Customer Base and Service Areas - TXNM Energy serves approximately 834,000 customers across New Mexico and Texas, with a focus on maintaining strong and modern electric infrastructure to ensure reliability and support economic growth[24]. - PNM's largest retail electric customer accounted for 4.2% of its retail electric revenues in 2024, with significant revenue contributions from metropolitan areas like Albuquerque and Santa Fe[47]. - TNMP's two largest retail electric providers accounted for 26% and 20% of its operating revenues in 2024, indicating a concentrated revenue base[41]. Load and Demand Trends - TNMP experienced a 1.8% increase in weather-normalized retail load and a 2.4% increase in weather-normalized demand-based load in 2024 compared to 2023, while data center load increased by 13.7%[41]. - PNM's weather-normalized residential load increased by 1.5%, and industrial load saw a significant increase of 12.5% in 2024 compared to 2023[46]. - TNMP recorded a new system peak in December 2024, driven by economic growth across Texas, necessitating further investments in grid reliability[210]. Rate Increases and Financial Proposals - PNM filed for a general increase in retail electric rates, proposing an increase of 92.2 million increase in base rates, effective in two phases starting July 1, 2025[49]. - PNM filed a 2025 Rate Request for a two-phase implementation of a 105.0 million increase in retail revenues, reflecting an ROE of 9.45%[199]. Infrastructure Investments and Modernization - PNM's Grid Modernization Plan, approved in October 2024, includes approximately 2.3 billion in utility plant during 2023 and 2024, focusing on transmission and distribution infrastructure to support growing demand and enhance grid reliability[209]. - PNM's investments aim to modernize infrastructure to accommodate increasing amounts of intermittent and distributed generation resources, enhancing customer value[212]. Renewable Energy and Sustainability Goals - The New Mexico Renewable Energy Act mandates utilities to achieve a renewable portfolio of 40% by 2025 and 100% zero-carbon energy by 2045[53]. - PNM plans to be coal-free by 2031 and achieve a carbon-free generating portfolio by 2040, demonstrating commitment to sustainability[217]. - PNM's customer distributed solar generation program represented 308.5 MW at December 31, 2024, and plans to increase renewable generation capacity to 52.1% by 2026[59]. Financial Health and Risks - The profitability of TXNM's utilities is dependent on recovering costs through regulated rates, with significant capital investments placing upward pressure on customer rates[96]. - TXNM and its subsidiaries have significant indebtedness, which may limit their ability to obtain additional financing and increase vulnerability to adverse economic conditions[148]. - Interest rates have increased, potentially raising financing costs for TXNM and its subsidiaries, affecting cash flows and financial position[136]. Regulatory Compliance and Environmental Concerns - PNM's operations may face increased costs due to potential new regulations regarding the classification of CCRs as hazardous waste, impacting mine reclamation expenses[104]. - The company is subject to environmental cleanup liabilities, which could lead to civil or criminal penalties if compliance with environmental laws is not met[105]. - Environmental noncompliance could harm the company's reputation and increase the cost of capital, affecting overall financial stability[108]. Cybersecurity and Operational Risks - The company faces risks from physical and cybersecurity attacks that could disrupt operations and lead to significant financial losses[122]. - TXNM's cybersecurity program is a top priority, focusing on identifying and managing risks associated with cybersecurity threats[170]. - Management is responsible for overseeing cybersecurity risks and ensuring compliance with legal and regulatory requirements[176]. Workforce and Diversity - As of December 31, 2024, the total number of employees across TXNM, PNM, and TNMP is 1,695, with 27% being women and 56% minorities[89]. - The company is committed to diversity and inclusion, with a goal for its workforce to mirror the communities it serves[87]. Community Engagement and Support - PNM's Good Neighbor Fund provided emergency assistance to 3,665 families in need during 2024, addressing energy affordability[216]. - TXNM's vision focuses on creating a clean energy future while ensuring safety, reliability, and customer satisfaction[200].
TXNM Energy, Inc.(TXNM) - 2024 Q4 - Annual Report