Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — Investor Presentation (December 2024)
32 slides from Txnm Energy's investor presentation, December 2024
Slide 1: Investor Meetings
Investor Meetings December 2024 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Investor Relations Contact Information Lisa Goodman Executive Director, Investor Relations and Shareholder Services 1-505-241-2160 Lisa.Goodman@pnmresources.com Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements made in this news release
Slide 3: TXNM Energy Overview
TXNM Energy Overview Energy holding company with two fully regulated electric utilities in Texas (TNMP) and New Mexico (PNM) NYSE: TXNM $4.5b market cap • Vertically integrated utility Service Territories and Generation Resources (generation, T&D) in New Mexico • $2.8b Retail rate base • $0.8b FERC
Slide 4: TXNM Energy Overview: Rate Base by Jurisdiction
TXNM Energy Overview Consistent, measured approach to growth among regulatory jurisdictions Increased percentage of rate base recovered through TNMP capital recovery mechanisms and FERC formula rate Rate Base by Jurisdiction 2028E 2023 $9.0b 2018 $4.3b $5.4b 23% 69% 38% 58% 46% 42% TNMP PNM 51% TNMP
Slide 5: TXNM Energy Investment Highlights
TXNM Energy Investment Highlights Robust customer-driven investment plans with additional opportunities • $6.2b investment plan 2024-2028 focused on T&D infrastructure Strong demand growth from diverse Steady load growth, clean energy transition, TNMP PNM customer base, resiliency investments, grid
Slide 6: Investment Plan 2024 – 2028
Investment Plan 2024 – 2028 5-year investment plan of $6.2 billion $1,323 $1,273 Projects on the Horizon $1,216 $48 $1,253 $44 $1,178 $48 $49 Included in plan: $46 $558 TNMP $564 $685 $641 Resiliency Plan $600m $582 West TX Transmission $84 Mobile Generation (in millions) $89 $120 $69 $78 $18
Slide 7: Execution of Financial Plans
Execution of Financial Plans Strong track record of achieving financial targets • Earning authorized return on regulated rate base • Delivering earnings and dividend growth • Maintaining investment grade credit ratings Targeting 6% - 7% (1) EPS growth $2.82 2024 - 2028(2) $2.69 $2.28 $2.45 $2.16 $1.
Slide 8: 2024 - 2028 Potential Earnings Power
2024 - 2028 Potential Earnings Power 6% - 7% Earnings per Share Growth 2024-2028(1) 2024 2025 Earnings 2026 Earnings 2027 Earnings 2028 Earnings Allowed Guidance Equity Potential Potential Potential Potential Midpoint Return / Avg Avg Avg Avg Avg Ratio Rate EPS Rate EPS Rate EPS Rate EPS Rate EPS Ba
Slide 9: Financing Plans
Financing Plans Long-term Debt Maturities 2024 Financing Activities Long-term Debt Maturities in millions(1) in millions(1) $550 • Completed 2024 equity needs of ~$100 million through ATM program • Issuance of junior subordinated $1,278 convertible bonds in Q2 2024 $60 • PNM and TNMP financings comp
Slide 10: TNMP
TNMP
Slide 11: TNMP Highlights
TNMP Highlights TNMP System Peak Consistent growth in TNMP service territory Continued nation-leading economic growth 2,944 System demand has grown 63% since 2020 Peak MW 2,545 13% annual growth rate 2,240 Entrance of data centers increased load beginning in 2022, 2,030 1,804 primarily in We
Slide 12: TNMP Investments
TNMP Investments TNMP Capital Spending Investment plans focused on meeting increased demands (millions) Expansion of transmission and distribution as economic $606 growth continues to drive increased demand Integration of rapidly increasing ERCOT generation $325 resources $129 Strengthen grid
Slide 13: PUCT Commissioners and Regulatory Framework
PUCT Commissioners and Regulatory Framework Commissioner Name Term Began Term Ends Party Thomas Gleeson(1) (Chair) Jan. 19, 2024 Sept. 1, 2029 Republican Kathleen Jackson Aug. 5, 2022 Sept. 1, 2027 Republican Lori Cobos(2) Sept. 1, 2021 Sept. 1, 2027(3) Republican Jimmy Glotfelty Aug. 6, 2021 Sept.
Slide 14: TNMP Key Regulatory Items
TNMP Key Regulatory Items Filing Action Timing Docket No. Transmission Cost of Approved and implemented March Filed January 25, 2024 56155 Service (1st 2024 filing) 15, 2024 Transmission Cost of Approved and implemented Filed July 25, 2024 56860 Service (2nd 2024 filing) September 20, 2024 Distribut
Slide 15: TNMP Wildfire Preparation and Mitigation Plans
TNMP Wildfire Preparation and Mitigation Plans Coordination with local officials for TNMP Vegetation power shut off consideration Management ($m) 35% of service territory identified $8.7 and prioritized as high risk $8.1 ~70% of transmission poles are steel or $4.4 concrete Diverse TX landscape & no
Slide 16: PNM
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Slide 17: PNM Highlights
PNM Highlights PNM System Peak Increasing system demands 2,131 New system peaks reached in 2022 and 2023 2,030 2024 subdued by milder temperatures MWs 2,008 Reflects need for additional resources and infrastructure Clean energy transition spurring economic development Our Goal: Carbon-Free E
Slide 18: PNM Transmission Development Potential
PNM Transmission Development Potential New Mexico’s location in the West and concentration of solar and wind resources demonstrates the potential for renewable development and associated transmission needs Western Energy Imbalance Predominance of Renewables Resources in Center of Market (WEIM) and C
Slide 19: PNM Investments
PNM Investments PNM Capital Spending Investment plans focused on T&D infrastructure to support (millions) $596 clean energy and meet growing customer needs $415 $397 System reliability and resilience investments 80% Grid modernization plan approved, $344m capital 31% $127 77% $476 $307 investmen
Slide 20: Key Drivers of PNM 2025 Rate Request
Key Drivers of PNM 2025 Rate Request • PNM filed its application in June 2024 for rates effective beginning July 2025 • PNM and parties filed an unopposed settlement on November 26, 2024 Total Revenues Request Settlement Rate base investments $430m new investments $430m new investments Equity financ
Slide 21: Key Drivers of PNM 2025 Rate Request
Key Drivers of PNM 2025 Rate Request Key Settlement Component Settlement Terms Ongoing Earnings Per Share Considerations $430M new investments Rate base investments +$0.22 return on new investments Dec 2024-June 2026 Equity financing costs (ROE) 9.45% +$0.04 vs currently authorized 9.26% Capital str
Slide 22: NMPRC Commissioners
NMPRC Commissioners Name Term Began Term Ends Party Patrick O'Connell (Chair) January 1, 2023 December 31, 2028 Democrat Gabriel Aguilera January 1, 2023 December 31, 2026 Democrat James Ellison January 10, 2023 December 31, 2024 Independent Commissioners confirmed by the New Mexico Senate on Feb. 8
Slide 23: PNM Regulation
PNM Regulation PNM FERC PNM Retail Transmission Distribution Generation 55% FERC / 45% Retail 100% Retail 100% Retail • $0.8b rate base • $2.8b rate base regulated by the New Mexico Public Regulation regulated by FERC, Commission with investments recovered primarily through recovered through general
Slide 24: PNM Key Regulatory Items
PNM Key Regulatory Items Filing Action Timing Docket No. PNM filed Oct. 25, 2023, for 60 MW 2026 Resource utility-owned battery and 350 MW Approved May 30, 2024 23-00353-UT Application solar and storage PPAs/ESAs, hearings held March 20-24, 2024 PNM filed October 3, 2022, for six- PNM NMPRC year pla
Slide 25: PNM Wildfire Preparation and Mitigation Plans
PNM Wildfire Preparation and Mitigation Plans Public Safety Power Shutoff (PSPS) plan implemented on May 1, 2024 PNM Vegetation Management ($m) 18% of service territory identified and prioritized as high risk $8.0 $6.5 $4.4 40% of T&D lines underground $2.0 New Mexico is the 5th largest state by siz
Slide 26: Appendix
Appendix 26
Slide 27: Sustainability
Sustainability Environmental Social Governance Industry-leading goals: Hiring, training, retention and 9 of 11 Board members are • Emissions-free by 2040 engagement programs for our independent, 7 years average reflects full elimination of diverse workforce with a focus tenure carbon from generation
Slide 28: 2024 - 2028 Potential Earnings Power
2024 - 2028 Potential Earnings Power 2024 2025 Earnings 2026 Earnings 2027 Earnings 2028 Earnings Allowed Guidance Equity Potential Potential Potential Potential Midpoint Return / Avg Avg Avg Avg Avg Ratio Rate EPS Rate EPS Rate EPS Rate EPS Rate EPS Base Base Base Base Base 9.45% / PNM Retail 51% (
Slide 29: 2024 Load Growth
2024 Load Growth TNMP Load Growth YTD Q3 2024 2024E Volumetric Load(1) 2.3% 2% - 3% Data centers add to traditional load growth Demand-Based Load(2) 3.8% 2% - 3% Steady growth across traditional customer classes and Data Center Load(3) 2.5% n/a service territories TNMP Avg. Customers 1.8% 1.5% C
Slide 30: PNM Generation Shared Ownership
PNM Generation Shared Ownership Palo Verde Nuclear Generating Station - MW Owned vs Leased Owned Capacity Leased Capacity Unit 1 2.3% 30 MW Unit 1 - (1) - (1) Unit 2 9.4% 124 MW Unit 2 - (2) - (2) Unit 3 10.2% 134 MW Unit 3 - - Total 7.3% 288 MW Total - - (1) 104 MW Unit 1 leases expired Jan. 2023 (
Slide 31: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec. 31, 2023 Sept. 30, 2024 Long-Term Debt (incl. current portion) (1) PNM $2,261.8 $2,459.1 TNMP 1,260.9 1,464.1 Corporate/Other 999.1 999.5 Consolidated $4,521.8 $4,922.7 Total Debt (incl. short-term) (1,2) PNM $2,399.3 $2,639.0 TNMP 1,316.0 1,561.
Slide 32: Liquidity as of October 25, 2024
Liquidity as of October 25, 2024 Corporate/ TXNM Energy PNM TNMP Other Consolidated Financing Capacity(1): (In millions) Revolving credit facilities $440.0 $200.0 $300.0 $940.0 As of 10/25/24: Short-term debt and 182.0 112.5 176.7 471.2 L/C balances Remaining availability 258.0 87.5 123.3 468.8 Inve