $ | 244 | $ | 868 | $ | 482 |
(12) | Stock-Based Compensation |
Year Ended December 31, | |||||||||||||
Restricted Shares and Performance-Based Shares | 2018 | 2017 | 2016 | ||||||||||
Expected quarterly dividends per share | $ | 0.2650 | $ | 0.2425 | $ | 0.2200 | |||||||
Risk-free interest rate | 2.38 | % | 1.50 | % | 0.94 | % | |||||||
Market-Based Shares | |||||||||||||
Dividend yield | 2.96 | % | 2.67 | % | 2.74 | % | |||||||
Expected volatility | 19.12 | % | 20.80 | % | 20.44 | % | |||||||
Risk-free interest rate | 2.36 | % | 1.54 | % | 0.97 | % |
Restricted Stock | Stock Options | |||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted Average Exercise Price | |||||||||||
Outstanding at December 31, 2017 | 189,045 | $ | 31.11 | 193,441 | $ | 9.98 | ||||||||
Granted | 221,062 | $ | 29.65 | — | $ | — | ||||||||
Exercised | (237,402 | ) | $ | 28.46 | (112,441 | ) | $ | 8.56 | ||||||
Forfeited | (6,054 | ) | $ | 31.37 | — | $ | — | |||||||
Expired | — | $ | — | — | $ | — | ||||||||
Outstanding at December 31, 2018 | 166,651 | $ | 32.93 | 81,000 | $ | 11.94 |
Year Ended December 31, | ||||||||||||
Restricted Stock | 2018 | 2017 | 2016 | |||||||||
Weighted-average grant date fair value | $ | 29.65 | $ | 23.06 | $ | 26.49 | ||||||
Total fair value of restricted shares that vested (in thousands) | $ | 8,558 | $ | 5,747 | $ | 5,079 | ||||||
Stock Options | ||||||||||||
Weighted-average grant date fair value of options granted | $ | — | $ | — | $ | — | ||||||
Total fair value of options that vested (in thousands) | $ | — | $ | — | $ | — | ||||||
Total intrinsic value of options exercised (in thousands) | $ | 3,117 | $ | 2,234 | $ | 1,242 |
(13) | Regulatory Assets and Liabilities |
PNM | TNMP | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Assets: | (In thousands) | ||||||||||||||
Current: | |||||||||||||||
FPPAC | $ | 4,104 | $ | 363 | $ | — | $ | — | |||||||
Energy efficiency costs | 430 | 1,776 | — | 794 | |||||||||||
4,534 | 2,139 | — | 794 | ||||||||||||
Non-Current: | |||||||||||||||
CTC, including carrying charges | — | — | 17,744 | 26,998 | |||||||||||
Coal mine reclamation costs | 19,915 | 16,462 | — | — | |||||||||||
Deferred income taxes | 63,369 | 59,220 | 9,309 | 9,621 | |||||||||||
Loss on reacquired debt | 21,085 | 22,744 | 31,510 | 32,808 | |||||||||||
Pension and OPEB(1) | 227,400 | 222,774 | 26,972 | 26,153 | |||||||||||
Shutdown of SJGS Units 2 and 3 | 119,785 | 125,539 | — | — | |||||||||||
Hurricane recovery costs(2) | — | — | 1,551 | 6,640 | |||||||||||
AMS surcharge | — | — | 31,435 | 27,903 | |||||||||||
AMS retirement and other costs | — | — | 16,489 | 8,948 | |||||||||||
Other | 9,349 | 12,500 | 3,017 | 2,362 | |||||||||||
460,903 | 459,239 | 138,027 | 141,433 | ||||||||||||
Total regulatory assets | $ | 465,437 | $ | 461,378 | $ | 138,027 | $ | 142,227 |
PNM | TNMP | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Liabilities: | (In thousands) | ||||||||||||||
Current: | |||||||||||||||
Renewable energy rider | $ | (4,475 | ) | $ | (779 | ) | $ | — | $ | — | |||||
Other | (1,500 | ) | (5 | ) | (3,471 | ) | (1,525 | ) | |||||||
(5,975 | ) | (784 | ) | (3,471 | ) | (1,525 | ) | ||||||||
Non-Current: | |||||||||||||||
Cost of removal | (263,597 | ) | (256,493 | ) | (29,637 | ) | (26,541 | ) | |||||||
Deferred income taxes | (407,978 | ) | (445,390 | ) | (143,745 | ) | (148,455 | ) | |||||||
PVNGS ARO | (18,397 | ) | (24,889 | ) | — | — | |||||||||
Renewable energy tax benefits | (20,226 | ) | (21,383 | ) | — | — | |||||||||
Nuclear spent fuel reimbursements | — | (5,518 | ) | — | — | ||||||||||
Accelerated depreciation SNCRs | (3,690 | ) | — | — | — | ||||||||||
Pension and OPEB(3) | — | — | (3,940 | ) | (3,442 | ) | |||||||||
Other | (83 | ) | (768 | ) | (136 | ) | (699 | ) | |||||||
(713,971 | ) | (754,441 | ) | (177,458 | ) | (179,137 | ) | ||||||||
Total regulatory liabilities | $ | (719,946 | ) | $ | (755,225 | ) | $ | (180,929 | ) | $ | (180,662 | ) |
(14) | Construction Program and Jointly-Owned Electric Generating Plants |
Station (Fuel Type) | Plant in Service | Accumulated Depreciation(1) | Construction Work in Progress | Composite Interest | ||||||||||
(In thousands) | ||||||||||||||
SJGS (Coal) (2) | $ | 814,738 | $ | (443,517 | ) | $ | 820 | 66.34 | % | |||||
PVNGS (Nuclear) (3) | $ | 831,663 | $ | (365,708 | ) | $ | 39,393 | 10.20 | % | |||||
Four Corners Units 4 and 5 (Coal) | $ | 276,960 | $ | (98,085 | ) | $ | 7,455 | 13.00 | % | |||||
Luna (Gas) | $ | 74,813 | $ | (28,609 | ) | $ | 131 | 33.33 | % |
(1) | Includes cost of removal. |
(2) | In December 2018, PNM submitted an NMPRC required filing indicating that, consistent with the conclusions reached in PNM’s 2017 IRP, PNM’s customers would benefit from the retirement of PNM’s share of SJGS in mid-2022. As of December 31, 2018, PNM impaired $121.8 million of plant in service and $86.8 million of accumulated depreciation on its 132 MW and 65 MW interests in SJGS Unit 4. These amounts are reflected in the table above and as $35.0 million of pre-tax regulatory disallowances and restructuring costs in the Consolidated Statements of Earnings. See Note 16 for additional discussion of the NMPRC’s December 16, 2015 order regarding SJGS’s compliance with the regional haze rules under the CAA and PNM’s December 2018 Compliance Filing. |
(3) | Includes interest in PVNGS Unit 3, interest in common facilities for all PVNGS units, and owned interests in PVNGS Units 1 and 2, including improvements. |
2019 | 2020 | 2021 | 2022 | 2023 | Total | ||||||||||||||||||
(In millions) | |||||||||||||||||||||||
PNM | $ | 333.4 | $ | 355.6 | $ | 253.5 | $ | 222.7 | $ | 231.8 | $ | 1,397.0 | |||||||||||
TNMP | 245.4 | 245.0 | 245.3 | 244.9 | 218.9 | 1,199.5 | |||||||||||||||||
Corporate and Other | 26.5 | 25.3 | 20.3 | 19.9 | 20.2 | 112.2 | |||||||||||||||||
Total PNMR | $ | 605.3 | $ | 625.9 | $ | 519.1 | $ | 487.5 | $ | 470.9 | $ | 2,708.7 |
(15) | Asset Retirement Obligations |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
Liability at December 31, 2015 | $ | 111,895 | $ | 111,049 | $ | 695 | |||||
Liabilities incurred | — | — | — | ||||||||
Liabilities settled | (14 | ) | (14 | ) | — | ||||||
Accretion expense | 9,170 | 9,098 | 59 | ||||||||
Revisions to estimated cash flows | 6,468 | 6,468 | — | ||||||||
Liability at December 31, 2016 | 127,519 | 126,601 | 754 | ||||||||
Liabilities incurred(1) | 1,854 | 1,853 | — | ||||||||
Liabilities settled | (968 | ) | (944 | ) | (24 | ) | |||||
Accretion expense | 10,680 | 10,603 | 63 | ||||||||
Revisions to estimated cash flows | 7,594 | 7,594 | — | ||||||||
Liability at December 31, 2017 | 146,679 | 145,707 | 793 | ||||||||
Liabilities incurred | — | — | — | ||||||||
Liabilities settled | (192 | ) | — | — | |||||||
Accretion expense | 11,482 | 11,402 | 67 | ||||||||
Revisions to estimated cash flows | 705 | 705 | — | ||||||||
Liability at December 31, 2018 | $ | 158,674 | $ | 157,814 | $ | 860 |
(16) | Commitments and Contingencies |
• | Permission to retire SJGS Units 2 and 3 at December 31, 2017 and to recover over 20 years their net book value at that date along with a regulated return on those costs |
• | A CCN to include PNM’s ownership of PVNGS Unit 3, amounting to 134 MW, as a resource to serve New Mexico retail customers at a proposed value of $2,500 per KW, effective January 1, 2018 |
• | An order allowing cost recovery for PNM’s share of the installation of SNCR and BDT equipment to comply with NAAQS requirements on SJGS Units 1 and 4, not to exceed a total cost of $82 million |
• | PNM would retire SJGS Units 2 and 3 (PNM’s ownership interest was 418 MW) by December 31, 2017 and recover, over 20 years, 50% of their undepreciated net book value at that date and earn a regulated return on those costs at PNM’s WACC |
• | PNM was granted a CCN to acquire an additional 132 MW in SJGS Unit 4 with an initial book value of zero, plus the costs of SNCR and other capital additions (an aggregate of $20.7 million), as a jurisdictional resource to serve PNM’s New Mexico retail customers effective January 1, 2018; PNM is prohibited from seeking recovery of any undepreciated investment in the 132 MW interest in the event SJGS Unit 4 is abandoned |
• | PNM was granted a CCN for 134 MW of PVNGS Unit 3 with an initial rate base value equal to the book value as of December 31, 2017, including transmission assets associated with PVNGS Unit 3 (an aggregate of $154.9 million) as a jurisdictional resource to serve PNM’s New Mexico retail customers beginning January 1, 2018 |
• | PNM was authorized to acquire 65 MW of SJGS Unit 4 as merchant plant; PNM and PNMR commit that no further coal-fired merchant plant will be acquired at any time by PNM, PNMR, or any PNM affiliate and PNM is not precluded from seeking a CCN to include the 65 MW or other coal capacity in rate base |
• | Beginning January 1, 2020, for every MWh produced by 197 MW of coal-fired generation from PNM’s ownership share of SJGS, PNM will acquire and retire one MWh of RECs or allowances that include a zero-CO2 emission attribute compliant with EPA’s Clean Power Plan; this REC retirement is in addition to what is required to meet the RPS; the cost of these RECs are to be capped at $7.0 million per year and will be recovered in rates; PNM should purchase EPA-compliant RECs from New Mexico renewable generation unless those RECs are more costly |
• | PNM would accelerate recovery of SNCR costs on SJGS Units 1 and 4 so that the costs are fully recovered by July 1, 2022 (cost recovery for PNM’s BDT project is discussed in Note 17) |
• | PNM would not recover approximately $20 million of other costs incurred in connection with CAA compliance |
• | The NMPRC would issue a Notice of Proposed Dismissal in PNM’s 2014 IRP |
• | PNM was required to make a filing with the NMPRC no later than December 31, 2018 to determine the extent to which SJGS should continue serving PNM’s retail customers’ needs after June 30, 2022. PNM’s filing was required to be made before PNM entered into a binding commitment to extend the SJGS CSA beyond its scheduled June 30, 2022 expiration date but after PNM had received firm pricing and other terms for the extended supply of coal to SJGS, unless PNM does not propose to pursue an extended SJGS CSA. See December 2018 Compliance Filing below and in Note 17 |
(17) | Regulatory and Rate Matters |
• | A ROE of 9.575% compared to the 10.5% requested by PNM |
• | Disallowing recovery of the entire $163.3 million purchase price for the January 15, 2016 purchases of the assets underlying three leases of portions of PVNGS Unit 2 (Note 8); the August 2016 RD proposed that power from the previously leased assets, aggregating 64.1 MW of capacity, be dedicated to serving New Mexico retail customers with those customers being charged for the costs of fuel and operating and maintenance expenses (other than property taxes, which were $0.8 million per year when the August 2016 RD was issued), but the customers would not bear any capital or depreciation costs other than those related to improvements made after the date of the original leases |
• | Disallowing recovery from retail customers of the rent expense, which aggregates $18.1 million per year, under the four leases of capacity in PVNGS Unit 1 that were extended for eight years beginning January 15, 2015 and the one lease of capacity in PVNGS Unit 2 that was extended for eight years beginning January 15, 2016 (Note 8) and related property taxes, which were $1.5 million per year when the August 2016 RD was issued; the August 2016 RD proposed that power from the leased assets, aggregating 114.6 MW of capacity, be dedicated to serving New Mexico retail customers with those customers being charged for the costs of fuel and operating and maintenance expense, except that customers would not bear rental costs or property taxes |
• | Disallowing recovery of the costs of converting SJGS Units 1 and 4 to BDT, which is required by the NSR permit for SJGS, (Note 16); PNM’s share of the costs of installing the BDT equipment was $52.3 million of which $40.0 million was included in rate base in PNM’s rate request |
• | Disallowing recovery of $4.5 million of amounts recorded as regulatory assets and deferred charges |
• | Inclusion of the January 2016 purchase of the assets underlying three leases of capacity, aggregating 64.1 MW, of PVNGS Unit 2 at an initial rate base value of $83.7 million; and disallowance of the recovery of the undepreciated costs of capitalized improvements made during the period the 64.1 MW was being leased by PNM, which aggregated $43.8 million when the order was issued |
• | Allowing full recovery of the rent expense and property taxes associated with the extended leases for capacity, aggregating 114.6 MW, in Palo Verde Units 1 and 2 |
• | Disallowance of the recovery of any future contributions for PVNGS decommissioning costs related to the 64.1 MW of capacity purchased in January 2016 and the 114.6 MW of capacity under the extended leases |
• | Recovery of assumed operating and maintenance expense savings of $0.3 million annually related to BDT |
• | Disallowance of recovery of the full purchase price, representing fair market value, of the 64.1 MW of capacity in PVNGS Unit 2 purchased in January 2016 |
• | Disallowance of the recovery of the undepreciated costs of capitalized improvements made during the period the 64.1 MW of capacity was leased by PNM |
• | Disallowance of recovery of future contributions for PVNGS decommissioning attributable to the 64.1 MW of purchased capacity and the 114.6 MW of capacity under the extended leases |
• | Disallowance of recovery of the costs of converting SJGS Units 1 and 4 to BDT |
• | The NMPRC allowing PNM to recover the costs of the lease extensions for the 114.6 MW of PVNGS Units 1 and 2 and any of the purchase price for the 64.1 MW in PVNGS Unit 2 |
• | The NMPRC allowing PNM to recover the costs incurred under the new Four Corners CSA |
• | The revised method to collect PNM’s fuel and purchased power costs under the FPPAC |
• | The final rate design |
• | The NMPRC allowing PNM to include the “prepaid pension asset” in rate base |
• | The remaining costs to acquire the assets previously leased under three leases aggregating 64.1 MW of PVNGS Unit 2 capacity in excess of the recovery permitted under the NMPRC’s order; the net book value of such excess amount was $73.3 million, after considering the losses recorded to date |
• | The undepreciated costs of capitalized improvements made during the period the 64.1 MW of capacity in PVNGS Unit 2 purchased by PNM in January 2016 was being leased by PNM; the net book value of these improvements was $38.0 million, after considering the losses recorded to date |
• | The remaining costs to convert SJGS Units 1 and 4 to BDT; the net book value of these assets was $50.0 million, after considering the losses recorded to date |
• | An increase in base non-fuel revenues of $99.2 million |
• | Based on a FTY beginning January 1, 2018 (the NMPRC’s rules specify that a FTY is a 12 month period beginning up to 13 months after the filing of a rate case application) |
• | ROE of 10.125% |
• | Drivers of revenue deficiency |
◦ | Implementation of the modifications in PNM’s resource portfolio, which were previously approved by the NMPRC as part of the SJGS regional haze compliance plan (Note 16) |
◦ | Infrastructure investments, including environmental upgrades at Four Corners |
◦ | Declines in forecasted energy sales due to successful energy efficiency programs and other economic factors |
◦ | Updates in the FERC/retail jurisdictional allocations |
• | Proposed changes to rate design to establish fair and equitable pricing across rate classes and to better align cost recovery with cost causation |
◦ | Increased customer and demand charges |
◦ | A “lost contribution to fixed cost” mechanism applicable to residential and small commercial customers to address the regulatory disincentive associated with PNM’s energy efficiency programs |
• | A revenue increase totaling $62.3 million, with an initial increase of $32.3 million beginning January 1, 2018 and the remaining increase beginning January 1, 2019 |
• | A ROE of 9.575% |
• | Full recovery of PNM’s investment in SCRs at Four Corners with a debt-only return |
• | An agreement to not implement non-fuel base rate changes, other than changes related to PNM’s rate riders, with an effective date prior to January 1, 2020 |
• | An agreement to adjust the January 2019 increase for certain changes in federal corporate tax laws enacted prior to November 1, 2018 and effective and applicable to PNM by January 1, 2019 and to true-up PNM’s cost of debt for refinancing transactions through 2018 |
• | Returning to customers over a three-year period the benefit of the reduction in the New Mexico corporate income tax rate (Note 18) to the extent attributable to PNM’s retail operations |
• | PNM would withdraw its proposal for a “lost contribution to fixed cost” mechanism with the issue to be addressed in a future docket |
• | PNM would perform a cost benefit analysis in its 2020 IRP of the impact of a possible early exit from Four Corners in 2024 and 2028 |
• | Identifying PNM’s decision to continue its participation in Four Corners as imprudent |
• | Disallowing PNM’s ability to collect a debt or equity return on its $90.1 million investment in SCRs at Four Corners and on $58.0 million of projected capital improvements during the period July 1, 2016 through December 31, 2018 |
• | Recommending a temporary disallowance of $36.8 million of PNM’s projected capital improvements at SJGS through December 31, 2018 |
• | Requiring the impacts of changes related to the reduction in the federal corporate income tax rate and PNM’s cost of debt (aggregating an estimated $47.6 million annually) be implemented in 2018 rather than January 1, 2019 |
• | Deferring further consideration regarding the prudency of PNM’s decision to continue its participation in Four Corners to PNM’s next rate case |
• | Disallowing PNM’s ability to collect an equity return on its $90.1 million investment in SCRs at Four Corners and on $58.0 million of projected capital improvements during the period July 1, 2016 through December 31, 2018, but allowed recovery of the total $148.1 million of investments with a debt-only return |
• | Requiring PNM to reduce the requested $62.3 million increase in non-fuel revenue by $9.1 million |
• | Implementation of the first phase of the rate increase for services rendered, rather than bills sent, beginning February 1, 2018 and of the second phase for services rendered beginning January 1, 2019 |
• | 157 MW of PNM-owned solar-PV facilities, including 50 MW of PNM-owned solar-PV facilities approved by the NMPRC in PNM’s 2018 renewable energy procurement plan which are currently under construction |
• | A PPA through 2044 for the output of New Mexico Wind, having a current aggregate capacity of 204 MW, and a PPA through 2035 for the output of Red Mesa Wind, having an aggregate capacity of 102 MW |
• | A PPA through 2042 for the output of the Lightning Dock Geothermal facility; the geothermal facility began providing power to PNM in January 2014; the current capacity of the facility is 15 MW |
• | Solar distributed generation, aggregating 100.6 MW at December 31, 2018, owned by customers or third parties from whom PNM purchases any net excess output and RECs |
• | Solar and wind RECs as needed to meet the RPS requirements |
• | Retiring PNM’s share of SJGS in 2022 after the expiration of the current operating and coal supply agreements would provide long-term cost savings for PNM’s customers |
• | PNM exiting its ownership interest in Four Corners after its current coal supply agreement expires in 2031 would also save customers money |
• | The best mix of new resources to replace the retired coal generation would include solar energy and flexible natural gas-fired peaking capacity; the mix could include energy storage, if the economics support it, and wind energy provided additional transmission capacity becomes available |
• | Significant increases in future wind energy supplies will likely require new transmission capacity to be built from eastern New Mexico to PNM’s service territory |
• | PNM should retain the currently leased capacity in PVNGS, which would avoid replacement with carbon-emitting generation |
• | PNM should continue to develop and implement energy efficiency and demand management programs |
• | PNM should assess the costs and benefits of participating in the California Independent System Operator Western Energy Imbalance Market |
• | PNM should analyze its current Reeves Station to consider possible technology improvements to phase out the older generators and replace them with new, more flexible supplies or energy storage |
• | Two new electric service rates |
• | A PPA under which PNM would purchase renewable energy from PNMR Development |
• | A special service contract to provide electric service |
• | Casa Mesa Wind, LLC, a subsidiary of NextEra Energy Resources, LLC., which is expected to be located near House, New Mexico, have a total capacity of 50 MW, and became operational in November 2018 |
• | A 166 MW portion of the La Joya Wind Project, owned by Avangrid Renewables, LLC, which is expected to be located near Estancia, New Mexico and be operational in November 2020 |
• | Route 66 Solar Energy Center, LLC, a subsidiary of NextEra Energy Resources, LLC., which is expected to be located west of Albuquerque, New Mexico, have a total capacity of 50 MW, and be operational in December 2021 |
Sales | Purchases | ||||||||||||
GWh | Amount | GWh | Amount | ||||||||||
(In millions) | (In millions) | ||||||||||||
Year ended December 31, 2018 | 725.7 | $ | 25.8 | 822.7 | $ | 28.7 | |||||||
Year ended December 31, 2017 | 827.1 | 23.6 | 849.0 | 24.2 | |||||||||
Year ended December 31, 2016 | 482.3 | 12.8 | 484.6 | 12.9 |
Effective Date | Aggregate Collection Amount | Performance Bonus | ||||||
(In millions) | ||||||||
March 1, 2016 | $ | 6.0 | $ | 0.7 | ||||
March 1, 2017 | 6.0 | 0.8 | ||||||
March 1, 2018 | 6.0 | 1.1 | ||||||
March 1, 2019 | 5.6 | 0.8 |
Effective Date | Approved Increase in Rate Base | Annual Increase in Revenue | ||||||
(In millions) | ||||||||
March 23, 2016 | $ | 25.8 | $ | 4.3 | ||||
September 8, 2016 | 9.5 | 1.8 | ||||||
March 14, 2017 | 30.2 | 4.8 | ||||||
September 13, 2017 | 27.5 | 4.7 | ||||||
March 27, 2018 | 32.0 | 0.6 |
(18) | Income Taxes |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(In thousands) | ||||||||||||||||
Net increase in regulatory liabilities | $ | 402,501 | $ | 146,451 | $ | — | $ | 548,952 | ||||||||
Net decrease in deferred income tax liabilities (deferred income tax assets) | 372,895 | 138,586 | (19,990 | ) | 491,491 | |||||||||||
Net deferred income tax expense | $ | 29,606 | $ | 7,865 | $ | 19,990 | $ | 57,461 |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(In thousands) | ||||||||||||||||
Net increase (decrease) in regulatory liabilities | $ | 11,244 | $ | (4,069 | ) | $ | — | $ | 7,175 | |||||||
Net decrease in deferred income tax liabilities (deferred income tax assets) | (2,175 | ) | (9,784 | ) | 13,869 | $ | 1,910 | |||||||||
Net increase in affiliate receivables (affiliate payables) | 12,300 | 4,042 | (16,342 | ) | — | |||||||||||
Net deferred income tax expense | $ | 1,119 | $ | 1,673 | $ | 2,473 | $ | 5,265 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Current federal income tax | $ | — | $ | — | $ | — | |||||
Current state income tax | (244 | ) | (188 | ) | (527 | ) | |||||
Deferred federal income tax | 7,716 | 119,182 | 60,892 | ||||||||
Deferred state income tax | 648 | 11,632 | 3,886 | ||||||||
Amortization of accumulated investment tax credits | (345 | ) | (286 | ) | (973 | ) | |||||
Total income taxes | $ | 7,775 | $ | 130,340 | $ | 63,278 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Federal income tax at statutory rates | $ | 22,902 | $ | 79,016 | $ | 68,311 | |||||
Amortization of accumulated investment tax credits | (345 | ) | (286 | ) | (973 | ) | |||||
Amortization of excess deferred income tax | (19,779 | ) | — | — | |||||||
Flow-through of depreciation items | 712 | 1,147 | 1,227 | ||||||||
Earnings attributable to non-controlling interest in Valencia | (3,173 | ) | (5,256 | ) | (5,082 | ) | |||||
State income tax, net of federal benefit | 1,358 | 5,398 | 4,537 | ||||||||
Impairment of state net operating loss carryforwards | — | 819 | (311 | ) | |||||||
Allowance for equity funds used during construction | (2,185 | ) | (3,331 | ) | (1,732 | ) | |||||
Impairment of charitable contribution carryforward | — | 909 | — | ||||||||
Regulatory recovery of prior year impairments of state net operating loss carryforward, including amortization | 1,367 | (2,225 | ) | (1,877 | ) | ||||||
Federal income tax rate change | 2,914 | 57,461 | — | ||||||||
Tax expense (benefit) related to stock compensation awards | 4,647 | (2,324 | ) | — | |||||||
Other | (643 | ) | (988 | ) | (822 | ) | |||||
Total income taxes | $ | 7,775 | $ | 130,340 | $ | 63,278 | |||||
Effective tax rate | 7.13 | % | 57.73 | % | 32.42 | % |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Net operating loss | $ | 82,386 | $ | 98,301 | |||
Regulatory liabilities related to income taxes | 158,416 | 189,501 | |||||
Federal tax credit carryforwards | 76,481 | 71,849 | |||||
Shutdown of SJGS Units 2 and 3 | 1,638 | 2,204 | |||||
Other | 97,515 | 45,656 | |||||
Total deferred tax assets | 416,436 | 407,511 | |||||
Deferred tax liabilities: | |||||||
Depreciation and plant related | (767,482 | ) | (690,909 | ) | |||
Investment tax credit | (57,853 | ) | (55,731 | ) | |||
Regulatory assets related to income taxes | (62,889 | ) | (61,956 | ) | |||
CTC | (3,613 | ) | (5,670 | ) | |||
Pension | (35,407 | ) | (56,070 | ) | |||
Regulatory asset for shutdown of SJGS Units 2 and 3 | (30,425 | ) | (31,887 | ) | |||
Other | (59,486 | ) | (52,498 | ) | |||
Total deferred tax liabilities | (1,017,155 | ) | (954,721 | ) | |||
Net accumulated deferred income tax liabilities | $ | (600,719 | ) | $ | (547,210 | ) |
Year Ended | |||
December 31, 2018 | |||
(In thousands) | |||
Net change in deferred income tax liability per above table | $ | 53,509 | |
Change in tax effects of income tax related regulatory assets and liabilities | (27,833 | ) | |
Amortization of excess deferred income tax | (19,779 | ) | |
Tax effect of mark-to-market adjustments | 380 | ||
Tax effect of excess pension liability | 308 | ||
Adjustment for uncertain income tax positions | 765 | ||
Reclassification of unrecognized tax benefits | (765 | ) | |
Amortization of state net operating loss recovered in prior years | 1,367 | ||
Federal income tax rate change, including impact on regulatory liabilities | 2,330 | ||
Refundable alternative minimum tax credit carryforward reclassified to receivable | (1,585 | ) | |
Other | (678 | ) | |
Deferred income taxes | $ | 8,019 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Current federal income tax | $ | (6,644 | ) | $ | 118 | $ | (10,290 | ) | |||
Current state income tax | (2,661 | ) | (1,112 | ) | (1,907 | ) | |||||
Deferred federal income tax | 5,661 | 73,308 | 49,123 | ||||||||
Deferred state income tax | (2,080 | ) | 9,527 | 4,969 | |||||||
Amortization of accumulated investment tax credits | (247 | ) | (286 | ) | (973 | ) | |||||
Total income taxes (benefit) | $ | (5,971 | ) | $ | 81,555 | $ | 40,922 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Federal income tax at statutory rates | $ | 13,514 | $ | 59,139 | $ | 46,501 | |||||
Amortization of accumulated investment tax credits | (247 | ) | (286 | ) | (973 | ) | |||||
Amortization of excess deferred income tax | (19,779 | ) | — | — | |||||||
Flow-through of depreciation items | 674 | 1,103 | 1,185 | ||||||||
Earnings attributable to non-controlling interest in Valencia | (3,173 | ) | (5,256 | ) | (5,082 | ) | |||||
State income tax, net of federal benefit | 1,323 | 4,926 | 3,921 | ||||||||
Impairment of state net operating loss carryforwards | — | 627 | (213 | ) | |||||||
Allowance for equity funds used during construction | (1,716 | ) | (3,032 | ) | (1,457 | ) | |||||
Regulatory recovery of prior year impairment of state net operating loss carryforward, net of amortization | 1,367 | (2,225 | ) | (1,877 | ) | ||||||
Federal income tax rate change | (683 | ) | 29,606 | — | |||||||
Allocation of tax expense (benefit) related to stock compensation awards | 3,967 | (1,708 | ) | — | |||||||
Other | (1,218 | ) | (1,339 | ) | (1,083 | ) | |||||
Total income taxes (benefit) | $ | (5,971 | ) | $ | 81,555 | $ | 40,922 | ||||
Effective tax rate | (9.28 | )% | 48.27 | % | 30.80 | % |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Net operating loss | $ | 50,762 | $ | 67,719 | |||
Regulatory liabilities related to income taxes | 125,395 | 152,059 | |||||
Federal tax credit carryforwards | 62,230 | 60,085 | |||||
Shutdown of SJGS Units 2 and 3 | 1,638 | 2,204 | |||||
Other | 36,916 | 23,801 | |||||
Total deferred tax assets | 276,941 | 305,868 | |||||
Deferred tax liabilities: | |||||||
Depreciation and plant related | (606,673 | ) | (544,270 | ) | |||
Investment tax credit | (55,484 | ) | (55,731 | ) | |||
Regulatory assets related to income taxes | (53,561 | ) | (52,392 | ) | |||
Pension | (31,046 | ) | (51,774 | ) | |||
Regulatory asset for shutdown of SJGS Units 2 and 3 | (30,425 | ) | (31,887 | ) | |||
Other | (2,519 | ) | (18,826 | ) | |||
Total deferred tax liabilities | (779,708 | ) | (754,880 | ) | |||
Net accumulated deferred income tax liabilities | $ | (502,767 | ) | $ | (449,012 | ) |
Year Ended | |||
December 31, 2018 | |||
(In thousands) | |||
Net change in deferred income tax liability per above table | $ | 53,755 | |
Change in tax effects of income tax related regulatory assets and liabilities | (27,833 | ) | |
Amortization of excess deferred income tax | (19,779 | ) | |
Tax effect of mark-to-market adjustments | 579 | ||
Tax effect of excess pension liability | 308 | ||
Adjustment for uncertain income tax positions | 725 | ||
Reclassification of unrecognized tax benefits | (725 | ) | |
Amortization of state net operating loss recovered in prior years | 1,367 | ||
Federal income tax rate change, including impact on regulatory liabilities | (6,250 | ) | |
Other | 1,187 | ||
Deferred income taxes | $ | 3,334 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Current federal income tax | $ | 13,347 | $ | 2,472 | $ | 9,445 | |||||
Current state income tax | 1,753 | 1,765 | 1,729 | ||||||||
Deferred federal income tax | (540 | ) | 27,304 | 12,690 | |||||||
Deferred state income tax | 2,320 | (29 | ) | (28 | ) | ||||||
Total income taxes | $ | 16,880 | $ | 31,512 | $ | 23,836 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Federal income tax at statutory rates | $ | 14,379 | $ | 23,475 | $ | 22,928 | |||||
State income tax, net of federal benefit | 1,454 | 1,198 | 1,132 | ||||||||
Federal income tax rate change | — | 7,865 | — | ||||||||
Allocation of tax expense (benefit) related to stock compensation awards | 735 | (616 | ) | — | |||||||
Other | 312 | (410 | ) | (224 | ) | ||||||
Total income taxes | $ | 16,880 | $ | 31,512 | $ | 23,836 | |||||
Effective tax rate | 24.65 | % | 46.98 | % | 36.39 | % |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Regulatory liabilities related to income taxes | $ | 33,021 | $ | 43,103 | |||
Other | 4,517 | 3,762 | |||||
Total deferred tax assets | 37,538 | 46,865 | |||||
Deferred tax liabilities: | |||||||
Depreciation and plant related | (136,117 | ) | (135,647 | ) | |||
CTC | (3,613 | ) | (5,670 | ) | |||
Regulatory assets related to income taxes | (9,328 | ) | (9,564 | ) | |||
Loss on reacquired debt | (6,617 | ) | (6,890 | ) | |||
Pension | (4,361 | ) | (4,296 | ) | |||
AMS | (10,030 | ) | (7,707 | ) | |||
Other | (3,710 | ) | (3,506 | ) | |||
Total deferred tax liabilities | (173,776 | ) | (173,280 | ) | |||
Net accumulated deferred income tax liabilities | $ | (136,238 | ) | $ | (126,415 | ) |
Year Ended | |||
December 31, 2018 | |||
(In thousands) | |||
Net change in deferred income tax liability per above table | $ | 9,823 | |
Change in tax effects of income tax related regulatory assets and liabilities | (350 | ) | |
Federal income tax rate change, including impact on regulatory liabilities | (7,761 | ) | |
Other | 68 | ||
Deferred income taxes | $ | 1,780 |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2015 | $ | 6,455 | $ | 3,652 | |||||||
Additions based on tax positions related to 2016 | 242 | 242 | — | ||||||||
Additions (reductions) for tax positions of prior years | 55 | 55 | — | ||||||||
Settlement payments | — | — | — | ||||||||
Balance at December 31, 2016 | 6,752 | 3,949 | — | ||||||||
Additions based on tax positions related to 2017 | 262 | 262 | — | ||||||||
Additions (reductions) for tax positions of prior years | 2,415 | 2,352 | 63 | ||||||||
Settlement payments | — | — | — | ||||||||
Balance at December 31, 2017 | 9,429 | 6,563 | 63 | ||||||||
Additions based on tax positions related to 2018 | 543 | 543 | — | ||||||||
Additions (reductions) for tax positions of prior years | 222 | 182 | 40 | ||||||||
Settlement payments | — | — | — | ||||||||
Balance at December 31, 2018 | $ | 10,194 | $ | 7,288 | $ | 103 |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
2018 | $ | — | $ | — | $ | — | |||||
2017 | $ | — | $ | — | $ | — | |||||
2016 | $ | 4,398 | $ | 3,625 | $ | 345 |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
December 31, 2017: | |||||||||||
Regulatory liability | $ | (10,109 | ) | $ | (10,109 | ) | $ | — | |||
Income tax expense | $ | (1,259 | ) | $ | (1,179 | ) | $ | — | |||
December 31, 2016: | |||||||||||
Regulatory liability | $ | (7,132 | ) | $ | (7,132 | ) | $ | — | |||
Income tax expense | $ | 712 | $ | 804 | $ | — |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
December 31, 2018: | |||||||||||
State tax credit carryforwards | $ | — | $ | — | $ | — | |||||
State net operating loss carryforwards | $ | — | $ | — | $ | — | |||||
Charitable contribution carryforwards | $ | — | $ | — | $ | — | |||||
Compensation expense | $ | 410 | $ | 298 | $ | 111 | |||||
December 31, 2017: | |||||||||||
State tax credit carryforwards | $ | — | $ | — | $ | — | |||||
State net operating loss carryforwards | $ | 819 | $ | 627 | $ | — | |||||
Charitable contribution carryforwards | $ | 909 | $ | — | $ | — | |||||
December 31, 2016: | |||||||||||
State tax credit carryforwards | $ | — | $ | — | $ | — | |||||
State net operating loss carryforwards | $ | (311 | ) | $ | (213 | ) | $ | — | |||
Charitable contribution carryforwards | $ | — | $ | — | $ | — |
PNMR | PNM | TNMP | |||||||||
(In thousands) | |||||||||||
December 31, 2018: | |||||||||||
State tax credit carryforwards | $ | — | $ | — | $ | — | |||||
State net operating loss carryforwards | $ | — | $ | — | $ | — | |||||
Charitable contribution carryforwards | $ | — | $ | — | $ | — | |||||
Compensation expense | $ | 410 | $ | 298 | $ | 111 | |||||
December 31, 2017: | |||||||||||
State tax credit carryforwards | $ | 2,487 | $ | — | $ | — | |||||
State net operating loss carryforwards | $ | 1,131 | $ | 839 | $ | — | |||||
Charitable contribution carryforwards | $ | 952 | $ | — | $ | — |
(20) | Related Party Transactions |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Services billings: | |||||||||||
PNMR to PNM | $ | 95,637 | $ | 97,914 | $ | 94,606 | |||||
PNMR to TNMP | 33,493 | 31,095 | 28,907 | ||||||||
PNM to TNMP | 367 | 382 | 427 | ||||||||
TNMP to PNMR | 140 | 141 | 66 | ||||||||
TNMP to PNM | — | 154 | 172 | ||||||||
PNMR to NMRD | 183 | — | — | ||||||||
Renewable energy purchases: | |||||||||||
PNM from NMRD | 2,924 | — | — | ||||||||
Interconnection and facility study billings: | |||||||||||
PNM to NMRD | 2,108 | — | — | ||||||||
PNM to PNMR | 68,820 | — | — | ||||||||
Interest billings: | |||||||||||
PNMR to PNM | 2,585 | 21 | 11 | ||||||||
PNM to PNMR | 289 | 220 | 150 | ||||||||
PNMR to TNMP | 136 | 133 | 132 | ||||||||
Income tax sharing payments: | |||||||||||
PNMR to TNMP | — | — | — | ||||||||
PNMR to PNM | — | 23,391 | — | ||||||||
PNM to PNMR | 134 | — | — | ||||||||
TNMP to PNMR | 3,424 | 20,686 | — |
Quarter Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | (1) | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
PNMR | ||||||||||||||||
2018 | ||||||||||||||||
Operating revenues | $ | 317,878 | $ | 352,313 | $ | 422,666 | $ | 343,756 | ||||||||
Operating income (loss) | 46,132 | 79,329 | 127,990 | (17,404 | ) | |||||||||||
Net earnings (loss) | 18,799 | 42,449 | 91,573 | (51,539 | ) | |||||||||||
Net earnings (loss) attributable to PNMR | 14,990 | 38,208 | 87,521 | (55,077 | ) | |||||||||||
Net earnings (loss) attributable to PNMR per common share: | ||||||||||||||||
Basic | 0.19 | 0.48 | 1.10 | (0.70 | ) | |||||||||||
Diluted | 0.19 | 0.48 | 1.09 | (0.69 | ) | |||||||||||
2017 | ||||||||||||||||
Operating revenues | $ | 330,178 | $ | 362,320 | $ | 419,900 | $ | 332,605 | ||||||||
Operating income | 55,960 | 85,105 | 142,484 | 22,936 | ||||||||||||
Net earnings (loss) | 26,446 | 41,231 | 78,327 | (50,585 | ) | |||||||||||
Net earnings (loss) attributable to PNMR | 22,862 | 37,555 | 73,739 | (54,282 | ) | |||||||||||
Net earnings attributable to PNMR per common share: | ||||||||||||||||
Basic | 0.29 | 0.47 | 0.92 | (0.68 | ) | |||||||||||
Diluted | 0.29 | 0.47 | 0.92 | (0.68 | ) | |||||||||||
PNM | ||||||||||||||||
2018 | ||||||||||||||||
Operating revenues | $ | 236,232 | $ | 264,511 | $ | 331,374 | $ | 259,848 | ||||||||
Operating income (loss) | 28,292 | 52,879 | 102,516 | (38,654 | ) | |||||||||||
Net earnings (loss) | 11,514 | 30,781 | 81,428 | (53,400 | ) | |||||||||||
Net earnings (loss) attributable to PNM | 7,837 | 26,672 | 77,508 | (56,806 | ) | |||||||||||
2017 | ||||||||||||||||
Operating revenues | $ | 251,558 | $ | 276,097 | $ | 327,254 | $ | 249,321 | ||||||||
Operating income | 38,331 | 59,164 | 113,252 | 1,778 | ||||||||||||
Net earnings (loss) | 20,110 | 30,476 | 65,283 | (28,456 | ) | |||||||||||
Net earnings (loss) attributable to PNM | 16,658 | 26,932 | 60,827 | (32,021 | ) | |||||||||||
TNMP | ||||||||||||||||
2018 | ||||||||||||||||
Operating revenues | $ | 81,646 | $ | 87,802 | $ | 91,292 | $ | 83,908 | ||||||||
Operating income | 18,532 | 26,829 | 27,824 | 23,312 | ||||||||||||
Net earnings | 9,413 | 15,367 | 16,100 | 10,711 | ||||||||||||
2017 | ||||||||||||||||
Operating revenues | $ | 78,620 | $ | 86,223 | $ | 92,646 | $ | 83,284 | ||||||||
Operating income | 17,965 | 26,286 | 29,474 | 19,879 | ||||||||||||
Net earnings | 7,604 | 12,204 | 14,727 | 1,024 |
Year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Operating Revenues | $ | — | $ | — | $ | — | |||||
Operating Expenses | 7,475 | 2,902 | 2,871 | ||||||||
Operating income (loss) | (7,475 | ) | (2,902 | ) | (2,871 | ) | |||||
Other Income and Deductions: | |||||||||||
Equity in earnings of subsidiaries | 109,995 | 111,877 | 122,252 | ||||||||
Other income | 2,048 | 1,181 | 1,711 | ||||||||
Net other income and deductions | 112,043 | 113,058 | 123,963 | ||||||||
Interest Charges | 19,453 | 12,490 | 8,102 | ||||||||
Earnings Before Income Taxes | 85,115 | 97,666 | 112,990 | ||||||||
Income Tax Expense (Benefit) | (527 | ) | 17,792 | (3,859 | ) | ||||||
Net Earnings | $ | 85,642 | $ | 79,874 | $ | 116,849 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(In thousands) | |||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net Cash Flows From Operating Activities | $ | (2,566 | ) | $ | (7,814 | ) | $ | 5,702 | |||
Cash Flows From Investing Activities: | |||||||||||
Utility plant additions | 826 | (180 | ) | 341 | |||||||
Investments in subsidiaries | (30,000 | ) | (50,000 | ) | (98,343 | ) | |||||
Cash dividends from subsidiaries | 129,379 | 105,084 | 35,959 | ||||||||
Net cash flows from investing activities | 100,205 | 54,904 | (62,043 | ) | |||||||
Cash Flows From Financing Activities: | |||||||||||
Short-term loan | 50,000 | — | 100,000 | ||||||||
Repayment of short-term loan | — | — | (150,000 | ) | |||||||
Revolving credit facility borrowings (repayments), net | (148,700 | ) | 42,600 | 84,500 | |||||||
Long-term borrowings | 349,652 | — | 100,000 | ||||||||
Repayment of long-term debt | (250,000 | ) | — | — | |||||||
Proceeds from stock option exercise | 963 | 1,739 | 7,028 | ||||||||
Purchases to satisfy awards of common stock | (12,635 | ) | (13,929 | ) | (15,451 | ) | |||||
Dividends paid | (84,433 | ) | (77,264 | ) | (70,095 | ) | |||||
Other, net | (2,414 | ) | (269 | ) | (28 | ) | |||||
Net cash flows from financing activities | (97,567 | ) | (47,123 | ) | 55,954 | ||||||
Change in Cash and Cash Equivalents | 72 | (33 | ) | (387 | ) | ||||||
Cash and Cash Equivalents at Beginning of Period | 21 | 54 | 441 | ||||||||
Cash and Cash Equivalents at End of Period | $ | 93 | $ | 21 | $ | 54 | |||||
Supplemental Cash Flow Disclosures: | |||||||||||
Interest paid, net of amounts capitalized | $ | 15,450 | $ | 10,899 | $ | 5,906 | |||||
Income taxes paid (refunded), net | $ | — | $ | — | $ | — |
December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 93 | $ | 21 | |||
Intercompany receivables | 82,539 | 96,227 | |||||
Income taxes receivable | 7,856 | 1,818 | |||||
Other, net | 5,635 | 1,937 | |||||
Total current assets | 96,123 | 100,003 | |||||
Property, plant and equipment, net of accumulated depreciation of $13,518 and $13,229 | 25,413 | 26,546 | |||||
Investment in subsidiaries | 2,064,693 | 2,056,198 | |||||
Other long-term assets | 60,265 | 66,090 | |||||
Total long-term assets | 2,150,371 | 2,148,834 | |||||
$ | 2,246,494 | $ | 2,248,837 | ||||
Liabilities and Stockholders’ Equity | |||||||
Short-term debt | $ | 170,000 | $ | 265,600 | |||
Short-term debt-affiliate | 8,819 | 11,919 | |||||
Current maturities of long-term debt | — | 249,979 | |||||
Accrued interest and taxes | 4,885 | 1,661 | |||||
Other current liabilities | 23,297 | 21,274 | |||||
Total current liabilities | 207,001 | 550,433 | |||||
Long-term debt | 348,310 | — | |||||
Other long-term liabilities | 2,803 | 3,151 | |||||
Total liabilities | 558,114 | 553,584 | |||||
Common stock (no par value; 120,000,000 shares authorized; issued and outstanding 79,653,624 shares) | 1,153,112 | 1,157,665 | |||||
Accumulated other comprehensive income (loss), net of tax | (108,685 | ) | (95,940 | ) | |||
Retained earnings | 643,953 | 633,528 | |||||
Total common stockholders’ equity | 1,688,380 | 1,695,253 | |||||
$ | 2,246,494 | $ | 2,248,837 |
Additions | Deductions | ||||||||||||||||||||
Description | Balance at beginning of year | Charged to costs and expenses | Charged to other accounts | Write-offs and other | Balance at end of year | ||||||||||||||||
(In thousands) | |||||||||||||||||||||
Allowance for doubtful accounts, year ended December 31: | |||||||||||||||||||||
2016 | $ | 1,397 | $ | 2,885 | $ | — | $ | 3,073 | $ | 1,209 | |||||||||||
2017 | $ | 1,209 | $ | 2,619 | $ | — | $ | 2,747 | $ | 1,081 | |||||||||||
2018 | $ | 1,081 | $ | 3,360 | $ | — | $ | 3,035 | $ | 1,406 |
Additions | Deductions | ||||||||||||||||||||
Description | Balance at beginning of year | Charged to costs and expenses | Charged to other accounts | Write-offs | Balance at end of year | ||||||||||||||||
(In thousands) | |||||||||||||||||||||
Allowance for doubtful accounts, year ended December 31: | |||||||||||||||||||||
2016 | $ | 1,397 | $ | 2,871 | $ | — | $ | 3,059 | $ | 1,209 | |||||||||||
2017 | $ | 1,209 | $ | 2,615 | $ | — | $ | 2,743 | $ | 1,081 | |||||||||||
2018 | $ | 1,081 | $ | 3,338 | $ | — | $ | 3,013 | $ | 1,406 |
Additions | Deductions | |||||||||||||||||||
Description | Balance at beginning of year | Charged to costs and expenses | Charged to other accounts | Write-offs | Balance at end of year | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Allowance for doubtful accounts, year ended December 31: | ||||||||||||||||||||
2016 | $ | — | $ | 14 | $ | — | $ | 14 | $ | — | ||||||||||
2017 | $ | — | $ | 4 | $ | — | $ | 4 | $ | — | ||||||||||
2018 | $ | — | $ | 22 | $ | — | $ | 22 | $ | — |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
(a) - 1. | See Index to Financial Statements under Part II, Item 8. | ||
(a) - 2. | Financial Statement Schedules for the years 2017, 2016, and 2015 are omitted for the reason that they are not required or the information is otherwise supplied under Part II, Item 8. | ||
(a) - 3-A. | Exhibits Filed: | ||
Exhibit No | Description | ||
10.1** | PNMR | ||
10.2 | PNMR | ||
10.3 | TNMP | ||
21 | PNMR | ||
23.1 | PNMR | ||
23.2 | PNM | ||
31.1 | PNMR | ||
31.2 | PNMR | ||
31.3 | PNM | ||
31.4 | PNM | ||
31.5 | TNMP | ||
31.6 | TNMP | ||
32.1 | PNMR | ||
32.2 | PNM | ||
32.3 | TNMP | ||
101.INS | PNMR | XBRL Instance Document | |
101.SCH | PNMR | XBRL Taxonomy Extension Schema Document | |
101.CAL | PNMR | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | PNMR | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | PNMR | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | PNMR | XBRL Taxonomy Extension Presentation Linkbase Document |
(a) -3- B. | Exhibits Incorporated By Reference: |
Exhibit No. | Description of Exhibit | Filed as Exhibit: | Registrant (s) File No: | |||
Articles of Incorporation and By-laws | ||||||
3.1 | 3.1 to PNMR’s Current Report on Form 8-K filed November 21, 2008 | 1-32462 PNMR | ||||
3.2 | 3.1.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 | 1-6986 PNM | ||||
3.3 | 3.1.2 to TNMP’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 | 2-97230 TNMP | ||||
3.4 | 3.4 to PNMR’s Current Report on Form 8-K filed October 25, 2017 | 1-32462 PNMR | ||||
3.5 | 3.1.2 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 | 1-6986 PNM | ||||
3.6 | 3.6 to TNMP’s Current Report on Form 8-K filed June 20, 2013 | 2-97230 TNMP | ||||
Indentures‡ | ||||||
PNMR | ||||||
4.1 | 10.2 to PNMR’s Current Report on Form 8-K filed March 31, 2005 | 1-32462 PNMR | ||||
4.2 | 4.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 | 1-32462 PNMR | ||||
4.3 | 4.2 to PNMR’s Current Report on Form 8-K filed March 9, 2018 | 1-32462 PNMR | ||||
PNM | ||||||
4.4 | 4.4 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 | 1-6986 PNM | ||||
4.5 | 4.6.4 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 | 1-6986 PNM | ||||
4.6 | 10.1 to PNM’s Current Report on Form 8-K/A filed July 29, 2010 | 1-6986 PNM | ||||
4.7 | 10.2 to PNM’s Current Report on Form 8-K/A filed July 29, 2010 | 1-6986 PNM | ||||
4.8 | 4.2 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 | 1-6986 PNM | ||||
4.9 | 4.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 | 1-6986 PNM | ||||
4.10 | 4.1 to PNM’s Current Report on Form 8-K filed September 27, 2016 | 1-6986 PNM | ||||
4.11 | 4.1 to PNM’s Registration Statement No. 333-53367 | 333-53367 PNM | ||||
4.12 | 4.3 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 | 1-6986 PNM | ||||
4.13 | 4.1 to PNM’s Current Report on Form 8-K filed October 12, 2011 | 1-6986 PNM | ||||
4.14 | 4.2 to PNM’s Current Report on Form 8-K filed August 11, 2015 | 1-6986 PNM | ||||
TNMP | ||||||
4.15 | 4.1 to TNMP’s Current Report on Form 8-K filed March 27, 2009 | 2-97230 TNMP | ||||
4.16 | 4.2 to TNMP’s Current Report on Form 8-K filed March 27, 2009 | 2-97230 TNMP | ||||
4.17 | 4.1 to TNMP’s Current Report on Form 8-K filed May 6, 2009 | 2-97230 TNMP | ||||
4.18 | 4.1 to TNMP’s Current Report on Form 8-K filed December 17, 2010 | 2-97230 TNMP | ||||
4.19 | 4.4 to TNMP’s Quarterly Report Form 10-Q for the quarter ended June 30, 2011 | 2-97230 TNMP | ||||
4.20 | 4.1 to TNMP’s Current Report on Form 8-K filed April 3, 2013 | 2-97230 TNMP | ||||
4.21 | 4.1 to TNMP’s Current Report on Form 8-K filed June 27, 2014 | 2-97230 TNMP | ||||
4.22 | 4.1 to TNMP’s Current Report on Form 8-K filed February 10, 2016 | 2-97230 TNMP | ||||
4.23 | 4.1 to TNMP’s Current Report on Form 8-K filed August 24, 2017 | 2-97230 TNMP | ||||
4.24 | 4.1 to TNMP’s Current Report on Form 8-K filed July 2, 2018 | 2-97230 TNMP | ||||
Material Contracts | ||||||
10.4 | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 | 1-32462 PNMR | ||||
10.5 | 10.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2018 | 1-32462 PNMR | ||||
10.6 | 10.1 to PNMR’s Current Report on Form 8-K filed December 17, 2018 | 1-32462 PNMR | ||||
10.7 | 10.1 to PNMR’s Current Report on Form 8-K filed December 21, 2018 | 1-32462 PNMR | ||||
10.8 | 10.1 to PNMR’s Current Report on Form 8-K filed November 28, 2018 | 1-32462 PNMR | ||||
10.9 | 10.2 to PNMR’s Current Report on Form 8-K filed November 28, 2018 | 1-32462 PNMR | ||||
10.10 | 10.4 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 | 1-6986 PNM | ||||
10.11 | 10.1 to PNM’s Current Report on Form 8-K filed December 12, 2017 | 1-6986 PNM | ||||
10.12 | 10.1 to PNM’s Current Report on Form 8-K filed January 18, 2019 | 1-6986 PNM | ||||
10.13 | 10.1 to PNM’s Current Report on Form 8-K filed July 20, 2017 | 1-6986 PNM | ||||
10.14 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 | 1-6986 PNM | ||||
10.15 | 10.1 to TNMP’s Current Report on Form 8-K filed September 27, 2017 | 2-97230 TNMP | ||||
10.16 | 10.3 to TNMP’s Annual Report on Form 10-K for the year ended December 31, 2018 | 2-97230 TNMP | ||||
10.17 | 10.1 to TNMP’s Current Report on Form 8-K filed July 2, 2018 | 2-97230 TNMP | ||||
10.18 | 10.1 to TNMP’s Current Report on Form 8-K filed June 14, 2017 | 2-97230 TNMP | ||||
10.19** | 4.3 to PNMR’s Form S-8 Registration Statement filed May 15, 2014 | 333-195974 PNMR | ||||
10.20** | 99.1 to PNMR’s Current Report on Form 8-K filed December 15, 2015 | 1-32462 PNMR | ||||
10.21** | 10.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||
10.22** | 4.1 to PNMR’s Form S-8 Registration Statement filed May 20, 2009 | 333-159361 PNMR | ||||
10.23** | 10.1 to PNMR’s Current Report Form 8-K filed May 20, 2011 | 1-32462 PNMR | ||||
10.24** | 10.6 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 | 1-32462 PNMR | ||||
10.25** | 10.1 to PNMR’s Current Report on Form 8-K filed May 17, 2012 | 1-32462 PNMR | ||||
10.26** | 10.3 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||
10.27** | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 | 1-32462 PNMR | ||||
10.28** | 10.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 | 1-32462 PNMR | ||||
10.29** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 | 1-32462 PNMR | ||||
10.30** | 10.2 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 | 1-32462 PNMR | ||||
10.31** | 10.5 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 | 1-32462 PNMR | ||||
10.32** | 10.4 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||
10.33** | 10.1 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||
10.34** | 10.3 to PNMR’s Current Report on Form 8-K filed May 26, 2009 | 1-32462 PNMR | ||||
10.35** | 10.2 to PNMR’s Current Report on Form 8-K filed February 16, 2007 | 1-32462 PNMR | ||||
10.36** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 | 1-32462 PNMR | ||||
10.37** | 10.4.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2014 | 1-32462 PNMR | ||||
10.38** | 10.1 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2018 | 1-32462 PNMR | ||||
10.39** | 10.1 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||
10.40** | 10.3 to PNMR’s Current Report on Form 8-K filed March 1, 2011 | 1-32462 PNMR | ||||
10.41** | 10.4.3 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2014 | 1-32462 PNMR | ||||
10.42** | 10.5 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||
10.43** | 10.4 to PNMR’s Current Report on Form 8-K filed March 1, 2011 | 1-32462 PNMR |
10.44** | 10.7 to PNMR’s Current Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||
10.45** | 10.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||
10.46** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 | 1-32462 PNMR | ||||
10.47** | 10.1.2 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2014 | 1-32462 PNMR | ||||
10.48** | 10.7 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 | 1-32462 PNMR | ||||
10.49** | 10.6 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||
10.50** | 10.7 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2013 | 1-32462 PNMR | ||||
10.51** | 10.3 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 | 1-32462 PNMR | ||||
10.52** | 10.3 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2008 | 1-32462 PNMR | ||||
10.53** | 10.8 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 | 1-32462 PNMR | ||||
10.54** | 10.6 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-32462 PNMR | ||||
10.55** | 10.7 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 | 1-32462 PNMR | ||||
10.56** | 10.24.1 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 | 333-32170 PNMR | ||||
10.57** | 10.27 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2004. | 333-32170 PNMR | ||||
10.58** | 10.5 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 | 1-32462 PNMR | ||||
10.59** | 10.10 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2008 | 1-32462 PNMR | ||||
10.60** | 10.15 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2008 | 1-32462 PNMR | ||||
10.61** | 10.5 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2011 | 1-32462 PNMR | ||||
10.62** | 10.8 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 333-32170 PNMR | ||||
10.63** | 10.9 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2016 | 1-32462 PNMR | ||||
10.64 | Supplemental Indenture of Lease dated as of July 19, 1966 between PNM and other participants in the Four Corners Project and the Navajo Indian Tribal Council | 4-D to PNM’s Registration Statement No. 2-26116 | 2-26116 PNM | |||
10.65 | 10.1.1 to PNM’s Annual Report on Form 10-K for year ended December 31, 1995 | 1-6986 PNM | ||||
10.66 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 | 1-6986 PNM | ||||
10.67 | 10.2 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 | 1-6986 PNM | ||||
10.68 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 | 1-6986 PNM | ||||
10.69 | 10.4 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2017 | 1-6986 PNM | ||||
10.70 | 10.3 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 | 1-6986 PNM | ||||
10.71 | 10.4 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 | 1-6986 PNM | ||||
10.72 | 10.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 | 1-6986 PNM | ||||
10.73 | Arizona Nuclear Power Project Participation Agreement among PNM and Arizona Public Service Company, Salt River Project Agricultural Improvement and Power District, Tucson Gas & Electric Company and El Paso Electric Company, dated August 23, 1973 | 5-T to PNM’s Registration Statement No. 2-50338 | 2-50338 PNM | |||
10.74 | Amendments No. 1 through No. 6 to Arizona Nuclear Power Project Participation Agreement | 10.8.1 to PNM’s Annual Report on Form 10-K for year ended December 31, 1991 | 1-6986 PNM | |||
10.75 | Amendment No. 7 effective April 1, 1982, to the Arizona Nuclear Power Project Participation Agreement (refiled) | 10.8.2 to PNM’s Annual Report on Form 10-K for year ended December 31, 1991 | 1-6986 PNM | |||
10.76 | 10.58 to PNM’s Annual Report on Form 10-K for year ended December 31, 1993 | 1-6986 PNM | ||||
10.77 | 10.8.4 to PNM’s Annual Report of the Registrant on Form 10-K for year ended December 31, 1994 | 1-6986 PNM | ||||
10.78 | 10.8.5 to PNM’s Annual Report of the Registrant on Form 10-K for year ended December 31, 1995 | 1-6986 PNM | ||||
10.79 | Amendment No. 12 to Arizona Nuclear Power Project Participation Agreement dated June 14, 1988, and effective August 5, 1988 | 19.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1990 | 1-6986 PNM | |||
10.80 | Amendment No. 13 to the Arizona Nuclear Power Project Participation Agreement dated April 4, 1990, and effective June 15, 1991 | 10.8.10 to PNM’s Annual Report on Form 10-K for the year ended December 31, 1990 | 1-6986 PNM | |||
10.81 | 10.8.9 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2000 | 1-6986 PNM | ||||
10.82 | 10.1 to PNM’s Current Report on Form 8-K filed March 1, 2011 | 1-6986 PNM | ||||
10.83 | 10.3 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 | 1-6986 PNM | ||||
10.84 | 10.18 to PNM’s Annual Report on Form 10-K for year ended December 31, 1995 | 1-6986 PNM | ||||
10.85 | 10.19 to PNM’s Annual Report on Form 10-K for year ended December 31, 1996 | 1-6986 PNM | ||||
10.86 | 10.21 to PNM’s Annual Report on Form 10-K for year ended December 31, 1996 | 1-6986 PNM | ||||
10.87 | 10.3 to PNM’s Annual Report on Form 10-K for year ended December 31, 2013 | 1-6986 PNM | ||||
10.88 | 10.22 to PNM’s Annual Report on Form 10-K for year ended December 31, 1996 | 1-6986 PNM | ||||
10.89 | 10.1 to PNM’s Current Report on Form 8-K filed March 18, 2014 | 1-6986 PNM | ||||
10.90 | 10.68 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 | 1-6986 PNM | ||||
10.91 | 10.68.1 to PNM’s Annual Report on Form 10-K for year ended December 31, 1997 | 1-6986 PNM | ||||
10.92 | 10.68.2 to PNM’s Annual Report on Form 10-K for year ended December 31, 2003 | 1-6986 PNM | ||||
10.93 | 10.86 to PNM’s Annual Report on Form 10-K for the year ended December 31, 2002 | 1-6986 PNM | ||||
10.94 | 10.134 to PNMR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 | 1-32462 PNMR/ TNMP | ||||
Subsidiaries | ||||||
21 | Certain subsidiaries of PNMR | 21 to PNMR’s Annual Report on Form 10-K for the year ended December 31, 2018 | 1-32462 PNMR | |||
Additional Exhibits | ||||||
99.1* | Participation Agreement dated as of December 16, 1985, among the Owner Participant named therein, First PV Funding Corporation, The First National Bank of Boston, in its individual capacity and as Owner Trustee (under a Trust Agreement dated as of December 16, 1985 with the Owner Participant), Chemical Bank, in its individual capacity and as Indenture Trustee (under a Trust Indenture, Mortgage, Security Agreement and Assignment of Rents dated as of December 16, 1985 with the Owner Trustee), and PNM (Unit 1 transaction), including Appendix A definitions, together with Amendment No. 1 dated July 15, 1986 and Amendment No. 2 dated November 18, 1986 (refiled) | 99.2 to PNM’s Annual Report on Form 10-K for year ended December 31, 1995 | 1-6986 PNM | |||
99.2 | 99.5 to PNM’s Annual Report on Form 10-K for year ended December 31, 1996 | 1-6986 PNM | ||||
99.3 | 99.11 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 | 1-6986 PNM | ||||
99.4 | 99.14 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 | 1-6986 PNM | ||||
99.5 | 99.19 to PNM’s Annual Report on Form 10-K for year ended December 31, 2013 | 1-6986 PNM | ||||
99.6 | 10.6 to PNM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 | 1-6986 PNM |
PNM RESOURCES, INC. | ||||
(Registrant) | ||||
Date: | March 1, 2019 | By | /s/ P. K. Collawn | |
P. K. Collawn | ||||
Chairman, President, and Chief Executive Officer |
Signature | Capacity | Date | |
/s/ P. K. Collawn | Principal Executive Officer and Director | March 1, 2019 | |
P. K. Collawn | |||
Chairman, President, and | |||
Chief Executive Officer | |||
/s/ C. N. Eldred | Principal Financial Officer | March 1, 2019 | |
C. N. Eldred | |||
Executive Vice President and | |||
Chief Financial Officer | |||
/s/ J. D. Tarry | Principal Accounting Officer | March 1, 2019 | |
J. D. Tarry | |||
Vice President, Controller and Treasurer | |||
/s/ V.A. Bailey | Director | March 1, 2019 | |
V.A. Bailey | |||
/s/ N.P. Becker | Director | March 1, 2019 | |
N. P. Becker | |||
/s/ E. R. Conley | Director | March 1, 2019 | |
E. R. Conley | |||
/s/ A. J. Fohrer | Director | March 1, 2019 | |
A. J. Fohrer | |||
/s/ S. M. Gutierrez | Director | March 1, 2019 | |
S. M. Gutierrez | |||
/s/ J.A. Hughes | Director | March 1, 2019 | |
J.A. Hughes | |||
/s/ M. T. Mullarkey | Director | March 1, 2019 | |
M. T. Mullarkey | |||
/s/ D. K. Schwanz | Director | March 1, 2019 | |
D. K. Schwanz | |||
/s/ B. W. Wilkinson | Director | March 1, 2019 | |
B. W. Wilkinson |
PUBLIC SERVICE COMPANY OF NEW MEXICO | ||||
(Registrant) | ||||
Date: | March 1, 2019 | By | /s/ P. K. Collawn | |
P. K. Collawn | ||||
President and Chief Executive Officer |
Signature | Capacity | Date | |
/s/ P. K. Collawn | Principal Executive Officer and Chairman of the Board | March 1, 2019 | |
P. K. Collawn | |||
President and | |||
Chief Executive Officer | |||
/s/ C. N. Eldred | Principal Financial Officer and Director | March 1, 2019 | |
C. N. Eldred | |||
Executive Vice President and | |||
Chief Financial Officer | |||
/s/ J. D. Tarry | Principal Accounting Officer | March 1, 2019 | |
J. D. Tarry | |||
Vice President, Controller and Treasurer | |||
/s/ R. N. Darnell | Director | March 1, 2019 | |
R. N. Darnell | |||
/s/ C. M. Olson | Director | March 1, 2019 | |
C. M. Olson |
TEXAS-NEW MEXICO POWER COMPANY | ||||
(Registrant) | ||||
Date: | March 1, 2019 | By | /s/ P. K. Collawn | |
P. K. Collawn | ||||
Chief Executive Officer |
Signature | Capacity | Date | |
/s/ P. K. Collawn | Principal Executive Officer and Chairman of the Board | March 1, 2019 | |
P. K. Collawn | |||
Chief Executive Officer | |||
/s/ C. N. Eldred | Principal Financial Officer and Director | March 1, 2019 | |
C. N. Eldred | |||
Executive Vice President and | |||
Chief Financial Officer | |||
/s/ J. D. Tarry | Principal Accounting Officer | March 1, 2019 | |
J. D. Tarry | |||
Vice President, Controller and Treasurer | |||
/s/ R. N. Darnell | Director | March 1, 2019 | |
R. N. Darnell | |||
/s/ C. M. Olson | Director | March 1, 2019 | |
C. M. Olson | |||
/s/ J. N. Walker | Director | March 1, 2019 | |
J. N. Walker |
Annual Retainer: | An annual cash retainer of $80,000 paid in quarterly installments and restricted stock rights* with a grant date market value of $105,000 | |
Lead Director Fee: | $25,000 paid in quarterly installments | |
Audit and Ethics Committee Chair Retainer: | $15,000 paid in quarterly installments | |
Compensation and Human Resources Committee Chair Retainer: | $10,000 paid in quarterly installments | |
Finance Committee Chair Retainer: | $7,500 paid in quarterly installments | |
Nominating and Governance Committee Chair Retainer: | $7,500 paid in quarterly installments | |
Supplemental Meeting Fees: | $1,500 –payable for and after each meeting of a particular committee or the full Board, as the case may be, attended by a committee member or non-employee director, respectively, in excess of eight committee or full Board meetings annually |
SECTION 1. | AUTHORIZATION OF BONDS | 1 | |
SECTION 2. | SALE AND PURCHASE OF BONDS | 2 | |
SECTION 3. | CLOSING | 2 | |
SECTION 4. | CONDITIONS TO CLOSING | 3 | |
Section 4.1. | Representations and Warranties | 3 | |
Section 4.2. | Performance; No Event of Default or Bond Repurchase Event | 3 | |
Section 4.3. | Compliance Certificates | 3 | |
Section 4.4. | Opinions of Counsel | 3 | |
Section 4.5. | Purchase Permitted By Applicable Law, Etc | 4 | |
Section 4.6. | Sale of Other Bonds | 4 | |
Section 4.7. | Payment of Special Counsel Fees | 4 | |
Section 4.8. | Private Placement Number | 4 | |
Section 4.9. | Changes in Corporate Structure | 4 | |
Section 4.10. | Funding Instructions | 4 | |
Section 4.11. | Proceeds and Documents | 4 | |
Section 4.12. | Issuance of Bonds under Indenture; Execution and Delivery and Filing and Recording of the Supplements | 4 | |
Section 4.13. | Regulatory Approvals | 5 | |
Section 4.14. | Notice of Closing Date | 5 | |
SECTION 5. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 5 | |
Section 5.1. | Organization; Power and Authority | 5 | |
Section 5.2. | Authorization, Etc | 5 | |
Section 5.3. | Disclosure | 6 | |
Section 5.4. | Organization and Ownership of Shares of Subsidiaries | 6 | |
Section 5.5. | Financial Statements; Material Liabilities | 6 | |
Section 5.6. | Compliance with Laws, Other Instruments, Etc | 7 | |
Section 5.7. | Governmental Authorizations, Etc | 7 | |
Section 5.8. | Litigation; Observance of Agreements, Statutes and Orders | 7 | |
Section 5.9. | Taxes | 8 | |
Section 5.10. | Title to Property; Leases | 8 | |
Section 5.11. | Licenses, Permits, Etc | 8 | |
Section 5.12. | Compliance with ERISA | 8 | |
Section 5.13. | Private Offering by the Company | 9 | |
Section 5.14. | Use of Proceeds; Margin Regulations | 10 | |
Section 5.15. | Existing Indebtedness | 10 | |
Section 5.16. | Foreign Assets Control Regulations, Etc | 11 | |
Section 5.17. | Status under Certain Statutes | 11 |
Section 5.18. | Lien of Indenture | 11 | |
SECTION 6. | REPRESENTATIONS OF THE PURCHASERS | 12 | |
Section 6.1. | Purchase for Investment | 12 | |
Section 6.2. | Source of Funds | 12 | |
SECTION 7. | INFORMATION AS TO COMPANY | 14 | |
Section 7.1. | Visitation | 14 | |
SECTION 8. | COVENANTS | 14 | |
Section 8.1. | Compliance with Law | 14 | |
Section 8.2. | Books and Records | 15 | |
Section 8.3. | Transactions with Affiliates | 15 | |
Section 8.4. | Line of Business | 15 | |
SECTION 9. | REMEDIES ON DEFAULT | 15 | |
SECTION 10. | EXPENSES, ETC | 15 | |
Section 10.1. | Transaction Expenses | 15 | |
Section 10.2. | Survival | 16 | |
SECTION 11. | SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT | 16 | |
SECTION 12. | AMENDMENT AND WAIVER | 16 | |
Section 12.1. | Requirements | 16 | |
Section 12.2. | Solicitation of Holders of Bonds | 16 | |
Section 12.3. | Binding Effect, Etc | 17 | |
Section 12.4. | Bonds Held by Company, Etc | 17 | |
SECTION 13. | REPRODUCTION OF DOCUMENTS | 17 | |
SECTION 14. | CONFIDENTIAL INFORMATION | 18 | |
SECTION 15. | SUBSTITUTION OF PURCHASER | 19 | |
SECTION 16. | MISCELLANEOUS | 20 | |
Section 16.1. | Successors and Assigns | 20 | |
Section 16.2. | Severability | 20 | |
Section 16.3. | Construction, Etc | 20 | |
Section 16.4. | Counterparts | 20 | |
Section 16.5. | Governing Law | 20 | |
Section 16.6. | Jurisdiction and Process; Waiver of Jury Trial | 20 |
Section 16.7. | Notices | 21 |
SECTION 1. | AUTHORIZATION OF BONDS . |
SECTION 2. | SALE AND PURCHASE OF BONDS. |
SECTION 3. | CLOSING . |
SECTION 4. | CONDITIONS TO EACH CLOSING. |
SECTION 5. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY. |
SECTION 6. | REPRESENTATIONS OF THE PURCHASERS. |
SECTION 7. | INFORMATION AS TO COMPANY. |
SECTION 8. | COVENANTS. |
SECTION 9. | REMEDIES ON DEFAULT. |
SECTION 10. | EXPENSES, ETC. |
SECTION 11. | SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. |
SECTION 12. | AMENDMENT AND WAIVER. |
SECTION 13. | REPRODUCTION OF DOCUMENTS. |
SECTION 14. | CONFIDENTIAL INFORMATION. |
SECTION 15. | SUBSTITUTION OF PURCHASER. |
SECTION 16. | MISCELLANEOUS. |
By: | AIG Asset Management (U.S.), LLC, as Investment Adviser |
By: | MEMBERS Capital Advisors, Inc. acting as Investment Advisor |
IntraLinks Items: | Document Title |
TNMP Cover Letter | TNMP Cover Letter (dated February 7, 2019) |
TNMP Bond Purchase Agreement - Blackline | TNMP - BPA Blackline_ v 2018 (2.12.19 draft BPA redlined to 6.28.18 BPA) |
TNMP Bond Purchase Agreement | TNMP - Bond Purchase Agreement (2.12.19 draft BPA) |
TNMP Investor Call Presentation | TNMP Investor Presentation 02-12-2019 Final |
TNMP Financial Information | TNMP Financial Information (Consolidated Balance Sheets for TNMP as of December 31 for years 2015-2017 and as of September 30, 2018; Consolidated Statements of Earnings for TNMP FYE December 31 of 2015-2017) |
TNMP Ratings Reports | 2018.07.06 Moody’s TNMP |
2018.05.04 S&P TNMP | |
Financial Statements Listed in Schedule 5.5 | |
SEC Filings: TNMP’s Annual Reports on Form 10-K for the years ended December 31, 2015-2017 and Quarterly Report on Form 10-Q for September 30, 2018 are all available on the following link: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000022767&owner=exclude&count=40&hidefilings=0 |
i) | The Company’s Subsidiaries (as defined): |
ii) | The Company’s Affiliates, other than Subsidiaries: |
a) | PNM Resources, Inc. |
b) | TNP Enterprises, Inc. |
c) | Public Service Company of New Mexico |
d) | PNMR Services Company |
e) | PNMR Development and Management Corporation |
f) | NM Renewable Development, LLC |
g) | NMRD Data Center, LLC |
h) | NMRD Data Center II, LLC |
i) | NMRD Data Center III, LLC |
j) | NM Capital Utility Corporation |
iii) | The Company’s Directors and Officers: |
a) | Directors: |
b) | Officers: |
Date Filed | SEC Filings | Description |
11/06/2018 | 10-Q | Quarterly Report for quarter ended 9/30/18 |
03/01/2018 | 10-K | Annual Report for year ended 12/31/17 |
2/28/2017 | 10-K | Annual Report for year ended 12/31/16 |
2/29/2016 | 10-K | Annual Report for year ended 12/31/15 |
DESCRIPTION | DATE OF NOTE | MATURITY DATE | INTEREST RATE | OUTSTANDING PRINCIPAL ($ IN MILLIONS) | COLLATERAL |
Taxable First Mortgage Bonds Series 2009A (CUSIP: 882587AY4) | 3/23/2009 | 4/1/2019 | 9.50% | $172.3 | Mortgaged Property |
Taxable First Mortgage Bonds Series 2013A (CUSIP: 882587AZ1) | 4/3/2013 | 4/1/2043 | 6.95% | $93.2 | Mortgaged Property |
Taxable First Mortgage Bonds Series 2014A (ID:EK3951234) | 6/27/2014 | 7/1/2024 | 4.03% | $80.0 | Mortgaged Property |
Taxable First Mortgage Bonds Series 2016A (CUSIP:88284A@8) | 2/10/2016 | 2/10/2026 | 3.53% | $60.0 | Mortgaged Property |
Taxable First Mortgage Bonds Series 2017A (CUSIP: 88259#AA7) | 8/24/2017 | 8/24/2027 | 3.22% | $60.0 | Mortgaged Property |
Taxable First Mortgage Bonds Series 2018A (ID:AT5296427) | 6/28/2018 | 6/28/2028 | 3.85% | $60.0 | Mortgaged Property |
Taxable Term Loan(1) | 7/25/2018 | 7/25/2020 | 2.94% | $20.0 | Unsecured |
TNMP Total Long‑term Debt | $545.5 |
DESCRIPTION | DATE OF NOTE | MATURITY DATE | INTEREST RATE | OUTSTANDING PRINCIPAL ($ IN MILLIONS) | COLLATERAL |
TNMP $75 million Revolver(2) Lenders: Key Bank; JPMorgan; Union Bank; Sun Trust; Wells Fargo | 9/25/2017 | 9/23/2022 | 2.99% | $17.5 | First Mortgage Bond Series 2009C |
TNMP $50 million Intercompany Loan Agreement dated 9/30/2018 Lender: PNM Resources, Inc. (parent) | 9/30/2018 (renewed yearly) | Renewed yearly as appropriate | 0.0% | $0.0 | None |
TNMP Total Short‑term Debt | $17.5 |
1. | Term Loan increased to $35 million in December of 2018. Based on 30 day Libor of 2.24% as of 09/26/2018 + spread of 0.70% |
2. | Based on 30 day LIBOR of 2.26% as of 9/28/2018 and 2.23% as of 9/25/2018 and amounts outstanding as of 9/30/2018 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
AMERICAN GENERAL LIFE INSURANCE COMPANY c/o AIG Asset Management 2929 Allen Parkway, A36-04 Houston, Texas 77019-2155 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑D | $20,000,000 | $0 |
(1) | All payments to be by wire transfer of immediately available funds, with sufficient information (including PPN #, interest rate, maturity date, interest amount, principal amount and premium amount, if applicable) to identify the source and application of such funds, to: |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY c/o AIG Asset Management 2929 Allen Parkway, A36-04 Houston, Texas 77019-2155 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $20,000,000 | $0 |
(1) | All payments to be by wire transfer of immediately available funds, with sufficient information (including PPN #, interest rate, maturity date, interest amount, principal amount and premium amount, if applicable) to identify the source and application of such funds, to: |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
COUNTRY LIFE INSURANCE COMPANY Attention: Investments 1705 N Towanda Avenue Bloomington, IL 61702 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑D | $2,000,000 | $0 |
Name in Which Note is Registered | COUNTRY LIFE INSURANCE COMPANY |
Principal Amount | $2,000,000 Series 2019-D |
Payment on Account of Note Method Account Information | Federal Funds Wire Transfer Northern Trust Chgo/Trust ABA Number 071000152 Wire Account Number 5186041000 SWIFT BIC: CNORUS44 For Further Credit to: 26-02712 Account Name: Country Life Insurance Company Representing P & I on (list security) [BANK] |
Accompanying Information | Name of Company: Texas‑New Mexico Power Company Description of Security: 4.06% due 2044 PPN: 882884 C*8 Due date and application (as among principal, premium and interest) of the payment being made: |
Address/Fax for Notices Related to Payments | Country Life Insurance Company Attention: Investment Accounting 1705 N Towanda Avenue Bloomington, IL 61702 Tel: (309) 821-6348 Fax: (309) 821-2800 Email: Privateplacements@countryfinancial.com |
Address/Fax for All Other Notices | Country Life Insurance Company Attention: Investments 1705 N Towanda Avenue Bloomington, IL 61702 Tel: (309) 821-6260 Fax: (309) 821-6301 PrivatePlacements@countryfinancial.com |
Instructions re: Delivery of Notes | The Northern Trust Company Trade Securities Processing C1N 801 South Canal Street Attn: 26-02712/Country Life Insurance Company Chicago, IL 60607 Include Acct # and Name in cover letter as well. |
Tax Identification Number | 37-0808781 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
COUNTRY MUTUAL INSURANCE COMPANY Attention: Investments 1705 N Towanda Avenue Bloomington, IL 61702 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $1,000,000 |
Name in Which Note is Registered | COUNTRY MUTUAL INSURANCE COMPANY |
Principal Amount | $1,000,000 Series 2019-A |
Payment on Account of Note Method Account Information | Federal Funds Wire Transfer Northern Trust Chgo/Trust ABA Number 071000152 Wire Account Number 5186041000 SWIFT BIC: CNORUS44 For Further Credit to: 26-02698 Account Name: Country Mutual Insurance Company Representing P & I on (list security) [BANK] |
Accompanying Information | Name of Company: Texas‑New Mexico Power Company Description of Security: 3.60% due 2029 PPN: 882884 B*9 Due date and application (as among principal, premium and interest) of the payment being made: |
Address/Fax for Notices Related to Payments | Country Mutual Insurance Company Attention: Investment Accounting 1705 N Towanda Avenue Bloomington, IL 61702 Tel: (309) 821-6348 Fax: (309) 821-2800 Email: Privateplacements@countryfinancial.com |
Address/Fax for All Other Notices | Country Mutual Insurance Company Attention: Investments 1705 N Towanda Avenue Bloomington, IL 61702 Tel: (309) 821-6260 Fax: (309) 821-6301 PrivatePlacements@countryfinancial.com |
Instructions re: Delivery of Notes | The Northern Trust Company Trade Securities Processing C1N 801 South Canal Street Attn: 26-02698/Country Mutual Insurance Company Chicago, IL 60607 Include Acct # and Name in cover letter as well. |
Tax Identification Number | 37-0807507 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
CMFG LIFE INSURANCE COMPANY c/o Members Capital Advisors, Inc. 5910 Mineral Point Road Madison WI 53705-4456 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $1,000,000 |
$ | 1,000,000.00 |
CMFG Life Insurance Company | |
By: | MEMBERS Capital Advisors, Inc. |
acting as Investment Advisor |
By: | |
Name: | Anne M. Finucane |
Title: | Managing Director, Investments |
NOTE DELIVERY INSTRUCTIONS: |
All Securities Being Purchased Should Be Registered In (See Nominee Name) and Notes Delivered To: |
DTCC |
Newport Office Center |
570 Washington Blvd |
Jersey City, NJ 07310 |
5th floor / NY Window / Robert Mendez |
FBO: State Street Bank & Trust for ZTAH |
WIRING INSTRUCTIONS: |
ABA: 011000028 |
Bank: State Street Bank |
Account Name: CMFG Life Members Horizon |
DDA #: 1036-313-3 |
REFERENCE FUND:ZTAH |
Nominee Name: TURNKEYS & CO |
CMFG Life Insurance Company TAX ID#: 39-0230590 |
TURNKEYS & CO TAX ID#: 03-0400481 |
EMAIL: | DS-PrivatePlacements@cunamutual.com |
EMAIL: | DS-PrivatePlacements@cunamutual.com |
EMAIL: | mcalegal@cunamutual.com |
CLOSING DOCUMENTS: |
Please send only one CD for all entities and forward to the address below: |
**Note** No bound or hard copies sent |
MEMBERS CAPITAL ADVISORS, INC. |
ATTN: PRIVATE PLACEMENTS |
5910 MINERAL POINT ROAD |
MADISON WI 53705-4456 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
CMFG LIFE INSURANCE COMPANY c/o Members Capital Advisors, Inc. 5910 Mineral Point Road Madison WI 53705-4456 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $2,000,000 |
$ | 2,000,000.00 |
CMFG Life Insurance Company | |
By: | MEMBERS Capital Advisors, Inc. |
acting as Investment Advisor |
By: | |
Name: | Anne M. Finucane |
Title: | Managing Director, Investments |
NOTE DELIVERY INSTRUCTIONS: |
All Securities Being Purchased Should Be Registered In (See Nominee Name) and Notes Delivered To: |
DTCC |
Newport Office Center |
570 Washington Blvd |
Jersey City, NJ 07310 |
5th floor / NY Window / Robert Mendez |
FBO: State Street Bank & Trust for ZTAH |
WIRING INSTRUCTIONS: |
ABA: 011000028 |
Bank: State Street Bank |
Account Name: CMFG Life Members Zone |
DDA #: 1026-256-6 |
REFERENCE FUND:ZTAV |
Nominee Name: TURNKEYS & CO |
CMFG Life Insurance Company TAX ID#: 39-0230590 |
TURNKEYS & CO TAX ID#: 03-0400481 |
EMAIL: | DS-PrivatePlacements@cunamutual.com |
EMAIL: | DS-PrivatePlacements@cunamutual.com |
EMAIL: | mcalegal@cunamutual.com |
CLOSING DOCUMENTS: |
Please send only one CD for all entities and forward to the address below: |
**Note** No bound or hard copies sent |
MEMBERS CAPITAL ADVISORS, INC. |
ATTN: PRIVATE PLACEMENTS |
5910 MINERAL POINT ROAD |
MADISON WI 53705-4456 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
CMFG LIFE INSURANCE COMPANY c/o Members Capital Advisors, Inc. 5910 Mineral Point Road Madison WI 53705-4456 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑B | $3,000,000 | $0 |
$ | 3,000,000.00 |
CMFG Life Insurance Company | |
By: | MEMBERS Capital Advisors, Inc. |
acting as Investment Advisor |
By: | |
Name: | Anne M. Finucane |
Title: | Managing Director, Investments |
NOTE DELIVERY INSTRUCTIONS: |
All Securities Being Purchased Should Be Registered In (See Nominee Name) and Notes Delivered To: |
DTCC |
Newport Office Center |
570 Washington Blvd |
Jersey City, NJ 07310 |
5th floor / NY Window / Robert Mendez |
FBO: State Street Bank & Trust for ZTAH |
WIRING INSTRUCTIONS: |
ABA: 011000028 |
Bank: State Street Bank |
Account Name: CMFG Life Members Zone |
DDA #: 1026-256-6 |
REFERENCE FUND:ZTAV |
Nominee Name: TURNKEYS & CO |
CMFG Life Insurance Company TAX ID#: 39-0230590 |
TURNKEYS & CO TAX ID#: 03-0400481 |
EMAIL: | DS-PrivatePlacements@cunamutual.com |
EMAIL: | DS-PrivatePlacements@cunamutual.com |
EMAIL: | mcalegal@cunamutual.com |
CLOSING DOCUMENTS: |
Please send only one CD for all entities and forward to the address below: |
**Note** No bound or hard copies sent |
MEMBERS CAPITAL ADVISORS, INC. |
ATTN: PRIVATE PLACEMENTS |
5910 MINERAL POINT ROAD |
MADISON WI 53705-4456 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA 7 Hanover Square New York, NY 10004-2616 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $5,000,000 | |
2019‑B | $3,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC. c/o The Guardian Life Insurance Company of America 7 Hanover Square New York, NY 10004-2616 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑B | $1,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA c/o The Guardian Life Insurance Company of America 7 Hanover Square New York, NY 10004-2616 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑D | $5,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
UNITED FARM FAMILY LIFE INSURANCE COMPANY 225 S. East Street Indianapolis, Indiana 46202 Attention: Investment Accounting Department Email: Michael.Lucado@infarmbureau.com | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $2,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
METROPOLITAN LIFE INSURANCE COMPANY 200 Park Avenue New York, New York 10166 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $3,100,000 | $0 | |
2019‑D | $1,800,000 | $0 |
(1) | All scheduled payments of principal and interest by wire transfer of immediately available funds to: |
(2) | All notices and communications: |
(3) | Original notes delivered to: |
(4) | Taxpayer I.D. Number: 13-5581829 |
(5) | Tax Jurisdiction: United States/New York |
(6) | UK Passport Treaty Number (if applicable): 13/M/61303/DTTP |
Audit Requests: Soft copy to AuditConfirms.PvtPlacements@metlife.com or hard copy to: Metropolitan Life Insurance Company, Attn: Private Placements Operations (ATTN: Audit Confirmations), 18210 Crane Nest Drive – 5th Floor, Tampa, FL 33647 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
METROPOLITAN LIFE INSURANCE COMPANY 200 Park Avenue New York, New York 10166 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑D | $1,000,000 | $0 |
Audit Requests: Soft copy to AuditConfirms.PvtPlacements@metlife.com or hard copy to: Metropolitan Life Insurance Company, Attn: Private Placements Operations (ATTN: Audit Confirmations), 18210 Crane Nest Drive – 5th Floor, Tampa, FL 33647 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
METLIFE INSURANCE K.K. 1-3, Kioicho, Chiyoda-ku Tokyo, 102-8525 JAPAN | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $18,900,000 | $0 | |
2019‑D | $17,600,000 | $0 |
Audit Requests: Soft copy to AuditConfirms.PvtPlacements@metlife.com or hard copy to: Metropolitan Life Insurance Company, Attn: Private Placements Operations (ATTN: Audit Confirmations), 18210 Crane Nest Drive – 5th Floor, Tampa, FL 33647 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
METROPOLITAN TOWER LIFE INSURANCE COMPANY 200 Park Avenue New York, New York 10166 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑D | $1,600,000 | $0 |
Audit Requests: Soft copy to AuditConfirms.PvtPlacements@metlife.com or hard copy to: Metropolitan Life Insurance Company, Attn: Private Placements Operations (ATTN: Audit Confirmations), 18210 Crane Nest Drive – 5th Floor, Tampa, FL 33647 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
BRIGHTHOUSE LIFE INSURANCE COMPANY 334 Madison Avenue Convent Station, New Jersey 07961 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $6,500,000 | $0 | |
2019‑D | $6,500,000 | $0 |
(1) | All scheduled payments of principal and interest by wire transfer of immediately available funds to: |
(2) | All notices and communications: |
(3) | Original notes delivered to: |
(4) | Taxpayer I.D. Number: 06-0566090 |
(5) | UK Passport Treaty Number (if applicable): 13/B/61653/DTTP |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
UNION FIDELITY LIFE INSURANCE COMPANY c/o Jane Kipper 7101 College Boulevard, Suite 1400 Overland Park, KS 66210 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $6,500,000 | $0 | |
2019‑D | $6,500,000 | $0 |
(1) | All scheduled payments of principal and interest by wire transfer of immediately available funds to: |
(2) | All notices and communications: |
(3) | Original notes delivered to: |
(4) | Taxpayer I.D. Number: 310252460 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
UNITED OF OMAHA LIFE INSURANCE COMPANY 4 - Investment Management 3300 Mutual of Omaha Plaza Omaha, NE 68175-1011 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $2,000,000 | $0 | |
2019‑D | $2,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Attn: Nationwide Investments – Private Placements One Nationwide Plaza (1-05-801) Columbus, OH 43215-2220 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $12,000,000 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NEW YORK LIFE INSURANCE COMPANY c/o NYL Investors LLC 51 Madison Avenue 2nd Floor, Room 208 New York, New York, 10010 Attn: Private Capital Investors, 2nd Floor | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $5,300,000 | $0 | |
2019‑D | $3,100,000 | $0 |
(1) | All payments by wire or intrabank transfer of immediately available funds to: |
• | Any changes in the foregoing payment instructions shall be confirmed by e-mail to NYLIMWireConfirmation@nylim.com prior to becoming effective. |
(2) | All other communications: |
Attention: | Private Capital Investors 2nd Floor |
(3) | Note(s) to be registered in the name of: New York Life Insurance Company |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION c/o NYL Investors LLC 51 Madison Avenue 2nd Floor, Room 208 New York, New York, 10010 Attn: Private Capital Investors, 2nd Floor | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $2,200,000 | $0 | |
2019‑D | $1,400,000 | $0 |
(1) | All payments by wire or intrabank transfer of immediately available funds to: |
(2) | All other communications: |
Attention: | , Private Capital Investors 2nd Floor |
(3) | Note(s) to be registered in the name of: New York Life Insurance and Annuity |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT (BOLI30C) c/o NYL Investors LLC 51 Madison Avenue 2nd Floor, Room 208 New York, New York 10010 Attn: Private Capital Investors, 2nd Floor | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $200,000 | $0 | |
2019‑D | $200,000 | $0 |
(1) | All payments by wire or intrabank transfer of immediately available funds to: |
(2) | All other communications: |
Attention: | Private Capital Investors |
(3) | Note(s) to be registered in the name of: New York Life Insurance and Annuity Corporation |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT (BOLI3-2) c/o NYL Investors LLC 51 Madison Avenue 2nd Floor, Room 208 New York, New York 10010 Attn: Private Capital Investors, 2nd Floor | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $100,000 | $0 | |
2019‑D | $100,000 | $0 |
(1) | All payments by wire or intrabank transfer of immediately available funds to: |
• | Any changes in the foregoing payment instructions shall be confirmed by e-mail to NYLIMWireConfirmation@nylim.com prior to becoming effective. |
(2) | All other communications: |
Attention: | Private Capital Investors 2nd Floor |
(3) | Note(s) to be registered in the name of: New York Life Insurance and Annuity Corporation |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT (BOLI3) c/o NYL Investors LLC 51 Madison Avenue 2nd Floor, Room 208 New York, New York 10010 Attn: Private Capital Investors, 2nd Floor | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $100,000 | $0 | |
2019‑D | $100,000 | $0 |
(1) | All payments by wire or intrabank transfer of immediately available funds to: |
(2) | All other communications: |
Attention: | Private Capital Investors |
- | FIIGLibrary@nylim.com TraditionalPVtOps@nylim.com |
(3) | Note(s) to be registered in the name of: New York Life Insurance and Annuity Corporation |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT (BOLI30E) c/o NYL Investors LLC 51 Madison Avenue 2nd Floor, Room 208 New York, New York 10010 Attn: Private Capital Investors, 2nd Floor | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $100,000 | $0 | |
2019‑D | $100,000 | $0 |
(1) | All payments by wire or intrabank transfer of immediately available funds to: / |
(2) | All other communications: |
Attention: | Private Capital Investors 2nd Floor |
(3) | Note(s) to be registered in the name of: New York Life Insurance and Annuity Corporation |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY 720 East Wisconsin Avenue Milwaukee, WI 53202 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $20,000,000 | |
2019‑B | $24,550,000 | $0 |
I. All payments on account of Notes held by such Purchaser shall be made by wire transfer of immediately available funds, providing sufficient information to identify the source of the transfer, the amount of the dividend and/or redemption (as applicable) and the identity of the security as to which payment is being made. Please contact our Treasury & Investment Operations Department to securely obtain wire transfer instructions for The Northwestern Mutual Life Insurance Company. E-mail: payments@northwesternmutual.com Phone: (414) 665-1679 |
II. All notices with respect to confirmation of payments on account of the Notes shall be delivered or mailed to: The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Investment Operations E-mail: payments@northwesternmutual.com Phone: (414) 665-1679 |
III. All other communications shall be delivered or mailed to: The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Securities Department E-mail: privateinvest@northwesternmutual.com Facsimile: (414) 625-7643 |
IV. Address for delivery of Notes and closing documents: The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Anne T. Brower |
V. Tax Identification No.: 39-0509570 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY FOR ITS GROUP ANNUITY SEPARATE ACCOUNT 720 East Wisconsin Avenue Milwaukee, WI 53202 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑B | $450,000 | $0 |
I. All payments on account of Notes held by such Purchaser shall be made by wire transfer of immediately available funds, providing sufficient information to identify the source of the transfer, the amount of the dividend and/or redemption (as applicable) and the identity of the security as to which payment is being made. Please contact our Treasury & Investment Operations Department to securely obtain wire transfer instructions for The Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account. E-mail: payments@northwesternmutual.com Phone: (414) 665-1679 |
II. All notices with respect to confirmation of payments on account of the Notes shall be delivered or mailed to: The Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Investment Operations E-mail: payments@northwesternmutual.com Phone: (414) 665-1679 |
III. All other communications shall be delivered or mailed to: The Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Securities Department E-mail: privateinvest@northwesternmutual.com Facsimile: (414) 625-7643 |
IV. Address for delivery of Notes and closing documents: The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Anne T. Brower |
V. Tax Identification No.: 39-0509570 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
JACKSON NATIONAL LIFE INSURANCE COMPANY One Corporate Way Lansing, MI 48951 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $6,000,000 |
1. | Please wire all payments as follows. To ensure accurate and timely posting of principal and interest, please include all relevant information on the wire. |
2. | Original physical notes & certificates should be delivered as follows: |
3. | DTC Settlement Instructions: |
4. | Original documents and copies of notes and certificates, notices, waivers, amendments and consents should be sent to: |
a) | PPM America, Inc. |
a) | PPM America, Inc. |
6. | Payment notices should be sent to: |
7. | Legal name to appear on notes: |
8. | Jackson National Life Insurance Company was incorporated in Michigan on June 19, 1961. |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
JACKSON NATIONAL LIFE INSURANCE COMPANY One Corporate Way Lansing, MI 48951 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $6,000,000 |
1. | Please wire all payments as follows. To ensure accurate and timely posting of principal and interest, please include all relevant information on the wire. |
2. | Original physical notes & certificates should be delivered as follows: |
3. | DTC Settlement Instructions: |
4. | Original documents and copies of notes and certificates, notices, waivers, amendments and consents should be sent to: |
a) | PPM America, Inc. b) |
a) | PPM America, Inc. |
6. | Payment notices should be sent to: |
7. | Legal name to appear on notes: |
8. | Jackson National Life Insurance Company was incorporated in Michigan on June 19, 1961. |
9. | Name of institution as it should appear in any publicity: PPM America, Inc. |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
LIFE INSURANCE COMPANY OF THE SOUTHWEST c/o National Life Insurance Company One National Life Drive Montpelier, VT 05604 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑C | $5,000,000 | $0 | |
2019‑D | $2,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
NATIONAL LIFE INSURANCE COMPANY One National Life Drive Montpelier, VT 05604 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑D | $4,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY 1401 Livingston Lane Jackson, MS 39205 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑B | $3,000,000 | $0 | |
2019‑C | $3,000,000 | $0 |
Purchaser: | Southern Farm Bureau Life Insurance Company | ||
Tax ID No.: | 64-0283583 | ||
Nominee: | Ell & Co c/o Northern Trust Company PO Box 92395 Chicago, IL 60675 Tax ID#: 36-6412623 | ||
Name in which Note is to be drafted: | Ell & Co, F/B/O Southern Farm Bureau Life Insurance Company | ||
Payment Information: | All payments should be made by wire transfer of immediately available funds to: | ||
The Northern Trust Company Chicago, IL 60607 ABA No.: 071 000 152 SWIFT/BIC: CNORUS44 Acct. Name: Trust Services Acct. No.: 518 604 1000 Reference: Attn: Income Collection, Acct# 44-72417; SFBLIC – FIXED INCOME; Texas-New Mexico Power Company; PPN 882884 B@7 (Series 2019-B) Note Number RB-__ and/or PPN 882884 B#5 (Series 2019-C) Note Number RC-__, ** | |||
**with sufficient information to identify the source and application of such funds, including the interest amount, principal amount, premium amount, etc. | |||
Address for notices related to scheduled payments: | The Northern Trust Company Attn: Income Collections/Oscell Owens 801 S Canal St Chicago, IL 60607 OOS@ntrs.com; ICPHYS@ntrs.com With a copy to: LParker@sfbli.com |
Address for audit confirmation requests: | By electronic delivery to: OOS@ntrs.com; ICPHYS@ntrs.com | ||
Address for all other communications, including waivers, amendments, consents and financial information: | By electronic delivery to: Attn: Securities Management PrivatePlacements@sfbli.com | ||
Address for physical delivery of Notes: | The Northern Trust Company Attn: Trade Securities Processing 801 S Canal St C2-N Chicago, IL 60607 With an electronic copy of the transmittal to: PrivatePlacements@sfbli.com | ||
Contact Persons: | David Divine Senior Portfolio Manager (601) 981-5332 x1010 | Zach Farmer Portfolio Manager (601) 981-5332 x1486 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
STATE FARM LIFE INSURANCE COMPANY One State Farm Plaza Bloomington, IL 61710 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $10,000,000 |
Participation/Series: | $10,000,000/3.60% First Mortgage Bonds due July 1, 2029 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
STATE FARM LIFE AND ACCIDENT ASSURANCE COMPANY One State Farm Plaza Bloomington, IL 61710 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $1,000,000 |
Participation/Series: | $1,000,000/3.60% First Mortgage Bonds due July 1, 2029 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
STATE FARM INSURANCE COMPANIES EMPLOYEE RETIREMENT TRUST One State Farm Plaza Bloomington, IL 61710 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $1,000,000 |
Participation/Series: | $1,000,000/3.60% First Mortgage Bonds due July 1, 2029 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
THRIVENT FINANCIAL FOR LUTHERANS Attn: Investment Division-Private Placements 625 Fourth Avenue South Minneapolis, MN 55415 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑A | $0 | $15,000,000 | |
2019‑B | $30,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
USAA LIFE INSURANCE COMPANY 9800 Fredericksburg Road San Antonio, TX 78288 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑B | $9,000,000 | $0 |
NAME AND ADDRESS OF PURCHASER | PRINCIPAL AMOUNT AND SERIES OF BONDS TO BE PURCHASED AT EACH CLOSING | ||
USAA LIFE INSURANCE COMPANY OF NEW YORK 9800 Fredericksburg Road San Antonio, TX 78288 | Series | 1st Closing (3/29/2019) | 2nd Closing (7/1/2019) |
2019‑B | $1,000,000 | $0 |
TEXAS-NEW MEXICO POWER COMPANY | ||
By: | ||
Name: | ||
Title: |
MUFG UNION BANK, N.A., as Trustee | ||
By: | ||
Name: | ||
Title: |
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. |
Signature: ___________________________________ | (seal) |
(i) | it is the sole record and beneficial owner of the 2019 Bonds in respect of which it is providing this certificate; |
(ii) | it is not a bank within the meaning of Section 881(c)(3)(A) of the Code; |
(iii) | it is not a ten percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of the Code; and |
(iv) | it is not a controlled foreign corporation related to the Company as described in Section 881(c)(3)(C) of the Code. |
[•] | |
By: _____________________________________ | |
Name: | |
Title: |
By: | TEXAS-NEW MEXICO POWER COMPANY | |
Name: | ||
Title: | ||
By: | MUFG UNION BANK, N.A., as Trustee | |
Authorized Officer |
By: | TEXAS-NEW MEXICO POWER COMPANY | |
Name: | ||
Title: | ||
By: | MUFG UNION BANK, N.A., as Trustee | |
Authorized Officer |
By: | TEXAS-NEW MEXICO POWER COMPANY | |
Name: | ||
Title: | ||
By: | MUFG UNION BANK, N.A., as Trustee | |
Authorized Officer |
By: | TEXAS-NEW MEXICO POWER COMPANY | |
Name: | ||
Title: | ||
By: | MUFG UNION BANK, N.A., as Trustee | |
Authorized Officer |
1. | I have reviewed this Annual Report on Form 10-K of PNM Resources, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 1, 2019 | By: | /s/ Patricia K. Collawn | ||
Patricia K. Collawn | |||||
President and Chief Executive Officer | |||||
PNM Resources, Inc. |
1. | I have reviewed this Annual Report on Form 10-K of PNM Resources, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 1, 2019 | By: | /s/ Charles N. Eldred | ||
Charles N. Eldred | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
PNM Resources, Inc. |
1. | I have reviewed this Annual Report on Form 10-K of Public Service Company of New Mexico; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 1, 2019 | By: | /s/ Patricia K. Collawn | ||
Patricia K. Collawn | |||||
President and Chief Executive Officer | |||||
Public Service Company of New Mexico |
1. | I have reviewed this Annual Report on Form 10-K of Public Service Company of New Mexico; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 1, 2019 | By: | /s/ Charles N. Eldred | ||
Charles N. Eldred | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
Public Service Company of New Mexico |
1. | I have reviewed this Annual Report on Form 10-K of Texas-New Mexico Power Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 1, 2019 | By: | /s/ Patricia K. Collawn | ||
Patricia K. Collawn | |||||
Chief Executive Officer | |||||
Texas-New Mexico Power Company |
1. | I have reviewed this Annual Report on Form 10-K of Texas-New Mexico Power Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 1, 2019 | By: | /s/ Charles N. Eldred | ||
Charles N. Eldred | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
Texas-New Mexico Power Company |
(1) | the Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 1, 2019 | By: | /s/ Patricia K. Collawn | ||
Patricia K. Collawn | |||||
President and Chief Executive Officer | |||||
PNM Resources, Inc. | |||||
By: | /s/ Charles N. Eldred | ||||
Charles N. Eldred | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
PNM Resources, Inc. |
(1) | the Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 1, 2019 | By: | /s/ Patricia K. Collawn | ||
Patricia K. Collawn | |||||
President and Chief Executive Officer | |||||
Public Service Company of New Mexico | |||||
By: | /s/ Charles N. Eldred | ||||
Charles N. Eldred | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
Public Service Company of New Mexico |
(1) | the Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 1, 2019 | By: | /s/ Patricia K. Collawn | ||
Patricia K. Collawn | |||||
Chief Executive Officer | |||||
Texas-New Mexico Power Company | |||||
By: | /s/ Charles N. Eldred | ||||
Charles N. Eldred | |||||
Executive Vice President and | |||||
Chief Financial Officer | |||||
Texas-New Mexico Power Company |
M:@!+,T3*A@ G8[3,,T0C:Z. 4Q"RN&X74*H 4&JLX[*J.A%%JK34I+";RG@D
M-Z4#FYJ^2IZ=B(D1PGA"F;1D:K 'RZQ>JC"G9JV/2GT* K7G(;6J1*9
M:@!+,T3*A@ G8[3,,T0C:Z. 4Q"RN&X74*H 4&JLX[*J.A%%JK34I+";RG@D
M-Z4#FYJ^2IZ=B(D1PGA"F;1D:K 'RZQ>JC"G9JV/2GT* K7G(;6J1*9
M:@!+,T3*A@ G8[3,,T0C:Z. 4Q"RN&X74*H 4&JLX[*J.A%%JK34I+";RG@D
M-Z4#FYJ^2IZ=B(D1PGA"F;1D:K 'RZQ>JC"G9JV/2GT* K7G(;6J1*9
Consolidated Statements of Changes in Equity - USD ($) |
Total |
Total Stockholders' Equity |
Common Stock |
AOCI |
Retained Earnings |
Non- controlling Interest in Valencia |
Public Service Company of New Mexico |
Public Service Company of New Mexico
Total Stockholders' Equity
|
Public Service Company of New Mexico
Common Stock
|
Public Service Company of New Mexico
AOCI
|
Public Service Company of New Mexico
Retained Earnings
|
Public Service Company of New Mexico
Non- controlling Interest in Valencia
|
Texas-New Mexico Power Company |
Texas-New Mexico Power Company
Common Stock
|
Texas-New Mexico Power Company
Paid-in Capital
|
Texas-New Mexico Power Company
Retained Earnings
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2015 | $ 1,726,220,000 | $ 1,654,813,000 | $ 1,166,465,000 | $ (71,432,000) | $ 559,780,000 | $ 71,407,000 | $ 1,389,340,000 | $ 1,317,933,000 | $ 1,236,776,000 | $ (71,476,000) | $ 152,633,000 | $ 71,407,000 | ||||
Beginning Balance at Dec. 31, 2015 | (71,432,000) | (71,476,000) | $ 533,380,000 | $ 64,000 | $ 404,166,000 | $ 129,150,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net earnings | 131,896,000 | 117,377,000 | 117,377,000 | 14,519,000 | 91,938,000 | 77,419,000 | 77,419,000 | 14,519,000 | ||||||||
Net Earnings | 77,419,000 | 41,672,000 | 41,672,000 | |||||||||||||
Total other comprehensive income (loss) | (21,019,000) | (21,019,000) | (21,019,000) | (20,952,000) | (20,952,000) | (20,952,000) | ||||||||||
Equity contribution from parent | 28,142,000 | 50,000,000 | 50,000,000 | |||||||||||||
Subsidiary preferred stock dividends/dividends declared on preferred stock | (528,000) | (528,000) | (528,000) | (528,000) | (528,000) | (528,000) | ||||||||||
Dividends declared on common stock | (71,887,000) | (71,887,000) | (71,887,000) | (4,142,000) | (4,142,000) | (4,142,000) | (31,817,000) | (31,817,000) | ||||||||
Proceeds from stock option exercise | 7,028,000 | 7,028,000 | 7,028,000 | |||||||||||||
Awards of common stock | (15,451,000) | (15,451,000) | (15,451,000) | 0 | 0 | 0 | ||||||||||
Excess tax (shortfall) from stock-based payment arrangements | (15,000) | (15,000) | (15,000) | |||||||||||||
Stock based compensation expense | 5,634,000 | 5,634,000 | 5,634,000 | |||||||||||||
Valencia’s transactions with its owner | (17,006,000) | (17,006,000) | (17,006,000) | (17,006,000) | ||||||||||||
Equity contributions from parent | 28,142,000 | 28,142,000 | 28,142,000 | 0 | 0 | |||||||||||
Balance at Dec. 31, 2016 | 1,744,872,000 | 1,675,952,000 | 1,163,661,000 | (92,451,000) | 604,742,000 | 68,920,000 | 1,466,792,000 | 1,397,872,000 | 1,264,918,000 | (92,428,000) | 225,382,000 | 68,920,000 | ||||
Ending Balance at Dec. 31, 2016 | (92,451,000) | (92,428,000) | 593,235,000 | 64,000 | 454,166,000 | 139,005,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Reclassification of stranded income taxes resulting from tax reform (Note 11) | 0 | (17,586,000) | 17,586,000 | 0 | (17,794,000) | 17,794,000 | ||||||||||
Net earnings | 95,419,000 | 80,402,000 | 80,402,000 | 15,017,000 | 87,413,000 | 72,396,000 | 72,396,000 | 15,017,000 | ||||||||
Net Earnings | 72,396,000 | 35,559,000 | 35,559,000 | |||||||||||||
Total other comprehensive income (loss) | 14,097,000 | 14,097,000 | 14,097,000 | 13,129,000 | 13,129,000 | 13,129,000 | ||||||||||
Equity contribution from parent | 0 | 50,000,000 | 50,000,000 | |||||||||||||
Subsidiary preferred stock dividends/dividends declared on preferred stock | (528,000) | (528,000) | (528,000) | (528,000) | (528,000) | (528,000) | ||||||||||
Dividends declared on common stock | (79,056,000) | (79,056,000) | (79,056,000) | (60,695,000) | (60,695,000) | (60,695,000) | (44,389,000) | (44,389,000) | ||||||||
Proceeds from stock option exercise | 1,739,000 | 1,739,000 | 1,739,000 | |||||||||||||
Awards of common stock | (13,929,000) | (13,929,000) | (13,929,000) | 0 | 0 | 0 | ||||||||||
Stock based compensation expense | 6,194,000 | 6,194,000 | 6,194,000 | |||||||||||||
Valencia’s transactions with its owner | (17,742,000) | (17,742,000) | (17,742,000) | (17,742,000) | ||||||||||||
Balance at Dec. 31, 2017 | 1,761,448,000 | 1,695,253,000 | 1,157,665,000 | (95,940,000) | 633,528,000 | 66,195,000 | 1,488,369,000 | 1,422,174,000 | 1,264,918,000 | (97,093,000) | 254,349,000 | 66,195,000 | ||||
Ending Balance at Dec. 31, 2017 | 1,695,253,000 | (95,940,000) | 1,422,174,000 | (97,093,000) | 634,405,000 | 64,000 | 504,166,000 | 130,175,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Cumulative effect adjustment (Note 9) | 11,200,000 | |||||||||||||||
Reclassification of stranded income taxes resulting from tax reform (Note 11) | 17,600,000 | |||||||||||||||
Net earnings | 101,282,000 | 86,170,000 | 86,170,000 | 15,112,000 | 70,323,000 | 55,211,000 | 55,211,000 | 15,112,000 | ||||||||
Net Earnings | 55,211,000 | 51,591,000 | 51,591,000 | |||||||||||||
Total other comprehensive income (loss) | (1,536,000) | (1,536,000) | (1,536,000) | 0 | (2,121,000) | (2,121,000) | (2,121,000) | |||||||||
Equity contribution from parent | 0 | 30,000,000 | 30,000,000 | |||||||||||||
Subsidiary preferred stock dividends/dividends declared on preferred stock | (528,000) | (528,000) | (528,000) | (528,000) | (528,000) | (528,000) | ||||||||||
Dividends declared on common stock | (86,425,000) | (86,425,000) | (86,425,000) | (77,377,000) | (77,377,000) | (77,377,000) | (41,903,000) | (41,903,000) | ||||||||
Proceeds from stock option exercise | 963,000 | 963,000 | 963,000 | |||||||||||||
Awards of common stock | (12,635,000) | (12,635,000) | (12,635,000) | 0 | 0 | 0 | ||||||||||
Stock based compensation expense | 7,120,000 | 7,120,000 | 7,120,000 | |||||||||||||
Valencia’s transactions with its owner | (17,095,000) | (17,095,000) | (17,095,000) | (17,095,000) | ||||||||||||
Balance at Dec. 31, 2018 | 1,752,594,000 | $ 1,688,382,000 | $ 1,153,113,000 | (108,684,000) | $ 643,953,000 | $ 64,212,000 | 1,461,571,000 | $ 1,397,359,000 | $ 1,264,918,000 | (110,422,000) | $ 242,863,000 | $ 64,212,000 | ||||
Ending Balance at Dec. 31, 2018 | $ 1,688,382,000 | $ (108,684,000) | $ 1,397,359,000 | $ (110,422,000) | $ 674,093,000 | $ 64,000 | $ 534,166,000 | $ 139,863,000 |
Summary of the Business and Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Business and Significant Accounting Policies | Summary of the Business and Significant Accounting Policies Nature of Business PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s primary subsidiaries are PNM and TNMP. PNM is a public utility with regulated operations primarily engaged in the generation, transmission, and distribution of electricity. TNMP is a wholly-owned subsidiary of TNP, which is a holding company that is wholly-owned by PNMR. TNMP provides regulated transmission and distribution services in Texas. PNMR’s common stock trades on the New York Stock Exchange under the symbol PNM. Financial Statement Preparation and Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated. The Notes to Consolidated Financial Statements include disclosures for PNMR, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to PNMR, PNM, and TNMP. Discussions regarding only PNMR, PNM, or TNMP are so indicated. Certain amounts in the 2017 and 2016 Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2018 financial statement presentation. GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events as required by GAAP. Principles of Consolidation The Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia (Note 10) and, through January 15, 2016, the PVNGS Capital Trust. PNM owns undivided interests in several jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants. PNMR shared services’ expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include interest and income tax sharing payments, as well as equity transactions, and interconnection billings. All intercompany transactions and balances have been eliminated. See Note 20. Accounting for the Effects of Certain Types of Regulation The Company maintains its accounting records in accordance with the uniform system of accounts prescribed by FERC and adopted by the NMPRC and PUCT. Certain of the Company’s operations are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to the regulated operations. Regulators may assign costs to accounting periods that differ from accounting methods applied by non-regulated utilities. When it is probable that regulators will permit recovery of costs through future rates, costs are deferred as regulatory assets that otherwise would be expensed. Likewise, regulatory liabilities are recognized when it is probable that regulators will require refunds through future rates or when revenue is collected for expenditures that have not yet been incurred. GAAP also provides for the recognition of revenue and regulatory assets and liabilities associated with “alternative revenue programs” authorized by regulators. Such programs allow the utility to adjust future rates in response to past activities or completed events, if certain criteria are met, even for programs that do not otherwise qualify for recognition of regulatory assets and liabilities. Regulatory assets and liabilities are amortized into earnings over the authorized recovery period. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Information on regulatory assets and regulatory liabilities is contained in Note 13. In some circumstances, regulators allow a requested increase in rates to be implemented, subject to refund, before the regulatory process has been completed and a decision rendered by the regulator. When this occurs, the Company assesses the possible outcomes of the rate proceeding. The Company records a provision for refund to the extent the amounts being collected, subject to refund, exceed the amount the Company determines is probable of ultimately being allowed by the regulator. Cash and Restricted Cash Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. In November 2016, the FASB issued Accounting Standards Update 2016-18 - Statement of Cash Flows (Topic 230), which requires amounts generally described as restricted cash and restricted cash equivalents (collectively, “restricted cash”) to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statements of cash flows and adds disclosures necessary to reconcile such amounts to cash and cash equivalents on the balance sheets. ASU 2016-18 does not require that restricted cash be reflected as cash in the statement of financial position and does not provide a definition of what should be considered restricted cash. As of January 1, 2016, PNM held a deposit of $8.2 million from a third party that was restricted for PNM’s construction of transmission interconnection facilities for that party. During 2016, PNM utilized $7.2 million of such third-party deposits to offset construction costs for the interconnection facilities. The remaining $1.0 million was held as restricted cash until the second quarter of 2017, at which time a refund was made to the third party. The balances of this deposit arrangement were included in other current assets on the balance sheets of PNMR and PNM. Under the terms of the BTMU Term Loan agreement (Note 7), all cash of NM Capital was restricted to be used for payments required under that agreement or for taxes and fees. On May 22, 2018, Westmoreland repaid the Westmoreland Loan in full. NM Capital used a portion of the proceeds to repay all of its obligations under the BTMU Term Loan. These payments effectively terminated the loan agreements (Note 10). Cash held by NM Capital was included in cash and cash equivalents on the balance sheets of PNMR and was less than $0.1 million at December 31, 2017. The Company adopted ASU 2016-18 as of January 1, 2018, its required effective date. Upon adoption, ASU 2016-18 requires the use of a retrospective transition method for the statement of cash flows in each period presented. Accordingly, PNM made retrospective adjustments to its Consolidated Statements of Cash Flows to increase beginning cash, restricted cash, and equivalents by $8.2 million at January 1, 2016 and by $1.0 million January 1, 2017, and to reduce operating cash in-flows - other current assets by $7.2 million for the year ended December 31, 2016 and by $1.0 million for the year ended December 31, 2017. In addition, the beginning and ending balances of cash, restricted cash, and equivalents are presented on the Consolidated Statements of Cash Flows. No other changes were made to the Consolidated Financial Statements in connection with the adoption of ASU 2016-18. Utility Plant Utility plant is stated at original cost, which includes capitalized payroll-related costs such as taxes, pension, other fringe benefits, administrative costs, and AFUDC, where authorized by rate regulation, or capitalized interest. Repairs, including major maintenance activities, and minor replacements of property are expensed when incurred, except as required by regulators for ratemaking purposes. Major replacements are charged to utility plant. Gains, losses, and costs to remove resulting from retirements or other dispositions of regulated property in the normal course of business are credited or charged to accumulated depreciation. PNM and TNMP may receive reimbursements, referred to as CIAC, from customers to pay for all or part of certain construction projects to extent that project does not benefit regulated customers in general. PNM and TNMP account for these reimbursements as offsets to utility plant additions based on the requirements of the NMPRC, FERC, and PUCT. Due to the PUCT’s regulatory treatment of CIAC reimbursements, TNMP also receives a financing component that is recognized as other income on the Consolidated Statements of Earnings. Under the NMPRC regulatory treatment, PNM typically does not receive a financing component. Depreciation and Amortization PNM’s provision for depreciation and amortization of utility plant, other than nuclear fuel, is based upon straight-line rates approved by the NMPRC and FERC. Amortization of nuclear fuel is based on units-of-production. TNMP’s provision for depreciation and amortization of utility plant is based upon straight-line rates approved by the PUCT. Depreciation of non-utility property is computed based on the straight-line method. The provision for depreciation of certain equipment is allocated between operating expenses and construction projects based on the use of the equipment. Average straight-line rates used were as follows:
Allowance for Funds Used During Construction As provided by the FERC uniform systems of accounts, AFUDC is charged to regulated utility plant for construction projects. This allowance is designed to enable a utility to capitalize financing costs during periods of construction of property subject to rate regulation. It represents the cost of borrowed funds (allowance for borrowed funds used during construction or “debt AFUDC”) and a return on other funds (allowance for equity funds used during construction or “equity AFUDC”). The debt AFUDC is recorded in interest charges and the equity AFUDC is recorded in other income on the Consolidated Statements of Earnings. For the years ended December 31, 2018, 2017, and 2016, PNM recorded $6.1 million, $6.3 million, and $5.3 million of debt AFUDC and $8.2 million, $8.7 million, and $4.2 million of equity AFUDC. TNMP recorded $2.3 million, $1.2 million, and $0.9 million of debt AFUDC and $2.2 million, $0.9 million, and $0.8 million of equity AFUDC. Capitalized Interest The Company capitalizes interest on its construction projects and major computer software projects not subject to the computation of AFUDC. Capitalized interest is recorded in interest charges. Interest was capitalized at the overall weighted average borrowing rate of 5.6%, 5.9%, and 6.1% for 2018, 2017, and 2016. In 2018, 2017, and 2016, capitalized interest was $0.6 million, $1.3 million, and $1.8 million for PNMR consolidated; $0.2 million, $0.6 million, and $0.8 million for PNM; and less than $0.1 million, less than $0.1 million, and $0.1 million for TNMP. Materials, Supplies, and Fuel Stock Materials and supplies relate to transmission, distribution, and generating assets. Materials and supplies are charged to inventory when purchased and are expensed or capitalized as appropriate when issued. Materials and supplies are valued using an average costing method. Coal is valued using a rolling weighted average costing method that is updated based on the current period cost per ton. Periodic aerial surveys are performed on the coal piles and adjustments are made. Average cost is equal to net realizable value under the ratemaking process. Inventories consisted of the following at December 31:
Investments In 1985 and 1986, PNM entered into eleven operating leases for interests in certain PVNGS generation facilities (Note 8). The 10.3% and 10.15% lessor notes that were issued by the owners of the assets subject to these leases were subsequently purchased and held by the PVNGS Capital Trust, which was consolidated by PNM. The PVNGS Capital Trust held certain of the lessor notes to their maturities in January 2015 and January 2016. Upon final maturity of the lessor notes, the PVNGS Capital Trust ceased to exist. The PVNGS lessor notes were carried at amortized cost. PNM holds investment securities in the NDT for the purpose of funding its share of the decommissioning costs of PVNGS and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners (Note 16). Prior to 2018, PNM classified all debt and equity investments held in the NDT and coal mine reclamation trusts as available-for-sale securities. Effective January 1, 2018, the Company adopted Accounting Standards Update 2016-01 – Financial Instruments (Subtopic 825-10), which eliminates the requirement to classify investments in equity securities with readily determinable fair values into trading or available-for-sale categories and requires those equity securities to be measured at fair value with changes in fair value recognized in net income rather than in OCI. Under ASU 2016-01, the accounting for available-for-sale debt securities remains essentially unchanged. See Note 9. PNM evaluates the securities for impairment on an on-going basis. Since third party investment managers have sole discretion over the purchase and sales of the securities, PNM records a realized loss as an impairment for any available-for-sale security that has a market value that is less than cost at the end of each quarter. For the year ended December 31, 2018, PNM recorded impairment losses on the available-for-sale debt securities of $13.7 million. For the years ended December 31, 2017, and 2016, PNM recorded impairment losses on the available-for-sale securities, which included both debt and equity securities, of $7.1 million and $13.9 million. No gains or losses are deferred as regulatory assets or liabilities. Through December 31, 2017, unrealized gains on available-for-sale securities, net of related tax effects, are included in OCI and AOCI. In accordance with ASU 2016-01, unrealized gains on equity securities, net of related tax effects, were reclassified from AOCI to retained earnings on January 1, 2018. For the year ended December 31, 2018, unrealized gains recognized in OCI and AOCI, net of related tax effects, are related only to the available-for sale debt securities. These investments are primarily comprised of international, United States, state, and municipal government obligations and corporate debt securities. All investments are held in PNM’s name and are in the custody of major financial institutions. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in other income and deductions. Investment in NM Renewable Development, LLC On September 22, 2017, PNMR Development and AEP OnSite Partners created NMRD to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. PNMR Development and AEP OnSite Partners each have a 50% ownership interest in NMRD. In December 2017, PNMR Development made a contribution to NMRD of its interest in three 10 MW solar facilities it was constructing and assigned its interests in several agreements related to those facilities to NMRD. The facilities had a book value of $24.8 million, which approximated fair value at that time. AEP OnSite Partners made a cash contribution to NMRD equal to 50% of the value of the 30 MW solar capacity, amounting to $12.4 million, which cash was then distributed from NMRD to PNMR Development. During 2018 and 2017, PNMR Development and AEP OnSite Partners each made contributions of $9.6 million and $4.1 million to NMRD for its construction activities. At December 31, 2018, NMRD’s renewable energy capacity in operation is 33.9 MW, which includes 30 MW to supply energy to serve a data center in PNM’s service territory (Note 17) and 3.9 MW to supply energy to electric cooperatives located in New Mexico. PNMR accounts for its investment in NMRD using the equity method of accounting because PNMR’s ownership interest results in significant influence, but not control, over NMRD and its operations. PNMR records as income its percentage share of earnings or loss of NMRD and carries its investment at cost, adjusted for its share of undistributed earnings or losses. For the year ended December 31, 2018, NMRD had revenues of $3.1 million and net earnings of $1.0 million. For the year ended December 31, 2017, NMRD revenues, expenses, and net income were each less than $0.1 million. At December 31, 2018 and 2017, NMRD had $2.6 million and $6.0 million of current assets, $50.8 million and $30.9 million of property, plant, and equipment and other assets, $0.2 million and $3.9 million of current liabilities, and $53.2 million and $33.0 million of owners’ equity. Goodwill Under GAAP, the Company does not amortize goodwill. Goodwill is evaluated for impairment annually, or more frequently if events and circumstances indicate that the goodwill might be impaired. See Note 19. Asset Impairment Tangible long-lived assets are evaluated in relation to the estimated future undiscounted cash flows to assess recoverability when events and circumstances indicate that the assets might be impaired. See Note 16. Revenue Recognition See Note 4 for a discussion of electric operating revenues. Accounts Receivable and Allowance for Uncollectible Accounts Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company calculates the allowance for uncollectible accounts based on historical experience and estimated default rates. The accounts receivable balances are reviewed monthly and adjustments to the allowance for uncollectible accounts and bad debt expense are made as necessary. Amounts that are deemed uncollectible are written off. Amortization of Debt Acquisition Costs Discount, premium, and expense related to the issuance of long-term debt are amortized over the lives of the respective issues. Gains and losses incurred upon the early retirement of long-term debt are recognized in other income or other deductions, except for amounts recoverable through NMPRC, FERC, or PUCT regulation, which are recorded as regulatory assets or liabilities and amortized over the lives of the respective issues. Unamortized debt premium, discount, and expense related to long-term are reflected as part of the debt liabilities on the Consolidated Balance Sheets. Derivatives The Company records derivative instruments, including energy contracts, on the balance sheet as either an asset or liability measured at their fair value. GAAP requires that changes in the derivatives’ fair value be recognized currently in earnings unless specific hedge accounting criteria are met. For qualifying hedges, an entity must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. GAAP provides that the effective portion of the gain or loss on a derivative instrument designated and qualifying as a cash flow hedging instrument be reported as a component of AOCI and be reclassified into earnings in the period during which the hedged forecasted transaction affects earnings. See Note 7 and Note 9. The Company treats all forward commodity purchases and sales contracts subject to unplanned netting or “book-out” by the transmission provider as derivative instruments subject to mark-to-market accounting. GAAP provides guidance on whether realized gains and losses on derivative contracts not held for trading purposes should be reported on a net or gross basis and concludes such classification is a matter of judgment that depends on the relevant facts and circumstances. See Note 4. Decommissioning and Reclamation Costs In accordance with GAAP, PNM is only required to recognize and measure decommissioning liabilities for tangible long-lived assets for which a legal obligation exists. Nuclear decommissioning costs and related accruals are based on periodic site-specific estimates of the costs for removing all radioactive and other structures at PVNGS and are dependent upon numerous assumptions, including estimates of future decommissioning costs at current price levels, inflation rates, and discount rates. PNM’s accruals for PVNGS Units 1, 2, and 3, including portions held under leases, have been made based on such estimates, the guidelines of the NRC, and the extended PVNGS license periods. PVNGS Units 1 and 2 are included in PNM’s retail rates and PVNGS Unit 3 was excluded through December 31, 2017, but is included in retail rates beginning in 2018. See Note 16 and Note 17. See Note 17 for information concerning the treatment of nuclear decommissioning for the leased portions of PVNGS in the NMPRC’s order in PNM’s NM 2015 Rate Case and PNM’s appeal of that order. In connection with both the SJGS and Four Corners coal supply agreements, the owners are required to reimburse the mining companies for the cost of contemporaneous reclamation, as well as the costs for final reclamation of the coal mines. The reclamation costs are based on periodic site-specific studies that estimate the costs to be incurred in the future and are dependent upon numerous assumptions, including estimates of future reclamation costs at current price levels, inflation rates, and discount rates. PNM considers the contemporaneous reclamation costs part of the cost of its delivered coal costs. See Note 16 for a discussion of reclamation costs. Environmental Costs The normal operations of the Company involve activities and substances that expose the Company to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though the past acts may have been lawful at the time they occurred. The Company records its environmental liabilities when site assessments or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. The Company reviews its sites and measures the liability by assessing a range of reasonably likely costs for each identified site using currently available information and the probable level of involvement and financial condition of other potentially responsible parties. These estimates are based on assumptions regarding the costs for site investigations, remediation, operations and maintenance, monitoring, and site closure. The ultimate cost to clean up the Company’s identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process. Amounts recorded for environmental expense in the years ended December 31, 2018, 2017, and 2016, as well as the amounts of environmental liabilities at December 31, 2018 and 2017 were insignificant. Pension and Other Postretirement Benefits See Note 11 for a discussion of pension and postretirement benefits expense, including a discussion of the actuarial assumptions. Stock-Based Compensation See Note 12 for a discussion of stock-based compensation expense. Income Taxes Income taxes are recognized using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. In accordance with GAAP, all deferred taxes are reflected as non-current on the Consolidated Balance Sheets. Current NMPRC, FERC, and PUCT approved rates include the tax effects of the majority of these differences. GAAP requires that rate-regulated enterprises record deferred income taxes for temporary differences accorded flow-through treatment at the direction of a regulatory commission. The resulting deferred tax assets and liabilities are recorded based on the expected cash flow to be reflected in future rates. Because the NMPRC, FERC, and the PUCT have consistently permitted the recovery of tax effects previously flowed-through earnings, the Company has established regulatory liabilities and assets offsetting such deferred tax assets and liabilities. The Company recognizes only the impact of tax positions that, based on their merits, are more likely than not to be sustained upon an IRS audit. The Company defers investment tax credits and amortizes them over the estimated useful lives of the assets. See Note 18 for additional information, including a discussion of the impacts of the Tax Act. The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before taxes, which includes the earnings attributable to the Valencia non-controlling interest. GAAP also provides that certain unusual or infrequently occurring items, as well as adjustments due to enactment of new tax laws, be excluded from the estimated annual effective tax rate calculation. New Accounting Pronouncements Information concerning recently issued accounting pronouncements that have not been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates. Accounting Standards Update 2016-02 – Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02 to provide guidance on the recognition, measurement, presentation, and disclosure of leases. Effective January 1, 2019, ASU 2016-02 requires that a liability be recorded on the balance sheet for all leases, based on the present value of future lease obligations. A corresponding right-of-use asset will also be recorded. Amortization of the lease obligation and the right-of-use asset for certain leases, primarily those classified as operating leases, will be on a straight-line basis and other leases will be required to be accounted for as financing arrangements, which are recorded in a manner that is similar to the accounting for capital leases under current GAAP. ASU 2016-02 also revises certain disclosure requirements. ASU 2016-02 allows entities to apply certain practical expedients to arrangements that exist upon adoption of the standard and provides for other practical expedients that can be applied to leases commencing after the date of adoption. As discussed in Note 8, the Company has operating leases of office buildings, vehicles, and equipment. PNM also has operating lease interests in PVNGS Units 1 and 2 that will expire in January 2023 and 2024. In addition, the Company routinely enters into land easements and right-of-way agreements but only one such agreement with the Navajo Nation has been accounted for as a lease under current guidance. The Company will elect to use many of the practical expedients available upon adoption of the standard. As a result, the Company will continue to account for its leases, including its land lease agreement with the Navajo Nation, existing as of January 1, 2019 as operating leases until they expire or a modified. The Company will also elect the use of the practical expedient related to retrospective application of the standard and will adopt the standard prospectively, rather than restating prior periods to conform to the new guidance. As of January 1, 2019, PNMR, PNM, and TNMP will record operating lease obligations and corresponding right-of-use assets aggregating approximately $160 million, $146 million, and $12 million. These amounts reflect anticipated future cash flows associated with each operating lease, including the 2018 consumer price index requirement for the right-of-way lease on the Navajo Nation, discounted at PNMR’s, PNM’s, and TNMP’s fully collateralized borrowing rates, except for fleet operating leases which contain specified interest rates. The Company anticipates the majority of its fleet leases, and certain of its leases for office equipment, commencing after the effective date of the new standard will be recorded as financing leases. After the date of adoption, the Company anticipates it will elect the use of the practical expedient to combine the lease and non-lease components for its fleet and office building leases, and to elect the practical expedient allowing leases with expected terms of less than one-year to not be recorded on its Consolidated Balance Sheets. The standard also expands disclosure requirements related to leases, which will be provided beginning in 2019. Accounting Standards Update 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, which changes the way entities recognize impairment of many financial assets, including accounts receivable and investments in debt securities, by requiring immediate recognition of estimated credit losses expected to occur over the remaining lives of the assets. In November 2018, the FASB clarified that receivables arising from operating leases are not within the scope of Topic 326 for assets measured at amortized costs. Instead, impairments of receivables arising from operating leases should be accounted for in accordance with Topic 842. The Company anticipates adopting ASU 2016-13 effective as of January 1, 2020, its required effective date. The Company is in the process of analyzing the impacts of this new standard but does not anticipate it will have a significant impact on its financial statements. Accounting Standards Update 2017-04 – Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04 to simplify the annual goodwill impairment assessment process. Currently, the first step of a quantitative impairment test requires an entity to compare the fair value of each reporting unit containing goodwill with its carrying value (including goodwill). If as a result of this analysis, the entity concludes there is an indication of impairment in a reporting unit having goodwill, the entity is required to perform the second step of the impairment analysis, determining the amount of goodwill impairment to be recorded. The amount is calculated by comparing the implied fair value of the goodwill to its carrying amount. This exercise requires the entity to allocate the fair value determined in step one to the individual assets and liabilities of the reporting unit. Any remaining fair value would be the implied fair value of goodwill on the testing date. To the extent the recorded amount of goodwill of a reporting unit exceeds the implied fair value determined in step two, an impairment loss would be reflected in results of operations. ASU 2017-04 eliminates the second step of the impairment analysis. Accordingly, if the first step of a quantitative goodwill impairment analysis performed after adoption of ASU 2017-04 indicates that the fair value of a reporting unit is less than its carrying value, the goodwill of that reporting unit would be impaired to the extent of that difference. The Company anticipates it will adopt ASU 2017-04 for impairment testing after January 1, 2020, its required effective date, although early adoption is permitted. However, if there is an indication of potential impairment of goodwill as a result of an impairment assessment prior to 2020, the Company will evaluate the impact of ASU 2017-04 and could elect to early adopt this standard. Accounting Standards Update 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12 to better align hedge accounting with an organization’s risk management activities and to simplify the application of hedge accounting guidance. ASU 2017-12 is effective for the Company on January 1, 2019 although early adoption is permitted. At adoption, ASU 2017-12 is to be applied prospectively and allows entities to record a cumulative-effect adjustment at the transition date as well as allowing entities to elect certain practical expedients upon adoption. As discussed in Note 7, the Company periodically enters into, and designates as cash flow hedges, interest rate swaps to hedge its exposure to changes in interest rates. In addition, as discussed in Note 9, the Company enters into various derivative instruments to economically hedge the risk of changes in commodity prices, which are not currently designated as cash flow hedges. Beginning on January 1, 2018, PNM’s capacity in PVNGS Unit 3 is being used as a resource to serve NM retail customers (Note 16). As a result, the Company’s exposure to fluctuations in commodity prices, as well as its use of economic hedging transactions, has been significantly reduced. The Company will adopt ASU 2017-12 on its January 1, 2019 effective date and does not anticipate the changes will have a significant impact on the Company’s financial statements. Accounting Standards Update 2018-13 – Fair Value Measurements (Topic 820) Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurements In August 2018, the FASB issued ASU 2018-13 to improve fair value disclosures. ASU 2018-13 eliminates certain disclosure requirements related to transfers between Levels 1 and 2 of the fair value hierarchy and the requirement to disclose the valuation process for Level 3 fair value measurements. ASU 2018-13 also amends certain disclosure requirements for investments measured at net asset value and requires new disclosures for Level 3 investments, including a new requirement to disclose changes in unrealized gains or losses recorded in OCI related to Level 3 fair value measurements. ASU 2018-13 is effective for the Company beginning on January 1, 2020 and permits entities to adopt all or certain elements of the new guidance prior to its effective date. ASU 2018-13 requires retrospective application, except for the new disclosures related to Level 3 investments which are to be applied prospectively. As discussed in Note 9, PNM and TNMP have investment securities in trusts for decommissioning, reclamation, pension benefits, and other postretirement benefits, which are measured at fair value. Certain investments in these trusts are measured at net asset value per share. These trusts also hold Level 3 investments. The Company is evaluating the requirements of ASU 2018-13, but does not anticipate it will have a significant impact on the Company’s fair value disclosures. Accounting Standards Update 2018-14 – Compensation - Retirement Benefits - Defined Benefit Plans (Topic 715) Disclosure Framework: Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14 to improve benefit plan sponsors’ disclosures for defined benefit pension and other post-employment benefit plans. ASU 2018-14 removes the requirement to disclose the amounts in other comprehensive income expected to be recognized as benefit cost over the next fiscal year and the requirement to disclose the impact of a one-percentage-point change in the assumed health care cost trend rate; clarifies the disclosure requirements for plans with assets that are less than their projected benefit, or accumulated benefit obligation; and requires significant gains and losses affecting benefit obligations during the period be disclosed. ASU 2018-14 is effective for the Company on January 1, 2021, although early adoption is permitted, and requires retrospective application. As discussed in Note 11, PNM and TNMP maintain qualified defined benefit, other postretirement benefit plans providing medical and dental benefits, and executive retirement programs. The Company is in the process of evaluating the requirements of ASU 2018-14 but does not anticipate these changes will have a significant impact on the Company’s defined benefit and other postretirement benefit plan disclosures. Accounting Standards Update 2018-15 – Intangibles - Goodwill and Other - Internal Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for implementation costs incurred to develop or obtain internal-use software. Under ASU 2018-15, entities are required to capitalize implementation costs for hosting arrangements if those costs meet the capitalization requirements for internal-use software arrangements. ASU 2018-15 requires entities to present cash flows, capitalized costs, and amortization expense in the same financial statement line items as other costs incurred for such hosting arrangements. ASU 2018-15 is effective for the Company on January 1, 2020, although early adoption is permitted, and allows entities to apply the new requirements retrospectively or prospectively. The Company is in the process of analyzing the impacts of this new standard. Accounting Standards Update 2018-18 - Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 In November 2018, the FASB issued ASU 2018-18 to clarify transactions between collaborative arrangement participants that should be recognized as revenue under Topic 606. ASU 2018-18 is effective for the Company on January 1, 2020, although early adoption is permitted, and requires retrospective application. The Company has collaborative arrangements related to its interests in SJGS, Four Corners, PVNGS, and Luna. The Company believes its current accounting practices comply with the requirements of ASU 2018-18 but is in the process of analyzing the impacts of the new standard. |
Segment Information |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided. PNM PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, as well as providing transmission services to third parties. The sale of electricity includes the asset optimization of PNM’s jurisdictional capacity as well as the capacity excluded from retail rates. FERC has jurisdiction over wholesale power and transmission rates. TNMP TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities. Corporate and Other The Corporate and Other segment includes PNMR holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development, NM Capital, and the equity method investment in NMRD are also included in Corporate and Other. Eliminations of intercompany income and expense transactions are reflected in the Corporate and Other segment. PNMR SEGMENT INFORMATION The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.
The Company defines utility margin as electric operating revenues less cost of energy. Cost of energy consists primarily of fuel and purchase power costs for PNM and costs charged by third-party transmission providers for TNMP. The Company believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since substantially all such costs are offset in revenues as fuel and purchase power costs are passed through to customers under PNM’s FPPAC and third-party transmission costs are passed on to customers through TNMP’s transmission cost recovery factor. Utility margin is not a financial measure required to be presented under GAAP and is considered a non-GAAP measure. Major Customers No individual customer accounted for more than 10% of the electric operating revenues of PNMR or PNM. Three REPs accounted for more than 10% of the electric operating revenues of TNMP, as follows:
|
Accumulated Other Comprehensive Income (Loss) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) AOCI reports a measure for accumulated changes in equity that result from transactions and other economic events other than transactions with shareholders. Information regarding AOCI is as follows:
The Consolidated Statements of Earnings include pre-tax amounts reclassified from AOCI related to Unrealized Gains on Available-for-Sale Securities in gains (losses) on investment securities, related to Pension Liability Adjustment in other(deductions), and related to Fair Value Adjustment for Cash Flow Hedges in interest charges. The income tax impacts of all amounts reclassified from AOCI are included in income taxes in the Consolidated Statements of Earnings. |
Electric Operating Revenue |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric Operating Revenue | Electric Operating Revenues PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are PNM and TNMP. Revenue Recognition Electric operating revenues are recorded in the period of energy delivery, which includes estimated amounts for service rendered but unbilled at the end of each accounting period. The determination of the energy sales billed to individual customers is based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading and the corresponding unbilled revenue are estimated. Unbilled electric revenue is estimated based on daily generation volumes, estimated customer usage by class, line losses, historical trends and experience, and applicable customer rates. Amounts billed are generally due within the next month. The Company does not incur incremental costs to obtain contracts for its energy services. PNM’s wholesale electricity sales are recorded as electric operating revenues and wholesale electricity purchases are recorded as costs of energy sold. In accordance with GAAP, derivative contracts that are subject to unplanned netting are recorded net in earnings. A “book-out” is the planned or unplanned netting of off-setting purchase and sale transactions. A book-out is a transmission mechanism to reduce congestion on the transmission system or administrative burden. For accounting purposes, a book-out is the recording of net revenues upon the settlement of a derivative contract. Unrealized gains and losses on derivative contracts that are not designated for hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power and fuel supply agreements, used to hedge generation assets and purchased power costs. Changes in the fair value of economic hedges are reflected in results of operations, with changes related to economic hedges on sales included in operating revenues and changes related to economic hedges on purchases included in cost of energy sold (Note 9). In May 2014, the FASB issued ASU 2014-09 – Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also revises the disclosure requirements regarding revenue and requires that revenue from contracts with customers be reported separately from other revenues. ASU 2014-09 provides that it could be applied retrospectively to each prior period presented or on a modified retrospective basis with a cumulative effect adjustment to retained earnings on the date of adoption. The Company adopted ASU 2014-09 effective as of January 1, 2018, its required effective date, using the modified retrospective method of adoption. The adoption of ASU 2014-09 did not result in changes to the nature, amount, and timing of the Company’s existing revenue recognition processes or information technology infrastructure. Therefore, the adoption of ASU 2014-09 had no effect on the amount of revenue recorded in 2018 compared to the amount that would have been recorded under prior GAAP, no effect on total electric operating revenues or any other caption within the Company’s financial statements, and no cumulative effect adjustment was recorded. Revenues for 2018 are presented in accordance with the standard on the Consolidated Statements of Earnings and 2017 and 2016 revenues are presented on a comparative basis. Additional disclosures to further disaggregate 2018 revenues are presented below. Under ASU 2014-09, PNM and TNMP recognize revenue as they satisfy performance obligations, which typically occurs as the customer or end-user consumes the electric service provided. Electric services are typically for a bundle of services that are distinct and transferred to the end-user in one performance obligation measured by KWh or KW. Electric operating revenues are recorded in the period of energy delivery, including estimated unbilled amounts. As permitted under GAAP, the Company has elected to exclude all sales and similar taxes from revenue. Revenue from contracts with customers is recorded based upon the total authorized tariff price at the time electric service is rendered, including amounts billed under arrangements qualifying as an Alternative Revenue Program (“ARP”). ARP arrangements are agreements between PNM or TNMP and its regulator that allows PNM or TNMP to adjust future rates in response to past activities or completed events, if certain criteria are met. GAAP requires that ARP revenues be reported separately from contracts with customers. ARP revenues in a given period include the recognition of “originating” ARP revenues (i.e. when the regulator-specific conditions are met) in the period, offset by the reversal of ARP revenues billed to customers in that period. Sources of Revenue Additional information about the nature of revenues is provided below. Additional information about matters affecting PNM’s and TNMP’s regulated revenues is provided in Note 17. Revenue from Contracts with Customers PNM NMPRC Regulated Retail Electric Service – PNM provides electric generation, transmission, and distribution service to its rate-regulated customers in New Mexico. PNM’s retail electric service territory covers a large area of north central New Mexico, including the cities of Albuquerque, Rio Rancho, and Santa Fe, and certain areas of southern New Mexico. Customer rates for retail electric service are set by the NMPRC and revenue is recognized as energy is delivered to the customer. PNM invoices customers on a monthly basis for electric service and generally collects billed amounts within one month. Transmission Service to Third Parties – PNM owns transmission lines that are interconnected with other utilities in New Mexico, Texas, Arizona, Colorado, and Utah. Transmission customers receive service for the transmission of energy owned by the customer utilizing PNM’s transmission facilities. Customers generally receive transmission services, which are regulated by FERC, from PNM through PNM’s Open Access Transmission Tariff (“OATT”) or a specific contract. Customers are billed based on capacity and energy components on a monthly basis. Other – On January 1, 2018, PNM acquired a 65 MW interest in SJGS Unit 4, which is held as merchant plant as ordered by the NMPRC (Note 16). PNM sells power from 36 MW of this capacity to a third party at a fixed price that is recorded as revenue from contracts with customers. PNM is obligated to deliver power under this arrangement only when SJGS Unit 4 is operating. Other market sales from this 65 MW interest are recorded in other electric operating revenues. TNMP PUCT Regulated Retail Electric Service – TNMP provides transmission and distribution services in Texas under the provisions of TECA and the Texas Public Utility Regulatory Act. TNMP is subject to traditional cost-of-service regulation with respect to rates and service under the jurisdiction of the PUCT and certain municipalities. TNMP’s transmission and distribution activities are solely within ERCOT and not subject to traditional rate regulation by FERC. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. Revenue is recognized as energy is delivered to the consumer. TNMP invoices REPs on a monthly basis and is generally paid within a month. Transmission Cost of Service (“TCOS”) – TNMP is a transmission service provider that is allowed to recover its TCOS through a network transmission rate that is approved by the PUCT. TCOS customers are other utilities that receive service for the transmission of energy owned by the customer utilizing TNMP’s transmission facilities. Alternative Revenue Programs ARP revenues, which are discussed above, include recovery or refund provisions under PNM’s renewable energy rider and true-ups to PNM’s formula transmission rates; TNMP’s AMS surcharge, transmission cost recovery factor, and the impacts of the PUCT’s January 25, 2018 order regarding the change in the federal corporate income tax rate; and the energy efficiency incentive bonus at both PNM and TNMP. GAAP provides for the recognition of regulatory assets and liabilities for the difference between ARP revenues and amounts billed under those programs. Regulatory assets and liabilities are amortized into earnings as amounts are billed. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Other Electric Operating Revenues Other electric operating revenues consist primarily of PNM’s sales for resale meeting the definition of a derivative under GAAP. Derivatives are not considered contracts with customers under ASU 2014-09. PNM engages in activities meeting the definition of derivatives to optimize its existing jurisdictional assets and long-term power agreements through spot market, hour-ahead, day-ahead, week-ahead, month-ahead, and other sales of excess generation not required to fulfill retail load and contractual commitments. Through December 31, 2017, PNM’s 134 MW share of Unit 3 at PVNGS was excluded from retail rates and was being sold in the wholesale market. In December 2015, the NMPRC approved PNM’s request to include PVNGS Unit 3 as a jurisdictional resource to service New Mexico retail customers beginning in 2018. Disaggregation of Revenues A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects ARP revenues and other revenues.
Contract balances Performance obligations related to contracts with customers are typically satisfied when the energy is delivered and the customer or end-user utilizes the energy. Accounts receivable from customers represent amounts billed to the customer or end-user, including amounts under ARP programs. For PNM, accounts receivable reflected on the Consolidated Balance Sheets, net of allowance for uncollectible accounts, includes $61.7 million and $61.8 million at December 31, 2018 and 2017 resulting from contracts with customers. All of TNMP’s accounts receivable results from contracts with customers. Contract assets are an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). The Company has no contract assets as of December 31, 2018. Contract liabilities arise when consideration is received in advance from a customer before satisfying the performance obligations. Therefore, revenue is deferred and not recognized until the obligation is satisfied. Under its OATT, PNM accepts upfront consideration for capacity reservations requested by transmission customers, which requires PNM to defer the customer’s transmission capacity rights for a specific period of time. PNM recognizes the revenue of these capacity reservations over the period it defers the customer’s capacity rights. Other utilities pay PNM and TNMP in advance for the joint-use of their utility poles. These revenues are recognized over the period of time specified in the joint-use contract, typically for one calendar year. Deferred revenues on these arrangements are recorded as contract liabilities. The Company has no other arrangements with remaining performance obligations to which a portion of the transaction price would be required to be allocated. Changes during the period in the balances of contract liabilities, which are included in other current liabilities on the Consolidated Balance Sheets, are as follows:
|
Earnings and Dividends Per Share |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings and Dividends Per Share | Earnings and Dividends Per Share In accordance with GAAP, dual presentation of basic and diluted earnings per share has been presented in the Consolidated Statements of Earnings of PNMR. Information regarding the computation of earnings per share and dividends per share is as follows:
|
Stockholders' Equity |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock and Equity Contributions PNMR, PNM, and TNMP did not issue any common stock during the three-year period ended December 31, 2018. PNMR funded cash equity contributions of zero in 2018 and 2017, and $28.1 million in 2016 to PNM, and $30.0 million in 2018 and $50.0 million in each of 2017 and 2016 to TNMP. PNMR offers shares of PNMR common stock through the PNMR Direct Plan. PNMR utilizes shares of its common stock purchased on the open market, by an independent agent, rather than issuing additional shares to satisfy subscriptions under the PNMR Direct Plan. The shares of PNMR common stock utilized in the PNMR Direct Plan are offered under a SEC shelf registration statement that expires in March 2021. Dividends on Common Stock The declaration of common dividends by PNMR is dependent upon a number of factors, including the ability of PNMR’s subsidiaries to pay dividends. PNMR’s primary sources of dividends are its operating subsidiaries. PNM declared and paid cash dividends to PNMR of $77.4 million, $60.7 million, and $4.1 million in 2018, 2017, and 2016. TNMP declared and paid cash dividends to PNMR of $41.9 million, $44.4 million, and $31.8 million in 2018, 2017, and 2016. The NMPRC has placed certain restrictions on the ability of PNM to pay dividends to PNMR, including the restriction that PNM cannot pay dividends that cause its debt rating to fall below investment grade. The NMPRC provisions allow PNM to pay dividends, without prior NMPRC approval, from current earnings, which is determined on a rolling four quarter basis, or from equity contributions previously made by PNMR. The Federal Power Act also imposes certain restrictions on dividends by public utilities, including that dividends cannot be paid from paid-in capital. Prior to July 2018, the Company’s revolving credit facilities and term loans contained a covenant requiring the maintenance of debt-to-capitalization ratios of not more than 65%. In July 2018, PNMR’s revolving credit facility and term loans were amended such that PNMR is now required to maintain a debt-to-capitalization ratio of not more than 70%. The debt-to-capitalization ratio requirements remain at less than or equal 65% for the PNM and TNMP. These debt-to-capitalization ratio requirements could limit the amounts of dividends that could be paid. PNM also has other financial covenants that limit the transfer of assets, through dividends or other means, including a requirement to obtain the approval of certain financial counterparties to transfer more than five percent of PNM’s assets. As of December 31, 2018: none of the numerical tests would restrict the payment of dividends from the retained earnings of TNMP; the 65% debt-to-capitalization covenant would allow the payment of dividends by PNM of up to $242.8 million; and the 70% debt-to-capitalization covenant would allow the payment of dividends by PNMR of up to $306.8 million. In addition, the ability of PNMR to declare dividends is dependent upon the extent to which cash flows will support dividends, the availability of retained earnings, financial circumstances and performance, current and future regulatory decisions, Congressional and legislative acts, and economic conditions. Conditions imposed by the NMPRC or PUCT, future growth plans and related capital requirements, and business considerations may also affect PNMR’s ability to pay dividends. Preferred Stock PNM’s cumulative preferred shares outstanding bear dividends at 4.58% per annum. PNM preferred stock does not have a mandatory redemption requirement, but may be redeemed, at PNM’s option, at 102% of the stated value plus accrued dividends. The holders of the PNM preferred stock are entitled to payment before the holders of common stock in the event of any liquidation or dissolution or distribution of assets of PNM. In addition, PNM’s preferred stock is not entitled to a sinking fund and cannot be converted into any other class of stock of PNM. PNMR and TNMP have no preferred stock outstanding. The authorized shares of PNMR and TNMP preferred stock are 10 million shares and 1 million shares. |
Financing |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing | Financing The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities or refinance other debt. Prior to July 2018, each of the Company’s revolving credit facilities and term loans contained a single financial covenant, which required the maintenance of a debt-to-capitalization ratio of less than or equal to 65%. In July 2018, the PNMR Revolving Credit Facility, the PNMR Development Revolving credit facility, and PNMR’s term loans were each amended such that PNMR is now required to maintain a debt-to-capitalization ratio of less than or equal to 70%. The debt-to-capitalization ratio requirement remains at less than or equal to 65% for the PNM and TNMP agreements. The Company’s revolving credit facilities and term loans generally also contain customary covenants, events of default-cross default provisions, and change-of-control provisions. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual short-term financing plan with the NMPRC. Financing Activities PNMR At January 1, 2016, PNMR had outstanding the $150.0 million PNMR Term Loan, which matured and was repaid on December 21, 2016. At January 1, 2016, PNMR had outstanding the $150.0 million PNMR 2015 Term Loan, which matured and was repaid on March 9, 2018. As discussed in Note 16, NM Capital, a wholly-owned subsidiary of PNMR, entered into a $125.0 million term loan agreement (the “BTMU Term Loan”) with BTMU, as lender and administrative agent, as of February 1, 2016. The BTMU Term Loan had a maturity date of February 1, 2021 and bore interest at a rate based on LIBOR plus a customary spread. PNMR, as parent company of NM Capital, guaranteed NM Capital’s obligations to BTMU. NM Capital utilized the proceeds of the BTMU Term Loan to provide funding of $125.0 million (the “Westmoreland Loan”) to a ring-fenced, bankruptcy-remote, special-purpose entity subsidiary of Westmoreland to finance Westmoreland’s purchase of SJCC. The BTMU Term Loan agreement required that NM Capital utilize all amounts, less taxes and fees, it received under the Westmoreland Loan to repay the BTMU Term Loan. On May 22, 2018, the full principal balance outstanding under the Westmoreland Loan of $50.1 million was repaid. NM Capital used a portion of the proceeds to repay all remaining principal of $43.0 million owed under the BTMU Term Loan. These payments effectively terminated the loan agreements. In addition, PNMR’s guarantee of NM Capital’s obligations was also effectively terminated. See Note 10. On October 21, 2016, PNMR entered into letter of credit arrangements with JPMorgan Chase Bank, N.A. (the “JPM LOC Facility”) under which letters of credit aggregating $30.3 million were issued to facilitate the posting of reclamation bonds, which SJCC is required to post in connection with permits relating to the operation of the San Juan mine (Note 16). On December 21, 2016, PNMR entered into two term loan agreements: (1) a $100.0 million term loan agreement (the “PNMR 2016 One-Year Term Loan”) among PNMR, the lenders identified therein, and Wells Fargo Bank, National Association, as administrative agent, that was to mature on December 21, 2017; and (2) a $100.0 million term loan agreement (the “PNMR 2016 Two-Year Term Loan”) among PNMR and JPMorgan Chase Bank, N.A., as lender and administrative agent, that matured on December 21, 2018. The proceeds of these term loans were used to repay the $150.0 million PNMR Term Loan and to reduce borrowings under the PNMR Revolving Credit Facility. On December 15, 2017, the PNMR 2016 One-Year Term Loan was extended to December 14, 2018. On March 9, 2018, PNMR issued $300.0 million aggregate principal amount of 3.250% SUNs (the “PNMR 2018 SUNs”), which mature on March 9, 2021. The proceeds from the offering were used to repay the $150.0 million PNMR 2015 Term Loan that was due on March 9, 2018 and to reduce borrowings under the PNMR Revolving Credit Facility. On November 26, 2018, PNMR Development entered into a $90.0 million term loan agreement (the “PNMR Development Term Loan”), among PNMR Development and KeyBank, N.A., as administrative agent and sole lender. Proceeds from the PNMR Development Term Loan were used to repay short-term borrowings under the PNMR Development’s revolving credit facility and to repay borrowings under its intercompany loan from PNMR. The PNMR Development Term Loan bears interest at a variable rate, which was 3.32% on December 31, 2018, and matures on November 26, 2020. PNMR, as parent company of PNMR Development, has guaranteed PNMR Development’s obligations under the loan. The PNMR Development Term Loan requires PNMR to maintain a debt-to-capitalization ratio of less than or equal to 70%, and contains customary events of default, a cross-default provision, and a change-of-control provision. On December 14, 2018, PNMR entered into a $150.0 million term loan agreement (the “PNMR 2018 One-Year Term Loan”) among PNMR, the lenders identified therein, and MUFG Bank, Ltd., as administrative agent. The proceeds from the PNMR 2018 One-Year Term Loan were used to repay the PNMR 2016 One-Year Term Loan (as extended), a portion of the PNMR 2016 Two-Year Term Loan, and for general corporate purposes. The PNMR 2018 One-Year Term Loan bears interest at a variable rate, which was 3.20% at December 31, 2018, and matures on December 13, 2019. On December 21, 2018, PNMR entered into a $50.0 million term loan agreement (the “PNMR 2018 Two-Year Term Loan”), between PNMR and Bank of America, N.A. as sole lender. Proceeds from the PNMR 2018 Two-Year Term Loan were used to repay the remaining amount owed under the PNMR 2016 Two-Year Term Loan and for general corporate purposes. The PNMR 2018 Two-Year Term Loan bears interest at a variable rate, which was 3.28% at December 31, 2018, and matures on December 21, 2020. PNMR has an automatic shelf registration that provides for the issuance of various types of debt and equity securities that expires in March 2021. PNM At January 1, 2016, PNM had a $125.0 million multi-draw term loan facility (the “PNM Multi-draw Term Loan”) that had a maturity date of June 21, 2016. The PNM Multi-draw Term Loan was repaid on May 20, 2016. On May 20, 2016, PNM entered into a $175.0 million term loan agreement (the “PNM 2016 Term Loan”) between PNM and JPMorgan Chase Bank, N.A., as lender and administrative agent. The PNM 2016 Term Loan bore interest at a variable rate and had a maturity date of November 17, 2017. PNM used a portion of the proceeds of the PNM 2016 Term Loan to prepay without penalty the $125.0 million outstanding under the PNM Multi-draw Term Loan. The PNM 2016 Term Loan was repaid on July 20, 2017. On September 27, 2016, PNM participated in the issuance and sale of an aggregate of $146.0 million of PCRBs by the City of Farmington, New Mexico. The proceeds from the sale were utilized to refund an aggregate of $146.0 million of outstanding PCRBs previously issued by the City of Farmington. The arrangements governing the PCRBs result in PNM reflecting the bonds as debt on its financial statements. The PCRBs bear interest at a rate of 1.875% for the period from September 27, 2016 through September 30, 2021, have a mandatory tender for remarketing on October 1, 2021, and a final maturity on April 1, 2033. At January 1, 2016, PNM had $37.0 million of outstanding PCRBs, which have a final maturity of June 1, 2040, and $20.0 million of outstanding PCRBs which have a final maturity of June 1, 2042. These PCRBs were subject to mandatory tender for remarketing on June 1, 2017 and were successfully remarketed on that date. The $37.0 million of PCRBs now bear interest at 2.125% and the $20.0 million of PCRBs now bear interest at 2.45%. Both series are now subject to mandatory tender for remarketing on June 1, 2022. On July 20, 2017, PNM entered into a $200.0 million term loan agreement (the “PNM 2017 Term Loan”) between PNM and JPMorgan Chase Bank, N.A., as lender and administrative agent, and U.S. Bank National Association, as lender. The PNM 2017 Term Loan bore interest at a variable rate, which was 3.26% at December 31, 2018, and was repaid on January 18, 2019. PNM used the proceeds of the PNM 2017 Term Loan to prepay without penalty the $175.0 million PNM 2016 Term Loan and to reduce short-term borrowings. On July 28, 2017, PNM entered into an agreement (the “PNM 2017 Senior Unsecured Note Agreement”) with institutional investors for the sale of $450.0 million aggregate principal amount of eight series of Senior Unsecured Notes (the “PNM 2018 SUNs”) offered in private placement transactions. On May 14, 2018 PNM issued $350.0 million of the PNM 2018 SUNs under that agreement (at fixed annual interest rates ranging from 3.15% to 4.50% for terms between 5 and 30 years) and used the proceeds to repay an equal amount of PNM’s 7.95% SUNs that matured on May 15, 2018. On July 31, 2018, PNM issued the remaining $100.0 million of the PNM 2018 SUNs (at fixed annual interest rates of 3.78% and 4.60% for terms of 10 and 30 years) and used the proceeds to repay an equal amount of PNM’s 7.50% SUNs on August 1, 2018. The PNM 2017 Senior Unsecured Note Agreement includes customary covenants, including a covenant that requires the maintenance of a debt-to-capitalization ratio of less than or equal to 65%, customary events of default, including a cross-default provision, and covenants regarding parity of financial covenants, liens and guarantees with respect to PNM’s material credit facilities. In the event of a change of control, PNM will be required to offer to prepay the PNM 2018 SUNs at par. PNM will have the right to redeem any or all of the PNM 2018 SUNs prior to their respective maturities, subject to payment of a customary make-whole premium. On April 9, 2018, PNMR Development deposited $68.2 million with PNM related to potential transmission network interconnections, which is shown as a cash inflow from financing activities on PNM’s Consolidated Statements of Cash Flows. PNM used the deposit to repay intercompany borrowings. PNM is required to pay interest to PNMR Development to the extent work under the interconnections has not been performed. During the year ended December 31, 2018, PNM recognized $2.4 million of interest expense under the agreement. At December 31, 2018, PNM’s remaining obligation under the interconnection agreement with PNMR Development of $68.2 million, excluding unpaid interest, is reflected in other deferred credits on PNM’s Consolidated Balance Sheets. As required by GAAP, all intercompany transactions related to this deposit have been eliminated on PNMR’s Consolidated Financial Statements. On January 18, 2019, PNM entered into a $250.0 million term loan agreement (the “PNM 2019 Term Loan”) among PNM, the lenders identified therein, and U.S. Bank N.A., as administrative agent. PNM used the proceeds of the PNM 2019 Term Loan to repay the PNM 2017 Term Loan, short-term borrowings under the PNM Revolving Credit Facility, and for general corporate purposes. The PNM 2019 Term Loan bears interest at a variable rate, which was 3.13% at February 22, 2019, and must be repaid on or before July 17, 2020. PNM has a shelf registration statement, which will expire in May 2020, with capacity for the issuance of up to $475.0 million of senior unsecured notes. TNMP On December 17, 2015, TNMP entered into an agreement which provided that TNMP would issue $60.0 million aggregate principal amount of 3.53% first mortgage bonds, due 2026 on or about February 10, 2016, subject to satisfaction of certain conditions. TNMP issued the bonds on February 10, 2016 and used the proceeds to reduce short-term debt and intercompany debt. On June 14, 2017, TNMP entered into an agreement which provided TNMP would issue $60.0 million aggregate principal amount of 3.22% first mortgage bonds, due 2027 on or about August 25, 2017, subject to satisfaction of certain conditions. TNMP issued the bonds on August 24, 2017 and used the proceeds to reduce short-term and intercompany debt and for general corporate purposes. On June 28, 2018, TNMP entered into an agreement under which TNMP issued $60.0 million aggregate principal amount of 3.85% first mortgage bonds, due 2028. On July 25, 2018, TNMP entered into a $20.0 million term loan agreement. On December 17, 2018, the TNMP 2018 Term Loan agreement was amended to provide additional funding of $15.0 million, which results in a total committed amount of $35.0 million under the agreement (the “TNMP 2018 Term Loan”). The TNMP 2018 Term Loan bears interest at a variable rate, which was 3.22% at December 31, 2018, and matures on July 25, 2020. TNMP used the proceeds from these issuances to repay short-term borrowings and for TNMP’s general corporate purposes. On February 26, 2019, TNMP entered into the TNMP 2019 Bond Purchase Agreement with institutional investors for the sale of $305.0 million aggregate principal amount of four series of TNMP first mortgage bonds (the “TNMP 2019 Bonds”) offered in private placement transactions. TNMP is required to issue specified amounts of the TNMP 2019 Bonds on March 29, 2019 and on or before July 1, 2019. The issuances of the TNMP 2019 Bonds are subject to the satisfaction of customary conditions, including continuing compliance with the representations, warranties and covenants of the TNMP 2019 Bond Purchase Agreement. TNMP will use the proceeds from the TNMP 2019 Bonds to repay $172.3 million 9.50% first mortgage bonds at their maturity on April 1, 2019, as well as to repay borrowings under the TNMP Revolving Credit Facility and for other general corporate purposes. The terms of the TNMP 2019 Bond Purchase Agreement include customary covenants, including a covenant that requires TNMP to maintain a debt-to-capitalization ratio of less than or equal to 65%, customary events of default, a cross-default provision, and a change-of-control provision. TNMP will have the right to redeem any or all of the TNMP 2019 Bonds prior to their respective maturities, subject to payment of a customary make-whole premium. Information concerning the funding dates, maturities and interest rates on the TNMP 2019 Bonds to be issued in March 2019 and on or before July 1, 2019 is as follows:
Interest Rate Hedging Activities In September 2015, PNMR entered into a hedging agreement whereby it effectively established a fixed interest rate of 1.927% for borrowings under the PNMR 2015 Term Loan for the period from January 11, 2016 through its maturity on March 9, 2018. In 2017, PNMR entered into three separate four-year hedging agreements whereby it effectively established fixed interest rates of 1.926%, 1.823%, and 1.629%, plus customary spreads over LIBOR, subject to change if there is a change in PNMR’s credit rating, for three separate tranches, each of $50.0 million, of its variable rate debt. These hedge agreements are accounted for as cash flow hedges. These hedge agreements had fair value gains totaling $1.0 million at December 31, 2018 that is included in other deferred charges and $1.4 million at December 31, 2017 that is included in other current assets on the Consolidated Balance Sheets. The fair values were determined using Level 2 inputs under GAAP, including using forward LIBOR curves under the mid-market convention to discount cash flows over the remaining term of the agreement. Borrowing Arrangements Between PNMR and its Subsidiaries PNMR has one-year intercompany loan agreements with its subsidiaries. Individual subsidiary loan agreements vary in amount up to $100.0 million and have either reciprocal or non-reciprocal terms. Interest charged to the subsidiaries is equivalent to interest paid by PNMR on its short-term borrowings or the money-market interest rate if PNMR does not have any short-term borrowings outstanding. TNMP had outstanding borrowings of $0.1 million from PNMR at December 31, 2018 and zero at February 22, 2019. TNMP had no borrowings at December 31, 2017. PNM had outstanding borrowings of $19.8 million from PNMR at December 31, 2018 and zero at February 22, 2019. PNM had no outstanding borrowings at December 31, 2017. Short-term Debt Currently, the PNMR Revolving Credit Facility has a financing capacity of $300.0 million and the PNM Revolving Credit Facility has a financing capacity of $400.0 million. Both facilities currently expire on October 31, 2023 and contain options to be extended through October 2024. However, one lender, whose current commitment is $10.0 million under the PNMR Revolving Credit Facility and $40.0 million under the PNM Revolving Credit Facility, did not agree to extend its commitments beyond October 31, 2020. Unless one or more of the other current lenders or a new lender assumes the commitments of the non-extending lender, the financing capacities will be reduced to $290.0 million for the PNMR Revolving Credit Facility and $360.0 million for the PNM Revolving Credit Facility beginning on November 1, 2020. The TNMP Revolving Credit Facility is a $75.0 million revolving credit facility secured by $75.0 million aggregate principal amount of TNMP first mortgage bonds. In September 2017, the TNMP Revolving Credit Facility was extended to mature on September 23, 2022. At January 1, 2016, PNM had a $50.0 million unsecured revolving credit facility (the “PNM 2014 New Mexico Credit Facility”) that was scheduled to expire on January 8, 2018. On December 12, 2017, PNM entered into a new $40.0 million unsecured revolving credit facility (the “PNM 2017 New Mexico Credit Facility”) by and among PNM, the lenders identified therein, U.S. Bank National Association, as Administrative Agent, and BOKF, NA dba Bank of Albuquerque, as Syndication Agent to replace the PNM 2014 New Mexico Credit Facility. The eight participating lenders are all banks that have a significant presence or are headquartered in New Mexico. The PNM 2017 New Mexico Credit Facility expires on December 12, 2022 and contains covenants and conditions similar to those in the PNM Revolving Credit Facility. On February 26, 2018, PNMR Development entered into a revolving credit facility with Wells Fargo Bank, National Association, as lender, which allows PNMR Development to borrow up to $24.5 million on a revolving credit basis and also provides for the issuance of letters of credit. The facility was scheduled to expire on February 25, 2019. On February 22, 2019, PNMR Development amended the revolving credit facility to increase the capacity to $25.0 million and to expire on February 24, 2020. The PNMR Development Revolving Credit Facility bears interest at a variable rate and contains terms similar to the PNMR Revolving Credit Facility. PNMR has guaranteed the obligations of PNMR Development under the facility. PNMR Development uses the facility to finance its participation in NMRD and for other activities. Short-term debt outstanding consists of:
(1) Includes both the PNMR 2018 One-Year Term Loan and the PNMR 2016 One-Year Term Loan (as extended) In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $4.7 million, $2.5 million, and $0.1 million at December 31, 2018 that reduce the available capacity under their respective revolving credit facilities. In addition, PNMR had $30.3 million of letters of credit outstanding under the JPM LOC Facility. At December 31, 2018, interest rates on outstanding borrowings were 3.76% for the PNMR Revolving Credit Facility, 3.63% for the PNM Revolving Credit Facility, 3.17% for the TNMP Revolving Credit Facility, 3.56% for the PNM 2017 New Mexico Credit Facility, 3.46% for the PNMR Development Revolving Credit Facility, and 3.20% for the PNMR 2018 One-Year Term Loan. At February 22, 2019, PNMR, PNM, and TNMP had $250.0 million, $397.5 million, and $37.4 million of availability under their respective revolving credit facilities, including reductions of availability due to outstanding letters of credit, PNM had $30.0 million of availability under the PNM 2017 New Mexico Credit Facility, and PNMR Development had $14.1 million of availability under the PNMR Development Revolving Credit Facility. Total availability at February 22, 2019, on a consolidated basis, was $729.0 million for PNMR. At February 22, 2019, PNMR and PNM had invested cash of $0.9 million and $18.1 million. TNMP had no invested cash at February 22, 2019. Long-Term Debt As discussed above, on January 18, 2019, PNM entered into the $250.0 million PNM 2019 Term Loan and used a portion of the proceeds under that agreement to repay the $200.0 million PNM 2017 Term Loan on that date. On February 26, 2019, TNMP entered into the TNMP 2019 Bond Purchase Agreement under which an aggregate of $305.0 million of TNMP 2019 Bonds are to be issued in March 2019 and on or before July 1, 2019. TNMP will use a portion of the proceeds from the TNMP 2019 Bonds to repay the $172.3 million 9.50% TNMP first mortgage bonds due on April 1, 2019. In accordance with GAAP, borrowings under the $200.0 million PNM 2017 Term Loan and the $172.3 million 9.50% TNMP first mortgage bonds are reflected as being long-term in the Consolidated Balance Sheets at December 31, 2018 since PNM and TNMP have demonstrated their intent and ability to re-finance these agreements on a long-term basis. In addition, aggregate borrowings of $450.0 million of PNM’s SUNs that were due on May 15, 2018 and August 1, 2018, are reflected as being long-term in the Consolidated Balance Sheets since the PNM 2017 Senior Unsecured Note Agreement demonstrated PNM’s ability and intent to re-finance the aggregate $450.0 million Senior Unsecured Notes on a long-term basis at December 31, 2017. Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
Reflecting mandatory tender dates, but excluding the impact of the refinancings under the PNM 2019 Term Loan and the TNMP 2019 Bond Purchase Agreement discussed above, long-term debt maturities as of December 31, 2018 are follows:
|
Lease Commitments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases Commitments | Lease Commitments The Company leases office buildings, vehicles, and other equipment under operating leases. In addition, PNM leases interests in Units 1 and 2 of PVNGS. Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation, and has no significant rights-of-way that will expire within the next five years. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2018 payment for the amount due under the Navajo Nation right-of-way lease was $6.9 million, which included amounts due under the Consumer Price Index adjustment. All of the Company’s leases, as well as the Navajo Nation rights-of-way agreement, are accounted for as operating leases. See New Accounting Pronouncements in Note 1. The PVNGS leases were entered into in 1985 and 1986 and initially were scheduled to expire on January 15, 2015 for the four Unit 1 leases and January 15, 2016 for the four Unit 2 leases. Each of the leases provided PNM with an option to purchase the leased assets at fair market value at the end of the leases, but PNM did not have a fixed price purchase option. In addition, the leases provided PNM with options to renew the leases at fixed rates set forth in each of the leases for two years beyond the termination of the original lease terms. The option periods on certain leases could be further extended for up to an additional six years (the “Maximum Option Period”) if the appraised remaining useful lives and fair value of the leased assets were greater than parameters set forth in the leases. The rental payments during the fixed renewal option periods are 50% of the amounts during the original terms of the leases. Gross annual lease payments aggregated $33.0 million for the Unit 1 leases and $23.7 million for the Unit 2 leases prior to the expiration of their original terms. Following procedures set forth in the PVNGS leases, PNM notified each of the four lessors under the Unit 1 leases and the lessor under the one Unit 2 lease containing the Maximum Option Period provision that it would elect to renew those leases for the Maximum Option Period on the expiration date of the original leases. PNM and each of those lessors entered into amendments to each of the leases setting forth the terms and conditions that would implement the extension of the term of the leases through the agreed upon Maximum Option Period. The four Unit 1 leases now expire on January 15, 2023 and the one Unit 2 lease now expires on January 15, 2024. The annual payments during the renewal periods aggregate $16.5 million for the PVNGS Unit 1 leases and $1.6 million for the Unit 2 lease, which are included in the table of future lease payments shown below. The terms of each of the extended leases do not provide for additional renewal options beyond their currently scheduled expiration dates. PNM has the option to purchase the assets underlying each of the extended leases at their fair market values or to return the lease interests to the lessors on the expiration dates. Under the terms of the extended leases, PNM has until January 15, 2020 for the Unit 1 leases and January 15, 2021 for the Unit 2 lease to provide notices to the lessors of PNM’s intent to exercise the purchase options or to return the leased assets to the lessors. PNM’s elections are independent for each lease and are irrevocable. In the proceeding addressing PNM’s 2017 IRP (Note 17), PNM agreed to promptly notify the NMPRC of a decision to extend the Unit 1 or 2 leases, or to exercise its option to purchase the leased assets at fair market value upon the expiration of leases. If PNM elects to exercise its purchase option under any of the leases, the leases provide an appraisal process to determine fair market value. If PNM elects to return the assets underlying the extended leases, PNM will retain certain obligations related to PNVGS, including costs to decommissioning the facility. PNM would seek to recover its undepreciated investments at the end of the PVNGS leases as well as any future obligations related to PNM’s leased capacity from NM retail customers. Any transfer of the assets underlying the leases will be required to comply with NRC licensing requirements. For the three PVNGS Unit 2 leases that did not contain the Maximum Option Period provisions, PNM, following procedures set forth in the leases, notified each of the lessors that PNM would elect to purchase the assets underlying those leases on the expiration date of the original leases. PNM and the lessors under these leases entered into agreements that established the purchase price, representing the fair market value, to be paid by PNM for the assets underlying the leases on January 15, 2016. On January 15, 2016, PNM paid $78.1 million to the lessor under one lease for 31.25 MW of the entitlement from PVNGS Unit 2 and $85.2 million to the lessors under the other two leases for 32.76 MW of the entitlement from PVNGS Unit 2. See Note 17 for information concerning the NMPRC’s treatment of the purchased assets and extended leases in PNM’s NM 2015 Rate Case. As discussed in Note 16, the NMPRC’s final order in the NM 2015 Rate Case ultimately authorized PNM to recover certain costs associated with the extended PVNGS Unit 1 and 2 leases through January 2023 and 2024 and to recover a portion of the January 2016 purchase price of assets underlying certain other leases in Unit 2 but has prohibited PNM from recovering future contributions to the trusts that will be used to fund decommissioning of these interests. The NMPRC’s decisions in the NM 2015 Rate Case are currently being appealed at the NM Supreme Court. PNM cannot predict the outcome of the appeals these matters in the NM Supreme Court or what decisions the NMPRC might reach regarding PNM’s ultimate decision to further extend, purchase, or return the assets underlying the extended leases. Covenants in PNM’s PVNGS Units 1 and 2 lease agreements limit PNM’s ability, without consent of the owner participants in the lease transactions, (i) to enter into any merger or consolidation, or (ii) except in connection with normal dividend policy, to convey, transfer, lease or dividend more than 5% of its assets in any single transaction or series of related transactions. PNM is exposed to losses under the PVNGS lease arrangements upon the occurrence of certain events that PNM does not consider to be reasonably likely to occur. Under certain circumstances (for example, the NRC issuing specified violation orders with respect to PVNGS or the occurrence of specified nuclear events), PNM would be required to make specified payments to the owner participants and take title to the leased interests. Exercise of renewal options under the leases required that amounts payable to the owner participants under the circumstances described above would increase to the fair market value as of the renewal date. If such an event had occurred as of December 31, 2018, amounts due to the lessors under the circumstances described above would be up to $163.8 million, payable on January 15, 2019 in addition to the scheduled lease payments due on January 15, 2019. In such event, PNM would record the acquired assets at the lower of their fair value or the amount paid. Operating lease expense, including the PVNGS leases was:
Future expected operating lease payments at December 31, 2018 are shown below:
The above table includes $18.5 million at PNMR, $7.5 million at PNM, and $11.0 million at TNMP for expected future payments on fleet leases that could be avoided if the leases were returned and the lessor is able to recover estimated market value for the equipment from third parties. |
Fair Value of Derivative and Other Financial Instruments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative and Other Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative and Other Financial Instruments | Fair Value of Derivative and Other Financial Instruments Fair value is defined under GAAP as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is based on current market quotes as available and is supplemented by modeling techniques and assumptions made by the Company to the extent quoted market prices or volatilities are not available. External pricing input availability varies based on market liquidity, term of the agreement, and, for commodities, location. Valuations of derivative assets and liabilities take into account nonperformance risk, including the effect of counterparties’ and the Company’s credit risk. The Company regularly assesses the validity and availability of pricing data for its derivative transactions. Although the Company uses its best judgment in estimating the fair value of these instruments, there are inherent limitations in any estimation technique. Energy Related Derivative Contracts Overview The primary objective for the use of commodity derivative instruments, including energy contracts, options, swaps, and futures, is to manage price risk associated with forecasted purchases of energy and fuel used to generate electricity, as well as managing anticipated generation capacity in excess of forecasted demand from existing customers. PNM’s energy related derivative contracts manage commodity risk. PNM is required to meet the demand and energy needs of its customers. PNM is exposed to market risk for the needs of its customers not covered under a FPPAC. PNM was exposed to market risk for its share of PVNGS Unit 3 through December 31, 2017, at which time PVNGS Unit 3 became a jurisdictional resource to serve New Mexico retail customers. Beginning January 1, 2018, PNM is exposed to market risk for its 65 MW interest in SJGS Unit 4 that is held as merchant plant as ordered by the NMPRC (Note 16). PNM has entered into agreements to sell power from 36 MW of that capacity to a third party at a fixed price for the period January 1, 2018 through June 30, 2022, subject to certain conditions. Under these agreements, PNM is obligated to deliver 36 MW of power only when SJGS Unit 4 is operating. These agreements are not considered derivatives because there is no notional amount due to the unit-contingent nature of the transactions. PNM’s operations are managed primarily through a net asset-backed strategy, whereby PNM’s aggregate net open forward contract position is covered by its forecasted excess generation capabilities or market purchases. PNM could be exposed to market risk if its generation capabilities were to be disrupted or if its load requirements were to be greater than anticipated. If all or a portion of load requirements were required to be covered as a result of such unexpected situations, commitments would have to be met through market purchases. TNMP does not enter into energy related derivative contracts. Commodity Risk Marketing and procurement of energy often involve market risks associated with managing energy commodities and establishing positions in the energy markets, primarily on a short-term basis. PNM routinely enters into various derivative instruments such as forward contracts, option agreements, and price basis swap agreements to economically hedge price and volume risk on power commitments and fuel requirements and to minimize the effect of market fluctuations. PNM monitors the market risk of its commodity contracts in accordance with approved risk and credit policies. Accounting for Derivatives Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2018, 2017, and 2016, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flows hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM has no trading transactions. Commodity Derivatives PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges, are summarized as follows:
Certain of PNM’s commodity derivative instruments in the above table are subject to master netting agreements whereby assets and liabilities could be offset in the settlement process. PNM does not offset fair value and cash collateral for derivative instruments under master netting arrangements and the above table reflects the gross amounts of fair value assets and liabilities for commodity derivatives. Included in the above table are equal amounts of assets and liabilities aggregating $3.6 million at December 31, 2018 and $4.6 million at December 31, 2017, resulting from PNM’s hazard sharing arrangements with Tri-State (Note 17). The hazard sharing arrangements are net-settled upon delivery. Other amounts that could be offset under master netting agreements were immaterial. At December 31, 2018 and 2017, PNM had no amounts recognized for the legal right to reclaim cash collateral. However, at December 31, 2018 and 2017, amounts posted as cash collateral under margin arrangements were $1.0 million and $0.8 million. At December 31, 2018 and 2017, obligations to return cash collateral were $1.0 million and $0.9 million. Cash collateral amounts are included in other current assets and other current liabilities on the Consolidated Balance Sheets. PNM has a NMPRC-approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC. There were no amounts hedged under this plan as of December 31, 2018 or 2017. The following table presents the effect of mark-to-market commodity derivative instruments on PNM’s earnings, excluding income tax effects. Commodity derivatives had no impact on OCI for the periods presented.
Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNM’s net buy (sell) volume positions:
PNM has contingent requirements to provide collateral under commodity contracts having an objectively determinable collateral provision that are in net liability positions and are not fully collateralized with cash. In connection with managing its commodity risks, PNM enters into master agreements with certain counterparties. If PNM is in a net liability position under an agreement, some agreements provide that the counterparties can request collateral if PNM’s credit rating is downgraded; other agreements provide that the counterparty may request collateral to provide it with “adequate assurance” that PNM will perform; and others have no provision for collateral. At December 31, 2018 and 2017, PNM had no such contracts in a net liability position. Non-Derivative Financial Instruments The carrying amounts reflected on the Consolidated Balance Sheets approximate fair value for cash, receivables, and payables due to the short period of maturity. Investment securities are carried at fair value. Investment securities consist of PNM assets held in the NDT for its share of decommissioning costs of PVNGS and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners (Note 16). At December 31, 2018 and 2017, the fair value of investment securities included $287.1 million and $293.7 million for the NDT and $41.1 million and $29.8 million for the mine reclamation trusts. In January 2016, the FASB issued Accounting Standards Update 2016-01 – Financial Instruments (Subtopic 825-10), which makes targeted improvements to GAAP regarding financial instruments. ASU 2016-01 eliminates the requirement to classify investments in equity securities with readily determinable fair values into trading or available-for-sale categories and requires those equity securities to be measured at fair value with changes in fair value recognized in net income rather than in OCI. Under ASU 2016-01, the accounting for available-for-sale debt securities remains essentially unchanged. The accounting required by ASU 2016-01 is to be applied prospectively with a cumulative effect adjustment recorded as of the beginning of the year of adoption. ASU 2016-01 also revises certain presentation and disclosure requirements. Accordingly, the following information for 2018 is presented under ASU 2016-01 and the information for 2017 is presented under prior GAAP. Prior to 2018, PNM classified all debt and equity investments held in the NDT and coal mine reclamation trusts as available-for-sale securities. Unrealized losses on these securities were recorded immediately through earnings and unrealized gains were recorded in AOCI until the securities were sold. On January 1, 2018, PNM recorded an after-tax cumulative effect adjustment of $11.2 million to reclassify unrealized holding gains on equity securities held in the NDT and coal mine reclamation trusts from AOCI to retained earnings on the Consolidated Balance Sheets. After January 1, 2018, all gains and losses resulting from sales and changes in the fair value of equity securities are recognized in earnings. Gains and losses recognized on the Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table.
The proceeds and gross realized gains and losses on the disposition of securities held in the NDT and coal mine reclamation trusts are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold. Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $(9.4) million, $3.3 million, and $(1.2) million for the years ended December 31, 2018, 2017 and 2016.
Held-to-maturity securities are those investments in debt securities that the Company has the ability and intent to hold until maturity. At December 31, 2017, PNMR’s held-to-maturity securities consisted of the Westmoreland Loan. In May 2018, the full amount owed under the Westmoreland Loan was repaid (Note 16). The Company has no available-for-sale debt securities for which carrying value exceeds fair value. There are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. At December 31, 2018, the available-for-sale debt securities held by PNM, had the following final maturities:
Fair Value Disclosures The Company determines the fair values of its derivative and other financial instruments based on the hierarchy established in GAAP, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. GAAP describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company records any transfers between fair value hierarchy levels as of the end of each calendar quarter. There were no transfers between levels during the years ended December 31, 2018 and 2017. See New Accounting Pronouncements in Note 1. For investment securities, Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value as of year-end. Level 3 investments are comprised of corporate term loans and, at December 31, 2017, the Westmoreland Loan. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. The valuation of Level 3 investments requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The significant unobservable inputs include the trading multiples of public companies that are considered comparable to the company being valued, company specific issues, estimates of liquidation value, current operating performance and future expectations of performance, changes in market outlook and the financing environment, capitalization rates, discount rates, and cash flows. For the Westmoreland Loan, fair values were determined using an internal valuation model of discounted cash flows that took into consideration discount rates observable for similar types of assets and liabilities. Management of the Company independently verifies the information provided by pricing services. Items recorded at fair value by PNM on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale securities. Under ASU 2016-01, PNM does not classify its investments in equity instruments as available-for-sale securities beginning January 1, 2018.
The carrying amounts and fair values of investments in the Westmoreland Loan, other investments, and long-term debt, which are not recorded at fair value on the Consolidated Balance Sheets are presented below:
Investments Held by Employee Benefit Plans As discussed in Note 11, PNM and TNMP have trusts that hold investment assets for their pension and other postretirement benefit plans. The fair value of the assets held by the trusts impacts the determination of the funded status of each plan but the assets are not reflected on the Company’s Consolidated Balance Sheets. Both the PNM Pension Plan and the TNMP Pension Plan hold units of participation in the PNM Resources, Inc. Master Trust (the “PNMR Master Trust”), which was established for the investment of assets of the pension plans. The Company changed its investment allocation targets by decreasing the fixed income investments used to match pension liabilities from 65% to 54% in 2018. GAAP provides a practical expedient that allows the net asset value per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Fair values for alternative investments held by the PNMR Master Trust are valued using this practical expedient. Under GAAP, investments for which fair value is measured using that practical expedient are not required to be categorized within the fair value hierarchy. Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For level 2 fair values, the pricing provider predominately uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value as of year-end. Level 3 investments are comprised of corporate term loans. Alternative investments include private equity funds, hedge funds, and real estate funds. The private equity funds are not voluntarily redeemable. These investments are realized through periodic distributions occurring over a 10 to 15 year term after the initial investment. The real estate funds and hedge funds may be voluntarily redeemed but are subject to redemption provisions that may result in the funds not being able to be redeemed in the near term. Audited financial statements are received for each fund and are reviewed by the Company annually. The valuation of Level 3 investments and alternative investments requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The significant unobservable inputs include the trading multiples of public companies that are considered comparable to the company being valued, company specific issues, estimates of liquidation value, current operating performance and future expectations of performance, changes in market outlook and the financing environment, capitalization rates, discount rates, and cash flows. The fair values of investments held by the employee benefit plans are as follows:
The fair values of investments in the PNMR Master Trust are as follows:
A reconciliation of the changes in Level 3 fair value measurements is as follows:
|
Variable Interest Entities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities GAAP determines how an enterprise evaluates and accounts for its involvement with variable interest entities, focusing primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a variable interest entity (“VIE”). GAAP also requires continual reassessment of the primary beneficiary of a VIE. Valencia PNM has a PPA to purchase all of the electric capacity and energy from Valencia, a 158 MW natural gas-fired power plant near Belen, New Mexico, through May 2028. A third party built, owns, and operates the facility while PNM is the sole purchaser of the electricity generated. PNM is obligated to pay fixed operation and maintenance and capacity charges in addition to variable operation and maintenance charges under this PPA. For the years ended December 31, 2018, 2017, and 2016, PNM paid $19.6 million, $19.6 million, and $19.3 million for fixed charges and $1.4 million, $1.3 million, and $1.1 million for variable charges. PNM does not have any other financial obligations related to Valencia. The assets of Valencia can only be used to satisfy its obligations and creditors of Valencia do not have any recourse against PNM’s assets. During the term of the PPA, PNM has the option, under certain conditions, to purchase and own up to 50% of the plant or the VIE. The PPA specifies that the purchase price would be the greater of 50% of book value reduced by related indebtedness or 50% of fair market value. PNM sources fuel for the plant, controls when the facility operates through its dispatch, and receives the entire output of the plant, which factors directly and significantly impact the economic performance of Valencia. Therefore, PNM has concluded that the third-party entity that owns Valencia is a VIE and that PNM is the primary beneficiary of the entity under GAAP since PNM has the power to direct the activities that most significantly impact the economic performance of Valencia and will absorb the majority of the variability in the cash flows of the plant. As the primary beneficiary, PNM consolidates Valencia in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of Valencia are included in the Consolidated Financial Statements of PNM although PNM has no legal ownership interest or voting control of the VIE. The assets and liabilities of Valencia set forth below are immaterial to PNM and, therefore, not shown separately on the Consolidated Balance Sheets. The owner’s equity and net income of Valencia are considered attributable to non-controlling interest. Summarized financial information for Valencia is as follows:
Westmoreland San Juan LLC (“WSJ”) and SJCC As discussed in the subheading Coal Supply in Note 16, PNM purchases coal for SJGS from SJCC under a coal supply agreement (“SJGS CSA”). That section includes information on the acquisition of SJCC by WSJ, a subsidiary of Westmoreland Coal Company (“Westmoreland”), on January 31, 2016, as well as the $125.0 million loan (the “Westmoreland Loan”) from NM Capital, a subsidiary of PNMR, to WSJ, which loan provided substantially all of the funds required for the SJCC purchase, and the issuance of $30.3 million in letters of credit under the JPM LOC Facility to facilitate the issuance of reclamation bonds required in order for SJCC to mine coal to be supplied to SJGS. The Westmoreland Loan and the letters of credit support result in PNMR being considered to have a variable interest in WSJ, including its subsidiary, SJCC, since PNMR and NM Capital could have been subject to possible loss in the event of a default by WSJ under the Westmoreland Loan or could be subject to loss if performance is required under the letter of credit support. Principal payments under the Westmoreland Loan began on August 1, 2016 and were required quarterly thereafter. Interest was also paid quarterly beginning on May 3, 2016. As discussed in Note 16, the full principal outstanding under the Westmoreland Loan of $50.1 million was repaid on May 22, 2018. NM Capital used a portion of the proceeds to repay all remaining amounts owed under the BTMU Term Loan. These payments effectively terminated the loan agreements and PNMR’s guarantee of NM Capital’s obligations under the BTMU Term Loan agreement. The Westmoreland Loan was secured by the assets of and the equity interests in SJCC. PNMR considers the possibility of loss under the letters of credit support to be remote since the purpose of posting the bonds is to provide assurance that SJCC performs the required reclamation of the mine site in accordance with applicable regulations and all reclamation costs are reimbursable under the SJGS CSA. Also, much of the mine reclamation activities will not be performed until after the expiration of the SJGS CSA. In addition, each of the SJGS participants has established and funds a trust to meet its future reclamation obligations. On May 21, 2018, Westmoreland filed a Current Report on Form 8-K with the SEC indicating it had obtained a new credit agreement with certain of its existing creditors that provided Westmoreland with additional financing. In the May 21, 2018 Form 8-K, Westmoreland indicated that “A portion of the proceeds of the Financing have been used to refinance in full the Company’s and its subsidiaries’ existing asset-based revolving credit facilities and Westmoreland San Juan, LLC’s existing term loan facility.” As mentioned above, the Westmoreland Loan was repaid in full in May 2018. On October 9, 2018, Westmoreland filed a Current Report on Form 8-K with the SEC announcing it had filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. In the October 9, 2018 Form 8-K, Westmoreland indicated that it has agreed to terms with its secured creditors that will allow it to fund its normal course operations and that will allow it to continue to serve its customers during the course of the bankruptcy case (Note 16). On February 28, 2019, the bankruptcy court approved Westmoreland’s plan providing for the sale of Westmoreland’s core assets, which includes the San Juan mine, and the assignment and assumption of related agreements. It is anticipated that the sale process will be completed by April 2019. If the sale process is successful and the PNMR and PNM agreements are assumed by and assigned to the purchaser, PNMR may be asked to amend the letters of credit supporting the reclamation bonds to take into account the transfer of the SJCC assets to the purchaser or to cause replacement letters of credit. If the sale process is not successful or the PNMR and PNM agreements are not assumed by and assigned to the purchaser, the coal supply for SJGS and letters of credit supporting the reclamation obligations at the San Juan mine could be negatively impacted. PNM is unable to predict the outcome of this matter. Both WSJ and SJCC are considered to be VIEs. PNMR’s analysis of these arrangements concluded that Westmoreland, as the parent of WSJ, has the ability to direct the SJCC mining operations, which is the factor that most significantly impacts the economic performance of WSJ and SJCC. NM Capital’s rights under the Westmoreland Loan were the typical protective rights of a lender, but did not give NM Capital any oversight over mining operations. Other than PNM being able to ensure that coal is supplied in adequate quantities and of sufficient quality to provide the fuel necessary to operate SJGS in a normal manner, the mining operations are solely under the control of Westmoreland and its subsidiaries, including developing mining plans, hiring of personnel, and incurring operating and maintenance expenses. Neither PNMR nor PNM has any ability to direct or influence the mining operation. PNM’s involvement through the SJGS CSA is a protective right rather than a participating right and Westmoreland has the power to direct the activities that most significantly impact the economic performance of SJCC. The SJGS CSA requires SJCC to deliver coal required to fuel SJGS in exchange for payment of a set price per ton, which is escalated over time for inflation. If SJCC is able to mine more efficiently than anticipated, its economic performance will be improved. Conversely, if SJCC cannot mine as efficiently as anticipated, its economic performance will be negatively impacted. Accordingly, PNMR believes Westmoreland is the primary beneficiary of WSJ and, therefore, WSJ and SJCC are not consolidated by either PNMR or PNM. The amounts outstanding under the letter of credit support constitute PNMR’s maximum exposure to loss from the VIEs at December 31, 2018. PVNGS Leases PNM leased portions of its interests in Units 1 and 2 of PVNGS under leases, which initially were scheduled to expire on January 15, 2015 for the four Unit 1 leases and January 15, 2016 for the four Unit 2 leases. See Note 8 for additional information regarding the leases and actions PNM has taken with respect to its renewal and purchase options. Each of the lease agreements was with a different trust whose beneficial owners were five different institutional investors. PNM is not the legal or tax owner of the leased assets. The beneficial owners of the trusts possess all of the voting control and pecuniary interests in the trusts. At January 15, 2015, the four Unit 1 leases were extended. At January 15, 2016, one of the Unit 2 leases was extended and PNM purchased the assets underlying the other three Unit 2 leases. See Note 17 for information concerning the NMPRC’s treatment of the purchased assets and extended leases in PNM’s NM 2015 Rate Case. See Note 8 for a discussion of PNM’s option to purchase or return the extended leases at the end of their current terms. PNM is only obligated to make payments to the trusts for the scheduled semi-annual lease payments and has no other financial obligations or commitments to the trusts or the beneficial owners although PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS both during and after termination of the leases. Creditors of the trusts have no recourse to PNM’s assets other than with respect to the contractual lease payments. PNM has no additional rights to the assets of the trusts other than the use of the leased assets. PNM has no assets or liabilities recorded on its Consolidated Balance Sheets related to the trusts other than accrued lease payments of $8.3 million at December 31, 2018 and 2017, which are included in other current liabilities on the Consolidated Balance Sheets. See discussion of leases under New Accounting Pronouncements in Note 1. Prior to their exercise or expiration, the fixed rate renewal options were considered to be variable interests in the trusts and resulted in the trusts being considered variable interest entities under GAAP. Upon execution of documents establishing terms of the asset purchases or lease extensions, the fixed rate renewal options ceased to exist as did PNM’s variable interest in the trusts. PNM evaluated the PVNGS lease arrangements, including actions taken with respect to the renewal and purchase options, and concluded that it did not have the power to direct the activities that most significantly impacted the economic performance of the trusts and, therefore, was not the primary beneficiary of the trusts under GAAP. The significant factors considered in reaching this conclusion were: the periods covered by fixed price renewal options were significantly shorter than the anticipated remaining useful lives of the assets since the operating licenses for the plants were extended for 20 years through 2045 for Unit 1 and 2046 for Unit 2; PNM’s only financial obligation to the trusts is to make the fixed lease payments and the payments do not vary based on the output of the plants or their performance; during the lease terms, the economic performance of the trusts is substantially fixed due to the fixed lease payments; PNM is only one of several participants in PVNGS and is not the operating agent for the plants, so does not significantly influence the day-to-day operations of the plants; the operations of the plants, including plans for their decommissioning, are highly regulated by the NRC, leaving little room for the participants to operate the plants in a manner that impacts the economic performance of the trusts; the economic performance of the trusts at the end of the lease terms is dependent upon the fair value and remaining lives of the plants at that time, which are determined by factors such as power prices, outlook for nuclear power, and the impacts of potential carbon legislation or regulation, all which are outside of PNM’s control; and, while PNM had some benefit from its renewal options, the vast majority of the value at the end of the leases would accrue to the beneficial owners of the trusts. |
Pension and Other Postretirement Benefits |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits PNMR and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). PNMR maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of the periodic cost or income to the extent included in retail rates (a “prepaid pension asset”). Participants in the PNM Plans include eligible employees and retirees of PNMR and PNM. Participants in the TNMP Plans include eligible employees and retirees of TNMP. The PNM pension plan was frozen at the end of 1997 with regard to new participants, salary levels, and benefits. Through December 31, 2007, additional credited service could be accrued under the PNM pension plan up to a limit determined by age and service. The TNMP pension plan was frozen at December 31, 2005 with regard to new participants, salary levels, and benefits. GAAP requires a plan sponsor to (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. GAAP requires unrecognized prior service costs and unrecognized gains or losses to be recorded in AOCI and subsequently amortized. The amortization of these incurred costs is included as pension and postretirement benefit periodic cost or income in subsequent years. To the extent the amortization of these items will ultimately be recovered or returned through future rates, PNM and TNMP record the costs as a regulatory asset or regulatory liability. The Company maintains trust funds for the pension and OPEB plans from which benefits are paid to eligible employees and retirees. The Company’s funding policy is to make contributions to the trusts, as determined by an independent actuary, that comply with minimum guidelines of the Employee Retirement Income Security Act and the Internal Revenue Code. Information concerning the investments is contained in Note 9. The Company has in place a policy that defines the investment objectives, establishes performance goals of asset managers, and provides procedures for the manner in which investments are to be reviewed. The plans implement investment strategies to achieve the following objectives:
Management is responsible for the determination of the asset target mix and the expected rate of return. The target asset allocations are determined based on consultations with external investment advisors. The expected long-term rate of return on pension and postretirement plan assets is calculated on the market-related value of assets. GAAP requires that actual gains and losses on pension and OPEB plan assets be recognized in the market-related value of assets equally over a period of not more than five years, which reduces year-to-year volatility. For the PNM Plans and TNMP Plans, the market-related value of assets is equal to the prior year’s market-related value of assets adjusted for contributions, benefit payments and investment gains and losses that are within a corridor of plus or minus 4.0% around the expected return on market value. Gains and losses that are outside the corridor are amortized over five years. In March 2017, the FASB issued Accounting Standards Update 2017-07 - Compensation - Retirement Benefits (Topic 715) to improve the presentation of net periodic pension and other postretirement benefit costs. Prior to ASU 2017-07, the Company presented all of its net periodic benefit costs, net of amounts capitalized to construction and other accounts, as administrative and general expenses on its statements of earnings. ASU 2017-07 requires the service cost component of net benefit costs be presented in the same line item or items as employees’ compensation. The other components of net periodic benefit cost (the “non-service cost components”) are required to be presented separately from the service cost component and outside of operating income. ASU 2017-07 also limits capitalization of net periodic benefit costs to only the service cost component. ASU 2017-07 requires retrospective presentation of the service and non-service cost components of net periodic benefit costs in the income statement and prospective application regarding the capitalization of only the service cost component of net periodic benefit costs. The Company adopted ASU 2017-07 as of January 1, 2018, its required effective date. In accordance with the standard, the PNM and PNMR Consolidated Statements of Earnings reflect a reclassification from administrative and general expenses to other (deductions) for the non-service cost components of net periodic benefit costs in the amount of $8.6 million and $6.7 million, net of amounts capitalized prior to the adoption of the standard, in the years ended December 31, 2017 and 2016. The non-service components of TNMP’s net periodic benefit costs in 2017 and 2016 were insignificant. The Company believes PNM and TNMP can continue to capitalize the non-service cost components of net periodic benefit costs as regulatory assets and liabilities to the extent attributable to regulated operations. During the year ended December 31, 2018, PNM recorded $4.3 million of non-service cost as other (deductions), which is net of $0.4 million recorded as regulatory assets, and TNMP recorded $0.3 million of non-service cost to other income, which is net of less than $0.1 million recorded as regulatory liabilities. See New Accounting Pronouncements in Note 1 regarding updates to disclosure requirements that will be effective in future periods. Pension Plans For defined benefit pension plans, including the executive retirement plans, the PBO represents the actuarial present value of all benefits attributed by the pension benefit formula to employee service rendered prior to that date using assumptions regarding future compensation levels. The ABO represents the PBO without considering future compensation levels. Since the pension plans are frozen, the PBO and ABO are equal. The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:
Actuarial (gain) loss results from changes in:
The following table presents pre-tax information about prior service cost and net actuarial (gain) loss in AOCI as of December 31, 2018.
The following table presents the components of net periodic benefit cost (income):
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost (income). Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost (income) would be affected.
The assumed discount rate for determining the PBO was determined based on a review of long-term high-grade bonds and management’s expectations. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the PBO. Factors that are considered include, but are not limited to, historic returns on plan assets, current market information on long-term returns (e.g., long-term bond rates) and current and target asset allocations between asset categories. If all other factors were to remain unchanged, a 1% decrease in the expected long-term rate of return would cause PNM’s and TNMP’s 2019 net periodic benefit cost to increase $5.0 million and $0.6 million (analogous changes would result from a 1% increase). The actual rate of return for the PNM and TNMP pension plans was (5.4)% and (5.2)% for the year ended December 31, 2018. The Company’s long-term pension investment strategy is to invest in assets whose interest rate sensitivity is correlated with the pension liability. The Company has chosen to implement this strategy, known as Liability Driven Investing (“LDI”), by increasing the liability matching investments as the funded status of the pension plans improve. These liability matching investments are currently fixed income securities. Beginning in 2018, the pension plans targeted asset allocation was 26% equities, 54% fixed income, and 20% alternative investments. The Company modified the LDI strategy by decreasing the liability matching fixed income investments portfolio from 65% to 54% in 2018. Equity investments are primarily in domestic securities that include large, mid, and small capitalization companies. The pension plans have a 7% targeted allocation to equities of companies domiciled primarily in developed countries outside of the United States. The equity investments category includes actively managed international and domestic equity securities that are benchmarked against a variety of style indices. Fixed income investments are primarily corporate bonds of companies from diversified industries and government securities. Alternative investments include investments in hedge funds, real estate funds, and private equity funds. The hedge funds and private equity funds are structured as multi-manager multi-strategy fund of funds to achieve a diversified position in these asset classes. The hedge funds pursue various absolute return strategies such as relative value, long-short equity, and event driven. Private equity fund strategies include mezzanine financing, buy-outs, and venture capital. The real estate investments are commingled real estate portfolios that invest in a diversified portfolio of assets including commercial property and multi-family housing. See Note 9 for fair value information concerning assets held by the pension plans. The following pension benefit payments are expected to be paid:
Based on current law, the Company does not expect to make any cash contributions to the pension plans in 2019-2021 but expects to contribute $1.3 million and zero to the PNM and TNMP pension plans in 2022. These expectations were developed using current funding assumptions with discount rates of 4.2% to 4.6%. Actual amounts to be funded in the future will be dependent on the actuarial assumptions at that time, including the appropriate discount rates. PNM and TNMP may make additional contributions at their discretion. Other Postretirement Benefit Plans For postretirement benefit plans, the APBO is the actuarial present value of all future benefits attributed under the terms of the postretirement benefit plan to employee service rendered to date. The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:
Actuarial (gain) loss results from changes in:
In the year ended December 31, 2018, actuarial losses of $0.9 million were recorded as adjustments to regulatory assets for the PNM OPEB plan. For the TNMP OPEB plan, actuarial gains of $1.6 million were recorded as adjustments to regulatory liabilities. The following table presents the components of net periodic benefit cost (income):
The following significant weighted-average assumptions were used to determine the APBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the APBO and net periodic benefit cost would be affected.
The assumed discount rate for determining the APBO was determined based on a review of long-term high-grade bonds and management’s expectations. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the APBO. Factors that are considered include, but are not limited to, historic returns on plan assets, current market information on long-term returns (e.g., long-term bond rates), and current and target asset allocations between asset categories. If all other factors were to remain unchanged, a 1% decrease in the expected long-term rate of return would cause PNM’s and TNMP’s 2019 net periodic benefit cost to increase $0.7 million and $0.1 million (analogous changes would result from a 1% increase). The actual rate of return for the PNM and TNMP OPEB plans was (9.7)% and (10.0)% for the year ended December 31, 2018. The following table shows the assumed health care cost trend rates for the PNM OPEB plan:
The following table shows the impact of a one-percentage-point change in assumed health care cost trend rates:
TNMP’s exposure to cost increases in the OPEB plan is minimized by a provision that limits TNMP’s share of costs under the plan. Costs of the plan in excess of the limit, which was reached at the end of 2001, are wholly borne by the participants. As a result, a one-percentage-point change in assumed health care cost trend rates would have no effect on either the net periodic expense or the year-end APBO. Effective January 1, 2018, the PNM OPEB plan was amended to limit the annual increase in the Company’s costs to 5% thereby reducing the impact of an increase in the assumed rates. Increases in excess of the limit are born by the PNM OPEB plan participants. The Company’s OPEB plans invest in a portfolio that is diversified by asset class and style strategies. The OPEB plans generally use the same pension fixed income and equity investment managers and utilize the same overall investment strategy as described above for the pension plans, except there is no allocation to alternative investments. The OPEB plans have a target asset allocation of 70% equities and 30% fixed income. See Note 9 for fair value information concerning assets held by the other postretirement benefit plans. The following OPEB payments, which reflect expected future service and are net of participant contributions, are expected to be paid:
PNM and TNMP do not expect to make contributions to the OPEB plans for 2019-2023. Executive Retirement Programs For the executive retirement programs, the following table presents information about the PBO and funded status of the plans:
The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2018.
The following table presents the components of net periodic benefit cost:
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost would be affected.
The assumed discount rate for determining the PBO was determined based on a review of long-term high-grade bonds and management’s expectations. The impacts of changes in assumptions or experience were not significant. The following executive retirement plan payments, which reflect expected future service, are expected:
Other Retirement Plans PNMR sponsors a 401(k) defined contribution plan for eligible employees, including those of its subsidiaries. PNMR’s contributions to the 401(k) plan consist of a discretionary matching contribution equal to 75% of the first 6% of eligible compensation contributed by the employee on a before-tax basis. PNMR also makes a non-matching contribution ranging from 3% to 10% of eligible compensation based on the eligible employee’s age. PNMR also provides executive deferred compensation benefits through an unfunded, non-qualified plan. The purpose of this plan is to permit certain key employees of PNMR who participate in the 401(k) defined contribution plan to defer compensation and receive credits without reference to the certain limitations on contributions. A summary of expenses for these other retirement plans is as follows:
|
Stock-Based Compensation |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation PNMR has various stock-based compensation programs, including stock options, restricted stock, and performance shares granted under the Performance Equity Plan (“PEP”). Although certain PNM and TNMP employees participate in the PNMR plans, PNM and TNMP do not have separate employee stock-based compensation plans. The Company has not awarded stock options since 2010. Certain restricted stock awards are subject to achieving performance or market targets. Other awards of restricted stock are only subject to time vesting requirements. Performance Equity Plan The PEP provides for the granting of non-qualified stock options, restricted stock rights, performance shares, performance units, and stock appreciation rights to officers, key employees, and non-employee members of the Board. Restricted stock under the PEP refers to awards of stock subject to vesting, performance, or market conditions rather than to shares with contractual post-vesting restrictions. Generally, the awards vest ratably over three years from the grant date of the award. However, awards with performance or market conditions vest upon satisfaction of those conditions. In addition, plan provisions provide that upon retirement, participants become 100% vested in certain stock awards. Beginning with 2017 awards, the vesting period for awards of restricted stock to non-employee members of the Board is one year. The total number of shares of PNMR common stock subject to all awards under the PEP, as approved by PNMR’s shareholders in May 2014, may not exceed 13.5 million shares, subject to adjustment and certain share counting rules set forth in the PEP. This current share pool is charged five shares for each share subject to restricted stock or other full value award. Re-pricing of stock options is prohibited unless specific shareholder approval is obtained. Source of Shares The source of shares for exercised stock options and vested restricted stock is shares acquired on the open market by an independent agent, rather than newly issued shares. Accounting for Stock Awards The stock-based compensation expense related to restricted stock awards without performance or market conditions to participants that are retirement eligible on the grant date is recognized immediately at the grant date and is not amortized. Compensation expense for other such awards is amortized to compensation expense over the shorter of the requisite vesting period or the period until the participant becomes retirement eligible. Compensation expense for performance-based shares is recognized ratably over the performance period and is adjusted periodically to reflect the level of achievement expected to be attained. Compensation expense related to market-based shares is recognized ratably over the measurement period, regardless of the actual level of achievement, provided the employees meet their service requirements. Total compensation expense for stock-based payment arrangements recognized by PNMR for the years ended December 31, 2018, 2017, and 2016 was $7.1 million, $6.2 million, and $5.6 million. Stock compensation expense of $4.9 million, $4.4 million, and $4.2 million was charged to PNM and $2.2 million, $1.8 million, and $1.5 million was charged to TNMP. At December 31, 2018, PNMR had unrecognized compensation expense related to stock awards of $4.0 million, which is expected to be recognized over an average of 1.45 years. PNMR receives a tax deduction for certain stock option exercises during the period the options are exercised, generally for the excess of the price at which the options are sold over the exercise prices of the options, and a tax deduction for the value of restricted stock at the vesting date. The FASB issued Accounting Standards Update 2016-09 – Compensation –- Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to simplify several aspects of the accounting for share-based payment transactions and eliminate diversity in practice. Prior to ASU 2016-09, benefits resulting from income tax deductions in excess of compensation cost recognized under GAAP for vested restricted stock and on exercised stock options (collectively, “excess tax benefits”) were recorded to equity provided the excess tax benefits reduced income taxes payable. Deficiencies resulting from tax deductions related to stock awards that were below recognized compensation cost upon vesting and on canceled stock options were recorded to equity. PNMR had not recorded excess tax benefits to equity since 2009 because it is in a net operating loss position for income tax purposes. ASU 2016-09 requires that all excess tax benefits and deficiencies be recorded to tax expense and classified as cash flows from operating activities effective January 1, 2017. As required by ASU 2016-09, PNMR recorded the excess tax benefits that were not recognized in prior years, due to its net operating loss position, as a cumulative effect adjustment of $10.4 million on January 1, 2017, increasing retained earnings and decreasing accumulated deferred income taxes on the Consolidated Balance Sheets. For the year ended December 31, 2018, PNMR recorded excess tax benefits of $1.4 million of which $1.0 million was allocated to PNM and $0.4 million was allocated to TNMP. For the year ended December 31, 2017, PNMR recorded excess tax benefits of $2.3 million of which $1.7 million was allocated to PNM and $0.6 million was allocated to TNMP. TNMP used excess tax benefits to reduce income taxes payable and the benefit was reflected in cash flows from operating activities. The benefit of excess tax benefits at PNM and PNMR will be reflected in operating cash flows when they reduce income taxes payable. The grant date fair value for restricted stock and stock awards with Company internal performance targets is determined based on the market price of PNMR common stock on the date of the agreements reduced by the present value of future dividends, which will not be received prior to vesting, applied to the total number of shares that are anticipated to vest, although the number of performance shares that ultimately vest cannot be determined until after the performance periods end. The grant date fair value of stock awards with market targets is determined using Monte Carlo simulation models, which provide grant date fair values that include an expectation of the number of shares to vest at the end of the measurement period. The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:
The following table summarizes activity in restricted stock awards, including performance-based and market-based shares, and stock options:
PNMR’s current stock-based compensation program provides for performance and market targets through 2021. Included as granted and as exercised in the above table are 97,697 previously awarded shares that were earned for the 2015 through 2017 performance measurement period and ratified by the Board in February 2018 (based upon achieving market targets at “target” levels weighted at 40%, and performance targets at below “target” levels weighted at 60%). In February 2019, the Board approved amendments to exclude certain impacts of the Tax Act on performance metrics for the performance periods ending in 2018 and 2019. These amendments did not impact the Company’s calculation of grant date fair values under the plans but did increase actual achievement levels for the performance period ending in 2018 from below “threshold” levels to below “target” levels and anticipated achievement levels for the performance period ending in 2019 from below “target” levels to the “maximum” level. As a result of these amendments, the Company recorded additional pre-tax expense of $1.0 million, of which $0.7 million was allocated to PNM and $0.3 million was allocated to TNMP. Excluded from the above table are 47,279 previously awarded shares that were earned for the 2016 through 2018 performance measurement period and ratified by the Board in February 2019 (based upon achieving market targets at below “threshold” levels, weighted at 40%, and performance targets at above “target” levels, together weighted at 60%), as well as maximums of 130,302 and 146,941 shares for the three-year performance periods ending in 2019 and 2020 that would be awarded if all performance and market criteria are achieved at maximum levels and all executives remain eligible. In March 2012, the Company entered into a retention award agreement with its Chairman, President, and Chief Executive Officer under which she was to receive 135,000 shares of PNMR’s common stock if PNMR met specific market targets at the end of 2016 and she remained an employee of the Company. The retention award was made under the PEP and was approved by the Board on February 28, 2012. Under the agreement, she received 35,000 of the total shares in 2015 since PNMR achieved the specified market targets at the end of 2014. The specified market target was achieved at the end of 2016 and the Board ratified her receiving the remaining 100,000 shares, in February 2017. Effective as of January 1, 2015, the Company entered into a retention award agreement with its Executive Vice President and Chief Financial Officer under which he would receive awards of restricted stock if PNMR met specified performance targets at the end of 2016 and 2017 and he remained an employee of the Company. The retention award was made under the PEP and was approved by the Board on December 9, 2014. The specified performance target was achieved at the end of 2016 and the Board ratified him receiving $100,000 of PNMR common stock in February 2017 based on a market per share value of $36.30 on the grant date of March 3, 2017, or 2,754 shares. Similarly, if PNMR achieved the specified performance target for the period from January 1, 2015 through December 31, 2017, he was to receive $275,000 of PNMR common stock based on the market value per share on the grant date in early 2018. The specified performance target was achieved at the end of 2017 and the Board ratified him receiving $275,000 of PNMR common stock in February 2018 based on a market value per share of $35.85 on the grant date of March 2, 2018, or 7,670 shares, which are included in the above table. In 2015, the Company entered into an additional retention award agreement with its Chairman, President, and Chief Executive Officer under which she would receive a total 53,859 shares of PNMR’s common stock if PNMR meets certain performance targets at the end of 2017 and 2019 and she remains an employee of the Company. The retention award was made under the PEP and was approved by the Board on February 26, 2015. The specified performance target was achieved at the end of 2017 and the Board ratified her receiving 17,953 shares in February 2018, which are included in the above table. The above table does not include any restricted stock shares that remain unvested under this retention award agreement. At December 31, 2018, the aggregate intrinsic value of stock options outstanding, all of which are exercisable, was $2.4 million with a weighted-average remaining contract life of 1.04 years. At December 31, 2018, no outstanding stock options had an exercise price greater than the closing price of PNMR common stock on that date. The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares, and stock options:
|
Regulatory Assets and Liabilities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities The operations of PNM and TNMP are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to its regulated operations. Regulatory assets represent probable future recovery of previously incurred costs that will be collected from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are to be credited to customers through the ratemaking process. Regulatory assets and liabilities reflected in the Consolidated Balance Sheets are presented below.
(1) Includes $0.4 million for certain pension costs as described in Note 11 (2) Amount shown is net of amounts owed under the PUCT’s January 25, 2018 order as described in Note 17 (3) Includes less than $0.1 million of amounts owed to customers for certain pension costs as described in Note 11 The Company’s regulatory assets and regulatory liabilities are reflected in rates charged to customers or have been addressed in a regulatory proceeding. The Company does not receive or pay a rate of return on the following regulatory assets and regulatory liabilities (and their remaining amortization periods): coal mine reclamation costs (through 2020); deferred income taxes (over the remaining life of the taxable item, up to the remaining life of utility plant); pension and OPEB costs (through 2033); and PVNGS ARO (to be determined in a future regulatory proceeding). The Company is permitted, under rate regulation, to accrue and record a regulatory liability for the estimated cost of removal and salvage associated with certain of its assets through depreciation expense. Under GAAP, actuarial losses and prior service costs for pension plans are required to be recorded in AOCI; however, to the extent authorized for recovery through the regulatory process these amounts are recorded as regulatory assets or liabilities. Based on prior regulatory approvals, the amortization of these amounts will be included in the Company’s rates. Based on a current evaluation of the various factors and conditions that are expected to impact future cost recovery, the Company believes that future recovery of its regulatory assets is probable. |
Construction Program and Jointly-Owned Electric Generating Plants |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction Program and Jointly-Owned Electric Generating Plants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction Program and Jointly-Owned Electric Generating Plants | Construction Program and Jointly-Owned Electric Generating Plants PNM is a participant in several jointly-owned power plant projects. The primary operating or participation agreements for the joint projects expire in July 2022 for SJGS, July 2041 for Four Corners, December 2046 for Luna, and November 2047 for PVNGS. PNM’s expenditures for additions to utility plant were $255.6 million in 2018, including expenditures on jointly-owned projects. TNMP does not participate in the ownership or operation of any generating plants, but incurred expenditures for additions to utility plant of $223.4 million during 2018. On a consolidated basis, PNMR’s expenditures for additions to utility plant were $501.2 million in 2018. Joint Projects Under the agreements for the jointly-owned projects, PNM has an undivided interest in each asset and liability of the project and records its pro-rata share of each item in the corresponding asset and liability account on PNM’s Consolidated Balance Sheets. Likewise, PNM records its pro-rata share of each item of operating and maintenance expenses for its jointly-owned plants within the corresponding operating expense account in its Consolidated Statements of Earnings. PNM is responsible for financing its share of the capital and operating costs of the joint projects. At December 31, 2018, PNM’s interests and investments in jointly-owned generating facilities are:
San Juan Generating Station PNM operates and jointly owns SJGS. Effective January 1, 2018, SJGS Unit 1 is owned 50% by PNM and 50% by Tucson and SJGS Unit 4 is owned 77.297% by PNM, including a 12.8% interest held as merchant plant, 8.475% by Farmington, 7.2% by Los Alamos, and 7.028% by UAMPS. See Note 16 for additional information about SJGS, including the shutdown of SJGS Units 2 and 3 in December 2017 and the restructuring of SJGS ownership as well as information on PNM’s December 2018 Compliance Filing. Palo Verde Nuclear Generating Station PNM is a participant in the three units of PVNGS with APS (the operating agent), SRP, EPE, SCE, SCPPA, and The Department of Water and Power of the City of Los Angeles. PNM has a 10.2% undivided interest in PVNGS, with portions of its interests in Units 1 and 2 held under leases. See Note 8 for additional information concerning the PVNGS leases, including PNM’s purchase of the assets underlying certain of the leases in January 2016, PNM’s option to purchase or return certain lease interests that have been extended through 2023 and 2024, and Note 17 for the NMPRC’s treatment of those purchases and lease extensions in the ratemaking process. Operation of each of the three PVNGS units requires an operating license from the NRC. The NRC issued full power operating licenses for Unit 1 in June 1985, Unit 2 in April 1986, and Unit 3 in November 1987. The full power operating licenses were originally for a period of 40 years and authorize APS, as operating agent for PVNGS, to operate the three PVNGS units. In April 2011, the NRC approved extensions in the operating licenses for the plants for 20 years through June 2045 for Unit 1, April 2046 for Unit 2, and November 2047 for Unit 3. In April 2010, APS entered into a Municipal Effluent Purchase and Sale Agreement that provides effluent water rights necessary for cooling purposes at PVNGS through 2050. Four Corners Power Plant PNM is a participant in two units of Four Corners with APS (the operating agent), an affiliate of APS, SRP, and Tucson. PNM has a 13.0% undivided interest in Units 4 and 5 of Four Corners. The Four Corners plant site is located on land within the Navajo Nation and is subject to an easement from the federal government. APS, on behalf of the Four Corners participants, negotiated amendments to an existing agreement with the Navajo Nation, which extends the owners’ right to operate the plant on the site to July 2041. See Note 16 for additional information about Four Corners. Luna Energy Facility Luna is a combined-cycle power plant near Deming, New Mexico. Luna is owned equally by PNM, Tucson, and Samchully Power & Utilities 1, LLC. The operation and maintenance of the facility has been contracted to North American Energy Services. Construction Program The Company anticipates making substantial capital expenditures for the construction and acquisition of utility plant and other property and equipment. An unaudited summary of the budgeted construction expenditures, including expenditures for jointly-owned projects, and nuclear fuel, is as follows:
The construction expenditure estimates are under continuing review and subject to ongoing adjustment, as well as to Board review and approval. The above construction expenditures include $61.2 million for 50 MW of new solar facilities included in PNM’s 2018 renewable energy procurement plan and approximately $130 million for an anticipated expansion of PNM’s transmission system. See Note 17. Expenditures for the expansion of PNM’s transmission system are subject to obtaining necessary approvals of the NMPRC. PNM will be required to file CCN applications with the NMPRC to obtain those approvals. |
Asset Retirement Obligations |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations AROs are recorded based on studies to estimate the amount and timing of future ARO expenditures and reflect underlying assumptions, such as discount rates, estimates of the future costs for decommissioning, and the timing of the removal activities to be performed. Approximately 81% of PNM’s total ARO liabilities are related to nuclear decommissioning of PVNGS. PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS, including portions under lease both during and after termination of the leases. Studies of the decommissioning costs of PVNGS, SJGS, Four Corners, and other facilities are performed periodically and revisions to the ARO liabilities are recorded. Changes in the assumptions underlying the calculations may also require revisions to the estimated AROs when identified. A reconciliation of the ARO liabilities is as follows:
(1) Represents the obligation related to the additional ownership interest in SJGS Unit 4 that PNM acquired on December 31, 2017 due to the restructuring of the ownership of SJGS. |
Commitments and Contingencies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Overview There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory (Note 17) proceedings in the normal course of its business. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows. With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. In accordance with GAAP, the Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, and commitments will have a material effect on its financial condition, results of operations, or cash flows. Commitments and Contingencies Related to the Environment PVNGS Decommissioning Funding The costs of decommissioning a nuclear power plant are substantial. PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS, including portions under lease both during and after termination of the leases. PNM has a program for funding its share of decommissioning costs for PVNGS, including portions held under leases. The nuclear decommissioning funding program is invested in equities and fixed income instruments in qualified and non-qualified trusts. PNM funded $1.3 million, $2.0 million, and $4.2 million for the years ended December 31, 2018, 2017, and 2016 into the qualified and non-qualified trust funds. The market value of the trusts at December 31, 2018 and 2017 was $287.1 million and $293.7 million. Nuclear Spent Fuel and Waste Disposal Nuclear power plant operators are required to enter into spent fuel disposal contracts with the DOE that require the DOE to accept and dispose of all spent nuclear fuel and other high-level radioactive wastes generated by domestic power reactors. Although the Nuclear Waste Policy Act required the DOE to develop a permanent repository for the storage and disposal of spent nuclear fuel by 1998, the DOE announced that it would not be able to open the repository by 1998 and sought to excuse its performance of these requirements. In November 1997, the DC Circuit issued a decision preventing the DOE from excusing its own delay but refused to order the DOE to begin accepting spent nuclear fuel. Based on this decision and the DOE’s delay, a number of utilities, including APS (on behalf of itself and the other PVNGS owners, including PNM), filed damages actions against the DOE in the Court of Federal Claims. The lawsuits filed by APS alleged that damages were incurred due to DOE’s continuing failure to remove spent nuclear fuel and high-level waste from PVNGS. In August 2014, APS and the DOE entered into a settlement agreement that establishes a process for the payment of claims for costs incurred through December 31, 2019. Under the settlement agreement, APS must submit claims annually for payment of allowable costs. The benefit from the claims is passed through to customers under the FPPAC to the extent applicable to NMPRC regulated operations. PNM estimates that it will incur approximately $57.7 million (in 2016 dollars) for its share of the costs related to the on-site interim storage of spent nuclear fuel at PVNGS during the term of the operating licenses. PNM accrues these costs as a component of fuel expense as the nuclear fuel is consumed. At December 31, 2018 and 2017, PNM’s liability for interim storage costs of $12.4 million and $12.3 million, which is included in other deferred credits. PVNGS has sufficient capacity at its on-site ISFSI to store all of the nuclear fuel that will be irradiated during the initial operating license period, which ends in December 2027. Additionally, PVNGS has sufficient capacity at its on-site ISFSI to store a portion of the fuel that will be irradiated during the period of extended operation, which ends in November 2047. If uncertainties regarding the United States government’s obligation to accept and store spent fuel are not favorably resolved, APS will evaluate alternative storage solutions that may obviate the need to expand the ISFSI to accommodate all of the fuel that will be irradiated during the period of extended operation. On June 8, 2012, the DC Circuit issued its decision on a challenge by several states and environmental groups of the NRC’s rulemaking regarding temporary storage and permanent disposal of high-level nuclear waste and spent nuclear fuel. The petitioners had challenged the NRC’s 2010 update to the agency’s Waste Confidence Decision and temporary storage rule (the “Waste Confidence Decision”). The DC Circuit found that the Waste Confidence Decision update constituted a major federal action which, consistent with NEPA, requires either an environmental impact statement or a finding of no significant impact from the NRC’s actions. The DC Circuit found that the NRC’s evaluation of the environmental risks from spent nuclear fuel was deficient and remanded the Waste Confidence Decision update for further action consistent with NEPA. On September 6, 2012, the NRC commissioners issued a directive to the NRC staff to proceed with development of a generic EIS to support an updated Waste Confidence Decision, which was issued in September 2013. On August 26, 2014, the NRC approved a final rule on the environmental effects of continued storage of spent nuclear fuel. The continued storage rule adopted the findings of the generic EIS regarding the environmental impacts of storing spent fuel at any reactor site after the reactor’s licensed period of operations. As a result, those generic impacts do not need to be re-analyzed in the environmental reviews for individual licenses. The August 2014 final rule has been subject to continuing legal challenges before the NRC and the United States Court of Appeals. On May 19, 2016, the NRC denied petitions filed by multiple petitioners to revise the August 2014 rule. The DC Circuit issued an order upholding the August 2014 rule on June 3, 2016 and denied a subsequent petition for rehearing on August 8, 2016. The Clean Air Act Regional Haze In 1999, EPA developed a regional haze program and regional haze rules under the CAA. The rule directs each of the 50 states to address regional haze. Pursuant to the CAA, states have the primary role to regulate visibility requirements by promulgating SIPs. States are required to establish goals for improving visibility in national parks and wilderness areas (also known as Class I areas) and to develop long-term strategies for reducing emissions of air pollutants that cause visibility impairment in their own states and for preventing degradation in other states. States must establish a series of interim goals to ensure continued progress by adopting a new SIP every ten years. In the first SIP planning period, states were required to conduct BART determinations for certain covered facilities, including utility boilers, built between 1962 and 1977 that have the potential to emit more than 250 tons per year of visibility impairing pollution. If it was demonstrated that the emissions from these sources caused or contributed to visibility impairment in any Class I area, then BART must have been installed by the beginning of 2018. For all future SIP planning periods, states must evaluate whether additional emissions reduction measures may be needed to continue making reasonable progress toward natural visibility conditions. On January 10, 2017, EPA published in the Federal Register revisions to the regional haze rule. EPA also provided a companion draft guidance document for public comment. The new rule delayed the due date for the next cycle of SIPs from 2019 to 2021, altered the planning process that states must employ in determining whether to impose “reasonable progress” emission reduction measures, and gave new authority to federal land managers to seek additional emission reduction measures outside of the states’ planning process. Finally, the rule made several procedural changes to the regional haze program, including changes to the schedule and process for states to file 5-year progress reports. EPA’s new rule was challenged by numerous parties. On January 19, 2018, EPA filed a motion to hold the case in abeyance in light of several letters issued by EPA on January 17, 2018 to grant various petitions for reconsideration of the 2017 rule revisions. On January 30, 2018, the court placed the case in abeyance and directed EPA to file status reports on 90-day intervals beginning April 30, 2018. On September 11, 2018, EPA released a memo titled “Regional Haze Reform Roadmap.” The memo includes forthcoming tools and guidance to support states in their SIP development processes for the second planning period, which covers 2018 to 2028. The memo also includes a notice-and-comment rulemaking to review other aspects of the January 2017 rule. SIPs for the second compliance period are due in July 2021. On December 20, 2018, EPA released its final guidance document on tracking visibility progress for the second planning period. EPA is allowing states discretion to develop SIPs that may differ from EPA’s guidance as long as they are consistent with the Clean Air Act and other applicable regulations. EPA’s decision to revisit the 2017 rule is not a determination on the merits of the issues raised in the petitions. PNM is evaluating the potential impacts of these matters. SJGS BART Compliance – SJGS is a source that is subject to the statutory obligations of the CAA to reduce visibility impacts. The State of New Mexico submitted its SIP on the regional haze and interstate transport elements of the visibility rules for review by EPA in June 2011. The SIP required SJGS to reduce NOx emissions by installing selective non-catalytic reduction technology (“SNCR”) as BART. Nevertheless, in August 2011, EPA published a FIP, which included a regional haze BART determination for SJGS that required installation of selective catalytic reduction technology (“SCR”) as BART on all four units by September 21, 2016. PNM, as the operating agent for SJGS, engaged in discussions with NMED and EPA regarding an alternative to the FIP and SIP, which resulted in a non-binding agreement that included the retirement of SJGS Units 2 and 3 by the end of 2017 and the installation of SNCRs on Units 1 and 4 (the “RSIP”). EPA issued final rules, which became effective on November 10, 2014, approving the RSIP and withdrawing the FIP. In addition to the SNCR equipment required by the RSIP, the NSR permit, which was required to be obtained in order to install the SNCRs, specified that SJGS Units 1 and 4 be converted to balanced draft technology (“BDT”). The requirement to install BDT was made binding and enforceable in the NSR permit issued by NMED that accompanied the RSIP submitted to the EPA. EPA’s rule approving the RSIP specifically references the NSR permit by including a condition that requires “modification of the fan systems on Units 1 and 4 to achieve ‘balanced’ draft configuration…” Installation of SNCRs on Unit 1 and BDT equipment on both Units 1 and 4 was completed in 2015 and installation of SNCRs on Unit 4 was completed in January 2016, which dates were within the timeframe contained in the RSIP. PNM’s share of the total costs for SNCRs and BDT equipment was $77.7 million. See Note 17 for information concerning the NMPRC’s treatment of BDT in PNM’s NM 2015 Rate Case. Although operating costs will be reduced due to the retirement of SJGS Units 2 and 3, the operating costs for SJGS Units 1 and 4 have increased with the installation of SNCR and BDT equipment. On December 20, 2013, PNM made a filing with the NMPRC requesting certain approvals necessary to effectuate the RSIP. In this filing, PNM requested:
PNM’s filing also addressed replacement of the capacity from the shutdown of SJGS Units 2 and 3 (which would reduce PNM’s ownership in SJGS by 418 MW), a possible increase in PNM’s ownership in SJGS Unit 4, the identification of a new natural gas-fired generation source, and 40 MW of new utility-scale solar-PV facilities. PNM received approval to construct the 40 MW of solar PV facilities in its 2015 Renewable Energy Plan but ultimately withdrew a request for permission to construct a new natural gas-fired generating station. PNM’s requests in the December 20, 2013 NMPRC filing were based on the status of the negotiations among the SJGS owners at that time regarding ownership restructuring and other matters (see SJGS Ownership Restructuring Matters below). After extensive negotiations, on August 13, 2015 PNM, NMPRC Staff, the NMAG, Western Resource Advocates, and the Coalition for Clean Affordable Energy filed a settlement agreement with the NMPRC. NMIEC, Interwest Energy Alliance, and New Mexico Independent Power Producers subsequently joined in this agreement and NEE filed in opposition to the agreement (collectively, the “Stipulated Settlement”). On December 16, 2015, following oral argument, the NMPRC issued an order adopting the Stipulated Settlement. As provided in that order:
At December 31, 2015, PNM recorded pre-tax losses aggregating $165.7 million, reflecting a $127.6 million write-off for 50% of the then estimated December 31, 2017 net book value that would not be recovered, $21.6 million for other unrecoverable costs, and $16.5 million for an increase in PNM’s share of estimated coal mine reclamation costs. During 2016, PNM revised its estimates of the December 31, 2017 projected book value of SJGS Units 2 and 3 and the other unrecoverable costs, which resulted in a net expense of $3.7 million, consisting of a $0.9 million expense due to a revision of the estimated net book value of SJGS Units 2 and 3, a $4.5 million expense related to a refinement of the estimated liability for coal mine reclamation resulting from the new coal mine reclamation arrangement, and a $1.7 million reduction of the other unrecoverable costs that are reflected in regulatory disallowances and restructuring costs on the Consolidated Statements of Earnings. In addition, PNMR Development recorded an expense of $0.6 million in 2016 for costs it was obligated to reimburse the other SJGS participants under the restructuring arrangement, which is included in other deductions on the Consolidated Statement of Earnings. SJGS Unit 3 was shut down on December 19, 2017 and SJGS Unit 2 was shut down on December 20, 2017. At shutdown, the carrying value for PNM’s ownership share of SJGS Units 2 and 3 was comprised of plant in service of $439.4 million and accumulated depreciation and amortization (including cost of removal) of $188.3 million for a net book value of $251.1 million. As of December 31, 2017, these amounts were written off and offset by previously recorded losses of $128.6 million. PNM also recorded a regulatory asset of $125.5 million for the 50% of the undepreciated book value that is to be recovered from ratepayers pursuant to the December 15, 2015 NMPRC order described above. This resulted in the reversal of previously recorded losses of $3.0 million being recorded at December 31, 2017. In addition, PNM recognized a reversal of $1.0 million of previously recorded losses for other unrecoverable costs. These reversals, which total $4.0 million, are included in regulatory disallowances and restructuring costs on the Consolidated Statements of Earnings. In January 2016, NEE filed a notice of appeal with the NM Supreme Court of the NMPRC’s December 16, 2015 order. In July 2016, NEE filed a brief alleging that the NMPRC’s decision violated New Mexico statutes and NMPRC regulations because PNM did not adequately consider replacement resources other than those proposed by PNM, the NMPRC did not require PNM to adequately address and mitigate ratepayer risk, the NMPRC unlawfully shifted the burden of proof, and the NMPRC’s decision was arbitrary and capricious. Several parties filed Answer Briefs refuting NEE’s claims in November 2016. Reply briefs were filed by NEE in January 2017 and the parties presented oral argument to the court on January 25, 2017. On March 5, 2018, the NM Supreme Court issued its opinion affirming the NMPRC’s December 2015 order, thereby denying NEE’s appeal. A request for rehearing of the NM Supreme Court’s decision was not filed by the statutory deadline. This matter is now concluded. NEE Complaint – On March 31, 2016, NEE filed a complaint with the NMPRC against PNM regarding the financing provided by NM Capital to facilitate the sale of SJCC. See Coal Supply below. The complaint alleges that PNM failed to comply with its discovery obligation in the SJGS abandonment case and requests the NMPRC investigate whether the financing transactions could adversely affect PNM’s ability to provide electric service to its retail customers. PNM responded to the complaint on May 4, 2016. On January 31, 2018, NEE filed a motion asking the NMPRC to investigate whether PNM’s relationship with WSJ, in light of Westmoreland’s financial condition, could be harmful to PNM’s customers. PNM responded requesting the NMPRC deny the motion and that NEE’s prior complaint be dismissed. On May 23, 2018, PNM filed its response to the NMPRC staff’s comments requesting additional information about the financing and noting that the Westmoreland Loan was paid in full on May 22, 2018. NEE and NMPRC staff responded on July 16, 2018. NEE continues its request that the NMPRC investigate whether Westmoreland’s financial condition could adversely affect PNM’s customers. The NMPRC staff response requested that PNM provide certain additional information about the financing transactions and stated an order to show cause requested by NEE is not warranted. On October 11, 2018, PNM filed a supplemental response notifying the NMPRC that Westmoreland had filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. PNM’s supplemental response indicated Westmoreland had agreed to terms with its secured creditors that will allow it to continue to fund normal-course operations and to continue to serve its customers during the course of the bankruptcy case. See Note 10. PNM’s supplemental response also included a letter from the United States Southern District of Texas Bankruptcy Court indicating that, subject to specified conditions, Westmoreland is authorized to “perform under its coal contracts and to conduct its business under the ordinary course of business” without seeking court approval. The NMPRC has taken no further action on NEE’s complaints. PNM cannot predict the outcome of these matters. SJGS Ownership Restructuring Matters – Prior to December 31, 2017, SJGS was jointly owned by PNM and eight other entities, including three participants that operate in the State of California. Furthermore, each participant did not have the same ownership interest in each unit. The SJPPA that governs the operation of SJGS expires on July 1, 2022. In connection with requirements to install SNCR and BDT equipment at SJGS, the California participants indicated that, under California law, they might be prohibited from making significant capital improvements to SJGS and expressed the intent to exit their ownership in SJGS by December 31, 2017. One other participant also expressed a similar intent to exit ownership in the plant. As a result, the SJGS participants negotiated a restructuring of the ownership in SJGS and addressed the obligations of the exiting participants for plant decommissioning, mine reclamation, environmental matters, and certain future operating costs, among other items. Prior to the restructuring, the exiting participants owned 50.0% of SJGS Unit 3 and 38.8% of SJGS Unit 4, but none of SJGS Units 1 and 2, and PNM owned 50.0% of SJGS Units 1, 2, and 3 and 38.5% of SJGS Unit 4. Following mediated negotiations, the SJGS participants executed the San Juan Project Restructuring Agreement (“SJGS RA”). The SJGS RA provides the essential terms of restructured ownership and addresses other related matters, including that the exiting participants remain obligated for their proportionate shares of environmental, mine reclamation, and certain other legacy liabilities that are attributable to activities that occurred prior to their exit. PNMR Development became a party to the SJGS RA and agreed to acquire an ownership interest in SJGS Unit 4 on the December 31, 2017 exit date, but had obligations related to Unit 4 before that time. Under the SJGS RA, PNM would acquire 132 MW and PNMR Development would acquire 65 MW of the capacity in SJGS Unit 4 from the exiting owners on the exit date for no initial cost other than funding capital improvements, including the costs of installing SNCR and BDT equipment. PNMR Development’s share of the costs of installing SNCR and BDT equipment amounted to $7.6 million. Consistent with the NMPRC order, PNM acquired the rights and obligations related to the 65 MW from PNMR Development effective on December 31, 2017 in order to facilitate dispatch of power from that capacity. The SJGS RA became effective contemporaneously with the effectiveness of the new SJGS CSA. The effectiveness of the new SJGS CSA was dependent on the closing of the purchase of the existing coal mine operation by a new mine operator, which as discussed in Coal Supply below, occurred on January 31, 2016. The SJGS RA sets forth the terms under which PNM acquired the coal inventory of the exiting SJGS participants as of January 1, 2016 and supplied coal to the exiting participants for the period from January 1, 2016 through December 31, 2017, which arrangement provided economic benefits that were passed on to PNM’s customers through the FPPAC. SJGS Units 2 and 3 were shut down in December 2017 and the restructuring of SJGS ownership under the SJGS RA occurred on December 31, 2017, including PNM’s acquisition of the additional 132 MW and 65 MW ownership interests in SJGS Unit 4 as set forth above. In accordance with the FERC chart of accounts, plant in service for utility assets acquired is to be recorded at the original cost of the assets less accumulated depreciation. Since PNM did not pay for any costs incurred prior to the effective date of the SJGS RA, PNM increased both plant in service and accumulated depreciation for the original cost of the acquired interests at that date, estimated to be $261.8 million, on December 31, 2017. As ordered by the NMPRC, PNM treats the 65 MW interest as merchant utility plant that is excluded from retail rates. In anticipation of the transfer of ownership, PNM entered into agreements to sell the power from 36 MW of that capacity to a third party at a fixed price for the period January 1, 2018 through June 30, 2022 (Note 9). Beginning in 2018, SJGS is jointly owned by five entities. Including the 65 MW considered to be merchant plant, PNM’s ownership share is 77.3% in SJGS Unit 4 and an aggregate of 66.3% in SJGS Units 1 and 4. December 2018 Compliance Filing – The NMPRC’s December 16, 2015 order required that, no later than December 31, 2018, PNM make a filing with the NMRPC to determine the extent to which SJGS should continue serving PNM’s customers’ needs after June 30, 2022, including PNM’s recommendation and supporting testimony and exhibits (the “December 2018 Compliance Filing”). The December 2018 Compliance Filing was required to be made before PNM entered into a binding commitment for post-2022 coal supply but after PNM received firm pricing and other terms for the supply of coal at SJGS, unless PNM did not intend to pursue an agreement for post-2022 coal supply at SJGS. The NMPRC’s December 16, 2015 order also indicated that, if SJGS Unit 4 is abandoned with undepreciated investment on PNM’s books, PNM is prohibited from recovering the undepreciated investment of its 132 MW interest and required that PNM’s 65 MW interest in SJGS Unit 4 be treated as excluded merchant plant. PNM is currently depreciating all its investments in SJGS through 2053, which reflects the period of time over which the NMPRC has authorized PNM to recover its investment in SJGS from New Mexico retail customers. PNM submitted the December 2018 Compliance Filing to the NMPRC on December 31, 2018 indicating that, consistent with the conclusions reached in PNM’s 2017 IRP (Note 17), PNM’s customers would benefit from the retirement of PNM’s share of SJGS after the current SJGS CSA expires in mid-2022. The December 2018 Compliance Filing also indicates that, pursuant to the terms of the agreements governing SJGS, all of the SJGS owners except for Farmington have provided written notice that they do not intend to extend the SJGS operating agreements beyond their June 30, 2022 expiration dates and that PNM has provided written notice to SJCC that PNM does not intend to extend the SJGS CSA beyond June 30, 2022 or to negotiate a new coal supply agreement on behalf of the other SJGS participants. The December 2018 Compliance Filing also requested the NMPRC accept the filing as compliant with the December 16, 2015 order and indicated that PNM anticipates it will have sufficient information by the end of the second quarter of 2019 to support a consolidated application seeking NMPRC approval to retire PNM’s share of SJGS in 2022 and for approval of CCNs, PPAs, or other applicable approvals, for replacement capacity resources. On January 10, 2019, the NMPRC opened a docket to determine whether the NMPRC should grant PNM’s request to accept the December 2018 Compliance Filing and take no further action pending PNM submitting a formal consolidated abandonment and replacement resources application, or whether the NMPRC should immediately establish a formal procedural schedule regarding the abandonment of SJGS. The NMPRC received responses from parties regarding the initial order and, on January 30, 2019, approved an order initiating a proceeding and requiring PNM to submit an application for the abandonment of PNM’s share of SJGS by March 1, 2019. On February 7, 2019, PNM filed a motion requesting the NMPRC vacate the January 30, 2019 order and to extend the deadline for PNM’s abandonment filing until the end of the second quarter of 2019, which was deemed denied. On February 27, 2019, PNM filed a petition with the NM Supreme Court stating that the requirements of the January 30, 2019 order exceed the NMPRC’s authority by, among other things, mandating PNM to make a filing that is legally voluntary, and that the order is contrary to NMPRC precedent which requires abandonment applications to also include identified replacement resources and other information that will not be available to PNM by March 1, 2019. PNM’s petition also requested the NM Supreme Court stay the January 30, 2019 order until after June 14, 2019. On March 1, 2019, the NM Supreme Court granted a temporary stay of the NMPRC’s order and will consider the merits of PNM’s petition after receiving responses, which are due by March 19, 2019. PNM cannot predict the outcome of this matter. GAAP requires that long-lived assets be tested for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. The test must consider only those cash flows that are directly associated with the long-lived asset, or group of assets, and requires the evaluation be performed at the lowest level for which identifiable cash flows are largely independent of other cash flows within the asset group. PNM evaluated the recent events surrounding its future participation in SJGS and determined that it is more likely than not that PNM’s share of SJGS will be retired in 2022. As a result, PNM performed an impairment analysis that assumed SJGS would not continue to operate through 2053, as previously approved by the NMPRC. PNM’s impairment analysis indicated that, pursuant to the NMPRC’s December 16, 2015 order, PNM’s undepreciated 132 MW interest in SJGS Unit 4 at June 30, 2022 will not be recovered from customers; that the estimated future cash flows expected to result from the operation of SJGS Unit 4 through June 30, 2022 are not sufficient to provide for recovery of PNM’s 65 MW merchant interest in the facility; and that it is unlikely PNM will be able to sell or transfer its interests in SJGS to third parties at amounts sufficient to provide for their recovery. As a result, as of December 31, 2018, PNM recorded a pre-tax impairment of its investment in SJGS of approximately $35.0 million, which is reflected as regulatory disallowances and restructuring costs on the Consolidated Statements of Earnings. This amount includes the entire $11.9 million carrying value of PNM’s 65 MW interest in SJGS Unit 4 as of December 31, 2018, and $23.1 million of estimated undepreciated investments in PNM’s 132 MW jurisdictional interest as of June 30, 2022 that will not be recovered from customers. The carrying value of PNM’s remaining undepreciated investments in SJGS, which PNM will seek to recover from customers in the event of an early retirement of the facility, is $373.6 million as of December 31, 2018. See additional discussion regarding the increase in PNM’s estimated liability for coal mine reclamation below. The December 2018 Compliance Filing and the 2017 IRP are not final determinations of PNM’s future generation portfolio. Retiring PNM’s share of SJGS will require future NMPRC approval. PNM will also be required to obtain NMPRC approval of replacement power resources through CCN, PPA, or other applicable filings. The financial impact of an early retirement of SJGS and the NMPRC approval process are influenced by many factors outside of PNM’s control, including the economic impact of a potential SJGS abandonment filing on the area surrounding that plant and the related mine, as well as the overall political and economic conditions of New Mexico. Other items that impact the economic viability of SJGS include the financial impact of climate change regulation or legislation, other environmental regulations, the result of litigation, other business considerations or the ability or willingness of individual participants to continue participation in the plant. PNM will seek full recovery of its remaining undepreciated investments and other costs necessary to retire the facility and for replacement resources in that filing. Four Corners On August 6, 2012, EPA issued its Four Corners FIP with a final BART determination for Four Corners. The rule included two compliance alternatives. On December 30, 2013, APS notified EPA that the Four Corners participants selected the alternative that required APS to permanently close Units 1, 2, and 3 by January 1, 2014 and install SCR post-combustion NOx control technology on each of Units 4 and 5 by July 31, 2018. Installation of SCRs on Four Corners Unit 5 was completed in March 2018 and the installation on Unit 4 was completed in June 2018. PNM owns a 13% interest in Units 4 and 5, but had no ownership interest in Units 1, 2, and 3, which were shut down by APS on December 30, 2013. For particulate matter emissions, EPA is requiring Units 4 and 5 to meet an emission limit of 0.015 lbs./MMBTU and the plant to meet a 20% opacity limit, both of which are achievable through operation of the existing baghouses. Although unrelated to BART, the final BART rule also imposes a 20% opacity limitation on certain fugitive dust emissions from Four Corners’ coal and material handling operations. PNM share of costs for post-combustion controls at Four Corners Units 4 and 5 through December 31, 2018 was $88.7 million, including PNM’s AFUDC. See Note 17 for information on the NMPRC’s treatment of these costs in PNM’s NM 2016 Rate Case. The Four Corners plant site is located on land within the Navajo Nation. APS, on behalf of the Four Corners participants, negotiated amendments to the existing agreement with the Navajo Nation, which extends the owners’ right to operate the plant on the site to July 2041. The DOI issued a Record of Decision on July 17, 2015 approving the 25-year extension for Four Corners, authorizes continued mining operations to supply the remaining units at Four Corners, renews transmission line and access road rights-of-way on the Navajo and Hopi Reservations, and accepts the proposed mining plan for the Navajo Mine. The Four Corners participants’ obligations to comply with EPA’s final BART determinations, coupled with the financial impact of climate change regulation or legislation, other environmental regulations, and other business or regulatory considerations, could jeopardize the economic viability of Four Corners or the ability of individual participants to continue their participation in Four Corners. Four Corners Federal Agency Lawsuit – On April 20, 2016, several environmental groups filed a lawsuit against OSM and other federal agencies in the United States District Court for the District of Arizona in connection with their issuance of the approvals that extended the life of Four Corners and the adjacent mine. The lawsuit alleges that these federal agencies violated both the ESA and NEPA in providing the federal approvals necessary to extend operations at Four Corners and the adjacent mine past July 6, 2016. The court granted an APS motion to intervene in the litigation on August 3, 2016. On September 15, 2016, NTEC, the current owner of the mine providing coal to Four Corners, filed a motion to intervene for the limited purpose of seeking dismissal of the lawsuit based on NTEC’s tribal sovereign immunity. On September 11, 2017, the court granted NTEC’s motion and dismissed the case with prejudice, terminating the proceedings. The environmental group plaintiffs filed a Notice of Appeal of the dismissed order in the United States Court of Appeals for the Ninth Circuit on November 9, 2017, and the court granted their subsequent motion to expedite the appeal. Oral arguments for the appeal have been scheduled for March 2019. PNM cannot predict if such appeal will be successful and, if it is successful, the outcome of further district court proceedings. Carbon Dioxide Emissions On August 3, 2015, EPA established final standards to limit CO2 emissions from power plants. EPA took three separate but related actions in which it: (1) established the final carbon pollution standards for new, modified, and reconstructed power plants; (2) established the final Clean Power Plan to set standards for carbon emission reductions from existing power plants; and (3) released a proposed federal plan associated with the final Clean Power Plan. The Clean Power Plan was published on October 23, 2015. Multiple states, utilities, and trade groups filed petitions for review in the DC Circuit to challenge both the Carbon Pollution Standards for new sources and the Clean Power Plan for existing sources. Numerous parties also simultaneously filed motions to stay the Clean Power Plan during the litigation. On January 21, 2016, the DC Circuit denied petitions to stay the Clean Power Plan, but 29 states and state agencies successfully petitioned the US Supreme Court for a stay, which was granted on February 9, 2016. The decision means the Clean Power Plan is not in effect and neither states nor sources are obliged to comply with its requirements. With the US Supreme Court stay in place, the DC Circuit heard oral arguments on the merits of the Clean Power Plan on September 27, 2016 in front of a ten judge en banc panel. However, before the DC Circuit could issue an opinion, the Trump Administration asked that the case be held in abeyance while the rule is re-evaluated, which was granted. On March 28, 2017, President Trump issued an Executive Order on Energy Independence. The order puts forth two general policies: promote clean and safe development of energy resources, while avoiding regulatory burdens, and ensure electricity is affordable, reliable, safe, secure, and clean. The order directs the EPA Administrator to immediately review and, if appropriate and consistent with law, suspend, revise, or rescind (1) the Clean Power Plan, (2) the NSPS for GHG from new, reconstructed, or modified electric generating units, (3) the Proposed Clean Power Plan Model Trading Rules, and (4) the Legal Memorandum supporting the Clean Power Plan. It also directs the EPA Administrator to notify the US Attorney General of his intent to review rules subject to pending litigation so that the US Attorney General may notify the court and, in his discretion, request that the court delay further litigation pending completion of the reviews. In response to the Executive Order, EPA filed a petition with the DC Circuit requesting the cases challenging the Clean Power Plan be held in abeyance until 30 days after the conclusion of EPA’s review and any subsequent rulemaking, which was granted. In addition, the DC Circuit issued a similar order in connection with a motion filed by EPA to hold cases challenging the NSPS in abeyance. On October 10, 2017, EPA issued a NOPR proposing to repeal the Clean Power Plan and filed its status report with the court requesting the case be held in abeyance until the completion of the rulemaking on the proposed repeal. The NOPR proposes a legal interpretation concluding that the Clean Power Plan exceeds EPA’s statutory authority. Under the proposed interpretation, Section 111(d) limits EPA’s authority to adopt performance standards to only those physical and operational changes that can be implemented within an individual source. Therefore, measures in the Clean Power Plan that would require power generators to change their energy portfolios by shifting generation from coal to gas and from fossil fuel to renewable energy exceed EPA’s statutory authority. In a separate but related action, on December 18, 2017, EPA released an advanced NOPR addressing GHG guidelines for existing electric utility generating units. On August 31, 2018, EPA published a proposed rule, which is informally known as the Affordable Clean Energy rule, to replace the Clean Power Plan. The proposed Affordable Clean Energy rule, among other things, would establish guidelines that replace the “outside-the-fenceline” control measures and specific numerical emission rates for existing EGUs. These measures are replaced with a list of “candidate technologies” for heat rate improvement measures, which include both technologies and operational changes, that EPA has identified as Best System of Emission Reduction (“BSER”). States would determine which of the candidate technologies to apply to each coal-fired unit and establish standards of performance based on the degree of emission reduction achievable through application of the selected BSER. States will have three years from when the rule is finalized to submit a plan to EPA. EPA will then have one year to determine if each proposed plan is acceptable. If states do not submit a plan, or if a state’s plan is not acceptable, EPA will develop a federal plan for the state to implement. EPA is also proposing revisions to the NSR program that would provide coal-fired power plants more latitude to make efficiency improvements consistent with BSER without triggering NSR permit requirements. Comments on the proposed Affordable Clean Energy rule were due to EPA by October 31, 2018. The proposed Affordable Clean Energy rule and the proposed 2015 federal plan released concurrently with the Clean Power Plan are important to Four Corners and the Navajo Nation. Since the Navajo Nation does not have primacy over its air quality program, EPA would be the regulatory authority responsible for implementing the proposed Affordable Clean Energy rule or the Clean Power Plan, should it ultimately be sustained, on the Navajo Nation. In addition, in the proposed 2015 federal plan, EPA included a finding “that it is necessary or appropriate” to implement a section 111(d) federal plan for affected EGUs located in Native American lands. APS and PNM filed separate comments with EPA on EPA’s draft 2015 federal plan advocating that such a federal plan is neither necessary nor appropriate to protect air quality on the Navajo Nation. PNM is unable to predict the financial or operational impacts on Four Corners if the Affordable Clean Energy rule, the Clean Power Plan, or other future GHG reduction rulemaking are ultimately implemented and EPA determines that a federal plan is necessary or appropriate for the Navajo Nation. On December 20, 2018, EPA published in the Federal Register a proposed rule that would revise the carbon pollution standards rule published in October 2015 for fossil fueled power plants. The proposed rule would revise the standards for coal-fired EGUs based on a revised BSER determination that would result in less stringent CO2 emission performance standards for new, reconstructed, and modified fossil-fueled power plants. EPA is not proposing any changes nor reopening the standards of performance for newly constructed or reconstructed stationary combustion turbines. Comments on the proposal are due on March 18, 2019. PNM’s review of the GHG emission reductions standards under the proposed Affordable Clean Energy rule, the revised proposed Carbon Pollution Standards rule, and the Clean Power Plan is ongoing and the assessment of its impacts will depend on the proposed repeal of the Clean Power Plan, promulgation of the Affordable Clean Energy rule and the revised proposed Carbon Pollution Standards rule, other future GHG reduction rulemaking, litigation of any final rule, and other actions the Trump Administration is taking through judicial and regulatory proceedings. Accordingly, PNM cannot predict the impact these standards may have on its operations or a range of the potential costs of compliance, if any. National Ambient Air Quality Standards (“NAAQS”) The CAA requires EPA to set NAAQS for pollutants reasonably anticipated to endanger public health or welfare. EPA has set NAAQS for certain pollutants, including NOx, SO2, ozone, and particulate matter. In 2010, EPA updated the primary NOx and SO2 NAAQS to include a 1-hour maximum standard while retaining the annual standards for NOx and SO2 and the 24-hour SO2 standard. New Mexico is in attainment for the 1-hour NOx NAAQS. On April 18, 2018, EPA published the final rule to retain the current primary health-based NOx standards of which NO2 is the constituent of greatest concern and is the indicator for the primary NAAQS. EPA concluded that the current 1-hour and annual primary NO2 standards are requisite to protect public health with an adequate margin of safety. The rule became effective on May 18, 2018. On May 13, 2014, EPA released the draft data requirements rule for the 1-hour SO2 NAAQS, which directs state and tribal air agencies to characterize current air quality in areas with large SO2 sources to identify maximum 1-hour SO2 concentrations. This characterization would result in these areas being designated as attainment, nonattainment, or unclassifiable for compliance with the 1-hour SO2 NAAQS. On March 2, 2015, the United States District Court for the Northern District of California approved a settlement that imposed deadlines for EPA to identify areas that violate the NAAQS standards for 1-hour SO2 emissions. The settlement resulted from a lawsuit brought by Earthjustice on behalf of the Sierra Club and the Natural Resources Defense Council under the CAA. The consent decree required that: (1) within 16 months of the consent decree entry, EPA must issue area designations for areas containing non-retiring facilities that either emitted more than 16,000 tons of SO2 in 2012 or emitted more than 2,600 tons with an emission rate of 0.45 lbs./MMBTU or higher in 2012; (2) by December 2017, EPA must issue designations for areas for which states have not adopted a new monitoring network under the proposed data requirements rule; and (3) by December 2020, EPA must issue designations for areas for which states have adopted a new monitoring network under the proposed data requirements rule. SJGS and Four Corners SO2 emissions are below the thresholds set forth in (1) above. EPA regions sent letters to state environmental agencies explaining how EPA plans to implement the consent decree. The letters outline the schedule that EPA expects states to follow in moving forward with new SO2 non-attainment designations. NMED did not receive a letter. On August 11, 2015, EPA released the Data Requirements Rule for SO2, telling states how to model or monitor to determine attainment or nonattainment with the new 1-hour SO2 NAAQS. On June 3, 2016, NMED notified PNM that air quality modeling results indicated that SJGS was in compliance with the standard. In January 2017, NMED submitted their formal modeling report regarding attainment status to EPA. The modeling indicated that no area in New Mexico exceeds the 1-hour SO2 standard. On June 27, 2018, NMED submitted the first annual report for SJGS as required by the Data Requirements Rule. The report recommends that no further modeling is warranted at this time due to decreased SO2 emissions. On May 14, 2015, PNM received an amendment to its NSR air permit for SJGS, which reflects the revised state implementation plan for regional haze BART and requires the installation of SNCRs as described above. The revised permit also requires the reduction of SO2 emissions to 0.10 pound per MMBTU on SJGS Units 1 and 4 and the installation of BDT equipment modifications for the purpose of reducing fugitive emissions, including NOx, SO2, and particulate matter. These reductions help SJGS meet the NAAQS for these constituents. The BDT equipment modifications were installed at the same time as the SNCRs, in order to most efficiently and cost effectively conduct construction activities at SJGS. See Regional Haze – SJGS above. On May 29, 2018, EPA released a proposed rule that would retain the primary health-based NAAQS for SOx. EPA is proposing to retain the current 1-hour standard for SO2, which is 75 parts per billion (“ppb”), based on the 3-year average of the 99th percentile of daily maximum 1-hour SO2 concentrations. SO2 is the most prevalent SOx compound and is used as the indicator for the primary SOx NAAQS. On October 1, 2015, EPA finalized the new ozone NAAQS and lowered both the primary and secondary 8-hour standard from 75 to 70 parts per billion. With ozone standards becoming more stringent, fossil-fueled generation units will come under increasing pressure to reduce emissions of NOx and volatile organic compounds, and to generate emission offsets for new projects or facility expansions located in nonattainment areas. On November 10, 2015, EPA proposed a rule revising its Exceptional Events Rule, which outlines the requirements for excluding air quality data (including ozone data) from regulatory decisions if the data is affected by events outside an area’s control. The proposed rule is important in light of the new more stringent ozone NAAQS final rule since western states like New Mexico and Arizona are particularly subject to elevated background ozone transport from natural local sources, such as wildfires, and transported via winds from distant sources, such as the stratosphere or another region or country. On February 25, 2016, EPA released guidance on area designations for ozone, which states used to determine their initial designation recommendations by October 1, 2016. NMED published its 2015 Ozone NAAQS Designation Recommendation Report on September 2, 2016. In New Mexico, EPA is designating only a small area in southern Dona Ana County as non-attainment for ozone. NMED will have responsibility for bringing this non-attainment area into compliance and will look at all sources of NOx and volatile organic compounds since these are the pollutants that form ground-level ozone. According to NMED’s website, “If emissions from Mexico keep New Mexico from meeting the standards, the New Mexico area could remain non-attainment but would not face more stringent requirements over time.” On November 6, 2017, EPA released a final rule establishing some, but not all, initial area designations. In that final rule, San Juan County, New Mexico, where SJGS and Four Corners are located, is designated as attainment/unclassifiable. EPA designated a small area in Dona Ana County as marginal non-attainment. On April 30, 2018, EPA completed additional area designations for the 2015 ozone standards. In a related matter, EPA published a final rule on March 9, 2018 establishing air quality thresholds that define the classifications assigned to all non-attainment areas for ozone NAAQS. The final rule also establishes the timing of attainment dates for each non-attainment area classification, which are marginal, moderate, serious, severe, or extreme. The rule became effective May 8, 2018. NMED is required to submit an infrastructure and transport SIP that provides the basic air quality management program to implement the revised ozone standard. This plan is generally due within 36 months from the date the NAAQS is promulgated. The NMED has published a proposed certification that New Mexico currently has an adequate, federally-approved SIP that addresses elements of the CAA Section 110(a)(2) infrastructure SIP, as applicable to the 2015 ozone NAAQS. The purpose of the proposed certification is to confirm to EPA that New Mexico has the required “infrastructure” in place under the current SIP to implement, maintain, and enforce the revised 2015 ozone NAAQS. Comments on the proposed certification were due by October 29, 2018. State ozone attainment plans are generally due within five to six years from the date of the ozone NAAQS promulgation and are planned for submittal in 2020 and 2021. PNM does not believe there will be material impacts to its facilities as a result of NMED’s non-attainment designation of the small area within Dona Ana County. Until EPA approves attainment designations for the Navajo Nation and releases a proposal to implement the revised ozone NAAQS, APS is unable to predict what impact the adoption of these standards may have on Four Corners. PNM cannot predict the outcome of this matter. WEG v. OSM NEPA Lawsuit In February 2013, WEG filed a Petition for Review in the United States District Court of Colorado against OSM challenging federal administrative decisions affecting seven different mines in four states issued at various times from 2007 through 2012. In its petition, WEG challenged several unrelated mining plan modification approvals, which were each separately approved by OSM. WEG alleged various NEPA violations against OSM, including, but not limited to, OSM’s alleged failure to provide requisite public notice and participation, alleged failure to analyze certain environmental impacts, and alleged reliance on outdated and insufficient documents. WEG’s petition sought various forms of relief, including a finding that the federal defendants violated NEPA by approving the mine plans; voiding, reversing, and remanding the various mining modification approvals; enjoining the federal defendants from re-issuing the mining plan approvals for the mines until compliance with NEPA has been demonstrated; and enjoining operations at the seven mines. Of the fifteen claims for relief in the WEG Petition, two concerned SJCC’s San Juan mine. WEG’s allegations concerning the San Juan mine arise from OSM administrative actions in 2008. SJCC intervened in this matter. The court granted SJCC’s motion to sever its claims from the lawsuit and transfer venue to the NM District Court. In July 2016, OSM filed a Motion for Voluntary Remand to allow the agency to conduct a new environmental analysis. On August 31, 2016, the court entered an order remanding the matter to OSM for the completion of an EIS by August 31, 2019. The court ruled that mining operations may continue in the interim and the litigation is administratively closed. If OSM does not complete the EIS within the time frame provided, the court will order immediate vacatur of the mining plan at issue absent a further court order based on good cause shown. On March 22, 2017, OSM issued its Notice of Intent to initiate the public scoping process and prepare an EIS for the project. The Notice of Intent provided that, in addition to analyzing the environmental effects of the mining project, the EIS will also analyze the indirect effects of coal combustion at SJGS. The public comment period ended on May 8, 2017 and the EIS resource data submittal phase was completed in November 2017. The draft EIS was made available in May 2018. The public comment period ended on July 9, 2018. PNM cannot currently predict the outcome of this matter. Navajo Nation Environmental Issues Four Corners is located on the Navajo Reservation and is held under easements granted by the federal government, as well as agreements with the Navajo Nation which grant each of the owners the right to operate on the site. The Navajo Acts purport to give the Navajo Nation Environmental Protection Agency authority to promulgate regulations covering air quality, drinking water, and pesticide activities, including those activities that occur at Four Corners. In October 1995, the Four Corners participants filed a lawsuit in the District Court of the Navajo Nation challenging the applicability of the Navajo Acts to Four Corners. In May 2005, APS and the Navajo Nation signed an agreement resolving the dispute regarding the Navajo Nation’s authority to adopt operating permit regulations under the Navajo Nation Air Pollution Prevention and Control Act. As a result of this agreement, APS sought, and the court granted, dismissal of the pending litigation in the Navajo Nation Supreme Court and the Navajo Nation District Court, to the extent the claims relate to the CAA. The agreement does not address or resolve any dispute relating to other aspects of the Navajo Acts. PNM cannot currently predict the outcome of these matters or the range of their potential impacts. Cooling Water Intake Structures EPA signed its final cooling water intake structures rule on May 16, 2014, which establishes national standards for certain cooling water intake structures at existing power plants and other facilities under the Clean Water Act to protect fish and other aquatic organisms by minimizing impingement mortality (the capture of aquatic wildlife on intake structures or against screens) and entrainment mortality (the capture of fish or shellfish in water flow entering and passing through intake structures). The final rule became effective October 14, 2014. The final rule allows multiple compliance options and considerations for site specific conditions and the permit writer is granted a significant amount of discretion in determining permit requirements, schedules, and conditions. To minimize impingement mortality, the rule provides operators of facilities, such as SJGS and Four Corners, seven options for meeting Best Technology Available (“BTA”) standards for reducing impingement. SJGS has a closed-cycle recirculating cooling system, which is a listed BTA and may also qualify for the “de minimis rate of impingement” based on the design of the intake structure. To minimize entrainment mortality, the permitting authority must establish the BTA for entrainment on a site-specific basis, taking into consideration an array of factors, including endangered species and social costs and benefits. Affected sources must submit source water baseline characterization data to the permitting authority to assist in the determination. Compliance deadlines under the rule are tied to permit renewal and will be subject to a schedule of compliance established by the permitting authority. The rule is not clear as to how it applies and what the compliance timelines are for facilities like SJGS that have a cooling water intake structure and only a multi-sector general stormwater permit. PNM is working with EPA regarding this issue. However, PNM does not expect material changes as a result of any requirements that may be imposed upon SJGS. On May 23, 2018, several environmental groups sued EPA Region IX in the United States Court of Appeals for the Ninth Circuit Court over EPA’s failure to timely reissue the Four Corners NPDES permit. The petitioners asked the court to issue a writ of mandamus compelling EPA Region IX to take final action on the pending NPDES permit by a reasonable date. EPA subsequently reissued the NPDES permit on June 12, 2018. The permit did not contain conditions related to the cooling water intake structure rule as EPA determined that the facility has achieved BTA for both impingement and entrainment by operating a closed-cycle recirculation system and no additional conditions are necessary. On July 16, 2018, several environmental groups filed a petition for review with the EPA’s Environmental Appeals Board concerning the reissued permit. The environmental groups alleged that the permit was reissued in contravention of several requirements under the Clean Water Act and did not contain required provisions concerning certain revised effluent limitation guidelines, existing-source regulations governing cooling-water intake structures, and effluent limits for surface seepage and subsurface discharges from coal-ash disposal facilities. On December 19, 2018, EPA withdrew the Four Corners NPDES permit in order to examine issues raised by the environmental groups. Withdrawal of the permit moots the appeal pending before the Environmental Appeals Board, and EPA has filed a motion to dismiss on that basis. EPA has indicated that it anticipates proposing a replacement NPDES permit by March 2019 and, depending on the amount of public comments received, taking final action on a new NPDES permit by June 2019. Four Corners will continue to operate under the 2001 NPDES permit. PNM cannot predict the outcome of this matter or whether reconsideration will have a material impact on PNM’s financial position, results of operations or cash flows. Effluent Limitation Guidelines On June 7, 2013, EPA published proposed revised wastewater effluent limitation guidelines establishing technology-based wastewater discharge limitations for fossil fuel-fired electric power plants. EPA’s proposal offered numerous options that target metals and other pollutants in wastewater streams originating from fly ash and bottom ash handling activities, scrubber activities, and non-chemical metal cleaning waste operations. All proposed alternatives establish a “zero discharge” effluent limit for all pollutants in fly ash transport water. Requirements governing bottom ash transport water differ depending on which alternative EPA ultimately chooses and could range from effluent limits based on Best Available Technology Economically Achievable to “zero discharge” effluent limits. EPA signed the final Steam Electric Effluent Guidelines rule on September 30, 2015. The final rule, which became effective on January 4, 2016, phases in the new, more stringent requirements in the form of effluent limits for arsenic, mercury, selenium, and nitrogen for wastewater discharged from wet scrubber systems and zero discharge of pollutants in ash transport water that must be incorporated into plants’ NPDES permits. Each plant must comply between 2018 and 2023 depending on when it needs a new or revised NPDES permit. On April 14, 2017, EPA filed a motion with the United States Court of Appeals for the Fifth Circuit relating to ongoing litigation of the 2016 Steam Electric Effluent Guidelines rule. EPA asked the court to hold all proceedings in the case in abeyance until August 12, 2017 while EPA reconsiders the rule. EPA also asked to be allowed to file a motion on August 12, 2017 to inform the court if EPA wishes to seek a remand of any provisions of the rule so that EPA may conduct further rulemaking, if appropriate. The motion referred to the notice signed by the EPA Administrator on April 12, 2017, which announced EPA’s intent to reconsider this rule, as well as EPA’s administrative stay of the compliance deadlines. On August 22, 2017, the court granted the government’s motion and the litigation is held in abeyance until EPA’s further rulemaking has concluded. On September 18, 2017, EPA published the final rule for postponement of certain compliance dates, which have not yet passed for the Effluent Limitations Guidelines rule, consistent with the EPA’s decision to grant reconsideration of that rule. The final rule postponed the earliest date on which compliance with the effluent limitation guidelines for these waste streams would be required from November 1, 2018 until November 1, 2020, although the new deadlines have been challenged in court. Because SJGS is zero discharge for wastewater and is not required to hold a NPDES permit, it is expected that minimal to no requirements will be imposed. Reeves Station, a PNM-owned gas-fired generating station, discharges cooling tower blowdown to a publicly owned treatment works and holds an NPDES permit. It is expected that minimal to no requirements will be imposed at Reeves Station. EPA reissued an NPDES permit for Four Corners on June 12, 2018. EPA had determined that the guidelines in the 2015 rule are not applicable to this permit because the effective dates of the 2015 effluent guidelines rule were extended. On December 19, 2018, EPA withdrew the Four Corners NPDES permit in order to examine issues raised by several environmental groups. Four Corners will continue to operate under the 2001 NPDES permit. See Cooling Water Intake Structures above. Four Corners may be required to change equipment and operating practices affecting boilers and ash handling systems, as well as change its waste disposal techniques, during the next NPDES permit renewal for Four Corners, which will be in 2023. PNM is unable to predict the outcome of these matters or a range of the potential costs of compliance. Santa Fe Generating Station PNM and the NMED are parties to agreements under which PNM installed a remediation system to treat water from a City of Santa Fe municipal supply well, an extraction well, and monitoring wells to address gasoline contamination in the groundwater at the site of PNM’s former Santa Fe Generating Station and service center. PNM believes the observed groundwater contamination originated from off-site sources but agreed to operate the remediation facilities until the groundwater meets applicable federal and state standards or until the NMED determines that additional remediation is not required, whichever is earlier. The City of Santa Fe has indicated that since the City no longer needs the water from the well, the City would prefer to discontinue its operation and maintain it only as a backup water source. However, for PNM’s groundwater remediation system to operate, the water well must be in service. Currently, PNM is not able to assess the duration of this project or estimate the impact on its obligations if the City of Santa Fe ceases to operate the water well. The Superfund Oversight Section of the NMED also has conducted multiple investigations into the chlorinated solvent plume in the vicinity of the site of the former Santa Fe Generating Station. In February 2008, a NMED site inspection report was submitted to EPA, which states that neither the source nor extent of contamination has been determined and that the source may not be the former Santa Fe Generating Station. Results of tests conducted by NMED in April 2012 and April 2013 showed elevated concentrations of nitrate in three monitoring wells and an increase in free-phase hydrocarbons in another well. PNM conducted similar site-wide sampling activities in April 2014 and obtained results similar to the 2013 data. As part of this effort, PNM also collected a sample of hydrocarbon product for “fingerprint” analysis from a monitoring well located on the northeastern corner of the property. This analysis indicated that the hydrocarbon product was a mixture of newer and older fuels, and the location of the monitoring well suggests that the hydrocarbon product is likely from offsite sources. PNM does not believe the former generating station is the source of the increased levels of free-phase hydrocarbons, but no conclusive determinations have been made. However, it is possible that PNM’s prior activities to remediate hydrocarbon contamination, as conducted under an NMED-approved plan, may have resulted in increased nitrate levels. Therefore, PNM has agreed to monitor nitrate levels in a limited number of wells under the terms of the renewed discharge permit for the former generating station. However, the renewed discharge permit required that PNM conduct more frequent monitoring than originally anticipated, which resulted in an insignificant increase to the project cost estimate. Effective December 22, 2015, PNM and NMED entered into a memorandum of understanding to address changing groundwater quality conditions at the site. Under the memorandum, PNM will continue hydrocarbon investigation of the site under the supervision of NMED and qualified costs of the work will be eligible for payment through the New Mexico Corrective Action Fund (“CAF”), which is administered by the NMED Petroleum Storage Tank Bureau. Among other things, money in the CAF is available to NMED to make payments to or on behalf of owners and operators for corrective action taken in accordance with statutory and regulatory requirements to investigate, minimize, eliminate, or clean up a release. PNM’s work plan and cost estimates for specific groundwater investigation tasks were approved by the Petroleum Storage Tank Bureau. PNM submitted a monitoring plan consisting of a compilation of the data associated with monitoring activities conducted under the CAF to NMED on October 3, 2016. PNM completed all CAF-related work associated with the monitoring plan and received NMED’s approval. PNM’s contractor prepared a scope of work, which PNM and NMED approved, for the installation of additional monitoring wells and additional sampling of certain existing monitoring wells at the site. These activities were completed in June 2018. PNM’s contractor has commenced the next phase of work which includes the installation of up to 38 additional monitoring wells. Work is expected to be completed in early 2019. Qualified costs of this work are eligible for payment through the CAF. PNM is unable to predict the outcome of these matters. Coal Combustion Residuals Waste Disposal CCRs consisting of fly ash, bottom ash, and gypsum generated from coal combustion and emission control equipment at SJGS are currently disposed of in the surface mine pits adjacent to the plant. SJGS does not operate any CCR impoundments or landfills. The NMMMD currently regulates mine reclamation activities at the San Juan mine, including placement of CCRs in the surface mine pits, with federal oversight by the OSM. APS disposes of CCRs in ponds and dry storage areas at Four Corners. Ash management at Four Corners is regulated by EPA and the New Mexico State Engineer’s Office. EPA’s final coal ash rule, which became effective on October 19, 2015, included a non-hazardous waste determination for coal ash. The rule sets minimum criteria for existing and new CCR landfills and existing and new CCR surface impoundments and all lateral expansions consisting of location restrictions, design and operating criteria; groundwater monitoring and corrective action; closure requirements and post closure care; and recordkeeping, notification, and internet posting requirements. Because the rule is promulgated under Subtitle D of RCRA, it does not require regulated facilities to obtain permits, does not require the states to adopt and implement the rules, and is not within EPA’s enforcement jurisdiction. Instead, the rule’s compliance mechanism is for a state or citizen group to bring a RCRA citizen suit in federal district court against any facility that is alleged to be in non-compliance with the requirements. On December 16, 2016, the Water Infrastructure Improvements for the Nation Act (the “WIIN Act”) was signed into law to address critical water infrastructure needs in the United States. The WIIN Act contains a number of provisions requiring EPA to modify the self-implementing provisions of the current CCR rules under Subtitle D. Among other things, the WIIN Act provides for the establishment of state and EPA permit programs for CCRs, provides flexibility for states to incorporate the EPA final rule for CCRs or develop other criteria that are at least as protective as the EPA’s final rule, and requires EPA to approve state permit programs within 180 days of submission by the state for approval. As a result, the CCR rule is no longer self-implementing and there will either be a state or federal permit program. Subject to Congressional appropriated funding, EPA will implement the permit program in states that choose not to implement a program. Until permit programs are in effect, EPA has authority to directly enforce the self-implementing CCR rule. For facilities located within the boundaries of Native American tribal reservations, such as the Navajo Nation where Four Corners is located, EPA is required to develop a federal permit program regardless of appropriated funds. EPA has yet to undertake rulemaking proceedings to implement the CCR provisions of the WIIN Act. There is no timeline for establishing either state or federal permitting programs. APS has sought clarification as to when and how EPA would be initiating permit proceedings for facilities on tribal reservations, including Four Corners. PNM is unable to predict when EPA will be issuing permits for Four Corners. On September 13, 2017, EPA agreed to evaluate whether to revise the CCR regulations based upon utility industry petitions for EPA to reconsider the RCRA Subtitle D regulations for CCRs, which were premised in part on the provisions of the WIIN Act. In light of the WIIN Act and the petitions for rulemaking, the EPA is considering making additional changes to the CCR rule to provide flexibility to state programs consistent with the WIIN Act. With respect to ongoing litigation initiated by industry and environmental groups challenging the legality of the CCR regulations and pursuant to an order issued by the DC Circuit, EPA and the industry groups argued the court should postpone adjudication until EPA completes the reconsideration process for the affected provision. Pursuant to a June 24, 2016 order by the DC Circuit in litigation by industry and environmental groups challenging EPA’s CCR regulations, EPA is required to complete a rulemaking proceeding by June 2019 to address specific technical issues. On March 15, 2018, EPA proposed its Phase I Remand Rule that includes potential revisions to provide site-specific, risk-based tailoring of groundwater monitoring, corrective action and location restriction requirements of the CCR rule. EPA published the final rule on July 30, 2018. According to EPA, the July 30, 2018 rule constitutes “Phase One, Part One” of its ongoing reconsideration and revision of the April 17, 2015 coal ash rule. The final rule includes two types of revisions. The first revision extends the deadline to allow EGUs with unlined impoundments or that fail to meet the uppermost aquifer requirement to continue to receive coal ash until October 31, 2020. The second revision authorizes a “Participating State Director” or EPA, in lieu of a professional engineer, to approve suspension of groundwater monitoring and to issue certifications related to the location restrictions, design criteria, groundwater monitoring, remedy selection and implementation. The revisions also modify groundwater protection standards for certain constituents, which include cobalt, molybdenum, lithium, and lead without a maximum contamination level. EPA indicated that provisions in the March 2018 rule that are not addressed in the July 2018 final rule will be addressed in a subsequent rulemaking. On August 21, 2018, the DC Circuit Court of Appeals issued its decision in the CCR litigation. The court denied EPA’s request to hold the case in abeyance; remanded the industry group’s challenges to the regulation of certain on-site CCR piles; denied relief for the remaining industry group’s claims, including the challenge to EPA’s authority to regulate inactive surface impoundments; and found for the environmental groups on their challenges to the ability of unlined impoundments to continue operating, the classification of certain unlined impoundments as “lined” units, and EPA’s failure to regulate legacy ponds. It remains unclear how the DC Circuit Court of Appeals decision will impact Four Corners as EPA has not yet taken regulatory action on remand to revise its CCR regulations consistent with the court’s order. Based on this decision, on December 17, 2018, certain environmental groups filed an emergency motion with the D.C. Circuit to stay or summarily vacate EPA’s July 17, 2018 final rule extending the closure-initiation deadline for certain unlined CCR surface impoundments until October 2020. In response, EPA filed a motion to remand but not vacate that deadline extension regulation. PNM cannot predict the outcome of the D.C. Circuit’s consideration of these competing motions, and whether or how such a ruling would affect operations at Four Corners. The CCR rule does not cover mine placement of coal ash. OSM is expected to publish a proposed rule covering mine placement in the future and will likely be influenced by EPA’s rule and the determination by EPA that CCRs are non-hazardous. PNM cannot predict the outcome of OSM’s proposed rulemaking regarding CCR regulation, including mine placement of CCRs, or whether OSM’s actions will have a material impact on PNM’s operations, financial position, or cash flows. Based upon the requirements of the final rule, PNM conducted a CCR assessment at SJGS and made minor modifications at the plant to ensure that there are no facilities which would be considered impoundments or landfills under the rule. PNM would seek recovery from its ratepayers of all CCR costs for retail jurisdictional assets that are ultimately incurred. PNM does not expect the rule to have a material impact on operations, financial position, or cash flows. As indicated above, CCRs at Four Corners are currently disposed of in ash ponds and dry storage areas. The CCR rule requires ongoing, phased groundwater monitoring. Utilities that own or operate CCR disposal units, such as those at Four Corners were required to collect sufficient groundwater sampling data to initiate a detection monitoring program. To the extent that certain threshold constituents are identified through this initial detection monitoring at levels above the CCR rule’s standards, the rule required the initiation of an assessment monitoring program by April 15, 2018. If this assessment monitoring program reveals concentrations of certain constituents above the CCR rule standards that trigger remedial obligations, a corrective measures evaluation must be completed by April 2019. Four Corners completed an analysis that determined several of its CCR disposal units will need corrective action or will need to cease operations and initiate closure by October 2020. Four Corners anticipates it will complete its evaluation of these matters by mid-2019. At this time, PNM does not anticipate its share of the cost to complete these corrective actions or to close the CCR disposal units at Four Corners will have a significant impact on its operations, financial position, or cash flows. Other Commitments and Contingencies Coal Supply SJGS The coal requirements for SJGS are supplied by SJCC. SJCC holds certain federal, state, and private coal leases. Through January 31, 2016, SJCC was a wholly-owned subsidiary of BHP and supplied processed coal for operation of SJGS under an underground coal sales agreement (“UG-CSA”) that was to expire on December 31, 2017. The parties to the UG-CSA were SJCC, PNM, and Tucson. Under the UG-CSA, SJCC was reimbursed for all costs for mining and delivering the coal, including an allocated portion of administrative costs, and received a return on its investment. In addition to coal delivered to meet the current needs of SJGS, PNM has prepaid SJCC for certain coal mined but not yet delivered to the plant site. At December 31, 2018 and 2017, prepayments for coal (including amounts purchased from the exiting SJGS participants discussed below), which are included in other current assets, amounted to $26.3 million and $26.3 million. In conjunction with the activities undertaken to comply with the CAA for SJGS, as discussed above, PNM and the other owners of SJGS evaluated alternatives for the supply of coal to SJGS after the expiration of the UG-CSA. Following extensive negotiations among the SJGS participants, the owner of SJCC, and third-party miners, agreements were negotiated under which the ownership of SJCC would transfer to a new third-party miner and PNM would enter into a new coal supply agreement and agreements for CCR disposal and mine reclamation services with SJCC on or about January 1, 2016. Effectiveness of the agreements was dependent upon the closing of the purchase of SJCC by the new third-party miner and the finalization of the SJGS RA and other agreements, which along with regulatory approvals, were necessary for the restructuring of ownership in SJGS to be consummated. On July 1, 2015, PNM and Westmoreland entered into a new coal supply agreement (the “SJGS CSA”) pursuant to which Westmoreland is to supply all of the coal requirements of SJGS through June 30, 2022. PNM and Westmoreland also entered into agreements under which Westmoreland is to provide CCR disposal and mine reclamation services for SJGS. Contemporaneous with the entry into the coal-related agreements, Westmoreland entered into a stock purchase agreement (the “Stock Purchase Agreement”) on July 1, 2015 to acquire all of the capital stock of SJCC. In addition, PNM, Tucson, SJCC, and SJCC’s owner entered into an agreement to terminate the existing UG-CSA upon the effective date of the new SJGS CSA. The SJGS CSA became effective as of 11:59 PM on January 31, 2016, upon the closing under the Stock Purchase Agreement. Upon closing under the Stock Purchase Agreement, Westmoreland’s rights and obligations under the SJGS CSA and the agreements for CCR disposal and mine reclamation services were assigned to SJCC. Westmoreland has guaranteed SJCC’s performance under the SJGS CSA. Pricing under the SJGS CSA is primarily fixed, adjusted to reflect general inflation. The pricing structure takes into account that SJCC has been paid for coal mined but not delivered, as discussed above. PNM has the option to extend the SJGS CSA, subject to negotiation of the term of the extension and compensation to the miner. In order to extend, the SJGS CSA provides that PNM must have given written notice of that intent by July 1, 2018 and the parties must have agreed to the terms of the extension by January 1, 2019. In addition, the SJPPA obligates each SJGS participant to provide notice to the other participants whether they wish to extend the terms of the SJPPA and the SJGS CSA beyond June 30, 2022. Los Alamos, UAMPS, and Tucson provided notice of their intent to exit SJGS in 2022. Farmington gave notice that it wishes to continue SJGS operations and to extend the terms of both agreements. PNM gave preliminary notice to the other participants that, based on updated coal pricing and other relevant information, PNM does not wish to extend the terms of the SJPPA or the SJGS CSA beyond June 30, 2022. Due to Farmington’s stated interest in continuing SJGS operations beyond 2022, PNM and Westmoreland agreed to extend the July 1, 2018 notice deadline to December 1, 2018. On November 30, 2018, PNM provided notice to Westmoreland that PNM does not intend to extend the term of the SJGS CSA or to negotiate a new coal supply agreement for SJGS, which will result in the current agreement expiring on its own terms on June 30, 2022. See December 2018 Compliance Filing above. On March 17, 2018, a coal silo used to supply fuel to SJGS Unit 1 collapsed resulting in an outage. Repairs necessary to return Unit 1 to service were completed by July 5, 2018. See Note 17. PNM notified Westmoreland that this event constituted a “force majeure” under the SJGS CSA and that PNM would be unable to satisfy its minimum obligations to purchase coal for Unit 1 as a result of the event. On October 5, 2018, PNM and SJCC reached a settlement under which the minimum obligation to purchase coal for SJGS during the 2018 contract year was reduced by 111,668 tons and resolving the issues related to the event. The benefit of this reduction will be returned to customers through the FPPAC. The SJGS RA sets forth terms under which PNM acquired the coal inventory, including coal mined but not delivered, of the exiting SJGS participants as of January 1, 2016 and supplied coal to the SJGS exiting participants for the period from January 1, 2016 through December 31, 2017 and is supplying coal to the SJGS remaining participants over the term of the SJGS CSA. Coal costs under the SJGS CSA are significantly less than under the previous arrangement with SJCC. Since substantially all of PNM’s coal costs are passed through the FPPAC, the benefit of the reduced costs is passed through to PNM’s customers. In support of the closing under the Stock Purchase Agreement and to facilitate PNM customer savings, NM Capital, a wholly-owned subsidiary of PNMR, provided funding of $125.0 million (the “Westmoreland Loan”) to Westmoreland San Juan, LLC (“WSJ”), a ring-fenced, bankruptcy-remote, special-purpose entity subsidiary of Westmoreland, to finance WSJ’s purchase of the stock of SJCC (including an insignificant affiliate) under the Stock Purchase Agreement. NM Capital provided the $125.0 million financing to WSJ by first entering into a $125.0 million term loan agreement (the “BTMU Term Loan”) with BTMU, as lender and administrative agent. The BTMU Term Loan agreement became effective as of February 1, 2016, had a maturity date of February 1, 2021, and bore interest at a rate based on LIBOR plus a customary spread. In connection with the BTMU Term Loan, PNMR, as parent company of NM Capital, guaranteed NM Capital’s obligations to BTMU. The Westmoreland Loan was a $125.0 million loan agreement among NM Capital, as lender, WSJ, as borrower, and SJCC and its affiliate, as guarantors. The Westmoreland Loan became effective as of February 1, 2016 and had a maturity date of February 1, 2021. The interest rate on the Westmoreland Loan escalated over time and was 9.25% plus LIBOR for the period from February 1, 2017 through January 31, 2018 and 12.25% plus LIBOR beginning February 1, 2018. WSJ paid principal and interest quarterly to NM Capital in accordance with an amortization schedule. In addition, the Westmoreland Loan required that all cash flows of WSJ, in excess of normal operating expenses, capital additions, and operating reserves, be utilized for principal and interest payments under the loan until it was fully repaid. The Westmoreland Loan was secured by the assets of and the equity interests in SJCC and its affiliate. The Westmoreland Loan also included customary representations and warranties, covenants, and events of default. There were no prepayment penalties. See Note 10. On May 22, 2018, the full principal outstanding under the Westmoreland Loan of $50.1 million was repaid. NM Capital used a portion of the proceeds to repay all remaining principal of $43.0 million owed under the BTMU Term Loan. These payments effectively terminated the loan agreements. In addition, PNMR’s guarantee of NM Capital’s obligations was also effectively terminated. In connection with certain mining permits relating to the operation of the San Juan mine, SJCC is required to post reclamation bonds of $118.7 million with the NMMMD. In order to facilitate the posting of reclamation bonds by sureties on behalf of SJCC, PNMR entered into letter of credit arrangements with a bank under which letters of credit aggregating $30.3 million have been issued. See NEE Complaint above and Note 10, for information concerning Westmoreland’s October 9, 2018 Chapter 11 bankruptcy filing and related proceedings. Four Corners APS purchases all of Four Corners’ coal requirements from NTEC, an entity owned by the Navajo Nation, under a coal supply contract (the “Four Corners CSA”) that expires in 2031. The coal comes from reserves located within the Navajo Nation. NTEC has contracted with Bisti Fuels Company, LLC, a subsidiary of The North American Coal Corporation, for management and operation of the mine. The contract provides for pricing adjustments over its term based on economic indices. The average coal price per ton under the contract was approximately 51% higher in the twelve months ended June 30, 2017 than in the twelve months ended June 30, 2016. In the twelve months ended June 30, 2018, the average coal price per delivered ton increased approximately 6.9% over the 2017 prices. As discussed below, the Four Corners CSA has been amended. PNM’s share of the coal costs is being recovered through the FPPAC. Four Corners Coal Supply Arbitration – The owners of Four Corners are obligated to purchase a specified minimum amount of coal each contract year and to pay for any shortfall below the minimum amount, except when caused by “uncontrollable forces” as defined in the Four Corners CSA. On June 13, 2017, APS received a demand for arbitration from NTEC in connection with the Four Corners CSA. NTEC originally sought a declaratory judgment to support its interpretation of a provision regarding uncontrollable forces in the agreement relating to the annual minimum quantities of coal to be purchased by the Four Corners owners. NTEC also alleged a shortfall in those purchases for the initial contract year, which ended June 30, 2017. On September 20, 2017, NTEC amended its demand for arbitration removing the request for a declaratory judgment. On June 29, 2018, a settlement was reached for the disputed shortfall during the period July 7, 2016 through February 28, 2018. PNM’s share of the settlement payment made to NTEC by the Four Corners owners was $4.9 million. PNM’s share of the shortfall for the guaranteed minimum purchase of coal for the period March 1, 2018 through June 30, 2018 was $1.4 million. The arbitration was dismissed on July 9, 2018. Substantially all of the amount that PNM is required to pay under this settlement agreement will be collected through the FPPAC. Contemporaneous with the execution of the settlement agreement, the Four Corners owners and NTEC amended the Four Corners CSA. The amendments reduce required take-or-pay volumes and the base price of coal. The amendments do not extend the term of the Four Corners CSA beyond its current July 6, 2031 expiration date. Coal Mine Reclamation In conjunction with the proposed shutdown of SJGS Units 2 and 3 to comply with the BART requirements of the CAA, an updated coal mine reclamation study was requested by the SJGS participants. In 2013, PNM updated its study of the final reclamation costs for both the surface mines that previously provided coal to SJGS and the current underground mine providing coal and revised its estimates of the final reclamation costs. This estimate reflected that the proposed shutdown of SJGS Units 2 and 3 as described above, and that the mine providing coal to SJGS would continue to operate through 2053, the life of SJGS approved by the NMPRC. The 2013 coal mine reclamation study indicated reclamation costs had increased, including significant increases due to the proposed shutdown of SJGS Units 2 and 3, which would reduce the amount of CCRs generated over the remaining life of SJGS and result in a significant increase in the amount of fill dirt required to remediate the underground mine area thereby increasing the overall reclamation costs. As discussed under Coal Combustion Residuals Waste Disposal above, SJGS currently disposes of CCRs from the plant in the surface mine pits adjacent to the plant. In 2015, PNM updated the SJGS reclamation cost estimate to reflect the terms of the new reclamation services agreement with Westmoreland, and changes related to the approval of the 2015 SJCC Mine Permit Plan. The 2015 reclamation cost estimate reflected that the scope and pricing structure of the reclamation service agreement with Westmoreland, design plan changes, updated regulatory expectations, and common mine reclamation practices would significantly increase reclamation costs. Upon the effectiveness of the SJGS CSA and the SJGS RA, PNM, on behalf of the SJGS owners, coordinated a more detailed coal mine reclamation cost study, which was completed in the third quarter of 2016. To complete the study, PNM was provided access to the mine site and obtained supporting data from Westmoreland allowing for the 2015 study to be refined with more extensive engineering analysis. The refined reclamation cost estimate reflected the terms of the new reclamation services agreement with Westmoreland and continuation of mining operations through 2053, which is the current NMPRC approved operating life of SJGS. The study indicated an additional increase in the reclamation cost estimate. PNM’s $4.5 million share of the increase was recorded in 2016 and is reflected in regulatory disallowances and restructuring costs in the Consolidated Statements of Earnings. The SJGS RA required PNM to complete an update to the reclamation cost estimate after the December 31, 2017 shutdown of SJGS Units 2 and 3. This reclamation cost estimate was completed in October 2018 and assumed continuation of mining operations through 2053. The 2018 study indicated a decrease in reclamation costs primarily driven by lower inflationary factors used to determine the estimated future cost of reclamation activities. PNM recorded its $2.5 million share of this decrease in September 2018, which is reflected in regulatory disallowances and restructuring costs in the Consolidated Statements of Earnings. As discussed above, on December 31, 2018, PNM submitted the December 2018 Compliance Filing to the NMPRC indicating that, consistent with the conclusions reached in PNM’s 2017 IRP (Note 17), PNM expects to retire its share of SJGS after the current SJGS CSA expires in mid-2022. PNM determined that recent events and circumstances regarding SJGS, including the December 2018 Compliance Filing, indicate that it is more likely than not that PNM’s share of SJGS will be retired in 2022. As a result, in December 2018 PNM again remeasured its liability for coal mine reclamation for the mine that serves SJGS to reflect that reclamation activities may occur beginning in 2022, rather than in 2053 as previously anticipated. This estimate resulted in an increase in overall reclamation costs due to an increase in the amount of fill dirt required to remediate the mine areas and the timing of activities necessary to reclaim the mine that serves SJGS. This remeasurement increased PNM’s liability for coal mine reclamation as of December 31, 2018 by $39.2 million, which reflects the increase in PNM’s obligation for both the underground and surface mines that serve SJGS. PNM recovers from retail customers reclamation costs associated with the underground mine. However, the NMPRC has capped the amount that can be collected from retail customers for final reclamation of the surface mines at $100.0 million. As a result, PNM recorded $9.4 million of the increase in the liability at December 31, 2018 related to the underground mine in regulatory assets on the Consolidated Balance Sheets and recorded the remaining $29.8 million associated with the surface mine as regulatory disallowances and restructuring costs on the Consolidated Statements of Earnings. PNM’s estimate of the costs necessary to reclaim the mine that serves SJGS is subject to many assumptions, including the timing of reclamation, generally accepted practices at the time reclamation activities occur, and then current inflation and discount rates. In addition, PNM may be exposed to additional loss if the cost of reclamation activities are not approved by the NMPRC in connection with the NMPRC approvals indicated above. The current estimate for decommissioning the mine serving Four Corners reflects the operation of the mine through 2031, the term of the Four Corners CSA. Based on the 2018 estimates and PNM’s ownership share of SJGS, PNM’s remaining payments for mine reclamation, in future dollars, are estimated to be $103.2 million for the surface mines at both SJGS and Four Corners and $39.7 million for the underground mine at SJGS as of December 31, 2018. At December 31, 2018 and 2017, liabilities, in current dollars, of $70.1 million and $41.4 million for surface mine reclamation and $23.2 million and $14.7 million for underground mine reclamation were recorded in other deferred credits. Under the terms of the SJGS CSA, PNM and the other SJGS owners are obligated to compensate SJCC for all reclamation costs associated with the supply of coal from the San Juan mine. The SJGS owners entered into a reclamation trust funds agreement to provide funding to compensate SJCC for post-term reclamation obligations. As part of the restructuring of SJGS ownership (see SJGS Ownership Restructuring Matters above), the SJGS owners negotiated the terms of an amended agreement to fund post-term reclamation obligations under the CSA. The trust funds agreement requires each owner to enter into an individual trust agreement with a financial institution as trustee, create an irrevocable reclamation trust, and periodically deposit funds into the reclamation trust for the owner’s share of the mine reclamation obligation. Deposits, which are based on funding curves, must be made on an annual basis. As part of the restructuring of SJGS ownership discussed above, the SJGS participants agreed to adjusted interim trust funding levels. PNM funded $10.0 million in 2018, $5.8 million in 2017, and $7.0 million in 2016. Based on PNM’s reclamation trust fund balance at December 31, 2018, the current funding curves indicate PNM’s required contributions to its reclamation trust fund would be $8.9 million in 2019, $10.2 million in 2020, and $10.9 million in 2021. Under the Four Corners CSA, which became effective on July 7, 2016, PNM is required to fund its ownership share of estimated final reclamation costs in thirteen annual installments, beginning on August 1, 2016, into an irrevocable escrow account solely dedicated to the final reclamation cost of the surface mine at Four Corners. PNM contributed $2.3 million in each of 2017 and 2018 and anticipates providing additional funding of $2.3 million in each of the years from 2019 through 2021. Continuous Highwall Mining Royalty Rate In August 2013, the DOI Bureau of Land Management (“BLM”) issued a proposed rulemaking that would retroactively apply the surface mining royalty rate of 12.5% to continuous highwall mining (“CHM”). Comments regarding the rulemaking were due on October 11, 2013 and PNM submitted comments in opposition to the proposed rule. There is no legal deadline for adoption of the final rule. SJCC utilized the CHM technique from 2000 to 2003 and, with the approval of the Farmington, New Mexico Field Office of BLM to reclassify the final highwall as underground reserves, applied the 8.0% underground mining royalty rate to coal mined using CHM and sold to SJGS. In March 2001, SJCC learned that the DOI Minerals Management Service (“MMS”) disagreed with the application of the underground royalty rate to CHM. In August 2006, SJCC and MMS entered into an agreement tolling the statute of limitations on any administrative action to recover unpaid royalties until BLM issued a final, non-appealable determination as to the proper rate for CHM-mined coal. The proposed BLM rulemaking has the potential to terminate the tolling provision of the settlement agreement. Underpaid royalties of approximately $5 million for SJGS would become due if the proposed BLM rule is adopted as proposed. PNM’s share of any amount that is ultimately paid would be approximately 46.3%, none of which would be passed through PNM’s FPPAC. PNM is unable to predict the outcome of this matter. PVNGS Liability and Insurance Matters Public liability for incidents at nuclear power plants is governed by the Price-Anderson Nuclear Industries Indemnity Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both commercial sources and an industry-wide retrospective payment plan. In accordance with this act, the PVNGS participants are insured against public liability exposure for a nuclear incident up to $14.1 billion per occurrence. PVNGS maintains the maximum available nuclear liability insurance in the amount of $450 million, which is provided by American Nuclear Insurers. The remaining $13.6 billion is provided through a mandatory industry-wide retrospective assessment program. If losses at any nuclear power plant covered by the program exceed the accumulated funds, PNM could be assessed retrospective premium adjustments. Based on PNM’s 10.2% interest in each of the three PVNGS units, PNM’s maximum potential retrospective premium assessment per incident for all three units is $41.6 million, with a maximum annual payment limitation of $6.2 million, to be adjusted periodically for inflation. The PVNGS participants maintain insurance for damage to, and decontamination of, property at PVNGS in the aggregate amount of $2.75 billion, a substantial portion of which must first be applied to stabilization and decontamination. These coverages are provided by Nuclear Electric Insurance Limited (“NEIL”). The primary policy offered by NEIL contains a sublimit of $2.25 billion for non-nuclear property damage. If NEIL’s losses in any policy year exceed accumulated funds, PNM is subject to retrospective premium adjustments of $5.4 million for each retrospective premium assessment declared by NEIL’s Board of Directors due to losses. The insurance coverages discussed in this and the previous paragraph are subject to certain policy conditions, sublimits, and exclusions. Natural Gas Supply PNM procures gas supplies for its power plants from third-party sources and contracts with third party transportation providers. Water Supply Because of New Mexico’s arid climate and periodic drought conditions, there is concern in New Mexico about the use of water, including that used for power generation. Although PNM does not believe that its operations will be materially affected by drought conditions at this time, it cannot forecast long-term weather patterns. Public policy, local, state and federal regulations, and litigation regarding water could also impact PNM operations. To help mitigate these risks, PNM has secured permanent groundwater rights for the existing plants at Reeves Station, Rio Bravo, Afton, Luna, Lordsburg, and La Luz. Water availability is not an issue for these plants at this time. However, prolonged drought, ESA activities, and a federal lawsuit by the State of Texas (suing the State of New Mexico over water deliveries) could pose a threat of reduced water availability for these plants. For SJGS and Four Corners, PNM and APS have negotiated an agreement with the more senior water rights holders (tribes, municipalities, and agricultural interests) in the San Juan basin to mutually share the impacts of water shortages with tribes and other water users in the San Juan basin. The agreement to share shortages in 2018 through 2021 has been endorsed by the parties and is being reviewed by the New Mexico Office of the State Engineer. In April 2010, APS signed an agreement on behalf of the PVNGS participants with five cities to provide cooling water essential to power production at PVNGS for 40 years. PVNGS Water Supply Litigation In 1986, an action commenced regarding the rights of APS and the other PVNGS participants to the use of groundwater and effluent at PVNGS. APS filed claims that dispute the court’s jurisdiction over PVNGS’ groundwater rights and their contractual rights to effluent relating to PVNGS and, alternatively, seek confirmation of those rights. In 1999, the Arizona Supreme Court issued a decision finding that certain groundwater rights may be available to the federal government and Indian tribes. In addition, the Arizona Supreme Court issued a decision in 2000 affirming the lower court’s criteria for resolving groundwater claims. Litigation on these issues has continued in the trial court. No trial dates have been set in these matters. PNM does not expect that this litigation will have a material impact on its results of operation, financial position, or cash flows. San Juan River Adjudication In 1975, the State of New Mexico filed an action in NM District Court to adjudicate all water rights in the San Juan River Stream System, including water used at Four Corners and SJGS. PNM was made a defendant in the litigation in 1976. In March 2009, then President Obama signed legislation confirming a 2005 settlement with the Navajo Nation. Under the terms of the settlement agreement, the Navajo Nation’s water rights would be settled and finally determined by entry by the court of two proposed adjudication decrees. The court issued an order in August 2013 finding that no evidentiary hearing was warranted in the Navajo Nation proceeding and, on November 1, 2013, issued a Partial Final Judgment and Decree of the Water Rights of the Navajo Nation approving the proposed settlement with the Navajo Nation. A number of parties subsequently appealed to the New Mexico Court of Appeals. PNM entered its appearance in the appellate case and supported the settlement agreement in the NM District Court. On April 3, 2018, the New Mexico Court of Appeals issued an order affirming the decision of the NM District Court. Several parties filed motions requesting a rehearing with the New Mexico Court of Appeals seeking clarification of the order, which were denied. The State of New Mexico and various other appellants filed a Writ of Certiorari with the NM Supreme Court. The NM Supreme Court granted the State of New Mexico’s petition, denied the other parties’ requests, and set a due date for petitioner’s brief of October 29, 2018. Adjudication of non-Indian water rights is ongoing. PNM is participating in this proceeding since PNM’s water rights in the San Juan Basin may be affected by the rights recognized in the settlement agreement and adjudicated to the Navajo Nation, which comprise a significant portion of water available from sources on the San Juan River and in the San Juan Basin and which have priority in times of shortages. PNM is unable to predict the ultimate outcome of this matter or estimate the amount or range of potential loss and cannot determine the effect, if any, of any water rights adjudication on the present arrangements for water at SJGS and Four Corners. Final resolution of the case cannot be expected for several years. An agreement reached with the Navajo Nation in 1985, however, provides that if Four Corners loses a portion of its rights in the adjudication, the Navajo Nation will provide, for an agreed upon cost, sufficient water from its allocation to offset the loss. Rights-of-Way Matter On January 28, 2014, the County Commission of Bernalillo County, New Mexico passed an ordinance requiring utilities to enter into a use agreement and pay a yet-to-be-determined fee as a condition to installing, maintaining, and operating facilities on county rights-of-way. The fee is purported to compensate the county for costs of administering and maintaining the rights-of-way, as well as for capital improvements. On February 27, 2014, PNM and other utilities filed a Complaint for Declaratory and Injunctive Relief in the United States District Court for the District of New Mexico challenging the validity of the ordinance. The court denied the utilities’ motion for judgment. The court further granted the County’s motion to dismiss the state law claims. The utilities filed an amended complaint reflecting the two federal claims remaining before the federal court. The utilities also filed a complaint in Bernalillo County, New Mexico District Court reflecting the state law matters dismissed by the federal court. In subsequent briefing in federal court, the county filed a motion for judgment on one of the utilities’ claims, which was granted by the court, leaving a claim regarding telecommunications service as the remaining federal claim. On January 4, 2016, the utilities filed an Application for Interlocutory Appeal from the state court, which was denied. On March 28, 2017, the utilities filed a Writ of Certiorari with the NM Supreme Court, which was denied. The matter is proceeding in NM District Court. The utilities and Bernalillo County reached a standstill agreement whereby the County would not take any enforcement action against the utilities pursuant to the ordinance during the pendency of the litigation, but not including any period for appeal of a judgment, or upon 30 days written notice by either the county or the utilities of their intention to terminate the agreement. Mediation was held on January 23, 2019. The matter remains unresolved. If the challenges to the ordinance are unsuccessful, PNM believes any fees paid pursuant to the ordinance would be considered franchise fees and would be recoverable from customers. PNM is unable to predict the outcome of this matter or its impact on PNM’s operations. Navajo Nation Allottee Matters In September 2012, 43 landowners filed a notice of appeal with the Bureau of Indian Affairs (“BIA”) appealing a March 2011 decision of the BIA Regional Director regarding renewal of a right-of-way for a PNM transmission line. The landowners claim to be allottees, members of the Navajo Nation, who pursuant to the Dawes Act of 1887, were allotted ownership in land carved out of the Navajo Nation and allege that PNM is a rights-of-way grantee with rights-of-way across the allotted lands and are either in trespass or have paid insufficient fees for the grant of rights-of-way or both. The allottees generally allege that they were not paid fair market value for the right-of-way, that they were denied the opportunity to make a showing as to their view of fair market value, and thus denied due process. The allottees filed a motion to dismiss their appeal with prejudice, which was granted in April 2014. Subsequent to the dismissal, PNM received a letter from counsel on behalf of what appears to be a subset of the 43 landowner allottees involved in the appeal, notifying PNM that the specified allottees were revoking their consents for renewal of right of way on six specific allotments. On January 22, 2015, PNM received a letter from the BIA Regional Director identifying ten allotments with rights-of-way renewals that were previously contested. The letter indicated that the renewals were not approved by the BIA because the previous consent obtained by PNM was later revoked, prior to BIA approval, by the majority owners of the allotments. It is the BIA Regional Director’s position that PNM must re-obtain consent from these landowners. On July 13, 2015, PNM filed a condemnation action in the NM District Court regarding the approximately 15.49 acres of land at issue. On December 1, 2015, the court ruled that PNM could not condemn two of the five allotments at issue based on the Navajo Nation’s fractional interest in the land. PNM filed a motion for reconsideration of this ruling which was denied. On March 31, 2016, the Tenth Circuit granted PNM’s petition to appeal the December 1, 2015 ruling. On September 18, 2015, the allottees filed a separate complaint against PNM for federal trespass. Both matters have been consolidated. Oral argument before the Tenth Circuit was heard on January 17, 2017. On May 26, 2017, the Tenth Circuit affirmed the district court. On July 8, 2017, PNM filed a Motion for Reconsideration en banc with the Tenth Circuit, which was denied. The NM District Court stayed the case based on the Navajo Nation’s acquisition of interests in two additional allotments and the unresolved ownership of the fifth allotment due to the owner’s death. On November 20, 2017, PNM filed its Petition for Writ of Certiorari with the US Supreme Court. On December 22, 2017, amicus briefs supporting PNM’s Petition for Writ of Certiorari were filed with the US Supreme Court. On April 30, 2018, the US Supreme Court declined to hear PNM’s Petition for Writ of Certiorari. The underlying litigation continues in the NM District Court. PNM cannot predict the outcome of these matters. Sales Tax Audits In November 2011, PNMR completed the sale of its retail electric provider, which operated in Texas under the name First Choice Power (“First Choice”). Under the sale agreement, PNMR is contractually obligated for First Choice’s taxes relating to periods prior to the sale. The Texas Comptroller of Public Accounts (“Comptroller”) initiated audits of First Choice’s sales and use tax filings and miscellaneous gross receipts tax filings for periods prior to the sale. During the course of the audits, PNMR accrued an immaterial liability for items identified in the audits for which PNMR believed an unfavorable resolution was probable. The Comptroller originally issued notifications of audit results indicating additional tax due of $5.0 million, plus penalties and interest. The primary issue in dispute was the disallowance by the auditor of the tax benefits of bad debt charge-offs and billing credits. On behalf of First Choice, PNMR filed requests for redetermination for both audits. In September 2018, the Comptroller issued an updated settlement offer that significantly reduced the additional tax due under the audits. Based on the terms of the settlement offer, PNMR increased its liability for amounts due under First Choice’s sales and use tax filings as of September 30, 2018 by an insignificant amount. In October 2018, PNMR settled the sales and use tax audit for a total of $0.9 million. In December 2018, PNMR and the Comptroller reached a settlement under which PNMR paid $1.4 million to resolve all matters related to the miscellaneous gross tax audit. These matters are now concluded. |
Regulatory and Rate Matters |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory and Rate Matters | Regulatory and Rate Matters The Company is involved in various regulatory matters, some of which contain contingencies that are subject to the same uncertainties as those described in Note 16. PNM New Mexico General Rate Cases New Mexico 2015 General Rate Case (“NM 2015 Rate Case”) On August 27, 2015, PNM filed an application with the NMPRC for a general increase in retail electric rates. The application proposed a revenue increase of $123.5 million, including base non-fuel revenues of $121.7 million. PNM’s application was based on a future test year (“FTY”) period beginning October 1, 2015, which met the NMPRC’s interpretation of the FTY statute, and proposed a ROE of 10.5%. PNM requested that the proposed new rates become effective beginning in July 2016. On March 2, 2016, the NMPRC required PNM to file supplemental testimony regarding the treatment of renewable energy in PNM’s FPPAC. See Renewable Portfolio Standard below. A public hearing on the proposed new rates was held in April 2016. Subsequent to this hearing, the NMPRC ordered PNM to file additional testimony regarding PNM’s interests in PVNGS, including the 64.1 MW of PVNGS Unit 2 that PNM repurchased in January 2016, pursuant to the terms of the initial sales-leaseback transactions (Note 8). A subsequent public hearing was held in June 2016. After the June hearing, PNM and other parties were ordered to file supplemental briefs and to provide final recommended revenue requirements that incorporated fuel savings that PNM implemented effective January 1, 2016 from PNM’s SJGS CSA (Note 16). PNM’s filing indicated that recovery for fuel related costs would be reduced by approximately $42.9 million reflecting the current SJGS CSA, which also reduced the request for base non-fuel related revenues by $0.2 million to $121.5 million. On August 4, 2016, the Hearing Examiner in the case issued a recommended decision (the “August 2016 RD”). The August 2016 RD proposed an increase in non-fuel revenues of $41.3 million compared to the $121.5 million increase requested by PNM. Major components of the difference in the increase in non-fuel revenues proposed in the August 2016 RD, included:
The August 2016 RD recommended that the NMPRC find PNM was imprudent in the actions taken to purchase the previously leased 64.1 MW of capacity in PVNGS Unit 2, extending the leases for 114.6 MW of capacity of PVNGS Units 1 and 2, and installing the BDT equipment on SJGS Units 1 and 4. The August 2016 RD also proposed that all fuel costs be removed from base rates and be recovered through the FPPAC. In addition, the August 2016 RD would remove recovery of the costs of power obtained from New Mexico Wind from the FPPAC and include recovery of those costs through PNM’s renewable energy rider discussed below. The August 2016 RD recommended continuation of the renewable energy rider and certain aspects of PNM’s proposals regarding rate design but would not approve certain other rate design proposals or PNM’s request for a revenue decoupling pilot program. The August 2016 RD proposed approving PNM’s proposals for revised depreciation rates (except the August 2016 RD would require depreciation on Four Corners be calculated based on a 2041 life rather than the 2031 life proposed by PNM), the inclusion of construction work in progress in rate base, and ratemaking treatment of the “prepaid pension asset.” The August 2016 RD proposed retail customers receive 100% of the New Mexico jurisdictional portion of revenues from “refined coal” (a third-party pre-treatment process) at SJGS. The August 2016 RD also approved PNM’s request to record a regulatory asset to recover a 2014 impairment of PNM’s New Mexico net operating loss carryforward resulting from an extension of the income tax provision for fifty percent bonus depreciation. The impact, net of federal income taxes, amounting to $2.1 million was reflected as a reduction of income tax expense on the Consolidated Statement of Earnings. The August 2016 RD did not preclude PNM from supporting the prudence of the PVNGS purchases and lease renewals in its next general rate case and seeking recovery of those costs. PNM disagreed with many of the key conclusions reached by the Hearing Examiner in the August 2016 RD and filed exceptions to defend its prudent utility investments. Other parties also filed exceptions to the August 2016 RD. On September 28, 2016, the NMPRC issued an order that authorized PNM to implement an increase in non-fuel rates of $61.2 million, effective for bills sent to customers after September 30, 2016. The order generally approved the August 2016 RD, but with certain significant modifications. The modifications to the August 2016 RD included:
On September 30, 2016, PNM filed a notice of appeal with the NM Supreme Court regarding the order in the NM 2015 Rate Case. Subsequently, NEE, NMIEC, and ABCWUA filed notices of cross-appeal to PNM’s appeal. On October 26, 2016, PNM filed a statement of issues related to its appeal with the NM Supreme Court, which stated PNM is appealing the NMPRC’s determination that PNM was imprudent in the actions taken to purchase the previously leased 64.1 MW of capacity in PVNGS Unit 2, extending the leases for 114.6 MW of capacity of PVNGS Units 1 and 2, and installing BDT equipment on SJGS Units 1 and 4. In addition, PNM’s statement indicated it is appealing the following specific elements of the NMPRC’s order:
The issues that are being appealed by the various cross-appellants include:
NEE subsequently filed a motion for a partial stay of the order at the NM Supreme Court. This motion was denied. The NM Supreme Court orally stated that the court’s intent was to request that PNM reimburse ratepayers for any amount overcharged should the cross-appellants prevail on the merits. On February 17, 2017, PNM filed its Brief in Chief, and pursuant to the court’s rules, the briefing schedule was completed on July 21, 2017. Oral argument at the NM Supreme Court was held on October 30, 2017. Although appeals of regulatory actions of the NMPRC have a priority at the NM Supreme Court under New Mexico law, there is no required time frame for the court to act on the appeals. GAAP requires a loss be recognized when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. When there is a range of the amount of the probable loss, the minimum amount of the range is to be accrued unless an amount within the range is a better estimate than any other amount. As of September 30, 2016, PNM evaluated the accounting consequences of the order in the NM 2015 Rate Case and the likelihood of being successful on the issues it is appealing in the NM Supreme Court as required under GAAP. The evaluation indicated it is reasonably possible that PNM will be successful on the issues it is appealing. If the NM Supreme Court rules in PNM’s favor on some or all of the issues, those issues would be remanded back to the NMPRC for further action. As of September 30, 2016, PNM estimated it would take a minimum of 15 months from the date PNM filed its appeal for the NM Supreme Court to render a decision and for the NMPRC to take action on any remanded issues. PNM concluded that a range of probable loss resulted from the NMPRC order in the NM 2015 Rate Case; that the minimum amount of loss was 15 months of capital cost recovery that the order disallowed for PNM’s investments in the PVNGS Unit 2 purchases, PVNGS Unit 2 capitalized improvements, and BDT; and that no amount within the range of possible loss was a better estimate than any other amount. Accordingly, PNM recorded a pre-tax regulatory disallowance of $6.8 million at September 30, 2016 for the capital costs that would not be recovered during that 15-month appeal period. In addition, PNM recorded a pre-tax regulatory disallowance for $4.5 million of costs recorded as regulatory assets and deferred charges (which the order disallowed and which PNM did not challenge in its appeal) since PNM could no longer assert that those assets were probable of being recovered through the ratemaking process. PNM also evaluated the accounting consequences of the issues that are being appealed by the cross-appellants. PNM does not believe the issues raised in the cross-appeals have substantial merit. Accordingly, PNM does not believe that the likelihood of the cross-appeals being successful is probable and, therefore, no loss has been recorded related to the issues subject to the cross-appeals. Since the NM Supreme Court did not issue a decision on the appeals related to the NM 2015 Rate Case by December 31, 2017, which was 15 months from the date of the NMPRC’s order in that case, PNM reevaluated the accounting consequences of the order in the NM 2015 Rate Case. As of December 31, 2017, PNM estimated the most likely period for the NM Supreme Court to issue a decision in the case and for the NMPRC to take action on any remanded issues was seven months. As a result, PNM recorded an additional pre-tax loss of $3.1 million as of December 31, 2017, representing seven months of capital cost recovery that the order disallowed and would not be recovered through July 31, 2018. During 2018, PNM updated its evaluation of the estimated time frame it would take for resolution of the matter resulting in additional pre-tax losses of $4.0 million, which are reflected as regulatory disallowances and restructuring costs on the Consolidated Statements of Earnings, based on an estimate of an additional nine months of capital cost recovery that the order disallowed and would not be collected from customers through April 30, 2019. Further losses will be recorded if the currently estimated time frame for the NM Supreme Court to render a decision and for the NMPRC to take action on any remanded issues is extended. PNM continues to believe that the disallowed investments, which are the subject of PNM’s appeal, were prudent and that PNM is entitled to full recovery of those investments through the ratemaking process. Although PNM believes it is reasonably possible that its appeals will be successful, it cannot predict what decision the NM Supreme Court will reach or what further actions the NMPRC will take on any issues remanded to it by the court. If PNM’s appeal is unsuccessful, PNM would record further pre-tax losses related to the capitalized costs for any unsuccessful issues. The impacts of not recovering future contributions for decommissioning would be recognized in future periods reflecting that rates charged to customers would not recover those costs as they are incurred. The amounts of any such losses to be recorded would depend on the ultimate outcome of the appeal and NMPRC process, as well as the actual amounts reflected on PNM books at the time of the resolution. However, based on the book values recorded by PNM as of December 31, 2018, such losses could include:
Although PNM does not believe that the likelihood of the cross-appeals being successful is probable, it is unable to predict what decision the NM Supreme Court will reach. If the NM Supreme Court were to overturn all of the issues subject to the cross-appeals and, upon remand, the NMPRC did not provide any cost recovery of those items, PNM would write-off all of the costs to acquire the assets previously leased under three leases, aggregating 64.1 MW of PVNGS Unit 2 capacity, totaling $146.1 million (which amount includes $73.3 million that is the subject of PNM’s appeal discussed above) at December 31, 2018, after considering the losses recorded to date. The impacts of not recovering costs for the lease extensions, new coal supply contract for Four Corners, and “prepaid pension asset” in rate base would be recognized in future periods reflecting that rates charged to customers would not recover those costs as they are incurred. The outcomes of the cross-appeals regarding the FPPAC and rate design should not have a financial impact to PNM. PNM is unable to predict the outcome of this matter. New Mexico 2016 General Rate Case (“NM 2016 Rate Case”) On December 7, 2016, PNM filed an application with the NMPRC for a general increase in retail electric rates. PNM did not include any of the costs disallowed in the NM 2015 Rate Case that are at issue in its pending appeal to the NM Supreme Court. Key aspects of PNM’s request were:
The NMPRC scheduled a public hearing to begin on June 5, 2017, ordered that a settlement conference be held, and that any resulting stipulation should be filed by March 27, 2017. Settlement discussions were held, but no agreements were reached by March 27, 2017, after which the date for filing a stipulation was extended. In early May 2017, PNM and thirteen intervenors (the “Signatories”) entered into a comprehensive stipulation. On May 12, 2017, the Hearing Examiners issued an order rejecting the stipulation in its then current form but allowed the Signatories to revise the stipulation. On May 23, 2017, the Signatories filed a revised stipulation that addressed the issues raised by the Hearing Examiners. NEE was the sole party opposing the revised stipulation. The terms of the revised stipulation, which required NMPRC approval in order to take effect, included:
A hearing on the revised stipulation was held in August 2017. On October 31, 2017, the Hearing Examiners issued a Certification of Stipulation recommending a Modified Revised Stipulation. The significant changes to the revised stipulation in the Hearing Examiners’ Modified Revised Stipulation included:
On December 20, 2017, the NMPRC issued an Order Partially Adopting Certification of Stipulation, which approved the Hearing Examiners’ Certification of Stipulation with certain changes. Substantive changes from the Certification of Stipulation included requiring the impacts of changes related to the reduction in the federal corporate income tax rate be implemented effective January 1, 2018 rather than January 1, 2019 and deferring further consideration regarding the prudency of PNM’s decision to continue its participation in Four Corners to a future proceeding. On December 28, 2017, PNM filed a Motion for Rehearing and Request for Oral Argument asking the NMPRC to vacate their December 20, 2017 order and allow the parties to present oral argument. Additionally, several Signatories to the revised stipulation filed a Joint Motion for Partial Rehearing asking that the NMPRC approve the revised stipulation without modification. On January 2, 2018, NEE filed a response urging the NMPRC to reject PNM’s Motion. On January 3, 2018, the NMPRC vacated its December 20, 2017 order and granted the motions for rehearing. The rehearing was held on January 10, 2018. The NMPRC issued a Revised Order Partially Adopting Certification of Stipulation dated January 10, 2018 (the “Revised Order”). The Revised Order approved the Hearing Examiners’ Certification of Stipulation with certain changes including:
On January 16, 2018, PNM requested clarifying changes to the Revised Order to adjust the $9.1 million reduction to $4.4 million, asserting that $4.7 million of the reduction was duplicative. On January 17, 2018, the NMPRC issued an order approving the adjustment requested by PNM. On January 19, 2018, PNM and the Signatories filed a joint notice of acceptance of the Revised Order, as amended. On January 31, 2018, the NMPRC issued an order closing the docket in the NM 2016 Rate Case. After implementation of changes to the federal corporate income tax rate and cost of debt, the final order results in a net increase to PNM’s non-fuel revenue requirement of $10.3 million. PNM implemented 50% of the approved increase for service rendered beginning February 1, 2018 and implemented the rest of the increase for service rendered beginning January 1, 2019. GAAP required PNM to recognize a loss to reflect that PNM will not earn an equity return on $148.1 million of investments at Four Corners. As of December 31, 2017, PNM recorded a pre-tax regulatory disallowance of $27.9 million. The amount of the loss was calculated by determining the present value of disallowed cash flows, which equals the difference between the cash flows resulting from recovery of those investments at PNM’s embedded cost of debt and the cash flows with a full return on investment (including an equity component), and discounting the differences at PNM’s WACC. On February 7, 2018, NEE filed a notice of appeal with the NM Supreme Court asking the court to review the NMPRC’s decisions in the NM 2016 Rate Case. On March 7, 2018, NEE filed its statement of issues with the NM Supreme Court requesting, among other things, that the NMPRC be required to identify PNM’s decision to continue its participation in Four Corners as imprudent and to deny any recovery related to PNM’s $148.1 million investments in that facility. NEE’s Brief in Chief was filed on July 16, 2018 and PNM’s Answer Brief was filed on October 12, 2018. Several parties to the case intervened in the appeal as intervenor-appellees in support of the NMPRC’s final decisions in the Revised Order. On November 15, 2018, NEE filed an unopposed motion to withdraw its appeal, which was granted by the NM Supreme Court. On December 3, 2018, the NM Supreme Court issued its order of dismissal and remanded the matter to the NMPRC. Investigation/Rulemaking Concerning NMPRC Ratemaking Policies On March 22, 2017, the NMPRC issued an order opening an investigation and rulemaking to simplify and increase “the transparency of NMPRC rate cases by reducing the number of issues litigated in rate cases,” and provide a “more level playing field among intervenors and NMPRC staff on the one hand, and the utilities on the other.” The order posed the following questions: whether a standardized method should be established for determining ROE; should the ROE be subject to reward or penalty based on utilities meeting or failing to meet certain metrics, which could include customer complaints, outages, peak demand reductions, and RPS and energy efficiency compliance; whether recovery of utility rate case expenses should be limited to 50% unless the case is settled; whether intervenors should be allowed to recover their expenses if the NMPRC accepts their position; whether parties should have access to software used by utilities to support their positions; and how regulatory assets should be authorized and recovered. Initial comments were filed in July 2017 and several public workshops have been held. PNM cannot predict the outcome of this proceeding. Renewable Portfolio Standard The REA establishes a mandatory RPS requiring a utility to acquire a renewable energy portfolio equal to 10% of retail electric sales by 2011, 15% by 2015, and 20% by 2020. PNM files annual renewable energy procurement plans for approval by the NMPRC. The NMPRC requires renewable energy portfolios to be “fully diversified.” The current diversity requirements, which are subject to the limitation of the RCT, are minimums of 30% wind, 20% solar, 3% distributed generation, and 5% other. The REA provides for streamlined proceedings for approval of utilities’ renewable energy procurement plans, assures that utilities recover costs incurred consistent with approved procurement plans, and requires the NMPRC to establish a RCT for the procurement of renewable resources to prevent excessive costs being added to rates. Currently, the RCT is set at 3% of customers’ annual electric charges. PNM makes renewable procurements consistent with the NMPRC approved plans. PNM recovers certain renewable procurement costs from customers through a rate rider. See Renewable Energy Rider below. Included in PNM’s approved procurement plans are the following renewable energy resources:
PNM filed its 2016 renewable energy procurement plan on June 1, 2015. The plan met RPS and diversity requirements within the RCT in 2016 and 2017 using existing resources and did not propose any significant new procurements. The NMPRC approved the plan in November 2015, and, after granting a rehearing motion to consider issues regarding the rate treatment of certain customers eligible for a cap on, or an exemption from, RPS procurement, the NMPRC again approved the plan in an order issued on February 3, 2016. The NMPRC deferred issues related to capped and exempt customers to PNM’s NM 2015 Rate Case and to a new case, which the NMPRC subsequently initiated through issuance of an order to show cause. The NM 2015 Rate Case and show cause proceeding were to examine whether PNM miscalculated the FPPAC factor and base fuel costs in its treatment of renewable energy costs and application of the renewable procurement cost caps and exemptions. The show cause proceeding was stayed pending the outcome of the NM 2015 Rate Case. The September 28, 2016 order in the NM 2015 Rate Case directed that the cost of New Mexico Wind be recovered through PNM’s renewable rider, rather than the FPPAC, and ordered certain other modifications regarding the accounting for renewable energy in PNM’s FPPAC. These modifications do not affect the amount of fuel and purchased power or renewable costs that PNM collects. No action has been taken in the show cause proceeding and PNM cannot predict its outcome. PNM filed its 2017 renewable energy procurement plan on June 1, 2016. The plan met RPS and diversity requirements for 2017 and 2018 using existing resources and PNM did not propose any significant new procurements. PNM projected that its plan would slightly exceed the RCT in 2017 and would be within the RCT in 2018. PNM requested a variance from the RCT in 2017 to the extent the NMPRC determined a variance was necessary. A public hearing was held on September 26, 2016. On October 21, 2016, the Hearing Examiner issued a recommended decision recommending that the plan be approved as filed and also found that a variance from the RCT was not required. The NMPRC approved the recommended decision on November 23, 2016. On June 1, 2017, PNM filed its 2018 renewable energy procurement plan. PNM requested approval to procure an additional 80 GWh in 2019 and 105 GWh in 2020 from a re-powering of New Mexico Wind; approval to procure an additional 55 GWh in 2019 and 77 GWh in 2020 from a re-powering of Lightning Dock Geothermal; approval to procure 50 MW of new solar facilities to be constructed beginning in 2018, and continuation of customer REC purchase programs and other purchases of RECs to ensure annual compliance with the RPS. PNM’s proposed procurement costs for 2018 and 2019 will be within the RCT. The plan also sought a variance from the “other” diversity category in 2018 due to a revised production forecast of the Lightning Dock Geothermal facility in 2018. A public hearing on the application was held in September 2017. On October 17, 2017, the Hearing Examiner issued a recommended decision that PNM’s 2018 renewable energy procurement plan be approved by the NMPRC, except for the re-powering of Lightning Dock Geothermal and PNM’s request to procure 50 MW of new solar facilities. The Hearing Examiner recommended that the PPA for the output of energy from Lightning Dock Geothermal be terminated effective January 1, 2018. The Hearing Examiner also recommended that PNM be required to issue another all-renewables RFP allowing developers to utilize PNM-owned sites to construct facilities, the output from which facilities would be sold to PNM through PPAs. PNM filed exceptions contesting the Hearing Examiner’s proposals. On November 15, 2017, the NMPRC issued an order approving PNM’s plan and rejecting the Hearing Examiner’s recommendations. On November 29, 2017, NMIEC filed an appeal with the NM Supreme Court objecting to the fuel allocation methodology. On December 14, 2017, NEE filed a motion to intervene and cross-appeal objecting to the approval of the 50 MW of new solar facilities. On December 18, 2017, PNM filed a motion to intervene, which was granted. NMIEC filed a motion for a partial stay of the NMPRC order, which was denied. Briefing on NMIEC’s appeal of the fuel allocation methodology is complete. On June 20, 2018, NEE filed its Brief in Chief with the NM Supreme Court stating, among other things, that PNM’s process favored ownership of the 50 MW solar facilities compared to PPAs. PNM and the NMPRC each filed Answer Briefs on September 4, 2018 stating there is substantial evidence in the case record to support the NMPRC’s decision and that PNM’s RFP process was reasonable, complied with RPS requirements, and consistent with industry standards. NEE’s Reply Brief was filed on October 15, 2018. PNM cannot predict the outcome of this matter. On June 1, 2018, PNM filed its 2019 renewable energy procurement plan. The plan meets RPS and diversity requirements for 2019 and 2020 using resources already approved by the NMPRC and did not propose any significant new procurements. PNM projects that the plan will be within the RCT in 2019 and will slightly exceed the RCT in 2020. Public hearings were held on the case in September and October 2018. On October 29, 2018, PNM and NMPRC staff filed a joint proposed recommended decision requesting the NMPRC accept PNM’s 2019 renewable energy procurement plan filing. The joint proposed recommended decision includes a requirement for PNM to periodically, or for certain events, inform the NMPRC of matters related to PNM’s PPA with Lightning Dock Geothermal. The NMPRC approved PNM’s 2019 renewable energy procurement plan on November 28, 2018. Renewable Energy Rider The NMPRC has authorized PNM to recover certain renewable procurement costs through a rate rider billed on a per KWh basis. In PNM’s NM 2015 Rate Case, the NMPRC authorized continuation of the renewable rider. PNM recorded revenues from the rider of $41.4 million, $45.2 million, and $42.0 million in 2018, 2017, and 2016. Beginning in 2017, the cost of energy from New Mexico Wind is being recovered through the renewable rider, rather than through the FPPAC, in compliance with the NMPRC’s order in PNM’s NM 2015 Rate Case. The 2018 renewable energy procurement plan became effective on January 1, 2018. In its 2019 renewable energy procurement plan case, which was approved by the NMPRC on November 28, 2018, PNM proposed to collect $49.6 million. Under the renewable rider, if PNM’s earned rate of return on jurisdictional equity in a calendar year, adjusted for weather and other items not representative of normal operations, exceeds the NMPRC-approved rate by 0.5%, PNM is required to refund the excess to customers during May through December of the following year. Preliminary calculations indicate PNM did not exceed such limitation in 2018. Energy Efficiency and Load Management Program Costs and Incentives/Disincentives The New Mexico Efficient Use of Energy Act (“EUEA”) requires public utilities to achieve specified levels of energy savings and to obtain NMPRC approval to implement energy efficiency and load management programs. The EUEA requires the NMPRC to remove utility disincentives to implementing energy efficiency and load management programs and to provide incentives for such programs. The NMPRC has adopted a rule to implement this act. The EUEA sets an annual program budget equal to 3% of an electric utility’s annual revenue. PNM’s costs to implement approved programs are recovered through a rate rider. On April 15, 2016, PNM filed an application for energy efficiency and load management programs to be offered in 2017. The proposed program portfolio consisted of ten programs with a total budget of $28.0 million. The application also sought approval of an incentive of $2.4 million based on targeted savings of 75 GWh. The actual incentive would be based on actual savings achieved. On January 11, 2017, the NMPRC approved an unopposed stipulation that established a method to ensure that funding of PNM’s energy efficiency program is equal to 3% of retail revenues, with an estimated 2017 energy efficiency funding level of $26.0 million, and approved a sliding scale profit incentive with a base level of 7.1% of program costs, equal to $1.8 million, if PNM achieves a minimum proscribed level of energy savings, increasing to a maximum of 9.0% depending on actual energy savings achieved above the minimum. On April 13, 2018, PNM filed its reconciliation of 2017 program costs and incentives, which indicated the incentive earned in 2017 is $2.3 million. The reconciliation filing and related incentive were accepted on May 23, 2018. On April 14, 2017, PNM filed an application for energy efficiency and load management programs to be offered in 2018. The proposed program portfolio consists of a continuation of the ten programs approved in the 2016 application with a total budget of $25.1 million. The application also sought approval of a sliding scale incentive with a base incentive of $1.9 million if PNM is able to achieve savings of 53 GWh in 2018. As proposed, PNM would have earned an incentive of $2.1 million based on targeted savings of 70 GWh. The actual incentive would be based on actual savings achieved. PNM proposed to continue the same ten programs and a similar incentive mechanism in 2019, with a proposed budget of $28.2 million and a base level incentive of $2.1 million. On July 26, 2017, PNM, NMPRC staff, and other parties filed a stipulation that would resolve all issues in the case if approved by the NMPRC. Under the settlement, all of PNM’s proposed programs would be approved with limited modifications and PNM’s base level incentive would be $1.7 million and could earn an incentive of up to $1.9 million based on savings of 69 GWh in 2018. The settlement also established a base level incentive for PNM of $1.8 million with the opportunity to earn up to $2.7 million in 2019, and required PNM to make a filing in 2019 to address incentives to be earned in 2020. A public hearing was held in September 2017. On November 8, 2017, the Hearing Examiner issued a Certification of Stipulation recommending approval of the stipulation with various modifications, including adoption of a discount rate equal to the tax-adjusted WACC of 9.59% rather than the 7.71% proposed in the stipulation and modifying the program budgets to $23.6 million for 2018 and $24.9 million for 2019. On January 31, 2018, the NMPRC issued an order that largely accepted the certification with certain exceptions concerning the measurement and verification of the approved load management programs. Energy Efficiency Rulemaking In July 2012, the NMPRC opened an energy efficiency rulemaking docket to potentially address decoupling and incentives. Workshops to develop a proposed rule have been held, but no order proposing a rule has been issued. PNM is unable to predict the outcome of this matter. On January 25, 2017, the NMPRC opened another energy efficiency rulemaking docket to consider whether applications for approval of energy efficiency and load management programs should be filed every two years rather than annually. On June 21, 2017, the NMPRC issued an order that modifies the filing frequency for utility energy efficiency plans to every three years. On June 21, 2017, the NMPRC also issued a new notice of proposed rulemaking to consider possible changes affecting a utility’s ability to modify NMPRC approved funding levels by up to 10% between energy efficiency program applications. This rulemaking is in response to consensus changes proposed by parties in the January 25, 2017 rulemaking. On September 13, 2017, the NMPRC approved the proposed rule. Under the new rule, PNM’s next application for energy efficiency and load management programs will be made in 2020 for programs to be offered beginning in 2021. As discussed below, PNM’s next energy efficiency application will include a proposal to implement an Advanced Metering Infrastructure pilot project. Petition for Energy Efficiency Disincentive As discussed above, PNM’s application in the NM 2016 Rate Case had requested a “lost contribution to fixed cost” mechanism to address the disincentives associated with PNM’s energy efficiency programs. In the revised stipulation to that case, PNM agreed to withdraw its proposal for such a mechanism and to address energy efficiency disincentives in a future docket. On March 2, 2018, PNM filed a petition proposing a “lost contribution to fixed cost mechanism” with substantially the same terms as those proposed in the NM 2016 Rate Case application. The Hearing Examiner issued a procedural order that included a public hearing to begin on October 30, 2018. Subsequently, the Hearing Examiner extended the deadline to file response testimony until December 19, 2018 and vacated the hearing schedule. On December 19, 2018, the Hearing Examiner approved a joint motion filed by PNM and other parties in the case to hold the proceedings in abeyance until mid-March 2019. The procedural schedule is to be reestablished at a future date. PNM cannot predict the outcome of this matter. FPPAC Continuation Application NMPRC rules require public utilities to file an application to continue using their FPPAC every four years. On April 23, 2018, PNM filed the required continuation application and requested that its FPPAC be continued without modification. On June 20, 2018, the NMPRC approved PNM’s continuation application. Integrated Resource Plans NMPRC rules require that investor owned utilities file an IRP every three years. The IRP is required to cover a 20-year planning period and contain an action plan covering the first four years of that period. 2014 IRP PNM filed its 2014 IRP on July 1, 2014. The four-year action plan was consistent with the replacement resources identified in PNM’s application to retire SJGS Units 2 and 3. On July 31, 2014, several parties requested the NMPRC to not accept the 2014 IRP as compliant with NMPRC rule because to do so could affect the then pending proceeding on PNM’s application to abandon SJGS Units 2 and 3 and for CCNs for certain replacement resources (Note 16) and because they asserted that the 2014 IRP did not conform to the NMPRC’s IRP rule. The NMPRC issued an order in August 2014 that docketed a case to determine whether the 2014 IRP complied with applicable NMPRC rules. The order also held the case in abeyance pending the issuance of final, non-appealable orders in PNM’s 2015 renewable energy procurement plan case and its application to retire SJGS Units 2 and 3. The order regarding PNM’s application to abandon SJGS Units 2 and 3 as described in Note 16 states that the NMPRC will issue a Notice of Proposed Dismissal in the 2014 IRP docket. On May 4, 2016, the NMPRC issued the Notice of Proposed Dismissal, stating that the docket would be closed with prejudice within thirty days unless good cause was shown why the docket should remain open. On May 31, 2016, NEE filed a request to hold the protests filed against PNM’s 2014 IRP in abeyance or to dismiss those protests without prejudice. PNM responded on June 13, 2016 and requested that the NMPRC dismiss the case with prejudice. The NMPRC has not yet acted on its Notice of Proposed Dismissal or the request filed on May 31, 2016. PNM cannot predict the outcome of this matter. 2017 IRP PNM filed its 2017 IRP on July 3, 2017. The 2017 IRP addresses the 20-year planning period, from 2017 through 2036 and includes an action plan describing PNM’s plan to implement the 2017 IRP in the four-year period following its filing. The 2017 IRP analyzed several scenarios utilizing assumptions that PNM continues service from its SJGS capacity beyond mid-2022 and that PNM retires its capacity after mid-2022. Key findings of the 2017 IRP include:
Protests to the 2017 IRP were filed by several parties. The issues addressed in the protests included the future of PNM’s interests in SJGS, Four Corners, and PVNGS and the timing of future procurement of renewable resources. On January 16, 2018, the Hearing Examiner issued an order setting the scope of the proceedings as the 2017 IRP’s compliance with the applicable statute and NMPRC rules. Hearings were held in June 2018. On October 26, 2018, the Hearing Examiner issued a recommended decision recommending that the NMPRC accept PNM’s 2017 IRP as compliant with the applicable statute and NMPRC rules. On December 19, 2018, the NMPRC issued a final order accepting the Hearing Examiner’s recommended decision. On January 18, 2019, the Board of the County of Commissioners for San Juan County, New Mexico, the City of Farmington, New Mexico, and other parties filed a Notice of Appeal with the NM Supreme Court regarding the NMPRC’s final order in PNM’s 2017 IRP. Statements of Issues in the appeal must be filed by March 9, 2019. On January 18, 2019, NEE submitted a motion requesting the NMPRC reconsider its acceptance of PNM’s 2017 IRP and alleging informational inadequacy and deficiencies in PNM’s filing. On January 29, 2019, PNM submitted a filing to the NMPRC in response to NEE’s motion for reconsideration. In its response, PNM stated that the issues raised by NEE had already been considered and rejected by the NMPRC in its December 19, 2018 final order and that the NMPRC lacks jurisdiction over the matters because the NMPRC’s final order has been appealed to the NM Supreme Court. The NMPRC did not take action on NEE’s motion for reconsideration. On February 19, 2019, NEE filed a motion with the NM Supreme Court to intervene in the appeal and to seek remand of the matter to the NMPRC. PNM plans to file a response to NEE’s motion by March 6, 2019. PNM cannot predict the outcome of this matter. The NMPRC’s order concerning SJGS’ compliance with the BART requirements of the CAA discussed in Note 16 required PNM to make a filing in 2018 to determine the extent to which SJGS Units 1 and 4 should continue serving PNM’s retail customers’ needs after June 30, 2022. PNM submitted its December 2018 Compliance Filing to the NMPRC on December 31, 2018 indicating that, consistent with the conclusions reached in the 2017 IRP (Note 17), PNM’s customers would benefit from the retirement of PNM’s share of SJGS in 2022. The December 2018 Compliance Filing and the 2017 IRP are not a final determinations of PNM’s future generation portfolio. Retiring PNM’s share of SJGS capacity will require future NMPRC approval. See Note 16. In addition, PNM will be required to obtain NMPRC approval of an exit from Four Corners, which PNM will seek at an appropriate time in the future. Likewise, NMPRC approval of new generation resources through CCNs, PPAs, or other applicable filings, would be required. PNM cannot predict the outcome of these matters. Cost Recovery Related to Joining the EIM The California Independent System Operator developed the Western Energy Imbalance Market (“EIM”) as a real-time wholesale energy trading market that enables participating electric utilities to buy and sell energy. The EIM aggregates the variability of electricity generation and load for multiple balancing authority areas and utility jurisdictions. In addition, the EIM facilitates greater integration of renewable resources through the aggregation of flexible resources by capturing diversity benefits from the expanded geographic footprint and the expanded potential uses for those resources. In 2018, PNM completed a cost-benefit analysis of participating in the EIM. PNM’s analysis indicated participation in the EIM would provide substantial benefits to retail customers. On August 22, 2018, PNM filed an application with the NMPRC requesting, among other things, authorization to recover an estimated $20.9 million of initial capital investments and to establish a regulatory asset to recover an estimated $7.4 million of other expenses that would be incurred in order to join the EIM. PNM’s application proposed the regulatory asset be adjusted to provide for full recovery of such costs, including carrying charges, until the effective date of new rates in PNM’s next general rate case. PNM’s application also proposes the benefits of participating in the EIM be credited to retail customers through PNM’s existing FPPAC. A public hearing was held on December 12, 2018. On December 19, 2018, the NMPRC issued an order approving the establishment of a regulatory asset to recover PNM’s cost of joining the EIM. On January 17, 2019, ABCWUA filed a motion to reopen the case and to reconsider the NMPRC’s order approving the establishment of a regulatory asset. PNM submitted its response opposing reconsideration of the case on January 28, 2019. On February 6, 2019, the NMPRC issued an order granting rehearing and vacating the December 19, 2018 order. On February 24, 2019, Western Resource Advocates, and the Coalition for Clean and Affordable Energy filed a motion for an expedited final order, which was supported by PNM and other parties and opposed by ABCWUA. On February 27, 2019, the NMPRC issued a procedural order that appoints a hearing examiner and requires the hearing examiner to report to the NMPRC, by March 13, 2019, on whether the matter should be reopened. PNM cannot predict the outcome of this matter. San Juan Generating Station Units 2 and 3 Retirement On December 16, 2015, the NMPRC issued an order approving PNM’s retirement of SJGS Units 2 and 3 on December 31, 2017. On January 14, 2016, NEE filed an appeal of the order with the NM Supreme Court. SJGS Units 2 and 3 were retired in December 2017. On March 5, 2018, the NM Supreme Court rendered a decision affirming the NMPRC’s ruling, thereby denying NEE’s appeal. A request for rehearing of the NM Supreme Court’s decision was not filed by the statutory deadline. This matter is now concluded. Additional information concerning the NMPRC filing and related proceedings is set forth in Note 16. San Juan Generating Station Unit 1 Outage On March 17, 2018, a coal silo used to supply fuel to SJGS Unit 1 collapsed resulting in an outage. PNM initiated a review of the cause of the outage and promptly contacted the staff of the NMPRC to inform them of the event. To minimize the operational and financial impacts of this event, PNM accelerated the fall 2018 planned outage to be performed while the unit was out of service for this event. Repairs necessary to return Unit 1 to service were completed by July 5, 2018. Costs of repairing damages to the facility are being reimbursed under an existing property insurance policy that covers SJGS, subject to a deductible of $2.0 million. PNM’s cost of repairs of $1.0 million reflects insurance reimbursements and PNM’s 50% ownership interest in SJGS Unit 1. On April 12, 2018, NEE filed a petition (jointly with certain other organizations) requesting that the NMPRC order an investigation into the SJGS Unit 1 event. The petition requested that the NMPRC order PNM to respond to the petition, that proceedings be set on this matter, and that PNM be required to provide a narrative explanation, cost/benefit analysis, and alternatives assessment used to determine that Unit 1 should be repaired rather than utilizing alternative resources. On April 25, 2018, the NMPRC issued an order requiring PNM to provide a factual statement of the nature and cause of the event, as well as the anticipated need for and schedule of repairs required. PNM was also required to address the necessity and appropriateness of the request for a cost/benefit analysis, alternatives assessment, and request for further proceedings. On May 8, 2018, PNM filed its response to the NMPRC order indicating that PNM used best practices when inspecting the SJGS coal silos during planned outages, that the damage to SJGS Unit 1 was repairable and could be made in a timely manner, that all but a limited amount of cost of the repairs are reimbursable under an existing insurance policy, and that further proceedings on the matter were unnecessary. In addition, PNM’s response indicated that if the unit was not repaired, customers would be exposed to significant contractual liabilities under the agreements governing the ownership of SJGS and would incur significant costs associated with the procurement of replacement power. On May 31, 2018, the NMPRC staff preliminarily recommended that the NMPRC not allow PNM to recover any costs associated with the SJGS Unit 1 coal silo repairs, including the cost of preventing similar failures on other SJGS coal silos, and that PNM reimburse customers for the loss of off-system sales during the time SJGS Unit 1 was in outage. The NMPRC staff also recommended, among other things, that further proceedings on the matter be deemed unnecessary provided PNM agree to hold customers harmless for such costs. On October 9, 2018, PNM filed a motion with the NMPRC requesting the inquiry docket be closed and stating the NMPRC staff’s proposal that PNM be required to absorb all losses related to the event, including the loss of off-system sales, is unwarranted and would result in piecemeal ratemaking. On November 15, 2018, the NMPRC staff filed a response to PNM’s motion proposing the investigation be closed provided, among other things, that PNM agree to hold customers harmless for PNM’s share of the uninsured costs to repairs SJGS for the event. In its response, PNM agreed that it would not seek recovery of the uninsured costs to repair the units. The NMPRC issued a final order to close the docket on December 5, 2018. Advanced Metering Infrastructure Application On February 26, 2016, PNM filed an application with the NMPRC requesting approval of a project to replace its existing customer metering equipment with Advanced Metering Infrastructure (“AMI”). The application asked the NMPRC to authorize the recovery of the cost of the project, up to $87.2 million, which was subsequently adjusted to $95.1 million, and includes the costs of customer education, severances for affected employees, and other costs, in future ratemaking proceedings, as well as to approve the recovery of the remaining undepreciated investment in existing metering equipment estimated to be approximately $33 million at the date of implementation. After extensive public hearings and discovery, on March 19, 2018, the Hearing Examiner issued a recommended decision finding that PNM had not proven a net public benefit in the case and recommending the NMPRC not approve the application. On April 2, 2018, PNM filed a statement on exceptions to the recommended decision indicating, among other things, that PNM disagreed with the finding that the record did not demonstrate a net public benefit to customers, but that PNM would not take exception to a recommendation to not approve the application. No other parties filed exceptions to the recommended decision by the required deadline. On April 11, 2018, the NMPRC adopted an order accepting the recommended decision and disapproving PNM’s application. The order indicated PNM’s next energy efficiency plan application should include a proposal for an AMI pilot project. Facebook, Inc. Data Center Project On July 8, 2016, PNM filed an application with the NMPRC for approval of arrangements in connection with services to be provided to Facebook, Inc. for a new data center to be constructed in PNM’s service area. On August 17, 2016, the NMPRC approved the application, which included:
Facebook’s service requirements include the acquisition by PNM of a sufficient amount of new renewable energy resources and RECs to match the energy and capacity requirements of the data center. PNM’s initial procurement was to be through a PPA with PNMR Development for the energy production from 30 MW of new solar capacity that PNMR Development was to construct. As discussed in Note 1, PNMR Development transferred its interests in the solar capacity and the PPA to NMRD in December 2017. The cost of the PPA is passed through to Facebook under a rate rider. A special service rate is applied to Facebook’s energy consumption in those hours of the month when their consumption exceeds the energy production from the renewable resources. Of the solar capacity, 10 MW began commercial operation in each of January 2018, March 2018, and May 2018. In late 2017, PNM entered into three separate 25-year PPAs to purchase renewable energy and RECs to be used by PNM to supply additional renewable energy to Facebook. These PPAs were subject to NMPRC approval, which was granted on March 21, 2018. These PPAs include the purchase of the power and RECs from:
On August 24, 2018, PNM filed an application with the NMPRC requesting approval to enter into two 25-year PPAs to purchase renewable energy and RECs from an aggregate of approximately 100 MW of capacity from two solar-PV facilities to be owned and operated by NMRD to supply power to Facebook. The cost of these PPAs will be passed through to Facebook under PNM’s rider. The NMPRC approved PNM’s application on October 17, 2018. NMRD is required to obtain FERC approval of the PPAs. Subject to FERC approval, the first 50 MW of these facilities is expected to begin commercial operation in December 2019 and the remaining capacity is expected to begin commercial operation in June 2020. Hazard Sharing Agreements On June 1, 2016, PNM and Tri-State entered into a one-year hazard sharing agreement, which expired on May 31, 2017. PNM and Tri-State entered into an additional agreement, under substantially identical terms, for a term of five years beginning June 1, 2017, subject to NMPRC approval. NMPRC approval was not required for the one-year agreement but was required for the five-year agreement. On May 10, 2017, the NMPRC issued an order approving the five-year agreement. Under these agreements, each party sells the other party 100 MW of capacity and energy from each party’s designated primary resource, which is SJGS Unit 4 for PNM and Springerville Generating Station Unit 3 for Tri-State, on a unit contingent basis subject to certain performance guarantees. The agreements reduce the magnitude of each party’s single largest generating hazard and assist in enhancing the reliability and efficiency of their respective operations. Both purchases and sales are made at the same market index price. PNM passes the sales and purchases through to customers under PNM’s FPPAC. Information about PNM’s purchases and sales is as follows:
Formula Transmission Rates PNM charges wholesale electric transmission service customers using a formula rate mechanism pursuant to which wholesale transmission service rates are calculated annually in accordance with an approved formula. The formula reflects a ROE of 10% and includes updating cost of service components, including investment in plant and operating expenses, based on information contained in PNM’s annual financial report filed with FERC, as well as including projected large transmission capital projects to be placed into service in the following year. The projections included are subject to true-up in the following year formula rate. Certain items, including changes to return on equity and depreciation rates, require a separate filing to be made with FERC before being included in the formula rate. Firm-Requirements Wholesale Customers Navopache Electric Cooperative, Inc. PNM had a PPA with NEC, previously PNM’s largest firm-requirements wholesale customer, that had an expiration date of December 31, 2035. On April 8, 2015, NEC filed a petition for a declaratory order requesting that FERC find that NEC could purchase an unlimited amount of power and energy from third party supplier(s) under its PSA with PNM. Following proceedings before a settlement judge, PNM and NEC entered into, and filed with FERC, a settlement agreement on October 29, 2015 that includes certain amendments to the PSA and related contracts on file with FERC. FERC approved the settlement on January 21, 2016. Under the settlement agreement, PNM served all of NEC’s load through December 31, 2015 at rates that were substantially consistent with those provided under the PSA. In 2016, PNM served all of NEC’s load at reduced demand and energy rates from those under the PSA. Beginning January 1, 2016, NEC also paid certain third-party transmission costs that it only partially paid previously. The PSA and related transmission agreements terminated on December 31, 2016. In 2017, PNM served 10 MW of NEC’s load under a short-term coordination tariff at a rate lower than provided under the PSA. Amounts billed to NEC were $4.5 million, and $20.0 million in the years ended December 31, 2017 and 2016. PNM’s NM 2016 Rate Case discussed above reflects a reallocation of costs among regulatory jurisdictions reflecting the termination of the contract to serve NEC. TNMP TNMP 2018 Rate Case On May 30, 2018, TNMP filed a general rate proceeding with the PUCT (the “TNMP 2018 Rate Case”) requesting an annual increase to base rates of $25.9 million based on a requested ROE of 10.5%, a cost of debt of 7.2%, and a capital structure comprised of 50% debt and 50% equity. TNMP’s request included $7.7 million of new rate riders to recover Hurricane Harvey restoration, rate case, and additional vegetation management costs. The application included the integration of revenues currently recorded under the AMS rider and collection of other unrecovered AMS investments into base rates. In 2017, TNMP recorded revenues of $21.8 million under the AMS rider. The TNMP 2018 Rate Case application also proposed to return the regulatory liability recorded at December 31, 2017 related to federal tax reform to customers and to reduce the federal corporate income tax rate to 21%. As discussed in Note 18, at December 31, 2017, TNMP recorded a regulatory liability of $146.5 million to reflect the change in federal corporate income tax rates that will be refunded to customers in future periods. The TNMP 2018 Rate Case application proposed to refund $14.4 million of this regulatory liability over a period of five years and the remaining amount over the estimated useful lives of plant in service as of December 31, 2017. On November 2, 2018, TNMP and other parties to the case filed an unopposed settlement agreement that was approved by the PUCT on December 20, 2018. The approved settlement results in a $10.0 million annual increase to base rates. The key elements of the settlement include a ROE of 9.65%, a cost of debt of 6.44%, and a capital structure comprised of 55% debt and 45% equity. The settlement excludes certain items from rate base that were requested in TNMP’s original filing, including approximately $10.6 million of transmission investments that TNMP included in January 2019 transmission cost of service filing. Under the terms of the settlement agreement, TNMP will refund approximately $37.8 million of the regulatory liability recorded at December 31, 2017 related to tax reform to customers over a period of five years and the remaining amount over the estimated useful lives of plant in service as of December 31, 2017. The settlement agreement also approves TNMP’s request to integrate revenues historically recorded under TNMP’s AMS rider, as well as other unrecovered AMS investments, into base rates. In 2017, TNMP recorded revenues of $21.8 million under the AMS rider. The settlement also approves TNMP’s request for new depreciation rates, and a new rider to recover Hurricane Harvey restoration costs. TNMP’s costs related to Hurricane Harvey restoration efforts will be offset by amounts to be refunded to customers resulting from the federal income tax rate beginning on January 25, 2018 (Note 18). At December 31, 2018, the balance of Hurricane Harvey restoration costs, net of amounts owed to customers for the reduction in the federal corporate income tax rate during 2018, was $1.6 million and is reflected as regulatory assets on the Consolidated Balance Sheets. The new rider will be charged to customers over a period of no more than five years beginning on the effective date of new base rates. New rates under the TNMP 2018 Rate Case were effective beginning on January 1, 2019. Advanced Meter System Deployment In July 2011, the PUCT approved a settlement and authorized an AMS deployment plan that permits TNMP to collect $113.4 million in deployment costs through a surcharge over a 12-year period. TNMP began collecting the surcharge on August 11, 2011. Deployment of advanced meters began in September 2011. TNMP completed its mass deployment in 2016 and has installed more than 242,000 advanced meters. The TNMP 2018 Rate Case and associated approved settlement discussed above included a reconciliation of AMS costs and integrate TNMP’s AMS recovery into base rates beginning on January 1, 2019. Energy Efficiency TNMP recovers the costs of its energy efficiency programs through an energy efficiency cost recovery factor (“EECRF”), which includes projected program costs, under or over collected costs from prior years, rate case expenses, and performance bonuses (if the programs exceed mandated savings goals). The following sets forth TNMP’s approved EECRF increases:
Transmission Cost of Service Rates TNMP can update its transmission cost of service (“TCOS”) rates twice per year to reflect changes in its invested capital although updates are not allowed while a general rate case is in process. Updated rates reflect the addition and retirement of transmission facilities, including appropriate depreciation, federal income tax and other associated taxes, and the approved rate of return on such facilities. The following sets forth TNMP’s recent interim transmission cost rate increases:
On January 25, 2019, TNMP filed an application to further update its transmission rates, which would increase revenues by $14.3 million annually, based on an increase in rate base of $111.8 million. The application is pending before the PUCT. Periodic Distribution Rate Adjustment PUCT rules permit interim rate adjustments to reflect changes in investments in distribution assets. Distribution utilities may file for a periodic rate adjustment between April 1 and April 8 of each year as long as the electric utility is not earning more than its authorized rate of return using weather-normalized data. However, TNMP has not made a filing to adjust rates for additional investments in distribution assets. Competition Transition Charge Compliance Filing In connection with the adoption of Senate Bill 7 by the Texas Legislature in 1999 that deregulated electric utilities operating within ERCOT, TNMP was allowed to recover its stranded costs through the CTC and to recover a carrying charge on the CTC. The amounts yet to be collected are recorded as regulatory assets by TNMP. Further, the order authorizing TNMP’s CTC included a true-up provision requiring an adjustment to the CTC due to a cumulative over- or under-collection of revenues, including interest, greater-than or equal to 15% of the most recent annual CTC funding amount. On March 13, 2017, TNMP made a filing to true-up the CTC. The requested adjustment reduces the collection of the amortization by $1.1 million annually. The change was approved on April 5, 2017 and went into effect on June 1, 2017. TNMP estimates the CTC will be fully recovered in November 2020. Order Related to Changes in Federal Income Tax Rates On January 25, 2018, the PUCT issued an accounting order that addresses the change in the federal corporate income tax rates on investor-owned utilities in the state of Texas. The order requires investor-owned utilities to record a regulatory liability equal to the reduction in accumulated federal deferred income tax balances at the end of 2017 due to the change in the federal corporate income tax rate. In addition, the order requires that a regulatory liability be recorded to reflect the difference between revenues collected under existing rates and those that would have been collected had those rates been set reflecting federal income tax reform beginning on the date of the order (Note 18). In compliance with the PUCT order, during the year ended December 31, 2018, TNMP reduced revenues by $5.4 million to reflect the impact of the reduction in the federal corporate income tax rate beginning January 25, 2018. The amount owed will be offset against TNMP’s Hurricane Harvey restoration costs and refunded to customers as a component of a new rate rider over a period of no more than five years beginning on January 1, 2019. |
Income Taxes |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Federal Income Tax Reform On December 22, 2017, comprehensive changes in United States federal income taxes were enacted through legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made many significant modifications to the tax laws, including reducing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Tax Act also eliminated federal bonus depreciation for utilities, limited interest deductibility for non-utility businesses and limited the deductibility of certain officer compensation. During 2018, the IRS issued additional guidance related to certain officer compensation and proposed regulations on interest deductibility that provide a 10% “de minimis” exception that allows entities with predominantly regulated activities to fully deduct interest expenses. In addition, the IRS issued proposed regulations interpreting Tax Act amendments to depreciation provisions of the Internal Revenue Code that allow the Company to claim a bonus depreciation deduction on certain construction projects placed in service subsequent to the third quarter of 2017. Although most of the provisions of the Tax Act were not effective until 2018, GAAP required that some effects be recognized in 2017. Under the asset and liability method of accounting for income taxes used by the Company, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. At the date of enactment of the Tax Act, the Company had net deferred tax liabilities for its regulated activities and net deferred tax assets for non-regulated activities. As a result of the change in the federal income tax rate, the Company re-measured and adjusted its deferred tax assets and liabilities as of December 31, 2017. The portion of that adjustment not related to PNM’s and TNMP’s regulated activities was recorded as a reduction in net deferred tax assets and an increase in income tax expense. The portion related to PNM’s and TNMP’s regulated activities was recorded as a reduction in net deferred tax liabilities and an increase in regulatory liabilities, based on the assumption that PNM and TNMP will be required to return the benefit to ratepayers over time. PNM’s NM 2016 Rate Case reflected that assumption by including an amortization of the estimated benefit of the reduction in existing deferred federal income taxes as a reduction to customer rates over approximately twenty-one years beginning in 2018. In addition, the approved settlement in the TNMP 2018 Rate Case reflects a similar amortization of excess deferred income taxes through reduced customer rates beginning in 2019. See additional discussion of PNM’s NM 2016 Rate Case and TNMP’s 2018 Rate Case in Note 17. The adjustments to deferred income taxes recorded as increases in regulatory liabilities and income tax expense as a result of the enactment of the Tax Act at December 31, 2017 are presented below:
GAAP requires that the impacts of adjusting existing deferred tax assets and liabilities for a change in an income tax rate be recognized in income tax expense during the period of enactment, including impacts that are reflected in AOCI. This resulted in the tax effects of items within AOCI not reflecting the appropriate tax rate and being stranded in AOCI. In February 2018, the FASB issued Accounting Standards Update 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income to address this issue by allowing entities to reclassify the income tax effects of the Tax Act on items within AOCI to retained earnings. The Company records in AOCI, net of income taxes, unamortized gains and losses related to PNM’s defined benefit pension plans to the extent not attributed to regulated operations, unrealized gains on PNM’s available-for-sale securities, and unrealized gains and losses on cash flow hedges related to PNMR’s interest rate swaps. When amounts are reclassified from AOCI to the Consolidated Statement of Earnings, the Company recognizes the related income tax expense (benefit) at the tax rate in effect at that time. As permitted by ASU 2018-02, as of December 31, 2017, the Company reclassified the stranded federal income tax effects of the Tax Act on items recorded in AOCI, resulting in a net increase in retained earnings of $17.6 million. See Note 3. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provided guidance to address the application of GAAP to reflect the Tax Act in circumstances where all information and analysis was not yet available or complete. This bulletin provided for up to a one-year period in which to complete the required analyses and accounting for the impacts of the Tax Act. In accordance with SAB 118, the Company completed its analysis of the impacts of the Tax Act in 2018. The adjustments to deferred income taxes resulting from completion of the Company’s analysis, which resulted primarily from differences between the estimated amounts recorded as of December 31, 2017 and the actual amounts reflected in the Company’s 2017 tax return filing, including adjustments resulting from additional guidance and interpretations to the Tax Act issued in 2018 related to bonus depreciation, certain incentive compensation, and other items are presented below:
PNMR PNMR’s income taxes consist of the following components:
PNMR’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
The components of PNMR’s net accumulated deferred income tax liability were:
The following table reconciles the change in PNMR’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:
PNM PNM’s income taxes (benefit) consist of the following components:
PNM’s provision for income taxes (benefit) differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
The components of PNM’s net accumulated deferred income tax liability were:
The following table reconciles the change in PNM’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:
TNMP TNMP’s income taxes consist of the following components:
TNMP’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the periods shown. The differences are attributable to the following factors:
The components of TNMP’s net accumulated deferred income tax liability at December 31, were:
The following table reconciles the change in TNMP’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:
Other Disclosures GAAP requires that the Company recognize only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority. A reconciliation of unrecognized tax benefits is as follows:
Included in the balance of unrecognized tax benefits at December 31, 2018 are $9.6 million, $6.7 million, and $0.1 million that, if recognized, would affect the effective tax rate for PNMR, PNM, and TNMP. The Company does not anticipate that any unrecognized tax expenses or unrecognized tax benefits will be reduced or settled in 2019. In 2016, the Company undertook an analysis of interest income and interest expense applicable to federal income tax matters. The analysis encompassed the impacts of IRS examinations, amended income tax returns, and filings for carrybacks of tax matters to previous taxable years applicable to all years not closed under the IRS rules. As a result of this effort, PNMR received net refunds from the IRS of $6.5 million. Of the refunds, $2.1 million was recorded as a reduction of the net interest receivable and $5.1 million was recorded as interest income, which was partially offset by $0.7 million of interest expense. In addition, PNMR incurred $0.9 million in professional fees related to the analysis. Of the net pre-tax impacts aggregating $3.5 million, $2.6 million is reflected in the PNM segment, $0.3 million in the TNMP segment, and $0.6 million in the Corporate and Other segment. Estimated interest income related to refunds the Company expects to receive is included in Other income and estimated interest expense and penalties related to potential cash settlements are included in Interest Charges in the Consolidated Statements of Earnings. Interest income (expense) related to income taxes was as follows:
There was no accumulated accrued interest receivable or payable related to income taxes as of December 31, 2018 and 2017. The Company files a federal consolidated and several consolidated and separate state income tax returns. The tax years prior to 2015 are closed to examination by either federal or state taxing authorities other than Arizona. The tax years prior to 2012 are closed to examination by Arizona taxing authorities. Other tax years are open to examination by federal and state taxing authorities. At December 31, 2018, the Company has $474.6 million of federal net operating loss carryforwards that expire beginning in 2030 and $76.5 million of federal tax credit carryforwards that expire beginning in 2023. State net operating losses expire beginning in 2017 and vary from federal due to differences between state and federal tax law. In 2013, New Mexico House Bill 641 reduced the New Mexico corporate income tax rate from 7.6% to 5.9%. The rate reduction was being phased-in from 2014 to 2018. In accordance with GAAP, PNMR and PNM adjusted accumulated deferred income taxes to reflect the tax rate at which the balances are expected to reverse during the period that includes the date of enactment, which was in the year ended December 31, 2013. At that time, the portion of the adjustment related to PNM’s regulated activities was recorded as a reduction in deferred tax liabilities and an increase in a regulatory liability, based on the assumption that PNM would be required to return the benefit to customers over time. PNM’s NM 2016 Rate Case (Note 17) reflects the benefit of the lower New Mexico corporate income tax rate being returned to customers over a three-year period beginning February 1, 2018. In addition, the portion of the adjustment that was not related to PNM’s regulated activities was recorded as a reduction in deferred tax assets and an increase in income tax expense. Changes in the estimated timing of reversals of deferred tax assets and liabilities resulted in refinements of the impacts of this change in tax rates being recorded through December 31, 2017, at which time the impacts of the rate reduction were fully phased-in. Adjustments to deferred income taxes recorded as increases (decreases) in the regulatory liability and income tax expense are as follows:
In 2008, fifty percent bonus tax depreciation was enacted as a temporary two-year stimulus measure as part of the Economic Stimulus Act of 2008. Bonus tax depreciation in various forms was continuously extended since that time, including by the Protecting Americans from Tax Hikes Act of 2015. The 2015 act extended and phased-out bonus tax depreciation through 2019. As discussed above the Tax Act eliminated bonus depreciation for utilities effective September 28, 2017. However, in 2018 the IRS issued proposed regulations interpreting Tax Act amendments to depreciation provisions of the Internal Revenue Code which allowed the Company to claim a bonus depreciation deduction on certain construction projects placed in service after the third quarter of 2017. As a result of the net operating loss carryforwards for income tax purposes created by bonus depreciation, certain tax carryforwards were not expected to be utilized before their expiration. In addition, as a result of Tax Act changes to the deductibility of officer compensation, certain deferred tax benefits related to compensation are not expected to be realized. In accordance with GAAP, the Company has impaired the deferred tax assets for tax carryforwards which are not expected to be utilized and for compensation that is not expected to be deductible. The impairments after reflecting the expiration of carryforwards under applicable tax laws, net of federal tax benefit, for 2016 through 2018 are as follows:
The impairments of unexpired state tax credits, state net operating loss, and charitable contribution carryforwards are reflected as a valuation allowance against deferred tax assets. The reserve balances, after reflecting expiration of carryforwards under applicable tax laws, at December 31, 2018 and 2017 are as follows:
As a result of carryforward expirations, there were no remaining impairments of state tax credits, state NOL, and charitable contribution carryforwards at December 31, 2018. The NMPRC’s order in the NM 2015 Rate Case (Note 17) approved PNM’s request to record a regulatory asset, which net of federal income taxes, amounted to $2.1 million, to recover a 2014 impairment of PNM’s New Mexico net operating loss carryforward resulting from an extension of the income tax provision for fifty percent bonus depreciation. The regulatory asset was being recovered through rates over two years. The settlement of the NM 2016 Rate Case (Note 17) included $3.3 million, net of federal tax, resulting from impairment of a 2015 New Mexico net operating loss as an addition to the remaining unamortized balance of the regulatory asset from the NM 2015 Rate Case. The total balance is being recovered over three years beginning in 2018. These impacts, including amortization, are reflected in income tax expense on the Consolidated Statement of Earnings. |
Goodwill |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The excess purchase price over the fair value of the assets acquired and the liabilities assumed by PNMR for its 2005 acquisition of TNP was recorded as goodwill and was pushed down to the businesses acquired. In 2007, the TNMP assets that were included in its New Mexico operations, including goodwill, were transferred to PNM. PNMR’s reporting units that currently have goodwill are PNM and TNMP. GAAP requires the Company to evaluate its goodwill for impairment annually at the reporting unit level or more frequently if circumstances indicate that the goodwill may be impaired. Application of the impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, and determination of the fair value of each reporting unit. GAAP provides that in certain circumstances an entity may perform a qualitative analysis to conclude that the goodwill of a reporting unit is not impaired. Under a qualitative assessment an entity considers macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events affecting a reporting unit, as well as whether a sustained decrease (both absolute and relative to its peers) in share price has occurred. An entity considers the extent to which each of the adverse events and circumstances identified could affect the comparison of a reporting unit’s fair value with its carrying amount. An entity places more weight on the events and circumstances that most affect a reporting unit’s fair value or the carrying amount of its net assets. An entity also considers positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity evaluates, on the basis of the weight of evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative analysis is not required if, after assessing the totality of events or circumstances, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount. In other circumstances, an entity may perform a quantitative analysis to reach the conclusion regarding impairment with respect to a reporting unit. An entity may choose to perform a quantitative analysis without performing a qualitative analysis and may perform a qualitative analysis for certain reporting units, but a quantitative analysis for others. The first step of the quantitative impairment test requires an entity to compare the fair value of the reporting unit with its carrying value, including goodwill. If as a result of this analysis, the entity concludes there is an indication of impairment in a reporting unit having goodwill, GAAP currently requires the entity to perform the second step of the impairment analysis, determining the amount of goodwill impairment to be recorded. The amount is calculated by comparing the implied fair value of the goodwill to its carrying amount. This exercise would require the entity to allocate the fair value determined in step one to the individual assets and liabilities of the reporting unit. Any remaining fair value would be the implied fair value of goodwill on the testing date. To the extent the recorded amount of goodwill of a reporting unit exceeds the implied fair value determined in step two, an impairment loss would be reflected in results of operations. As further discussed under New Accounting Pronouncements in Note 1, a new accounting pronouncement changes how goodwill impairment is determined by eliminating the second step of the quantitative impairment analysis. PNMR periodically updates its quantitative analysis for both PNM and TNMP. The use of a quantitative approach in a given period is not necessarily an indication that a potential impairment has been identified under a qualitative approach. For the annual evaluations performed as of April 1, 2018, PNMR utilized a quantitative analysis for the PNM reporting unit and a qualitative analysis for the TNMP reporting unit. PNMR utilized qualitative analysis for the annual evaluations performed as of April 1, 2017 and quantitative analysis for the evaluations performed as of April 1, 2016 for both the PNM and TNMP reporting units. For the quantitative analysis, a discounted cash flow methodology was primarily used to estimate the fair value of the PNM reporting unit. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of long-term growth rates for the business, and determination of appropriate weighted average cost of capital for the reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value and the conclusion of impairment. The April 1, 2018 quantitative evaluations indicated the fair value of the PNM reporting unit, which has goodwill of $51.6 million, exceeded its carrying value by approximately 19%. The 2018 qualitative analysis for the TNMP reporting unit was performed by considering changes in expectations of future financial performance since the April 1, 2016 quantitative analysis that indicated the fair value of the TNMP reporting unit, which has goodwill of $226.7 million, exceeded its carrying value by approximately 32%. The 2018 analysis considered events specific to TNMP such as the potential impacts of legal and regulatory matters discussed in Note 17, including potential adverse outcomes in the TNMP 2018 Rate Case. Both the PNM quantitative analysis and the TNMP qualitative analysis considered market and macroeconomic factors including changes in growth rates, changes in the WACC, and changes in discount rates. The Company also evaluated its stock price relative to historical performance, industry peers, and to major market indices, including an evaluation of the Company’s market capitalization relative to the carrying value of its reporting units. Based on an evaluation of these and other factors, the Company determined it is not more likely than not that the April 1, 2018 carrying values of PNM or TNMP exceed their fair values. For the April 1, 2017 evaluation for both the PNM and TNMP reporting units, the qualitative analyses were performed by considering changes in the Company’s expectations of future financial performance since the April 1, 2016 quantitative analyses. These analyses considered Company specific events such as the potential impacts of legal and regulatory matters discussed in Note 16 and Note 17, including the estimated impacts of the proposed revised stipulation in the PNM NM 2016 Rate Case, the impacts of potential outcomes of the matters appealed to the NM Supreme Court under the NM 2015 Rate Case, and the impacts of changes in PNM’s resource needs based on PNM’s 2017 IRP. These evaluations also considered changes in TNMP’s regulatory environment such as the PUCT’s proposed amendments to the interim transmission cost of service filing rule, as well as potential outcomes associated with TNMP’s general rate case filing, which the Company anticipates filing in May 2018. The qualitative analyses also considered market and macroeconomic factors including changes in anticipated growth rates, anticipated changes in the WACC, and changes in discount rates. The Company also evaluated its stock price relative to historical performance, industry peers, and to major market indices, including an evaluation of the Company’s market capitalization relative to the carrying value of its reporting units. Based on an evaluation of these and other factors, the Company determined it is not more likely than not that the April 1, 2017 carrying values of PNM or TNMP exceed their fair values. For its annual evaluations performed as of April 1, 2016, PNMR performed quantitative analyses for both the PNM and TNMP reporting units. For the quantitative analyses, a discounted cash flow methodology was primarily used to estimate the fair value of the reporting unit. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of long-term growth rates for the business, and determination of appropriate WACC for each reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value and the conclusion of impairment. The April 1, 2016 and 2015 quantitative evaluations for PNM both indicated the fair value of the PNM reporting unit, which has goodwill of $51.6 million, exceeded its carrying value by approximately 25%. An increase of 0.5% in the expected return on equity capital utilized in discounting the forecasted cash flows, would have reduced the excess of PNM’s fair value over carrying value to approximately 18%. The April 1, 2016 quantitative evaluation indicated the fair value of the TNMP reporting unit, which has goodwill of $226.7 million, exceeded its carrying value by 32%. An increase of 0.5% in the expected return on equity capital utilized in calculating the WACC used to discount the forecasted cash flows, would have reduced the excess of TNMP’s fair value over carrying value to approximately 21% at April 1, 2016. |
Related Party Transactions |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions PNMR, PNM, TNMP, and NMRD are considered related parties as defined under GAAP, as is PNMR Services Company, a wholly-owned subsidiary of PNMR that provides corporate services to PNMR and its subsidiaries in accordance with shared services agreements. These services are billed at cost on a monthly basis to the business units. In addition, PNMR provides construction and operations and maintenance services to NMRD, a 50% owned subsidiary of PNMR Development (Note 1), and PNM purchases renewable energy from certain NMRD-owned facilities at a fixed price per MWh of energy produced. PNM also provides interconnection services to PNMR Development (Note 7) and NMRD. PNMR files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between PNMR and each of its affiliated companies. These agreements provide that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to PNMR. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from PNMR to the extent that PNMR is able to utilize those benefits. See Note 7 for information on intercompany borrowing arrangements. The table below summarizes the nature and amount of related party transactions of PNMR, PNM and TNMP:
|
Quarterly Operating Results (Unaudited) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Operating Results (Unaudited) | Quarterly Operating Results (Unaudited) Unaudited operating results by quarters for 2018 and 2017 are presented below. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) necessary for a fair statement of the results of operations for such periods have been included.
(1) 2018 reflects pre-tax regulatory disallowances and restructuring costs of $63.3 million primarily resulting from the impairment of PNM’s 132 MW and 65 MW interests in SJGS Unit 4 and for an adjustment to PNM’s coal mine reclamation obligation for the mine that serves SJGS. See additional discussion under December 2018 Compliance Filing and under Coal Mine Reclamation in Note 16. 2017 reflects the impacts of changes in federal income tax rate of $57.5 million, $29.6 million, and $7.9 million for PNMR, PNM, and TNMP (Note 18). 2017 also reflects a pre-tax regulatory disallowance resulting from PNM’s NM 2016 Rate Case of $27.9 million (Note 17). |
Schedule I - Condensed Financial Information of Parent Company |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule I - Condensed Financial Information of Parent Company | SCHEDULE I PNM RESOURCES, INC. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF EARNINGS
SCHEDULE I PNM RESOURCES, INC. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF CASH FLOWS
SCHEDULE I PNM RESOURCES, INC. CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY BALANCE SHEETS
See Notes 7, 8, 14, and 16 for information regarding commitments, contingencies, and maturities of long-term debt. |
Schedule II - Valuation and Qualifying Accounts |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II PNM RESOURCES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC. VALUATION AND QUALIFYING ACCOUNTS
|
Summary of the Business and Significant Accounting Policies (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of accounting | Financial Statement Preparation and Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated. |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia (Note 10) and, through January 15, 2016, the PVNGS Capital Trust. PNM owns undivided interests in several jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants. PNMR shared services’ expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include interest and income tax sharing payments, as well as equity transactions, and interconnection billings. All intercompany transactions and balances have been eliminated. |
Accounting for the Effects of Certain Types of Regulation | Accounting for the Effects of Certain Types of Regulation The Company maintains its accounting records in accordance with the uniform system of accounts prescribed by FERC and adopted by the NMPRC and PUCT. Certain of the Company’s operations are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to the regulated operations. Regulators may assign costs to accounting periods that differ from accounting methods applied by non-regulated utilities. When it is probable that regulators will permit recovery of costs through future rates, costs are deferred as regulatory assets that otherwise would be expensed. Likewise, regulatory liabilities are recognized when it is probable that regulators will require refunds through future rates or when revenue is collected for expenditures that have not yet been incurred. GAAP also provides for the recognition of revenue and regulatory assets and liabilities associated with “alternative revenue programs” authorized by regulators. Such programs allow the utility to adjust future rates in response to past activities or completed events, if certain criteria are met, even for programs that do not otherwise qualify for recognition of regulatory assets and liabilities. Regulatory assets and liabilities are amortized into earnings over the authorized recovery period. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Information on regulatory assets and regulatory liabilities is contained in Note 13. In some circumstances, regulators allow a requested increase in rates to be implemented, subject to refund, before the regulatory process has been completed and a decision rendered by the regulator. When this occurs, the Company assesses the possible outcomes of the rate proceeding. The Company records a provision for refund to the extent the amounts being collected, subject to refund, exceed the amount the Company determines is probable of ultimately being allowed by the regulator. |
Cash and Cash Equivalents | Cash and Restricted Cash Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. In November 2016, the FASB issued Accounting Standards Update 2016-18 - Statement of Cash Flows (Topic 230), which requires amounts generally described as restricted cash and restricted cash equivalents (collectively, “restricted cash”) to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statements of cash flows and adds disclosures necessary to reconcile such amounts to cash and cash equivalents on the balance sheets. ASU 2016-18 does not require that restricted cash be reflected as cash in the statement of financial position and does not provide a definition of what should be considered restricted cash. As of January 1, 2016, PNM held a deposit of $8.2 million from a third party that was restricted for PNM’s construction of transmission interconnection facilities for that party. During 2016, PNM utilized $7.2 million of such third-party deposits to offset construction costs for the interconnection facilities. The remaining $1.0 million was held as restricted cash until the second quarter of 2017, at which time a refund was made to the third party. The balances of this deposit arrangement were included in other current assets on the balance sheets of PNMR and PNM. Under the terms of the BTMU Term Loan agreement (Note 7), all cash of NM Capital was restricted to be used for payments required under that agreement or for taxes and fees. On May 22, 2018, Westmoreland repaid the Westmoreland Loan in full. NM Capital used a portion of the proceeds to repay all of its obligations under the BTMU Term Loan. These payments effectively terminated the loan agreements (Note 10). Cash held by NM Capital was included in cash and cash equivalents on the balance sheets of PNMR and was less than $0.1 million at December 31, 2017. The Company adopted ASU 2016-18 as of January 1, 2018, its required effective date. Upon adoption, ASU 2016-18 requires the use of a retrospective transition method for the statement of cash flows in each period presented. Accordingly, PNM made retrospective adjustments to its Consolidated Statements of Cash Flows to increase beginning cash, restricted cash, and equivalents by $8.2 million at January 1, 2016 and by $1.0 million January 1, 2017, and to reduce operating cash in-flows - other current assets by $7.2 million for the year ended December 31, 2016 and by $1.0 million for the year ended December 31, 2017. In addition, the beginning and ending balances of cash, restricted cash, and equivalents are presented on the Consolidated Statements of Cash Flows. No other changes were made to the Consolidated Financial Statements in connection with the adoption of ASU 2016-18. |
Utility Plant | Utility Plant Utility plant is stated at original cost, which includes capitalized payroll-related costs such as taxes, pension, other fringe benefits, administrative costs, and AFUDC, where authorized by rate regulation, or capitalized interest. Repairs, including major maintenance activities, and minor replacements of property are expensed when incurred, except as required by regulators for ratemaking purposes. Major replacements are charged to utility plant. Gains, losses, and costs to remove resulting from retirements or other dispositions of regulated property in the normal course of business are credited or charged to accumulated depreciation. PNM and TNMP may receive reimbursements, referred to as CIAC, from customers to pay for all or part of certain construction projects to extent that project does not benefit regulated customers in general. PNM and TNMP account for these reimbursements as offsets to utility plant additions based on the requirements of the NMPRC, FERC, and PUCT. Due to the PUCT’s regulatory treatment of CIAC reimbursements, TNMP also receives a financing component that is recognized as other income on the Consolidated Statements of Earnings. Under the NMPRC regulatory treatment, PNM typically does not receive a financing component. |
Depreciation and Amortization | Depreciation and Amortization PNM’s provision for depreciation and amortization of utility plant, other than nuclear fuel, is based upon straight-line rates approved by the NMPRC and FERC. Amortization of nuclear fuel is based on units-of-production. TNMP’s provision for depreciation and amortization of utility plant is based upon straight-line rates approved by the PUCT. Depreciation of non-utility property is computed based on the straight-line method. The provision for depreciation of certain equipment is allocated between operating expenses and construction projects based on the use of the equipment. |
Allowance for Funds Used During Construction | Allowance for Funds Used During Construction As provided by the FERC uniform systems of accounts, AFUDC is charged to regulated utility plant for construction projects. This allowance is designed to enable a utility to capitalize financing costs during periods of construction of property subject to rate regulation. It represents the cost of borrowed funds (allowance for borrowed funds used during construction or “debt AFUDC”) and a return on other funds (allowance for equity funds used during construction or “equity AFUDC”). The debt AFUDC is recorded in interest charges and the equity AFUDC is recorded in other income on the Consolidated Statements of Earnings. |
Capitalized Interest | Capitalized Interest The Company capitalizes interest on its construction projects and major computer software projects not subject to the computation of AFUDC. Capitalized interest is recorded in interest charges. |
Materials, Supplies, and Fuel Stock | Materials, Supplies, and Fuel Stock Materials and supplies relate to transmission, distribution, and generating assets. Materials and supplies are charged to inventory when purchased and are expensed or capitalized as appropriate when issued. Materials and supplies are valued using an average costing method. Coal is valued using a rolling weighted average costing method that is updated based on the current period cost per ton. Periodic aerial surveys are performed on the coal piles and adjustments are made. Average cost is equal to net realizable value under the ratemaking process. |
Investments | PNM holds investment securities in the NDT for the purpose of funding its share of the decommissioning costs of PVNGS and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners (Note 16). Prior to 2018, PNM classified all debt and equity investments held in the NDT and coal mine reclamation trusts as available-for-sale securities. Effective January 1, 2018, the Company adopted Accounting Standards Update 2016-01 – Financial Instruments (Subtopic 825-10), which eliminates the requirement to classify investments in equity securities with readily determinable fair values into trading or available-for-sale categories and requires those equity securities to be measured at fair value with changes in fair value recognized in net income rather than in OCI. Under ASU 2016-01, the accounting for available-for-sale debt securities remains essentially unchanged. See Note 9. PNM evaluates the securities for impairment on an on-going basis. Since third party investment managers have sole discretion over the purchase and sales of the securities, PNM records a realized loss as an impairment for any available-for-sale security that has a market value that is less than cost at the end of each quarter. For the year ended December 31, 2018, PNM recorded impairment losses on the available-for-sale debt securities of $13.7 million. For the years ended December 31, 2017, and 2016, PNM recorded impairment losses on the available-for-sale securities, which included both debt and equity securities, of $7.1 million and $13.9 million. No gains or losses are deferred as regulatory assets or liabilities. Through December 31, 2017, unrealized gains on available-for-sale securities, net of related tax effects, are included in OCI and AOCI. In accordance with ASU 2016-01, unrealized gains on equity securities, net of related tax effects, were reclassified from AOCI to retained earnings on January 1, 2018. For the year ended December 31, 2018, unrealized gains recognized in OCI and AOCI, net of related tax effects, are related only to the available-for sale debt securities. These investments are primarily comprised of international, United States, state, and municipal government obligations and corporate debt securities. All investments are held in PNM’s name and are in the custody of major financial institutions. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in other income and deductions. |
Goodwill | Goodwill Under GAAP, the Company does not amortize goodwill. Goodwill is evaluated for impairment annually, or more frequently if events and circumstances indicate that the goodwill might be impaired. |
Asset Impairment | Asset Impairment Tangible long-lived assets are evaluated in relation to the estimated future undiscounted cash flows to assess recoverability when events and circumstances indicate that the assets might be impaired. |
Revenue Recognition | Revenue Recognition See Note 4 for a discussion of electric operating revenues. |
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company calculates the allowance for uncollectible accounts based on historical experience and estimated default rates. The accounts receivable balances are reviewed monthly and adjustments to the allowance for uncollectible accounts and bad debt expense are made as necessary. Amounts that are deemed uncollectible are written off. |
Amortization of Debt Acquisition Costs | Amortization of Debt Acquisition Costs Discount, premium, and expense related to the issuance of long-term debt are amortized over the lives of the respective issues. Gains and losses incurred upon the early retirement of long-term debt are recognized in other income or other deductions, except for amounts recoverable through NMPRC, FERC, or PUCT regulation, which are recorded as regulatory assets or liabilities and amortized over the lives of the respective issues. Unamortized debt premium, discount, and expense related to long-term are reflected as part of the debt liabilities on the Consolidated Balance Sheets. |
Derivatives and Accounting for Derivatives | Derivatives The Company records derivative instruments, including energy contracts, on the balance sheet as either an asset or liability measured at their fair value. GAAP requires that changes in the derivatives’ fair value be recognized currently in earnings unless specific hedge accounting criteria are met. For qualifying hedges, an entity must formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. GAAP provides that the effective portion of the gain or loss on a derivative instrument designated and qualifying as a cash flow hedging instrument be reported as a component of AOCI and be reclassified into earnings in the period during which the hedged forecasted transaction affects earnings. See Note 7 and Note 9. The Company treats all forward commodity purchases and sales contracts subject to unplanned netting or “book-out” by the transmission provider as derivative instruments subject to mark-to-market accounting. GAAP provides guidance on whether realized gains and losses on derivative contracts not held for trading purposes should be reported on a net or gross basis and concludes such classification is a matter of judgment that depends on the relevant facts and circumstances. Accounting for Derivatives Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2018, 2017, and 2016, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flows hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM has no trading transactions. |
Decommissioning and Reclamation Costs | Decommissioning and Reclamation Costs In accordance with GAAP, PNM is only required to recognize and measure decommissioning liabilities for tangible long-lived assets for which a legal obligation exists. Nuclear decommissioning costs and related accruals are based on periodic site-specific estimates of the costs for removing all radioactive and other structures at PVNGS and are dependent upon numerous assumptions, including estimates of future decommissioning costs at current price levels, inflation rates, and discount rates. PNM’s accruals for PVNGS Units 1, 2, and 3, including portions held under leases, have been made based on such estimates, the guidelines of the NRC, and the extended PVNGS license periods. PVNGS Units 1 and 2 are included in PNM’s retail rates and PVNGS Unit 3 was excluded through December 31, 2017, but is included in retail rates beginning in 2018. See Note 16 and Note 17. See Note 17 for information concerning the treatment of nuclear decommissioning for the leased portions of PVNGS in the NMPRC’s order in PNM’s NM 2015 Rate Case and PNM’s appeal of that order. In connection with both the SJGS and Four Corners coal supply agreements, the owners are required to reimburse the mining companies for the cost of contemporaneous reclamation, as well as the costs for final reclamation of the coal mines. The reclamation costs are based on periodic site-specific studies that estimate the costs to be incurred in the future and are dependent upon numerous assumptions, including estimates of future reclamation costs at current price levels, inflation rates, and discount rates. PNM considers the contemporaneous reclamation costs part of the cost of its delivered coal costs. See Note 16 for a discussion of reclamation costs. |
Environmental Costs | Environmental Costs The normal operations of the Company involve activities and substances that expose the Company to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though the past acts may have been lawful at the time they occurred. The Company records its environmental liabilities when site assessments or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. The Company reviews its sites and measures the liability by assessing a range of reasonably likely costs for each identified site using currently available information and the probable level of involvement and financial condition of other potentially responsible parties. These estimates are based on assumptions regarding the costs for site investigations, remediation, operations and maintenance, monitoring, and site closure. The ultimate cost to clean up the Company’s identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process. |
Income Taxes | Income Taxes Income taxes are recognized using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. In accordance with GAAP, all deferred taxes are reflected as non-current on the Consolidated Balance Sheets. Current NMPRC, FERC, and PUCT approved rates include the tax effects of the majority of these differences. GAAP requires that rate-regulated enterprises record deferred income taxes for temporary differences accorded flow-through treatment at the direction of a regulatory commission. The resulting deferred tax assets and liabilities are recorded based on the expected cash flow to be reflected in future rates. Because the NMPRC, FERC, and the PUCT have consistently permitted the recovery of tax effects previously flowed-through earnings, the Company has established regulatory liabilities and assets offsetting such deferred tax assets and liabilities. The Company recognizes only the impact of tax positions that, based on their merits, are more likely than not to be sustained upon an IRS audit. The Company defers investment tax credits and amortizes them over the estimated useful lives of the assets. See Note 18 for additional information, including a discussion of the impacts of the Tax Act. The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before taxes, which includes the earnings attributable to the Valencia non-controlling interest. GAAP also provides that certain unusual or infrequently occurring items, as well as adjustments due to enactment of new tax laws, be excluded from the estimated annual effective tax rate calculation. |
New Accounting Pronouncements | New Accounting Pronouncements Information concerning recently issued accounting pronouncements that have not been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates. Accounting Standards Update 2016-02 – Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02 to provide guidance on the recognition, measurement, presentation, and disclosure of leases. Effective January 1, 2019, ASU 2016-02 requires that a liability be recorded on the balance sheet for all leases, based on the present value of future lease obligations. A corresponding right-of-use asset will also be recorded. Amortization of the lease obligation and the right-of-use asset for certain leases, primarily those classified as operating leases, will be on a straight-line basis and other leases will be required to be accounted for as financing arrangements, which are recorded in a manner that is similar to the accounting for capital leases under current GAAP. ASU 2016-02 also revises certain disclosure requirements. ASU 2016-02 allows entities to apply certain practical expedients to arrangements that exist upon adoption of the standard and provides for other practical expedients that can be applied to leases commencing after the date of adoption. As discussed in Note 8, the Company has operating leases of office buildings, vehicles, and equipment. PNM also has operating lease interests in PVNGS Units 1 and 2 that will expire in January 2023 and 2024. In addition, the Company routinely enters into land easements and right-of-way agreements but only one such agreement with the Navajo Nation has been accounted for as a lease under current guidance. The Company will elect to use many of the practical expedients available upon adoption of the standard. As a result, the Company will continue to account for its leases, including its land lease agreement with the Navajo Nation, existing as of January 1, 2019 as operating leases until they expire or a modified. The Company will also elect the use of the practical expedient related to retrospective application of the standard and will adopt the standard prospectively, rather than restating prior periods to conform to the new guidance. As of January 1, 2019, PNMR, PNM, and TNMP will record operating lease obligations and corresponding right-of-use assets aggregating approximately $160 million, $146 million, and $12 million. These amounts reflect anticipated future cash flows associated with each operating lease, including the 2018 consumer price index requirement for the right-of-way lease on the Navajo Nation, discounted at PNMR’s, PNM’s, and TNMP’s fully collateralized borrowing rates, except for fleet operating leases which contain specified interest rates. The Company anticipates the majority of its fleet leases, and certain of its leases for office equipment, commencing after the effective date of the new standard will be recorded as financing leases. After the date of adoption, the Company anticipates it will elect the use of the practical expedient to combine the lease and non-lease components for its fleet and office building leases, and to elect the practical expedient allowing leases with expected terms of less than one-year to not be recorded on its Consolidated Balance Sheets. The standard also expands disclosure requirements related to leases, which will be provided beginning in 2019. Accounting Standards Update 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, which changes the way entities recognize impairment of many financial assets, including accounts receivable and investments in debt securities, by requiring immediate recognition of estimated credit losses expected to occur over the remaining lives of the assets. In November 2018, the FASB clarified that receivables arising from operating leases are not within the scope of Topic 326 for assets measured at amortized costs. Instead, impairments of receivables arising from operating leases should be accounted for in accordance with Topic 842. The Company anticipates adopting ASU 2016-13 effective as of January 1, 2020, its required effective date. The Company is in the process of analyzing the impacts of this new standard but does not anticipate it will have a significant impact on its financial statements. Accounting Standards Update 2017-04 – Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04 to simplify the annual goodwill impairment assessment process. Currently, the first step of a quantitative impairment test requires an entity to compare the fair value of each reporting unit containing goodwill with its carrying value (including goodwill). If as a result of this analysis, the entity concludes there is an indication of impairment in a reporting unit having goodwill, the entity is required to perform the second step of the impairment analysis, determining the amount of goodwill impairment to be recorded. The amount is calculated by comparing the implied fair value of the goodwill to its carrying amount. This exercise requires the entity to allocate the fair value determined in step one to the individual assets and liabilities of the reporting unit. Any remaining fair value would be the implied fair value of goodwill on the testing date. To the extent the recorded amount of goodwill of a reporting unit exceeds the implied fair value determined in step two, an impairment loss would be reflected in results of operations. ASU 2017-04 eliminates the second step of the impairment analysis. Accordingly, if the first step of a quantitative goodwill impairment analysis performed after adoption of ASU 2017-04 indicates that the fair value of a reporting unit is less than its carrying value, the goodwill of that reporting unit would be impaired to the extent of that difference. The Company anticipates it will adopt ASU 2017-04 for impairment testing after January 1, 2020, its required effective date, although early adoption is permitted. However, if there is an indication of potential impairment of goodwill as a result of an impairment assessment prior to 2020, the Company will evaluate the impact of ASU 2017-04 and could elect to early adopt this standard. Accounting Standards Update 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12 to better align hedge accounting with an organization’s risk management activities and to simplify the application of hedge accounting guidance. ASU 2017-12 is effective for the Company on January 1, 2019 although early adoption is permitted. At adoption, ASU 2017-12 is to be applied prospectively and allows entities to record a cumulative-effect adjustment at the transition date as well as allowing entities to elect certain practical expedients upon adoption. As discussed in Note 7, the Company periodically enters into, and designates as cash flow hedges, interest rate swaps to hedge its exposure to changes in interest rates. In addition, as discussed in Note 9, the Company enters into various derivative instruments to economically hedge the risk of changes in commodity prices, which are not currently designated as cash flow hedges. Beginning on January 1, 2018, PNM’s capacity in PVNGS Unit 3 is being used as a resource to serve NM retail customers (Note 16). As a result, the Company’s exposure to fluctuations in commodity prices, as well as its use of economic hedging transactions, has been significantly reduced. The Company will adopt ASU 2017-12 on its January 1, 2019 effective date and does not anticipate the changes will have a significant impact on the Company’s financial statements. Accounting Standards Update 2018-13 – Fair Value Measurements (Topic 820) Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurements In August 2018, the FASB issued ASU 2018-13 to improve fair value disclosures. ASU 2018-13 eliminates certain disclosure requirements related to transfers between Levels 1 and 2 of the fair value hierarchy and the requirement to disclose the valuation process for Level 3 fair value measurements. ASU 2018-13 also amends certain disclosure requirements for investments measured at net asset value and requires new disclosures for Level 3 investments, including a new requirement to disclose changes in unrealized gains or losses recorded in OCI related to Level 3 fair value measurements. ASU 2018-13 is effective for the Company beginning on January 1, 2020 and permits entities to adopt all or certain elements of the new guidance prior to its effective date. ASU 2018-13 requires retrospective application, except for the new disclosures related to Level 3 investments which are to be applied prospectively. As discussed in Note 9, PNM and TNMP have investment securities in trusts for decommissioning, reclamation, pension benefits, and other postretirement benefits, which are measured at fair value. Certain investments in these trusts are measured at net asset value per share. These trusts also hold Level 3 investments. The Company is evaluating the requirements of ASU 2018-13, but does not anticipate it will have a significant impact on the Company’s fair value disclosures. Accounting Standards Update 2018-14 – Compensation - Retirement Benefits - Defined Benefit Plans (Topic 715) Disclosure Framework: Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14 to improve benefit plan sponsors’ disclosures for defined benefit pension and other post-employment benefit plans. ASU 2018-14 removes the requirement to disclose the amounts in other comprehensive income expected to be recognized as benefit cost over the next fiscal year and the requirement to disclose the impact of a one-percentage-point change in the assumed health care cost trend rate; clarifies the disclosure requirements for plans with assets that are less than their projected benefit, or accumulated benefit obligation; and requires significant gains and losses affecting benefit obligations during the period be disclosed. ASU 2018-14 is effective for the Company on January 1, 2021, although early adoption is permitted, and requires retrospective application. As discussed in Note 11, PNM and TNMP maintain qualified defined benefit, other postretirement benefit plans providing medical and dental benefits, and executive retirement programs. The Company is in the process of evaluating the requirements of ASU 2018-14 but does not anticipate these changes will have a significant impact on the Company’s defined benefit and other postretirement benefit plan disclosures. Accounting Standards Update 2018-15 – Intangibles - Goodwill and Other - Internal Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract In August 2018, the FASB issued ASU 2018-15 to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for implementation costs incurred to develop or obtain internal-use software. Under ASU 2018-15, entities are required to capitalize implementation costs for hosting arrangements if those costs meet the capitalization requirements for internal-use software arrangements. ASU 2018-15 requires entities to present cash flows, capitalized costs, and amortization expense in the same financial statement line items as other costs incurred for such hosting arrangements. ASU 2018-15 is effective for the Company on January 1, 2020, although early adoption is permitted, and allows entities to apply the new requirements retrospectively or prospectively. The Company is in the process of analyzing the impacts of this new standard. Accounting Standards Update 2018-18 - Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 In November 2018, the FASB issued ASU 2018-18 to clarify transactions between collaborative arrangement participants that should be recognized as revenue under Topic 606. ASU 2018-18 is effective for the Company on January 1, 2020, although early adoption is permitted, and requires retrospective application. The Company has collaborative arrangements related to its interests in SJGS, Four Corners, PVNGS, and Luna. The Company believes its current accounting practices comply with the requirements of ASU 2018-18 but is in the process of analyzing the impacts of the new standard. |
Segment Information | The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided. |
Fair Value of Derivatives | The Company determines the fair values of its derivative and other financial instruments based on the hierarchy established in GAAP, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. GAAP describes three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company records any transfers between fair value hierarchy levels as of the end of each calendar quarter. There were no transfers between levels during the years ended December 31, 2018 and 2017. See New Accounting Pronouncements in Note 1. For investment securities, Level 2 and Level 3 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value as of year-end. Level 3 investments are comprised of corporate term loans and, at December 31, 2017, the Westmoreland Loan. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. The valuation of Level 3 investments requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The significant unobservable inputs include the trading multiples of public companies that are considered comparable to the company being valued, company specific issues, estimates of liquidation value, current operating performance and future expectations of performance, changes in market outlook and the financing environment, capitalization rates, discount rates, and cash flows. For the Westmoreland Loan, fair values were determined using an internal valuation model of discounted cash flows that took into consideration discount rates observable for similar types of assets and liabilities. Management of the Company independently verifies the information provided by pricing services. |
Variable Interest Entities | GAAP determines how an enterprise evaluates and accounts for its involvement with variable interest entities, focusing primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a variable interest entity (“VIE”). GAAP also requires continual reassessment of the primary beneficiary of a VIE. |
Pension and Other Postretirement Benefits | The expected long-term rate of return on pension and postretirement plan assets is calculated on the market-related value of assets. GAAP requires that actual gains and losses on pension and OPEB plan assets be recognized in the market-related value of assets equally over a period of not more than five years, which reduces year-to-year volatility. GAAP requires a plan sponsor to (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. GAAP requires unrecognized prior service costs and unrecognized gains or losses to be recorded in AOCI and subsequently amortized. The amortization of these incurred costs is included as pension and postretirement benefit periodic cost or income in subsequent years. To the extent the amortization of these items will ultimately be recovered or returned through future rates, PNM and TNMP record the costs as a regulatory asset or regulatory liability. |
Commitments and Contingencies | There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory (Note 17) proceedings in the normal course of its business. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows. With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. In accordance with GAAP, the Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, and commitments will have a material effect on its financial condition, results of operations, or cash flows. |
Summary of the Business and Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Average Rates Used Allocated Between Depreciation Expense and Construction Expense Projects Based on Use of Equipment | Average straight-line rates used were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventories consisted of the following at December 31:
|
Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segments | The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Major Customers | Three REPs accounted for more than 10% of the electric operating revenues of TNMP, as follows:
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Information regarding AOCI is as follows:
|
Electric Operating Revenue (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects ARP revenues and other revenues.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability | Changes during the period in the balances of contract liabilities, which are included in other current liabilities on the Consolidated Balance Sheets, are as follows:
|
Earnings and Dividends Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Earnings per Share and Dividends per Share | Earnings and Dividends Per Share In accordance with GAAP, dual presentation of basic and diluted earnings per share has been presented in the Consolidated Statements of Earnings of PNMR. Information regarding the computation of earnings per share and dividends per share is as follows:
|
Financing (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | Information concerning the funding dates, maturities and interest rates on the TNMP 2019 Bonds to be issued in March 2019 and on or before July 1, 2019 is as follows:
Reflecting mandatory tender dates, but excluding the impact of the refinancings under the PNM 2019 Term Loan and the TNMP 2019 Bond Purchase Agreement discussed above, long-term debt maturities as of December 31, 2018 are follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt | Short-term debt outstanding consists of:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
|
Lease Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rent Expense | Operating lease expense, including the PVNGS leases was:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Operating Lease Payments | Future expected operating lease payments at December 31, 2018 are shown below:
|
Fair Value of Derivative and Other Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative and Other Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Commodity Derivatives | PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges, are summarized as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Effect of Mark-to-Market Commodity Derivative Instruments on Earnings | The following table presents the effect of mark-to-market commodity derivative instruments on PNM’s earnings, excluding income tax effects. Commodity derivatives had no impact on OCI for the periods presented.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Buy (Sell) Volume Positions | The table below presents PNM’s net buy (sell) volume positions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value and Unrealized Gains of Available-for-sale Securities | In January 2016, the FASB issued Accounting Standards Update 2016-01 – Financial Instruments (Subtopic 825-10), which makes targeted improvements to GAAP regarding financial instruments. ASU 2016-01 eliminates the requirement to classify investments in equity securities with readily determinable fair values into trading or available-for-sale categories and requires those equity securities to be measured at fair value with changes in fair value recognized in net income rather than in OCI. Under ASU 2016-01, the accounting for available-for-sale debt securities remains essentially unchanged. The accounting required by ASU 2016-01 is to be applied prospectively with a cumulative effect adjustment recorded as of the beginning of the year of adoption. ASU 2016-01 also revises certain presentation and disclosure requirements. Accordingly, the following information for 2018 is presented under ASU 2016-01 and the information for 2017 is presented under prior GAAP. Prior to 2018, PNM classified all debt and equity investments held in the NDT and coal mine reclamation trusts as available-for-sale securities. Unrealized losses on these securities were recorded immediately through earnings and unrealized gains were recorded in AOCI until the securities were sold. On January 1, 2018, PNM recorded an after-tax cumulative effect adjustment of $11.2 million to reclassify unrealized holding gains on equity securities held in the NDT and coal mine reclamation trusts from AOCI to retained earnings on the Consolidated Balance Sheets. After January 1, 2018, all gains and losses resulting from sales and changes in the fair value of equity securities are recognized in earnings. Gains and losses recognized on the Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Realized Gain (Loss) | Gains and losses recognized on the Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table.
Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $(9.4) million, $3.3 million, and $(1.2) million for the years ended December 31, 2018, 2017 and 2016.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Classified by Contractual Maturity Date | At December 31, 2018, the available-for-sale debt securities held by PNM, had the following final maturities:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Instruments Presented by Level of Hierarchy | Items recorded at fair value by PNM on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale securities. Under ASU 2016-01, PNM does not classify its investments in equity instruments as available-for-sale securities beginning January 1, 2018.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Carrying Amounts and Fair Value of Instruments | The carrying amounts and fair values of investments in the Westmoreland Loan, other investments, and long-term debt, which are not recorded at fair value on the Consolidated Balance Sheets are presented below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments Held by the Employee Benefit Plans | The fair values of investments held by the employee benefit plans are as follows:
The fair values of investments in the PNMR Master Trust are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Level 3 Measurements | A reconciliation of the changes in Level 3 fair value measurements is as follows:
The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:
The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:
|
Variable Interest Entities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information for Noncontrolling Interest | Summarized financial information for Valencia is as follows:
|
Pension and Other Postretirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures | A reconciliation of the changes in Level 3 fair value measurements is as follows:
The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:
The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions Used | The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost would be affected.
The following significant weighted-average assumptions were used to determine the APBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the APBO and net periodic benefit cost would be affected.
Actuarial (gain) loss results from changes in:
Actuarial (gain) loss results from changes in:
The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost (income). Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost (income) would be affected.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | The following table presents pre-tax information about prior service cost and net actuarial (gain) loss in AOCI as of December 31, 2018.
The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2018.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The following table presents the components of net periodic benefit cost (income):
The following table presents the components of net periodic benefit cost:
The following table presents the components of net periodic benefit cost (income):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Expected Benefit Payments | The following OPEB payments, which reflect expected future service and are net of participant contributions, are expected to be paid:
The following pension benefit payments are expected to be paid:
The following executive retirement plan payments, which reflect expected future service, are expected:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Health Care Cost Trend Rates | The following table shows the assumed health care cost trend rates for the PNM OPEB plan:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | The following table shows the impact of a one-percentage-point change in assumed health care cost trend rates:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Funded Status | For the executive retirement programs, the following table presents information about the PBO and funded status of the plans:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Expenses for Other Retirement Plans | A summary of expenses for these other retirement plans is as follows:
|
Stock-Based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Awards | The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:
The following table summarizes activity in restricted stock awards, including performance-based and market-based shares, and stock options:
The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares, and stock options:
|
Regulatory Assets and Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Assets and Liabilities | Regulatory assets and liabilities reflected in the Consolidated Balance Sheets are presented below.
|
Construction Program and Jointly-Owned Electric Generating Plants (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction Program and Jointly-Owned Electric Generating Plants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interests and Investments in Jointly-Owned Generating Facilities | At December 31, 2018, PNM’s interests and investments in jointly-owned generating facilities are:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Budgeted Construction Expenditures | An unaudited summary of the budgeted construction expenditures, including expenditures for jointly-owned projects, and nuclear fuel, is as follows:
|
Asset Retirement Obligations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Asset Retirement Obligations | A reconciliation of the ARO liabilities is as follows:
(1) Represents the obligation related to the additional ownership interest in SJGS Unit 4 that PNM acquired on December 31, 2017 due to the restructuring of the ownership of SJGS. |
Regulatory and Rate Matters Regulatory and Rate Matters (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulated Operations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Energy/Capacity Transactions | Information about PNM’s purchases and sales is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rate Increases for Transmission Costs | TNMP recovers the costs of its energy efficiency programs through an energy efficiency cost recovery factor (“EECRF”), which includes projected program costs, under or over collected costs from prior years, rate case expenses, and performance bonuses (if the programs exceed mandated savings goals). The following sets forth TNMP’s approved EECRF increases:
TNMP can update its transmission cost of service (“TCOS”) rates twice per year to reflect changes in its invested capital although updates are not allowed while a general rate case is in process. Updated rates reflect the addition and retirement of transmission facilities, including appropriate depreciation, federal income tax and other associated taxes, and the approved rate of return on such facilities. The following sets forth TNMP’s recent interim transmission cost rate increases:
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Tax Reform Adjustments | In accordance with SAB 118, the Company completed its analysis of the impacts of the Tax Act in 2018. The adjustments to deferred income taxes resulting from completion of the Company’s analysis, which resulted primarily from differences between the estimated amounts recorded as of December 31, 2017 and the actual amounts reflected in the Company’s 2017 tax return filing, including adjustments resulting from additional guidance and interpretations to the Tax Act issued in 2018 related to bonus depreciation, certain incentive compensation, and other items are presented below:
The adjustments to deferred income taxes recorded as increases in regulatory liabilities and income tax expense as a result of the enactment of the Tax Act at December 31, 2017 are presented below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | PNM’s income taxes (benefit) consist of the following components:
PNMR’s income taxes consist of the following components:
TNMP’s income taxes consist of the following components:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | PNMR’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
The differences are attributable to the following factors:
The differences are attributable to the following factors:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Deferred Tax Assets and Liabilities | The components of PNM’s net accumulated deferred income tax liability were:
The components of PNMR’s net accumulated deferred income tax liability were:
The components of TNMP’s net accumulated deferred income tax liability at December 31, were:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Accumulated Deferred Income Tax Liability to Deferred Income Tax Benefit | The following table reconciles the change in PNM’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:
The following table reconciles the change in PNMR’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:
The following table reconciles the change in TNMP’s net accumulated deferred income tax liability to the deferred income tax benefit included in the Consolidated Statement of Earnings:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Unrecognized Tax Benefits (Expenses) | A reconciliation of unrecognized tax benefits is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Income (Expense) Related to Income Taxes | Interest income (expense) related to income taxes was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Income Taxes, Increase (Decrease) In Regulatory Liability and Income Tax Expense | Adjustments to deferred income taxes recorded as increases (decreases) in the regulatory liability and income tax expense are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax Carryforward, Impairments, net of Federal Tax Benefit | The impairments after reflecting the expiration of carryforwards under applicable tax laws, net of federal tax benefit, for 2016 through 2018 are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Tax Credit Carryforwards | The reserve balances, after reflecting expiration of carryforwards under applicable tax laws, at December 31, 2018 and 2017 are as follows:
|
Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The table below summarizes the nature and amount of related party transactions of PNMR, PNM and TNMP:
|
Quarterly Operating Results (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Unaudited operating results by quarters for 2018 and 2017 are presented below. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) necessary for a fair statement of the results of operations for such periods have been included.
(1) 2018 reflects pre-tax regulatory disallowances and restructuring costs of $63.3 million primarily resulting from the impairment of PNM’s 132 MW and 65 MW interests in SJGS Unit 4 and for an adjustment to PNM’s coal mine reclamation obligation for the mine that serves SJGS. See additional discussion under December 2018 Compliance Filing and under Coal Mine Reclamation in Note 16. 2017 reflects the impacts of changes in federal income tax rate of $57.5 million, $29.6 million, and $7.9 million for PNMR, PNM, and TNMP (Note 18). 2017 also reflects a pre-tax regulatory disallowance resulting from PNM’s NM 2016 Rate Case of $27.9 million (Note 17). |
Segment Information - Schedule (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenues | $ 1,436,613 | $ 1,445,003 | $ 1,362,951 | ||||||||
Utility margin | 1,036,887 | 1,037,524 | 982,355 | ||||||||
Other operating expenses | 559,652 | 490,543 | 488,520 | ||||||||
Depreciation and amortization | 241,188 | 231,942 | 209,110 | ||||||||
Operating income | $ (17,404) | $ 127,990 | $ 79,329 | $ 46,132 | $ 22,936 | $ 142,484 | $ 85,105 | $ 55,960 | 236,047 | 315,039 | 284,725 |
Interest income | 15,540 | 15,916 | 22,293 | ||||||||
Other income (deductions) | (15,286) | 22,429 | 16,789 | ||||||||
Interest charges | (127,244) | (127,625) | (128,633) | ||||||||
Earnings before Income Taxes | 109,057 | 225,759 | 195,174 | ||||||||
Income taxes (benefit) | 7,775 | 130,340 | 63,278 | ||||||||
Net Earnings | (51,539) | 91,573 | 42,449 | 18,799 | (50,585) | 78,327 | 41,231 | 26,446 | 101,282 | 95,419 | 131,896 |
Valencia non-controlling interest | (15,112) | (15,017) | (14,519) | ||||||||
Subsidiary preferred stock dividends | (528) | (528) | (528) | ||||||||
Net Earnings Attributable to PNMR | 85,642 | 79,874 | 116,849 | ||||||||
Total Assets | 6,865,551 | 6,646,103 | 6,865,551 | 6,646,103 | 6,471,080 | ||||||
Goodwill | 278,297 | 278,297 | 278,297 | 278,297 | 278,297 | ||||||
PNM | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Utility margin | 777,929 | 782,553 | 736,199 | ||||||||
Other operating expenses | 481,030 | 414,457 | 407,922 | ||||||||
Depreciation and amortization | 151,866 | 147,017 | 133,447 | ||||||||
Operating income | 145,033 | 221,079 | 194,830 | ||||||||
Interest income | 13,089 | 8,454 | 10,173 | ||||||||
Other income (deductions) | (17,312) | 22,132 | 15,326 | ||||||||
Interest charges | (76,458) | (82,697) | (87,469) | ||||||||
Earnings before Income Taxes | 64,352 | 168,968 | 132,860 | ||||||||
Income taxes (benefit) | (5,971) | 81,555 | 40,922 | ||||||||
Net Earnings | 70,323 | 87,413 | 91,938 | ||||||||
Valencia non-controlling interest | (15,112) | (15,017) | (14,519) | ||||||||
Subsidiary preferred stock dividends | (528) | (528) | (528) | ||||||||
Net Earnings Attributable to PNMR | 54,683 | 71,868 | 76,891 | ||||||||
Total Assets | 5,035,883 | 4,921,563 | 5,035,883 | 4,921,563 | 4,867,546 | ||||||
Goodwill | 51,632 | 51,632 | 51,632 | 51,632 | 51,632 | ||||||
TNMP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Utility margin | 258,958 | 254,971 | 246,156 | ||||||||
Other operating expenses | 96,272 | 98,221 | 93,389 | ||||||||
Depreciation and amortization | 66,189 | 63,146 | 61,126 | ||||||||
Operating income | 96,497 | 93,604 | 91,641 | ||||||||
Interest income | 0 | 0 | 0 | ||||||||
Other income (deductions) | 4,065 | 3,551 | 3,202 | ||||||||
Interest charges | (32,091) | (30,084) | (29,335) | ||||||||
Earnings before Income Taxes | 68,471 | 67,071 | 65,508 | ||||||||
Income taxes (benefit) | 16,880 | 31,512 | 23,836 | ||||||||
Net Earnings | 51,591 | 35,559 | 41,672 | ||||||||
Valencia non-controlling interest | 0 | 0 | 0 | ||||||||
Subsidiary preferred stock dividends | 0 | 0 | 0 | ||||||||
Net Earnings Attributable to PNMR | 51,591 | 35,559 | 41,672 | ||||||||
Total Assets | 1,665,177 | 1,500,770 | 1,665,177 | 1,500,770 | 1,383,223 | ||||||
Goodwill | 226,665 | 226,665 | 226,665 | 226,665 | 226,665 | ||||||
Corporate and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Utility margin | 0 | 0 | 0 | ||||||||
Other operating expenses | (17,650) | (22,135) | (12,791) | ||||||||
Depreciation and amortization | 23,133 | 21,779 | 14,537 | ||||||||
Operating income | (5,483) | 356 | (1,746) | ||||||||
Interest income | 2,451 | 7,462 | 12,120 | ||||||||
Other income (deductions) | (2,039) | (3,254) | (1,739) | ||||||||
Interest charges | (18,695) | (14,844) | (11,829) | ||||||||
Earnings before Income Taxes | (23,766) | (10,280) | (3,194) | ||||||||
Income taxes (benefit) | (3,134) | 17,273 | (1,480) | ||||||||
Net Earnings | (20,632) | (27,553) | (1,714) | ||||||||
Valencia non-controlling interest | 0 | 0 | 0 | ||||||||
Subsidiary preferred stock dividends | 0 | 0 | 0 | ||||||||
Net Earnings Attributable to PNMR | (20,632) | (27,553) | (1,714) | ||||||||
Total Assets | 164,491 | 223,770 | 164,491 | 223,770 | 220,311 | ||||||
Goodwill | 0 | 0 | 0 | 0 | 0 | ||||||
Electricity | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenues | $ 343,756 | $ 422,666 | $ 352,313 | $ 317,878 | $ 332,605 | $ 419,900 | $ 362,320 | $ 330,178 | 1,436,613 | 1,445,003 | 1,362,951 |
Cost of energy | 399,726 | 407,479 | 380,596 | ||||||||
Electricity | PNM | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenues | 1,091,965 | 1,104,230 | 1,035,913 | ||||||||
Cost of energy | 314,036 | 321,677 | 299,714 | ||||||||
Electricity | TNMP | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenues | 344,648 | 340,773 | 327,038 | ||||||||
Cost of energy | 85,690 | 85,802 | 80,882 | ||||||||
Electricity | Corporate and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenues | 0 | 0 | 0 | ||||||||
Cost of energy | $ 0 | $ 0 | $ 0 |
Segment Information - Major Customers (Details) - Electric operating revenues - customer |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
PNMR and PNM | |||
Concentration Risk [Line Items] | |||
Number of customers that make up more than 10% of total revenue | 0 | ||
PNMR and PNM | Maximum | |||
Concentration Risk [Line Items] | |||
Operating revenues from continuing operations | 10.00% | ||
Texas-New Mexico Power Company | |||
Concentration Risk [Line Items] | |||
Number of customers that make up more than 10% of total revenue | 3 | ||
Texas-New Mexico Power Company | REP A | |||
Concentration Risk [Line Items] | |||
Operating revenues from continuing operations | 21.00% | 16.00% | 16.00% |
Texas-New Mexico Power Company | REP B | |||
Concentration Risk [Line Items] | |||
Operating revenues from continuing operations | 15.00% | 11.00% | 11.00% |
Texas-New Mexico Power Company | REP C | |||
Concentration Risk [Line Items] | |||
Operating revenues from continuing operations | 12.00% | 10.00% | 11.00% |
Electric Operating Revenue Change in Contract Liabilities (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Beginning balance | $ 349 |
Consideration received in advance of service to be provided | 6,172 |
Deferred revenue earned | (6,172) |
Ending balance | 349 |
Public Service Company of New Mexico | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Beginning balance | 349 |
Consideration received in advance of service to be provided | 4,660 |
Deferred revenue earned | (4,660) |
Ending balance | 349 |
Texas-New Mexico Power Company | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Beginning balance | 0 |
Consideration received in advance of service to be provided | 1,512 |
Deferred revenue earned | (1,512) |
Ending balance | $ 0 |
Electric Operating Revenue Narrative (Details) |
Dec. 31, 2018
USD ($)
utility
MW
|
Dec. 31, 2017
USD ($)
MW
|
---|---|---|
Contract with Customers, Asset and Liability [Roll Forward] | ||
Number of regulated utilities | utility | 2 | |
Contract assets | $ | $ 0 | |
Public Service Company of New Mexico | ||
Contract with Customers, Asset and Liability [Roll Forward] | ||
Expected exposure to market risk (in megawatts) | 65 | 65 |
Power to be sold to third party (in megawatts) | 36 | 36 |
Public Service Company of New Mexico | Contracts with Customers | ||
Contract with Customers, Asset and Liability [Roll Forward] | ||
Contract with customers, net | $ | $ 61,700,000 | $ 61,800,000 |
Palo Verde Nuclear Generating Station Unit 3 | Clean Air Act, SNCR | Public Service Company of New Mexico | ||
Contract with Customers, Asset and Liability [Roll Forward] | ||
Number of megawatts | 134 |
Earnings and Dividends Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Earnings Per Share [Abstract] | |||||||||||
Net Earnings Attributable to PNMR | $ 85,642 | $ 79,874 | $ 116,849 | ||||||||
Average Number of Common Shares: | |||||||||||
Outstanding during year (in shares) | 79,654 | 79,654 | 79,654 | ||||||||
Vested awards of restricted stock (in shares) | 236 | 237 | 104 | ||||||||
Average Shares – Basic (in shares) | 79,890 | 79,891 | 79,758 | ||||||||
Dilutive Effect of Common Stock Equivalents: | |||||||||||
Stock options and restricted stock (in shares) | 122 | 250 | 374 | ||||||||
Average Shares – Diluted (in shares) | 80,012 | 80,141 | 80,132 | ||||||||
Net Earnings Attributable to PNMR Per Share of Common Stock: | |||||||||||
Basic (in dollars per share) | $ (0.70) | $ 1.10 | $ 0.48 | $ 0.19 | $ (0.68) | $ 0.92 | $ 0.47 | $ 0.29 | $ 1.07 | $ 1.00 | $ 1.47 |
Diluted (in dollars per share) | $ (0.69) | $ 1.09 | $ 0.48 | $ 0.19 | $ (0.68) | $ 0.92 | $ 0.47 | $ 0.29 | 1.07 | 1.00 | 1.46 |
Dividends Declared per Common Share (in dollars per share) | $ 1.0850 | $ 0.9925 | $ 0.9025 |
Financing - Schedule of Maturities and Interest Rates (Details) - Texas-New Mexico Power Company - Mortgages - Subsequent Event - USD ($) |
Jul. 01, 2019 |
Mar. 29, 2019 |
Feb. 26, 2019 |
---|---|---|---|
First Mortgage Bonds 3.79 Percent Due 2034 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 75,000,000 | ||
Stated percentage | 3.79% | ||
First Mortgage Bonds 3.92 Percent Due 2039 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 75,000,000 | ||
Stated percentage | 3.92% | ||
First Mortgage Bonds 4.06 Percent Due 2044 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 75,000,000 | ||
Stated percentage | 4.06% | ||
TNMP 2019 Bond Purchase Agreement | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 225,000,000 | $ 305,000,000.0 | |
Stated percentage | 400.00% | ||
First Mortgage Bonds 3.60 Percent Due 2029 | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 80,000,000 | ||
Stated percentage | 3.60% |
Financing - Long-term Debt Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Long-term Debt, by Maturity [Abstract] | ||
2019 | $ 372,302 | |
2020 | 275,345 | |
2021 | 606,000 | |
2022 | 57,000 | |
2023 | 55,000 | |
Thereafter | 1,300,698 | |
Total | 2,666,345 | $ 2,431,507 |
PNMR | ||
Long-term Debt, by Maturity [Abstract] | ||
2019 | 0 | |
2020 | 140,000 | |
2021 | 300,000 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total | 440,000 | 300,137 |
Public Service Company of New Mexico | ||
Long-term Debt, by Maturity [Abstract] | ||
2019 | 200,000 | |
2020 | 100,345 | |
2021 | 306,000 | |
2022 | 57,000 | |
2023 | 55,000 | |
Thereafter | 947,500 | |
Total | 1,665,845 | 1,665,870 |
Texas-New Mexico Power Company | ||
Long-term Debt, by Maturity [Abstract] | ||
2019 | 172,302 | |
2020 | 35,000 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 353,198 | |
Total | $ 560,500 | $ 465,500 |
Lease Commitments - Schedule of Rent Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
PNMR | |||
Operating lease expense [Line Items] | |||
Operating lease expense | $ 37,959 | $ 35,972 | $ 37,432 |
Public Service Company of New Mexico | |||
Operating lease expense [Line Items] | |||
Operating lease expense | 33,085 | 31,817 | 32,843 |
Texas-New Mexico Power Company | |||
Operating lease expense [Line Items] | |||
Operating lease expense | $ 4,351 | $ 3,570 | $ 3,748 |
Lease Commitments - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Lease commitments | |
2019 | $ 31,772 |
2020 | 30,404 |
2021 | 29,012 |
2022 | 28,175 |
2023 | 18,868 |
Later years | 43,489 |
Total minimum lease payments | 181,720 |
Public Service Company of New Mexico | |
Lease commitments | |
2019 | 27,691 |
2020 | 27,000 |
2021 | 26,462 |
2022 | 26,217 |
2023 | 17,447 |
Later years | 42,329 |
Total minimum lease payments | 167,146 |
Texas-New Mexico Power Company | |
Lease commitments | |
2019 | 3,664 |
2020 | 3,102 |
2021 | 2,324 |
2022 | 1,795 |
2023 | 1,279 |
Later years | 1,150 |
Total minimum lease payments | $ 13,314 |
Fair Value of Derivative and Other Financial Instruments - Effect of Mark-to-Market Instruments on Earnings (Details) - PNMR and PNM - Designated as hedging instrument - Commodity Contract - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) | $ (102) | $ (235) | $ (1,261) |
Electric operating revenues | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) | (50) | 5,151 | (53) |
Cost of energy | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) | $ (52) | $ (5,386) | $ (1,208) |
Fair Value of Derivative and Other Financial Instruments - Volume Positions and Requirements to Provide Collateral (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
MMBTU
MWh
|
Dec. 31, 2017
USD ($)
MMBTU
MWh
|
|
Derivative [Line Items] | ||
Contract in a net liability position | $ | $ 0 | $ 0 |
Long | Commodity Contract | Economic Hedges | PNMR and PNM | ||
Derivative [Line Items] | ||
Power-related contracts | MMBTU | 100,000 | 100,000 |
Short | Commodity Contract | Economic Hedges | PNMR and PNM | ||
Derivative [Line Items] | ||
Power-related contracts | MWh | 0 | 0 |
Fair Value of Derivative and Other Financial Instruments - Investment in NDTs (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Equity securities: | |
Net gains from equity securities sold | $ 4,864 |
Net (losses) from equity securities still held | (10,523) |
Total net (losses) on equity securities | (5,659) |
Available-for-sale debt securities: | |
Net (losses) on debt securities | (11,517) |
Net (losses) on investment securities | $ (17,176) |
Fair Value of Derivative and Other Financial Instruments - Maturities of Securities (Details) - PNMR and PNM $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Available-for-Sale | |
Within 1 year | $ 12,488 |
After 1 year through 5 years | 63,600 |
After 5 years through 10 years | 60,344 |
After 10 years through 15 years | 9,984 |
After 15 years through 20 years | 10,904 |
After 20 years | 48,418 |
Available-for-sale debt securities | $ 205,738 |
Pension and Other Postretirement Benefits - Assumed Health Care Cost Trend Rates and Impact of a One-Percentage-Point Change in Assumed Health Care Cost Trend Rates (Details) - Public Service Company of New Mexico - Other Postretirement Benefits - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract] | ||
Health care cost trend rate assumed for next year | 6.50% | 6.50% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2026 | 2024 |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rate [Abstract] | ||
1-Percentage-Point Increase, Effect on total of service and interest cost | $ 60 | |
1-Percentage-Point Increase, Effect on APBO | 1,158 | |
1-Percentage-Point Decrease, Effect on total of service and interest cost | 100 | |
1-Percentage-Point Decrease, Effect on APBO | $ (1,529) |
Pension and Other Postretirement Benefits - Other Postretirement Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
401(k) plan | |||
Defined Contribution Plan [Abstract] | |||
401(k) plan | $ 16,677 | $ 16,452 | $ 17,762 |
401(k) plan | Public Service Company of New Mexico | |||
Defined Contribution Plan [Abstract] | |||
401(k) plan | 12,052 | 12,120 | 13,397 |
401(k) plan | Texas-New Mexico Power Company | |||
Defined Contribution Plan [Abstract] | |||
401(k) plan | 4,625 | 4,332 | 4,365 |
Non-qualified plan | |||
Defined Contribution Plan [Abstract] | |||
Non-qualified plan | 865 | 3,702 | 2,017 |
Non-qualified plan | Public Service Company of New Mexico | |||
Defined Contribution Plan [Abstract] | |||
Non-qualified plan | 621 | 2,834 | 1,535 |
Non-qualified plan | Texas-New Mexico Power Company | |||
Defined Contribution Plan [Abstract] | |||
Non-qualified plan | $ 244 | $ 868 | $ 482 |
Stock-Based Compensation - Weighted Average Assumptions (Details) - $ / shares |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restricted Shares and Performance-Based Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected quarterly dividends per share (in dollars per share) | $ 0.2650 | $ 0.2425 | $ 0.2200 | |
Risk-free interest rate | 2.38% | 1.50% | 0.94% | |
Market-Based Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend yield | 2.96% | 2.67% | 2.74% | |
Expected volatility | 19.12% | 20.80% | 20.44% | |
Risk-free interest rate | 2.36% | 1.54% | 0.97% | |
Achieves a specific performance target by the end of 2017 and she remains an employee | Common Stock | Chairman, President, and Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 17,953 |
Commitments and Contingencies - PVNGS Decommissioning Funding (Details) - Public Service Company of New Mexico - Palo Verde Nuclear Generating Station - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Public Utilities, General Disclosures [Line Items] | |||
Funding for decommissioning costs in qualified and non-qualified trust funds | $ 1.3 | $ 2.0 | $ 4.2 |
Estimated market value of trusts for decommissioning costs | $ 287.1 | $ 293.7 |
Commitments and Contingencies - Nuclear Spent Fuel and Waste Disposal (Details) - Public Service Company of New Mexico - Palo Verde Nuclear Generating Station - Nuclear spent fuel and waste disposal - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Loss Contingencies [Line Items] | ||
Estimate of possible loss | $ 57.7 | |
Other deferred credits | ||
Loss Contingencies [Line Items] | ||
Liability for interim storage costs | $ 12.4 | $ 12.3 |
Commitments and Contingencies - WEG v. OSM NEPA Lawsuit (Details) - Public Service Company of New Mexico - WEG v OSM Lawsuit |
Feb. 28, 2013
state
mine
lawsuit
|
---|---|
Loss Contingencies [Line Items] | |
Number of mines affected | mine | 7 |
Number of states | state | 4 |
Number of claims filed for relief (in lawsuits) | 15 |
San Juan Generating Station | |
Loss Contingencies [Line Items] | |
Number of claims filed for relief (in lawsuits) | 2 |
Commitments and Contingencies - Mining Royalty Rate (Details) - Continuous Highwall Mining - San Juan Generating Station - USD ($) $ in Millions |
Aug. 31, 2013 |
Aug. 31, 2006 |
Dec. 31, 2003 |
---|---|---|---|
Public Utilities, General Disclosures [Line Items] | |||
Proposed retroactive surface mining royalty rate | 12.50% | ||
Surface mining royalty rate applied between 2000 and 2003 | 8.00% | ||
Estimated underpaid surface mining royalties under proposed rate change | $ 5 | ||
PNM's share of estimated underpaid surface mining royalties under proposed rate change | 46.30% |
Commitments and Contingencies - Water Supply (Details) - Public Service Company of New Mexico - Palo Verde Nuclear Generating Station |
1 Months Ended |
---|---|
Apr. 30, 2010
city
| |
Public Utilities, General Disclosures [Line Items] | |
Providing water to a number of cities | 5 |
Providing water, term | 40 years |
Regulatory and Rate Matters - Proceeding Regarding Definition of Future Test Year (Details) |
Dec. 07, 2016 |
---|---|
2014 Electric Rate Case | Public Service Company of New Mexico | |
Public Utilities, General Disclosures [Line Items] | |
Redefined future test year as period that begins a period of time following the filing of a rate case application (up to) | 13 months |
Regulatory and Rate Matters - Renewable Energy Rider (Details) - Public Service Company of New Mexico - Renewable energy rider - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Public Utilities, General Disclosures [Line Items] | |||
Revenue from renewable energy rider | $ 41.4 | $ 45.2 | $ 42.0 |
Maximum | |||
Public Utilities, General Disclosures [Line Items] | |||
Annual revenue to be collected | $ 49.6 | ||
NMPRC-approved return on equity | 0.50% | 10.50% |
Regulatory and Rate Matters - FFPAC Continuation Application (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Public Service Company of New Mexico | |
Public Utilities, General Disclosures [Line Items] | |
Frequency of FPPAC filings | 4 years |
Regulatory and Rate Matters - Integrated Resource Plan (Details) |
12 Months Ended | ||
---|---|---|---|
May 04, 2016 |
Jul. 01, 2014 |
Dec. 31, 2018 |
|
NMPRC | |||
Public Utilities, General Disclosures [Line Items] | |||
Period of action plan | 4 years | ||
Public Service Company of New Mexico | |||
Public Utilities, General Disclosures [Line Items] | |||
Required filing of Integrated Resource Plan | 3 years | ||
Planning period covered, IRP | 20 years | ||
Period of action plan | 4 years | ||
Public Service Company of New Mexico | NMPRC | |||
Public Utilities, General Disclosures [Line Items] | |||
Period of action plan | 4 years | ||
Period of time to show good cause why a docket should remain open | 30 days |
Regulatory and Rate Matters - Cost Recovery Related to Joining the EIM (Details) - Energy Imbalance Market - Public Service Company of New Mexico $ in Millions |
Aug. 22, 2018
USD ($)
|
---|---|
Public Utilities, General Disclosures [Line Items] | |
Initial capital investments to be recovered | $ 20.9 |
Other expenses to be recovered | $ 7.4 |
Regulatory and Rate Matters - San Juan Generating Station Unit 1 Outage (Details) - Public Service Company of New Mexico $ in Millions |
Mar. 17, 2018
USD ($)
|
---|---|
Public Utilities, General Disclosures [Line Items] | |
Estimated insurance deductible | $ 2.0 |
Cost of property repairs and maintenance | $ 1.0 |
Ownership interest | 50.00% |
Regulatory and Rate Matters - Hazard Sharing Agreement (Details) - Public Service Company of New Mexico - Tri-State GWh in Millions, $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jun. 01, 2017 |
Jun. 01, 2016
MW
|
Dec. 31, 2018
USD ($)
GWh
|
Dec. 31, 2017
USD ($)
GWh
|
Dec. 31, 2016
USD ($)
GWh
|
|
Public Utilities, General Disclosures [Line Items] | |||||
Hazard sharing agreement | 5 years | 1 year | |||
Agreement to sell the other party capacity and energy (in mw) | MW | 100 | ||||
Number of hours sold (in GWh) | GWh | 725.7 | 827.1 | 482.3 | ||
Hours sold (in dollars) | $ | $ 25.8 | $ 23.6 | $ 12.8 | ||
Number of hours purchased (in GWh) | GWh | 822.7 | 849.0 | 484.6 | ||
Hours purchased (in dollars) | $ | $ 28.7 | $ 24.2 | $ 12.9 |
Regulatory and Rate Matters - Formula Transmission Rate Case (Details) |
Dec. 31, 2018 |
---|---|
Public Service Company of New Mexico | Formula Transmission Rate Case | |
Public Utilities, General Disclosures [Line Items] | |
Return on equity | 10.00% |
Regulatory and Rate Matters - Firm-Requirements Wholesale Customers (Details) - Public Service Company of New Mexico - Firm Requirements Wholesale Power Rate Case, Navopache $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017
USD ($)
MW
|
Dec. 31, 2016
USD ($)
|
|
Public Utilities, General Disclosures [Line Items] | ||
Serving megawatts of load under a lower tariff (in mw) | MW | 10 | |
Revenue for power sold under specific contract | $ | $ 4.5 | $ 20.0 |
Regulatory and Rate Matters - TNMP Schedules (Details) - Texas-New Mexico Power Company - USD ($) $ in Millions |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 27, 2018 |
Sep. 13, 2017 |
Mar. 14, 2017 |
Sep. 08, 2016 |
Mar. 23, 2016 |
Feb. 29, 2020 |
Feb. 28, 2019 |
Feb. 28, 2018 |
Feb. 28, 2017 |
|
Energy efficiency costs | |||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||
Aggregate Collection Amount | $ 6.0 | $ 6.0 | |||||||
Performance Bonus | $ 0.8 | $ 0.7 | |||||||
Energy efficiency costs | Scenario, forecast | |||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||
Aggregate Collection Amount | $ 5.6 | $ 6.0 | |||||||
Performance Bonus | $ 0.8 | $ 1.1 | |||||||
Transmission Cost of Service Rates | |||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||
Approved Increase in Rate Base | $ 32.0 | $ 27.5 | $ 30.2 | $ 9.5 | $ 25.8 | ||||
Annual Increase in Revenue | $ 0.6 | $ 4.7 | $ 4.8 | $ 1.8 | $ 4.3 |
Goodwill (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Apr. 01, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Apr. 01, 2016 |
Apr. 01, 2015 |
---|---|---|---|---|---|---|
Schedule of Goodwill and Other Intangible Assets [Line Items] | ||||||
Goodwill | $ 278,297 | $ 278,297 | $ 278,297 | |||
Public Service Company of New Mexico | ||||||
Schedule of Goodwill and Other Intangible Assets [Line Items] | ||||||
Goodwill | 51,632 | $ 51,600 | 51,632 | $ 51,600 | $ 51,600 | |
Percentage of fair value in excess of carrying amount | 19.00% | 25.00% | ||||
Percentage increase in expected return on equity | 0.50% | 0.50% | ||||
Reduced percentage of fair value in excess of carrying value | 18.00% | |||||
Texas-New Mexico Power Company | ||||||
Schedule of Goodwill and Other Intangible Assets [Line Items] | ||||||
Goodwill | $ 226,665 | $ 226,700 | $ 226,665 | $ 226,700 | ||
Percentage of fair value in excess of carrying amount | 32.00% | 32.00% | ||||
Percentage increase in expected return on equity | 0.50% | |||||
Reduced percentage of fair value in excess of carrying value | 21.00% |
Quarterly Operating Results (Unaudited) (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
$ / shares
MW
|
Sep. 30, 2018
USD ($)
$ / shares
|
Jun. 30, 2018
USD ($)
$ / shares
|
Mar. 31, 2018
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
$ / shares
|
Sep. 30, 2017
USD ($)
$ / shares
|
Jun. 30, 2017
USD ($)
$ / shares
|
Mar. 31, 2017
USD ($)
$ / shares
|
Dec. 31, 2018
USD ($)
$ / shares
MW
|
Dec. 31, 2017
USD ($)
$ / shares
|
Dec. 31, 2016
USD ($)
$ / shares
|
Dec. 16, 2015
MW
|
Jul. 31, 2015
MW
|
|
Segment Reporting Information [Line Items] | |||||||||||||
Operating Revenues | $ 1,436,613 | $ 1,445,003 | $ 1,362,951 | ||||||||||
Operating income | $ (17,404) | $ 127,990 | $ 79,329 | $ 46,132 | $ 22,936 | $ 142,484 | $ 85,105 | $ 55,960 | 236,047 | 315,039 | 284,725 | ||
Net earnings (loss) | (51,539) | 91,573 | 42,449 | 18,799 | (50,585) | 78,327 | 41,231 | 26,446 | $ 101,282 | $ 95,419 | $ 131,896 | ||
Net Earnings Attributable to PNMR | $ (55,077) | $ 87,521 | $ 38,208 | $ 14,990 | $ (54,282) | $ 73,739 | $ 37,555 | $ 22,862 | |||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||
Basic (in dollars per share) | $ / shares | $ (0.70) | $ 1.10 | $ 0.48 | $ 0.19 | $ (0.68) | $ 0.92 | $ 0.47 | $ 0.29 | $ 1.07 | $ 1.00 | $ 1.47 | ||
Diluted (in dollars per share) | $ / shares | $ (0.69) | $ 1.09 | $ 0.48 | $ 0.19 | $ (0.68) | $ 0.92 | $ 0.47 | $ 0.29 | $ 1.07 | $ 1.00 | $ 1.46 | ||
Federal income tax rate change | $ 2,914 | $ 57,461 | $ 0 | ||||||||||
Public Service Company of New Mexico | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Operating Revenues | 1,091,965 | 1,104,230 | 1,035,913 | ||||||||||
Operating income | $ (38,654) | $ 102,516 | $ 52,879 | $ 28,292 | $ 1,778 | $ 113,252 | $ 59,164 | $ 38,331 | 145,033 | 221,079 | 194,830 | ||
Net earnings (loss) | (53,400) | 81,428 | 30,781 | 11,514 | (28,456) | 65,283 | 30,476 | 20,110 | 70,323 | 87,413 | 91,938 | ||
Net Earnings Attributable to PNMR | (56,806) | 77,508 | 26,672 | 7,837 | (32,021) | 60,827 | 26,932 | 16,658 | 55,211 | 72,396 | 77,419 | ||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||
Federal income tax rate change | (683) | 29,606 | 0 | ||||||||||
Texas-New Mexico Power Company | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Operating Revenues | 344,648 | 340,773 | 327,038 | ||||||||||
Operating income | 23,312 | 27,824 | 26,829 | 18,532 | 19,879 | 29,474 | 26,286 | 17,965 | 96,497 | 93,604 | 91,641 | ||
Net Earnings Attributable to PNMR | 10,711 | 16,100 | 15,367 | 9,413 | 1,024 | 14,727 | 12,204 | 7,604 | 51,591 | 35,559 | 41,672 | ||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||
Federal income tax rate change | 0 | 7,865 | 0 | ||||||||||
NMPRC | |||||||||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||
Pre-tax regulatory disallowance | 27,900 | 27,900 | |||||||||||
Electricity | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Operating Revenues | 343,756 | 422,666 | 352,313 | 317,878 | 332,605 | 419,900 | 362,320 | 330,178 | 1,436,613 | $ 1,445,003 | $ 1,362,951 | ||
Electricity | Public Service Company of New Mexico | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Operating Revenues | 259,848 | 331,374 | 264,511 | 236,232 | 249,321 | 327,254 | 276,097 | 251,558 | |||||
Electricity | Texas-New Mexico Power Company | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Operating Revenues | $ 83,908 | $ 91,292 | $ 87,802 | $ 81,646 | $ 83,284 | $ 92,646 | $ 86,223 | $ 78,620 | |||||
Clean Air Act, SNCR | San Juan Generating Station Unit 4 | Public Service Company of New Mexico | |||||||||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||
Regulatory disallowance and restructuring costs | $ 63,300 | ||||||||||||
Additional ownership to be obtained (in megawatts) | MW | 65 | 65 | 65 | 132 | |||||||||
Potential acquisition of ownership (in megawatts) | MW | 65 | 65 | |||||||||||
Clean Air Act, SNCR Hearing Examiner Recommended Denial | San Juan Generating Station Unit 4 | Public Service Company of New Mexico | |||||||||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||
Additional ownership to be obtained (in megawatts) | MW | 132 | 132 | 132 |
Schedule I - Condensed Financial Information of Parent Company - Statements of Earnings (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Operating Revenues | $ 1,436,613 | $ 1,445,003 | $ 1,362,951 | ||||||||
Operating Expenses | 1,200,566 | 1,129,964 | 1,078,226 | ||||||||
Operating income | $ (17,404) | $ 127,990 | $ 79,329 | $ 46,132 | $ 22,936 | $ 142,484 | $ 85,105 | $ 55,960 | 236,047 | 315,039 | 284,725 |
Other Income and Deductions: | |||||||||||
Other income | 17,586 | 19,515 | 17,796 | ||||||||
Net other income and deductions | 254 | 38,345 | 39,082 | ||||||||
Interest charges | 127,244 | 127,625 | 128,633 | ||||||||
Earnings before Income Taxes | 109,057 | 225,759 | 195,174 | ||||||||
Income Taxes | 7,775 | 130,340 | 63,278 | ||||||||
Net Earnings Attributable to Company | $ (55,077) | $ 87,521 | $ 38,208 | $ 14,990 | $ (54,282) | $ 73,739 | $ 37,555 | $ 22,862 | |||
PNM Resources | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Operating Revenues | 0 | 0 | 0 | ||||||||
Operating Expenses | 7,475 | 2,902 | 2,871 | ||||||||
Operating income | (7,475) | (2,902) | (2,871) | ||||||||
Other Income and Deductions: | |||||||||||
Equity in earnings of subsidiaries | 109,995 | 111,877 | 122,252 | ||||||||
Other income | 2,048 | 1,181 | 1,711 | ||||||||
Net other income and deductions | 112,043 | 113,058 | 123,963 | ||||||||
Interest charges | 19,453 | 12,490 | 8,102 | ||||||||
Earnings before Income Taxes | 85,115 | 97,666 | 112,990 | ||||||||
Income Taxes | (527) | 17,792 | (3,859) | ||||||||
Net Earnings Attributable to Company | $ 85,642 | $ 79,874 | $ 116,849 |
Schedule I - Condensed Financial Information of Parent Company - Balance Sheets (Parenthetical) (Details) - USD ($) $ / shares in Units, $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Condensed Financial Statements, Captions [Line Items] | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 79,653,624 | 79,653,624 |
Common stock, shares outstanding | 79,653,624 | 79,653,624 |
PNM Resources | ||
Condensed Financial Statements, Captions [Line Items] | ||
Accumulated depreciation | $ 13,518 | $ 13,229 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 79,653,624 | 79,653,624 |
Common stock, shares outstanding | 79,653,624 | 79,653,624 |
B'[R2Q[B>5PZ!&70F Z/JH!&P)7ITQK)RQD##OR@'O^&+.FC$@OK(Y>/H3:*'&V
M^V&8$07
M0MTUKPN!$S-S[
M@8
7 SU!QC'ABHN?%L
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M WG!!0B1B'.T' 1HQ"!AAM/XC'5<*3C>/'16PU?)!L]WGN#9JR$V3=B^B(0
MA"RP%3%;<88@C)BM" 1ATG?IZ_5QG*NS4Q2[O'SL3JA4B[OB>5^WAQ'.KIY.
MP7PT[2F,T?4;?;$^GF7YX>9XM.;/K'S<[*O%UZ*NBUUW$N.A*.J\B5!]:,;U
M*<_N3S^V^4/=?FVGP/)XI.7XHRX._7&=U>G,T/7_4$L#!!0 ( !MK84[Q
MO.4T? ( $\) 9 >&PO=V]R:W-H965T9;%Q4]$=S_=,N$J)4U'*G1!)\(E@K9 Z80Q #ZW2;XB$J AF,)'504)4K%B?1Q)5(EH"
M9 /.07S A/P1I6]V)DJH&BO2=V0'J^A<)CLLBF#-C2?5HY=%V'[?2 B(( 2T
M[-27,*FMR/@M85*+SF/3;8DVS_@[MB5:0KH6+=#3[8 MZ&%SU@RV1IC7 N9E
M>;3-3V-WM$8XVH)I1$MFK2WA:.LJ7$KHUZ+SG/11?MKFR=