Txnm Energy, Inc. · NYSE:TXNM
Txnm Energy — PNM Resources — EEI Investor Meetings November 2023
32 slides from Txnm Energy's conference presentation, November 2023
Slide 1: EEI Investor Meetings
EEI Investor Meetings November 2023
Slide 2: Contact Information and Safe Harbor Statement
Contact Information and 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 m
Slide 3: PNM Resources Overview
PNM Resources Overview Energy holding company based in Albuquerque, New Mexico with two fully regulated electric utility subsidiaries NYSE: PNM $4B market cap • Vertically integrated utility in New Mexico focused on clean Service Territories and Generation Resources energy transformation • $3.6B rat
Slide 4: Shareholder Value Proposition – Merger with Avangrid
Shareholder Value Proposition – Merger with Avangrid Pending merger with Avangrid provides additional opportunity for shareholder value Transaction Benefits: • $50.30/share transaction price • Proposed customer and community benefits in New Mexico and Texas • Achieves benefits of scale to fund capit
Slide 5: Avangrid and PNM Resources Strategic Merger Approvals
Avangrid and PNM Resources Strategic Merger Approvals Merger agreement through December 2023, can be extended through March 2024 Filing Docket No. Approvals/Clearances Proxy filing / Shareholder approval N/A Approved 2/12/2021 Department of Justice (Hart-Scott- Cleared waiting period, refiled and cl
Slide 6: PNM Resources Vision: Create a Clean and Bright Energy Future
PNM Resources Vision: Create a Clean and Bright Energy Future Clean Energy Critical Electric Strong Corporate Portfolio Infrastructure Profile PNM progress towards T&D investments in Delivering financial industry-leading goal of reliability and resiliency results, investment-grade 100% emissions-fre
Slide 7: Commitment to ESG Strategy
Commitment to ESG Strategy Environmental Social Governance Industry-leading goals: Hiring, training, retention and 8 of 9 Board members are • Emissions-free by 2040 engagement programs for our independent, 9 years average reflects full elimination of diverse workforce with a focus tenure carbon from
Slide 8: Investment Plan 2023 – 2027
Investment Plan 2023 – 2027 5-year investment plan of $5.9 billion $1,245 $1,166 $48 $1,163 $1,178 $1,102 $44 $47 $42 $46 $508 $449 $496 $557 $610 $84 (in millions) $26 $58 $89 $92 $96 $27 $73 $69 $527 $489 $441 $379 $513 $419 $460 $453 $452 $318 2023 2024 2025 2026 2027 PNM T&D PNM Owned Battery St
Slide 9: Long-Term Earnings Growth
Long-Term Earnings Growth Delivering consistent long- Continued 5% Long-Term EPS Growth Target term earnings growth 5% EPS Growth Target 2020 - 2027 $2.78 Timing of equity issuances $2.69 can shift dilution impacts $2.45 between years $2.28 • $200M equity forward sales in 2023(1) and NMRD sales proc
Slide 10: Financing Plans
Financing Plans Positioned for future growth Long-term Debt Maturities • $200 million equity (4.4m shares through forward ATM to in millions(1) be issued in Dec. 2023) • NMRD (unregulated joint venture) sales proceeds $1,113 expected in Q4 2023 or early Q1 2024 • Securitization bonds to be issued No
Slide 11: Dividend Growth
Dividend Growth Annual dividend targets middle of • Expect dividend growth a 50% - 60% payout ratio range consistent with earnings growth targeting the $2.69 $2.78 middle of a 50% - 60% $2.45 payout ratio range $2.28 $2.16 • Board typically addresses $1.47 annual dividends in $1.39 $1.16 $1.23 $1.31
Slide 12: PNM Resources Value Proposition
PNM Resources Value Proposition Strong financial track record, above-average rate base growth at regulated electric utilities TNMP: High-growth Texas service territory with legislative focus on reliability/resiliency PNM: Grid expansion to support growing system demand and transition to clean energy
Slide 13: PNM
PNM
Slide 14: PNM Overview
PNM Overview Retail Operations • Transmission, Distribution and Generation service to retail customers regulated by the New Mexico Public Regulation Commission • Recovery of investments through retail rates set through general rate reviews (future test year); current authorized ROE of 9.575% and 50%
Slide 15: Executing the Energy Transition Act
Executing the Energy Transition Act Our Goal: Carbon-Free by 2040 (5 years earlier than state mandate) Step 1: Exit coal generation Retire San Juan Generating Station: completed in 2022 (783 MWs) 2021 2022 2023 Reduction of MW Coal Capacity Coal Coal 6% 983 22% reduction 7% Renewables Coal Renewab
Slide 16: 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 17: PNM Customer Affordability
PNM Customer Affordability 2024 Rate Change Avg Residential Bill(1) • Energy Transition Act is achieving the clean $132.15 energy transition with benefits to customers $121.57 • T&D investments partially offset by $87.82 generation portfolio changes reduced bill impact to customers National Avg Regi
Slide 18: Transmission Development Potential
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 Predominance of Renewables Resources in Center of Country and Load Centers on Coasts Source: NREL
Slide 19: TNMP
Pres PNV(C Resources’
Slide 20: TNMP Overview
TNMP Overview Transmission and Distribution Utility (TDU) within Deregulated ERCOT Market • Transmission and Distribution service to consumers regulated by the Public Utility Commission of Texas • Semi-annual recovery of transmission investments and (added in 2023) distribution investments • General
Slide 21: TNMP Infrastructure Investment
TNMP Infrastructure Investment Investment driven by Economic Growth TNMP Investment Plan Growth • Rapid demand-based load growth over recent years in the $610 Commercial and Industrial classes drives need for increased $ Millions electrification and reliability / system upgrade investments $435 • Re
Slide 22: 2023 Texas Legislative Session Highlights
2023 Texas Legislative Session Highlights • Constructive session for utilities focused on grid reliability and resilience • Bills passed to encourage and protect utility infrastructure investments : Distribution Cost Recovery Filing (DCRF) System Resiliency Temporary Mobile Generation West T
Slide 23: TNMP Rate Recovery Framework
TNMP Rate Recovery Framework DCRF (Distribution TCOS (Transmission General Rate Review Cost Recovery Factor) Cost of Service) Standard rate review involving comprehensive Pre-defined schedules, includes filing, discovery, interveners, Pre-defined schedules; Staff earnings test; Staff Process hearing
Slide 24: PUCT Commissioners
PUCT Commissioners PUCT Commissioners Name Term Began Term Ends Party Kathleen Jackson (Interim Chair) Aug. 5, 2022 Sept. 1, 2027 Republican Will McAdams April 1, 2021 Sept. 1, 2025 Republican Lori Cobos(1) Sept. 1, 2021 Sept. 1, 2027 Republican Jimmy Glotfelty Aug. 6, 2021 Sept. 1, 2025 Republican
Slide 25: Appendix
Appendix
Slide 26: PNM Key Regulatory Proceedings
PNM Key Regulatory Proceedings Docket Filing Action Timing No. PNM/AVANGRID appealed NMPRC denial with NM 20-00222-UT Merger transaction approval Supreme Court on Jan. 3, 2022, briefings completed No statutory timeframe S-1-SC-39152 Aug. 5, 2022, oral argument held Sept. 15, 2023 Four Corners Abando
Slide 27: TNMP Key Regulatory Proceedings
TNMP Key Regulatory Proceedings Docket Filing Action Timing No. TCOS Filing Filed January 23, 2023 Approved and implemented May 12, 2023 54588 (first 2023 filing) Unanimous settlement Interim rates for settlement ($14.5M of $14.8M DCOS Filing 53436 approved July 20, 2023 request) implemented Septemb
Slide 28: New Mexico Supreme Court Appeal - Statement of Issues
New Mexico Supreme Court Appeal - Statement of Issues PNM / Avangrid Merger (filed Feb. 2, 2022), case S-1-SC-39152 • The decision was based on inadmissible hearsay evidence and information outside the evidentiary record • Examples: written testimony of a witness that was not present for cross exami
Slide 29: PNM Near Term Resource Portfolio Changes
PNM Near Term Resource Portfolio Changes 2022 2023 2024 • Retirement of • Return of PV • Return of PV SJGS Units 1 Leases (104 MW) Lease (10 MW) and 4 (562 MW) • 350 MW solar • 690 MW solar • Replacement and 170 MW and 462 MW power delayed storage added storage to be added San Juan Generating Statio
Slide 30: Four Corners Coal Plant Ownership
Four Corners Coal Plant Ownership Total PNM PNM Unit Other Participants/Ownership MW MW Ownership Arizona Public Service Company 63% (485 MW) Navajo Transitional Energy Company 7% (54 MW) 4 770 100 13% Salt River Project 10% (77 MW) Tucson Electric Power 7% (54 MW) Arizona Public Service Company 63%
Slide 31: Palo Verde Nuclear Generating Station Ownership and Leases
Palo Verde Nuclear Generating Station Ownership and Leases 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 0.8% 10 MW Unit 3 10.2% 134 MW Unit 3 - - Total 21.9% 288 MW Total 0.8% 10 MW (1) 104 MW Unit 1 leases expired Jan. 16, 2023 Yea
Slide 32: Selected Balance Sheet Information
Selected Balance Sheet Information (In millions) Dec. 31, 2022 Sept. 30, 2023 Long-Term Debt (incl. current portion) (1) PNM $2,000.9 $2,145.2 TNMP 1,076.9 1,260.9 Corporate/Other 999.6 999.0 Consolidated $4,077.4 $4,405.1 Total Debt (incl. short-term) (1,2) PNM $2,186.8 $2,312.1 TNMP 1,113.6 1,300.