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PNM Resourcesa? Texas Utility Files for General Rate Increase

^{Published on 2010-08-26 13:25:45 - Market Wire}
 

ALBUQUERQUE, N.M.--([ BUSINESS WIRE ])--PNM Resourcesa™ (NYSE: PNM) transmission and distribution utility in Texas, TNMP, today filed for an annual revenue increase of $20.1 million, or 10.9 percent.

"TNMPa™s financial investments benefit its customers and it is crucial for the utility to timely recover its costs and be well positioned to continue to invest in its system."

If approved by the Public Utility Commission of Texas, the proposed new general rates would go into effect in approximately one year. The filing proposes a return on equity of 11.5 percent, based on a rate base of $448.3 million and a revenue requirement of $204.3 million. The filing also proposes a debt-to-equity capital ratio of 50-50. The current ratio used for regulatory purposes is 60 percent debt and 40 percent equity.

aTNMP has made substantial investments in its distribution system during the past two years to ensure its long-term reliability.a said Pat Vincent-Collawn, PNM Resources president and CEO. aTNMPa™s financial investments benefit its customers and it is crucial for the utility to timely recover its costs and be well positioned to continue to invest in its system.a

Vincent-Collawn said that during the next five years, TNMP plans to spend over $160 million to replace and update its aging distribution system.

aFrom the standpoint of access to capital, TNMP needs solid credit ratings,a Vincent-Collawn said. aAnd, without significant and sustained improvement to its ability to recover its costs, TNMP remains exposed to credit pressures, which would have negative consequences to TNMP and its customers.a

In its filing, TNMP is asking the PUCT to eliminate the consolidated tax methodology that unfairly transfers a hypothetical tax benefit of losses from other related business units to TNMP customers. TNMP believes it should be allowed to recover the utilitya™s actual tax expense in rates, similar to the recovery of its other expenses. Today, TNMP is allowed to recover a tax expense amount that is artificially reduced by the losses of other subsidiaries and business units.

TNMP is a transmission and distribution service provider that delivers power to residential and business customers in three non-contiguous areas spanning more than 13,100 square miles. TNMPa™s rates primarily cover the use of the transmission and distribution system and meter-reading services, which account for less than 29 percent of a typical residential electric bill in Texas. If approved by the PUCT, the impact of the general rate increase to residential customers using 1,200 kilowatt-hours per month would be less than $10 monthly.

The general rate case is the latest regulatory effort by TNMP to timely recover costs and earn its allowed return. In May, the utility gained approval to increase transmission cost-of-service rates by $5.5 million annually. Also in May, TNMP filed a plan with regulators to deploy advanced meters for its business and residential customers. The filing requests a surcharge to collect $158 million in costs over 12 years, including recovery of capital expenditures incurred through 2015 of $70.6 million. A hearing before the State Office of Administrative Hearings is scheduled for October.

The filing is available at [ http://www.pnmresources.com/investors/regulatory.cfm ].

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2009 consolidated operating revenues from continuing operations of $1.6 billion. Through its utility and energy subsidiaries, PNM Resources has more than 2,710 megawatts of generation resources and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50 percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources. For more information, visit the companya™s Web site at [ www.PNMResources.com ].