Financial Data and Key Metrics Changes - Ongoing earnings for 2024 were reported at 2.74 and 1 billion, targeting earnings growth of 7% to 9% through 2029 [8][9] Business Line Data and Key Metrics Changes - TNMP reported an 18% increase in system peak records, with data center demand totaling over 600 megawatts at year-end, reflecting a 200 megawatt increase in Q4 [13] - Expected growth from distribution customers billed on a volumetric basis is 2% to 4%, and 4% to 6% from demand-based customers [14] - PNM added 500 megawatts of solar and storage in November, bringing total carbon-free resource capacity to approximately 1,500 megawatts [20] Market Data and Key Metrics Changes - Interconnection requests in 2024 were 10% higher than in 2023, indicating increased growth expectations for 2025 [14] - The approval of the grid modernization plan at PNM is expected to enhance customer integration of renewable resources [21] Company Strategy and Development Direction - The company is focusing on balancing customer affordability with infrastructure needs, particularly in New Mexico [23] - A five-year investment plan includes significant capital investments aimed at enhancing system resiliency and supporting growth in Texas [16][26] - The company is committed to transitioning to clean energy, with plans to increase carbon-free resources to 75% by 2026 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the targeted earnings growth of 7% to 9%, highlighting strong growth in Texas [47] - The company is optimistic about regulatory accomplishments and ongoing economic development initiatives in New Mexico [10][25] Other Important Information - The board increased the dividend by 5%, maintaining a targeted payout ratio of 50% to 60% for 2025 [9] - The company plans to file a base rate review in 2025, recognizing changes in components of base rates since the last approval in 2018 [19] Q&A Session Summary Question: Can you clarify the incremental opportunity in the plan and the $750 million related to the Permian? - Management discussed the balance between affordability and capital expenditure in New Mexico, highlighting economic development legislation and transmission build opportunities [55][56][60] Question: What structure is assumed for the remaining term loan in the Texas rate case? - Management indicated that the term loan would be replaced with debt while including equity content to strengthen credit metrics [64][66] Question: How should we interpret the wider range in the CAGR guidance? - Management explained that the broader range reflects the significant capital expenditure included in the budget and a comfortable outlook for growth [105] Question: Is the 5% dividend increase a good benchmark for future years? - Management stated that the board reviews dividends annually, considering various factors, and the target is to maintain a payout ratio around the middle of the 50% to 60% range [107][109] Question: What is the timeline for stakeholder engagement regarding Four Corners? - Management confirmed plans to exit Four Corners by 2031 and emphasized the importance of the 2029 to 2032 RFP for replacement alternatives [117]
TXNM Energy, Inc.(TXNM) - 2024 Q4 - Earnings Call Transcript