PNM Resources Inc. (PNM, Financial) filed Quarterly Report for the period ended 2012-09-30.
Pnm Resources Inc has a market cap of $1.75 billion; its shares were traded at around $22.01 with a P/E ratio of 16.6 and P/S ratio of 1. The dividend yield of Pnm Resources Inc stocks is 2.6%. Pnm Resources Inc had an annual average earning growth of 4.2% over the past 5 years.
On August 21, 2011, PNM implemented a $72.1 million annual non-fuel rate increase for its retail customers. This rate increase improved revenues and margin by $5.6 million and $40.3 million for the three and nine months ended September 30, 2012. Lower retail loads, driven by weather, reduced revenues and margin for the three and nine months ended September 30, 2012 by $4.7 million and $0.8 million, as milder weather in the third quarter was partially offset by warmer weather in the second quarter. The average number of retail customers and usage per customer have stayed relatively flat during 2012. The increase in fuel costs and the reduction in off-system sales volumes resulting from the fire incident at the mine providing coal to SJGS are recovered through PNM's FPPAC and did not negatively impact 2012 results. See Note 9 for more discussion on the SJGS mine fire incident.
PNM offers several energy efficiency programs and initiatives to its retail customers regulated by the NMPRC. In addition, PNM is allowed to earn adders on these programs, based on energy savings of the programs. PNM recovers these energy efficiency program costs via a rate rider. For the three and nine months ended September 30, 2012, revenues and margin improved by $7.2 million and $17.1 million, of which $0.3 million and $0.8 million is adder revenues and the remaining $6.9 million and $16.3 million is offset by an increase in operating expense for energy efficiency program costs.
Changes in unrealized mark-to-market gains and losses are based on economic hedges in place for sales and fuel costs not covered under the FPPAC, primarily associated with PVNGS Unit 3. Unrealized losses of $1.1 million for the three months ended September 30, 2012 compared to unrealized gains of $2.7 million for the three months ended September 30, 2011, decreased margin by $3.8 million. Unrealized losses of $3.1 million for the nine months ended September 30, 2012 compared to unrealized gains of $4.1 million for the nine months ended September 30, 2011, decreased margin by $7.2 million.
For the three months ended September 30, 2012, operating expenses decreased by $1.0 million. For the nine months ended September 30, 2012, operating expenses decreased by $18.0 million, primarily due to a regulatory disallowance of $17.5 million recorded in the second quarter of 2011. See Note 17 of the Notes to Consolidated Financial Statements in the 2011 Annual Reports on Form 10-K. PNM incurred $1.0 million and $2.7 million in the three and nine months ended September 30, 2011 to implement several process improvement activities, which did not recur in 2012 resulting in lower operating expenses. The benefits of these process improvement initiatives and labor savings further reduced operating expenses by $3.0 million and $4.9 million for the three and nine months ended September 30, 2012. Lower incentive compensation of $1.8 million and $1.9 million reduced operating expenses for the three and nine months ended September 30, 2012. Adjustments of $4.4 million and $6.1 million for additional taxes other than income, primarily gross receipts taxes, were recorded in the three and nine months ended September 30, 2011 with no such adjustments recorded in 2012, resulted in reduced operating expenses in 2012 compared to 2011. For the nine months ended September 30, 2012, improved plant performance at SJGS and PVNGS reduced maintenance expenses by $2.4 million compared to 2011. Also, the timing of a planned outage at a gas facility in 2011 of $1.4 million and lower vegetation management costs of $1.0 million reduced expenses for the nine months ended September 30, 2012. For the three and nine months ended September 30, 2012, these savings were offset by increases of $6.9 million and $16.3 million of energy efficiency program costs, which are recovered through revenues discussed above.
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Pnm Resources Inc has a market cap of $1.75 billion; its shares were traded at around $22.01 with a P/E ratio of 16.6 and P/S ratio of 1. The dividend yield of Pnm Resources Inc stocks is 2.6%. Pnm Resources Inc had an annual average earning growth of 4.2% over the past 5 years.
Highlight of Business Operations:
In January 2012, PNM filed an application for a rate rider that PNM proposed would go into effect in August 2012 to collect costs for renewable energy procurements incurred after December 31, 2010 that are not otherwise being collected in rates. These costs include the procurement of solar RECs from customers, wind resource procurements during November and December 2011 as ordered by the NMPRC, and the revenue requirements for PNM-owned solar PV facilities and a solar battery storage demonstration project that went into service during 2011. The rider's rate for 2012 would be set at 2.081% of the retail customer's monthly bill. The rate would be reset to 2.695% as of January 1, 2013 to reflect unrecovered costs from 2012 and projected costs to be incurred in 2013. The rider would terminate upon a final order in PNM's next general rate case unless that order authorized a continuation of the rider. Amounts that can be collected under the proposed rider are capped at $18.0 million in 2012 and $24.6 million in 2013 under the stipulation in PNM's 2010 Electric Rate Case. Any amounts above the caps are deferred for future recovery without carrying costs. As a separate component of the rider, PNM proposes that if its earned return on jurisdictional equity in 2013 exceeds 10.5%, it would refund to customers during May through December 2014 the amount over 10.5%. On August 14, 2012, the NMPRC issued an order approving the rider with modifications. The NMPRC ordered that the rider be billed on a per KWh basis, rather than as a percentage of the bill. The approved rate is $0.0022335 per KWh in 2012 and $0.0028371 per KWh in 2013. The order disapproved the recovery of the cost of the supplemental procurement ordered by the NMPRC in the 2012 procurement plan because the NMPRC had not acted on the specific $0.9 million procurement proposed by PNM, which is discussed under Renewable Portfolio Standard above. In October 2012, a motion by an intervenor for rehearing was granted in part by the NMPRC to clarify that no separate hearing is required prior to increasing the rider rate for new procurements if a legally appropriate hearing on the increase was conducted as part of the hearing on the procurement plan. PNM implemented the rider on August 20, 2012.On August 21, 2011, PNM implemented a $72.1 million annual non-fuel rate increase for its retail customers. This rate increase improved revenues and margin by $5.6 million and $40.3 million for the three and nine months ended September 30, 2012. Lower retail loads, driven by weather, reduced revenues and margin for the three and nine months ended September 30, 2012 by $4.7 million and $0.8 million, as milder weather in the third quarter was partially offset by warmer weather in the second quarter. The average number of retail customers and usage per customer have stayed relatively flat during 2012. The increase in fuel costs and the reduction in off-system sales volumes resulting from the fire incident at the mine providing coal to SJGS are recovered through PNM's FPPAC and did not negatively impact 2012 results. See Note 9 for more discussion on the SJGS mine fire incident.
PNM offers several energy efficiency programs and initiatives to its retail customers regulated by the NMPRC. In addition, PNM is allowed to earn adders on these programs, based on energy savings of the programs. PNM recovers these energy efficiency program costs via a rate rider. For the three and nine months ended September 30, 2012, revenues and margin improved by $7.2 million and $17.1 million, of which $0.3 million and $0.8 million is adder revenues and the remaining $6.9 million and $16.3 million is offset by an increase in operating expense for energy efficiency program costs.
Changes in unrealized mark-to-market gains and losses are based on economic hedges in place for sales and fuel costs not covered under the FPPAC, primarily associated with PVNGS Unit 3. Unrealized losses of $1.1 million for the three months ended September 30, 2012 compared to unrealized gains of $2.7 million for the three months ended September 30, 2011, decreased margin by $3.8 million. Unrealized losses of $3.1 million for the nine months ended September 30, 2012 compared to unrealized gains of $4.1 million for the nine months ended September 30, 2011, decreased margin by $7.2 million.
For the three months ended September 30, 2012, operating expenses decreased by $1.0 million. For the nine months ended September 30, 2012, operating expenses decreased by $18.0 million, primarily due to a regulatory disallowance of $17.5 million recorded in the second quarter of 2011. See Note 17 of the Notes to Consolidated Financial Statements in the 2011 Annual Reports on Form 10-K. PNM incurred $1.0 million and $2.7 million in the three and nine months ended September 30, 2011 to implement several process improvement activities, which did not recur in 2012 resulting in lower operating expenses. The benefits of these process improvement initiatives and labor savings further reduced operating expenses by $3.0 million and $4.9 million for the three and nine months ended September 30, 2012. Lower incentive compensation of $1.8 million and $1.9 million reduced operating expenses for the three and nine months ended September 30, 2012. Adjustments of $4.4 million and $6.1 million for additional taxes other than income, primarily gross receipts taxes, were recorded in the three and nine months ended September 30, 2011 with no such adjustments recorded in 2012, resulted in reduced operating expenses in 2012 compared to 2011. For the nine months ended September 30, 2012, improved plant performance at SJGS and PVNGS reduced maintenance expenses by $2.4 million compared to 2011. Also, the timing of a planned outage at a gas facility in 2011 of $1.4 million and lower vegetation management costs of $1.0 million reduced expenses for the nine months ended September 30, 2012. For the three and nine months ended September 30, 2012, these savings were offset by increases of $6.9 million and $16.3 million of energy efficiency program costs, which are recovered through revenues discussed above.
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