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Holly LaFon
Holly LaFon
Articles (9418)  | Author's Website |

Mario Gabelli Comments on PNM Resources Inc.

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February 04, 2019 | About:
PNM Resources Inc. (NYSE:PNM) (3.4%) (PNM – $41.09 – NYSE) of Albuquerque, New Mexico, is the holding company for regulated electric utilities Public Service Company of New Mexico (PSNM) and Texas-New Mexico Power Company (TNMP). PSNM serves 524,000 customers in and around Albuquerque, Rio Rancho, and Santa Fe, and owns 2,600 MWs (15% nuclear) of generation. PSNM expects to be coal-free by 2031. TNMP is a distribution/transmission company and serves 250,000 customers in three non-contiguous areas of Texas. PSNM was recently authorized a two phase rate plan calling for a $32 million revenue increase in 2018 and an additional $30 million in 2019, based on a 9.575% allowed-ROE. Higher rates are necessary to recognize its environmental plan, the addition of Palo Verde 3 at $1,118/kW ($150 million) into rate base, other investments, and declining sales. Importantly, the request was based on a future 2018 test year, rather than the often used historical test year. In May of 2018, TNMP requested a rate increase, with new rates to be effective in early 2019. PNM targets earnings growth of 6% and provides 2018 and 2019 earnings guidance of $1.80-$1.92 per share and $2.04-$2.16 per share, respectively.

From Mario Gabelli (Trades, Portfolio)'s Gabelli Utilities Fund fourth-quarter 2018 commentary.

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

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