v3.25.0.1
Cover Page - USD ($)
 12 Months Ended
Dec. 31, 2024
Feb. 14, 2025
Jun. 28, 2024
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2024    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity Registrant Name TXNM Energy, Inc.    
Entity Incorporation, State or Country Code NM    
Entity Address, Address Line One 414 Silver Ave. SW    
Entity Address, City or Town Albuquerque    
Entity Address, State or Province NM    
Entity Address, Postal Zip Code 87102    
City Area Code 505    
Local Phone Number 241-2700    
Entity File Number 001-32462    
Entity Tax Identification Number 85-0468296    
Title of 12(b) Security Common Stock, no par value    
Trading Symbol TXNM    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction Flag false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   92,659,335  
Entity Public Float     $ 3,333,806,193
Documents Incorporated by Reference
Portions of the following document are incorporated by reference into Part III of this report:

Proxy Statement to be filed by TXNM with the SEC pursuant to Regulation 14A relating to the annual meeting of shareholders of TXNM to be held on May 13, 2025.

This combined Form 10-K is separately filed by TXNM, PNM, and TNMP.  Information contained herein relating to any individual registrant is filed by such registrant on its own behalf.  Each registrant makes no representation as to information relating to the other registrants.  When this Form 10-K is incorporated by reference into any filing with the SEC made by TXNM, PNM, or TNMP, as a registrant, the portions of this Form 10-K that relate to each other registrant are not incorporated by reference therein.
    
Entity Central Index Key 0001108426    
Document Fiscal Year Focus 2024    
Document Fiscal Period Focus FY    
Amendment Flag false    
PNM      
Document Information [Line Items]      
Current Fiscal Year End Date --12-31    
Entity Registrant Name Public Service Company of New Mexico    
Entity Address, Address Line One 414 Silver Ave. SW    
Entity Address, City or Town Albuquerque    
Entity Address, State or Province NM    
Entity Address, Postal Zip Code 87102    
City Area Code 505    
Local Phone Number 241-2700    
Entity File Number 001-06986    
Entity Tax Identification Number 85-0019030    
Title of 12(b) Security 1965 Series, 4.58% Cumulative Preferred Stock    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Document Financial Statement Error Correction Flag false    
Entity Common Stock, Shares Outstanding   39,117,799  
Entity Central Index Key 0000081023    
Document Fiscal Year Focus 2024    
Document Fiscal Period Focus FY    
Amendment Flag false    
TNMP      
Document Information [Line Items]      
Current Fiscal Year End Date --12-31    
Entity Registrant Name Texas-New Mexico Power Company    
Entity Address, Address Line One 577 N. Garden Ridge Blvd.    
Entity Address, City or Town Lewisville    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 75067    
City Area Code 972    
Local Phone Number 420-4189    
Entity File Number 002-97230    
Entity Tax Identification Number 75-0204070    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers Yes    
Entity Current Reporting Status No    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Document Financial Statement Error Correction Flag false    
Entity Common Stock, Shares Outstanding   6,358  
Entity Central Index Key 0000022767    
Document Fiscal Year Focus 2024    
Document Fiscal Period Focus FY    
Amendment Flag false    
v3.25.0.1
Audit Information
 12 Months Ended
Dec. 31, 2024
Auditor [Line Items]  
Auditor Firm ID 185
Auditor Name KPMG LLP
Auditor Location New York, New York
PNM  
Auditor [Line Items]  
Auditor Firm ID 185
Auditor Name KPMG LLP
Auditor Location New York, New York
TNMP  
Auditor [Line Items]  
Auditor Firm ID 185
Auditor Name KPMG LLP
Auditor Location New York, New York
v3.25.0.1
Consolidated Statements of Earnings - TXNM - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Electric Operating Revenues $ 1,971,199 $ 1,939,198 $ 2,249,555
Operating Expenses:      
Administrative and general 247,116 227,900 227,149
Regulatory disallowances 8,980 71,923 832
Depreciation and amortization 384,925 319,503 304,853
Transmission and distribution costs 98,380 98,721 94,684
Taxes other than income taxes 100,580 95,940 92,989
Total operating expenses 1,517,713 1,707,858 1,855,795
Operating income 453,486 231,340 393,760
Other Income and Deductions:      
Interest income 23,537 21,963 16,095
(Gains) losses on investment securities 26,851 19,246 (78,357)
Other income 28,621 24,204 21,601
Other (deductions) (24,189) (15,869) (13,881)
Net other income and (deductions) 54,820 49,544 (54,542)
Interest Charges 228,066 190,355 127,908
Earnings before Income Taxes 280,240 90,529 211,310
Income Taxes (Benefits) 21,518 (16,350) 26,130
Net Earnings 258,722 106,879 185,180
(Earnings) Attributable to Valencia Non-controlling Interest (16,040) (18,533) (15,122)
Subsidiary preferred stock dividends (528) (528) (528)
Net earnings attributable to TXNM, basic $ 242,154 $ 87,818 $ 169,530
Net Earnings Attributable to TXNM per Common Share:      
Basic (in dollars per share) $ 2.67 $ 1.02 $ 1.97
Diluted (in dollars per share) $ 2.67 $ 1.02 $ 1.97
Electricity      
Electric Operating Revenues $ 1,971,199 $ 1,939,198 $ 2,249,555
Operating Expenses:      
Cost of energy and production costs 583,984 802,261 987,941
Energy production costs      
Operating Expenses:      
Cost of energy and production costs $ 93,748 $ 91,610 $ 147,347
v3.25.0.1
Consolidated Statements of Comprehensive Income - TXNM - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]      
Net Earnings $ 258,722 $ 106,879 $ 185,180
Unrealized Gains on Available-for-Sale Debt Securities:      
Net increase (decrease) in unrealized holding gains arising during the period, net of income tax (expense) benefit of $225, $(2,928), and $490 (660) 8,601 (1,438)
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $3,330, $1,828, and $972 (9,778) (5,371) (2,855)
Pension Liability Adjustment:      
Experience gains (losses), net of income tax (expense) benefit of $815, $(353), and $1,159 (2,395) 1,036 (3,406)
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(1,236), $(1,212), and $(1,804) 3,630 3,564 5,300
Fair Value Adjustment for Cash Flow Hedges:      
Change in fair market value, net of income tax (expense) of $3,876, $3,933, and $(3,121) (11,384) (11,550) 9,164
Reclassification adjustment for (gains) losses included in net earnings, net of income tax expense (benefit) of $(2,629), $(2,359), and $299 7,719 6,928 (877)
Total Other Comprehensive Income (Loss) (12,868) 3,208 5,888
Comprehensive Income 245,854 110,087 191,068
Comprehensive (Income) Attributable to Valencia Non-controlling Interest (16,040) (18,533) (15,122)
Subsidiary preferred stock dividends (528) (528) (528)
Comprehensive Income Attributable to TXNM $ 229,286 $ 91,026 $ 175,418
v3.25.0.1
Consolidated Statements of Comprehensive Income - TXNM (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]      
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit $ 225 $ (2,928) $ 490
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit) 3,330 1,828 972
Pension liability adjustment, income tax expense (benefit) 815 (353) 1,159
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, income tax expense (1,236) (1,212) (1,804)
Change in fair market value, income tax (expense) benefit 3,876 3,933 (3,121)
Reclassification adjustment for losses included in net earnings, income tax expense (benefit) $ (2,629) $ (2,359) $ 299
v3.25.0.1
Consolidated Statements of Cash Flows - TXNM - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cash Flows From Operating Activities:      
Net Earnings $ 258,722 $ 106,879 $ 185,180
Adjustments to reconcile net earnings to net cash flows from operating activities:      
 Depreciation and amortization 423,010 353,692 341,123
Deferred income tax expense (benefit) 43,050 (13,509) 24,533
(Gain) on sale of NMRD (4,449) 0 0
(Gains) losses on investment securities (26,851) (19,246) 78,357
Stock based compensation expense 9,480 7,190 7,825
Regulatory disallowances 8,980 71,923 832
Allowance for equity funds used during construction (17,887) (14,978) (13,799)
Other, net 4,165 804 2,377
Changes in certain assets and liabilities:      
Accounts receivable and unbilled revenues (13,349) 53,229 (73,099)
Materials, supplies, and fuel stock (33,804) (31,301) (8,528)
Other current assets 31,967 (52,225) 17,159
Other assets (83,541) (25,820) 5,002
Accounts payable 10,021 (33,536) 47,568
Accrued interest and taxes 5,114 17,526 9,205
Other current liabilities (106,374) 125,580 (28,516)
Other liabilities (94) 4,963 (27,935)
Net cash flows from operating activities 508,160 551,171 567,284
Cash Flows From Investing Activities:      
Additions to utility and non-utility plant (1,247,041) (1,075,812) (912,557)
Proceeds from sale of plant assets (Note 8) 2,840 32,654 0
Proceeds from sales of investment securities 707,338 574,199 526,448
Purchases of investment securities (756,805) (593,241) (564,912)
Proceeds from sale of NMRD 116,936 0 0
Investments in NMRD (12,550) (26,250) 0
Other, net 14,910 44 674
Net cash flows used in investing activities (1,174,372) (1,088,406) (950,347)
Cash Flows From Financing Activities:      
Revolving credit facilities borrowings 2,892,200 2,358,900 1,829,500
Revolving credit facilities repayments (2,544,800) (2,329,000) (1,660,200)
Long-term borrowings 1,233,000 1,358,096 558,000
Repayment of long-term debt (819,529) (910,000) (179,500)
Issuance of common stock 98,601 198,177 0
Awards of common stock (8,460) (9,646) (7,980)
Dividends paid (140,339) (126,705) (119,839)
Valencia’s transactions with its owner (19,098) (21,569) (17,533)
Transmission interconnection and security deposit arrangements 92,272 49,807 96,550
Refunds paid under transmission interconnection and security deposit arrangements (79,011) (21,124) (107,397)
Debt issuance costs and other, net (20,482) (9,836) (5,564)
Net cash flows from financing activities 684,354 537,100 386,037
Change in Cash, Cash Equivalents, and Restricted Cash 18,142 (135) 2,974
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 3,943 4,078 1,104
Cash, Cash Equivalents, and Restricted Cash at End of Year 22,085 3,943 4,078
Restricted Cash Included in Other Current Assets and Other Deferred Charges on Consolidated Balance Sheets:      
At beginning of period 1,728 0 0
At end of period 17,587 1,728 0
Supplemental Cash Flow Disclosures:      
Interest paid, net of amounts capitalized 207,972 155,273 118,485
Income taxes paid (refunded), net (998) 1,505 (1,011)
Supplemental schedule of noncash investing and financing activities:      
(Increase) decrease in accrued plant additions $ 10,728 $ (23,002) $ 4,455
v3.25.0.1
Consolidated Balance Sheets - TXNM - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 4,498 $ 2,215
Accounts receivable, net of allowance for credit losses of $1,398 and $3,388 130,351 126,291
Unbilled revenues 69,176 64,072
Other receivables 37,236 76,509
Materials, supplies, and fuel stock 166,861 98,034
Regulatory assets 41,492 73,046
Prepaid assets 25,452 19,759
Income taxes receivable 7,684 6,697
Other current assets 16,086 8,920
Total current assets 498,836 475,543
Other Property and Investments:    
Investment securities 475,524 444,408
Equity investment in NMRD 0 119,570
Other investments 259 171
Non-utility property, including financing leases 28,832 29,367
Total other property and investments 504,615 593,516
Utility Plant:    
Plant in service, held for future use, and to be abandoned 10,697,774 9,701,180
Less accumulated depreciation and amortization 2,829,296 2,755,823
Net plant in service and plant held for future use 7,868,478 6,945,357
Construction work in progress 495,976 589,834
Nuclear fuel, net of accumulated amortization of $28,245 and $35,840 72,554 74,671
Net utility plant 8,437,008 7,609,862
Deferred Charges and Other Assets:    
Regulatory assets 962,003 914,381
Goodwill 278,297 278,297
Operating lease right-of-use assets, net of accumulated amortization 272,894 182,201
Other deferred charges 258,080 198,805
Total deferred charges and other assets 1,771,274 1,573,684
Total assets 11,211,733 10,252,605
Current Liabilities:    
Short-term debt 609,300 261,900
Current installments of long-term debt (includes $6,907 and $2,529 related to ETBC I) 611,603 280,169
Accounts payable 204,468 205,175
Customer deposits 6,533 6,237
Accrued interest and taxes 104,756 98,655
Regulatory liabilities 34,173 140,005
Operating lease liabilities 14,293 12,267
Dividends declared 36,889 35,085
Transmission interconnection arrangement liabilities 68,085 96,870
Other current liabilities 84,998 94,397
Total current liabilities 1,775,098 1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $331,726 and $338,521 related to ETBC I) 4,311,765 4,241,642
Deferred Credits and Other Liabilities:    
Accumulated deferred income taxes 899,392 845,280
Regulatory liabilities 748,738 771,317
Asset retirement obligations 244,618 245,531
Accrued pension liability and postretirement benefit cost 23,065 21,429
Operating lease liabilities 255,376 167,000
Other deferred credits 358,867 319,066
Total deferred credits and other liabilities 2,530,056 2,369,623
Total liabilities 8,616,919 7,842,025
Commitments and Contingencies (See Note 16)
Cumulative preferred stock of subsidiary without mandatory redemption requirements ([$100] stated value; [10,000,000] shares authorized; issued and outstanding [115,293] shares) 11,529 11,529
Company Common Stockholders' Equity    
Common stock (no par value; 200,000,000 and 120,000,000 shares authorized; issued and outstanding 92,659,335 and 90,200,384 shares) 1,724,444 1,624,823
Accumulated other comprehensive income (loss), net of income taxes (75,708) (62,840)
Retained earnings 887,649 787,110
Total TXNM common stockholders’ equity 2,536,385 2,349,093
Non-controlling interest in Valencia 46,900 49,958
Total equity 2,583,285 2,399,051
Total liabilities and stockholders' equity $ 11,211,733 $ 10,252,605
v3.25.0.1
Consolidated Balance Sheets - TXNM (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Current Assets:    
Allowance for uncollectible accounts $ 1,398 $ 3,388
Utility Plant:    
Accumulated depreciation, nuclear fuel 28,245 35,840
Debt    
Current installments of long-term debt 611,603 280,169
Long-term Debt $ 4,311,765 $ 4,241,642
Deferred Credits and Other Liabilities:    
Cumulative preferred stock of subsidiary, stated value (in dollars per share) $ 100 $ 100
Cumulative preferred stock of subsidiary, shares authorized (in shares) 10,000,000 10,000,000
Cumulative preferred stock of subsidiary, shares issued (in shares) 115,293 115,293
Cumulative preferred stock of subsidiary, shares outstanding (in shares) 115,293 115,293
Company Common Stockholders' Equity    
Common stock, no par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 200,000,000 120,000,000
Common stock, shares issued (in shares) 92,659,335 92,659,335
Common stock, shares outstanding (in shares) 90,200,384 90,200,384
Securitized Bonds    
Debt    
Current installments of long-term debt $ 6,907 $ 2,529
Long-term Debt $ 331,726 $ 338,521
v3.25.0.1
Consolidated Statements of Changes in Equity - TXNM - USD ($)
$ in Thousands
Total
Total Stockholders' Equity
Common Stock
AOCI
Retained Earnings
Non- controlling Interest in Valencia
Beginning balance at Dec. 31, 2021 $ 2,222,929 $ 2,167,524 $ 1,429,257 $ (71,936) $ 810,203 $ 55,405
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings before subsidiary preferred stock dividends 185,180 170,058     170,058 15,122
Total other comprehensive income (loss) 5,888 5,888   5,888    
Subsidiary preferred stock dividends (528) (528)     (528)  
Dividends declared on common stock (150,855) (150,855)     (150,855)  
Awards of common stock (7,980) (7,980) (7,980)      
Stock based compensation expense 7,825 7,825 7,825      
Valencia’s transactions with its owner (17,533)         (17,533)
Ending balance at Dec. 31, 2022 2,244,926 2,191,932 1,429,102 (66,048) 828,878 52,994
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings before subsidiary preferred stock dividends 106,879 88,346     88,346 18,533
Total other comprehensive income (loss) 3,208 3,208   3,208    
Subsidiary preferred stock dividends (528) (528)     (528)  
Dividends declared on common stock (129,586) (129,586)     (129,586)  
Awards of common stock (9,646) (9,646) (9,646)      
Issuance of common stock 198,177 198,177 198,177      
Stock based compensation expense 7,190 7,190 7,190      
Valencia’s transactions with its owner (21,569)         (21,569)
Ending balance at Dec. 31, 2023 2,399,051 2,349,093 1,624,823 (62,840) 787,110 49,958
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings before subsidiary preferred stock dividends 258,722 242,682     242,682 16,040
Total other comprehensive income (loss) (12,868) (12,868)   (12,868)    
Subsidiary preferred stock dividends (528) (528)     (528)  
Dividends declared on common stock (141,615) (141,615)     (141,615)  
Awards of common stock (8,460) (8,460) (8,460)      
Issuance of common stock 98,601 98,601 98,601      
Stock based compensation expense 9,480 9,480 9,480      
Valencia’s transactions with its owner (19,098)         (19,098)
Ending balance at Dec. 31, 2024 $ 2,583,285 $ 2,536,385 $ 1,724,444 $ (75,708) $ 887,649 $ 46,900
v3.25.0.1
Consolidated Statements of Earnings - PNM - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Electric Operating Revenues $ 1,971,199 $ 1,939,198 $ 2,249,555
Operating Expenses:      
Administrative and general 247,116 227,900 227,149
Regulatory disallowances 8,980 71,923 832
Depreciation and amortization 384,925 319,503 304,853
Transmission and distribution costs 98,380 98,721 94,684
Taxes other than income taxes 100,580 95,940 92,989
Total operating expenses 1,517,713 1,707,858 1,855,795
Operating income 453,486 231,340 393,760
Other Income and Deductions:      
Interest income 23,537 21,963 16,095
Gains (losses) on investment securities 26,851 19,246 (78,357)
Other income 28,621 24,204 21,601
Other (deductions) (24,189) (15,869) (13,881)
Net other income and (deductions) 54,820 49,544 (54,542)
Interest Charges 228,066 190,355 127,908
Earnings before Income Taxes 280,240 90,529 211,310
Income Taxes (Benefits) 21,518 (16,350) 26,130
Net Earnings 258,722 106,879 185,180
(Earnings) Attributable to Valencia Non-controlling Interest (16,040) (18,533) (15,122)
Net earnings attributable to TXNM, basic 242,154 87,818 169,530
PNM      
Electric Operating Revenues 1,379,088 1,403,948 1,766,825
Operating Expenses:      
Administrative and general 226,560 206,650 204,846
Regulatory disallowances 8,980 70,750 832
Depreciation and amortization 221,780 177,633 180,812
Transmission and distribution costs 61,302 61,725 58,278
Taxes other than income taxes 49,807 48,790 49,210
Total operating expenses 1,097,095 1,320,772 1,505,338
Operating income 281,993 83,176 261,487
Other Income and Deductions:      
Interest income 23,454 21,355 14,816
Gains (losses) on investment securities 26,851 19,246 (78,357)
Other income 15,329 11,638 10,763
Other (deductions) (4,140) (10,881) (9,418)
Net other income and (deductions) 61,494 41,358 (62,196)
Interest Charges 106,018 86,574 61,073
Earnings before Income Taxes 237,469 37,960 138,218
Income Taxes (Benefits) 29,217 (16,758) 19,198
Net Earnings 208,252 54,718 119,020
(Earnings) Attributable to Valencia Non-controlling Interest (16,040) (18,533) (15,122)
Net earnings 192,212 36,185 103,898
Preferred Stock Dividends Requirements (528) (528) (528)
Net earnings attributable to TXNM, basic 191,684 35,657 103,370
Electricity      
Electric Operating Revenues 1,971,199 1,939,198 2,249,555
Operating Expenses:      
Cost of energy and production costs 583,984 802,261 987,941
Electricity | PNM      
Operating Expenses:      
Cost of energy and production costs 434,918 663,614 864,013
Energy production costs      
Operating Expenses:      
Cost of energy and production costs 93,748 91,610 147,347
Energy production costs | PNM      
Operating Expenses:      
Cost of energy and production costs $ 93,748 $ 91,610 $ 147,347
v3.25.0.1
Consolidated Statements of Comprehensive Income - PNM - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Net Earnings $ 258,722 $ 106,879 $ 185,180
Unrealized Gains on Available-for-Sale Debt Securities:      
Net increase (decrease) in unrealized holding gains (losses) arising during the period, net of income tax (expense) benefit of $225, $(2,928), and $490 (660) 8,601 (1,438)
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $3,330, $1,828, and $972 (9,778) (5,371) (2,855)
Pension Liability Adjustment:      
Experience gains (losses), net of income tax (expense) benefit of $815, $(353), and $1,159 (2,395) 1,036 (3,406)
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(1,236), $(1,212), and $(1,804) 3,630 3,564 5,300
Total Other Comprehensive Income (Loss) (12,868) 3,208 5,888
Comprehensive Income 245,854 110,087 191,068
Comprehensive (Income) Attributable to Valencia Non-controlling Interest (16,040) (18,533) (15,122)
Comprehensive Income Attributable to TXNM 229,286 91,026 175,418
PNM      
Net Earnings 208,252 54,718 119,020
Unrealized Gains on Available-for-Sale Debt Securities:      
Net increase (decrease) in unrealized holding gains (losses) arising during the period, net of income tax (expense) benefit of $225, $(2,928), and $490 (660) 8,601 (1,438)
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $3,330, $1,828, and $972 (9,778) (5,371) (2,855)
Pension Liability Adjustment:      
Experience gains (losses), net of income tax (expense) benefit of $815, $(353), and $1,159 (2,395) 1,036 (3,406)
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(1,236), $(1,212), and $(1,804) 3,630 3,564 5,300
Total Other Comprehensive Income (Loss) (9,203) 7,830 (2,399)
Comprehensive Income 199,049 62,548 116,621
Comprehensive (Income) Attributable to Valencia Non-controlling Interest (16,040) (18,533) (15,122)
Comprehensive Income Attributable to TXNM $ 183,009 $ 44,015 $ 101,499
v3.25.0.1
Consolidated Statements of Comprehensive Income - PNM (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit $ 225 $ (2,928) $ 490
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit) 3,330 1,828 972
Pension liability adjustment, income tax expense (benefit) 815 (353) 1,159
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, income tax expense (1,236) (1,212) (1,804)
PNM      
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit 225 (2,928) 490
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit) 3,330 1,828 972
Pension liability adjustment, income tax expense (benefit) 815 (353) 1,159
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, income tax expense $ (1,236) $ (1,212) $ (1,804)
v3.25.0.1
Consolidated Statements of Cash Flows - PNM - USD ($)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cash Flows From Operating Activities:      
Net Earnings $ 258,722,000 $ 106,879,000 $ 185,180,000
Adjustments to reconcile net earnings to net cash flows from operating activities:      
 Depreciation and amortization 423,010,000 353,692,000 341,123,000
Deferred income tax expense (benefit) 43,050,000 (13,509,000) 24,533,000
(Gains) losses on investment securities (26,851,000) (19,246,000) 78,357,000
Regulatory disallowances 8,980,000 71,923,000 832,000
Allowance for equity funds used during construction (17,887,000) (14,978,000) (13,799,000)
Other, net 4,165,000 804,000 2,377,000
Changes in certain assets and liabilities:      
Accounts receivable and unbilled revenues (13,349,000) 53,229,000 (73,099,000)
Materials, supplies, and fuel stock (33,804,000) (31,301,000) (8,528,000)
Other current assets 31,967,000 (52,225,000) 17,159,000
Other assets (83,541,000) (25,820,000) 5,002,000
Accounts payable 10,021,000 (33,536,000) 47,568,000
Accrued interest and taxes 5,114,000 17,526,000 9,205,000
Other current liabilities (106,374,000) 125,580,000 (28,516,000)
Other liabilities (94,000) 4,963,000 (27,935,000)
Net cash flows from operating activities 508,160,000 551,171,000 567,284,000
Cash Flows From Investing Activities:      
Additions to utility and non-utility plant (1,247,041,000) (1,075,812,000) (912,557,000)
Proceeds from sale of plant assets (Note 8) 2,840,000 32,654,000 0
Proceeds from sales of investment securities 707,338,000 574,199,000 526,448,000
Purchases of investment securities (756,805,000) (593,241,000) (564,912,000)
Other, net 14,910,000 44,000 674,000
Net cash flows used in investing activities (1,174,372,000) (1,088,406,000) (950,347,000)
Cash Flows From Financing Activities:      
Revolving credit facilities borrowings 2,892,200,000 2,358,900,000 1,829,500,000
Revolving credit facilities repayments (2,544,800,000) (2,329,000,000) (1,660,200,000)
Long-term borrowings 1,233,000,000 1,358,096,000 558,000,000
Repayment of long-term debt (819,529,000) (910,000,000) (179,500,000)
Dividends paid (140,339,000) (126,705,000) (119,839,000)
Valencia’s transactions with its owner (19,098,000) (21,569,000) (17,533,000)
Transmission interconnection and security deposit arrangements 92,272,000 49,807,000 96,550,000
Refunds paid under transmission interconnection and security deposit arrangements (79,011,000) (21,124,000) (107,397,000)
Debt issuance costs and other, net (20,482,000) (9,836,000) (5,564,000)
Net cash flows from financing activities 684,354,000 537,100,000 386,037,000
Change in Cash, Cash Equivalents, and Restricted Cash 18,142,000 (135,000) 2,974,000
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 3,943,000 4,078,000 1,104,000
Cash, Cash Equivalents, and Restricted Cash at End of Year 22,085,000 3,943,000 4,078,000
Restricted Cash Included in Other Current Assets and Other Deferred Charges on Consolidated Balance Sheets:      
At beginning of period 1,728,000 0 0
At end of period 17,587,000 1,728,000 0
Supplemental Cash Flow Disclosures:      
Interest paid, net of amounts capitalized 207,972,000 155,273,000 118,485,000
Income taxes paid (refunded), net (998,000) 1,505,000 (1,011,000)
Supplemental schedule of noncash investing and financing activities:      
(Increase) decrease in accrued plant additions 10,728,000 (23,002,000) 4,455,000
PNM      
Cash Flows From Operating Activities:      
Net Earnings 208,252,000 54,718,000 119,020,000
Adjustments to reconcile net earnings to net cash flows from operating activities:      
 Depreciation and amortization 250,042,000 202,885,000 213,517,000
Deferred income tax expense (benefit) 41,903,000 (21,972,000) 29,487,000
(Gains) losses on investment securities (26,851,000) (19,246,000) 78,357,000
Regulatory disallowances 8,980,000 70,750,000 832,000
Allowance for equity funds used during construction (13,043,000) (9,832,000) (9,323,000)
Other, net 4,459,000 3,485,000 3,758,000
Changes in certain assets and liabilities:      
Accounts receivable and unbilled revenues (11,295,000) 51,314,000 (60,743,000)
Materials, supplies, and fuel stock (25,915,000) (25,681,000) (4,804,000)
Other current assets 19,943,000 (54,934,000) 17,956,000
Other assets (33,013,000) (20,956,000) 5,487,000
Accounts payable 8,135,000 (30,423,000) 48,868,000
Accrued interest and taxes (3,041,000) 16,091,000 (19,574,000)
Other current liabilities (99,353,000) 123,048,000 (41,876,000)
Other liabilities (7,691,000) 4,588,000 (26,029,000)
Net cash flows from operating activities 321,512,000 343,835,000 354,933,000
Cash Flows From Investing Activities:      
Additions to utility and non-utility plant (682,412,000) (565,080,000) (433,459,000)
Proceeds from sale of plant assets (Note 8) 2,840,000 32,654,000 0
Proceeds from sales of investment securities 707,338,000 574,199,000 526,448,000
Purchases of investment securities (756,805,000) (593,241,000) (564,912,000)
Other, net 14,885,000 7,000 439,000
Net cash flows used in investing activities (714,154,000) (551,461,000) (471,484,000)
Cash Flows From Financing Activities:      
Revolving credit facilities borrowings 1,433,200,000 1,114,300,000 708,600,000
Revolving credit facilities repayments (1,206,900,000) (1,162,700,000) (530,100,000)
Long-term borrowings 398,000,000 673,096,000 298,000,000
Repayment of long-term debt (200,529,000) (410,000,000) (179,500,000)
Equity contribution from parent 55,000,000 0 0
Dividends paid (51,529,000) (528,000) (154,028,000)
Valencia’s transactions with its owner (19,098,000) (21,569,000) (17,533,000)
Transmission interconnection and security deposit arrangements 81,022,000 38,807,000 90,150,000
Refunds paid under transmission interconnection and security deposit arrangements (74,161,000) (17,624,000) (93,247,000)
Debt issuance costs and other, net (4,664,000) (6,555,000) (2,825,000)
Net cash flows from financing activities 410,341,000 207,227,000 119,517,000
Change in Cash, Cash Equivalents, and Restricted Cash 17,699,000 (399,000) 2,966,000
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 2,586,000 2,985,000 19,000
Cash, Cash Equivalents, and Restricted Cash at End of Year 20,285,000 2,586,000 2,985,000
Restricted Cash Included in Other Current Assets and Other Deferred Charges on Consolidated Balance Sheets:      
At beginning of period 1,728,000 0 0
At end of period 17,587,000 1,728,000 0
Supplemental Cash Flow Disclosures:      
Interest paid, net of amounts capitalized 85,100,000 66,456,000 54,816,000
Income taxes paid (refunded), net (4,058,000) (5,338,000) 11,602,000
Supplemental schedule of noncash investing and financing activities:      
(Increase) decrease in accrued plant additions $ 25,955,000 $ (8,604,000) $ (6,859,000)
v3.25.0.1
Consolidated Balance Sheets - PNM - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 4,498 $ 2,215
Accounts receivable, net of allowance for credit losses of $1,398 and $3,388 130,351 126,291
Unbilled revenues 69,176 64,072
Other receivables 37,236 76,509
Materials, supplies, and fuel stock 166,861 98,034
Regulatory assets 41,492 73,046
Prepaid assets 25,452 19,759
Income taxes receivable 7,684 6,697
Other current assets 16,086 8,920
Total current assets 498,836 475,543
Other Property and Investments:    
Investment securities 475,524 444,408
Other investments 259 171
Non-utility property, including financing leases 28,832 29,367
Total other property and investments 504,615 593,516
Utility Plant:    
Plant in service, held for future use, and to be abandoned 10,697,774 9,701,180
Less accumulated depreciation and amortization 2,829,296 2,755,823
Net plant in service and plant held for future use 7,868,478 6,945,357
Construction work in progress 495,976 589,834
Nuclear fuel, net of accumulated amortization of $28,245 and $35,840 72,554 74,671
Net utility plant 8,437,008 7,609,862
Deferred Charges and Other Assets:    
Regulatory assets 962,003 914,381
Goodwill 278,297 278,297
Operating lease assets, net of amortization 272,894 182,201
Other deferred charges 258,080 198,805
Total deferred charges and other assets 1,771,274 1,573,684
Total assets 11,211,733 10,252,605
Current Liabilities:    
Short-term debt 609,300 261,900
Current installments of long-term debt (includes $6,907 and $2,529 related to ETBC I) 611,603 280,169
Accounts payable 204,468 205,175
Customer deposits 6,533 6,237
Accrued interest and taxes 104,756 98,655
Regulatory liabilities 34,173 140,005
Operating lease liabilities 14,293 12,267
Dividends declared 36,889 35,085
Transmission interconnection arrangement liabilities 68,085 96,870
Other current liabilities 84,998 94,397
Total current liabilities 1,775,098 1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $331,726 and $338,521 related to ETBC I) 4,311,765 4,241,642
Deferred Credits and Other Liabilities:    
Accumulated deferred income taxes 899,392 845,280
Regulatory liabilities 748,738 771,317
Asset retirement obligations 244,618 245,531
Accrued pension liability and postretirement benefit cost 23,065 21,429
Operating lease liabilities 255,376 167,000
Other deferred credits 358,867 319,066
Total deferred credits and other liabilities 2,530,056 2,369,623
Total liabilities 8,616,919 7,842,025
Commitments and Contingencies (See Note 16)
Cumulative preferred stock without mandatory redemption requirements ([$100] stated value; [10,000,000] shares authorized; issued and outstanding [115,293] shares) 11,529 11,529
Company Common Stockholders' Equity    
Common stock (no par value; 40,000,000 shares authorized; issued and outstanding 39,117,799 shares) 1,724,444 1,624,823
Accumulated other comprehensive income (loss), net of income taxes (75,708) (62,840)
Retained earnings 887,649 787,110
Total TXNM common stockholders’ equity 2,536,385 2,349,093
Non-controlling interest in Valencia 46,900 49,958
Total equity 2,583,285 2,399,051
Total liabilities and stockholders' equity 11,211,733 10,252,605
PNM    
Current Assets:    
Cash and cash equivalents 2,698 858
Accounts receivable, net of allowance for credit losses of $1,398 and $3,388 95,932 94,879
Unbilled revenues 52,983 46,925
Materials, supplies, and fuel stock 142,510 81,572
Regulatory assets 36,224 72,996
Prepaid assets 14,746 9,941
Income taxes receivable 16,309 7,682
Other current assets 16,091 1,756
Total current assets 410,908 377,837
Other Property and Investments:    
Investment securities 475,524 444,408
Other investments 184 69
Non-utility property, including financing leases 13,647 13,538
Total other property and investments 489,355 458,015
Utility Plant:    
Plant in service, held for future use, and to be abandoned 6,797,493 6,151,510
Less accumulated depreciation and amortization 2,079,363 1,976,657
Net plant in service and plant held for future use 4,718,130 4,174,853
Construction work in progress 328,403 490,178
Nuclear fuel, net of accumulated amortization of $28,245 and $35,840 72,554 74,671
Net utility plant 5,119,087 4,739,702
Deferred Charges and Other Assets:    
Regulatory assets 857,310 838,727
Goodwill 51,632 51,632
Operating lease assets, net of amortization 271,433 180,370
Other deferred charges 207,554 166,782
Total deferred charges and other assets 1,387,929 1,237,511
Total assets 7,407,279 6,813,065
Current Liabilities:    
Short-term debt 363,800 137,500
Current installments of long-term debt (includes $6,907 and $2,529 related to ETBC I) 560,637 200,222
Customer deposits 6,533 6,237
Accrued interest and taxes 46,923 41,337
Regulatory liabilities 33,571 134,846
Operating lease liabilities 13,542 11,371
Dividends declared 132 132
Transmission interconnection arrangement liabilities 68,085 96,870
Other current liabilities 50,099 52,587
Total current liabilities 1,282,900 839,194
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $331,726 and $338,521 related to ETBC I) 1,898,955 2,061,558
Deferred Credits and Other Liabilities:    
Accumulated deferred income taxes 756,218 684,037
Regulatory liabilities 518,701 565,021
Asset retirement obligations 243,663 244,633
Accrued pension liability and postretirement benefit cost 22,067 19,949
Operating lease liabilities 254,702 166,191
Other deferred credits 234,346 220,178
Total deferred credits and other liabilities 2,029,697 1,900,009
Total liabilities 5,211,552 4,800,761
Commitments and Contingencies (See Note 16)
Cumulative preferred stock without mandatory redemption requirements ([$100] stated value; [10,000,000] shares authorized; issued and outstanding [115,293] shares) 11,529 11,529
Company Common Stockholders' Equity    
Common stock (no par value; 40,000,000 shares authorized; issued and outstanding 39,117,799 shares) 1,602,918 1,547,918
Accumulated other comprehensive income (loss), net of income taxes (75,708) (66,505)
Retained earnings 610,088 469,404
Total TXNM common stockholders’ equity 2,137,298 1,950,817
Non-controlling interest in Valencia 46,900 49,958
Total equity 2,184,198 2,000,775
Total liabilities and stockholders' equity 7,407,279 6,813,065
PNM | Nonrelated Party    
Current Assets:    
Other receivables 24,174 51,975
Current Liabilities:    
Accounts payable 123,883 141,704
PNM | Related Party    
Current Assets:    
Other receivables 9,241 9,253
Current Liabilities:    
Accounts payable $ 15,695 $ 16,388
v3.25.0.1
Consolidated Balance Sheets - PNM (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Current Assets:    
Allowance for uncollectible accounts $ 1,398 $ 3,388
Utility Plant:    
Accumulated depreciation, nuclear fuel 28,245 35,840
Debt    
Current installments of long-term debt 611,603 280,169
Long-term Debt $ 4,311,765 $ 4,241,642
Company Common Stockholders' Equity    
Common stock, no par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 200,000,000 120,000,000
Common stock, shares issued (in shares) 92,659,335 92,659,335
Common stock, shares outstanding (in shares) 90,200,384 90,200,384
Securitized Bonds    
Debt    
Current installments of long-term debt $ 6,907 $ 2,529
Long-term Debt 331,726 338,521
PNM    
Current Assets:    
Allowance for uncollectible accounts 1,398 3,388
Utility Plant:    
Accumulated depreciation, nuclear fuel 28,245 35,840
Debt    
Current installments of long-term debt 560,637 200,222
Long-term Debt $ 1,898,955 $ 2,061,558
Deferred Credits and Other Liabilities:    
Cumulative preferred stock of subsidiary, stated value (in dollars per share) $ 100 $ 100
Cumulative preferred stock of subsidiary, shares authorized (in shares) 10,000,000 10,000,000
Cumulative preferred stock of subsidiary, shares outstanding (in shares) 115,293 115,293
Cumulative preferred stock of subsidiary, shares issued (in shares) 115,293 115,293
Company Common Stockholders' Equity    
Common stock, no par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 40,000,000 40,000,000
Common stock, shares issued (in shares) 39,117,799 39,117,799
Common stock, shares outstanding (in shares) 39,117,799 39,117,799
PNM | Securitized Bonds    
Debt    
Current installments of long-term debt $ 6,907 $ 2,529
Long-term Debt $ 331,726 $ 338,521
v3.25.0.1
Consolidated Statements of Changes in Equity - PNM - USD ($)
$ in Thousands
Total
Total Stockholders' Equity
Common Stock
AOCI
Retained Earnings
Non- controlling Interest in Valencia
PNM
PNM
Total Stockholders' Equity
PNM
Common Stock
PNM
AOCI
PNM
Retained Earnings
PNM
Non- controlling Interest in Valencia
Beginning balance at Dec. 31, 2021 $ 2,222,929 $ 2,167,524 $ 1,429,257 $ (71,936) $ 810,203 $ 55,405 $ 2,015,264 $ 1,959,859 $ 1,547,918 $ (71,936) $ 483,877 $ 55,405
Increase (Decrease) in Stockholders' Equity [Roll Forward]                        
Net earnings 185,180 170,058     170,058 15,122 119,020 103,898     103,898 15,122
Total other comprehensive income (loss) 5,888 5,888   5,888     (2,399) (2,399)   (2,399)    
Subsidiary preferred stock dividends             (528) (528)     (528)  
Dividends declared on common stock (150,855) (150,855)     (150,855)   (153,500) (153,500)     (153,500)  
Valencia’s transactions with its owner (17,533)         (17,533) (17,533)         (17,533)
Ending balance at Dec. 31, 2022 2,244,926 2,191,932 1,429,102 (66,048) 828,878 52,994 1,960,324 1,907,330 1,547,918 (74,335) 433,747 52,994
Increase (Decrease) in Stockholders' Equity [Roll Forward]                        
Net earnings 106,879 88,346     88,346 18,533 54,718 36,185     36,185 18,533
Total other comprehensive income (loss) 3,208 3,208   3,208     7,830 7,830   7,830    
Subsidiary preferred stock dividends             (528) (528)     (528)  
Dividends declared on common stock (129,586) (129,586)     (129,586)              
Valencia’s transactions with its owner (21,569)         (21,569) (21,569)         (21,569)
Ending balance at Dec. 31, 2023 2,399,051 2,349,093 1,624,823 (62,840) 787,110 49,958 2,000,775 1,950,817 1,547,918 (66,505) 469,404 49,958
Increase (Decrease) in Stockholders' Equity [Roll Forward]                        
Net earnings 258,722 242,682     242,682 16,040 208,252 192,212     192,212 16,040
Total other comprehensive income (loss) (12,868) (12,868)   (12,868)     (9,203) (9,203)   (9,203)    
Subsidiary preferred stock dividends             (528) (528)     (528)  
Equity contribution from parent             55,000 55,000 55,000      
Dividends declared on common stock (141,615) (141,615)     (141,615)   (51,000) (51,000)     (51,000)  
Valencia’s transactions with its owner (19,098)         (19,098) (19,098)         (19,098)
Ending balance at Dec. 31, 2024 $ 2,583,285 $ 2,536,385 $ 1,724,444 $ (75,708) $ 887,649 $ 46,900 $ 2,184,198 $ 2,137,298 $ 1,602,918 $ (75,708) $ 610,088 $ 46,900
v3.25.0.1
Consolidated Statements of Earnings - TNMP - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Electric Operating Revenues $ 1,971,199 $ 1,939,198 $ 2,249,555
Operating Expenses:      
Administrative and general 247,116 227,900 227,149
Regulatory disallowances 8,980 71,923 832
Depreciation and amortization 384,925 319,503 304,853
Transmission and distribution costs 98,380 98,721 94,684
Taxes other than income taxes 100,580 95,940 92,989
Total operating expenses 1,517,713 1,707,858 1,855,795
Operating income 453,486 231,340 393,760
Other Income and Deductions:      
Other income 28,621 24,204 21,601
Other (deductions) (24,189) (15,869) (13,881)
Net other income and (deductions) 54,820 49,544 (54,542)
Interest Charges 228,066 190,355 127,908
Earnings before Income Taxes 280,240 90,529 211,310
Income Taxes 21,518 (16,350) 26,130
TNMP      
Electric Operating Revenues 592,111 535,250 482,730
Operating Expenses:      
Cost of energy and production costs 149,066 138,647 123,928
Administrative and general 54,711 53,963 49,592
Regulatory disallowances 0 1,173 0
Depreciation and amortization 125,915 113,142 98,316
Transmission and distribution costs 37,078 36,996 36,406
Taxes other than income taxes 44,441 41,311 38,521
Total operating expenses 411,211 385,232 346,763
Operating income 180,900 150,018 135,967
Other Income and Deductions:      
Other income 12,305 10,127 10,641
Other (deductions) (3,580) (1,759) (1,988)
Net other income and (deductions) 8,725 8,368 8,653
Interest Charges 58,983 46,152 37,192
Earnings before Income Taxes 130,642 112,234 107,428
Income Taxes 27,114 17,297 15,161
Net earnings $ 103,528 $ 94,937 $ 92,267
v3.25.0.1
Consolidated Statements of Cash Flows - TNMP - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cash Flows From Operating Activities:      
Net earnings $ 258,722 $ 106,879 $ 185,180
Adjustments to reconcile net earnings to net cash flows from operating activities:      
 Depreciation and amortization 423,010 353,692 341,123
Deferred income tax expense (benefit) 43,050 (13,509) 24,533
Regulatory disallowances 8,980 71,923 832
Allowance for equity funds used during construction and other, net (17,887) (14,978) (13,799)
Changes in certain assets and liabilities:      
Accounts receivable and unbilled revenues (13,349) 53,229 (73,099)
Materials, supplies, and fuel stock (33,804) (31,301) (8,528)
Other current assets 31,967 (52,225) 17,159
Other assets (83,541) (25,820) 5,002
Accounts payable 10,021 (33,536) 47,568
Accrued interest and taxes 5,114 17,526 9,205
Other current liabilities (106,374) 125,580 (28,516)
Other liabilities (94) 4,963 (27,935)
Net cash flows from operating activities 508,160 551,171 567,284
Cash Flows From Investing Activities:      
Utility plant additions (1,247,041) (1,075,812) (912,557)
Net cash flows used in investing activities (1,174,372) (1,088,406) (950,347)
Cash Flows From Financing Activities:      
Revolving credit facilities borrowings 2,892,200 2,358,900 1,829,500
Revolving credit facilities repayments (2,544,800) (2,329,000) (1,660,200)
Long-term borrowings 1,233,000 1,358,096 558,000
Repayment of long-term debt (819,529) (910,000) (179,500)
Transmission interconnection and security deposit arrangements 92,272 49,807 96,550
Refunds paid under transmission interconnection and security deposit arrangements (79,011) (21,124) (107,397)
Debt issuance costs and other, net (20,482) (9,836) (5,564)
Net cash flows from financing activities 684,354 537,100 386,037
Change in Cash, Cash Equivalents, and Restricted Cash 18,142 (135) 2,974
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 3,943 4,078 1,104
Cash, Cash Equivalents, and Restricted Cash at End of Year 22,085 3,943 4,078
Supplemental Cash Flow Disclosures:      
Interest paid, net of amounts capitalized 207,972 155,273 118,485
Income taxes paid (refunded), net (998) 1,505 (1,011)
Supplemental schedule of noncash investing and financing activities:      
(Increase) decrease in accrued plant additions 10,728 (23,002) 4,455
TNMP      
Cash Flows From Operating Activities:      
Net earnings 103,528 94,937 92,267
Adjustments to reconcile net earnings to net cash flows from operating activities:      
 Depreciation and amortization 126,868 113,854 99,165
Deferred income tax expense (benefit) 26,363 2,888 (4,556)
Regulatory disallowances 0 1,173 0
Allowance for equity funds used during construction and other, net (5,222) (5,145) (4,477)
Changes in certain assets and liabilities:      
Accounts receivable and unbilled revenues (2,053) 1,916 (12,356)
Materials, supplies, and fuel stock (7,889) (5,620) (3,723)
Other current assets 11,063 3,650 (264)
Other assets (33,601) 3,109 3,834
Accounts payable (832) 171 195
Accrued interest and taxes (818) 2,886 14,667
Other current liabilities (5,355) (156) 11,952
Other liabilities 1,564 949 (1,757)
Net cash flows from operating activities 213,616 214,612 194,947
Cash Flows From Investing Activities:      
Utility plant additions (541,604) (464,436) (449,534)
Net cash flows used in investing activities (541,604) (464,436) (449,534)
Cash Flows From Financing Activities:      
Revolving credit facilities borrowings 637,000 407,600 480,500
Revolving credit facilities repayments (540,500) (389,200) (444,200)
Long-term borrowings 285,000 185,000 160,000
Repayment of long-term debt (80,000) 0 0
Transmission interconnection and security deposit arrangements 11,250 11,000 6,400
Refunds paid under transmission interconnection and security deposit arrangements (4,850) (3,500) (14,150)
Equity contribution from parent 24,000 40,900 68,000
Debt issuance costs and other, net (3,679) (1,976) (1,963)
Net cash flows from financing activities 328,221 249,824 254,587
Change in Cash, Cash Equivalents, and Restricted Cash 233 0 0
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 0 0 0
Cash, Cash Equivalents, and Restricted Cash at End of Year 233 0 0
Supplemental Cash Flow Disclosures:      
Interest paid, net of amounts capitalized 50,956 41,847 33,974
Income taxes paid (refunded), net 11,021 16,904 9,245
Supplemental schedule of noncash investing and financing activities:      
(Increase) decrease in accrued plant additions $ (16,328) $ (17,297) $ (9,131)
v3.25.0.1
Consolidated Balance Sheets - TNMP - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 4,498 $ 2,215
Accounts receivable 130,351 126,291
Unbilled revenues 69,176 64,072
Other receivables 37,236 76,509
Materials, supplies, and fuel stock 166,861 98,034
Regulatory assets 41,492 73,046
Other current assets 16,086 8,920
Total current assets 498,836 475,543
Other Property and Investments:    
Other investments 259 171
Non-utility property, including financing leases 28,832 29,367
Total other property and investments 504,615 593,516
Utility Plant:    
Plant in service, held for future use, and to be abandoned 10,697,774 9,701,180
Less accumulated depreciation and amortization 2,829,296 2,755,823
Net plant in service and plant held for future use 7,868,478 6,945,357
Construction work in progress 495,976 589,834
Net utility plant 8,437,008 7,609,862
Deferred Charges and Other Assets:    
Regulatory assets 962,003 914,381
Goodwill 278,297 278,297
Operating lease assets, net of amortization 272,894 182,201
Other deferred charges 258,080 198,805
Total deferred charges and other assets 1,771,274 1,573,684
Total assets 11,211,733 10,252,605
Current Liabilities:    
Short-term debt 609,300 261,900
Current installments of long-term debt 611,603 280,169
Accounts payable 204,468 205,175
Accrued interest and taxes 104,756 98,655
Regulatory liabilities 34,173 140,005
Operating lease liabilities 14,293 12,267
Other current liabilities 84,998 94,397
Total current liabilities 1,775,098 1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $331,726 and $338,521 related to ETBC I) 4,311,765 4,241,642
Deferred Credits and Other Liabilities:    
Accumulated deferred income taxes 899,392 845,280
Regulatory liabilities 748,738 771,317
Asset retirement obligations 244,618 245,531
Accrued pension liability and postretirement benefit cost 23,065 21,429
Operating lease liabilities 255,376 167,000
Other deferred credits 358,867 319,066
Total deferred credits and other liabilities 2,530,056 2,369,623
Total liabilities 8,616,919 7,842,025
Commitments and Contingencies (See Note 16)
Company Common Stockholders' Equity    
Common stock ($10 par value; 12,000,000 shares authorized; issued and outstanding 6,358 shares) 1,724,444 1,624,823
Retained earnings 887,649 787,110
Total TXNM common stockholders’ equity 2,536,385 2,349,093
Total liabilities and stockholders' equity 11,211,733 10,252,605
TNMP    
Current Assets:    
Cash and cash equivalents 233 0
Accounts receivable 34,419 31,412
Unbilled revenues 16,193 17,147
Other receivables 15,144 26,983
Materials, supplies, and fuel stock 24,351 16,462
Regulatory assets 5,268 50
Other current assets 4,908 2,705
Total current assets 100,516 94,759
Other Property and Investments:    
Other investments 75 102
Non-utility property, including financing leases 13,137 14,746
Total other property and investments 13,212 14,848
Utility Plant:    
Plant in service, held for future use, and to be abandoned 3,635,550 3,210,870
Less accumulated depreciation and amortization 616,741 582,140
Net plant in service and plant held for future use 3,018,809 2,628,730
Construction work in progress 165,527 91,274
Net utility plant 3,184,336 2,720,004
Deferred Charges and Other Assets:    
Regulatory assets 104,693 75,654
Goodwill 226,665 226,665
Operating lease assets, net of amortization 923 1,814
Other deferred charges 18,780 11,287
Total deferred charges and other assets 351,061 315,420
Total assets 3,649,125 3,145,031
Current Liabilities:    
Short-term debt 151,600 55,100
Current installments of long-term debt 0 79,947
Accrued interest and taxes 56,740 57,558
Regulatory liabilities 602 5,159
Operating lease liabilities 713 895
Other current liabilities 6,964 12,084
Total current liabilities 291,074 269,295
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $331,726 and $338,521 related to ETBC I) 1,464,079 1,180,933
Deferred Credits and Other Liabilities:    
Accumulated deferred income taxes 208,107 178,748
Regulatory liabilities 230,037 206,296
Asset retirement obligations 955 898
Accrued pension liability and postretirement benefit cost 998 1,480
Operating lease liabilities 167 809
Other deferred credits 88,519 68,911
Total deferred credits and other liabilities 528,783 457,142
Total liabilities 2,283,936 1,907,370
Commitments and Contingencies (See Note 16)
Company Common Stockholders' Equity    
Common stock ($10 par value; 12,000,000 shares authorized; issued and outstanding 6,358 shares) 64 64
Paid-in-capital 870,066 846,066
Retained earnings 495,059 391,531
Total TXNM common stockholders’ equity 1,365,189 1,237,661
Total liabilities and stockholders' equity 3,649,125 3,145,031
TNMP | Nonrelated Party    
Current Liabilities:    
Accounts payable 67,116 51,620
TNMP | Related Party    
Current Liabilities:    
Accounts payable $ 7,339 $ 6,932
v3.25.0.1
Consolidated Balance Sheets - TNMP (Parenthetical) - $ / shares
Dec. 31, 2024
Dec. 31, 2023
Company Common Stockholders' Equity    
Common stock, shares authorized (in shares) 200,000,000 120,000,000
Common stock, shares issued (in shares) 92,659,335 92,659,335
Common stock, shares outstanding (in shares) 90,200,384 90,200,384
TNMP    
Company Common Stockholders' Equity    
Common stock, par value (in dollars per share) $ 10 $ 10
Common stock, shares authorized (in shares) 12,000,000 12,000,000
Common stock, shares issued (in shares) 6,358 6,358
Common stock, shares outstanding (in shares) 6,358 6,358
v3.25.0.1
Consolidated Statements of Changes in Common Stockholder's Equity - TNMP - USD ($)
$ in Thousands
Total
TNMP
TNMP
Common Stock
TNMP
Paid-in Capital
TNMP
Retained Earnings
Beginning balance at Dec. 31, 2021   $ 941,557 $ 64 $ 737,166 $ 204,327
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net earnings   92,267     92,267
Equity contribution from parent   68,000   68,000  
Ending balance at Dec. 31, 2022   1,101,824 64 805,166 296,594
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net earnings   94,937     94,937
Equity contribution from parent   40,900   40,900  
Ending balance at Dec. 31, 2023 $ 2,349,093 1,237,661 64 846,066 391,531
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net earnings   103,528     103,528
Equity contribution from parent   24,000   24,000  
Ending balance at Dec. 31, 2024 $ 2,536,385 $ 1,365,189 $ 64 $ 870,066 $ 495,059
v3.25.0.1
Summary of the Business and Significant Accounting Policies
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Summary of the Business and Significant Accounting Policies Summary of the Business and Significant Accounting Policies
Nature of Business

TXNM is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. TXNM’s primary subsidiaries are PNM and TNMP. PNM is a public utility with regulated operations primarily engaged in the generation, transmission, and distribution of electricity. In 2023, ETBC I, a special purpose entity that is wholly-owned by PNM, was formed for the limited purpose of purchasing, owning, and administering energy transition property, issuing Securitized Bonds, and performing related activities. See Note 7. TNMP is a wholly-owned subsidiary of TNP, which is a holding company that is wholly-owned by TXNM. TNMP provides regulated transmission and distribution services in Texas. TXNM’s common stock trades on the New York Stock Exchange under the symbol TXNM.

Financial Statement Preparation and Presentation

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated.

On August 2, 2024, PNM Resources, Inc. (“PNMR”) amended its Articles of Incorporation to change its name to TXNM Energy, Inc. (“TXNM”) and increased the number of authorized shares of the Company’s common stock from 120,000,000 to 200,000,000. The Notes to Consolidated Financial Statements include disclosures for TXNM, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to TXNM, PNM, and TNMP. Discussions regarding only TXNM, PNM, or TNMP are so indicated. Certain amounts in the 2023 and 2022 Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2024 financial statement presentation.

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events accordingly.

Principles of Consolidation

The Consolidated Financial Statements of each of TXNM, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia and ETBC I (Note 10). PNM owns undivided interests in jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants.

PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between TXNM, PNM, and TNMP include intercompany loans, interest and income tax sharing payments, as well as equity transactions, and interconnection billings. All intercompany transactions and balances have been eliminated. See Note 20.
 
Accounting for the Effects of Certain Types of Regulation

The Company maintains its accounting records in accordance with the uniform system of accounts prescribed by FERC and adopted by the NMPRC and PUCT.

Certain of the Company’s operations are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to the regulated operations. Regulators may assign costs to accounting periods that differ from accounting methods applied by non-regulated utilities.  When it is probable that regulators will permit recovery of costs through future rates, costs are deferred as regulatory assets that otherwise would be expensed.  Likewise, regulatory liabilities are recognized when it is probable that regulators will require refunds through future rates or when revenue is collected for
expenditures that have not yet been incurred.  GAAP also provides for the recognition of revenue and regulatory assets and liabilities associated with “alternative revenue programs” authorized by regulators. Such programs allow the utility to adjust future rates in response to past activities or completed events, if certain criteria are met. Regulatory assets and liabilities are amortized into earnings over the authorized recovery period. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Information on regulatory assets and regulatory liabilities is contained in Note 13.

In some circumstances, regulators allow a requested increase in rates to be implemented, subject to refund, before the regulatory process has been completed and a decision rendered by the regulator. When this occurs, the Company assesses the possible outcomes of the rate proceeding. The Company records a provision for refund to the extent the amounts being collected, subject to refund, exceed the amount the Company determines is probable of ultimately being allowed by the regulator.

Cash and Restricted Cash

Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. Cash deposits received and held for a period of time that are restricted to a specific purpose, under the terms of their effective agreements, are considered restricted cash. PNM and TXNM have restricted cash balances related to the ETBC I Securitized Bonds. Restricted cash amounts are included in Other current assets and Other deferred charges on the Consolidated Balance Sheets as of December 31, 2024 and 2023. See Note 10. At December 31, 2024 and 2023 there was no restricted cash for TNMP. At December 31, 2022 there was no restricted cash for TXNM, PNM, and TNMP.

Utility Plant

Utility plant is stated at original cost and includes capitalized payroll-related costs such as taxes, pension, other fringe benefits, administrative costs, and AFUDC, where authorized by rate regulation, or capitalized interest.

Repairs, including major maintenance activities, and minor replacements of property are expensed when incurred, except as required by regulators for ratemaking purposes. Major replacements are charged to utility plant. Gains, losses, and costs to remove resulting from retirements or other dispositions of regulated property in the normal course of business are credited or charged to accumulated depreciation.

PNM and TNMP may receive reimbursements, referred to as CIAC, from customers to pay for all or part of certain construction projects to the extent the project does not benefit regulated customers in general. PNM and TNMP account for these reimbursements as offsets to utility plant additions based on the requirements of the NMPRC, FERC, and PUCT. Due to the PUCT’s regulatory treatment of CIAC reimbursements, TNMP also receives a financing component that is recognized as Other income on the Consolidated Statements of Earnings. Under the NMPRC regulatory treatment, PNM typically does not receive a financing component.

Depreciation and Amortization

PNM’s provision for depreciation and amortization of utility plant, other than nuclear fuel, is based upon straight-line rates approved by the NMPRC and FERC. Amortization of nuclear fuel is based on units-of-production. TNMP’s provision for depreciation and amortization of utility plant is based upon straight-line rates approved by the PUCT. Depreciation and amortization of non-utility property, including right-of-use assets for finance leases as discussed in Note 8, is computed based on the straight-line method. The provision for depreciation of certain equipment is allocated between operating expenses and construction projects based on the use of the equipment.

Average straight-line rates used were as follows:

Year ended December 31,
202420232022
PNM
Electric plant2.87 %2.67 %2.55 %
Common, intangible, and general plant14.06 7.64 7.83 
TNMP3.74 3.77 3.72 
Depreciation expense on electric, common, intangible, and general plant is as follows:

Year ended December 31,
202420232022
(In thousands)
PNM$188,035 $158,956 $163,162 
TNMP124,976 110,675 96,131 

Allowance for Funds Used During Construction

As provided by the FERC uniform systems of accounts, AFUDC is charged to regulated utility plant for construction projects. This allowance is designed to enable a utility to capitalize financing costs during periods of construction of property subject to rate regulation. It represents the cost of borrowed funds (allowance for borrowed funds used during construction or “debt AFUDC”) and a return on other funds (allowance for equity funds used during construction or “equity AFUDC”). The debt AFUDC is recorded in interest charges and the equity AFUDC is recorded in other income on the Consolidated Statements of Earnings.

For the years ended December 31, 2024, 2023, and 2022, PNM recorded $12.9 million, $9.5 million, and $3.7 million of debt AFUDC at annual rates of 3.19%, 2.99%, and 1.70% and $13.0 million, $9.8 million, and $9.3 million of equity AFUDC at annual rates of 3.30%, 3.24%, and 4.26%. For the years ended December 31, 2024, 2023, and 2022, TNMP recorded $8.0 million, $5.7 million, and $3.4 million of debt AFUDC at rates of 4.14%, 3.49%, and 2.25% and $4.8 million, $5.1 million, and $4.5 million of equity AFUDC at rates of 2.48%, 3.17%, and 2.99%.

Materials, Supplies, and Fuel Stock

Materials and supplies relate to transmission, distribution, and generating assets. Materials and supplies are charged to inventory when purchased and are expensed or capitalized as appropriate when issued. Materials and supplies are valued using an average costing method. Inventories consisted of the following at December 31:

 
TXNM
PNMTNMP
 202420232024202320242023
 (In thousands)
Fuel Oil
$1,095 $896 $1,095 $896 $— $— 
Materials and supplies165,766 97,138 141,415 80,676 24,351 16,462 
$166,861 $98,034 $142,510 $81,572 $24,351 $16,462 

Investments

PNM holds investment securities in the NDT for the purpose of funding its share of the decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines that served SJGS and continue to serve Four Corners (Note 16). Investments (both equity and available-for-sale debt securities) are measured at fair value on a quarterly basis with changes in fair value for equity securities recognized in earnings for that period. Since third party investment managers have sole discretion over the purchase and sale of the securities (under general guidelines and targets provided by management), PNM records an impairment, as a realized loss, for any available-for-sale debt security that has a fair value which is less than cost at the end of each quarter. For the years ended December 31, 2024, 2023 and 2022, PNM recorded impairment losses on the available-for-sale debt securities of $17.8 million, $(19.1) million and $25.8 million. No gains or losses are deferred as regulatory assets or liabilities. See Notes 3 and 9. All investments are held in PNM’s name and are in the custody of major financial institutions. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in other income and deductions.

As discussed above, PNM immediately records an impairment loss for any available-for-sale debt security that has a fair value that is less than its carrying value. As a result, the Company has no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings.
Equity Method Investment

TXNM accounted for its investment in NMRD using the equity method of accounting because TXNM’s ownership interest resulted in significant influence, but not control, over NMRD and its operations.  TXNM recorded as income its percentage share of earnings or loss of NMRD and carried its investment at cost, adjusted for its share of undistributed earnings or losses, until its investment was sold on February 27, 2024. See Note 21.

Goodwill

The Company does not amortize goodwill. Goodwill is evaluated for impairment annually, or more frequently if events and circumstances indicate that the goodwill might be impaired. See Note 19.

Asset Impairment

Tangible long-lived assets and right-of-use assets associated with leases are evaluated in relation to the estimated future undiscounted cash flows to assess recoverability when events and circumstances indicate that the assets might be impaired.

Revenue Recognition

See Note 4 for a discussion of electric operating revenues.

Accounts Receivable and Allowance for Credit Losses

See Note 4 for a discussion of accounts receivable and the allowance for credit losses.

Amortization of Debt Acquisition Costs

Discount, premium, and expense related to the issuance of long-term debt are amortized over the lives of the respective issues. Gains and losses incurred upon the early retirement of long-term debt are recognized in other income or other deductions, except for amounts recoverable through NMPRC, FERC, or PUCT regulation, which are recorded as regulatory assets or liabilities and amortized over the lives of the respective issues. Unamortized premium, discount, and expense related to long-term debt are reflected as part of the related liability on the Consolidated Balance Sheets.

Derivatives

The Company records derivative instruments, including energy contracts, on the balance sheet as either an asset or liability measured at their fair value. Changes in the derivatives’ fair value are recognized in earnings unless specific hedge accounting criteria are met. PNM also records certain commodity derivative transactions recoverable through NMPRC regulation as regulatory assets or liabilities. See Note 9.

The Company treats all forward commodity purchases and sales contracts subject to unplanned netting or “book-out” by the transmission provider as derivative instruments subject to mark-to-market accounting. GAAP provides guidance on whether realized gains and losses on derivative contracts not held for trading purposes should be reported on a net or gross basis and concludes such classification is a matter of judgment that depends on the relevant facts and circumstances. See Note 4.

Decommissioning and Reclamation Costs

PNM is only required to recognize and measure decommissioning liabilities for tangible long-lived assets for which a legal obligation exists. Nuclear decommissioning costs and related accruals are based on periodic site-specific estimates of the costs for removing all radioactive and other structures at PVNGS and are dependent upon numerous assumptions, including estimates of future decommissioning costs at current price levels, inflation rates, and discount rates. PNM’s accruals for PVNGS Units 1, 2, and 3, including portions previously held under leases, have been made based on such estimates, the guidelines of the NRC, and the PVNGS license periods. PNM records its share of the SJGS decommissioning obligation as an ARO on its Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. See Note 16.
In connection with both the SJGS and Four Corners coal supply agreements, the owners are required to reimburse the mining companies for the cost of contemporaneous reclamation, as well as the costs for final reclamation of the coal mines. The reclamation costs are based on periodic site-specific studies that estimate the costs to be incurred in the future and are dependent upon numerous assumptions, including estimates of future reclamation costs at current price levels, inflation rates, and discount rates. PNM considers the contemporaneous reclamation costs part of the cost of its delivered coal costs. See Note 16 for a discussion of reclamation costs.

Environmental Costs

The normal operations of the Company involve activities and substances that expose the Company to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and may be imposed without regard to fault, or may be imposed for past acts, even though the past acts may have been lawful at the time they occurred.

The Company records its environmental liabilities when site assessments or remedial actions are probable, and a range of reasonably likely cleanup costs can be estimated. The Company reviews its sites and measures the liability by assessing a range of reasonably likely costs for each identified site using currently available information and the probable level of involvement and financial condition of other potentially responsible parties. These estimates are based on assumptions regarding the costs for site investigations, remediation, operations and maintenance, monitoring, and site closure. The ultimate cost to clean up the Company’s identified sites varies from its recorded liability due to numerous uncertainties inherent in the estimation process. See Note 16.

Pension and Other Postretirement Benefits

See Note 11 for a discussion of pension and postretirement benefits expense, including a discussion of the actuarial assumptions.

Stock-Based Compensation

See Note 12 for a discussion of stock-based compensation expense.

Income Taxes

Income taxes are recognized using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. All deferred taxes are reflected as non-current on the Consolidated Balance Sheets. Current NMPRC, FERC, and PUCT approved rates include the tax effects of the majority of these differences. Rate-regulated enterprises are required to record deferred income taxes for temporary differences accorded flow-through treatment at the direction of a regulatory commission. The resulting deferred tax assets and liabilities are recorded based on the expected cash flow to be reflected in future rates. Because the NMPRC, FERC, and the PUCT have consistently permitted the recovery of tax effects previously flowed-through earnings, the Company has established regulatory assets and liabilities offsetting such deferred tax assets and liabilities. The Company recognizes only the impact of tax positions that, based on their merits, are more likely than not to be sustained upon an IRS audit. The Company defers investment tax credits and amortizes them over the estimated useful lives of the assets. See Note 18 for additional information, including a discussion of the impacts of the Tax Act.

The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before taxes. Certain unusual or infrequently occurring items, as well as adjustments due to enactment of new tax laws, have been excluded from the estimated annual effective tax rate calculation.

Lease Commitments

See Note 8 for a discussion of lease commitments.
New Accounting Pronouncements

Information concerning recently issued accounting pronouncements that have not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates.

Accounting Standards Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 enhancing the transparency and decision usefulness of income tax disclosures. Disclosure requirements of this update include (on an annual basis) the disclosure of specific categories in the rate reconciliation and the inclusion of additional information for reconciling items that meet a quantitative threshold (if the effect of the reconciling item is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income by the applicable statutory rate). The amendment also requires the disclosure (on an annual basis) of information about income taxes paid (net of refunds) including, the disaggregation by federal, state, and foreign taxes as well as by individual jurisdiction. Additional requirements include the disclosure of income (loss) from continuing operations before income tax expense (benefit) disaggregated between foreign and domestic as well as income tax expense (benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for the Company beginning January 1, 2025 with early adoption being permitted. ASU 2023-09 is to be applied on a prospective basis with retrospective application permitted.

Accounting Standards Update 2024-03 - Income Statement (Subtopic 220-40): Reporting Comprehensive Income - Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03 that will require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses at each interim and annual period. Disclosures should include amounts for purchases of inventory, employee compensation, depreciation and, intangible asset amortization; certain amounts that are already required to be disclosed under GAAP in the same disclosure as other disaggregation requirements; qualitative descriptions of the amounts remaining in relevant expense categories that are not disaggregated; the total amount of selling expenses including the entity’s definition of selling expenses. In January 2025, ASU 2025-01 was issued to clarify that the amendments of ASU 2024-03 are effective for public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.
v3.25.0.1
Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
TXNM has three reportable segments including PNM, TNMP, and Corporate and other. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The measure of profitability used by the CODM is Segment earnings (loss) attributable to TXNM, as presented below. The CODM uses this measure of profitability to allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget to actual variances on a regular basis when making decisions about allocating capital and operational expense funding to the segments. TXNM’s CODM is its President and COO who is also the CEO of the PNM and TNMP segments.

PNM

PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, which includes the asset optimization of PNM’s jurisdictional capacity as well as providing transmission services to third parties. FERC has jurisdiction over wholesale power and transmission rates. PNM includes the results of ETBC I upon its formation in 2023.

TNMP

TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities.
Corporate and Other

The Corporate and Other segment includes TXNM holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other until the close of the sale of NMRD on February 27, 2024 (Note 21). Eliminations of intercompany transactions are reflected in the Corporate and Other segment.

The following tables present summarized financial information for TXNM by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.

2024PNMTNMPCorporate
and Other
TXNM Consolidated
(In thousands)
Electric operating revenues$1,379,088 $592,111 $— $1,971,199 
Cost of energy
Fuel burn
130,380 — — 130,380 
Purchases for resale
286,399 — — 286,399 
Transmission by others
18,139 149,066 — 167,205 
Significant segment expenses
Administrative and general - direct
63,105 (1,452)151,089 212,742 
Administrative and general - corporate allocation
132,209 53,166 (185,375)— 
Customer related expenses
31,246 2,997 131 34,374 
Energy production costs
93,748 — — 93,748 
Regulatory disallowances
8,980 — — 8,980 
Depreciation and amortization
221,780 125,915 37,230 384,925 
Transmission and distribution costs
61,302 37,078 — 98,380 
Taxes other than income taxes
49,807 44,441 6,332 100,580 
Total operating expenses
1,097,095 411,211 9,407 1,517,713 
Net other income and (deductions)
61,494 8,725 (15,399)54,820 
Interest charges(106,018)(58,983)(63,065)(228,066)
Income taxes (benefit)29,217 27,114 (34,813)21,518 
Valencia non-controlling interest(16,040)— — (16,040)
Subsidiary preferred stock dividends(528)— — (528)
Segment earnings (loss) attributable to TXNM
$191,684 $103,528 $(53,058)$242,154 
At December 31, 2024:
Total Assets$7,407,279 $3,649,125 $155,329 $11,211,733 
Goodwill$51,632 $226,665 $— $278,297 
 
2023PNMTNMPCorporate
and Other
TXNM Consolidated
(In thousands)
Electric operating revenues$1,403,948 $535,250 $— $1,939,198 
Cost of energy
Fuel burn
138,538 — — 138,538 
Purchases for resale
499,921 — — 499,921 
Transmission by others
25,155 138,647 — 163,802 
Significant segment expenses
Administrative and general - direct
52,554 2,710 139,010 194,274 
Administrative and general - corporate allocation
124,321 47,470 (171,791)— 
Customer related expenses
29,775 3,783 68 33,626 
Energy production costs
91,610 — — 91,610 
Regulatory disallowances
70,750 1,173 — 71,923 
Depreciation and amortization
177,633 113,142 28,728 319,503 
Transmission and distribution costs
61,725 36,996 — 98,721 
Taxes other than income taxes
48,790 41,311 5,839 95,940 
Total operating expenses
1,320,772 385,232 1,854 1,707,858 
Net other income and (deductions)
41,358 8,368 (182)49,544 
Interest charges(86,574)(46,152)(57,629)(190,355)
Income taxes (benefit)(16,758)17,297 (16,889)(16,350)
Valencia non-controlling interest(18,533)— — (18,533)
Subsidiary preferred stock dividends(528)— — (528)
Segment earnings (loss) attributable to TXNM
$35,657 $94,937 $(42,776)$87,818 
At December 31, 2023:
Total Assets$6,813,065 $3,145,031 $294,509 $10,252,605 
Goodwill$51,632 $226,665 $— $278,297 
2022PNMTNMPCorporate
and Other
TXNM Consolidated
(In thousands)
Electric operating revenues$1,766,825 $482,730 $— $2,249,555 
Cost of energy
Fuel burn
299,411 — — 299,411 
Purchases for resale
541,828 — — 541,828 
Trading mark-to-market
(456)— — (456)
Transmission by others
23,230 123,928 — 147,158 
Significant segment expenses
Administrative and general - direct
62,505 3,607 130,336 196,448 
Administrative and general - corporate allocation
115,416 42,293 (157,709)— 
Customer related expenses
26,925 3,692 84 30,701 
Energy production costs
147,347 — — 147,347 
Regulatory disallowances
832 — — 832 
Depreciation and amortization
180,812 98,316 25,725 304,853 
Transmission and distribution costs
58,278 36,406 — 94,684 
Taxes other than income taxes
49,210 38,521 5,258 92,989 
Total operating expenses
1,505,338 346,763 3,694 1,855,795 
Net other income and (deductions)
(62,196)8,653 (999)(54,542)
Interest charges(61,073)(37,192)(29,643)(127,908)
Income taxes (benefit)19,198 15,161 (8,229)26,130 
Valencia non-controlling interest(15,122)— — (15,122)
Subsidiary preferred stock dividends(528)— — (528)
Segment earnings (loss) attributable to TXNM
$103,370 $92,267 $(26,107)$169,530 
At December 31, 2022:
Total Assets$6,272,166 $2,746,601 $238,610 $9,257,377 
Goodwill$51,632 $226,665 $— $278,297 

Significant Segment Expenses

Reflected above are certain additional categories of operating expenses that are regularly provided to the CODM. Cost of energy consists primarily of fuel and purchase power costs for PNM and costs charged by third-party transmission providers for TNMP. Administrative and general - direct expenses are those that are incurred directly by the segment while corporate allocation are those costs that are incurred by the corporate and other segment and allocated to the utilities based on the nature of the cost incurred. Corporate allocation is eliminated in the corporate and other segment. Customer related expenses include meter reading, customer service, and bad debt expenses.

Major Customers

PNM’s participation in EIM, operated by CAISO, accounted for approximately 4%, 15%, and 24% of electric operating revenues during the years ended December 31, 2024, 2023, and 2022. These revenues are passed on to customers under PNM’s FPPAC with no impact to net earnings. Two REPs during the years ended December 31, 2024, 2023, and 2022 accounted for more than 10% of the electric operating revenues of TNMP as follows:
Year Ended December 31,
202420232022
REP A26 %25 %27 %
REP B20 19 20 
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Accumulated Other Comprehensive Income (Loss)
 12 Months Ended
Dec. 31, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss)
AOCI reports a measure for accumulated changes in equity that result from transactions and other economic events other than transactions with shareholders. Information regarding AOCI is as follows:
Accumulated Other Comprehensive Income (Loss)
PNM
TXNM
Unrealized Gains on Available-for-Sale SecuritiesPension
Liability
Adjustment		TotalFair Value Adjustment for Cash Flow HedgesTotal
 (In thousands)
Balance at December 31, 2021
$11,715 $(83,651)$(71,936)$— $(71,936)
 Amounts reclassified from AOCI (pre-tax)(3,827)7,104 3,277 (1,176)2,101 
Income tax impact of amounts reclassified972 (1,804)(832)299 (533)
 Other OCI changes (pre-tax)(1,928)(4,565)(6,493)12,285 5,792 
Income tax impact of other OCI changes490 1,159 1,649 (3,121)(1,472)
Net after-tax change(4,293)1,894 (2,399)8,287 5,888 
Balance at December 31, 2022
7,422 (81,757)(74,335)8,287 (66,048)
 Amounts reclassified from AOCI (pre-tax)(7,199)4,776 (2,423)9,287 6,864 
Income tax impact of amounts reclassified1,828 (1,212)616 (2,359)(1,743)
 Other OCI changes (pre-tax)11,529 1,389 12,918 (15,483)(2,565)
Income tax impact of other OCI changes(2,928)(353)(3,281)3,933 652 
Net after-tax change3,230 4,600 7,830 (4,622)3,208 
Balance at December 31, 202310,652 (77,157)(66,505)3,665 (62,840)
 Amounts reclassified from AOCI (pre-tax)(13,108)4,866 (8,242)10,348 2,106 
Income tax impact of amounts reclassified3,330 (1,236)2,094 (2,629)(535)
 Other OCI changes (pre-tax)(885)(3,210)(4,095)(15,260)(19,355)
Income tax impact of other OCI changes225 815 1,040 3,876 4,916 
Net after-tax change(10,438)1,235 (9,203)(3,665)(12,868)
Balance at December 31, 2024$214 $(75,922)$(75,708)$— $(75,708)
 
The Consolidated Statements of Earnings include pre-tax amounts reclassified from AOCI related to Unrealized Gains on Available-for-Sale Debt Securities in gains (losses) on investment securities, related to Pension Liability Adjustment in other (deductions), and related to Fair Value Adjustment for Cash Flow Hedges in interest charges. The income tax impacts of all amounts reclassified from AOCI are included in income taxes in the Consolidated Statements of Earnings.
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Electric Operating Revenues
 12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
Electric Operating Revenues Electric Operating Revenues
Accounts Receivable and Allowance for Credit Losses

Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company estimates the allowance for credit losses on trade receivables based on historical experience and estimated default rates. Accounts receivable balances are reviewed monthly, adjustments to the allowance for credit losses are made as necessary and amounts that are deemed uncollectible are written off. In addition to the allowance for credit losses on trade receivables, the Company has evaluated other receivables for potential credit related losses. These balances include potential exposures for other non-retail utility services. In the years ended December 31, 2024 and 2023, there were no estimated credit losses related to these transactions.
Revenue Recognition

Retail electric operating revenues are recorded in the period of energy delivery, which includes estimated amounts for service rendered but unbilled at the end of each accounting period. The determination of the energy sales billed to individual retail customers is based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading and the corresponding unbilled revenue are estimated. Unbilled electric revenue is estimated based on daily generation volumes, estimated customer usage by class, line losses, historical trends and experience, applicable customer rates or by using AMS data where available. Amounts billed are generally due within the next month. The Company does not incur incremental costs to obtain contracts for its energy services.

PNM’s wholesale electricity sales are recorded as electric operating revenues and wholesale electricity purchases are recorded as costs of energy sold. Derivative contracts that are subject to unplanned netting are recorded net in earnings. A “book-out” is the planned or unplanned netting of off-setting purchase and sale transactions. A book-out is a transmission mechanism to reduce congestion on the transmission system or administrative burden. For accounting purposes, a book-out is the recording of net revenues upon the settlement of a derivative contract.

Unrealized gains and losses on derivative contracts that are not designated for hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power and fuel supply agreements, used to hedge generation assets and purchased power costs. Changes in the fair value of economic hedges are reflected in results of operations, with changes related to economic hedges on sales included in operating revenues and changes related to economic hedges on purchases included in cost of energy sold. See Note 9.

The Company has collaborative arrangements related to its interest in SJGS, Four Corners, PVNGS, and Luna. The Company has determined that during the years ended December 31, 2024, 2023, and 2022 none of the joint owners in its collaborative arrangements were customers under Topic 606. The Company will continue to evaluate transactions between collaborative arrangement participants in future periods under the revenue recognition standard.

PNM and TNMP recognize revenue as they satisfy performance obligations, which typically occurs as the customer or end-user consumes the electric service provided. Electric services are typically for a bundle of services that are distinct and transferred to the end-user in one performance obligation measured by KWh or KW. Electric operating revenues are recorded in the period of energy delivery, including estimated unbilled amounts. The Company has elected to exclude all sales and similar taxes from revenue.

Revenue from contracts with customers is recorded based upon the total authorized tariff or market price at the time electric service is rendered, including amounts billed under arrangements qualifying as an Alternative Revenue Program (“ARP”). ARP arrangements are agreements between PNM or TNMP and its regulator that allow PNM or TNMP to adjust future rates in response to past activities or completed events, if certain criteria are met. ARP revenues are required to be reported separately from contracts with customers. ARP revenues in a given period include the recognition of “originating” ARP revenues (i.e. when the regulator-specific conditions are met) in the period, offset by the reversal of ARP revenues currently approved for recovery by the governing bodies.

Sources of Revenue

Additional information about the nature of revenues is provided below. Additional information about matters affecting PNM’s and TNMP’s regulated revenues is provided in Note 17.

Revenue from Contracts with Customers

PNM

NMPRC Regulated Retail Electric Service – PNM provides electric generation, transmission, and distribution service to its rate-regulated customers in New Mexico. PNM’s retail electric service territory covers a large area of north central New Mexico, including the cities of Albuquerque, Rio Rancho, and Santa Fe, and certain areas of southern New Mexico. Customer rates for retail electric service are set by the NMPRC and revenue is recognized as energy is delivered to the customer. PNM invoices customers on a monthly basis for electric service and generally collects billed amounts within one month.
Transmission Service to Third Parties – PNM owns transmission lines that are interconnected with other utilities in New Mexico, Texas, Arizona, Colorado, and Utah. Transmission customers receive service for the transmission of energy owned by the customer utilizing PNM’s transmission facilities. Customers generally receive transmission services, which are regulated by FERC, from PNM through PNM’s Open Access Transmission Tariff (“OATT”) or a specific contract. Customers are billed based on capacity and energy components on a monthly basis. PNM owns the Western Spirit Line and services under related transmission agreements use an incremental rate, approved by FERC, that is separate from the formula rate mechanism.

Wholesale Energy Sales – PNM engages in activities to optimize its existing jurisdictional assets and long-term power agreements through spot market, hour-ahead, day-ahead, week-ahead, month-ahead, and other sales of excess generation not required to fulfill retail load and contractual commitments. PNM participates in the EIM (a real-time wholesale energy trading market operated by the CAISO) that enables participating electric utilities to buy and sell energy. The NMPRC granted PNM authority to seek recovery of costs associated with joining the EIM, which have been included in the 2024 Rate Change and to pass the benefits of participating in EIM to customers through the FPPAC. PNM’s participation in EIM has significantly increased Electric operating revenues which are passed on to customers under PNM’s FPPAC with no impact to net earnings.

TNMP

PUCT Regulated Retail Electric Service – TNMP provides transmission and distribution services in Texas under the provisions of TECA and the Texas Public Utility Regulatory Act. TNMP is subject to traditional cost-of-service regulation with respect to rates and service under the jurisdiction of the PUCT and certain municipalities. TNMP’s transmission and distribution activities are solely within ERCOT and not subject to traditional rate regulation by FERC. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service territory. Revenue is recognized as energy is delivered to the consumer. TNMP invoices REPs on a monthly basis and is generally paid within a month.

TCOS – TNMP is a transmission service provider that is allowed to recover its TCOS through a network transmission rate that is approved by the PUCT. TCOS customers are other utilities that receive service for the transmission of energy owned by the customer utilizing TNMP’s transmission facilities.

Alternative Revenue Programs

The Company defers certain costs and records certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. ARP revenues, which are discussed above, include recovery or refund provisions under PNM’s renewable energy rider and true-ups to PNM’s formula transmission rates; transmission cost recovery factor, and the impacts of the PUCT’s January 25, 2018 order regarding the change in the federal corporate income tax rate; the energy efficiency incentive bonus at both PNM and TNMP; and PNM’s TOD rate pilot program. Regulatory assets and liabilities are recognized for the difference between ARP revenues and amounts currently approved for recovery by the governing bodies. Regulatory assets and liabilities are amortized into earnings as amounts are billed. TNMP’s 2018 Rate Case integrated AMS costs into base rates beginning January 1, 2019. These costs are being amortized into earnings as alternative revenues over a period of five years.

Other Electric Operating Revenues

Other electric operating revenues consist primarily of PNM’s economic hedges that meet the definition of a derivative and are therefore not considered revenue from contracts with customers. Derivative revenues include gains and losses representing changes in fair value (Note 9) and settlements from sales of electricity under forward sales contracts.
Disaggregation of Revenues

A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects ARP revenues and other revenues.
PNMTNMP
TXNM Consolidated
Year Ended December 31, 2024(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$541,581 $203,227 $744,808 
Commercial460,311 166,858 627,169 
Industrial123,754 35,300 159,054 
Public authority23,161 7,329 30,490 
Economy energy service25,481 — 25,481 
Transmission141,058 157,049 298,107 
Wholesale energy sales64,903 — 64,903 
Miscellaneous5,776 3,813 9,589 
Total revenues from contracts with customers
1,386,025 573,576 1,959,601 
Alternative revenue programs(9,720)18,535 8,815 
Other electric operating revenues2,783 — 2,783 
Total Electric Operating Revenues
$1,379,088 $592,111 $1,971,199 


PNMTNMP
TXNM Consolidated
Year Ended December 31, 2023
(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$425,448 $190,953 $616,401 
Commercial391,964 155,254 547,218 
Industrial90,084 45,508 135,592 
Public authority21,018 6,777 27,795 
Economy energy service34,340 — 34,340 
Transmission159,475 135,831 295,306 
Wholesale energy sales248,801 — 248,801 
Miscellaneous5,676 3,739 9,415 
Total revenues from contracts with customers
1,376,806 
1
538,062 1,914,868 
1
Alternative revenue programs9,419 (2,812)6,607 
Other electric operating revenues17,723 — 17,723 
Total Electric Operating Revenues
$1,403,948 $535,250 $1,939,198 
1 Included in revenue from contracts with customers at PNM and TXNM is a $128.7 million reduction associated with the SJGS abandonment settlement and a $38.4 million reduction associated with PVNGS leased capacity as a result of the NMPRC final order in the 2024 Rate Change.
PNMTNMP
TXNM Consolidated
Year Ended December 31, 2022
(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$484,699 $187,951 $672,650 
Commercial422,163 154,059 576,222 
Industrial85,102 36,919 122,021 
Public authority21,330 6,379 27,709 
Economy energy service45,009 — 45,009 
Transmission149,421 113,782 263,203 
Wholesale energy sales534,196 — 534,196 
Miscellaneous5,390 3,817 9,207 
Total revenues from contracts with customers
1,747,310 502,907 2,250,217 
Alternative revenue programs692 (20,177)(19,485)
Other electric operating revenues18,823 — 18,823 
Total Electric Operating Revenues
$1,766,825 $482,730 $2,249,555 

Contract Balances

Performance obligations related to contracts with customers are typically satisfied when the energy is delivered, and the customer or end-user utilizes the energy. Accounts receivable from customers represent amounts billed, including amounts under ARPs. For PNM, accounts receivable reflected on the Consolidated Balance Sheets, net of allowance for credit losses, includes $94.3 million and $93.6 million at December 31, 2024 and 2023 resulting from contracts with customers. All of TNMP’s accounts receivable results from contracts with customers.

Contract assets are an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). Upon the completion of the Western Spirit Line, PNM entered into a TSA with Pattern Wind under an incremental tariff rate approved by FERC. The terms of the agreement provide for a financing component that benefits the customer. As such, the revenue that PNM recognizes will be in excess of the consideration received at the beginning of the service term resulting in a contract asset. The balance of the contract asset was $32.0 million at December 31, 2024 and $22.1 million at December 31, 2023, and is included in Other deferred charges on the Consolidated Balance Sheets.

Contract liabilities arise when consideration is received in advance from a customer before satisfying the performance obligations. Therefore, revenue is deferred and not recognized until the obligation is satisfied. Under its OATT, PNM accepts upfront consideration for capacity reservations requested by transmission customers, which requires PNM to defer the customer’s transmission capacity rights for a specific period of time. PNM recognizes the revenue of these capacity reservations over the period it defers the customer’s capacity rights. Other utilities pay PNM and TNMP in advance for the joint-use of their utility poles. These revenues are recognized over the period of time specified in the joint-use contract, typically for one calendar year. Deferred revenues on these arrangements are recorded as contract liabilities. TXNM’s, PNM’s, and TNMP’s contract liabilities and related revenues are not material for any of the periods presented. The Company has no other arrangements with remaining performance obligations to which a portion of the transaction price would be required to be allocated.
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Earnings and Dividends Per Share
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Earnings and Dividends Per Share Earnings and Dividends Per Share
Basic earnings per share is computed by dividing net earnings attributable to TXNM by the weighted average number of common shares outstanding during the period. Diluted earnings per share was computed by dividing net earnings attributable to TXNM by the diluted weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other agreements to issue common stock were settled. TXNM applies the treasury stock method for restricted stock, the 2022 ATM Program, and the 2024 ATM Program. The if-converted method is applied in determining the potential dilutive effect of the conversion of outstanding Convertible Notes.
Information regarding the computation of earnings per share and dividends per share is as follows:
 Year Ended December 31,
 202420232022
 (In thousands, except per share amounts)
Net Earnings Attributable to TXNM
$242,154 $87,818 $169,530 
Average Number of Common Shares:
Outstanding during year90,214 86,038 85,835 
Vested awards of restricted stock320 258 287 
Average Shares – Basic90,534 86,296 86,122 
Dilutive Effect of Common Stock Equivalents:
TXNM ATM Programs
12 38 — 
Restricted stock
45 35 47 
Average Shares – Diluted90,591 86,369 86,169 
Net Earnings Attributable to TXNM Per Share of Common Stock:
Basic$2.67 $1.02 $1.97 
Diluted$2.67 $1.02 $1.97 
Dividends Declared per Common Share$1.57 $1.49 $1.41 
v3.25.0.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2024
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Stockholders’ Equity
Common Stock and Equity Contributions
On August 2, 2024, TXNM increased the number of authorized shares of the Company’s common stock from 120,000,000 to 200,000,000.
On December 30, 2024, TXNM physically settled 2,458,951 shares sold under forward sales agreements pursuant to the TXNM 2024 ATM Program. The settlement included $0.8 million for issuance costs resulting in net proceeds of $98.6 million. Following this settlement, 1,104,641 shares of TXNM’s common stock remain subject to future settlement under the TXNM 2024 ATM Program.
On December 15, 2023, TXNM physically settled all 4,365,510 shares sold under forward sales agreements pursuant to the TXNM 2022 ATM Program. The settlement included $1.0 million for issuance costs resulting in net proceeds of $198.2 million. Following this settlement, no shares of TXNM’s common stock remained subject to future settlement under the TXNM 2022 ATM Program. TXNM, PNM, and TNMP did not issue any common stock during the years ended December 31, 2022 and 2021.
TXNM funded cash equity contributions to PNM of $55.0 million, zero, and zero in 2024, 2023, and 2022. TXNM funded $24.0 million, $40.9 million, and $68.0 million of cash equity contributions to TNMP in 2024, 2023, and 2022.
Dividends on Common Stock
The declaration of common dividends by TXNM is dependent upon a number of factors, including the ability of TXNM’s subsidiaries to pay dividends. TXNM’s primary sources of dividends are its operating subsidiaries.
PNM declared and paid cash dividends to TXNM of $51.0 million, zero, and $153.5 million in 2024, 2023, and 2022. TNMP did not declare or pay any cash dividends to TXNM in 2024, 2023, or 2022.
The NMPRC has placed certain restrictions on the ability of PNM to pay dividends to TXNM, including the restriction that PNM cannot pay dividends that cause its debt rating to fall below investment grade. The NMPRC provisions allow PNM to pay dividends, with at least 15 days prior notice, from current earnings, which is determined on a rolling four quarter basis, or from equity contributions previously made by TXNM. The Federal Power Act also imposes certain restrictions on dividends by public utilities. Debt-to-capitalization ratio requirements, as discussed in Note 7, remain at less than or equal to 65% for PNM and TNMP and less than or equal to 70% for TXNM. These debt-to-capitalization ratio requirements could limit the amounts of dividends that could be paid. PNM also has other financial covenants that limit the transfer of assets, through dividends or other means, including a requirement to obtain the approval of certain financial counterparties to transfer more than five percent of PNM’s assets. As of December 31, 2024, the 65% debt-to-capitalization covenant would restrict the payment of dividends from the retained earnings of PNM to $509.1 million, and the 65% debt-to-capitalization covenant would
restrict the payment of dividends by TNMP to $318.0 million. Similarly, the 70% debt-to-capitalization covenant would restrict the payment of dividends by TXNM to $775.0 million.
 
In addition, the ability of TXNM to declare dividends is dependent upon the extent to which cash flows will support dividends, the availability of retained earnings, financial circumstances and performance, current and future regulatory decisions, Congressional and legislative acts, and economic conditions. Conditions imposed by the NMPRC or PUCT, future growth plans and related capital requirements, and business considerations may also affect TXNM’s ability to pay dividends.
Preferred Stock
PNM’s cumulative preferred shares outstanding bear dividends at 4.58% per annum. PNM preferred stock does not have a mandatory redemption requirement, but may be redeemed, at PNM’s option, at 102% of the stated value plus accrued dividends. The holders of the PNM preferred stock are entitled to payment before the holders of common stock in the event of any liquidation or dissolution or distribution of assets of PNM. In addition, PNM’s preferred stock is not entitled to a sinking fund and cannot be converted into any other class of stock of PNM.
TXNM and TNMP have no preferred stock outstanding. The authorized shares of TXNM and TNMP preferred stock are 10 million shares and 1 million shares, respectively.
v3.25.0.1
Financing
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Financing Financing
The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities or refinance other debt. Each of the Company’s revolving credit facilities, term loans, and other debt agreements contain a single financial covenant that requires the maintenance of a debt-to-capitalization ratio. For the TXNM agreements this ratio must be maintained at less than or equal to 70%, and for the PNM and TNMP agreements this ratio must be maintained at less than or equal to 65%. The Company’s revolving credit facilities, term loans, and other debt agreements generally also contain customary covenants, events of default, cross-default provisions, and change-of-control provisions.

PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual informational financing filing and short-term financing plan with the NMPRC.

Financing Activities

TXNM

At December 31, 2022, TXNM had $1.0 billion outstanding under the 2021 Delayed-Draw Term Loan, among TXNM, the lenders party thereto, and Wells Fargo Bank, N.A., as administrative agent. As discussed below on June 30, 2023, $500.0 million under the TXNM 2021 Delayed Draw Term Loan was prepaid, without penalty, with proceeds from the TXNM 2023 Term Loan. As discussed below, on June 21, 2024, proceeds from the Convertible Notes were used to prepay, without penalty, $449.0 million under the TXNM 2021 Delayed Draw Term Loan. Draws on the TXNM 2021 Delayed-Draw Term Loan bear interest at a variable rate, which was 5.41% at December 31, 2024.

On March 2, 2022, TXNM filed a shelf registration that provides for the issuance of various types of debt and equity securities. The TXNM shelf registration statement expires in March 2025.

On November 10, 2022, TXNM entered into a distribution agreement with BofA Securities, Inc., MUFG Securities Americas Inc. and Wells Fargo Securities, LLC, as sales agents, and Bank of America, N.A., MUFG Securities EMEA plc and Wells Fargo Bank, N.A., as forward purchasers, pursuant to which the Company may sell, from time to time, up to an aggregate
sales price of $200.0 million of its common stock, no par value, through the sales agents (the “TXNM 2022 ATM Program”). Sales of the shares made pursuant to the distribution agreement may be made in “at the market offerings” as defined in Rule 415 of the Securities Act. TXNM did not initially receive any proceeds upon the execution of this agreement.

Throughout 2023, TXNM entered into forward sale agreements, for the sale of shares of TXNM common stock. On December 15, 2023, TXNM physically settled the forward purchases under the TXNM 2022 ATM Program and used the proceeds to repay borrowings under the TXNM Revolving Credit Facility and for other corporate purposes.
Cash proceeds shown below were reduced by $1.0 million in issuance costs resulting in net cash proceeds of $198.2 million.

Forward completion
Initial forward price
Shares
Settlement price
Settlement amount
(in thousands)
March 15, 2023$48.49 504,452 $49.00 $24,720 
March 20, 202348.30 528,082 48.78 25,758
May 30, 202347.56 244,639 47.99 11,741
June 30, 202344.87 804,477 45.07 36,257
September 26, 202344.03 2,283,860 44.11 100,734
4,365,510 $199,210 

On June 30, 2023, TXNM entered into a $500.0 million term loan agreement (the “TXNM 2023 Term Loan”) among TXNM, the lenders party thereto, and Wells Fargo Bank, N.A., as administrative agent. The proceeds were used to prepay an equal amount of the TXNM 2021 Delayed Draw Term Loan, without penalty. As discussed below, on June 21, 2024, proceeds from the Convertible Notes were used to prepay, without penalty, $90.0 million under the TXNM 2023 Term Loan. The TXNM 2023 Term Loan matures on June 30, 2026 and bears interest at a variable rate, which was 5.81% at December 31, 2024.

On May 6, 2024, TXNM entered into a distribution agreement with BofA Securities, Inc., Citigroup Global Markets, Inc., MUFG Securities Americas Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc., and Wells Fargo Securities, LLC, as sales agents, and Bank of America, N.A., Citibank, N.A., MUFG Securities EMEA plc, Royal Bank of Canada, The Bank of Nova Scotia, and Wells Fargo Bank, N.A., as forward purchasers, pursuant to which the Company may sell, from time to time, up to an aggregate sales amount of $100.0 million of its common stock, no par value, through the sales agents (the “TXNM 2024 ATM Program”). On August 5, 2024, subsequent to approval by shareholders to increase TXNM’s authorized shares, the Company amended the distribution agreement increasing the aggregate sales amount from $100.0 million to $300.0 million of its common stock, no par value, that may be sold under the TXNM 2024 ATM Program. Sales of the shares made pursuant to the distribution agreement may be made in “at the market offerings” as defined in Rule 415 of the Securities Act. TXNM did not initially receive any proceeds upon the execution of this agreement.

TXNM entered into forward sales agreements with forward purchasers relating to the sale of 262,025 shares of common stock, at an initial forward sale price of $37.77 per share in the second quarter; 2,196,926 shares of common stock at a weighted average initial forward sale price of $40.58 per share in the third quarter; and 1,104,641 shares of common stock at a weighted average initial forward sale price of $44.83 per share in the fourth quarter. All initial forward prices under the agreements are subject to adjustments based on a net interest rate factor and by future dividends paid on TXNM common stock. On December 30, 2024, TXNM physically settled forward purchases under the TXNM 2024 ATM Program for 2,458,951 shares and used the proceeds to repay borrowings under the TXNM Revolving Credit Facility. Cash proceeds shown below were reduced by $0.8 million in issuance costs resulting in net cash proceeds of $98.6 million.
Forward completion
Initial forward price
Shares
Settlement price
Settlement amount
(in thousands)
May 13, 2024$37.76 262,025 $38.01 $9,960 
August 13, 202439.98 113,014 40.21 4,545
August 16, 202440.26 261,066 40.48 10,568
August 23, 202440.36 284,952 40.56 11,558
August 30, 202440.47 311,583 40.64 12,661
September 16, 202440.77 1,226,311 40.85 50,093
2,458,951 $99,385 

As of December 31, 2024, 1,104,641 shares under forward sales agreements under the 2024 TXNM ATM Program remained unsettled.

On June 10, 2024, TXNM issued $500.0 million aggregate principal amount of junior subordinated convertible notes due 2054 (the “Convertible Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Convertible Notes are unsecured obligations of the Company and rank junior and subordinate in right of payment to the prior payment in full of the Company’s existing and future senior indebtedness. The Convertible Notes bear interest at a rate of 5.75% per year, payable semi-annually in arrears on June 1 and December 1, and mature on June 1, 2054, unless earlier
converted, redeemed, or repurchased in accordance with their terms. On June 21, 2024, TXNM issued an additional $50.0 million aggregate principal amount of the Convertible Notes, pursuant to an overallotment option granted by TXNM to the initial purchasers of the $500.0 million Convertible Notes. Proceeds from the Convertible Notes were used to prepay $449.0 million of borrowings under the TXNM 2021 Delayed Draw Term Loan and $90.0 million of borrowings under the TXNM 2023 Term Loan, without penalty, and for other corporate purposes.

TXNM may not redeem the Convertible Notes prior to June 6, 2029, except upon the occurrence of certain tax events, rating agency events or treasury stock events (each, a “special event”). TXNM may redeem for cash all, but not less than all, of the Convertibles Notes upon the occurrence of a special event at any time, at its option, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, TXNM may redeem for cash all or part (subject to certain limitations on partial redemptions) of the Convertible Notes, at its option, on or after June 6, 2029, at a redemption price equal to 100% of the principal amount of the convertible notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of TXNM’s common stock has been at least 130% of the conversion price of the convertible notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which TXNM provides notice of redemption. In each case, TXNM will not, and will not be permitted to, issue a notice of redemption, or specify a redemption date, during any interest deferral period.

Prior to the close of business on the business day immediately preceding December 1, 2053, the Convertible Notes will be convertible at the option of the holders only under certain conditions. On or after December 1, 2053 until the close of business on the second business day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes at their option, at any time, at the conversion rate then in effect, irrespective of these conditions. Upon conversion of the Convertible Notes, TXNM will pay cash, or deliver an equal aggregate principal amount of a newly issued series of its nonconvertible junior subordinated notes with the same terms as the Convertible Notes (other than the conversion features and certain features in relation to redemption rights), in either case, up to the aggregate principal amount of the Convertible Notes being converted, and deliver shares of TXNM’s common stock in respect of the remainder, if any, of TXNM’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

The conversion rate for the Convertible Notes will initially be 22.4911 shares of TXNM’s common stock per $1,000 principal amount of the Convertible Notes, equivalent to an initial conversion price of $44.46 per share of common stock. The initial conversion price of the Convertible Notes represents a conversion premium of 17.5% above the last reported sale price of TXNM’s common stock on June 4, 2024. The conversion rate and the corresponding conversion price will be subject to adjustment by certain events such as increased dividends but will not adjust for any accrued or unpaid interest. In addition, following certain corporate events that occur prior to the maturity date of the Convertible Notes or if TXNM delivers a notice of a special event redemption, TXNM will, in certain circumstances, increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such a corporate event or such notice of special event redemption, as the case may be.

TXNM issued the Convertible Notes pursuant to an indenture (the “Convertible Notes Indenture”) dated as of June 10, 2024 between TXNM and Computershare Trust Company, N.A., as trustee. The Convertible Notes are subject to continuing compliance with the representations, warranties, and covenants set forth in the Convertible Notes Indenture, which include the customary covenants discussed above. In the event of a fundamental change, as defined in the Convertible Notes Indenture, TXNM may be required to repurchase, for cash, the aggregate principal amount of Convertible Notes plus accrued interest. TXNM may not redeem the Convertible notes prior to June 6, 2029 except upon the occurrence of a special event as defined in the Convertible Notes Indenture.

So long as no event of default with respect to the Convertible Notes has occurred and is continuing, TXNM may, at its option, defer interest payments on the Convertible Notes on one or more occasions for up to 20 consecutive semi-annual interest payment periods. During any deferral period, interest on the Convertible Notes will continue to accrue at the then-applicable interest rate on the Convertible Notes. In addition, during any deferral period, interest on deferred interest will accrue at the then-applicable interest rate on the Convertible Notes, compounded semi-annually, to the extent permitted by applicable law.

PNM

On June 18, 2021, PNM entered into a $75.0 million term loan agreement (the “PNM 2021 Term Loan”) between PNM and Bank of America, N.A., as lender. The PNM 2021 Term Loan was used to repay the PNM 2019 $40.0 million Term Loan
and for other corporate purposes. On August 5, 2022, the PNM 2021 Term Loan was prepaid without penalty with proceeds from the PNM 2022 Delayed-Draw Term Loan discussed below.

At December 31, 2021, PNM had $104.5 million PCRBs outstanding with a mandatory remarketing date of June 1, 2022, consisting of $36.0 million at 1.05% issued by the Maricopa County, Arizona Pollution Control Corporation with a final maturity of January 2038; $37.0 million at 2.125% issued by the City of Farmington, New Mexico with a final maturity of June 2040; $11.5 million at 1.20% issued by the City of Farmington, New Mexico with a final maturity of June 2040; and $20.0 million at 2.45% issued by the City of Farmington, New Mexico with a final maturity of September 2042. On June 1, 2022, PNM remarketed to new investors the $36.0 million and $37.0 million series in the tax-exempt market at 3.00% with a mandatory remarketing date of June 1, 2024. PNM purchased and redeemed the remaining two series of PCRBs, totaling $31.5 million, on June 1, 2022.

On August 5, 2022, PNM entered into a $225.0 million delayed-draw term loan agreement (the “PNM 2022 Delayed-Draw Term Loan”), among PNM, the lender parties thereto, and Royal Bank of Canada, as administrative agent. PNM initially drew $180.0 million to prepay, without penalty, the $75.0 million PNM 2021 Term Loan ahead of its December 2022 maturity and for other corporate purposes. On September 30, 2022, PNM drew the remaining $45.0 million and used the proceeds for general corporate purposes. On November 15, 2023, upon receipts of funds from the sale of energy transition property to ETBC I discussed below, PNM prepaid the $225.0 million outstanding under the PNM 2022 Delayed-Draw Term Loan, without penalty.

At December 31, 2022, PNM had $130.0 million of 1.10% PCRBs outstanding with a mandatory remarketing date of June 1, 2023, issued by the City of Farmington, New Mexico with a final maturity of June 2040. On June 1, 2023, PNM remarketed the $130.0 million to new investors at 3.90% with a mandatory tender date of June 1, 2028.

At December 31, 2022, PNM had $55.0 million aggregate principal amount of its 3.15% SUNs outstanding due May 2023. On May 15, 2023, PNM repaid the $55.0 million 3.15% SUNs.

On April 28, 2023, PNM entered into an agreement (the “PNM 2023 Note Purchase Agreement”) with institutional investors for the sale and issuance of $200.0 million aggregate principal amount of two series of SUNs (the “PNM 2023 SUNs”) offered in private placement transactions. The PNM 2023 SUNs were issued on April 28, 2023. PNM issued $150.0 million of the PNM 2023 SUNs at 5.51%, due April 28, 2035, and another $50.0 million at 5.92%, due April 28, 2053. Proceeds from the PNM 2023 SUNs were used to repay borrowings under the PNM Revolving Credit Facility and the PNM New Mexico Credit Facility, for funding of capital expenditures, and for general corporate purposes. The PNM 2023 Note Purchase Agreement includes the customary covenants discussed above. In the event of a change of control, PNM will be required to offer to prepay the PNM 2023 SUNs at par. PNM has the right to redeem any or all of the PNM 2023 SUNs prior to their maturities, subject to payment of a customary make-whole premium.

On May 10, 2024, PNM entered into a $200.0 million term loan agreement (the “PNM 2024 Term Loan”), among PNM, the lenders party thereto and U.S. Bank National Association, as administrative agent. PNM used the proceeds of the PNM 2024 Term Loan to repay borrowings under the PNM Revolving Credit Facility, the PNM New Mexico Credit Facility, and for general corporate purposes. The PNM 2024 Term Loan bears interest at a variable rate, which was 5.40% at December 31, 2024, and must be repaid on or before November 10, 2025.

At December 31, 2023, PNM had outstanding $37.0 million of 3.00% PCRBs and $125.0 million of 1.15% PCRBs issued by the City of Farmington, New Mexico with a mandatory remarketing date of June 1, 2024 and final maturities of June 2040 and $36.0 million of 3.00% PCRBs issued by Maricopa County, Arizona with a mandatory remarketing date of June 1, 2024 and a final maturity of January 2038. On June 3, 2024, PNM remarketed these PCRBs aggregating $198.0 million to new investors at 3.875% with a mandatory tender date of June 1, 2029.

On January 21, 2025, PNM entered into a $195.0 million term loan agreement (the “PNM 2025 Term Loan”), among PNM, the lenders party thereto and Canadian Imperial Bank of Commerce, New York Branch, as administrative agent. PNM used the proceeds of the PNM 2025 Term Loan to repay borrowings under the PNM Revolving Credit Facility, the PNM New Mexico Credit Facility, and for general corporate purposes. The PNM 2025 Term Loan bears interest at a variable rate and must be repaid on or before July 21, 2026.

ETBC I

On November 15, 2023, ETBC I issued $343.2 million aggregate principal amount of its senior secured energy transition bonds, Series A (“ETBC I Securitized Bonds”) in two tranches. The first tranche of $175.0 million aggregate principal amount
was issued at an interest rate of 5.64% with an expected final payment due in August 2040. The second tranche of $168.2 million aggregate principal amount was issued at an interest rate of 6.03% with an expected final payment due in August 2048. Each tranche is subject to fixed, scheduled, semi-annual payments of principal and interest beginning on August 15, 2024 with $6.9 million included as Current installments of long-term debt on the Consolidated Balance Sheets at December 31, 2024. The ETBC I Securitized Bonds were offered pursuant to a prospectus dated November 7, 2023 and are governed by an indenture between ETBC I and U.S. Bank Trust Company, National Association, as indenture trustee dated as of November 15, 2023. ETBC I used the proceeds from the issuance of the ETBC I Securitized Bonds to purchase energy transition property (Note 16) from PNM. See Note 10.

TNMP

On April 27, 2022, TNMP entered into an agreement (the “TNMP 2022 Bond Purchase Agreement”) with institutional investors for the sale of $160.0 million aggregate principal amount of two series of TNMP first mortgage bonds (the “TNMP 2022 Bonds”) offered in private placement transactions. TNMP issued the first series of $65.0 million of the TNMP 2022 Bonds on May 12, 2022, at a 4.13% interest rate, due May 12, 2052, and the second series of $95.0 million of the TNMP 2022 Bonds on July 28, 2022, at a 3.81% interest rate, due July 28, 2032. The proceeds were used to repay borrowings under the TNMP Revolving Credit Facility and for other corporate purposes. The TNMP 2022 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indenture governing the TNMP 2022 Bonds. The terms of the supplemental indentures governing the TNMP 2022 Bonds include the customary covenants discussed above. In the event of a change of control, TNMP will be required to offer to prepay the TNMP 2022 Bonds at par. TNMP has the right to redeem any or all of the TNMP 2022 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On April 28, 2023, TNMP entered into an agreement (the “TNMP 2023 Bond Purchase Agreement”) with institutional investors for the sale of $185.0 million aggregate principal amount of two series of TNMP first mortgage bonds (the “TNMP 2023 Bonds”) offered in private placement transactions. TNMP issued the first series of $130.0 million on April 28, 2023, at a 5.01% interest rate, due April 28, 2033. The second series of $55.0 million was issued on July 28, 2023, at a 5.47% interest rate, due July 28, 2053. The proceeds were used to repay borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2023 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2023 Bonds. The terms of the supplemental indentures governing the TNMP 2023 Bonds include the customary covenants discussed above. In the event of a change of control, TNMP will be required to offer to prepay the TNMP 2023 Bonds at par. TNMP has the right to redeem any or all of the TNMP 2023 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On March 28, 2024, TNMP entered into an agreement (the “TNMP 2024 Bond Purchase Agreement”) with institutional investors for the sale of $285.0 million aggregate principal amount of four series of TNMP first mortgage bonds (the “TNMP 2024 Bonds”) offered in private placement transactions. TNMP issued the first two series on March 28, 2024, consisting of $32.0 million at a 5.26% interest rate, due March 28, 2029, and $85.0 million at a 5.55% interest rate, due March 28, 2036. The third and fourth series were issued on July 1, 2024, consisting of $40.0 million at a 5.65% interest rate, due July 1, 2039, and $128.0 million at a 5.79% interest rate, due July 1, 2054. The proceeds were used to repay existing debt, including the $80.0 million of 4.03% TNMP FMBs that were due July 2024 and borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2024 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2024 Bonds. The terms of the supplemental indentures governing the TNMP 2024 Bonds include the customary covenants discussed above. In the event of certain changes of control of TXNM or TNMP, TNMP will be required to offer to prepay the TNMP 2024 Bonds at par. TNMP has the right to redeem any or all of the TNMP 2024 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On February 14, 2025, TNMP entered into an agreement (the “TNMP 2025 Bond Purchase Agreement”) with institutional investors for the sale of $140.0 million aggregate principal amount of its 5.19% TNMP first mortgage bonds (the “TNMP 2025 Bonds”) offered in private placement transactions. TNMP issued all $140.0 million at a 5.19% interest rate, due April 1, 2031. The proceeds were used to repay borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2025 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2025 Bonds. The terms of the supplemental indentures governing the TNMP 2025 Bonds include the customary covenants discussed above. In the event of a change of control, TNMP will be required to offer to prepay the TNMP 2025 Bonds at par. TNMP has the right to redeem any or all of the TNMP 2025 Bonds prior to their maturity, subject to payment of a customary make-whole premium.
Interest Rate Hedging Activities

TXNM has entered into hedging agreements that establish a fixed rate for the indicated amount of variable rate debt, above which a customary spread is applied, which is subject to change if there is a change in TXNM’s credit rating. As of December 31, 2023, TXNM’s hedging agreements were as follows:

Variable Rate Established
Effective DateMaturity DateDebt HedgedFixed Rate
(In millions)(Percent)
March 17, 2023September 30, 2023$150.0 4.57 %
October 31, 2022December 31, 2023100.0 4.65 
October 31, 2022December 31, 2023100.0 4.66 
September 30, 2022December 31, 2023100.0 4.17 
September 30, 2022December 31, 2023100.0 4.18 
May 20, 2022December 31, 2023100.0 2.52 
May 2, 2022December 31, 2023150.0 2.65 
May 2, 2022December 31, 2023200.0 2.65 
January 1, 2024December 31, 2024100.0 3.32 
January 1, 2024December 31, 2024100.0 3.32 
January 1, 2024December 31, 2024100.0 3.38 
January 1, 2024December 31, 2024150.0 3.62 
January 1, 2024December 31, 2024150.0 3.57 
January 1, 2025December 31, 2025100.0 4.18 
January 1, 2025December 31, 2025100.0 4.18 
January 1, 2025December 31, 2025100.0 3.99 

Throughout 2023 and 2024, these hedging agreements were accounted for as cash flow hedges. At December 31, 2023, the fair value of the active hedging agreements was a gain of $7.2 million that was included in Other current assets and a loss of $2.3 million that was included in Other deferred credits on the Consolidated Balance Sheets. Fair values were determined using Level 2 inputs under GAAP, including using forward SOFR curves under the mid-market convention to discount cash flows over the remaining term of the agreements. In November 2024, TXNM unwound and settled the $300.0 million of hedging agreements that were expected to mature on December 31, 2025, and on December 31, 2024, the remaining $600.0 million of hedging agreements matured. TXNM had no active hedging agreements at December 31, 2024.

Borrowing Arrangements Between TXNM and its Subsidiaries
TXNM has intercompany loan agreements with its subsidiaries. Individual subsidiary loan agreements vary in amount up to $150.0 million and have either reciprocal or non-reciprocal terms. Interest charged to the subsidiaries is equivalent to interest paid by TXNM on its short-term borrowings or the money-market interest rate if TXNM does not have any short-term borrowings outstanding. All balances outstanding under intercompany loan agreements are eliminated upon consolidation. See Note 1. PNM and TNMP had no borrowings from TXNM at December 31, 2024 and 2023. PNMR Development had zero and $2.3 million in short-term borrowings outstanding from TXNM at December 31, 2024 and 2023. TXNM had $1.5 million and zero in short-term borrowings outstanding from PNMR Development at December 31, 2024 and 2023.

Short-term Debt and Liquidity

As of December 31, 2024, the TXNM Revolving Credit Facility had a financing capacity of $300.0 million and the PNM Revolving Credit Facility had a financing capacity of $400.0 million. On April 1, 2024, TXNM and PNM amended their respective revolving credit facilities, extending their maturity to March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to March 2031, subject to approval by a majority of the lenders. PNM also has the $40.0 million PNM New Mexico Credit Facility with a maturity of May 20, 2026. As of December 31, 2023, the TNMP Revolving Credit Facility had a capacity of $100.0 million, secured by $100.0 million aggregate principal amount of TNMP first mortgage bonds. On April 1, 2024, TNMP entered into a new $200.0 million Revolving Credit Facility that replaced the $100.0 million Revolving Credit Facility. The new $200.0 million Revolving Credit Facility is secured by $200.0 million aggregate principal amount of TNMP first mortgage bonds and has a maturity of March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to March 2031, subject to approval by a majority of the lenders. Variable interest rates under the TXNM, PNM, and TNMP revolving credit facilities are based on SOFR.
Short-term debt outstanding consists of:
 December 31,
Short-term Debt20242023
 (In thousands)
PNM:
PNM Revolving Credit Facility$323,800 $107,500 
PNM New Mexico Credit Facility40,000 30,000 
363,800 137,500 
TNMP Revolving Credit Facility151,600 55,100 
TXNM:
TXNM Revolving Credit Facility
93,900 69,300 
$609,300 $261,900 

In addition to the above borrowings, TXNM, PNM, and TNMP had letters of credit outstanding of $3.1 million, zero, and zero at December 31, 2024, that reduce the available capacity under their respective revolving credit facilities. TXNM also has $30.3 million of letters of credit outstanding under the WFB LOC Facility. At December 31, 2024, interest rates on outstanding borrowings were 5.73% for the PNM Revolving Credit Facility, 5.81% for the PNM New Mexico Credit Facility, 5.37% for the TNMP Revolving Credit Facility, and 5.96% for the TXNM Revolving Credit Facility.

Long-Term Debt

Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
 December 31, 2024December 31, 2023
PrincipalUnamortized Discounts, (Premiums), and Issuance Costs, netPrincipalUnamortized Discounts, (Premiums), and Issuance Costs, net
 (In thousands)
PNM Debt
ETBC I - Senior Secured Energy Transition Bonds
Series A-1, 5.64%
$172,471 $1,025 $175,000 $1,093 
Series A-2, 6.03%
168,200 1,014 168,200 1,057 
Senior Unsecured Notes, Pollution Control Revenue Bonds:
2.15% due April 2033
146,000 736 146,000 824 
3.00% due June 2040, mandatory tender - June 1, 2024
— — 37,000 88 
0.875% mandatory tender - October 1, 2026
100,345 257 100,345 403 
3.00% due January 2038, mandatory tender - June 1, 2024
— — 36,000 87 
1.15% due June 2040, mandatory tender - June 1, 2024
— — 125,000 132 
3.90% due June 2040, mandatory tender - June 1, 2028
130,000 796 130,000 1,029 
3.875% due June 2040, mandatory tender - June 1, 2029
162,000 1,158 — — 
3.875% due January 2038, mandatory tender - June 1, 2029
36,000 258 — — 
Senior Unsecured Notes:
3.45% due May 2025
104,000 39 104,000 143 
3.85% due August 2025
250,000 174 250,000 477 
3.68% due May 2028
88,000 209 88,000 271 
3.78% due August 2028
15,000 38 15,000 48 
3.93% due May 2033
38,000 149 38,000 167 
4.22% due May 2038
45,000 212 45,000 228 
4.50% due May 2048
20,000 110 20,000 114 
4.60% due August 2048
85,000 470 85,000 490 
3.21% due April 2030
150,000 852 150,000 1,011 
3.57% due April 2039
50,000 398 50,000 426 
2.59% due July 2033
80,000 328 80,000 366 
December 31, 2024December 31, 2023
PrincipalUnamortized Discounts, (Premiums), and Issuance Costs, netPrincipalUnamortized Discounts, (Premiums), and Issuance Costs, net
(In thousands)
PNM Debt (Continued)
3.14% due July 2041
80,000 381 80,000 404 
2.29% due December 2031
50,000 205 50,000 235 
2.97% due December 2041
100,000 499 100,000 528 
5.51% due April 2035
150,000 779 150,000 854 
5.92% due April 2053
50,000 280 50,000 290 
PNM 2024 $200.0 Million Term Loan due November 2025
200,000 57 — — 
2,470,016 10,424 2,272,545 10,765 
Less current maturities560,907 270 200,529 307 
1,909,109 10,154 2,072,016 10,458 
TNMP Debt
First Mortgage Bonds:
6.95% due April 2043
93,198 (13,056)93,198 (13,771)
4.03% due July 2024
— — 80,000 53 
3.53% due February 2026
60,000 91 60,000 174 
3.22% due August 2027
60,000 152 60,000 209 
3.85% due June 2028
60,000 219 60,000 281 
3.79% due March 2034
75,000 347 75,000 385 
3.92% due March 2039
75,000 401 75,000 429 
4.06% due March 2044
75,000 433 75,000 456 
3.60% due July 2029
80,000 270 80,000 330 
2.73% due April 2030
85,000 445 85,000 530 
3.36% due April 2050
25,000 210 25,000 218 
2.93% due July 2035
25,000 175 25,000 191 
3.36% due July 2050
50,000 424 50,000 441 
2.44% due August 2035
65,000 382 65,000 418 
4.13% due May 2052
65,000 409 65,000 424 
3.81% due July 2032
95,000 505 95,000 572 
5.01% due April 2033
130,000 610 130,000 682 
5.47% due July 2053
55,000 286 55,000 296 
5.26% due March 2029
32,000 189 — — 
5.55% due March 2036
85,000 538 — — 
5.65% due July 2039
40,000 256 — — 
5.79% due July 2054
128,000 833 — — 
1,458,198 (5,881)1,253,198 (7,682)
Less current maturities— — 80,000 53 
1,458,198 (5,881)1,173,198 (7,735)
TXNM Debt
TXNM 2021 Delayed-Draw Term Loan due May 202551,000 34 500,000 114 
TXNM 2023 Term Loan due June 2026410,000 441 500,000 735 
5.75% TXNM Junior Subordinated Convertible Notes due June 2054
550,000 10,828 — — 
1,011,000 11,303 1,000,000 849 
Less current maturities51,000 34 — — 
960,000 11,269 1,000,000 849 
Total Consolidated TXNM Debt
4,939,214 15,846 4,525,743 3,932 
Less current maturities611,907 304 280,529 360 
$4,327,307 $15,542 $4,245,214 $3,572 
Reflecting mandatory tender dates, long-term debt maturities as of December 31, 2024, are follows:

TXNM
PNMTNMP
TXNM Consolidated
(In thousands)
2025$51,000 $560,907 $— $611,907 
2026410,000 107,648 60,000 577,648 
2027— 7,721 60,000 67,721 
2028— 241,162 60,000 301,162 
2029— 206,629 112,000 318,629 
Thereafter550,000 1,345,949 1,166,198 3,062,147 
   Total$1,011,000 $2,470,016 $1,458,198 $4,939,214 
v3.25.0.1
Lease Commitments
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Lease Commitments Lease Commitments
The Company enters into various lease agreements to meet its business needs and to satisfy the needs of its customers. The Company accounts for contracts that convey the use and control of identified assets for a period of time as leases. The Company classifies leases as operating or financing by evaluating the terms of the lease agreement. Agreements under which the Company is likely to utilize substantially all of the economic value or life of the asset or that the Company is likely to own at the end of the lease term, either through purchase or transfer of ownership, are classified as financing leases. Leases not meeting these criteria are accounted for as operating leases. Agreements under which the Company is a lessor are insignificant. TXNM, PNM, and TNMP determine present value for their leases using their incremental borrowing rates at the commencement date of the lease or, when readily available, the rate implicit in the agreement. The Company leases office buildings, vehicles, energy storage facilities, and other equipment. In addition, PNM had lease interests in PVNGS and certain rights-of-way agreements that are classified as leases. All of the Company’s leases with fixed-payment terms in excess of one year are recorded on the Consolidated Balance Sheets by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Consolidated Statements of Earnings.

PVNGS

In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2.

On April 5, 2021, PNM and Salt River Project entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to Salt River Project certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to Salt River Project, receiving payments of $33.7 million, of which $28.4 million was recorded as a reduction to Net utility plant on the Consolidated Balance Sheets and is presented as cash flows from investing activities on the Consolidated Statement of Cash Flows. In addition, $5.3 million was recorded as a reduction to materials, supplies, and fuel stock on the Consolidated Balance Sheets and is presented as cash flows from operating activities on the Consolidated Statement of Cash Flows. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to Salt River Project, receiving payments of $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Consolidated Balance Sheets and is presented as cash flows from investing activities on the Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Consolidated Balance Sheets and is presented as cash flows from operating activities on the Consolidated Statement of Cash Flows.
Land Easements and Rights-of-Ways

Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2024 payment for the amount due under the Navajo Nation right-of-way lease was $8.6 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019, are considered variable lease payments.

PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Consolidated Statement of Earnings over their term. As of December 31, 2024 and 2023, the unamortized balance of these rights-of-ways was $67.1 million and $56.2 million. During the years ended December 31, 2024, 2023, and 2022, PNM recognized amortization expense associated with these agreements of $4.3 million, $3.5 million, and $3.8 million.

Fleet Vehicles and Equipment

Fleet vehicle and equipment leases commencing on or after January 1, 2019, are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018, are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At December 31, 2024, residual value guarantees on fleet vehicle and equipment leases are $0.7 million, $0.9 million, and $1.6 million for PNM, TNMP, and TXNM Consolidated.

Energy Storage Agreements

PNM has entered into various ESAs with fixed payments over the life of the agreements. These types of agreements are accounted for as operating leases. In the fourth quarter of 2024, an energy storage facility with an aggregate capacity of 100 MW began commercial operation and PNM recorded lease liabilities with a corresponding right-of-use asset of $101.5 million. PNM has also entered into ESAs with monthly payments that vary depending on the available capacity of the storage facility. These types of ESAs are accounted for as operating leases with variable consideration and do not require a lease liability or right-of-use asset. In the fourth quarter of 2024, a 300MW energy storage agreement with payments that depend on available capacity began commercial operation. The expense for this lease is reflected in variable lease expense in the tables below. In addition, the Company has elected to separate lease components from non-lease components for ESAs and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components which are not included in the measurement of the lease liability or the corresponding right-of-use asset, comprises of 25.5% of the value of the agreements.

Information related to the Company’s operating leases recorded on the Consolidated Balance Sheets is presented below:
December 31, 2024December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
(In thousands)
Operating leases:
Operating lease assets, net of amortization
$271,433 $923 $272,894 $180,370 $1,814 $182,201 
Current portion of operating lease liabilities
13,542 713 14,293 11,371 895 12,267 
Long-term portion of operating lease liabilities
254,702 167 255,376 166,191 809 167,000 
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019, as financing leases. Information related to the Company’s financing leases recorded on the Consolidated Balance Sheets is presented below:
December 31, 2024December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
(In thousands)
Financing leases:
Non-utility property
$24,548 $24,420 $50,144 $25,425 $24,487 $49,981 
Accumulated depreciation
(10,997)(13,411)(24,604)(11,984)(11,869)(23,905)
Non-utility property, net
$13,551 $11,009 $25,540 $13,441 $12,618 $26,076 
Other current liabilities
$4,311 $4,527 $9,126 $4,146 $4,616 $8,776 
Other deferred credits
9,262 6,504 16,470 9,300 8,023 17,326 

Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
December 31, 2024December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
Weighted average remaining lease term (years):
Operating leases
17.521.1017.4516.791.6516.65
Financing leases
3.512.803.203.813.083.45
Weighted average discount rate:
Operating leases
5.68 %4.41 %5.68 %5.61 %4.16 %5.60 %
Financing leases5.08 5.19 5.12 4.54 4.63 4.58 

Information for the components of lease expense is as follows:
Year Ended December 31, 2024
PNMTNMP
TXNM Consolidated
(In thousands)
Operating lease cost:
Energy storage leases
$13,353 $— $13,353 
Other operating leases
7,722 907 8,679 
Amounts capitalized(101)(793)(894)
Total operating lease expense
20,974 114 21,138 
Financing lease cost:
Amortization of right-of-use assets
4,554 5,129 9,889 
Interest on lease liabilities
603 595 1,229 
Amounts capitalized(3,227)(4,648)(7,875)
Total financing lease expense
1,930 1,076 3,243 
Variable lease expense3,900 — 3,900 
Short-term lease expense
714 23 787 
Total lease expense for the period$27,518 $1,213 $29,068 
Year Ended December 31, 2023
PNMTNMP
TXNM Consolidated
(In thousands)
Operating lease cost
Energy storage leases
$4,351 $— $4,351 
Other operating leases11,127 1,479 12,606 
Amounts capitalized(374)(1,298)(1,672)
Total operating lease expense
15,104 181 15,285 
Financing lease cost:
Amortization of right-of-use assets
4,566 4,634 9,253 
Interest on lease liabilities
562 497 1,060 
Amounts capitalized(3,190)(4,250)(7,440)
Total financing lease expense
1,938 881 2,873 
Variable lease expense1,342 — 1,342 
Short-term lease expense
675 29 782 
Total lease expense for the period$19,059 $1,091 $20,282 

Year Ended December 31, 2022
PNMTNMP
TXNM Consolidated
(In thousands)
Operating lease cost
Other operating leases$26,764 $2,020 $28,835 
Amounts capitalized(690)(1,728)(2,417)
Total operating lease expense
26,074 292 26,418 
Financing lease cost:
Amortization of right-of-use assets
3,175 3,279 6,529 
Interest on lease liabilities
327 330 659 
Amounts capitalized(2,264)(3,208)(5,471)
Total financing lease expense
1,238 401 1,717 
Variable lease expense890 — 890 
Short-term lease expense (1)
3,058 5 3,109 
Total lease expense for the period$31,260 $698 $32,134 
(1) Includes expense of $2.7 million for the twelve months ended December 31, 2022 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are partially offset with insurance reimbursements of $2.7 million for the twelve months ended December 31, 2022.
Supplemental cash flow information related to the Company’s leases is as follows:

Year Ended December 31, 2024Year Ended December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$21,277 $47 $21,368 $21,575 $110 $21,685 
Operating cash flows from financing leases
206 102 340 183 73 256 
Financing cash flows from financing leases1,707 971 2,872 1,671 802 2,527 
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases
$101,594 $100 $102,261 $138,204 $6 $138,210 
Financing leases
4,962 3,715 9,850 6,421 5,407 11,828 

Capitalized lease costs are reflected as investing activities on the Company’s Consolidated Statements of Cash Flows for the twelve months ended December 31, 2024 and 2023.

Future expected lease payments are shown below:
As of December 31, 2024
PNMTNMP
TXNM Consolidated
Operating
Operating
Financing
Energy Storage
Other
FinancingOperatingFinancing
Energy Storage
Other
(In thousands)
2025
$4,879 $20,333 $7,101 $4,971 $808 $10,181 $20,333 $7,976 
2026
4,300 20,333 7,042 3,635 90 8,258 20,333 7,201 
2027
3,019 20,333 7,046 2,186 14 5,507 20,333 7,131 
2028
1,640 20,333 7,049 811 11 2,571 20,333 7,133 
2029
568 20,333 7,036 258 — 826 20,333 7,111 
Later years230 287,100 3,550 — — 230 287,100 3,902 
Total minimum lease payments14,636 388,765 38,824 11,861 923 27,573 388,765 40,454 
Less: Imputed interest1,063 154,931 4,414 830 43 1,977 154,932 4,618 
Lease liabilities
$13,573 $233,834 $34,410 $11,031 $880 $25,596 $233,833 $35,836 

The above table includes $12.7 million, $10.4 million, and $23.3 million for PNM, TNMP, and TXNM at December 31, 2024 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties.

At December 31, 2024, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to ESAs. The Company currently expects lease commencement dates in 2025 and 2029, with lease terms expiring in 2044 and 2045, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $226.3 million over the 20-year terms of the agreements.
Lease Commitments Lease Commitments
The Company enters into various lease agreements to meet its business needs and to satisfy the needs of its customers. The Company accounts for contracts that convey the use and control of identified assets for a period of time as leases. The Company classifies leases as operating or financing by evaluating the terms of the lease agreement. Agreements under which the Company is likely to utilize substantially all of the economic value or life of the asset or that the Company is likely to own at the end of the lease term, either through purchase or transfer of ownership, are classified as financing leases. Leases not meeting these criteria are accounted for as operating leases. Agreements under which the Company is a lessor are insignificant. TXNM, PNM, and TNMP determine present value for their leases using their incremental borrowing rates at the commencement date of the lease or, when readily available, the rate implicit in the agreement. The Company leases office buildings, vehicles, energy storage facilities, and other equipment. In addition, PNM had lease interests in PVNGS and certain rights-of-way agreements that are classified as leases. All of the Company’s leases with fixed-payment terms in excess of one year are recorded on the Consolidated Balance Sheets by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Consolidated Statements of Earnings.

PVNGS

In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2.

On April 5, 2021, PNM and Salt River Project entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to Salt River Project certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to Salt River Project, receiving payments of $33.7 million, of which $28.4 million was recorded as a reduction to Net utility plant on the Consolidated Balance Sheets and is presented as cash flows from investing activities on the Consolidated Statement of Cash Flows. In addition, $5.3 million was recorded as a reduction to materials, supplies, and fuel stock on the Consolidated Balance Sheets and is presented as cash flows from operating activities on the Consolidated Statement of Cash Flows. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to Salt River Project, receiving payments of $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Consolidated Balance Sheets and is presented as cash flows from investing activities on the Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Consolidated Balance Sheets and is presented as cash flows from operating activities on the Consolidated Statement of Cash Flows.
Land Easements and Rights-of-Ways

Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2024 payment for the amount due under the Navajo Nation right-of-way lease was $8.6 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019, are considered variable lease payments.

PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Consolidated Statement of Earnings over their term. As of December 31, 2024 and 2023, the unamortized balance of these rights-of-ways was $67.1 million and $56.2 million. During the years ended December 31, 2024, 2023, and 2022, PNM recognized amortization expense associated with these agreements of $4.3 million, $3.5 million, and $3.8 million.

Fleet Vehicles and Equipment

Fleet vehicle and equipment leases commencing on or after January 1, 2019, are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018, are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At December 31, 2024, residual value guarantees on fleet vehicle and equipment leases are $0.7 million, $0.9 million, and $1.6 million for PNM, TNMP, and TXNM Consolidated.

Energy Storage Agreements

PNM has entered into various ESAs with fixed payments over the life of the agreements. These types of agreements are accounted for as operating leases. In the fourth quarter of 2024, an energy storage facility with an aggregate capacity of 100 MW began commercial operation and PNM recorded lease liabilities with a corresponding right-of-use asset of $101.5 million. PNM has also entered into ESAs with monthly payments that vary depending on the available capacity of the storage facility. These types of ESAs are accounted for as operating leases with variable consideration and do not require a lease liability or right-of-use asset. In the fourth quarter of 2024, a 300MW energy storage agreement with payments that depend on available capacity began commercial operation. The expense for this lease is reflected in variable lease expense in the tables below. In addition, the Company has elected to separate lease components from non-lease components for ESAs and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components which are not included in the measurement of the lease liability or the corresponding right-of-use asset, comprises of 25.5% of the value of the agreements.

Information related to the Company’s operating leases recorded on the Consolidated Balance Sheets is presented below:
December 31, 2024December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
(In thousands)
Operating leases:
Operating lease assets, net of amortization
$271,433 $923 $272,894 $180,370 $1,814 $182,201 
Current portion of operating lease liabilities
13,542 713 14,293 11,371 895 12,267 
Long-term portion of operating lease liabilities
254,702 167 255,376 166,191 809 167,000 
As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019, as financing leases. Information related to the Company’s financing leases recorded on the Consolidated Balance Sheets is presented below:
December 31, 2024December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
(In thousands)
Financing leases:
Non-utility property
$24,548 $24,420 $50,144 $25,425 $24,487 $49,981 
Accumulated depreciation
(10,997)(13,411)(24,604)(11,984)(11,869)(23,905)
Non-utility property, net
$13,551 $11,009 $25,540 $13,441 $12,618 $26,076 
Other current liabilities
$4,311 $4,527 $9,126 $4,146 $4,616 $8,776 
Other deferred credits
9,262 6,504 16,470 9,300 8,023 17,326 

Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities is presented below:
December 31, 2024December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
Weighted average remaining lease term (years):
Operating leases
17.521.1017.4516.791.6516.65
Financing leases
3.512.803.203.813.083.45
Weighted average discount rate:
Operating leases
5.68 %4.41 %5.68 %5.61 %4.16 %5.60 %
Financing leases5.08 5.19 5.12 4.54 4.63 4.58 

Information for the components of lease expense is as follows:
Year Ended December 31, 2024
PNMTNMP
TXNM Consolidated
(In thousands)
Operating lease cost:
Energy storage leases
$13,353 $— $13,353 
Other operating leases
7,722 907 8,679 
Amounts capitalized(101)(793)(894)
Total operating lease expense
20,974 114 21,138 
Financing lease cost:
Amortization of right-of-use assets
4,554 5,129 9,889 
Interest on lease liabilities
603 595 1,229 
Amounts capitalized(3,227)(4,648)(7,875)
Total financing lease expense
1,930 1,076 3,243 
Variable lease expense3,900 — 3,900 
Short-term lease expense
714 23 787 
Total lease expense for the period$27,518 $1,213 $29,068 
Year Ended December 31, 2023
PNMTNMP
TXNM Consolidated
(In thousands)
Operating lease cost
Energy storage leases
$4,351 $— $4,351 
Other operating leases11,127 1,479 12,606 
Amounts capitalized(374)(1,298)(1,672)
Total operating lease expense
15,104 181 15,285 
Financing lease cost:
Amortization of right-of-use assets
4,566 4,634 9,253 
Interest on lease liabilities
562 497 1,060 
Amounts capitalized(3,190)(4,250)(7,440)
Total financing lease expense
1,938 881 2,873 
Variable lease expense1,342 — 1,342 
Short-term lease expense
675 29 782 
Total lease expense for the period$19,059 $1,091 $20,282 

Year Ended December 31, 2022
PNMTNMP
TXNM Consolidated
(In thousands)
Operating lease cost
Other operating leases$26,764 $2,020 $28,835 
Amounts capitalized(690)(1,728)(2,417)
Total operating lease expense
26,074 292 26,418 
Financing lease cost:
Amortization of right-of-use assets
3,175 3,279 6,529 
Interest on lease liabilities
327 330 659 
Amounts capitalized(2,264)(3,208)(5,471)
Total financing lease expense
1,238 401 1,717 
Variable lease expense890 — 890 
Short-term lease expense (1)
3,058 5 3,109 
Total lease expense for the period$31,260 $698 $32,134 
(1) Includes expense of $2.7 million for the twelve months ended December 31, 2022 for rental of temporary cooling towers associated with the SJGS Unit 1 outage. These amounts are partially offset with insurance reimbursements of $2.7 million for the twelve months ended December 31, 2022.
Supplemental cash flow information related to the Company’s leases is as follows:

Year Ended December 31, 2024Year Ended December 31, 2023
PNMTNMP
TXNM Consolidated
PNMTNMP
TXNM Consolidated
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$21,277 $47 $21,368 $21,575 $110 $21,685 
Operating cash flows from financing leases
206 102 340 183 73 256 
Financing cash flows from financing leases1,707 971 2,872 1,671 802 2,527 
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases
$101,594 $100 $102,261 $138,204 $6 $138,210 
Financing leases
4,962 3,715 9,850 6,421 5,407 11,828 

Capitalized lease costs are reflected as investing activities on the Company’s Consolidated Statements of Cash Flows for the twelve months ended December 31, 2024 and 2023.

Future expected lease payments are shown below:
As of December 31, 2024
PNMTNMP
TXNM Consolidated
Operating
Operating
Financing
Energy Storage
Other
FinancingOperatingFinancing
Energy Storage
Other
(In thousands)
2025
$4,879 $20,333 $7,101 $4,971 $808 $10,181 $20,333 $7,976 
2026
4,300 20,333 7,042 3,635 90 8,258 20,333 7,201 
2027
3,019 20,333 7,046 2,186 14 5,507 20,333 7,131 
2028
1,640 20,333 7,049 811 11 2,571 20,333 7,133 
2029
568 20,333 7,036 258 — 826 20,333 7,111 
Later years230 287,100 3,550 — — 230 287,100 3,902 
Total minimum lease payments14,636 388,765 38,824 11,861 923 27,573 388,765 40,454 
Less: Imputed interest1,063 154,931 4,414 830 43 1,977 154,932 4,618 
Lease liabilities
$13,573 $233,834 $34,410 $11,031 $880 $25,596 $233,833 $35,836 

The above table includes $12.7 million, $10.4 million, and $23.3 million for PNM, TNMP, and TXNM at December 31, 2024 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties.

At December 31, 2024, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to ESAs. The Company currently expects lease commencement dates in 2025 and 2029, with lease terms expiring in 2044 and 2045, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $226.3 million over the 20-year terms of the agreements.
v3.25.0.1
Fair Value of Derivative and Other Financial Instruments
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Derivative and Other Financial Instruments Fair Value of Derivative and Other Financial Instruments
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is based on current market quotes as available and is supplemented by modeling techniques and assumptions made by the Company to the extent quoted market prices or volatilities are not available. External pricing input availability varies based on commodity location, market liquidity, and term of the agreement. Valuations of derivative assets and liabilities take into account nonperformance risk, including the effect of counterparties’ and the Company’s credit risk. The Company regularly assesses the validity and availability of pricing data for its derivative transactions. Although the Company uses its best judgment in estimating the fair value of these instruments, there are inherent limitations in any estimation technique.

Energy Related Derivative Contracts
Overview

The primary objective for the use of commodity derivative instruments, including energy contracts, options, swaps, and futures, is to manage price risk associated with forecasted purchases of energy and fuel used to generate electricity, as well as managing anticipated generation capacity in excess of forecasted demand from existing customers. PNM’s energy related derivative contracts manage commodity risk. PNM is required to meet the demand and energy needs of its customers. PNM is exposed to market risk for the needs of its customers not covered under the FPPAC.

PNM has entered into agreements for the purchase and sale of power from third parties. In 2024, PNM entered into agreements to purchase a total of 125 MW from July 1, 2025 through August 31, 2025 in order to ensure that customer demand during the 2025 summer peak load period will be met. In addition, PNM entered into agreements to purchase a total of 150 MW from July 1, 2024 through July 31, 2024 and 100 MW from August 1, 2024 through August 30, 2024. These agreements are accounted for as derivative agreements and are considered economic hedges under the NMPRC approved hedging plan covered by its FPPAC.

Agreements for the purchase of 85 MW from June through September 2023 as well as agreements for the sale of 50 MW from September 1,2024 through December 31, 2024 were not considered derivatives because they qualified for a normal purchase, normal sale scope exception.

PNM’s operations are managed primarily through a net asset-backed strategy, whereby PNM’s aggregate net open forward contract position is covered by its forecasted excess generation capabilities or market purchases. PNM could be exposed to market risk if its generation capabilities were to be disrupted or if its load requirements were to be greater than anticipated. If all or a portion of load requirements were required to be covered as a result of such unexpected situations, commitments would have to be met through market purchases. TNMP does not enter into energy related derivative contracts.

Commodity Risk

Marketing and procurement of energy often involve market risks associated with managing energy commodities and establishing positions in the energy markets, primarily on a short-term basis. PNM routinely enters into various derivative instruments such as forward contracts, option agreements, and price basis swap agreements to economically hedge price and volume risk on power commitments and fuel requirements and to minimize the effect of market fluctuations. PNM monitors the market risk of its commodity contracts in accordance with approved risk and credit policies.

Accounting for Derivatives

Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2024, 2023, and 2022, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flow hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered
by its FPPAC. Changes in the fair value of instruments covered by its FPPAC are recorded as regulatory assets and liabilities. PNM has no trading transactions.
 
Commodity Derivatives

PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Consolidated Balance Sheets: 
 Economic Hedges
 December 31,
 20242023
 (In thousands)
Other current assets$— $826 
Other current liabilities(5,737)— 
Net$(5,737)$826 
Certain of PNM’s commodity derivative instruments in the above table are subject to master netting agreements whereby assets and liabilities could be offset in the settlement process. PNM does not offset fair value and cash collateral for derivative instruments under master netting arrangements and the above table reflects the gross amounts of fair value assets and liabilities for commodity derivatives.

As discussed above, PNM has NMPRC-approved guidelines for hedging arrangements to manage fuel and purchased power costs related to customers covered by its FPPAC. The table above includes zero in current assets and $5.7 million of current liabilities related to these arrangements at December 31, 2024 and $0.8 million in current assets and zero of current liabilities at December 31, 2023 with changes in fair value recorded as regulatory assets and regulatory liabilities. See Note 13.
At December 31, 2024 and 2023, PNM had no amounts recognized for the legal right to reclaim cash collateral. However, amounts posted as cash collateral under margin arrangements were $0.1 million at December 31, 2024 and $0.2 million at December 31, 2023. These amounts are included in other current assets on the Consolidated Balance Sheets. At December 31, 2024 and December 31, 2023, obligations to return cash collateral were zero and $0.2 million, which is included in other current liabilities on the Consolidated Balance Sheets.
 
The changes in the fair value of commodity derivative instruments that are considered economic hedges had no impact on PNM’s net earnings during the years ended December 31, 2024 and 2023. Commodity derivatives also had no impact on OCI for the periods presented. Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNM’s net buy (sell) volume positions:

Economic Hedges
MMBTU
MWh
December 31, 2024—89,900
December 31, 2023—(15,360)

PNM has contingent requirements to provide collateral under commodity contracts having an objectively determinable collateral provision that are in net liability positions and are not fully collateralized with cash. In connection with managing its commodity risks, PNM enters into master agreements with certain counterparties. If PNM is in a net liability position under an agreement, some agreements provide that the counterparties can request collateral if PNM’s credit rating is downgraded; other agreements provide that the counterparty may request collateral to provide it with “adequate assurance” that PNM will perform; and others have no provision for collateral.

The table below presents information about PNM’s contingent requirement to provide collateral under certain commodity contracts having an objectively determinable collateral position, that are in net liability positions, and that are not fully collateralized with cash. Contractual liability represents those commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. Cash collateral posted under these contracts does not reflect letters of credit under the Company’s revolving credit facilities that may have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchase and
normal sale, offset by existing collateral and by any offsets available under master netting agreements, including both assets and liability positions.

Contingent Feature - Credit Rating
Contractual Liability
Existing Cash Collateral
Net Exposure
(In thousands)
December 31, 2024$5,737 $— $5,737 
December 31, 2023$— $— $— 

Non-Derivative Financial Instruments

The carrying amounts reflected on the Consolidated Balance Sheets approximate fair value for cash, receivables, and payables due to the short period of maturity. Investment securities are carried at fair value. Investment securities consist of PNM assets held in the NDT for its share of decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners. See Note 16. At December 31, 2024 and 2023, the fair value of investment securities included $384.6 million and $361.0 million for the NDT, $8.2 million and $12.3 million for the SJGS decommissioning trust, and $82.7 million and $71.1 million for the coal mine reclamation trusts.

PNM records a realized loss as an impairment for any available-for-sale debt security that has a fair value that is less than its carrying value. As a result, the Company has no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings. Gains and losses recognized on the Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table:
Year ended December 31,
202420232022
(In thousands)
Equity securities:
Net gains (losses) from equity securities sold$28,283 $1,086 $(6,940)
Net gains (losses) from equity securities still held
(10,071)14,152 (38,025)
Total net gains (losses) on equity securities18,212 15,238 (44,965)
Available-for-sale debt securities:
Net gains (losses) on debt securities8,639 4,008 (33,392)
Net gains (losses) on investment securities$26,851 $19,246 $(78,357)

The proceeds and gross realized gains and losses on the disposition of securities held in the NDT and coal mine reclamation trusts are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold. Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $17.8 million, $19.1 million, and $(25.8) million for the years ended December 31, 2024, 2023 and 2022.

 Year Ended December 31,
 202420232022
 (In thousands)
Proceeds from sales$707,338 $574,199 $526,448 
Gross realized gains$35,918 $18,618 $22,071 
Gross realized (losses)$(16,814)$(32,649)$(36,623)
At December 31, 2024, the available-for-sale debt securities held by PNM, had the following final maturities:
 Fair Value
 (In thousands)
Within 1 year$24,446 
After 1 year through 5 years7,898 
$32,344 
Fair Value Disclosures

The Company determines the fair values of its derivative and other financial instruments based on the hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

For investment securities, Level 2 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market values based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value (“NAV”). For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. Management of the Company independently verifies the information provided by pricing services. Uncategorized investments include common/collective investment trusts, which are measured at NAV at the end of each reporting period. Audited financial statements are received for each fund and reviewed by the Company annually. Fair value for these collective investment trusts is measured using a practical expedient provided under GAAP that allows the NAV per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Investments valued using this practical expedient are not required to be presented within the GAAP fair value hierarchy.

Items recorded at fair value by PNM on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale debt securities.
GAAP Fair Value Hierarchy
TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs
(Level 2)		Unrealized Gains
(In thousands)
December 31, 2024
Cash and cash equivalents$150,745 $150,745 $— 
Equity securities:
Corporate stocks, common134,553 134,553 — 
Mutual funds and other135,779 135,779 — 
Available-for-sale debt securities:
U.S. government25,148 25,148 — $202 
Municipals— — — — 
Corporate and other7,196 — 7,196 122 
Investments categorized within the fair value hierarchy
$453,421 $446,225 $7,196 $324 
Uncategorized Collective Investment Trust
22,103 
Total investment securities
$475,524 
GAAP Fair Value Hierarchy
TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs
(Level 2)		Unrealized Gains
December 31, 2023
(In thousands)
Cash and cash equivalents$93,873 $93,873 $— 
Equity securities:
Corporate stocks, common77,422 77,422 — 
Corporate stocks, preferred4,323 504 3,819 
Mutual funds and other57,966 57,966 — 
Available-for-sale debt securities:
U.S. government35,113 34,522 591 $2,055 
International government8,735 — 8,735 104 
Municipals53,436 — 53,436 2,872 
Corporate and other113,540 — 113,540 9,285 
$444,408 $264,287 $180,121 $14,316 
The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Consolidated Balance Sheets are presented below:
 Carrying
Amount		Fair Value
December 31, 2024(In thousands)
TXNM
$4,923,368 $4,706,076 
PNM$2,459,592 $2,284,362 
TNMP$1,464,079 $1,324,194 
December 31, 2023
TXNM
$4,521,811 $4,260,509 
PNM$2,261,780 $2,107,588 
TNMP$1,260,880 $1,152,922 

The carrying amount and fair value of the Company’s other investments presented on the Consolidated Balance Sheets are not material and not shown in the above table.
Investments Held by Employee Benefit Plans
As discussed in Note 11, PNM and TNMP have trusts that hold investment assets for their pension and other postretirement benefit plans. The fair value of the assets held by the trusts impacts the determination of the funded status of each plan, but the assets are not reflected on the Company’s Consolidated Balance Sheets. Both the PNM Pension Plan and the TNMP Pension Plan hold units of participation in the PNM Resources, Inc. Master Trust (the “PNMR Master Trust”), which was established for the investment of assets of the pension plans. The PNM Pension Plan’s investment allocation targets in 2024 consist of 35% equities, 15% alternative investments (both of which are considered return generating), and 50% fixed income. The TNMP Pension Plan’s investment allocation targets in 2024 consist of 16% equities, 14% alternative investments (both of which are considered return generating), and 70% fixed income.
GAAP provides a practical expedient that allows the net asset value per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies.  Fair values for alternative investments held by the PNMR Master Trust and PNM OPEB Plan are valued using this practical expedient. Investments for which fair value is measured using that practical expedient are not required to be categorized within the fair value hierarchy. Level 2 fair values are provided by fund managers utilizing a pricing service. For level 2 fair values, the pricing provider predominately uses the market approach using bid side market value based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value as of year-end. Fair value prices for Level 2 corporate term loans predominately use the market approach which uses bid side market values based upon hierarchy information for specific securities or securities with similar characteristics.
Alternative investments include private equity funds, hedge funds, real estate funds, and a private collective investment trust. The private equity funds are not voluntarily redeemable. These investments are realized through periodic distributions occurring over a 10 to 15 years term after the initial investment. The real estate funds and hedge funds may be voluntarily redeemed but are subject to redemption provisions that may result in the funds not being redeemable in the near term. The private collective investment trust is a non-unitized fund that does not publish daily prices. Audited financial statements are received for each fund and are reviewed by the Company annually.
The valuation of alternative investments requires significant judgment by the pricing provider due to the absence of quoted market values, changes in market conditions, and the long-term nature of the assets. The significant unobservable inputs include estimates of liquidation value, current operating performance, and future expectations of performance.
The fair values of investments held by the employee benefit plans are as follows:
GAAP Fair Value Hierarchy
TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)
December 31, 2024(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy
$319,528 $106,220 $213,308 
Uncategorized investments
59,546 
Total Master Trust Investments$379,074 
TNMP Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy
$33,294 $7,543 $25,751 
Uncategorized investments
4,872 
Total Master Trust Investments$38,166 
PNM OPEB Plan
Cash and cash equivalents$825 $825 $— 
Equity securities:
Mutual funds38,713 38,713 — 
Investments categorized within fair value hierarchy$39,538 $39,538 $— 
Uncategorized investments
31,176 
$70,714 
TNMP OPEB Plan
Cash and cash equivalents$111 $111 $— 
Equity securities:
Mutual funds6,987 6,987 — 
Investments categorized within fair value hierarchy$7,098 $7,098 $— 
Uncategorized investments
484 
$7,582 
GAAP Fair Value Hierarchy
TotalQuoted Prices in Active
Markets for Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)
December 31, 2023(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy$342,296 $136,474 $205,822 
Uncategorized investments65,421 
Total Master Trust Investments$407,717 
TNMP Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy$35,870 $12,192 $23,678 
Uncategorized investments5,258 
Total Master Trust Investments$41,128 
PNM OPEB Plan
Cash and cash equivalents$2,419 $2,419 $— 
Equity securities:
Mutual funds47,674 43,703 3,971 
Investments categorized within fair value hierarchy$50,093 $46,122 $3,971 
Uncategorized investments23,290 
Total Master Trust Investments$73,383 
TNMP OPEB Plan
Cash and cash equivalents$162 $162 $— 
Equity securities:
Mutual funds8,241 7,806 435 
Investments categorized within fair value hierarchy$8,403 $7,968 $435 
The fair values of investments in the PNMR Master Trust are as follows:
GAAP Fair Value Hierarchy
TotalQuoted Prices
in Active Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)
December 31, 2024(In thousands)
PNMR Master Trust
Cash and cash equivalents$10,981 $10,981 $— 
Equity securities:
Corporate stocks, common34,418 34,418 — 
Corporate stocks, preferred— — — 
Mutual funds and other146,858 45,333 101,525 
Fixed income securities:
U.S. government56,303 23,031 33,272 
International government— — — 
Municipals4,718 — 4,718 
Corporate and other99,544 — 99,544 
Total investments categorized within fair value hierarchy
352,822 $113,763 $239,059 
Uncategorized investments:
Private equity funds2,846 
Hedge funds34,126 
Real estate funds27,446 
$417,240 
December 31, 2023
PNMR Master Trust
Cash and cash equivalents$13,995 $13,995 $— 
Equity securities:
Corporate stocks, common27,167 27,167 — 
Corporate stocks, preferred741 741 — 
Mutual funds and other159,281 49,219 110,062 
Fixed income securities:
U.S. government61,684 57,544 4,140 
International government4,713 — 4,713 
Municipals5,071 — 5,071 
Corporate and other105,514 — 105,514 
Total investments categorized within fair value hierarchy
378,166 $148,666 $229,500 
Uncategorized investments:
Private equity funds5,617 
Hedge funds35,137 
Real estate funds29,925 
$448,845 
v3.25.0.1
Variable Interest Entities
 12 Months Ended
Dec. 31, 2024
Variable Interest Entities [Abstract]  
Variable Interest Entities Variable Interest Entities
How an enterprise evaluates and accounts for its involvement with variable interest entities, focuses primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a variable interest entity (“VIE”). This evaluation requires continual reassessment of the primary beneficiary of a VIE.
 
Valencia

PNM has a PPA to purchase all of the electric capacity and energy from Valencia, a 155 MW natural gas-fired power plant near Belen, New Mexico, through May 2028. A third party built, owns, and operates the facility while PNM is the sole purchaser of the electricity generated. PNM is obligated to pay fixed operation and maintenance and capacity charges in
addition to variable operation and maintenance charges under this PPA. For the years ended December 31, 2024, 2023, and 2022, PNM paid $20.5 million, $20.3 million, and $19.5 million for fixed charges and $2.4 million, $5.2 million, and $1.9 million for variable charges. PNM does not have any other financial obligations related to Valencia. The assets of Valencia can only be used to satisfy its obligations and creditors of Valencia do not have any recourse against PNM’s assets. During the term of the PPA, PNM has the option, under certain conditions, to purchase and own up to 50% of the plant or the VIE. The PPA specifies that the purchase price would be the greater of 50% of book value reduced by related indebtedness or 50% of fair market value.
PNM sources fuel for the plant, controls when the facility operates through its dispatch, and receives the entire output of the plant, which factors directly and significantly impact the economic performance of Valencia. Therefore, PNM has concluded that the third-party entity that owns Valencia is a VIE and that PNM is the primary beneficiary of the entity since PNM has the power to direct the activities that most significantly impact the economic performance of Valencia and will absorb the majority of the variability in the cash flows of the plant. As the primary beneficiary, PNM consolidates Valencia in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of Valencia are included in the Consolidated Financial Statements of PNM although PNM has no legal ownership interest or voting control of the VIE. The assets and liabilities of Valencia are set forth below and are not shown separately on the Consolidated Balance Sheets. The owner’s equity and net income of Valencia are considered attributable to non-controlling interest.
Summarized financial information for Valencia is as follows:
Results of Operations
 Year Ended December 31
 202420232022
 (In thousands)
Operating revenues$22,763 $25,421 $21,403 
Operating expenses6,723 6,896 6,281 
Other Misc (Income)/Expense
— (8)— 
Earnings attributable to non-controlling interest$16,040 $18,533 $15,122 
 
Financial Position
 December 31,
 20242023
 (In thousands)
Current assets$3,095 $3,422 
Net property, plant and equipment44,411 47,253 
Total assets47,506 50,675 
Current liabilities606 717 
Owners’ equity – non-controlling interest$46,900 $49,958 

Westmoreland San Juan Mining, LLC

As discussed in the subheading Coal Supply in Note 16, PNM and Westmoreland San Juan Mining, LLC (“WSJ LLC”), a subsidiary of Westmoreland Mining Holdings, LLC have an agreement under which mine reclamation services for SJGS will be provided.

TXNM issued $30.3 million in letters of credit to facilitate the issuance of reclamation bonds. The letters of credit support results in TXNM having a variable interest in WSJ LLC since TXNM is subject to possible loss in the event performance by TXNM is required under the letters of credit support. TXNM considers the possibility of loss under the letters of credit support to be remote since the purpose of posting the bonds is to provide assurance that WSJ LLC performs the required reclamation of the mine site in accordance with applicable regulations and the reclamation services agreement provides WSJ LLC the ability to recover the cost of reclamation. As discussed in Note 16, each of the SJGS participants has established and actively fund trusts to meet future reclamation obligations.
WSJ LLC is considered a VIE.  TXNM’s analysis of its arrangements with WSJ LLC concluded that WSJ LLC has the ability to direct its reclamation services, which are the factors that most significantly impact the economic performance of WSJ LLC.  Other than PNM being able to monitor reclamation activities, the reclamation services were solely under the control of WSJ LLC, including developing reclamation plans, hiring of personnel, and incurring operating and maintenance expenses.
Neither TXNM nor PNM has any ability to direct or influence the reclamation activities.  PNM’s involvement through the reclamation services agreement is a protective right rather than a participating right and WSJ LLC still has the power to direct the activities that most significantly impact the economic performance of WSJ LLC.  If WSJ LLC performs reclamation services more efficiently than anticipated, its economic performance will improve.  Conversely, if WSJ LLC does not perform reclamation services as efficiently as anticipated, its economic performance will be negatively impacted.  Accordingly, TXNM believes WSJ LLC is the primary beneficiary and, therefore, WSJ LLC is not consolidated by either TXNM or PNM. The amounts outstanding under the letters of credit support continue to be TXNM’s maximum exposure to loss from the VIE at December 31, 2024.

ETBC I

ETBC I is a wholly-owned, special purpose, subsidiary of PNM that was formed in August 2023 for the limited purpose of purchasing, owning, and administering energy transition property, issuing Securitized Bonds, and performing related activities authorized by the NMPRC. On November 15, 2023, ETBC I issued the ETBC I Securitized Bonds and used the proceeds to purchase energy transition property from PNM. The energy transition property purchased includes the right to impose, bill, collect, and adjust a non-bypassable energy transition charge from all PNM retail customers until the ETBC I Securitized Bonds are paid in full and all allowed financing costs have been recovered. The ETBC I Securitized bonds are secured by the energy transition property and cash collections from the energy transition charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to PNM.

PNM acts as the servicer of the energy transition property on behalf of ETBC I and is responsible for metering, calculating, billing, and collecting the Energy Transition Charges. On behalf of ETBC I, PNM is required to remit all collections of the Energy Transition Charges to the trustee for the ETBC I Securitized Bonds. PNM has the power to direct the activities that most significantly impact the economic performance of ETBC I and will absorb the majority of the variability in the cash flows of the entity. As the primary beneficiary, PNM consolidates ETBC I in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of ETBC I are included in the Consolidated Financial Statements of PNM.

The following tables summarize the impact of ETBC I on PNM’s Consolidated Financial Statements:

Results of Operations
Year ended December 31,
 20242023
 (In thousands)
Electric Operating Revenues
$24,798 $2,914 
Depreciation and amortization
4,550 407 
Interest Charges
20,073 2,516 
Other
175 (9)
Net Earnings
$— $— 

Financial Position
December 31,
20242023
(In thousands)
Regulatory assets - Current
$— $2,724 
Restricted cash (included in Other current assets)
15,838 — 
Restricted cash (included in Other deferred charges)
1,748 1,728 
Securitized Cost (included in Regulatory assets - Deferred)
336,079 340,629 
Current installments of long-term debt
6,907 2,529 
Accrued interest and taxes
7,452 2,502 
Regulatory liabilities - Current
6,975 — 
Long-term Debt
331,726 338,521 
v3.25.0.1
Pension and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
TXNM and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). TXNM maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of the periodic cost or income to the extent included in retail rates (a “prepaid pension asset”).
Participants in the PNM Plans include eligible employees and retirees of TXNM and PNM. Participants in the TNMP Plans include eligible employees and retirees of TNMP. The PNM pension plan was frozen at the end of 1997 with regard to new participants, salary levels, and benefits. Through December 31, 2007, additional credited service could be accrued under the PNM pension plan up to a limit determined by age and service. The TNMP pension plan was frozen at December 31, 2005 with regard to new participants, salary levels, and benefits.
A plan sponsor is required to (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur.
Unrecognized prior service costs and unrecognized gains or losses are required to be recorded in AOCI and subsequently amortized. To the extent the amortization of these items will ultimately be recovered or returned through future rates, PNM and TNMP record the costs as a regulatory asset or regulatory liability. The amortization of these incurred costs is included as pension and postretirement benefit periodic cost or income in subsequent years.
The Company maintains trust funds for the pension and OPEB plans from which benefits are paid to eligible employees and retirees. The Company’s funding policy is to make contributions to the trusts, as determined by an independent actuary, that comply with minimum guidelines of the Employee Retirement Income Security Act and the IRC. Information concerning the fair value of investments is contained in Note 9. The Company has in place a policy that defines the investment objectives, establishes performance goals of asset managers, and provides procedures for the manner in which investments are to be reviewed. The plans implement investment strategies to achieve the following objectives:
 
•Implement investment strategies commensurate with the risk that the Corporate Investment Committee deems appropriate to meet the obligations of the pension plans and OPEB plans, minimize the volatility of expense, and account for contingencies
•Transition asset mix over the long-term to a higher proportion of high-quality fixed income investments as the plans’ funded statuses improve

Management is responsible for the determination of the asset target mix and the expected rate of return. The target asset allocations are determined based on consultations with external investment advisors. The expected long-term rate of return on pension and postretirement plan assets is calculated on the market-related value of assets. Actual gains and losses on pension and OPEB plan assets are recognized in the market-related value of assets equally over a period of not more than five years, which reduces year-to-year volatility. For the PNM Plans and TNMP Plans, the market-related value of assets is equal to the prior year’s market-related value of assets adjusted for contributions, benefit payments and investment gains and losses that are within a corridor of plus or minus 4.0% around the expected return on market value. Gains and losses that are outside the corridor are amortized over five years.

Pension Plans
For defined benefit pension plans, including the executive retirement plans, the PBO represents the actuarial present value of all benefits attributed by the pension benefit formula to employee service rendered prior to that date using assumptions regarding future compensation levels. The ABO represents the PBO without considering future compensation levels. Since the pension plans are frozen, the PBO and ABO are equal.
The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:
 PNMTNMP
 Year Ended December 31,Year Ended December 31,
 2024202320242023
 (In thousands)
PBO at beginning of year$418,657 $433,645 $42,582 $43,961 
Service cost— — — — 
Interest cost21,709 23,653 2,214 2,402 
Actuarial (gain) loss
(6,063)4,290 (2,047)1,261 
Benefits paid(40,942)(42,931)(3,526)(5,042)
Settlements— — — — 
PBO at end of year393,361 418,657 39,223 42,582 
Fair value of plan assets at beginning of year407,211 410,463 41,353 43,447 
Actual return on plan assets12,884 39,679 247 2,948 
Employer contributions1 — 151 — 
Benefits paid(40,942)(42,931)(3,526)(5,042)
Settlements— — — — 
Fair value of plan assets at end of year379,154 407,211 38,225 41,353 
Funded status – asset (liability) for pension benefits$(14,207)$(11,446)$(998)$(1,229)

Actuarial (gain) loss results from changes in:
PNMTNMP
Year Ended December 31,Year Ended December 31,
2024202320242023
(in thousands)
Discount rates$(9,376)$8,806 $(961)$969 
Demographic experience
3,313 (1,777)(1,125)538 
Mortality rate— (2,739)— (239)
Other assumptions and experience— — 39 (7)
$(6,063)$4,290 $(2,047)$1,261 

The following table presents pre-tax information about net actuarial (gain) loss in AOCI as of December 31, 2024.
 PNMTNMP
 (In thousands)
Amounts in AOCI not yet recognized in net periodic benefit cost at beginning of year
$104,067 $— 
Experience (gain) loss
12,081 456 
Regulatory asset (liability) adjustment(8,853)(456)
Amortization recognized in net periodic benefit (income)(4,782)— 
Amounts in AOCI not yet recognized in net periodic benefit cost at end of year$102,513 $— 
The following table presents the components of net periodic benefit cost (income):
 Year Ended December 31,
 202420232022
 (In thousands)
PNM
Service cost$— $— $— 
Interest cost21,709 23,653 16,857 
Expected return on plan assets(31,029)(29,196)(28,563)
Amortization of net loss10,646 10,583 15,794 
Amortization of prior service cost— — — 
Net periodic benefit cost$1,326 $5,040 $4,088 
TNMP
Service cost$— $— $— 
Interest cost2,214 2,402 1,720 
Expected return on plan assets(2,749)(2,697)(2,472)
Amortization of net loss556 439 932 
Amortization of prior service cost— — — 
Settlement loss— — 1,033 
Net periodic benefit cost$21 $144 $1,213 

The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost (income). Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost (income) would be affected.
 Year Ended December 31,
PNM202420232022
Discount rate for determining December 31 PBO5.78 %5.46 %5.74 %
Discount rate for determining net periodic benefit cost5.46 5.74 3.00 
Expected return on plan assets6.86 6.30 5.50 
Rate of compensation increaseN/AN/AN/A
TNMP
Discount rate for determining December 31 PBO5.78 %5.47 %5.75 %
Discount rate for determining net periodic benefit cost5.47 5.75 3.01 
Expected return on plan assets5.95 5.50 4.40 
Rate of compensation increaseN/AN/AN/A
The assumed discount rate for determining the PBO was determined based on a review of long-term high-grade bonds and management’s expectations. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the PBO. Factors that are considered include, but are not limited to, historic returns on plan assets, current market information on long-term returns (e.g., long-term bond rates) and current and target asset allocations between asset categories. If all other factors were to remain unchanged, a 1% decrease in the expected long-term rate of return would cause PNM’s and TNMP’s 2025 net periodic benefit cost to increase $4.1 million and $0.4 million (analogous changes would result from a 1% increase). The actual rate of return for the PNM and TNMP pension plans was 3.33% and 0.62% for the year ended December 31, 2024.

The Company’s long-term pension investment strategy is to invest in assets whose interest rate sensitivity is correlated with the pension liability. The Company uses an investment strategy, known as Liability Driven Investing, that increases the liability matching investments as the funded status of the pension plans improve. The Company’s investment allocation targets consist of 35% equities, 15% alternative investments (both of which are considered return generating), and 50% liability matching securities that are primarily bonds and other fixed income investments. Equity investments are primarily in domestic securities that include large-, mid-, and small-capitalization companies. The pension plans have a 13% targeted allocation to equities of companies domiciled primarily in developed countries outside of the U.S. The equity investments category includes active and passive managed domestic equity securities that are benchmarked against a variety of style indices. Fixed income investments are primarily corporate bonds of companies from diversified industries and government securities. Alternative investments include investments in hedge funds, real estate funds, and private equity funds. The private equity funds are structured as multi-manager multi-strategy fund of funds to achieve a diversified position in these asset classes. The hedge
funds use multi-strategies that pursue various absolute return strategies such as relative value, merger arbitrage, event driven equities, and structured credit. The real estate investments are commingled real estate portfolios that invest in a diversified portfolio of assets including commercial property, infrastructure, storage facilities and multi-family housing. See Note 9 for fair value information concerning assets held by the pension plans.

The following pension benefit payments are expected to be paid:

PNMTNMP
 (In thousands)
2025$40,927 $4,239 
202639,585 4,188 
202738,706 4,000 
202837,373 3,902 
202936,231 3,759 
2030 - 2034
160,876 15,464 

Based on current law, funding requirements, and estimates of portfolio performance, the Company does not expect to make any cash contributions to the pension plans in 2025 through 2028. PNM does expect to make a cash contribution of $7.9 million in 2029. TNMP does not expect to make any cash contributions to the pension plans from 2025 through 2029. The funding assumptions were developed using a discount rate of 5.35%. Actual amounts to be funded in the future will be dependent on the actuarial assumptions at that time, including the appropriate discount rates. PNM and TNMP may make additional contributions at their discretion.
Other Postretirement Benefit Plans
For postretirement benefit plans, the APBO is the actuarial present value of all future benefits attributed under the terms of the postretirement benefit plan to employee service rendered to date. The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:
 PNMTNMP
 Year Ended December 31,Year Ended December 31,
 2024202320242023
 (In thousands)
APBO at beginning of year$46,217 $49,950 $7,331 $7,705 
Service cost— — 21 21 
Interest cost2,387 2,703 385 425 
Participant contributions1,463 1,592 357 359 
Actuarial (gain)(2,205)(1,608)(147)(282)
Benefits paid(6,261)(6,420)(1,193)(897)
Curtailment loss— — — — 
APBO at end of year41,601 46,217 6,754 7,331 
Fair value of plan assets at beginning of year73,392 70,301 8,353 8,718 
Actual return on plan assets3,216 7,762 25 173 
Employer contributions193 157 — — 
Participant contributions1,463 1,592 357 359 
Benefits paid(6,261)(6,420)(1,193)(897)
Fair value of plan assets at end of year72,003 73,392 7,542 8,353 
Funded status – asset$30,402 $27,175 $788 $1,022 
 
As of December 31, 2024, the fair value of plan assets exceeds the APBO for both PNM’s and TNMP’s OPEB Plans, and the resulting net asset is presented in other deferred charges on the Consolidated Balance Sheets.
Actuarial (gain) loss results from changes in:
PNMTNMP
Year Ended December 31,Year Ended December 31,
2024202320242023
(in thousands)
Discount rates$(877)$868 $(179)$174 
Claims, contributions, and demographic experience(1,425)(2,171)32 (423)
Assumed participation rate97 — — — 
Mortality rate— (305)— (33)
Dental trend assumption— — — — 
$(2,205)$(1,608)$(147)$(282)

In the year ended December 31, 2024, actuarial losses of $0.1 million were recorded as adjustments to regulatory assets for the PNM OPEB plan. For the TNMP OPEB plan, actuarial losses of $0.3 million were recorded as adjustments to regulatory liabilities.

The following table presents the components of net periodic benefit cost (income):
 Year Ended December 31,
 202420232022
 (In thousands)
PNM
Service cost$— $— $10 
Interest cost2,387 2,703 1,914 
Expected return on plan assets(5,563)(4,969)(4,351)
Amortization of net loss— — — 
Curtailment loss— — 836 
Net periodic benefit (income)$(3,176)$(2,266)$(1,591)
TNMP
Service cost$21 $21 $38 
Interest cost385 425 307 
Expected return on plan assets(515)(481)(418)
Amortization of net (gain)(642)(760)(520)
Net periodic benefit (income)$(751)$(795)$(593)

The following significant weighted-average assumptions were used to determine the APBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the APBO and net periodic benefit cost would be affected.
 Year Ended December 31,
PNM202420232022
Discount rate for determining December 31 APBO5.78 %5.48 %5.75 %
Discount rate for determining net periodic benefit cost5.48 5.75 2.99 
Expected return on plan assets6.60 5.90 4.75 
Rate of compensation increaseN/AN/AN/A
TNMP
Discount rate for determining December 31 APBO5.78 %5.48 %5.75 %
Discount rate for determining net periodic benefit cost5.48 5.75 2.99 
Expected return on plan assets5.25 4.70 3.80 
Rate of compensation increaseN/AN/AN/A
The assumed discount rate for determining the APBO was determined based on a review of long-term high-grade bonds and management’s expectations. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the APBO. Factors that are considered include, but are not limited to, historic returns on plan assets, current market information on long-term returns (e.g., long-term bond rates), and current and target asset allocations between asset categories. If all other factors were to remain unchanged, a
1% decrease in the expected long-term rate of return would cause PNM’s and TNMP’s 2025 net periodic benefit cost to increase $0.8 million and $0.1 million (analogous changes would result from a 1% increase). The actual rate of return for the PNM and TNMP OPEB plans was 4.5% and 0.3% for the year ended December 31, 2024.
The following table shows the assumed health care cost trend rates for the PNM OPEB plan: 
 PNM
 December 31,
 20242023
Health care cost trend rate assumed for next year6.50 %6.00 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)4.75 4.75 
Year that the rate reaches the ultimate trend rate20332029
 
TNMP’s exposure to cost increases in the OPEB plan is minimized by a provision that limits TNMP’s share of costs under the plan. Costs of the plan in excess of the limit, which was reached at the end of 2001, are wholly borne by the participants. As a result, a one-percentage-point change in assumed health care cost trend rates would have no effect on either the net periodic expense or the year-end APBO. Effective January 1, 2018, the PNM OPEB plan was amended to limit the annual increase in the Company’s costs to 5%. Increases in excess of the limit are born by the PNM OPEB plan participants.

The Company’s OPEB plans invest in a portfolio that is diversified by asset class and style strategies. The OPEB plans generally use the same pension fixed income and equity investment managers and utilize the same overall investment strategy as described above for the pension plans, except there is no allocation to alternative investments. The OPEB plans have a target asset allocation of 30% equities and 70% fixed income. See Note 9 for fair value information concerning assets held by the other postretirement benefit plans. The following OPEB payments, which reflect expected future service and are net of participant contributions, are expected to be paid:
PNMTNMP
 (In thousands)
2025$4,771 $589 
20264,560 597 
20274,333 588 
20284,128 585 
20293,871 574 
2030 - 2034
16,604 2,606 

PNM and TNMP made cash contributions to the OPEB trusts in 2024 of less than $0.1 million and $0.2 million and did not make any cash contributions in 2023. PNM and TNMP do not expect to make cash contributions to the OPEB trusts in 2025-2029. However, a portion of the disbursements attributable to the OPEB trust are paid by PNM and are therefore considered to be contributions to the PNM OPEB plan. Payments by PNM on behalf of the PNM OPEB plan are expected to be $2.0 million in 2025 and $11.1 million in 2026-2029.

Executive Retirement Programs

For the executive retirement programs, the following table presents information about the PBO and funded status of the plans:
 PNMTNMP
 Year Ended December 31,Year Ended December 31,
 2024202320242023
 (In thousands)
PBO at beginning of year$9,714 $10,042 $316 $344 
Service cost— — — — 
Interest cost496 540 15 18 
Actuarial (gain) loss
(47)411 (314)13 
Benefits paid(1,132)(1,279)(17)(59)
PBO at end of year – funded status9,031 9,714 — 316 
Less current liability1,171 1,210 — 64 
Non-current liability$7,860 $8,504 $— $252 
 
The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2024.
 December 31, 2024
 PNMTNMP
 (In thousands)
Amount in AOCI not yet recognized in net periodic benefit cost at beginning of year
$1,104 $— 
Experience (gain)(45)(314)
Regulatory asset adjustment26 314 
Amortization recognized in net periodic benefit (income)(84)— 
Amount in AOCI not yet recognized in net periodic benefit cost at end of year$1,001 $— 

The following table presents the components of net periodic benefit cost:
 Year Ended December 31,
 202420232022
 (In thousands)
PNM
Service cost$— $— $— 
Interest cost496 540 362 
Amortization of net loss200 152 327 
Amortization of prior service cost— — — 
Net periodic benefit cost$696 $692 $689 
TNMP
Service cost$— $— $— 
Interest cost15 18 11 
Amortization of net loss— — — 
Amortization of prior service cost— — — 
Net periodic benefit cost$15 $18 $11 

The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost would be affected.
 Year Ended December 31,
PNM202420232022
Discount rate for determining December 31 PBO5.78 %5.45 %5.73 %
Discount rate for determining net periodic benefit cost5.45 5.73 3.02 
Long-term rate of return on plan assetsN/AN/AN/A
Rate of compensation increaseN/AN/AN/A
TNMP
Discount rate for determining December 31 PBON/A5.47 %5.75 %
Discount rate for determining net periodic benefit cost5.47 5.75 3.01 
Long-term rate of return on plan assetsN/AN/AN/A
Rate of compensation increaseN/AN/AN/A
 
The assumed discount rate for determining the PBO was determined based on a review of long-term high-grade bonds and management’s expectations. The impacts of changes in assumptions or experience were not significant.

Disbursements under the executive retirement program, funded by PNM and TNMP, which are considered to be contributions to the plan were $1.3 million and less than $0.1 million in the year ended December 31, 2024 and $1.3 million and $0.1 million for the year ended December 31, 2023.
The following executive retirement plan payments, which reflect expected future service, are expected:
PNMTNMP
 (In thousands)
2025$1,205 $— 
20261,150 — 
20271,089 — 
20281,022 — 
2029952 — 
2030 - 2034
3,699 — 

Other Retirement Plans

TXNM sponsors a 401(k) defined contribution plan for eligible employees, including those of its subsidiaries. TXNM’s contributions to the 401(k) plan consist of a discretionary matching contribution equal to 75% of the first 6% of eligible compensation contributed by the employee on a before-tax basis. TXNM also makes a non-matching contribution ranging from 3% to 10% of eligible compensation based on the eligible employee’s age. TXNM also provides executive deferred compensation benefits through an unfunded, non-qualified plan. The purpose of this plan is to permit certain key employees of TXNM who participate in the 401(k) defined contribution plan to defer compensation and receive credits without reference to the certain limitations on contributions.

A summary of expenses for these other retirement plans is as follows:
 Year Ended December 31,
 202420232022
 (In thousands)
TXNM
401(k) plan$17,514 $16,118 $15,844 
Non-qualified plan$4,350 $1,197 $(1,027)
PNM
401(k) plan$11,896 $10,839 $11,067 
Non-qualified plan$2,937 $825 $(721)
TNMP
401(k) plan$5,617 $5,279 $4,776 
Non-qualified plan$1,414 $372 $(305)
v3.25.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
TXNM has various stock-based compensation programs, which provide restricted stock awards, that are performance based and time based, under the Performance Equity Plan (“PEP”). Although certain PNM and TNMP employees are eligible to participate in the TXNM plans, PNM and TNMP do not have separate employee stock-based compensation plans. Performance stock awards awarded under the PEP are awarded for a three-year, overlapping performance period. Performance stock awards with performance periods ending before 2024 or after 2025 are subject to achieving both performance and market targets. Performance stock awards with performance periods ending from 2024 through 2025 do not include market targets. Other awards of restricted stock are only subject to time-based vesting requirements.
 
Performance Equity Plan

The PEP provides for the granting of non-qualified stock options, restricted stock rights, performance shares, performance units, and stock appreciation rights to officers, key employees, and non-employee members of the Board. Restricted stock under the PEP refers to awards of stock subject to vesting, performance, or market conditions rather than to shares with contractual post-vesting restrictions. Generally, the awards vest ratably over three years from the grant date of the award. However, awards with performance or market conditions vest upon satisfaction of those conditions. In addition, plan provisions provide that upon retirement, participants become 100% vested in certain stock awards. The vesting period for awards of restricted stock to non-employee members of the Board is one year. The total number of shares of TXNM common stock subject to all awards under the 2014 PEP, as approved by TXNM’s shareholders in May 2014, may not exceed 13.5 million shares, subject to adjustment and certain share counting rules set forth in the PEP. This share pool is charged five
shares for each share subject to restricted stock or other full value award. In May 2023, TXNM’s shareholders approved the 2023 PEP which set the maximum number of shares subject to all awards to be 2.5 million shares. The 2023 PEP share pool is charged a single share for each award.

Source of Shares

The source of shares for exercised stock options and vested restricted stock is currently shares acquired on the open market by an independent agent, rather than newly issued shares.

Accounting for Stock Awards
    
The stock-based compensation expense related to restricted stock awards without performance or market conditions to participants that are retirement eligible on the grant date is recognized immediately at the grant date and is not amortized. Compensation expense for other such awards is amortized to compensation expense over the shorter of the requisite vesting period or the period until the participant becomes retirement eligible. Compensation expense for performance-based shares is recognized ratably over the performance period as required service is provided and is adjusted periodically to reflect the level of achievement expected to be attained. Compensation expense related to market-based shares is recognized ratably over the measurement period, regardless of the actual level of achievement, provided the employees meet their service requirements.

Total compensation expense for stock-based payment arrangements recognized by TXNM for the years ended December 31, 2024, 2023, and 2022 was $9.5 million, $7.2 million, and $7.9 million. Stock compensation expense of $5.0 million, $4.8 million, and $5.3 million was charged to PNM and $2.7 million, $2.4 million, and $2.6 million was charged to TNMP. At December 31, 2024, TXNM had unrecognized compensation expense related to stock awards of $5.0 million, which is expected to be recognized over an average of 2.26 years.

TXNM receives a tax deduction for the value of restricted stock at the vesting date. To the extent the tax deduction exceeds the Company’s cumulative expense related to a stock award, an excess tax benefit is recorded. When the cumulative expense exceeds the tax deduction, a tax deficiency is recorded. All excess tax benefits and deficiencies are recorded to tax expense and classified as operating cash flows when used to reduce taxes payable.

 Year Ended December 31,
Excess Tax Benefits (Deficiencies)202420232022
(In thousands)
PNM$10 $185 $(65)
TNMP4 76 (26)
TXNM
17 261 (91)

TNMP used excess tax benefits to reduce income taxes payable and the benefit was reflected in cash flows from operating activities. The benefit of excess tax benefits at PNM and TXNM will be reflected in operating cash flows when they reduce income taxes payable.

The grant date fair value for restricted stock and stock awards with Company internal performance targets is determined based on the market price of TXNM common stock on the date of the agreements reduced by the present value of future dividends that will not be received prior to vesting. The grant date fair value is applied to the total number of shares that are anticipated to vest, although the number of performance shares that ultimately vest cannot be determined until after the performance periods end. The grant date fair value of stock awards with market targets is determined using Monte Carlo simulation models, which provide grant date fair values that include an expectation of the number of shares to vest at the end of the measurement period.
The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:
 Year Ended December 31,
Restricted Shares and Performance-Based Shares202420232022
Expected quarterly dividends per share$0.3875 $0.3675 $0.3475 
Risk-free interest rate4.27 %4.46 %1.46 %
Market-Based Shares (1)
Dividend yield4.21 %N/AN/A
Expected volatility13.09 %N/AN/A
Risk-free interest rate4.31 %N/AN/A
(1) Restricted stock expected to be awarded under the PEP for performance periods ending in 2022 and 2023 do not have market targets.

The following table summarizes activity in restricted stock awards including performance-based and market-based shares:
Restricted Stock
SharesWeighted-Average Grant Date Fair Value
Outstanding at December 31, 2023212,080 $40.33 
Granted249,282 33.51 
Released(218,403)38.37 
Forfeited(1,722)43.80 
Outstanding at December 31, 2024241,237 $37.05 
 
Included as granted and released in the table above are 80,492 previously awarded shares that were earned for the 2021 - 2023 performance measurement period and ratified by the Board in February 2024 (based upon achieving targets at above “target”, below “maximum” levels). Also included, as granted and released, are 8,791 of other RSAs for participants who retired and immediately vested plus a one-time sign-on RSA that immediately vested (discussed below). Excluded from the above table are 49,489 previously awarded shares that were earned for the 2022 - 2024 performance measurement period and ratified by the Board in February 2025 (based upon achieving targets at above “threshold”, below “target” levels). Also excluded from the table above are 150,976 and 227,472 shares for the three-year performance periods ending in 2025 and 2026 that will be awarded if all performance criteria are achieved at maximum levels and all executives remain eligible.

On December 4, 2023, the Company entered into retention agreements with its Chairman and Chief Executive Officer and its Senior Vice President and General Counsel under which they would be awarded a total of 26,766 and 8,922 respectively of restricted stock rights if they remained employed through the award’s vesting date which is the earliest of 24 months from the grant date, the closing of the Merger, or six months following the termination of the Merger. As of December 31, 2023, upon the notice from Avangrid regarding the termination of the Merger Agreement, these awards vested on June 30, 2024.

On December 4, 2023, the Company entered into a retention agreement with its President and Chief Operating Officer under which he would receive a retention bonus of $1.0 million to be paid in increments beginning in December 2023 and continuing each December until 2025. On April 8, 2024, pursuant to the retention agreement, the Board elected to convert the unvested portion of the retention bonus of $0.8 million into restricted stock rights whereby each share of restricted stock is equal to one share of Company common stock as of the first trading day after expiration of the then current black-out period. On May 3, 2024, subsequent to the expiration of the black-out period, 19,851 restricted stock rights were awarded and 6,617 have vested as of December 31, 2024, in accordance with the original terms of the retention agreement.

On September 16, 2024, in connection with a one-time sign-on equity grant, the Company’s newly appointed General Counsel, Senior Vice President Regulatory and Public Policy, and Corporate Secretary was awarded 9,300 shares of restricted stock, of which 50% vested immediately and the remaining 50% will vest on the first anniversary of his start date, subject to continued employment through the vesting date.
The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares:
 Year Ended December 31,
Restricted Stock202420232022
Weighted-average grant date fair value$38.37 $41.98 $41.04 
Total fair value of restricted shares that vested (in thousands)$8,380 $8,689 $7,368 
v3.25.0.1
Regulatory Assets and Liabilities
 12 Months Ended
Dec. 31, 2024
Regulated Operations [Abstract]  
Regulatory Assets and Liabilities Regulatory Assets and Liabilities
The operations of PNM and TNMP are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to its regulated operations. Regulatory assets represent probable future recovery of previously incurred costs that will be collected from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are to be credited to customers through the ratemaking process. Regulatory assets and liabilities reflected in the Consolidated Balance Sheets are presented below.
 
PNMTNMP
 December 31,December 31,
 2024202320242023
Assets:(In thousands)
Current:
FPPAC$30,487 $65,251 $— $— 
NMPRC Hedging Plan
5,737 — — — 
Transmission cost recovery factor
— — 5,268 — 
Energy efficiency costs— — — 50 
Renewable energy rider
— 5,021 — — 
SJGS Energy Transition Property
— 2,724 — — 
36,224 72,996 5,268 50 
Non-Current:
SJGS Energy Transition Property
$336,079 $340,629 $— $— 
SJGS ETA
24,996 — — — 
SJGS - non-ETA
114,333 122,246 — — 
PVNGS leased interest
82,982 80,777 — — 
EIM15,189 18,731 — — 
TEP
4,942 2,644 — — 
Loss on reacquired debt12,507 13,806 23,721 25,019 
Pension and OPEB
176,171 172,508 21,087 21,854 
Deferred income taxes74,925 71,359 8,570 8,882 
Excess ADIT
— — 6,542 — 
AMS retirement and other costs— — 12,851 12,343 
Deferred COVID-19 costs3,328 5,664 — — 
Hurricane Beryl
— — 20,958 — 
Other11,858 10,363 10,964 7,556 
857,310 838,727 104,693 75,654 
Total regulatory assets$893,534 $911,723 $109,961 $75,704 
PNMTNMP
December 31,December 31,
2024202320242023
Liabilities:
(In thousands)
Current:
SJGS rate refunds
$(157)$(113,372)$— $— 
PVNGS rate refunds
(19,194)(19,194)— — 
Renewable energy rider
(4,786)— — — 
Energy efficiency costs(2,459)(1,454)(602)— 
Transmission Cost Recovery Factor
— — — (5,159)
SJGS Energy Transition Property
(6,975)— 
NMPRC hedging plan
— (826)— — 
(33,571)(134,846)(602)(5,159)
Non-Current:
Cost of removal$(247,280)$(247,627)$(147,296)$(117,759)
Deferred income taxes(253,158)(281,588)(80,152)(83,459)
Renewable energy tax benefits
(13,317)(14,463)— — 
PVNGS rate refunds
(3,277)(19,194)— — 
Pension and OPEB— — (2,589)(3,644)
COVID-19 cost savings(469)(900)— — 
Other(1,200)(1,249)— (1,434)
(518,701)(565,021)(230,037)(206,296)
Total regulatory liabilities$(552,272)$(699,867)$(230,639)$(211,455)

The Company’s regulatory assets and regulatory liabilities are reflected in rates charged to customers or have been addressed in a regulatory proceeding. The Company does not receive or pay a rate of return on the following regulatory assets and regulatory liabilities (and their remaining amortization periods): SJGS Energy Transition Property (over the life of the ETBC I Securitized Bonds); portions of PVNGS Leased Interest (through 2044); SJGS rate refunds (through 2024); PVNGS rate refunds (through 2025); deferred income taxes (over the remaining life of the taxable item, up to the remaining life of utility plant); pension and OPEB costs (through 2040).

The Company is permitted, under rate regulation, to accrue and record a regulatory liability for the estimated cost of removal and salvage associated with certain of its assets through depreciation expense. Actuarial losses and prior service costs for pension plans are required to be recorded in AOCI; however, to the extent authorized for recovery through the regulatory process these amounts are recorded as regulatory assets or liabilities. Based on prior regulatory approvals, the amortization of these amounts will be included in the Company’s rates. Based on a current evaluation of the various factors and conditions that are expected to impact future cost recovery, the Company believes that future recovery of its regulatory assets is probable.
v3.25.0.1
Construction Program and Jointly-Owned Electric Generating Plants
 12 Months Ended
Dec. 31, 2024
Construction Program and Jointly-Owned Electric Generating Plants [Abstract]  
Construction Program and Jointly-Owned Electric Generating Plants Construction Program and Jointly-Owned Electric Generating Plants
PNM is a participant in jointly-owned power plant projects. The participation agreement for SJGS expired on September 30, 2022. The primary operating or participation agreements for the other joint projects expire in July 2041 for Four Corners, December 2046 for Luna, and November 2047 for PVNGS.
PNM’s expenditures for additions to utility plant were $682.4 million in 2024, including expenditures on jointly-owned projects. TNMP does not participate in the ownership or operation of any generating plants, but incurred expenditures for additions to utility plant of $541.6 million during 2024. On a consolidated basis, TXNM’s expenditures for additions to utility plant were $1,247.0 million in 2024.
 
Joint Projects

Under the agreements for the jointly-owned projects, PNM has an undivided interest in each asset and liability of the project and records its pro-rata share of each item in the corresponding asset and liability account on PNM’s Consolidated Balance Sheets. Likewise, PNM records its pro-rata share of each item of operating and maintenance expenses for its jointly-owned plants within the corresponding operating expense account in its Consolidated Statements of Earnings. PNM is responsible for financing its share of the capital and operating costs of the joint projects.
At December 31, 2024, PNM’s interests and investments in jointly-owned generating facilities are:
Station (Type)Plant in
Service
Accumulated
Depreciation (1)
Construction
Work in
Progress		Composite
Interest
 (In thousands)
PVNGS (Nuclear) $800,999 $415,747 $32,650 7.29 %
Four Corners Units 4 and 5 (Coal)$291,355 $98,049 $14,579 13.00 %
Luna (Gas)$99,479 $37,448 $2,658 33.33 %
(1) Includes cost of removal.
Palo Verde Nuclear Generating Station
PNM is a participant in the three units of PVNGS with APS (the operating agent), SRP, EPE, SCE, SCPPA, and The Department of Water and Power of the City of Los Angeles. PNM has ownership interests of 2.3% in Unit 1, 9.4% in Unit 2, and 10.2% in Unit 3. PNM previously had a 10.2% undivided interest in PVNGS, with portions of its interests in Units 1 and 2 held under leases. In January 2023, leased capacity of 104 MW in PVNGS Unit 1 expired and the rights to the capacity were acquired by SRP from the lessors subsequently, reducing PNM’s interest in PVNGS to 7.6% at December 31, 2023. In January 2024, the leased capacity of 10 MW in PVNGS Unit 2 expired and the rights were also acquired by SRP, further reducing PNM’s interest in PVNGS to 7.3%. See Note 8 for additional information concerning the PVNGS leases.
Four Corners Power Plant
PNM is a participant in two units of Four Corners with APS (the operating agent), an affiliate of APS, SRP, and Tucson. PNM has a 13.0% undivided interest in Units 4 and 5 of Four Corners. The Four Corners plant site is located on land within the Navajo Nation and is subject to an easement from the federal government. APS, on behalf of the Four Corners participants, negotiated amendments to an existing agreement with the Navajo Nation, which extends the owners’ right to operate the plant on the site to July 2041. See Notes 16 and 17 for additional information about Four Corners.


Luna Energy Facility

Luna is a combined-cycle power plant near Deming, New Mexico. Luna is owned equally by PNM, Tucson, and Samchully Power & Utilities 1, LLC. The operation and maintenance of the facility has been contracted to North American Energy Services by PNM.
v3.25.0.1
Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2024
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations Asset Retirement Obligations
AROs are recorded based on studies to estimate the amount and timing of future ARO expenditures and reflect underlying assumptions, such as discount rates, estimates of the future costs for decommissioning, and the timing of the removal activities to be performed. Approximately 75.7% of PNM’s total ARO liabilities are related to nuclear decommissioning of PVNGS. PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS, including portions both during and after termination of the leases. Studies of the decommissioning costs of PVNGS, SJGS, Four Corners, and other facilities are performed periodically and revisions to the ARO liabilities are recorded. Changes in the assumptions underlying the calculations may also require revisions to the estimated AROs when identified.
A reconciliation of the ARO liabilities is as follows:
TXNM
PNMTNMP
 (In thousands)
Liability at December 31, 2021$234,146 $233,383 $763 
Liabilities incurred— — — 
Liabilities settled— — — 
Accretion expense10,767 10,702 65 
Revisions to estimated cash flows(1)
(21,536)(21,536)— 
Liability at December 31, 2022223,377 222,549 828 
Liabilities incurred— — — 
Liabilities settled(3,482)(3,482)— 
Accretion expense10,218 10,148 70 
Revisions to estimated cash flows(2)
15,418 15,418 — 
Liability at December 31, 2023245,531 244,633 898 
Liabilities incurred— — — 
Liabilities settled(12,451)(12,432)(19)
Accretion expense11,538 11,462 76 
Revisions to estimated cash flows
— — — 
Liability at December 31, 2024$244,618 $243,663 $955 

(1) Reflects a decrease of $21.5 million related to an updated SJGS decommissioning study.
(2) Reflects an increase of $15.4 million related to an updated PVNGS decommissioning study.
v3.25.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Overview
There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory proceedings in the normal course of its business. See Note 17. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows.
With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. The Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimatable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, or commitments will have a material effect on its financial condition, results of operations, or cash flows.

Commitments and Contingencies Related to the Environment

PVNGS Decommissioning Funding

The costs of decommissioning a nuclear power plant are substantial. PNM is responsible for all decommissioning obligations related to its entire interest in PVNGS, including portions under leases both during and after termination of the leases. PNM has a program for funding its share of decommissioning costs for PVNGS, including portions previously held under leases. The nuclear decommissioning funding program is invested in equities and fixed income instruments in qualified and non-qualified trusts. PNM funded $1.3 million for each of the years ended December 31, 2024, 2023 and 2022 into the qualified trust funds. The fair value of the trusts at December 31, 2024 and 2023 was $384.6 and $361.0 million.
Nuclear Spent Fuel and Waste Disposal
Nuclear power plant operators are required to enter into spent fuel disposal contracts with the DOE that require the DOE to accept and dispose of all spent nuclear fuel and other high-level radioactive wastes generated by domestic power reactors. Although the Nuclear Waste Policy Act required the DOE to develop a permanent repository for the storage and disposal of spent nuclear fuel by 1998, the DOE announced that it would not be able to open the repository by 1998 and sought to excuse its performance of these requirements. In November 1997, the DC Circuit issued a decision preventing the DOE from excusing its own delay but refused to order the DOE to begin accepting spent nuclear fuel. Based on this decision and the DOE’s delay, a number of utilities, including APS (on behalf of itself and the other PVNGS owners, including PNM), filed damages actions against the DOE in the Court of Federal Claims. The lawsuits filed by APS alleged that damages were incurred due to DOE’s continuing failure to remove spent nuclear fuel and high-level waste from PVNGS. APS and the DOE entered into a settlement agreement, subsequently extended, that established a process for the payment of claims for costs incurred through December 31, 2025. Under the settlement agreement, APS must submit claims annually for payment of allowable costs. PNM records estimated claims on a quarterly basis. The benefit from the claims is passed through to customers under the FPPAC.

PNM estimates that it will incur approximately $55.6 million (in 2023 dollars) for its share of the costs related to the on-site interim storage of spent nuclear fuel at PVNGS for the remaining term of the operating licenses. PNM accrues these costs as a component of fuel expense as the nuclear fuel is consumed. At December 31, 2024 and 2023, PNM had a liability for interim storage costs of $13.4 million and $11.0 million, which is included in other deferred credits.

PVNGS has sufficient capacity at its on-site Independent Spent Fuel Storage Installation (“ISFSI”) to store all of the nuclear fuel that will be irradiated during the initial operating license period, which ends in December 2027.  Additionally, PVNGS has sufficient capacity at its on-site ISFSI to store a portion of the fuel that will be irradiated during the period of extended operation, which ends in November 2047.  If uncertainties regarding the U.S. government’s obligation to accept and store spent fuel are not favorably resolved, APS will evaluate alternative storage solutions that may obviate the need to expand the ISFSI to accommodate all of the fuel that will be irradiated during the period of extended operation.

The Energy Transition Act

The Energy Transition Act (“ETA”) sets a statewide standard that requires investor-owned electric utilities to have specified percentages of their electric-generating portfolios be from renewable and zero-carbon generating resources. The ETA requires utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. The ETA also allows for the recovery of undepreciated investments and decommissioning costs related to qualifying EGUs that the NMPRC has required be removed from retail jurisdictional rates, provided replacement resources to be included in retail rates have lower or zero-carbon emissions. The ETA requires the NMPRC to review and approve utilities’ annual renewable portfolio plans to ensure compliance with the RPS. Also pursuant to the ETA, the New Mexico Environmental Improvement Board adopted standards of performance that limit CO2 emissions to no more than 1,100 lbs. per MWh beginning January 1, 2023 for new and existing coal-fired EGUs with original installed capacities exceeding 300 MW.

The ETA provides for a transition from fossil-fuel generation resources to renewable and other carbon-free resources through certain provisions relating to the abandonment of coal-fired generating facilities. These provisions include the use of energy transition bonds, which are designed to be highly rated bonds that can be issued to finance certain costs of abandoning coal-fired facilities that are retired prior to January 1, 2023 for facilities operated by a “qualifying utility,” or prior to January 1, 2032 for facilities that are not operated by a qualifying utility. The amount of energy transition bonds that can be issued to recover abandonment costs is limited to the lesser of $375.0 million or 150% of the undepreciated investment of the facility as of the abandonment date. Proceeds provided by energy transition bonds must be used only for purposes related to providing utility service to customers and to pay energy transition costs (as defined by the ETA). These costs may include plant decommissioning and coal mine reclamation costs provided those costs have not previously been recovered from customers or disallowed by the NMPRC or by a court order. Proceeds from energy transition bonds may also be used to fund severances for employees of the retired facility and related coal mine and to promote economic development, education and job training in areas impacted by the retirement of the coal-fired facilities. Energy transition bonds must be issued under a NMPRC-approved financing order, are secured by “energy transition property,” are non-recourse to the issuing utility, and are repaid by a non-bypassable charge paid by all customers of the issuing utility. These customer charges are subject to an adjustment mechanism designed to provide for timely and complete payment of principal and interest due under the energy transition bonds.
The ETA also provides that utilities must obtain NMPRC approval of competitively procured replacement resources that shall be evaluated based on their cost, economic development opportunity, ability to provide jobs with comparable pay and benefits to those lost upon retirement of the facility, and that do not exceed emissions thresholds specified in the ETA. In determining whether to approve replacement resources, the NMPRC must give preference to resources with the least environmental impacts, those with higher ratios of capital costs to fuel costs, and those located in the school district of the abandoned facility. The ETA also provides for the procurement of energy storage facilities and gives utilities discretion to maintain, control, and operate these systems to ensure reliable and efficient service.

The ETA has had and will have a significant impact on PNM’s future generation portfolio, including PNM’s retirement of SJGS in 2022. PNM cannot predict the full impact of the ETA with respect to Four Corners or the outcome of its future generating resource abandonment and replacement resource filings with the NMPRC. See additional discussion in Note 17 of PNM’s SJGS and Four Corners Abandonment Applications.

The Clean Air Act
Regional Haze

Pursuant to the CAA, states are required to establish goals for improving visibility in national parks and wilderness areas (also known as Class I areas) and to develop long-term strategies for reducing emissions of air pollutants that cause visibility impairment in their own states and for preventing degradation in other states. States must establish a series of interim goals to ensure continued progress by adopting a new SIP every ten years. In the first SIP planning period, states were required to conduct BART determinations for certain covered facilities, including utility boilers, built between 1962 and 1977 that have the potential to emit more than 250 tons per year of visibility impairing pollution. For all future SIP planning periods, states must evaluate whether additional emissions reduction measures may be needed to continue making reasonable progress toward natural visibility conditions.

SIPs for the second planning period were due in July 2021, which deadline NMED was unable to meet. NMED is currently preparing its SIP for the second compliance period and has notified PNM that it will not be required to submit a regional haze four-factor analysis for SJGS since PNM retired its share of SJGS in 2022. On August 30, 2022, EPA published in the Federal Register an official “Finding of Failure to Submit” for states, including New Mexico, that have not yet submitted a round 2 regional haze SIP. This action by EPA started a 2-year clock for it to issue a Federal Implementation Plan (“FIP”), which deadline has now passed. NMED petitioned the NM Environmental Improvement Board to adopt a proposed SIP. The public hearing that was scheduled for December 18, 2024 was cancelled and a new hearing is scheduled for April 28 to April 30, 2025. PNM submitted comments on the proposed SIP in response to a request for comments by NMED.

Carbon Dioxide Emissions

In 2015, EPA established standards to limit CO2 emissions from power plants, including (1) Carbon Pollution Standards for new, modified, and reconstructed power plants; and (2) the Clean Power Plan for existing power plants. Challengers successfully petitioned the US Supreme Court for a stay of the Clean Power Plan. In 2019, EPA repealed the Clean Power Plan, promulgated the ACE Rule, and revised the implementing regulations for all emission guidelines. The ACE Rule was also challenged, and on January 19, 2021, the DC Circuit issued an opinion in American Lung Association and American Public Health Association v. EPA, et al., vacating the ACE Rule.

Numerous parties sought review by the US Supreme Court, and on June 30, 2022, the Court held that the “generation shifting” approach in the Clean Power Plan exceeded the powers granted to EPA by Congress. Of broader significance in administrative law, the Court’s opinion expressly invoked the “major question” doctrine, which requires rules involving issues of “vast economic or political significance” to be supported by clear statutory authorization. In cases where there is no clear statement of authority, courts need not defer to the agency’s statutory interpretation on “major questions.” The decision sets legal precedent for future rulemakings by EPA and other federal regulatory agencies whereby the agencies’ authority may be limited based upon similar reasoning.

The litigation over the Carbon Pollution Standards remains held in abeyance but could be reactivated by the parties upon a determination by the court that reconsideration of the rule has concluded.

In 2024, EPA adopted regulatory actions under CAA sections 111(b) and (d) to replace the Clean Power Plan and the ACE Rule. The final rules include revised new source performance standards under Section 111(b) for all new natural gas-fired combustion turbines and emission guidelines under Section 111(d) requiring states to develop standards of performance for GHG emissions from existing fossil-fuel-fired electric steam generating units. In the final rules, EPA determined that the
standards for existing coal- or gas-fired steam generating units must be based on the use of either CCS (long-term), natural gas co-firing (medium-term), or exempt from the rule via early retirement. The standards for new combustion turbines must be based on CCS (base load), efficient simple cycle design (intermediate load), or lower-emitting fuels (low load). Over a dozen states, several industry groups and some power companies and labor unions have filed challenges to the rule at the DC Circuit, which heard oral arguments on December 6, 2024. However, President Trump issued several executive orders on January 20, 2025, directing his administration to review all agency actions and suspend, revise, or rescind those identified as imposing an undue burden on domestic energy resources, which will likely include the rules for greenhouse gas emissions from new combustion turbines and existing steam generation units.

Because the CAA 111 rule does not contain provisions for existing natural gas units, on March 26, 2024, EPA announced it was opening a non-regulatory docket and issued framing questions to gather input about ways to design a stronger, more durable approach to GHG regulation of existing gas combustion turbines. The docket was open for public comment from March 26, 2024 to May 28, 2024 and the agency held a policy forum to bring stakeholders together to share ideas with EPA and others. Under the new Trump Administration, EPA is unlikely to propose a rule based on this non-regulatory docket.

In 2021, President Biden signed an extensive executive order aimed at addressing climate change concerns domestically and internationally. The order is intended to build on the initial climate-related actions the Biden Administration took on January 20, 2021. It addresses a wide range of issues, including establishing climate change concerns as an essential element of U.S. foreign and security policy, identifying a process to determine the U.S. INDC under the Paris Agreement, and establishing a Special Presidential Envoy for Climate that will sit on the National Security Council. On April 22, 2021, at the Earth Day Summit, as part of the U.S.’s re-entry into the Paris Agreement, President Biden unveiled the goal to cut U.S. emissions by 50% - 52% from 2005 levels by 2030, nearly double the GHG emissions reduction target set by the Obama Administration. The 2030 goal joins President Biden’s other climate goals which include a carbon pollution-free power sector by 2035 and a net-zero emissions economy by no later than 2050. In an executive order issued January 20, 2025, President Trump ordered his administration to withdraw the United States from Paris Agreement and from any agreement, pact, accord, or similar commitment made under the United Nations Framework Convention on Climate Change.

PNM’s review of the GHG emission reductions standards that have or may occur as a result of legislation or regulation is ongoing. We are currently determining what impact, if any, the final rules will have on PNM’s business, results of operations, and financial condition.

National Ambient Air Quality Standards (“NAAQS”)

The CAA requires EPA to set NAAQS for pollutants reasonably anticipated to endanger public health or welfare. EPA has set NAAQS for certain pollutants, including NOx, SO2, ozone, and particulate matter.

NOX Standard – In 2018, EPA published the final rule to retain the current primary health-based NOx standards of which NO2 is the constituent of greatest concern and is the indicator for the primary NAAQS. EPA concluded that the current 1-hour and annual primary NO2 standards are requisite to protect public health with an adequate margin of safety. The rule became effective on May 18, 2018. The State of New Mexico has attained the current NOx NAAQS standards.

SO2 Standard – In 2019, EPA announced its final decision to retain, without changes, the primary health-based NAAQS for SO2. Specifically, EPA retained the current 1-hour standard for SO2, which is 75 parts per billion, based on the 3-year average of the 99th percentile of daily maximum 1-hour SO2 concentrations. In 2021, EPA published in the Federal Register the initial air quality designations for all remaining areas not yet designated under the 2010 SO2 Primary NAAQS. All areas of New Mexico have been designated attainment/unclassifiable through four rounds of designations by EPA.

Ozone Standard – In 2015, EPA finalized the new ozone NAAQS and lowered both the primary and secondary 8-hour standard from 75 to 70 parts per billion. With ozone standards becoming more stringent, fossil-fueled generation units will come under increasing pressure to reduce emissions of NOx and volatile organic compounds since these are the pollutants that form ground-level ozone. During 2017 and 2018, EPA released rules establishing area designations for ozone. In those rules, San Juan County, New Mexico, where Four Corners is located, is designated as attainment/unclassifiable and only a small area in Doña Ana County, New Mexico is designated as marginal non-attainment.  Although Afton Generating Station is located in Doña Ana County, it is not located within the small area designated as non-attainment for the 2015 ozone standard. PNM does not believe there will be material impacts to its facilities because of the non-attainment designation of the small area within Doña Ana County. Until EPA approves attainment designations for the Navajo Nation and releases a proposal to implement the revised ozone NAAQS, PNM is unable to predict what impact the adoption of these standards may have on Four Corners. On July 13, 2020, EPA proposed to retain the existing ozone NAAQS based on a review of the full body of currently available
scientific evidence and exposure/risk information, but on August 21, 2023, EPA announced an entirely new review of the ozone standard. PNM cannot predict the outcome of this matter.

In 2019, EPA issued findings that several states, including New Mexico, had failed to submit interstate transport SIPs for the 2015 8-hour ozone NAAQS, triggering an obligation for EPA to issue a federal implementation plan within two years. In response, NMED submitted a Good Neighbor SIP on July 27, 2021 that demonstrates that there are no significant contributions from New Mexico to downwind problems in meeting the federal ozone standard. On March 15, 2023, EPA Administrator Regan signed a final action imposing a FIP on multiple states but did not include a FIP for New Mexico because the most updated modeling available at the time of the proposal confirmed the state did not contribute to downwind ozone nonattainment or maintenance areas. However, the updated modeling EPA used in the final rule indicated that New Mexico may be significantly contributing to one or more non-attainment or maintenance areas. In light of that modeling result, on February 16, 2024, the EPA published a proposed rule partially disapproving the SIPs for New Mexico and four other states (Arizona, Iowa, Kansas, Tennessee) and expanding the Good Neighbor FIP to apply to these states. The FIP aspect of the proposed rule would have required fossil fuel-fired power plants in these five states to participate in an allowance-based ozone season NOx emissions trading program beginning in 2025, but the outgoing Biden Administration did not finalize the rule, and the new Trump administration is highly unlikely to finalize it.

PM Standard – In 2023, EPA published, in the Federal Register, a proposal to lower the annual fine PM standard to between 9-10 µg/m3 but retain the rest of its PM standards, including the current daily fine PM standard, the daily coarse PM standard, and the secondary PM standards. The final rule was published on March 6, 2024, lowering the primary annual PM 2.5 NAAQS to 9 ug/m3. The rule became effective May 6, 2024, and states will have until March 2032 to attain compliance with the new standard. During the multi-year implementation process, EPA will designate attainment/nonattainment areas by March 6, 2026, and states will submit a State Implementation Plan to EPA by September 6, 2027. This implementation process also applies to the Albuquerque-Bernalillo County Environmental Health Department who may combine efforts with NMED. Bernalillo County does not currently meet the 9 ug/m3 standard which may impact future air permitting activities at Rio Bravo and Reeves Generating Stations if the county is designated as nonattainment. However, even before any designations are made, the new standard is effective for conducting required modeling for permit applications and revisions. The lower standard is expected to result in new nonattainment areas throughout the country and could prompt additional PM control requirements, but PNM cannot predict the impacts of the outcome of future rulemaking.

Cooling Water Intake Structures
In 2014, EPA issued a rule establishing national standards for certain cooling water intake structures at existing power plants and other facilities under the Clean Water Act to protect fish and other aquatic organisms by minimizing impingement mortality (the capture of aquatic wildlife on intake structures or against screens) and entrainment mortality (the capture of fish or shellfish in water flow entering and passing through intake structures).
To minimize impingement mortality, the rule provides operators of facilities, such as Four Corners, seven options for meeting Best Technology Available (“BTA”) standards for reducing impingement. The permitting authority must establish the BTA for entrainment on a site-specific basis, taking into consideration an array of factors, including endangered species and social costs and benefits. Affected sources must submit source water baseline characterization data to the permitting authority to assist in the BTA determination. Compliance deadlines under the rule are tied to permit renewal, including any subject to a schedule of compliance established by the permitting authority in the permit.

In 2018, several environmental groups sued EPA Region IX in the U.S. Court of Appeals for the Ninth Circuit over EPA’s failure to timely reissue the Four Corners NPDES permit. The petitioners asked the court to issue a writ of mandamus compelling EPA Region IX to take final action on the pending NPDES permit by a reasonable date. EPA subsequently reissued the NPDES permit. The permit did not contain conditions related to the cooling water intake structure rule, because EPA determined that the facility had achieved BTA for both impingement and entrainment by operating a closed-cycle recirculation system. Several environmental groups filed a petition for review with EPA’s Environmental Appeals Board (“EAB”) concerning the reissued permit. The environmental groups alleged that the permit was reissued in contravention of the Clean Water Act and did not contain limits or conditions required by EPA’s Effluent Limitations Guidelines (“ELG”) applicable to Four Corners or EPA’s cooling water intake structures rule, among others. EPA withdrew the Four Corners NPDES permit in order to examine the issues raised by the environmental groups and then issued an updated NPDES permit in 2019. The permit was once again appealed to the EAB and was stayed before the effective date, but the EAB issued an order denying the petition for review on September 30, 2020. Thereafter, the Regional Administrator of the EPA signed a notice of final permit decision, and the NPDES permit was issued on November 9, 2020. The permit became effective December 1, 2020. On January 22, 2021, the environmental groups filed a petition for review of the EAB’s decision with the U.S. Court of Appeals for the Ninth
Circuit. The September 2019 permit remained in effect pending the outcome of this appeal. On March 21, 2022, EPA provided notice in the Federal Register of a proposed settlement agreement with the environmental groups. The parties subsequently executed the settlement agreement as of May 2, 2022. Under the settlement, the lawsuit was administratively closed through September 6, 2023, during which time a third-party consultant spent 12 months sampling discharges from Four Corners and EPA spent three months completing an analysis. On December 1, 2023, EPA issued a modification, effective December 31, 2023, to the NPDES permit that had been issued on November 9, 2020. The modification applies to permit elements related to effluent discharge. PNM cannot predict whether the analysis required to be performed by EPA under the settlement agreement will result in further changes to the NPDES permit but does not anticipate that it will have a material impact on PNM’s financial position, results of operations, or cash flows.

Effluent Limitation Guidelines

In 2013, EPA published proposed revised wastewater ELG establishing technology-based wastewater discharge limitations for fossil fuel-fired electric power plants.  EPA signed the final Steam Electric ELG rule in 2015. The final rule, which became effective on January 4, 2016, phased in the new, more stringent requirements in the form of effluent limits for arsenic, mercury, selenium, and nitrogen for wastewater discharged from wet scrubber systems and zero discharge of pollutants in ash transport water that must be incorporated into plants’ NPDES permits. The 2015 rule required each plant to comply between 2018 and 2023 depending on when it needs a new or revised NPDES permit.

The Steam Electric ELG rule was challenged in the U.S. Court of Appeals for the Fifth Circuit by numerous parties. In 2017, EPA signed a notice indicating its intent to reconsider portions of the rule, and the Fifth Circuit issued an order severing the issues under reconsideration and holding the case in abeyance as to those issues. However, the court allowed challenges to other portions of the rule to proceed. In 2019, the Fifth Circuit granted those challenges and issued an opinion vacating several portions of the rule, specifically those related to legacy wastewater and leachate, for which the court deemed the standards selected by EPA arbitrary and capricious.

In 2017, EPA published a final rule for postponement of certain compliance dates. The rule postponed the earliest date on which compliance with the ELG for these waste streams would be required from November 1, 2018 until November 1, 2020. In 2019, EPA published a proposed rule revising the original ELG while maintaining the compliance dates. In 2020, EPA published in the Federal Register the final Steam Electric ELG and Standards for the Steam Electric Power Generating Point Source Category, revising the final 2015 guidelines for both flue gas desulfurization wastewater and bottom ash transport water. The 2020 rule required compliance with new limits as soon as possible on or after October 13, 2021, but no later than December 31, 2025.

In 2021, EPA published notice that it would undertake a supplemental rulemaking to revise the ELG after completing its review of the rules reconsidered in 2020. As part of this process, EPA committed to determine whether more stringent limitations and standards would be appropriate. On March 29, 2023, EPA published the proposed ELG Rule in the Federal Register. The proposed rule included stricter limitations for wastewater discharges for coal-fired facilities, but allowed for flexibilities for those coal-powered facilities that would soon decommission or repower. With this proposed rule EPA extended the date of decommissioning or repowering from December 31, 2028, to December 31, 2032.

On May 9, 2024, EPA published a final rule to further revise the ELG. This final supplemental rule updated the technology-based limitations applicable to flue gas desulfurization wastewater, bottom ash transport water, and legacy wastewater at existing sources, as well as combustion residual leachate at new and existing sources. The 2024 rule was challenged in the U.S. Court of Appeals for the Eighth Circuit, but the court denied motions for stay, so the rule remains in effect.

Reeves Station discharges cooling tower blowdown to a publicly owned treatment plant and no longer holds an NPDES permit; therefore, it is expected that no ELG requirements will be imposed.

See “Cooling Water Intake Structures” above for additional discussion of Four Corners’ current NPDES permit. Four Corners may be required to change equipment and operating practices affecting boilers and ash handling systems, as well as change its waste disposal techniques during the next NPDES permit renewal.  PNM is unable to predict the outcome of these matters or a range of the potential costs of compliance.
Santa Fe Generating Station
PNM and NMED are parties to agreements under which PNM has installed a remediation system to treat water from a City of Santa Fe municipal supply well and an extraction well to address gasoline contamination in the groundwater at the site
of PNM’s former Santa Fe Generating Station and service center. A 2008 NMED site inspection report states that neither the source nor extent of contamination at the site has been determined and that the source may not be the former Santa Fe Generating Station. During 2013 and 2014, PNM and NMED collected additional samples that showed elevated concentrations of nitrate and volatile organic compounds in some of the monitoring wells at the site. In addition, one monitoring well contained free-phase hydrocarbon products. PNM collected a sample of the product for “fingerprint” analysis. The results of this analysis indicated the product was a mixture of older and newer fuels. The presence of newer fuels in the sample suggests the hydrocarbon product likely originated from off-site sources. In 2015, PNM and NMED entered into a memorandum of understanding to address changing groundwater conditions at the site under which PNM agreed to continue hydrocarbon investigation under the supervision of NMED. Qualified costs are eligible for payment through the New Mexico Corrective Action Fund (“CAF”), which is administered by the NMED Petroleum Storage Tank Bureau. In 2019, PNM received notice from NMED that an abatement plan for the site is required to address concentrations of previously identified compounds, unrelated to those discussed above, found in the groundwater. NMED approved PNM’s abatement plan proposal, which covers field work and reporting.
Field work related to the investigation under both the CAF and abatement plan requirements was completed and activities and findings associated with the field work were presented in two separate reports and released to stakeholders in early 2020. Subsequent field work was completed in July 2020 and two reports were released supporting PNM’s contention that off-site sources have impacted, and are continuing to impact, the local groundwater in the vicinity of the former Santa Fe Generating Station.
In 2021, NMED approved both the field work plans required for site characterization and associated work activities which were completed by the end of 2022 and a report was submitted to the NMED in 2023. Groundwater sampling for the abatement plan’s first semiannual work was completed in 2023, and the associated report was completed and submitted to the NMED. In addition, the work plan for the 2023 CAF work was completed and submitted to the NMED in July 2023. NMED approved this work plan in December 2023. The activities from the work plan include the installation of three monitoring wells and additional rounds of groundwater sampling were completed in January 2025. Site wide sampling will take place in 2025, with reports provided to NMED.
The City of Santa Fe has stopped operating its well at the site, which is needed for PNM’s groundwater remediation system to operate. As a result, PNM has stopped performing remediation activities at the site. However, PNM’s monitoring and other abatement activities at the site are ongoing and will continue until the groundwater meets applicable federal and state standards or until the NMED determines remediation is not required, whichever is earlier. PNM is not able to assess the duration of this project or estimate the impact on its obligations if PNM is required to resume groundwater remediation activities at the site. PNM is unable to predict the outcome of these matters.
Coal Combustion Residuals Waste Disposal
CCRs consisting of fly ash, bottom ash, and gypsum generated from coal combustion and emission control equipment at SJGS have been disposed of in the surface mine pits adjacent to the plant. SJGS does not operate any onsite CCR impoundments or landfills. The NMMMD currently regulates mine reclamation activities at the San Juan mine, including placement of CCRs in the surface mine pits, with federal oversight by the OSM. APS disposes of CCRs in onsite ponds and dry storage areas at Four Corners.  Ash management at Four Corners is regulated by EPA and the New Mexico State Engineer’s Office. 
EPA’s 2015 coal ash rule included a non-hazardous waste determination for coal ash and sets minimum criteria for existing and new CCR landfills and surface impoundments. In 2016, the Water Infrastructure Improvements for the Nation Act (the “WIIN Act”) was signed into law to address critical water infrastructure needs in the U.S. and contained a number of provisions related to CCRs. Among other things, the WIIN Act allowed, but did not require, states to develop and submit CCR permit programs for EPA approval, provided flexibility for states to incorporate EPA’s 2015 rule for CCRs or develop other criteria that are at least as protective as EPA’s rule, and required EPA to approve state permit programs within 180 days of submission by the state. Because states are not required to implement their own CCR permit programs, EPA was required to develop a federal permit program in states that chose not to implement a program, subject to congressional funding. Until state or federal permit programs are in effect, the 2015 rule continues to be self-implementing in nature, subject to enforcement by EPA or citizen groups. For facilities located within the boundaries of Native American reservations, such as the Navajo Nation where Four Corners is located, EPA is required to develop a federal permit program regardless of appropriated funds.

In 2018, EPA published a rule that constitutes “Phase One, Part One” of its ongoing reconsideration and revision of the 2015, CCR rule. The final Phase One, Part One rule extended the deadline to allow EGUs with unlined impoundments or that fail to meet the uppermost aquifer requirement to continue to receive coal ash until October 31, 2020, which was again
extended by subsequent amendments. The rule also authorized a “Participating State Director” or EPA to approve suspension of groundwater monitoring requirements and to issue certifications related to the location restrictions, design criteria, groundwater monitoring, remedy selection and implementation. The rule also modified groundwater protection standards for certain constituents, which include cobalt, molybdenum, lithium, and lead without a maximum contamination level.

In 2019, EPA published a second round of proposed revisions, which are commonly referred to as the “Phase Two” revisions, to address reporting and accessibility to public information, “CCR piles” and “beneficial use” definitions, and the requirements for management of CCR piles. EPA reopened and extended the Phase Two comment period several times. To date, EPA has not yet finalized provisions in Phase Two related to beneficial use of CCR and CCR piles.

Since its Phase Two proposal, EPA has finalized two other rules addressing various CCR rule provisions. In 2020, EPA promulgated its proposed Holistic Approach to Closure Part A (“Part A”), which proposed a new deadline of August 31, 2020, for companies to initiate closure of unlined CCR impoundments. In accordance with the DC Circuit Court of Appeals’ vacatur of portions of the 2015 CCR Rule, Part A also changed the classification of compacted soil-lined or clay-lined surface impoundments from “lined” to “unlined”, triggering closure or retrofit requirements for those impoundments. In addition, Part A delineated a process for owners/operators to submit requests for alternative closure deadlines based on lack of alternate disposal capacity and gave operators of unlined impoundments until April 11, 2021 to cease receipt of waste at these units and initiate closure.

EPA also issued the Holistic Approach to Closure Part B (“Part B”) in 2020, which delineated the process for owners/operators to submit alternate liner demonstrations for clay-lined surface impoundments that could otherwise meet applicable requirements. This rule did not include beneficial use of CCR for closure, which EPA explained would be addressed in subsequent rulemaking actions. On May 18, 2023, EPA published a proposed rule on the regulatory requirements for inactive surface impoundments at inactive facilities and a new category of regulated unit called a CCR management unit (“CCRMU”), including groundwater monitoring, corrective action, closure, and post-closure care requirements for all CCR management units (regardless of how or when that CCR was placed), and several technical corrections to the existing regulations. Comments on the proposed rule were due July 17, 2023.

On May 8, 2024, EPA published a final rule that extended federal CCR regulatory requirements to (1) inactive CCR surface impoundments at inactive utilities and (2) CCRMU (Legacy Rule), including CCR impoundments and landfills that closed prior to the effective date of the 2015 CCR rule, inactive CCR landfills, and other areas where CCR was managed directly on the land. The rule became effective on November 8, 2024. EPA included deferral options for smaller CCRMU containing between one and 1,000 tons of CCR, CCRMU located beneath critical infrastructure or large buildings or structures vital to the continuation of current site activities, and CCRMU that closed prior to the effective date of the new rule (subject to certain eligibility conditions). EPA also codified the controversial definitions of infiltration and liquids that were litigated in the DC Circuit. Six petitions for review of the Legacy Rule were filed and were consolidated into one case by the DC Circuit. The Utility Solid Waste Activities Group, of which TXNM Energy is a member, is a petitioner jointly with the National Rural Electric Cooperative Association, and American Public Power Association.

As of the effective date of the rule, one CCRMU was identified at SJGS. SJGS is required, at a minimum, to conduct a two-part evaluation of historic and current CCRMUs with reporting due dates of February 9, 2026, and February 8, 2027, with each report posted to a company website by the due date.

At this time, PNM is still evaluating the financial impacts of this final regulation for Four Corners. Initial CCRMU site surveys are expected to be completed by February 2026 with final site investigation reports expected to be finalized by February 2027. Based on the information available to the Company at this time, PNM cannot reasonably estimate the fair value of the entire CCRMU asset retirement obligation. PNM cannot predict the outcome of the CCRMU site evaluations and investigations, or how these outcomes might affect the associated costs, which might have a material impact on PNM’s operations, financial position, or cash flows.

In 2020, EPA published a proposed rule establishing a federal permitting program for the handling of CCR within the boundaries of Native American reservations and in states without their own federally authorized state programs. Permits for units within the boundaries of Native American reservations would be due 18 months after the effective date of the rule. EPA projected finalizing the rule in October 2024 but still has not submitted a final version to OMB. Given the change in Administration, it is not clear whether or when EPA will finalize the rule. EPA has coordinated with the affected permits for the three facilities with CCR disposal units located on Native American lands. PNM cannot predict the outcome of EPA’s rulemaking activity or the outcome of any related litigation, and whether or how such a ruling would affect operations at Four Corners.
EPA’s CCR rule does not cover mine placement of coal ash. In the preamble to its 2015 rule, EPA explained that the United States Office of Surface Mining Reclamation and Enforcement (“OSM”) and, as necessary, EPA would address the management of CCR in mine fills in a separate regulatory action, recognizing OSM’s expertise in this area. EPA’s decision to defer to OSM was based on a recommendation from the National Academy of Sciences (“NAS”), which was commissioned by Congress in 2006 to investigate the health, safety and environmental risks associated with the use of CCR for mine reclamation. The NRC report recommended that enforceable federal standards be established for the disposal of CCR in mine fills to ensure that states have specific authority and that states implement adequate safeguards. In 2007, OSM published an advance notice of proposed rulemaking on the placement of CCR at mine sites. In that notice, OSM explained its intent to develop the proposed regulations based on its existing authority under the Surface Mining Control and Reclamation Act (“SMCRA”). Since 2007, however, OSM has not taken any further action to advance this rulemaking. PNM cannot predict the outcome of OSM’s proposed rulemaking regarding CCR regulation, including mine placement of CCRs, or whether OSM’s actions will have a material impact on PNM’s operations, financial position, or cash flows. 

As noted above, SJGS does not operate any onsite CCR impoundments or landfills that are regulated under the 2015 CCR rule, and as of November 8, 2024, identified only one CCRMU that would be regulated under the Legacy Rule. That CCRMU has since been removed from that unit. PNM would seek recovery from its retail customers of all CCR costs for jurisdictional assets that are ultimately incurred.

Utilities that own or operate CCR disposal units, such as those at Four Corners, as indicated above, were required to collect sufficient groundwater sampling data to initiate a detection monitoring program.  Four Corners completed the analysis for its CCR disposal units, which identified several units that needed corrective action or needed to cease operations and initiate closure by April 11, 2021. Work is ongoing. Four Corners continues to gather additional groundwater data and perform remedial evaluations and activities. At this time, PNM does not anticipate its share of the cost to complete these corrective actions to close the CCR disposal units, or to gather and perform remedial evaluations on groundwater at Four Corners, will have a significant impact on its operations, financial position, or cash flows.
Other Commitments and Contingencies
Coal Supply

Four Corners
APS purchases all of Four Corners’ coal requirements from NTEC, an entity owned by the Navajo Nation, under the Four Corners CSA that expires in 2031. The coal comes from reserves located within the Navajo Nation. The contract provides for pricing adjustments over its term based on economic indices and certain minimum payments that may be required if no deliveries of coal are taken. As of December 31, 2024 those minimum payments were $42.5 million for 2025, $85.9 million for 2026 and 2027, $89.8 million for 2028 and 2029, and $71.0 million for 2030 and thereafter. PNM’s share of the coal costs is being recovered through the FPPAC.

Coal Mine Reclamation

As indicated under Coal Combustion Residuals Waste Disposal above, SJGS disposed of CCRs in the surface mine pits adjacent to the plant and Four Corners disposes of CCRs in ponds and dry storage areas.
Under the terms of the SJGS CSA, PNM and the other SJGS owners are obligated to compensate WSJ LLC for all reclamation costs associated with the supply of coal from the San Juan mine. PNM and Westmoreland have entered into an agreement under which mine reclamation services for SJGS would be provided. A mine reclamation cost study was completed in the first quarter of 2024 and PNM remeasured its liability, which resulted in an increase in overall reclamation costs of $20.9 million, due primarily to higher inflationary factors. As a result, PNM recorded the increase in the liability related to the underground mine of $17.0 million as a regulatory asset on the Consolidated Balance Sheets. Due to the NMPRC cap on the amount that can be collected from retail customers for final reclamation of the surface mines at $100.0 million, PNM was required to record $4.0 million of the increase related to the surface mine liability plus an additional $0.5 million, related to other costs, as a regulatory disallowance on the Consolidated Statements of Earnings for the year ended December 31, 2024. In the third quarter of 2024, PNM and Westmoreland amended the mine reclamation services agreement to update the base rates for the costs of reclamation activities, which resulted in an increase in overall reclamation costs of $12.1 million. As a result, PNM recorded the increase in the liability related to the underground mine of $6.0 million as regulatory assets on the Consolidated Balance Sheets and the increase of $6.1 million related to the surface mine as a regulatory disallowance on the Consolidated Statements of Earnings for the year ended December 31, 2024.
PNM’s estimate of the costs necessary to reclaim the mine that serves SJGS is subject to many assumptions, including the timing of reclamation, generally accepted practices at the time reclamation activities occur, and current inflation and discount rates. PNM cannot predict the ultimate cost to reclaim the mine that serves SJGS and would seek to recover all costs related to reclaiming the underground mine from its customers but could be exposed to additional loss related to surface mine reclamation. In connection with certain mining permits relating to the operation of the San Juan mine, Westmoreland was required to post reclamation bonds of $118.7 million with the NMMMD. In order to facilitate the posting of reclamation bonds by sureties on behalf of Westmoreland, TXNM entered into the WFB LOC Facility under which letters of credit aggregating $30.3 million have been issued.
A coal mine reclamation study for the surface mine that serves Four Corners was issued in December 2024. The study reflected operation of the mine through 2031, the term of the Four Corners CSA. PNM remeasured its liability, which resulted in a decrease in overall reclamation costs of $1.6 million, due primarily to lower overhead costs, contractor management costs, and tax and royalties. Due to the NMPRC cap on the amount that can be collected from retail customers for final reclamation of the surface mines at $100.0 million, PNM recorded the decrease related to the surface mine liability as a regulatory disallowance on the Consolidated Statements of Earnings for the year ended December 31, 2024.
Based on the most recent estimates, PNM’s remaining payments for mine reclamation, in future dollars, are estimated to be $51.1 million for the surface mines at both SJGS and Four Corners and $62.7 million for the underground mine at SJGS as of December 31, 2024. At December 31, 2024 and 2023, liabilities, in current dollars, of $38.3 million and $50.0 million for surface mine reclamation and $52.9 million and $26.2 million for underground mine reclamation were recorded in other deferred credits.
The SJGS owners are parties to a reclamation trust funds agreement to provide financial assurance for post-term coal mine reclamation obligations. The trust funds agreement requires each owner to enter into an individual trust agreement with a financial institution as trustee, create an irrevocable reclamation trust, and meet year-end funding targets set by funding curves that are approved by the SJGS ownership. PNM began using its mine reclamation trust to pay for final mine reclamation costs in April 2023. Because the trust agreement requires meeting specific funding targets at year end, it may be necessary for PNM to make additional contributions to meet those targets. PNM funded $27.3 million in 2024, $2.7 million in 2023, and $10.0 million in 2022. Based on PNM’s reclamation trust fund balance at December 31, 2024 and current funding curve targets, PNM anticipates contributing $1.0 million in 2025 and $0.6 million in 2026.

Under the Four Corners CSA, PNM is required to fund its share of estimated final reclamation costs in annual installments into an irrevocable escrow account solely dedicated to the final reclamation cost of the surface mine at Four Corners. PNM contributed $3.2 million in 2024, $0.2 million in 2023, and $2.4 million in 2022 and anticipates providing additional funding of $0.5 million in 2025 and $0.5 million in 2026.

PNM recovers from retail customers reclamation costs associated with the underground mine. However, the NMPRC capped the amount collected from retail customers for final reclamation of the surface mines at $100.0 million for both SJGS and Four Corners. If future estimates increase the liability for surface mine reclamation, the excess would be expensed at that time. The impacts of changes in New Mexico state law as a result of the enactment of the ETA and regulatory determinations made by the NMPRC may also affect PNM’s financial position, results of operations, and cash flows. See additional discussion regarding PNM’s SJGS and Four Corners Abandonment Applications in Note 17. PNM is currently unable to determine the outcome of these matters or the range of possible impacts.

SJGS Decommissioning

On November 9, 2021, the San Juan County Commission approved the Coal-Fired Electricity Generating Facility Demolition and Remediation Ordinance (“Ordinance 121”), requiring the full demolition of SJGS upon its complete and permanent closure. Ordinance 121 required the SJGS owners to submit a proposed demolition and remediation plan no later than three months after SJGS was retired. The SJGS owners submitted the decommissioning and remediation plan on December 28, 2022. In connection with restructuring of the SJGS ownership on December 31, 2017, PNM and the other SJGS owners entered into the San Juan Decommissioning and Trust Funds Agreement, which requires PNM to fund its ownership share of final decommissioning costs into an irrevocable trust. Under the agreement, PNM made an initial funding of $14.7 million in December 2022 and made additional contributions of $7.0 million in 2024. The amount and timing of additional trust funding is subject to revised decommissioning cost studies and agreement among the SJGS owners. PNM began using its decommissioning trust to pay for demolition and decommissioning costs in October 2023. PNM has posted a surety bond in the amount of $46.0 million in connection with certain environmental decommissioning obligations and must maintain the bond or other financial assurance until those obligations are satisfied. The surety bond only represents a liability if the SJGS owners fail to deliver on its contractual liability.
PNM records its share of the SJGS decommissioning obligation as an ARO on its Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. In the third quarter of 2022, a new decommissioning cost study was completed, which required PNM to remeasure its SJGS decommissioning ARO. The new study resulted in an estimated decrease to PNM’s share of the decommissioning obligation of $21.1 million, which was recorded in September 2022.

PVNGS Liability and Insurance Matters
Public liability for incidents at nuclear power plants is governed by the Price-Anderson Nuclear Industries Indemnity Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both commercial sources and an industry-wide retrospective payment plan. The insurance limit is subject to an adjustment every five years based upon the aggregate percentage change in the CPI. The most recent adjustment took effect on January 1, 2024. As of that date, in accordance with this act, the PVNGS participants are insured against public liability exposure for a nuclear incident up to $16.3 billion per occurrence. PVNGS maintains the maximum available nuclear liability insurance in the amount of $500 million, which is provided by American Nuclear Insurers. The remaining $15.8 billion is provided through a mandatory industry-wide retrospective assessment program. If losses at any nuclear power plant covered by the program exceed the accumulated funds, PNM could be assessed retrospective premium adjustments. The maximum retrospective premium per reactor under the program for each nuclear liability incident is $165.9 million, subject to a maximum annual premium of $24.7 million per incident. Based on PNM’s ownership interest in the three units, PNM’s maximum retrospective premium per incident for all three units is $36.3 million, with a maximum annual payment limitation of $5.4 million, to be adjusted periodically for inflation.

The PVNGS participants maintain insurance for damage to, and decontamination of, property at PVNGS in the aggregate amount of $2.8 billion, a substantial portion of which must first be applied to stabilization and decontamination. These coverages are provided by Nuclear Electric Insurance Limited (“NEIL”). The primary policy offered by NEIL contains a sublimit of $2.25 billion for non-nuclear property damage. If NEIL’s losses in any policy year exceed accumulated funds, PNM is subject to retrospective premium adjustments of $5.1 million. The insurance coverages discussed in this, and the previous paragraph are subject to certain policy conditions, sublimits, and exclusions.
v3.25.0.1
Regulatory and Rate Matters
 12 Months Ended
Dec. 31, 2024
Regulated Operations [Abstract]  
Regulatory and Rate Matters Regulatory and Rate Matters
The Company is involved in various regulatory matters, some of which contain contingencies that are subject to the same uncertainties as those described in Note 16.

PNM

New Mexico General Rate Case

2025 Rate Request

On June 14, 2024, PNM filed an application with the NMPRC for a general increase in retail electric rates. The proposed base rate changes would be implemented in two phases, with the first phase effective July 1, 2025 and the second phase effective January 1, 2026. Key aspects of PNM’s request include:
•Recovery on total rate base of $3.0 billion, based on a FTY with the 12 months ending June 30, 2026
•An increase of $174.3 million in retail revenues, comprised of a $92.2 million increase in base rates and a $82.1 million increase in revenues collected under PNM’s FPPAC
•Drivers of revenue deficiency:
◦Needed investments across distribution, transmission, and generation facilities to ensure safe, reliable delivery of electricity
◦Increased operations and maintenance expenses to meet operational needs, including wildfire risk mitigation
◦Costs associated with ESAs, previously approved by the NMPRC, necessary to serve our customers
◦ROE of 10.45%
◦Proposed capital structure of 52.5% equity
◦An increased cost of borrowing
◦Adjustments to Four Corners depreciation rates to recover remaining plant investments through July 2031, the expected abandonment date of the facility
•Proposed ratemaking treatment of ESAs to be recovered through PNM’s FPPAC beginning July 1, 2025
On November 26, 2024, PNM filed an unopposed comprehensive stipulation with the NMPRC. Key components agreed upon by the signatories are as follows:
•Overall revenue requirement increase of $105.0 million with the first phase effective July 1, 2025 and the second phase effective April 1, 2026
•ROE of 9.45%
•Capital structure of 51.0% equity
•Maintain currently approved depreciation rates for Four Corners as established in PNM’s 2024 Rate Change and PNM’s NM 2015 Rate Case
•Modification of PNM’s current amortization period through December 31, 2028 on the unprotected Excess Deferred Federal Income Taxes (“EDFIT”) regulatory liability to reflect amortization of remaining unprotected EDFIT through December 31, 2027
•Costs associated with ESAs shall be recovered through base rates
◦PNM will establish a regulatory asset or regulatory liability for the difference in actual ESA costs compared to the forecasted $82.1 million included in base rates in the test period and thereafter until new rates are effective from PNM’s next general rate case filing. The regulatory asset or regulatory liability will be subject to NMPRC approval in PNM’s next rate case
•PNM will establish a regulatory liability associated with investment tax credits for the Sandia energy storage system as proposed in its application
•PNM will establish a regulatory liability equal to the return on legacy meters currently included in rates, as the legacy meters are retired during PNM’s deployment of its grid modernization plan approved in PNM’s Grid Modernization Application

A hearing was held on February 17 and 18, 2025. PNM cannot predict the outcome of this matter.

2024 Rate Change

On December 5, 2022, PNM filed an application with the NMPRC for a general increase in retail electric rates including recovery on total rate base of $2.7 billion based on a calendar year 2024 FTY, an increase of $63.8 million in retail non-fuel revenues, and an ROE 10.25%. The application also proposed ratemaking treatment of PVNGS Leased Interest and testimony supporting the prudence of PNM’s decisions to renew the five leases and repurchase 64.1 MW of PVNGS Unit 2 capacity.

On January 3, 2024, the NMPRC issued a final order authorizing PNM to implement an increase in non-fuel base rates of $15.3 million, effective for service beginning January 15, 2024. Major components of the difference compared to PNM’s application include:

•A ROE of 9.26%.
•A capital structure of 49.61% equity, 50.10% debt, and 0.29% preferred stock.
•Finding of imprudence regarding PNM’s decision to remain in Four Corners and a remedy for the imprudence resulting in a disallowance of $81.0 million to PNM’s total Four Corners net book value.
•Approval of $51.3 million of PNM’s requested $96.3 million regulatory asset for PVNGS undepreciated investments, but disallowance of a return on the remaining $45.0 million or any CWIP associated with it.
•Requiring that the $38.4 million regulatory liability associated with leased capacity at PVNGS after the Unit 1 lease expired on January 15, 2023, be returned to ratepayers over two years through a separate rate rider.
•The approval of new depreciation rates, reflecting shorter useful lives, of PNM’s gas plants with service lives and depreciable lives extending beyond January 1, 2045, which would include PNM’s La Luz and Luna generating stations.
•The approval of PNM’s TOD pilot program, with a requirement to make annual compliance filings and to adjust certain rate schedules.

As a result of the NMPRC final order in the 2024 Rate Change, during the year ended December 31, 2023, PNM recorded a regulatory disallowance of $55.5 million on the Consolidated Statement of Earnings and a corresponding reduction to Utility Plant, after accounting for previous impairments, to reflect the remedy adopted in the Final Order for Four Corners. In addition, PNM recorded a reduction to electric operating revenues of $38.4 million with a corresponding current regulatory liability of $19.2 million and a deferred regulatory liability of $19.2 million for the PVNGS rate refunds that will be returned to customers over a two-year period. PNM also recorded a regulatory disallowance of $8.2 million on the Consolidated Statement of Earnings and a corresponding reduction to Utility Plant for the disallowance of CWIP from PVNGS.
In March 2024, notice of appeals were separately filed with the NM Supreme Court by NEE and PNM, and a joint notice of appeal was filed by the NM Department of Justice, Bernalillo County, and ABCWUA. NEE’s appeal was subsequently consolidated with the joint notice of appeal. In the statements of issues submitted in the parties’ appellate dockets, PNM took issue with the NMPRC’s ruling on capital structure; other appellants primarily challenged the NMPRC rulings related to Four Corners and Palo Verde cost recovery. PNM cannot predict the outcome of this matter.

Renewable Energy Portfolio Standard

As discussed in Note 16, the ETA amends the REA including removal of diversity requirements and certain customer caps and exemptions relating to the application of the RPS under the REA. The REA provides for streamlined proceedings for approval of utilities’ renewable energy procurement plans, assures that utilities recover costs incurred consistent with approved procurement plans, and requires the NMPRC to establish a Reasonable Cost Threshold (“RCT”) for the procurement of renewable resources to prevent excessive costs being added to rates. The ETA sets a RCT of $60 per MWh, adjusted for inflation, using an average annual levelized resource cost basis. PNM makes renewable procurements consistent with the NMPRC approved plans and recovers certain renewable procurement costs from customers through the renewable energy rider billed on a KWh basis.


Included in PNM’s approved procurement plans are the following renewable energy resources:
•158 MW of PNM-owned solar-PV facilities
•A PPA through 2044 for the output of New Mexico Wind, having a current aggregate capacity of 200 MW, and a PPA through 2035 for the output of Red Mesa Wind, having an aggregate capacity of 102 MW
•A PPA through 2040 for 140 MW of output from La Joya Wind II
•A PPA through 2042 for the output of the Lightning Dock Geothermal facility with a capacity of 11 MW
•Solar distributed generation, aggregating 308.5 MW at December 31, 2024, owned by customers or third parties from whom PNM purchases any net excess output and RECs

The NMPRC has authorized PNM to recover certain renewable procurement costs through a rate rider billed on a per KWh basis. In its 2024 renewable energy procurement plan, which became effective on January 1, 2024, PNM proposed to collect $59.0 million for the year. On June 3, 2024, PNM filed its renewable energy procurement plan for 2025 which proposes to collect $58.7 million for the year. PNM did not propose any new resource procurements, and the plan states that existing projects are anticipated to exceed the applicable RPS standards of 2025, despite the standard doubling. On September 11, 2024, a public hearing was held and on October 11, 2024, the hearing examiners issued a RD recommending approval of all PNM’s requests. On November 14, 2024, the NMPRC issued an order adopting the recommended decision. The 2025 renewable energy procurement plan became effective on January 1, 2025.

The following sets forth PNM’s revenues recorded for the renewable energy rider:
Year EndedAnnual Revenues
(In millions)
2022$60.3
202356.9
202452.0
Under the renewable rider, if PNM’s earned rate of return on jurisdictional equity in a calendar year, adjusted for items not representative of normal operations, exceeds the NMPRC-approved rate by 0.5%, PNM is required to refund the excess to customers during May through December of the following year. PNM does not expect to exceed the limitation in 2024.

Energy Efficiency and Load Management

Program Costs and Incentives/Disincentives

The New Mexico EUEA requires public utilities to achieve specified levels of energy savings and to obtain NMPRC approval to implement energy efficiency and load management programs. The EUEA requires the NMPRC to remove utility disincentives to implementing energy efficiency and load management programs and to provide incentives for such programs. The NMPRC has adopted a rule to implement this act. PNM’s costs to implement approved programs and incentives are recovered through a rate rider. During the 2019 New Mexico legislative session, the EUEA was amended to, among other
things, include a decoupling mechanism for disincentives, preclude a reduction to a utility’s ROE based on approval of disincentive or incentive mechanisms, establish energy savings targets for the period 2021 through 2025, and require that annual program funding be 3% to 5% of an electric utility’s annual customer bills excluding gross receipt taxes, franchise and right-of-way access fees, provided that a customer’s annual cost does not exceed seventy-five thousand dollars.

In 2020, PNM received approval for energy efficiency and load management programs to be offered in 2021, 2022, and 2023. The program portfolio consisted of twelve programs with a total annual budget of $31.4 million in 2021, $31.0 million in 2022, and $29.6 million in 2023. The program included an annual base incentive of 7.1% of the portfolio budget if PNM were to achieve energy savings of at least 80 GWh in a year. The incentive increases if PNM is able to achieve savings greater than 94 GWh in a year.

In 2023, PNM filed an application for energy efficiency and load management programs to be offered in 2024, 2025, and 2026 (the “2024 Plan”). The 2024 Plan proposed to continue ten existing energy efficiency programs with modification and a total annual budget of $34.5 million in 2024, $35.4 million in 2025, and $36.5 million in 2026. The application also sought approval of an annual base incentive of 7.1% of the portfolio budget and a sliding scale that provides additional incentive for additional energy saved as a percentage of program cost, up to the maximum allowed by the energy efficiency rule which for PNM is 8.82%. On January 26, 2024, the hearing examiners in the case issued a RD. The RD largely approved PNM’s 2024 Plan but with modifications that include the pursuit of demand response resources, additional analysis in future filings, adjustments to certain energy efficiency programs, and modification of the incentive sliding scale cap to reflect a new maximum. On March 7, 2024, the NMPRC approved the RD in its entirety.

2020 Decoupling Petition

As discussed above, the legislature amended the EUEA to, among other things, include a decoupling mechanism for disincentives. On May 28, 2020, PNM filed a petition for approval of a rate adjustment mechanism that would decouple the rates of its residential and small power rate classes. Decoupling is a rate design principle that severs the link between the recovery of fixed costs of the utility through volumetric charges. On July 13, 2020, NEE, ABCWUA, the City of Albuquerque, and Bernalillo County filed motions to dismiss the petition on the grounds that approving PNM’s proposed rate adjustment mechanism outside of a general rate case would result in retroactive ratemaking and piecemeal ratemaking. The motions to dismiss also alleged that PNM’s proposed rate adjustment mechanism is inconsistent with the EUEA. On October 2, 2020, PNM requested an order to vacate the public hearing, scheduled to begin October 13, 2020, and staying the proceeding until the NMPRC decides whether to entertain a petition to issue a declaratory order resolving the issues raised in the motions to dismiss. On October 7, 2020, the hearing examiner approved PNM’s request to stay the proceeding and vacate the public hearing and required PNM to file a petition for declaratory order by October 30, 2020. On October 30, 2020, PNM filed a petition for declaratory order asking the NMPRC to issue an order finding that full revenue decoupling is authorized by the EUEA. On November 4, 2020, ABCWUA and Bernalillo County jointly filed a competing petition asking the NMPRC to issue a declaratory order on the EUEA’s requirements related to disincentives. On March 17, 2021, the NMPRC issued an order granting the petitions for declaratory order, commencing a declaratory order proceeding to address the petitions and appointing a hearing examiner to preside over the declaratory order proceeding.

On January 14, 2022, the hearing examiner issued a RD recommending the NMPRC find that the EUEA does not mandate the NMPRC to authorize or approve a full decoupling mechanism, defining full decoupling as limited to energy efficiency and load management measures and programs. The RD also states that a utility may request approval of a rate adjustment mechanism to remove regulatory disincentives to energy efficiency and load management measures and programs through a stand-alone petition, as part of the utility’s triennial energy efficiency application or a general rate case and that PNM is not otherwise precluded from petitioning for a rate adjustment mechanism prior to its next general rate case. Finally, the RD stated that the EUEA does not permit the NMPRC to reduce a utility’s ROE based on approval of a disincentive removal mechanism founded on removing regulatory disincentives to energy efficiency and load management measures and programs. The RD does not specifically prohibit a downward adjustment to a utility’s capital structure, based on approval of a disincentive removal mechanism. On April 27, 2022, the NMPRC issued an order adopting the RD in its entirety. On May 24, 2022, PNM filed a notice of appeal with the NM Supreme Court. The NM Supreme Court held oral arguments on November 13, 2023. On May 13, 2024, the NM Supreme Court issued a decision finding that the EUEA allows a utility to propose full decoupling mechanisms. The NM Supreme Court did not address the second issue regarding a downward adjustment to a utility’s capital structure based on approval of disincentive removal mechanism. No declaratory order was issued by the NMPRC. This matter is now concluded.
Integrated Resource Plans

NMPRC rules require that investor-owned utilities file an IRP every three years. The IRP is required to cover a 20-year planning period and contain an action plan covering the first three years of that period. On September 14, 2022, the NMPRC adopted revisions to the IRP Rule. The new rule revamps and modernizes the planning process to accommodate increased stakeholder involvement. The IRP Rule establishes a collaborative facilitated process for a utility and stakeholders to agree on a statement of need for potential new or additional resources, as well as an action plan to guide procurement or development of resources to meet the stated need. A most-cost-effective portfolio of resources shall be derived from the statement of need analysis. The statement of need and action plan must be accepted before the utility begins the resource solicitation process pursuant to the IRP Rule. Following acceptance of the statement of need and action plan, a utility will provide the NMPRC and intervenors drafts of the RFP and a timeline for issuing, receiving, evaluating, and ranking bids. The NMPRC will then appoint an Independent Monitor (“IM”) to oversee the RFP process, which allows for parties and the IM to comment on the RFP consistency with the IRP, after which the utility issues the RFP. Within 120 days of receiving bids the utility shall provide the IM with results including pricing and non-price evaluation criteria, ranking of bids, chosen portfolio and alternatives that also meet the needs; the IM then rules on the fairness of the RFP execution. Acceptance of the statement of need and action plan will not constitute a finding of prudency or pre-approval of costs associated with the additional resources. Following the RFP and IM processes, the utility may apply for approvals, and any costs incurred to implement the action plan will be considered in a general rate case and/or resource acquisition proceeding. On October 14, 2022, PNM and other investor-owned utilities filed motions for rehearing with the NMPRC. On October 26, 2022, the NMPRC issued an order partially granting and partially denying certain aspects of PNM’s and the other investor-owned utilities’ motions for rehearing. On November 2, 2022, the NMPRC adopted an amended IRP Rule. On December 2, 2022, PNM filed an appeal with the NM Supreme Court. Two other investor-owned utilities also separately filed appeals at the NM Supreme Court. On January 3, 2023, PNM and the two other investor-owned utilities filed statements of issues with the NM Supreme Court. Among other things, the investor-owned utilities question whether the IRP Rule exceeds the NMPRC authority by imposing unauthorized requirements on utilities and extending NMPRC jurisdiction through over-broad interpretation of the statutes and state that the IRP Rule is contrary to law in its provisions for NMPRC regulation of a utility’s resource procurement decision-making. On June 5, 2023, PNM and the other two investor-owned utilities filed their Joint Brief in Chief and request for oral arguments at the NM Supreme Court. The NM Supreme Court held oral arguments on May 13, 2024. On December 6, 2024, the NM Supreme Court issued a decision finding that the amended regulations do not exceed the statutory scope of the EUEA.

2023 IRP

On December 15, 2023, PNM filed its 2023 IRP with a continued focus on a carbon-free energy system by 2040. The plan highlights the need for the significant sustained addition of resources over the next two decades, replacing retiring or expiring capacity, meeting concurrent load growth, while reducing the carbon intensity of PNM’s portfolio. On April 4, 2024, the NMPRC accepted PNM’s 2023 IRP.

On December 30, 2024, PNM issued its 2029-2032 RFP for at least 900 MW of new energy resources to come online between 2029 and 2032, with at least 500 MW needed by 2030. The RFP is consistent with the needs identified in PNM’s 2023 IRP, which identified a range of 900 to 2,900 MW of new capacity needed by 2032, depending on the type of resources selected. The 2029-2032 RFP is anticipated to identify potential replacement resources for PNM’s current natural gas generation capacity as well as PNM’s ownership interest in Four Corners.

Abandonment Applications made under the ETA

As discussed in Note 16, the ETA provides for a transition from fossil-fueled generating resources to renewable and carbon-free resources by allowing utilities to issue energy transition bonds related to the retirement of certain coal-fired generating facilities, to qualified investors.

SJGS Abandonment Application

In 2019, PNM filed a Consolidated Application for the Abandonment and Replacement of SJGS and Related Securitized Financing Pursuant to the ETA. In 2023, PNM, along with intervening parties reached a unanimous settlement which was approved by the NMPRC. As a result, PNM recorded a $128.7 million reduction to electric operating revenues in the Consolidated Statement of Earnings and a corresponding current regulatory liability on the Consolidated Balance Sheets as of and for the year ended December 31, 2023. In addition, PNM recorded a regulatory disallowance of $3.3 million on the Consolidated Statement of Earnings and a corresponding decrease to deferred regulatory assets on the Consolidated Balance
Sheets as of and for the year ended December 31, 2023, to reflect PNM’s agreement to withdraw its request for regulatory assets associated with prefunding of ETA state administered funds and legal costs associated with this matter.

Four Corners Abandonment Application

In 2020, PNM entered into the Four Corners Purchase and Sale Agreement with NTEC, pursuant to which PNM agreed to sell its 13% ownership interest (other than certain transmission assets) in Four Corners to NTEC, contingent upon NMPRC approval. In connection with the sale, PNM would make payments of $75.0 million to NTEC for relief from its obligations under the coal supply agreement for Four Corners after December 31, 2024. PNM made an initial payment to NTEC of $15.0 million in November 2020, subject to refund with interest upon termination of the Four Corners Purchase and Sale Agreement prior to closing. Under the terms of the Four Corners Purchase and Sale Agreement, upon receipt of the NMPRC approval, PNM was expected to make a final payment of $60.0 million.

On January 8, 2021, PNM filed the Four Corners Abandonment Application, which sought NMPRC approval to exit PNM’s share of Four Corners as of December 31, 2024, and issuance of approximately $300 million of Securitized Bonds as provided by the ETA. On December 15, 2021, the NMPRC issued a final order denying approval of the Four Corners Abandonment Application and the corresponding request for issuance of securitized financing. On December 22, 2021, PNM filed a Notice of Appeal with the NM Supreme Court of the NMPRC decision to deny the application and on July 6, 2023, the NM Supreme Court affirmed the NMPRC decision concluding that the NMPRC reasonably and lawfully denied PNM’s application for abandonment. As a result of the NM Supreme Court's decision to uphold the NMPRC's denial, the Consolidated Statements of Earnings for the year ended December 31, 2023 reflect a regulatory disallowance of $3.7 million. On April 23, 2024, PNM filed an interim notice informing the NMPRC that PNM’s updated analysis indicates it is in the interest of customers for PNM to remain as a participant in Four Corners until the expiration of the current coal supply agreement in 2031. In August 2024, PNM and NTEC terminated the Four Corners Purchase and Sale Agreement and executed an agreement for the reimbursement of PNM’s initial $15.0 million payment with interest, which was paid in 2024.

2026 Resource Application

On October 25, 2023, PNM filed an application with the NMPRC seeking approval of resources to be available for the 2026 summer peak. The application included a request for approval of a 100 MW solar PPA and three ESAs of 100 MW, 100 MW, and 50 MW. In addition, PNM was seeking approval of a CCN for a 60 MW battery to be owned by PNM. The resources were deemed necessary for PNM to safely and reliably meet its projected system load. A hearing was held on March 20 and 21, 2024. On May 3, 2024, the hearing examiner in the case issued a RD approving PNM’s requested resources. On May 30, 2024, the NMPRC approved the RD in its entirety. On July 9, 2024, a group of New Mexico legislators filed a petition with the NM Supreme Court requesting the court grant their motion for rehearing, which was denied on September 3, 2024. This matter is now concluded.

2028 Resource Application

On November 22, 2024, PNM filed an application with the NMPRC seeking approval of ESAs, a PPA, and a CCN for system resources in 2028 to be available to meet summer 2028 customer needs. PNM is requesting approval of:

•Two 150 MW ESAs
•A 167 MW PPA for the Valencia power plant through 2039
•A CCN for a 100 MW solar facility and a 30 MW battery to be PNM-owned and located in San Juan County. The request provides the opportunity to increase the 30 MW battery by an additional 20 MW

A hearing will be held beginning April 2, 2025, if needed.

Grid Modernization Plan

On October 3, 2022, in compliance with New Mexico Grid Modernization Statute, PNM filed its Grid Modernization Application with the NMPRC. The projects included in the Grid Modernization Application improve customers’ ability to customize their use of energy and ensure that customers, including low-income customers, are a top priority and will benefit consistent with the Grid Modernization Statute. PNM’s proposal to modernize its electricity grid through infrastructure and technology improvements also increases the efficiency, reliability, resilience, and security of PNM’s electric system. PNM’s application seeks approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy. The proposed Grid Modernization Rider would recover capital costs, operating expenses, and taxes associated
with the investments included in the Grid Modernization Application. PNM also requested authorization to create related regulatory assets and liabilities, permitting PNM to record costs incurred for the development and implementation of PNM’s plan between the requested approval of the application on July 1, 2023, and the implementation of the Grid Modernization Rider by September 1, 2023; undepreciated investments associated with legacy meters being replaced with AMI meters; and over- or under-collection of costs through the Grid Modernization Rider. In addition, PNM requested approval of the proposed format of an Opt-Out Consent Form and proposed opt-out fees, which includes a one-time fee and a monthly fee. Following a hearing and subsequent briefs, on May 31, 2023, the NMPRC issued an order requiring the hearing examiner to direct PNM to file a cost benefit analysis as a supplement to the application. On November 22, 2023, PNM filed the required cost benefit analysis supporting PNM’s proposed Grid Modernization plan. A hearing was held in April 2024 and post-hearing briefs and response briefs were filed in June 2024. On August 16, 2024, the hearing examiner in the case issued a RD. The RD largely approved PNM’s application with minor modifications, including limiting to a return of its undepreciated costs of legacy meters and conditioned approval upon PNM accelerating the deployment schedule following a final order. On October 17, 2024, the NMPRC issued a final order adopting the RD but removed the accelerated deployment schedule.

The Community Solar Act

In 2021, the Community Solar Act established a program that allows for the development of community solar facilities and provides customers of a qualifying utility with the option of subscribing to community solar facilities, and in exchange would receive a bill credit from their utility, while the utility received energy from the community solar facility. The NMPRC was charged with administering the Community Solar Act program, establishing a total maximum capacity of 200 MW community solar facilities and allocating proportionally to the New Mexico electric investor-owned utilities and participating cooperatives, of which PNM was allocated 125 MW. On October 3, 2024, the NMPRC issued an order raising the total maximum capacity of community solar facilities by 300 MW, of which PNM was allocated 185 MW.

In 2022, PNM filed its initial Community Solar tariff and subsequently filed an updated Community Solar tariff under protest and filed a motion for clarification, suspension, and timely hearing on PNM’s Community Solar tariff. In 2023, the NMPRC suspended PNM’s Community Solar tariff and issued an order opening a new docket for two-phase proceedings. The first phase addressed issues concerning the proposed subscriber organization agreements and the proposed customer data forms. The second phase addressed all issues concerning proposed tariffs, agreements and forms that were not addressed in the first phase. In 2023, the NMPRC issued an order approving an uncontested stipulation on the first phase and PNM’s advice notice conforming to the stipulation became effective. A hearing for the second phase was held from January 17 through January 19, 2024. On August 30, 2024, the hearing examiner issued a RD, that recommended rejecting PNM’s proposed community solar rider and required PNM to refile the rider, approval of an accounting order to track certain costs in a regulatory asset and included recommendations for various issues to be handled in a future rulemaking. On November 26, 2024, the NMPRC issued an order rejecting substantially all tariffs, agreements and forms, requiring PNM to file new proposed tariffs, in addition to adopting a majority of other components proposed in the RD. PNM filed revised tariffs on February 21, 2025. PNM cannot predict the outcome of the pending matters.

FERC Compliance

PNM conducted a comprehensive internal review of its filings with FERC regarding the potential timely filing of certain agreements that contained deviations from PNM’s standard form of service agreement in its OATT and assessing any applicable FERC waivers or refund requirements. Upon completion of the comprehensive review, PNM identified service agreements containing provisions that do not conform to the standard form of agreement on file with FERC. On March 18 and March 21, 2022, PNM filed applications with FERC requesting acceptance of certain agreements as well as rejection of other service agreements and further requesting that FERC not assess time-value refunds on the accepted agreements. On May 17, 2022, FERC issued two delegated letter orders accepting the service agreements and requiring PNM to pay the time-value refunds on the revenues it received on unaffiliated, late-filed, service agreements which contained language alleged to be non-conforming.

On November 21, 2022, FERC issued an order on rehearing that required PNM to pay its customers approximately $8.1 million in time-value refunds. On November 28, 2022, PNM filed an unopposed motion for voluntary dismissal with the United States Court of Appeals for the District of Columbia of its petitions for review, which was granted on December 22, 2022. In the fourth quarter of 2022, PNM made payments totaling $8.1 million to customers which were recorded as a reduction to electric operating revenues on the Consolidated Statements of Earnings. This matter is now concluded.
FERC Order 864

In November 2019, FERC issued Order No. 864, which required public utility transmission providers with transmission formula rates to revise those rates to account for changes resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). PNM had already made revisions to its formula rate to account for Tax Act changes, and, as a result of the Order, PNM proposed additional changes to its formula rate to implement the remaining requirements of the Order. In July 2022, FERC issued an order finding that PNM had predominantly complied with the requirements but set aside certain matters for settlement and hearing procedures.

On November 22, 2023, PNM, on behalf of the settling parties, filed a settlement agreement with FERC resolving all issues. As a result of the settlement agreement, PNM recorded a decrease of $3.2 million to electric operating revenues and an increase to interest charges of $0.3 million on the Consolidated Statement of Earnings and an increase to other current liabilities of $3.5 million on the Consolidated Balance Sheets as of and for the year ended December 31, 2023. This matter is now concluded.
Transportation and Electrification Program (TEP)
On June 1, 2023, PNM filed its 2024-2026 TEP with the NMPRC, requesting approval of a $37.1 million total three-year budget and continuation of the current TEP Rider. Approximately 22% of the budget, $8.0 million, will be dedicated to low-income customers. On February 2, 2024, the hearing examiners in the case issued a RD largely approving PNM’s 2024 Plan but with modifications to certain TEP programs. On February 23, 2024, the NMPRC approved the RD with additional modifications that reduced the three-year budget by $4.0 million, for a total revised budget of $32.9 million. The TEP rider became effective on April 26, 2024.

TNMP
Energy Efficiency
TNMP recovers the costs of its energy efficiency programs through an energy efficiency cost recovery factor (“EECRF”), which includes projected program costs, under or over collected costs from prior years, rate case expenses, and performance bonuses (if the programs exceed mandated savings goals).
The following sets forth TNMP’s EECRF increases:
Effective DateAggregate Collection AmountPerformance Bonus
(In millions)
March 1, 2022$7.2 $2.3 
March 1, 20237.3 1.9
March 1, 20246.6 1.2

On May 31, 2024, TNMP filed its request to adjust the EECRF to reflect changes in costs for 2025. On October 24, 2024, the PUCT approved the total amount requested, authorizing recovery of $7.0 million, including a performance bonus of $1.3 million based on TNMP’s energy efficiency achievements in the 2023 plan year.

Transmission Cost of Service Rates

TNMP can update its TCOS rates twice per year to reflect changes in its invested capital although updates are not allowed while a general rate case is in process. Updated rates reflect the addition and retirement of transmission facilities, including appropriate depreciation, federal income tax and other associated taxes, and the approved rate of return on such facilities.
The following sets forth TNMP’s recent interim transmission cost rate increases:

Effective DateApproved Increase in Rate BaseAnnual Increase in Revenue
(In millions)
March 25, 2022$95.6 $14.2 
September 22, 202236.0 5.3 
May 12, 2023150.5 19.4 
September 6, 202321.4 4.2 
March 15, 202497.4 13.1 
September 20, 202420.6 3.9 

On January 24, 2025, TNMP filed an application to further update its transmission rates, which would increase revenues by $11.5 million annually, based on an increase in rate base of $83.5 million. The application is pending before the PUCT.
Periodic Distribution Rate Adjustment

PUCT rules permit interim rate adjustments to reflect changes in investments in distribution assets. Historically, distribution utilities have been restricted to a single, annual periodic rate adjustment through a DCRF submitted between April 1 and April 8 of each year as long as the electric utility was not earning more than its authorized rate of return using weather-normalized data. However, the recent passage of Senate Bill 1015 now permits DCRF proceedings to be filed twice per year with a 60-day administrative deadline that can be extended for 15 days on good cause. Additionally, a DCRF may be filed during a pending rate case proceeding as long as that DCRF request is not filed until the 185th day after the rate case proceeding was initiated. The following sets forth TNMP’s recent interim distribution rate increases:

Effective DateApproved Increase in Rate BaseAnnual Increase in Revenue
(In millions)
September 1, 2022$95.7 $6.8 
September 1, 2023157.0 14.5 
July 28, 2024205.9 15.6 
November 17, 202443.7 7.7 
3G Meters Notice of Violation

In 2020, the PUCT established the COVID-19 Electricity Relief Program for electric utilities, REPs, and customers impacted by COVID-19. The program allowed providers to implement a rider to collect unpaid residential retail customer bills and to establish a regulatory asset for costs related to COVID-19. These costs included but were not limited to costs related to unpaid accounts.

In December 2023, TNMP and the PUCT reached a settlement agreement related to a notice of violation against TNMP primarily for estimating 3G meters during the period that TNMP was remediating the meters. TNMP maintained that the remediation efforts were impacted by supply chain and labor availability issues resulting from COVID-19. Pursuant to the settlement agreement, TNMP agreed to no longer pursue the recovery of COVID-19 related costs that were recorded as a regulatory asset. This resulted in a regulatory disallowance of $1.2 million recorded for the year ended December 31, 2023.

Hurricane Beryl

On July 8, 2024, Hurricane Beryl made landfall in the Texas Gulf Coast leaving approximately 116,000 customers in the TNMP service area without power. As of December 31, 2024, TNMP incurred $53.1 million of costs, of which $32.1 million has been recorded in Utility Plant and $21.0 million has been recorded as a regulatory asset. TNMP will continue to track storm-related restoration costs to seek collection of such costs in a future regulatory proceeding.
System Resiliency Plan (“SRP”)

In 2023, the Texas Legislature enacted House Bill No, 2555 (“HB 2555”), permitting an electric utility to seek approval of, and cost recovery for, a system resiliency plan. On August 28, 2024, TNMP filed its first SRP with the PUCT designed to benefit customers through enhanced resiliency of its distribution system, as intended under HB 2555. The SRP includes approximately $600 million of capital investments and approximately $151 million of other related costs over three years and was developed using a comprehensive and data-driven approach which evaluated various types of resiliency events posing material risk to the safe and reliable operation of TNMP's distribution system. TNMP's service territory includes non-contiguous areas across different regions of Texas, ranging from small communities and rural areas to communities around large metropolitan areas, each with unique risks. Investments in the SRP are prioritized based on customer benefit, physical protection of infrastructure, foundational investments in operational and cybersecurity technologies, and wildfire risk reduction and are focused on lower-performing areas in the context of reliability. Eight different resiliency measures are outlined in the SRP with associated programs and infrastructure impacts to improve the system's ability to prevent, withstand, mitigate and/or more promptly recover from resiliency events: distribution system resiliency, distribution system protection modernization, vegetation management, wildfire mitigation, flood mitigation, enhanced operations system technology, cybersecurity, and physical security resiliency. The SRP is subject to PUCT approval over 180 days as stated in Texas legislation. Recovery of investments and costs are permissible primarily through semi-annual DCRF filings, with deferral of depreciation and other certain expenses until recovery begins.

On December 11, 2024, TNMP filed an unopposed settlement with the PUCT. The settlement includes $565.8 million of capital investments over 2025 through 2027, reflecting 94% of TNMP’s proposed plan investments. The settlement also encompasses $128.2 million of operations and maintenance expenses associated with several programs, including vegetation management and wildfire mitigation.
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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Federal Income Tax Reform

In 2017, comprehensive changes in U.S. federal income taxes were enacted through legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made many significant modifications to the tax laws, including reducing the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Tax Act also eliminated federal bonus depreciation for utilities, limited interest deductibility for non-utility businesses and limited the deductibility of officer compensation. During 2020, the IRS issued final regulations related to certain officer compensation and, in January 2021, issued final regulations on interest deductibility that provide a 10% “de minimis” exception that allows entities with predominantly regulated activities to fully deduct interest expenses.

As a result of the change in the federal income tax rate, the Company re-measured and adjusted its deferred tax assets and liabilities as of December 31, 2017. The portion of that adjustment not related to PNM’s and TNMP’s regulated activities was recorded as a reduction in net deferred tax assets and an increase in income tax expense. The portion related to PNM’s and TNMP’s regulated activities was recorded as a reduction in net deferred tax liabilities and an increase in regulatory liabilities.

Beginning February 2018, PNM’s NM 2016 Rate Case reflected the reduction in the federal and state corporate income tax rates, including amortization of excess deferred federal and state income taxes. In accordance with the order in that case and amortization requirements of the tax laws, PNM is returning the protected portion of excess deferred federal income taxes to customers over the average remaining life of plant in service as of December 31, 2017. The remaining balance of the unprotected portion of excess deferred federal income taxes, which was being returned to customers over a period of approximately twenty-three years, will be returned over a five-year period when new rates go into effect from the 2024 Rate Change. Excess deferred state income taxes were returned to customers over a three-year period, which concluded in the first quarter of 2021. The approved settlement in the TNMP 2018 Rate Case includes a reduction in customer rates to reflect the impacts of the Tax Act beginning on January 1, 2019. TXNM, PNM, and TNMP amortized federal excess deferred income taxes of $23.4 million, $20.8 million, and $2.6 million in 2024.
TXNM
TXNM’s income taxes (benefits) consist of the following components:
 Year Ended December 31,
 202420232022
 (In thousands)
Current federal income tax$— $— $— 
Current state income tax (benefit)
(1,984)(2,841)1,597 
Deferred federal income tax (benefit)
13,042 (11,503)18,413 
Deferred state income tax (benefit)
10,630 (825)7,302 
Amortization of accumulated investment tax credits(170)(1,181)(1,182)
Total income taxes (benefits)
$21,518 $(16,350)$26,130 

TXNM’s provision for income taxes (benefits) differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
 Year Ended December 31,
 202420232022
 (In thousands)
Federal income tax at statutory rates$58,850 $19,011 $44,375 
Amortization of accumulated investment tax credits(170)(1,181)(1,182)
Amortization of excess deferred income tax(23,362)(22,859)(23,599)
Flow-through of depreciation items1,003 1,281 2,795 
(Earnings) attributable to non-controlling interest in Valencia(3,368)(3,892)(3,176)
State income tax (benefit), net of federal (benefit)
6,284 (2,239)6,826 
Allowance for equity funds used during construction(3,756)(3,145)(2,898)
Allocation of tax (benefit) related to stock compensation awards(17)(261)91 
Non-deductible compensation1,332 1,659 1,125 
Non-deductible merger related costs
— (1,959)74 
Sale of NMRD
(15,822)— — 
R&D credit
(1,500)(2,050)(1,320)
Other2,044 (715)3,019 
Total income taxes (benefits)
$21,518 $(16,350)$26,130 
Effective tax rate7.68 %(18.06)%12.37 %
The components of TXNM’s net accumulated deferred income tax liability were:
 December 31,
 20242023
 (In thousands)
Deferred tax assets:
Net operating loss$31,592 $16,833 
Regulatory liabilities related to income taxes82,702 90,461 
Federal tax credit carryforwards126,770 124,510 
Regulatory disallowances42,330 42,330 
Regulatory liability SJGS retirement credits40 28,797 
Other52,955 35,492 
Total deferred tax assets336,389 338,423 
Deferred tax liabilities:
Depreciation and plant related(794,203)(738,078)
Investment tax credit(81,068)(95,046)
Regulatory assets related to income taxes(84,053)(80,643)
Pension(41,383)(41,141)
Regulatory asset for shutdown of SJGS Units 2 and 3(20,860)(22,454)
Regulatory asset SJGS energy transition property
(85,365)(86,521)
Regulatory asset PVNGS investment
(21,044)(20,503)
PVNGS trusts
(48,421)(41,767)
Other(59,384)(57,550)
Total deferred tax liabilities(1,235,781)(1,183,703)
Net accumulated deferred income tax liabilities$(899,392)$(845,280)

The following table reconciles the change in TXNM’s net accumulated deferred income tax liability to the deferred income tax (benefit) included in the Consolidated Statement of Earnings:
 Year Ended
December 31, 2024
 (In thousands)
Net change in deferred income tax liability per above table$54,112 
Change in tax effects of income tax related regulatory assets and liabilities(11,629)
Amortization of excess deferred income tax(23,362)
Tax effect of mark-to-market adjustments4,802 
Tax effect of excess pension liability(421)
Adjustment for uncertain income tax positions(135)
Reclassification of unrecognized tax benefits135 
Other— 
Deferred income tax (benefit)
$23,502 
PNM

PNM’s income taxes (benefits) consist of the following components:
 Year Ended December 31,
 202420232022
 (In thousands)
Current federal income tax (benefit)$(7,005)$9,518 $(13,533)
Current state income tax (benefit)(5,681)(4,304)3,244 
Deferred federal income tax (benefit)
28,183 (22,951)25,298 
Deferred state income tax13,890 1,150 4,361 
Amortization of accumulated investment tax credits(170)(171)(172)
Total income taxes (benefits)
$29,217 $(16,758)$19,198 

PNM’s provision for income taxes (benefits) differed from the federal income tax computed at the statutory rate for each of the years shown. The differences are attributable to the following factors:
 Year Ended December 31,
 202420232022
 (In thousands)
Federal income tax at statutory rates$49,868 $7,972 $29,026 
Amortization of accumulated investment tax credits(170)(171)(172)
Amortization of excess deferred income tax(20,750)(14,252)(14,421)
Flow-through of depreciation items796 1,114 2,641 
(Earnings) attributable to non-controlling interest in Valencia(3,368)(3,892)(3,176)
State income tax (benefit), net of federal (benefit)
6,594 (2,216)5,694 
Allowance for equity funds used during construction(2,739)(2,065)(1,958)
Allocation of tax (benefit) related to stock compensation awards(10)(185)65 
Non-deductible compensation822 1,015 701 
Non-deductible merger costs
— (33)10 
R&D credit
(1,450)(2,000)(1,300)
Other(376)(2,045)2,088 
Total income taxes (benefits)
$29,217 $(16,758)$19,198 
Effective tax rate12.30 %(44.15)%13.89 %
The components of PNM’s net accumulated deferred income tax liability were:
 December 31,
 20242023
 (In thousands)
Deferred tax assets:
Net operating loss$— $— 
Regulatory liabilities related to income taxes64,481 71,546 
Federal tax credit carryforwards93,481 80,586 
Regulatory disallowance42,330 42,330 
Regulatory liability SJGS retirement credits
40 28,797 
Other35,650 35,993 
Total deferred tax assets235,982 259,252 
Deferred tax liabilities:
Depreciation and plant related(582,089)(545,815)
Investment tax credit(81,068)(73,844)
Regulatory assets related to income taxes(75,464)(71,742)
Pension(36,678)(36,483)
Regulatory asset for shutdown of SJGS Units 2 and 3(20,860)(22,454)
Regulatory asset SJGS energy transition property(85,365)(86,521)
Regulatory asset PVNGS investment
(21,044)(20,503)
PVNGS Trusts
(48,421)(41,767)
Other(41,211)(44,160)
Total deferred tax liabilities(992,200)(943,289)
Net accumulated deferred income tax liabilities$(756,218)$(684,037)

The following table reconciles the change in PNM’s net accumulated deferred income tax liability to the deferred income tax (benefit) included in the Consolidated Statement of Earnings:
 Year Ended
December 31, 2024
 (In thousands)
Net change in deferred income tax liability per above table$72,181 
Change in tax effects of income tax related regulatory assets and liabilities(11,246)
Amortization of excess deferred income tax(20,750)
Tax effect of mark-to-market adjustments3,554 
Tax effect of excess pension liability(421)
Adjustment for uncertain income tax positions(161)
Reclassification of unrecognized tax benefits(1,254)
Deferred income tax (benefit)
$41,903 
TNMP
TNMP’s income taxes consist of the following components:
 Year Ended December 31,
 202420232022
 (In thousands)
Current federal income tax$(2,549)$11,354 $17,055 
Current state income tax3,300 3,055 2,662 
Deferred federal income tax (benefit)26,363 2,917 (4,527)
Deferred state income tax (benefit)— (29)(29)
Total income taxes$27,114 $17,297 $15,161 
 
TNMP’s provision for income taxes differed from the federal income tax computed at the statutory rate for each of the periods shown. The differences are attributable to the following factors:
 Year Ended December 31,
 202420232022
 (In thousands)
Federal income tax at statutory rates$27,435 $23,569 $22,560 
Amortization of excess deferred income tax(2,612)(8,607)(9,177)
State income tax, net of federal (benefit)2,606 2,414 2,103 
Allocation of tax (benefit) related to stock compensation awards(4)(77)26 
Non-deductible compensation509 642 422 
Transaction costs— 3 1 
Other(820)(647)(774)
Total income taxes$27,114 $17,297 $15,161 
Effective tax rate20.75 %15.41 %14.11 %

The components of TNMP’s net accumulated deferred income tax liability were:
 December 31,
 20242023
 (In thousands)
Deferred tax assets:
Regulatory liabilities related to income taxes$18,221 $18,915 
Other4,522 5,534 
Total deferred tax assets22,743 24,449 
Deferred tax liabilities:
Depreciation and plant related(200,709)(179,483)
Regulatory assets related to income taxes(8,589)(8,901)
Loss on reacquired debt(4,981)(5,254)
Pension(4,706)(4,659)
AMS(2,709)(2,613)
Other(9,156)(2,287)
Total deferred tax liabilities(230,850)(203,197)
Net accumulated deferred income tax liabilities$(208,107)$(178,748)

The following table reconciles the change in TNMP’s net accumulated deferred income tax liability to the deferred income tax included in the Consolidated Statement of Earnings:
 Year Ended
December 31, 2024
 (In thousands)
Net change in deferred income tax liability per above table$29,359 
Change in tax effects of income tax related regulatory assets and liabilities(383)
Amortization of excess deferred income tax(2,612)
Other(1)
Deferred income tax
$26,363 
Other Disclosures

The Company is required to recognize only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority. A reconciliation of unrecognized tax benefits is as follows:
TXNM
PNMTNMP
 (In thousands)
Balance at December 31, 2021$13,714 $10,771 $141 
Additions based on tax positions related to 2021
1,444 1,437 7 
Additions (reductions) for tax positions of prior years
(4)(7)3 
Balance at December 31, 202215,154 12,201 151 
Additions based on tax positions related to 2022
(277)(294)17 
Additions (reductions) for tax positions of prior years
259 239 20 
Balance at December 31, 202315,136 12,146 188 
Additions (reductions) based on tax positions related to 2023
19 2 17 
Additions for tax positions of prior years
(154)(163)9 
Balance at December 31, 2024$15,001 $11,985 $214 

Included in the balance of unrecognized tax benefits at December 31, 2024 are $14.9 million, $11.9 million, and $0.2 million that, if recognized, would affect the effective tax rate for TXNM, PNM, and TNMP. The Company does not anticipate that any unrecognized tax expenses or unrecognized tax benefits will be reduced or settled in 2025.

TXNM, PNM, and TNMP had no estimated interest income or expense related to income taxes for the years ended December 31, 2024, 2023, and 2022. There was no accumulated accrued interest receivable or payable related to income taxes as of December 31, 2024 and 2023.

The Company files a federal consolidated and several consolidated and separate state income tax returns. The tax years prior to 2021 are closed to examination by either federal or state taxing authorities other than Arizona. The tax years prior to 2020 are closed to examination by Arizona taxing authorities. Other tax years are open to examination by federal and state taxing authorities and net operating loss carryforwards are open to examination for the years in which the carryforwards are utilized. At December 31, 2024, the Company has $186.2 million of federal net operating loss carryforwards that expire beginning in 2036 and $129.0 million of federal tax credit carryforwards that expire beginning in 2025. State net operating losses expire beginning in 2037 and vary from federal due to differences between state and federal tax law.

In 2008, fifty percent bonus tax depreciation was enacted as a temporary two-year stimulus measure as part of the Economic Stimulus Act of 2008. Bonus tax depreciation in various forms has been extended since that time, including by the Protecting Americans from Tax Hikes Act of 2015. The 2015 act extended and phased-out bonus tax depreciation through 2019. As discussed above, the Tax Act eliminated bonus depreciation for utilities effective September 28, 2017. However, in 2020 the IRS issued regulations interpreting Tax Act amendments to depreciation provisions of the IRC which allowed the Company to claim a bonus depreciation deduction on certain construction projects placed in service after the third quarter of 2017. As a result of the net operating loss carryforwards for income tax purposes created by bonus depreciation, certain tax carryforwards were not expected to be utilized before their expiration. In addition, as a result of Tax Act changes to the deductibility of officer compensation, certain deferred tax benefits related to compensation are not expected to be realized. The Company has impaired the deferred tax assets for tax carryforwards which are not expected to be utilized and for compensation that is not expected to be deductible.

The Company earns investment tax credits for construction or purchase of eligible property. The Company uses the deferral method of accounting for these investment tax credits.
Impairments of tax attributes after reflecting the expiration of carryforwards under applicable tax laws, net of federal tax benefit, for 2022 through 2024 are as follows:
TXNM
PNMTNMP
(In thousands)
December 31, 2024:
Federal tax credit carryforwards$131 $— $— 
Compensation expense$(516)$(335)$(179)
December 31, 2023:
Federal tax credit carryforwards
$839 $(427)$— 
Compensation expense$387 $246 $140 
December 31, 2022:
Federal tax credit carryforwards
$187 $427 $— 
Compensation expense$199 $140 $59 


The tax effect of compensation that is not expected to be deductible and impairments of unexpired tax credits are reflected as a valuation allowance against deferred tax assets. The reserve balances, after reflecting expiration of carryforwards under applicable tax laws, at December 31, 2024 and 2023 are as follows:
TXNM
PNMTNMP
(In thousands)
December 31, 2024:
Federal tax credit carryforwards$2,186 $— $— 
Compensation expense$596 $394 $202 
December 31, 2023:
Federal tax credit carryforwards$2,055 $— $— 
Compensation expense$1,112 $729 $381 
v3.25.0.1
Goodwill
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill Goodwill
The excess purchase price over the fair value of the assets acquired and the liabilities assumed by TXNM for its 2005 acquisition of TNP was recorded as goodwill and was pushed down to the businesses acquired. In 2007, the TNMP assets that were included in its New Mexico operations, including goodwill, were transferred to PNM. TXNM’s reporting units that currently have goodwill are PNM and TNMP.

The Company evaluates its goodwill for impairment annually at the reporting unit level or more frequently if circumstances indicate that the goodwill may be impaired. Application of the impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, and determination of the fair value of each reporting unit.

In certain circumstances an entity may perform a qualitative analysis to conclude that the goodwill of a reporting unit is not impaired. Under a qualitative assessment an entity considers macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events affecting a reporting unit, as well as whether a sustained decrease (both absolute and relative to its peers) in share price has occurred. An entity considers the extent to which each of the adverse events and circumstances identified could affect the comparison of a reporting unit’s fair value with its carrying amount. An entity places more weight on the events and circumstances that most affect a reporting unit’s fair value or the carrying amount of its net assets. An entity also considers positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity evaluates, on the basis of the weight of evidence, the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. A quantitative analysis is not required if, after assessing events and circumstances, an entity determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount.

In other circumstances, an entity may perform a quantitative analysis to reach the conclusion regarding impairment with respect to a reporting unit. An entity may choose to perform a quantitative analysis without performing a qualitative analysis
and may perform a qualitative analysis for certain reporting units, but a quantitative analysis for others. The first step of the quantitative impairment test requires an entity to compare the fair value of the reporting unit with its carrying value, including goodwill. If as a result of this analysis, the entity concludes there is an indication of impairment in a reporting unit having goodwill, the entity is required to perform the second step of the impairment analysis, determining the amount of goodwill impairment to be recorded. The amount is calculated by comparing the implied fair value of the goodwill to its carrying amount. This exercise would require the entity to allocate the fair value determined in step one to the individual assets and liabilities of the reporting unit. Any remaining fair value would be the implied fair value of goodwill on the testing date. To the extent the recorded amount of goodwill of a reporting unit exceeds the implied fair value determined in step two, an impairment loss would be reflected in results of operations.

TXNM periodically updates its quantitative analysis for both PNM and TNMP. The use of a quantitative approach in a given period is not necessarily an indication that a potential impairment has been identified under a qualitative approach. When TXNM performs a quantitative analysis for PNM or TNMP, a discounted cash flow methodology is primarily used to estimate the fair value of the reporting unit. This analysis requires significant judgments, including estimations of future cash flows, which is dependent on internal forecasts, estimations of long-term growth rates for the business, and determination of appropriate weighted average cost of capital for the reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value and the conclusion of impairment.

When TXNM performs a qualitative or quantitative analysis for PNM or TNMP, TXNM considers market and macroeconomic factors including changes in growth rates, changes in the WACC, and changes in discount rates. TXNM also evaluates its stock price relative to historical performance, industry peers, and to major market indices, including an evaluation of TXNM’s market capitalization relative to the carrying value of its reporting units.

For its annual evaluations performed as of April 1, 2022, TXNM performed a qualitative analysis for both the PNM and TNMP reporting units. In addition to the typical considerations discussed above, the qualitative analysis considered changes in the Company’s expectations of future financial performance since the April 1, 2018 quantitative analysis and the previous qualitative analyses through April 1, 2021 performed for PNM, as well as the April 1, 2020 quantitative analysis and the previous qualitative analyses performed for TNMP. This analysis considered Company specific events such as the Merger, potential impacts of legal and regulatory matters discussed in Notes 16 and 17, including potential outcomes in PNM’s 2024 Rate Change, PNM’s San Juan Abandonment Application, PNM’s Four Corners Abandonment Application, PNM’s PVNGS Leased Interest Abandonment Application and other potential impacts of changes in PNM’s resource needs based on PNM’s 2020 IRP. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2022 carrying values of PNM and TNMP exceeded their fair value.

For its annual evaluations performed as of April 1, 2023, TXNM performed a qualitative analysis for both the PNM and TNMP reporting units. In addition to the typical considerations discussed above, the qualitative analysis considered changes in the Company’s expectations of future financial performance since the April 1, 2018 quantitative analysis and the previous qualitative analyses through April 1, 2022 performed for PNM, as well as the April 1, 2021 quantitative analysis and the previous qualitative analyses performed for TNMP. This analysis considered Company specific events such as the Merger, potential impacts of legal and regulatory matters discussed in Notes 16 and 17, including potential outcomes in PNM’s 2024 Rate Change, PNM’s San Juan Abandonment Application, PNM’s Four Corners Abandonment Application, PNM’s PVNGS Leased Interest Abandonment Application and other potential impacts of changes in PNM’s resource needs based on PNM’s 2020 IRP. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2023 carrying values of PNM and TNMP exceeded their fair value.
 
For its annual evaluations performed as of April 1, 2024, TXNM performed a quantitative analysis for the PNM reporting unit and a qualitative analysis for the TNMP reporting unit. The quantitative analysis, discussed above, indicated that the fair value of the PNM reporting unit, which has goodwill of $51.6 million, exceeded its carrying value by approximately 54%. The qualitative analysis, in addition to the typical considerations discussed above, considered changes in the Company’s expectations of future financial performance since the April 1, 2020 quantitative analysis and the previous qualitative analyses through April 1, 2023 performed for TNMP. This analysis considered events specific to TNMP such as the potential impacts of legal and regulatory matters discussed in Note 16 and Note 17. Based on an evaluation of these and other factors, the Company determined it was not more likely than not that the April 1, 2024 carrying values of PNM and TNMP exceeded their fair value. Since the April 1, 2024 annual evaluation, there have been no events or indications that the fair values of the reporting units with recorded goodwill have decreased below their carrying values.
v3.25.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
TXNM, PNM, TNMP, and NMRD are considered related parties, as is PNMR Services Company, a wholly-owned subsidiary of TXNM that provides corporate services to TXNM and its subsidiaries in accordance with shared services agreements. These services are billed at cost on a monthly basis to the business units. In addition, PNM purchases renewable energy from certain NMRD-owned facilities at a fixed price per MWh of energy produced. On February 27, 2024, PNMR Development and AEP OnSite Partners sold their respective interests in NMRD, and the table below reflects transactions with NMRD prior to the sale.

TXNM files a consolidated federal income tax return with its affiliated companies. A tax allocation agreement exists between TXNM and each of its affiliated companies. These agreements provide that the subsidiary company will compute its taxable income on a stand-alone basis. If the result is a net tax liability, such amount shall be paid to TXNM. If there are net operating losses and/or tax credits, the subsidiary shall receive payment for the tax savings from TXNM to the extent that TXNM is able to utilize those benefits.
 
See Note 7 for information on intercompany borrowing arrangements. The table below summarizes the nature and amount of related party transactions of TXNM, PNM and TNMP:     
 Year Ended December 31,
 202420232022
(In thousands)
Services billings:
TXNM to PNM
$132,209 $124,321 $115,415 
TXNM to TNMP
53,166 47,470 42,293 
PNM to TNMP440 349 411 
TNMP to TXNM
114 141 141 
TNMP to PNM497 — — 
TXNM to NMRD
66 333 308 
Renewable energy purchases:
PNM from NMRD1,523 12,717 11,795 
Interest billings:
TXNM to PNM
142 23 13 
PNM to TXNM
612 582 249 
TXNM to TNMP
210 129 166 
Income tax sharing payments:
TXNM to PNM
2,351 5,338 — 
PNM to TXNM
— — 11,602 
TNMP to TXNM
10,312 15,749 8,341 
v3.25.0.1
Equity Method Investment
 12 Months Ended
Dec. 31, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investment Equity Method Investment
In September 2017, PNMR Development and AEP OnSite Partners created NMRD to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. PNMR Development and AEP OnSite Partners each had a 50% ownership interest in NMRD.

On December 22, 2023, PNMR Development and AEP Onsite reached agreement with Exus New Mexico, LLC, a subsidiary of Exus North America Holdings, LLC, for the sale of NMRD and its subsidiaries, pursuant to a Membership Interest Purchase Agreement, dated December 22, 2023 (“MIPA”). Closing occurred on February 27, 2024, with PNMR Development receiving net proceeds of $117.0 million and recognized an after-tax gain of $4.4 million, which includes the recognition of deferred investment tax credits of $15.7 million.

TXNM accounted for its investment in NMRD using the equity method of accounting because TXNM’s ownership interest results in significant influence, but not control, over NMRD and its operations. TXNM recorded as income its percentage share of earnings or loss of NMRD and carried its investment at cost, adjusted for its share of undistributed earnings or losses.
During 2024, 2023 and 2022 PNMR Development and AEP OnSite Partners each made cash contributions of $12.6 million, $26.3 million and zero to NMRD.

TXNM presented its share of net earnings from NMRD in other income on the Consolidated Statements of Earnings. Summarized financial information for NMRD is as follows:
December 31,
202420232022
(In thousands)
Operating revenues
$3,204 $13,629 $12,505 
Operating expenses3,378 8,228 9,591 
Net earnings
$(174)$5,401 $2,914 
Financial Position

December 31,
20242023
(In thousands)
Current assets$— $2,589 
Net property, plant, and equipment— 235,791 
Non-current assets— 1,849 
Total assets
— 240,229 
Current liabilities— 730 
Non-current liabilities— 358 
Owners’ equity
$— $239,141 
v3.25.0.1
Schedule I - Condensed Financial Information of Parent Company
 12 Months Ended
Dec. 31, 2024
Condensed Financial Information Disclosure [Abstract]  
Schedule I - Condensed Financial Information of Parent Company
SCHEDULE I
TXNM ENERGY, INC.
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENTS OF EARNINGS
 
 Year ended December 31,
 202420232022
 (In thousands)
Operating Revenues$— $— $— 
Operating Expenses9,406 4,972 6,199 
Operating (loss)(9,406)(4,972)(6,199)
Other Income and Deductions:
Equity in earnings of subsidiaries299,867 133,628 197,860 
Other income
1,427 2,245 663 
Net other income and (deductions)301,294 135,873 198,523 
Interest Charges64,916 58,934 30,430 
Earnings Before Income Taxes226,972 71,967 161,894 
Income Tax (Benefit)(15,182)(15,851)(7,636)
Net Earnings$242,154 $87,818 $169,530 
SCHEDULE I
TXNM ENERGY, INC.
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY
STATEMENTS OF CASH FLOWS
 
 Year Ended December 31,
 202420232022
 (In thousands)
Cash Flows From Operating Activities:
Net Cash Flows From Operating Activities$(36,927)$(31,368)$(10,261)
Cash Flows From Investing Activities:
Additions to non-utility plant
839 1,138 1,136 
Investments in subsidiaries(112,000)(85,500)(70,200)
Cash dividends from subsidiaries153,000 — 153,500 
Net cash flows from investing activities41,839 (84,362)84,436 
Cash Flows From Financing Activities:
Short-term borrowings (repayments) -affiliate, net21,100 (5,300)(700)
Revolving credit facility borrowings
822,000 837,000 640,400 
Revolving credit facility repayments
(797,400)(777,100)(685,900)
Long-term borrowings550,000 500,000 100,000 
Repayment of long-term debt(539,000)(500,000)— 
Issuance of common stock98,601 198,177 — 
Awards of common stock(8,460)(9,646)(7,980)
Dividends paid(139,811)(126,177)(119,311)
Other, net(11,945)(1,221)(686)
Net cash flows from financing activities(4,915)115,733 (74,177)
Change in Cash and Cash Equivalents(3)3 (2)
Cash and Cash Equivalents at Beginning of Period64 61 63 
Cash and Cash Equivalents at End of Period$61 $64 $61 
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized$71,917 $47,122 $29,904 
Income taxes paid (refunded), net$(1,707)$350 $(2,500)
SCHEDULE I
TXNM ENERGY, INC.
CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY
BALANCE SHEETS
 
 December 31,
 20242023
 (In thousands)
Assets
Cash and cash equivalents$61 $64 
Intercompany receivables— 55,575 
Derivative instruments— 7,172 
Income taxes receivable15,326 8,266 
Other current assets15 133 
Total current assets15,402 71,210 
Property, plant and equipment, net of accumulated depreciation of $19,650 and $18,810
19,536 20,374 
Investment in subsidiaries3,625,611 3,345,400 
Other long-term assets48,312 44,628 
Total long-term assets3,693,459 3,410,402 
$3,708,861 $3,481,612 
Liabilities and Stockholders’ Equity
Short-term debt93,900 69,300 
Short-term debt-affiliate30,319 9,219 
Current installments of long-term debt
50,967 — 
Intercompany payables
1,999 — 
Accrued interest and taxes6,428 14,650 
Dividends declared36,757 34,953 
Other current liabilities571 184 
Total current liabilities220,941 128,306 
Long-term debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs948,731 999,151 
Other long-term liabilities2,803 5,062 
Total liabilities1,172,475 1,132,519 
Common stock (no par value; 200,000,000 and $120,000,000 shares authorized; issued and outstanding 92,659,335 and 90,200,384 shares)
1,724,444 1,624,823 
Accumulated other comprehensive income (loss), net of income taxes(75,708)(62,840)
Retained earnings887,650 787,110 
Total common stockholders’ equity2,536,386 2,349,093 
$3,708,861 $3,481,612 
See Notes 7, 8, 11, and 16 for information regarding commitments, contingencies, and maturities of long-term debt.
v3.25.0.1
Schedule II - Valuation and Qualifying Accounts
 12 Months Ended
Dec. 31, 2024
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
Schedule II - Valuation and Qualifying Accounts
SCHEDULE II
TXNM ENERGY, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
 
   AdditionsDeductions 
DescriptionBalance at
beginning of
year		Charged to
costs and
expenses		Charged to
other
accounts		Write-offs and otherBalance at
end of year
   (In thousands) 
Allowance for credit losses, year ended December 31:
2022$7,265 $3,758 $— $6,098 $4,925 
2023$4,925 $3,585 $— $5,122 $3,388 
2024$3,388 $4,184 $— $6,174 $1,398 
SCHEDULE II
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES
A WHOLLY-OWNED SUBSIDIARY OF TXNM ENERGY, INC.
VALUATION AND QUALIFYING ACCOUNTS
 
   AdditionsDeductions 
DescriptionBalance at
beginning of
year		Charged to
costs and
expenses		Charged to
other
accounts		Write-offs and otherBalance at
end of year
   (In thousands) 
Allowance for credit losses, year ended December 31:
2022$7,265 $3,758 $— $6,098 $4,925 
2023$4,925 $3,549 $— $5,086 $3,388 
2024$3,388 $4,184 $— $6,174 $1,398 
 
SCHEDULE II
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
A WHOLLY-OWNED SUBSIDIARY OF TXNM ENERGY, INC.
VALUATION AND QUALIFYING ACCOUNTS
 
  AdditionsDeductions 
DescriptionBalance at
beginning of
year		Charged to
costs and
expenses		Charged to
other
accounts		Write-offs and otherBalance at
end of year
  (In thousands) 
Allowance for credit losses, year ended December 31:
2022$— $— $— $— $— 
2023$— $36 $— $36 $— 
2024$— $— $— $— $— 
v3.25.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.25.0.1
Insider Trading Policies and Procedures
 12 Months Ended
Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.0.1
Cybersecurity Risk Management and Strategy Disclosure
 12 Months Ended
Dec. 31, 2024
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
Cybersecurity Risk Management and Strategy

Process for identifying, assessing, and managing cybersecurity risks

From an overall enterprise risk management perspective, the Company views cybersecurity as a “tier 1” risk and considers it one of its top priorities. The Company’s cybersecurity program (the “Cybersecurity Program”) includes processes to identify, assess, and manage material risks from cybersecurity threats. The Cybersecurity Program utilizes a risk-based approach and includes written cybersecurity and information technology policies and procedures, including a cybersecurity incident response plan. The Company’s Cybersecurity Program is led by its Vice President and Chief Information Officer (“CIO”), who oversees the management and development of all business technology and cyber and physical security for the Company and its subsidiaries. The CIO is also responsible for federal reliability standards compliance, critical infrastructure protection and crisis management resilience.

The Cybersecurity Program is a robust, enterprise-wide, risk-based security program that adheres to the guidelines of the National Institute of Science and Technology (“NIST”) Cybersecurity Framework for Protecting Critical Infrastructure to define material risks and establish controls designed to protect, detect, respond to, and recover from cybersecurity incidents. To protect the most critical systems, the Company also complies with the NERC Critical Infrastructure Protection Standards.

The Company regularly assesses control results through third party audits, penetration tests and internal assessments to continuously improve cyber protections and data privacy controls. The Company partners with government and industry peers in several cybersecurity programs to share information and provide mutual assistance in the event of a cyber-attack. Supply chain risk of third-party suppliers is also assessed as part of the procurement process and incorporates cybersecurity contractual stipulations in its supplier contracts. The Company remains focused on increasing cybersecurity awareness and is continuously evaluating and implementing effective, up-to-date technologies and processes to enhance its cybersecurity capabilities.

The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes and practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing, and other exercises focused on
evaluating the effectiveness of the Company’s cybersecurity measures and planning. The Company regularly engages third parties to perform assessments on the Company’s cybersecurity measures, including information security maturity assessments, audits and independent reviews of the Company’s information security control environment and operating effectiveness. The results of such assessments, audits, and reviews are reported to the Audit and Ethics Committee and the Board, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits, and reviews.

Risks from cybersecurity threats

The information set forth under Item 1A, “Risk Factors” — “TXNM, PNM, and TNMP are subject to information security breaches and risks of unauthorized access to their information and operational technology systems as well as physical threats to assets.” on page A-14 of this Annual Report on Form 10-K is hereby incorporated by reference. As of December 31, 2024, our financial condition, results of operations or business strategy have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block] From an overall enterprise risk management perspective, the Company views cybersecurity as a “tier 1” risk and considers it one of its top priorities. The Company’s cybersecurity program (the “Cybersecurity Program”) includes processes to identify, assess, and manage material risks from cybersecurity threats.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]
Cybersecurity risk oversight remains a priority for the Board who is responsible for oversight of the Company’s information security program, including compliance and risk management and the review of cybersecurity risks. The Board has adopted a Cyber Risk Policy which is overseen by the Audit and Ethics Committee. The Audit and Ethics Committee’s oversight of cyber risk management assists in the Board’s assessment of the adequacy of resources, funding, and focus within the Company with respect to cyber risk. Specifically, the Audit and Ethics Committee assists the Board in its oversight responsibilities regarding the company-wide security risk management practices, including overseeing the practices, procedures, and controls that management uses to identify, assess, respond to, remediate, and mitigate risks related to cybersecurity. The Audit and Ethics Committee provides oversight of management’s efforts to identify and mitigate cyber risk. Specifically, senior leadership, including the CIO, regularly briefs the Audit and Ethics Committee and the Board on Company’s cybersecurity posture. In executing its risk oversight duties, the Audit and Ethics Committee and the Board can and does access internal and external expertise regarding the Company’s challenges and opportunities related to cybersecurity.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] The Company’s management is responsible for managing cybersecurity risk and bringing to the Audit and Ethics Committee and Board’s attention the most significant cybersecurity risks facing the Company.  The CIO oversees the Company’s Cybersecurity Program and reports to the Company’s President and Chief Operating Officer.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] The CIO oversees the Company’s Cybersecurity Program and reports to the Company’s President and Chief Operating Officer.
Cybersecurity Risk Role of Management [Text Block]
The Company’s management is responsible for managing cybersecurity risk and bringing to the Audit and Ethics Committee and Board’s attention the most significant cybersecurity risks facing the Company.  The CIO oversees the Company’s Cybersecurity Program and reports to the Company’s President and Chief Operating Officer. The CIO leads the development, implementation, and enforcement of security policies and data breach resiliency plans, as well as works with internal and external cybersecurity and IT teams to monitor and maintain the security of the Company’s IT infrastructure. The CIO is supported by a team of enterprise information, system security, and risk professionals. The CIO receives reports on cybersecurity threats on an ongoing basis and regularly reviews risk management measures implemented by the Company to identify and mitigate data security and cybersecurity risks. The CIO updates senior management on these matters and works closely with the General Counsel to oversee compliance with legal, regulatory, and contractual security requirements. The CIO has significant information technology and program management experience and has served many years in the Company’s information security organization. The CIO is a Certified Project Management Professional and Change Management Registered Practitioner. In addition, the CIO has a B.B.A. in business computer systems and an MBA.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] The CIO is supported by a team of enterprise information, system security, and risk professionals. The CIO receives reports on cybersecurity threats on an ongoing basis and regularly reviews risk management measures implemented by the Company to identify and mitigate data security and cybersecurity risks.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] The CIO has significant information technology and program management experience and has served many years in the Company’s information security organization. The CIO is a Certified Project Management Professional and Change Management Registered Practitioner. In addition, the CIO has a B.B.A. in business computer systems and an MBA.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] The Company’s management is responsible for managing cybersecurity risk and bringing to the Audit and Ethics Committee and Board’s attention the most significant cybersecurity risks facing the Company.  The CIO oversees the Company’s Cybersecurity Program and reports to the Company’s President and Chief Operating Officer. The CIO leads the development, implementation, and enforcement of security policies and data breach resiliency plans, as well as works with internal and external cybersecurity and IT teams to monitor and maintain the security of the Company’s IT infrastructure. The CIO is supported by a team of enterprise information, system security, and risk professionals. The CIO receives reports on cybersecurity threats on an ongoing basis and regularly reviews risk management measures implemented by the Company to identify and mitigate data security and cybersecurity risks. The CIO updates senior management on these matters and works closely with the General Counsel to oversee compliance with legal, regulatory, and contractual security requirements.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.0.1
Summary of the Business and Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Financial Statement Preparation and Presentation
Financial Statement Preparation and Presentation

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated.

On August 2, 2024, PNM Resources, Inc. (“PNMR”) amended its Articles of Incorporation to change its name to TXNM Energy, Inc. (“TXNM”) and increased the number of authorized shares of the Company’s common stock from 120,000,000 to 200,000,000. The Notes to Consolidated Financial Statements include disclosures for TXNM, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to TXNM, PNM, and TNMP. Discussions regarding only TXNM, PNM, or TNMP are so indicated. Certain amounts in the 2023 and 2022 Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2024 financial statement presentation.

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events accordingly.
Principles of Consolidation
Principles of Consolidation

The Consolidated Financial Statements of each of TXNM, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia and ETBC I (Note 10). PNM owns undivided interests in jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants.
PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between TXNM, PNM, and TNMP include intercompany loans, interest and income tax sharing payments, as well as equity transactions, and interconnection billings. All intercompany transactions and balances have been eliminated.
Accounting for the Effects of Certain Types of Regulation
Accounting for the Effects of Certain Types of Regulation

The Company maintains its accounting records in accordance with the uniform system of accounts prescribed by FERC and adopted by the NMPRC and PUCT.

Certain of the Company’s operations are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to the regulated operations. Regulators may assign costs to accounting periods that differ from accounting methods applied by non-regulated utilities.  When it is probable that regulators will permit recovery of costs through future rates, costs are deferred as regulatory assets that otherwise would be expensed.  Likewise, regulatory liabilities are recognized when it is probable that regulators will require refunds through future rates or when revenue is collected for
expenditures that have not yet been incurred.  GAAP also provides for the recognition of revenue and regulatory assets and liabilities associated with “alternative revenue programs” authorized by regulators. Such programs allow the utility to adjust future rates in response to past activities or completed events, if certain criteria are met. Regulatory assets and liabilities are amortized into earnings over the authorized recovery period. Accordingly, the Company has deferred certain costs and recorded certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. Information on regulatory assets and regulatory liabilities is contained in Note 13.

In some circumstances, regulators allow a requested increase in rates to be implemented, subject to refund, before the regulatory process has been completed and a decision rendered by the regulator. When this occurs, the Company assesses the possible outcomes of the rate proceeding. The Company records a provision for refund to the extent the amounts being collected, subject to refund, exceed the amount the Company determines is probable of ultimately being allowed by the regulator.
Cash and Restricted Cash
Cash and Restricted Cash

Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. Cash deposits received and held for a period of time that are restricted to a specific purpose, under the terms of their effective agreements, are considered restricted cash. PNM and TXNM have restricted cash balances related to the ETBC I Securitized Bonds. Restricted cash amounts are included in Other current assets and Other deferred charges on the Consolidated Balance Sheets as of December 31, 2024 and 2023. See Note 10. At December 31, 2024 and 2023 there was no restricted cash for TNMP. At December 31, 2022 there was no restricted cash for TXNM, PNM, and TNMP.
Cash and Restricted Cash
Cash and Restricted Cash

Investments in highly liquid investments with original maturities of three months or less at the date of purchase are considered cash and cash equivalents. Cash deposits received and held for a period of time that are restricted to a specific purpose, under the terms of their effective agreements, are considered restricted cash. PNM and TXNM have restricted cash balances related to the ETBC I Securitized Bonds. Restricted cash amounts are included in Other current assets and Other deferred charges on the Consolidated Balance Sheets as of December 31, 2024 and 2023. See Note 10. At December 31, 2024 and 2023 there was no restricted cash for TNMP. At December 31, 2022 there was no restricted cash for TXNM, PNM, and TNMP.
Utility Plant
Utility Plant

Utility plant is stated at original cost and includes capitalized payroll-related costs such as taxes, pension, other fringe benefits, administrative costs, and AFUDC, where authorized by rate regulation, or capitalized interest.

Repairs, including major maintenance activities, and minor replacements of property are expensed when incurred, except as required by regulators for ratemaking purposes. Major replacements are charged to utility plant. Gains, losses, and costs to remove resulting from retirements or other dispositions of regulated property in the normal course of business are credited or charged to accumulated depreciation.

PNM and TNMP may receive reimbursements, referred to as CIAC, from customers to pay for all or part of certain construction projects to the extent the project does not benefit regulated customers in general. PNM and TNMP account for these reimbursements as offsets to utility plant additions based on the requirements of the NMPRC, FERC, and PUCT. Due to the PUCT’s regulatory treatment of CIAC reimbursements, TNMP also receives a financing component that is recognized as Other income on the Consolidated Statements of Earnings. Under the NMPRC regulatory treatment, PNM typically does not receive a financing component.
Depreciation and Amortization
Depreciation and Amortization
PNM’s provision for depreciation and amortization of utility plant, other than nuclear fuel, is based upon straight-line rates approved by the NMPRC and FERC. Amortization of nuclear fuel is based on units-of-production. TNMP’s provision for depreciation and amortization of utility plant is based upon straight-line rates approved by the PUCT. Depreciation and amortization of non-utility property, including right-of-use assets for finance leases as discussed in Note 8, is computed based on the straight-line method. The provision for depreciation of certain equipment is allocated between operating expenses and construction projects based on the use of the equipment.
Allowance for Funds Used During Construction
Allowance for Funds Used During Construction

As provided by the FERC uniform systems of accounts, AFUDC is charged to regulated utility plant for construction projects. This allowance is designed to enable a utility to capitalize financing costs during periods of construction of property subject to rate regulation. It represents the cost of borrowed funds (allowance for borrowed funds used during construction or “debt AFUDC”) and a return on other funds (allowance for equity funds used during construction or “equity AFUDC”). The debt AFUDC is recorded in interest charges and the equity AFUDC is recorded in other income on the Consolidated Statements of Earnings.
Materials, Supplies, and Fuel Stock
Materials, Supplies, and Fuel Stock
Materials and supplies relate to transmission, distribution, and generating assets. Materials and supplies are charged to inventory when purchased and are expensed or capitalized as appropriate when issued. Materials and supplies are valued using an average costing method.
Investments
Investments

PNM holds investment securities in the NDT for the purpose of funding its share of the decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines that served SJGS and continue to serve Four Corners (Note 16). Investments (both equity and available-for-sale debt securities) are measured at fair value on a quarterly basis with changes in fair value for equity securities recognized in earnings for that period. Since third party investment managers have sole discretion over the purchase and sale of the securities (under general guidelines and targets provided by management), PNM records an impairment, as a realized loss, for any available-for-sale debt security that has a fair value which is less than cost at the end of each quarter. For the years ended December 31, 2024, 2023 and 2022, PNM recorded impairment losses on the available-for-sale debt securities of $17.8 million, $(19.1) million and $25.8 million. No gains or losses are deferred as regulatory assets or liabilities. See Notes 3 and 9. All investments are held in PNM’s name and are in the custody of major financial institutions. The specific identification method is used to determine the cost of securities disposed of, with realized gains and losses reflected in other income and deductions.
As discussed above, PNM immediately records an impairment loss for any available-for-sale debt security that has a fair value that is less than its carrying value. As a result, the Company has no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings.
Equity Method Investment
Equity Method Investment
TXNM accounted for its investment in NMRD using the equity method of accounting because TXNM’s ownership interest resulted in significant influence, but not control, over NMRD and its operations.  TXNM recorded as income its percentage share of earnings or loss of NMRD and carried its investment at cost, adjusted for its share of undistributed earnings or losses, until its investment was sold on February 27, 2024.
Goodwill
Goodwill
The Company does not amortize goodwill. Goodwill is evaluated for impairment annually, or more frequently if events and circumstances indicate that the goodwill might be impaired.
Asset Impairment
Asset Impairment

Tangible long-lived assets and right-of-use assets associated with leases are evaluated in relation to the estimated future undiscounted cash flows to assess recoverability when events and circumstances indicate that the assets might be impaired.
Amortization of Debt Acquisition Costs
Amortization of Debt Acquisition Costs

Discount, premium, and expense related to the issuance of long-term debt are amortized over the lives of the respective issues. Gains and losses incurred upon the early retirement of long-term debt are recognized in other income or other deductions, except for amounts recoverable through NMPRC, FERC, or PUCT regulation, which are recorded as regulatory assets or liabilities and amortized over the lives of the respective issues. Unamortized premium, discount, and expense related to long-term debt are reflected as part of the related liability on the Consolidated Balance Sheets.
Derivatives
Derivatives

The Company records derivative instruments, including energy contracts, on the balance sheet as either an asset or liability measured at their fair value. Changes in the derivatives’ fair value are recognized in earnings unless specific hedge accounting criteria are met. PNM also records certain commodity derivative transactions recoverable through NMPRC regulation as regulatory assets or liabilities. See Note 9.
The Company treats all forward commodity purchases and sales contracts subject to unplanned netting or “book-out” by the transmission provider as derivative instruments subject to mark-to-market accounting. GAAP provides guidance on whether realized gains and losses on derivative contracts not held for trading purposes should be reported on a net or gross basis and concludes such classification is a matter of judgment that depends on the relevant facts and circumstances.
Accounting for Derivatives

Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the years ended December 31, 2024, 2023, and 2022, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flow hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations and are classified between operating revenues and cost of energy according to the intent of the hedge. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered
by its FPPAC. Changes in the fair value of instruments covered by its FPPAC are recorded as regulatory assets and liabilities. PNM has no trading transactions.
Decommissioning and Reclamation Costs
Decommissioning and Reclamation Costs

PNM is only required to recognize and measure decommissioning liabilities for tangible long-lived assets for which a legal obligation exists. Nuclear decommissioning costs and related accruals are based on periodic site-specific estimates of the costs for removing all radioactive and other structures at PVNGS and are dependent upon numerous assumptions, including estimates of future decommissioning costs at current price levels, inflation rates, and discount rates. PNM’s accruals for PVNGS Units 1, 2, and 3, including portions previously held under leases, have been made based on such estimates, the guidelines of the NRC, and the PVNGS license periods. PNM records its share of the SJGS decommissioning obligation as an ARO on its Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. See Note 16.
In connection with both the SJGS and Four Corners coal supply agreements, the owners are required to reimburse the mining companies for the cost of contemporaneous reclamation, as well as the costs for final reclamation of the coal mines. The reclamation costs are based on periodic site-specific studies that estimate the costs to be incurred in the future and are dependent upon numerous assumptions, including estimates of future reclamation costs at current price levels, inflation rates, and discount rates. PNM considers the contemporaneous reclamation costs part of the cost of its delivered coal costs.
Environmental Costs
Environmental Costs

The normal operations of the Company involve activities and substances that expose the Company to potential liabilities under laws and regulations protecting the environment. Liabilities under these laws and regulations can be material and may be imposed without regard to fault, or may be imposed for past acts, even though the past acts may have been lawful at the time they occurred.
The Company records its environmental liabilities when site assessments or remedial actions are probable, and a range of reasonably likely cleanup costs can be estimated. The Company reviews its sites and measures the liability by assessing a range of reasonably likely costs for each identified site using currently available information and the probable level of involvement and financial condition of other potentially responsible parties. These estimates are based on assumptions regarding the costs for site investigations, remediation, operations and maintenance, monitoring, and site closure. The ultimate cost to clean up the Company’s identified sites varies from its recorded liability due to numerous uncertainties inherent in the estimation process.
Income Taxes
Income Taxes

Income taxes are recognized using the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis. All deferred taxes are reflected as non-current on the Consolidated Balance Sheets. Current NMPRC, FERC, and PUCT approved rates include the tax effects of the majority of these differences. Rate-regulated enterprises are required to record deferred income taxes for temporary differences accorded flow-through treatment at the direction of a regulatory commission. The resulting deferred tax assets and liabilities are recorded based on the expected cash flow to be reflected in future rates. Because the NMPRC, FERC, and the PUCT have consistently permitted the recovery of tax effects previously flowed-through earnings, the Company has established regulatory assets and liabilities offsetting such deferred tax assets and liabilities. The Company recognizes only the impact of tax positions that, based on their merits, are more likely than not to be sustained upon an IRS audit. The Company defers investment tax credits and amortizes them over the estimated useful lives of the assets. See Note 18 for additional information, including a discussion of the impacts of the Tax Act.

The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before taxes. Certain unusual or infrequently occurring items, as well as adjustments due to enactment of new tax laws, have been excluded from the estimated annual effective tax rate calculation.
New Accounting Pronouncements
New Accounting Pronouncements

Information concerning recently issued accounting pronouncements that have not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates.

Accounting Standards Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 enhancing the transparency and decision usefulness of income tax disclosures. Disclosure requirements of this update include (on an annual basis) the disclosure of specific categories in the rate reconciliation and the inclusion of additional information for reconciling items that meet a quantitative threshold (if the effect of the reconciling item is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income by the applicable statutory rate). The amendment also requires the disclosure (on an annual basis) of information about income taxes paid (net of refunds) including, the disaggregation by federal, state, and foreign taxes as well as by individual jurisdiction. Additional requirements include the disclosure of income (loss) from continuing operations before income tax expense (benefit) disaggregated between foreign and domestic as well as income tax expense (benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for the Company beginning January 1, 2025 with early adoption being permitted. ASU 2023-09 is to be applied on a prospective basis with retrospective application permitted.

Accounting Standards Update 2024-03 - Income Statement (Subtopic 220-40): Reporting Comprehensive Income - Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03 that will require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses at each interim and annual period. Disclosures should include amounts for purchases of inventory, employee compensation, depreciation and, intangible asset amortization; certain amounts that are already required to be disclosed under GAAP in the same disclosure as other disaggregation requirements; qualitative descriptions of the amounts remaining in relevant expense categories that are not disaggregated; the total amount of selling expenses including the entity’s definition of selling expenses. In January 2025, ASU 2025-01 was issued to clarify that the amendments of ASU 2024-03 are effective for public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.
Segment Information
TXNM has three reportable segments including PNM, TNMP, and Corporate and other. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The measure of profitability used by the CODM is Segment earnings (loss) attributable to TXNM, as presented below. The CODM uses this measure of profitability to allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget to actual variances on a regular basis when making decisions about allocating capital and operational expense funding to the segments. TXNM’s CODM is its President and COO who is also the CEO of the PNM and TNMP segments.

PNM

PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, which includes the asset optimization of PNM’s jurisdictional capacity as well as providing transmission services to third parties. FERC has jurisdiction over wholesale power and transmission rates. PNM includes the results of ETBC I upon its formation in 2023.

TNMP

TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities.
Corporate and Other

The Corporate and Other segment includes TXNM holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other until the close of the sale of NMRD on February 27, 2024 (Note 21). Eliminations of intercompany transactions are reflected in the Corporate and Other segment.
Accounts Receivable and Allowance for Credit Losses
Accounts Receivable and Allowance for Credit Losses
Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company estimates the allowance for credit losses on trade receivables based on historical experience and estimated default rates. Accounts receivable balances are reviewed monthly, adjustments to the allowance for credit losses are made as necessary and amounts that are deemed uncollectible are written off.
Revenue Recognition
Revenue Recognition

Retail electric operating revenues are recorded in the period of energy delivery, which includes estimated amounts for service rendered but unbilled at the end of each accounting period. The determination of the energy sales billed to individual retail customers is based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading and the corresponding unbilled revenue are estimated. Unbilled electric revenue is estimated based on daily generation volumes, estimated customer usage by class, line losses, historical trends and experience, applicable customer rates or by using AMS data where available. Amounts billed are generally due within the next month. The Company does not incur incremental costs to obtain contracts for its energy services.

PNM’s wholesale electricity sales are recorded as electric operating revenues and wholesale electricity purchases are recorded as costs of energy sold. Derivative contracts that are subject to unplanned netting are recorded net in earnings. A “book-out” is the planned or unplanned netting of off-setting purchase and sale transactions. A book-out is a transmission mechanism to reduce congestion on the transmission system or administrative burden. For accounting purposes, a book-out is the recording of net revenues upon the settlement of a derivative contract.

Unrealized gains and losses on derivative contracts that are not designated for hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power and fuel supply agreements, used to hedge generation assets and purchased power costs. Changes in the fair value of economic hedges are reflected in results of operations, with changes related to economic hedges on sales included in operating revenues and changes related to economic hedges on purchases included in cost of energy sold. See Note 9.

The Company has collaborative arrangements related to its interest in SJGS, Four Corners, PVNGS, and Luna. The Company has determined that during the years ended December 31, 2024, 2023, and 2022 none of the joint owners in its collaborative arrangements were customers under Topic 606. The Company will continue to evaluate transactions between collaborative arrangement participants in future periods under the revenue recognition standard.

PNM and TNMP recognize revenue as they satisfy performance obligations, which typically occurs as the customer or end-user consumes the electric service provided. Electric services are typically for a bundle of services that are distinct and transferred to the end-user in one performance obligation measured by KWh or KW. Electric operating revenues are recorded in the period of energy delivery, including estimated unbilled amounts. The Company has elected to exclude all sales and similar taxes from revenue.

Revenue from contracts with customers is recorded based upon the total authorized tariff or market price at the time electric service is rendered, including amounts billed under arrangements qualifying as an Alternative Revenue Program (“ARP”). ARP arrangements are agreements between PNM or TNMP and its regulator that allow PNM or TNMP to adjust future rates in response to past activities or completed events, if certain criteria are met. ARP revenues are required to be reported separately from contracts with customers. ARP revenues in a given period include the recognition of “originating” ARP revenues (i.e. when the regulator-specific conditions are met) in the period, offset by the reversal of ARP revenues currently approved for recovery by the governing bodies.

Sources of Revenue

Additional information about the nature of revenues is provided below. Additional information about matters affecting PNM’s and TNMP’s regulated revenues is provided in Note 17.

Revenue from Contracts with Customers

PNM

NMPRC Regulated Retail Electric Service – PNM provides electric generation, transmission, and distribution service to its rate-regulated customers in New Mexico. PNM’s retail electric service territory covers a large area of north central New Mexico, including the cities of Albuquerque, Rio Rancho, and Santa Fe, and certain areas of southern New Mexico. Customer rates for retail electric service are set by the NMPRC and revenue is recognized as energy is delivered to the customer. PNM invoices customers on a monthly basis for electric service and generally collects billed amounts within one month.
Transmission Service to Third Parties – PNM owns transmission lines that are interconnected with other utilities in New Mexico, Texas, Arizona, Colorado, and Utah. Transmission customers receive service for the transmission of energy owned by the customer utilizing PNM’s transmission facilities. Customers generally receive transmission services, which are regulated by FERC, from PNM through PNM’s Open Access Transmission Tariff (“OATT”) or a specific contract. Customers are billed based on capacity and energy components on a monthly basis. PNM owns the Western Spirit Line and services under related transmission agreements use an incremental rate, approved by FERC, that is separate from the formula rate mechanism.

Wholesale Energy Sales – PNM engages in activities to optimize its existing jurisdictional assets and long-term power agreements through spot market, hour-ahead, day-ahead, week-ahead, month-ahead, and other sales of excess generation not required to fulfill retail load and contractual commitments. PNM participates in the EIM (a real-time wholesale energy trading market operated by the CAISO) that enables participating electric utilities to buy and sell energy. The NMPRC granted PNM authority to seek recovery of costs associated with joining the EIM, which have been included in the 2024 Rate Change and to pass the benefits of participating in EIM to customers through the FPPAC. PNM’s participation in EIM has significantly increased Electric operating revenues which are passed on to customers under PNM’s FPPAC with no impact to net earnings.

TNMP

PUCT Regulated Retail Electric Service – TNMP provides transmission and distribution services in Texas under the provisions of TECA and the Texas Public Utility Regulatory Act. TNMP is subject to traditional cost-of-service regulation with respect to rates and service under the jurisdiction of the PUCT and certain municipalities. TNMP’s transmission and distribution activities are solely within ERCOT and not subject to traditional rate regulation by FERC. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service territory. Revenue is recognized as energy is delivered to the consumer. TNMP invoices REPs on a monthly basis and is generally paid within a month.

TCOS – TNMP is a transmission service provider that is allowed to recover its TCOS through a network transmission rate that is approved by the PUCT. TCOS customers are other utilities that receive service for the transmission of energy owned by the customer utilizing TNMP’s transmission facilities.

Alternative Revenue Programs

The Company defers certain costs and records certain liabilities pursuant to the rate actions of the NMPRC, PUCT, and FERC. ARP revenues, which are discussed above, include recovery or refund provisions under PNM’s renewable energy rider and true-ups to PNM’s formula transmission rates; transmission cost recovery factor, and the impacts of the PUCT’s January 25, 2018 order regarding the change in the federal corporate income tax rate; the energy efficiency incentive bonus at both PNM and TNMP; and PNM’s TOD rate pilot program. Regulatory assets and liabilities are recognized for the difference between ARP revenues and amounts currently approved for recovery by the governing bodies. Regulatory assets and liabilities are amortized into earnings as amounts are billed. TNMP’s 2018 Rate Case integrated AMS costs into base rates beginning January 1, 2019. These costs are being amortized into earnings as alternative revenues over a period of five years.

Other Electric Operating Revenues

Other electric operating revenues consist primarily of PNM’s economic hedges that meet the definition of a derivative and are therefore not considered revenue from contracts with customers. Derivative revenues include gains and losses representing changes in fair value (Note 9) and settlements from sales of electricity under forward sales contracts.
Fair Value of Derivatives
Fair Value Disclosures

The Company determines the fair values of its derivative and other financial instruments based on the hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
For investment securities, Level 2 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market values based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value (“NAV”). For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. Management of the Company independently verifies the information provided by pricing services. Uncategorized investments include common/collective investment trusts, which are measured at NAV at the end of each reporting period. Audited financial statements are received for each fund and reviewed by the Company annually. Fair value for these collective investment trusts is measured using a practical expedient provided under GAAP that allows the NAV per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Investments valued using this practical expedient are not required to be presented within the GAAP fair value hierarchy.
Variable Interest Entities How an enterprise evaluates and accounts for its involvement with variable interest entities, focuses primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a variable interest entity (“VIE”). This evaluation requires continual reassessment of the primary beneficiary of a VIE.
Pension and Other Postretirement Benefits
TXNM and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). TXNM maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of the periodic cost or income to the extent included in retail rates (a “prepaid pension asset”).
Participants in the PNM Plans include eligible employees and retirees of TXNM and PNM. Participants in the TNMP Plans include eligible employees and retirees of TNMP. The PNM pension plan was frozen at the end of 1997 with regard to new participants, salary levels, and benefits. Through December 31, 2007, additional credited service could be accrued under the PNM pension plan up to a limit determined by age and service. The TNMP pension plan was frozen at December 31, 2005 with regard to new participants, salary levels, and benefits.
A plan sponsor is required to (a) recognize in its statement of financial position an asset for a plan’s overfunded status or a liability for a plan’s underfunded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year; and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur.
Unrecognized prior service costs and unrecognized gains or losses are required to be recorded in AOCI and subsequently amortized. To the extent the amortization of these items will ultimately be recovered or returned through future rates, PNM and TNMP record the costs as a regulatory asset or regulatory liability. The amortization of these incurred costs is included as pension and postretirement benefit periodic cost or income in subsequent years.
The Company maintains trust funds for the pension and OPEB plans from which benefits are paid to eligible employees and retirees. The Company’s funding policy is to make contributions to the trusts, as determined by an independent actuary, that comply with minimum guidelines of the Employee Retirement Income Security Act and the IRC. Information concerning the fair value of investments is contained in Note 9. The Company has in place a policy that defines the investment objectives, establishes performance goals of asset managers, and provides procedures for the manner in which investments are to be reviewed. The plans implement investment strategies to achieve the following objectives:
 
•Implement investment strategies commensurate with the risk that the Corporate Investment Committee deems appropriate to meet the obligations of the pension plans and OPEB plans, minimize the volatility of expense, and account for contingencies
•Transition asset mix over the long-term to a higher proportion of high-quality fixed income investments as the plans’ funded statuses improve
Management is responsible for the determination of the asset target mix and the expected rate of return. The target asset allocations are determined based on consultations with external investment advisors. The expected long-term rate of return on pension and postretirement plan assets is calculated on the market-related value of assets. Actual gains and losses on pension and OPEB plan assets are recognized in the market-related value of assets equally over a period of not more than five years, which reduces year-to-year volatility. For the PNM Plans and TNMP Plans, the market-related value of assets is equal to the prior year’s market-related value of assets adjusted for contributions, benefit payments and investment gains and losses that are within a corridor of plus or minus 4.0% around the expected return on market value. Gains and losses that are outside the corridor are amortized over five years.
Commitments and Contingencies
There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory proceedings in the normal course of its business. See Note 17. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows.
With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. The Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimatable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, or commitments will have a material effect on its financial condition, results of operations, or cash flows.
v3.25.0.1
Summary of the Business and Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Schedule of Average Straight-Line Rates and Depreciation on Electric, Common, Intangible, and General Plant
Average straight-line rates used were as follows:

Year ended December 31,
202420232022
PNM
Electric plant2.87 %2.67 %2.55 %
Common, intangible, and general plant14.06 7.64 7.83 
TNMP3.74 3.77 3.72 
Depreciation expense on electric, common, intangible, and general plant is as follows:

Year ended December 31,
202420232022
(In thousands)
PNM$188,035 $158,956 $163,162 
TNMP124,976 110,675 96,131 
Schedule of Inventory Inventories consisted of the following at December 31:
 
TXNM
PNMTNMP
 202420232024202320242023
 (In thousands)
Fuel Oil
$1,095 $896 $1,095 $896 $— $— 
Materials and supplies165,766 97,138 141,415 80,676 24,351 16,462 
$166,861 $98,034 $142,510 $81,572 $24,351 $16,462 
v3.25.0.1
Segment Information (Tables)
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Schedule of Financial Information by Segment
The following tables present summarized financial information for TXNM by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.

2024PNMTNMPCorporate
and Other
TXNM Consolidated
(In thousands)
Electric operating revenues$1,379,088 $592,111 $— $1,971,199 
Cost of energy
Fuel burn
130,380 — — 130,380 
Purchases for resale
286,399 — — 286,399 
Transmission by others
18,139 149,066 — 167,205 
Significant segment expenses
Administrative and general - direct
63,105 (1,452)151,089 212,742 
Administrative and general - corporate allocation
132,209 53,166 (185,375)— 
Customer related expenses
31,246 2,997 131 34,374 
Energy production costs
93,748 — — 93,748 
Regulatory disallowances
8,980 — — 8,980 
Depreciation and amortization
221,780 125,915 37,230 384,925 
Transmission and distribution costs
61,302 37,078 — 98,380 
Taxes other than income taxes
49,807 44,441 6,332 100,580 
Total operating expenses
1,097,095 411,211 9,407 1,517,713 
Net other income and (deductions)
61,494 8,725 (15,399)54,820 
Interest charges(106,018)(58,983)(63,065)(228,066)
Income taxes (benefit)29,217 27,114 (34,813)21,518 
Valencia non-controlling interest(16,040)— — (16,040)
Subsidiary preferred stock dividends(528)— — (528)
Segment earnings (loss) attributable to TXNM
$191,684 $103,528 $(53,058)$242,154 
At December 31, 2024:
Total Assets$7,407,279 $3,649,125 $155,329 $11,211,733 
Goodwill$51,632 $226,665 $— $278,297 
 
2023PNMTNMPCorporate
and Other
TXNM Consolidated
(In thousands)
Electric operating revenues$1,403,948 $535,250 $— $1,939,198 
Cost of energy
Fuel burn
138,538 — — 138,538 
Purchases for resale
499,921 — — 499,921 
Transmission by others
25,155 138,647 — 163,802 
Significant segment expenses
Administrative and general - direct
52,554 2,710 139,010 194,274 
Administrative and general - corporate allocation
124,321 47,470 (171,791)— 
Customer related expenses
29,775 3,783 68 33,626 
Energy production costs
91,610 — — 91,610 
Regulatory disallowances
70,750 1,173 — 71,923 
Depreciation and amortization
177,633 113,142 28,728 319,503 
Transmission and distribution costs
61,725 36,996 — 98,721 
Taxes other than income taxes
48,790 41,311 5,839 95,940 
Total operating expenses
1,320,772 385,232 1,854 1,707,858 
Net other income and (deductions)
41,358 8,368 (182)49,544 
Interest charges(86,574)(46,152)(57,629)(190,355)
Income taxes (benefit)(16,758)17,297 (16,889)(16,350)
Valencia non-controlling interest(18,533)— — (18,533)
Subsidiary preferred stock dividends(528)— — (528)
Segment earnings (loss) attributable to TXNM
$35,657 $94,937 $(42,776)$87,818 
At December 31, 2023:
Total Assets$6,813,065 $3,145,031 $294,509 $10,252,605 
Goodwill$51,632 $226,665 $— $278,297 
2022PNMTNMPCorporate
and Other
TXNM Consolidated
(In thousands)
Electric operating revenues$1,766,825 $482,730 $— $2,249,555 
Cost of energy
Fuel burn
299,411 — — 299,411 
Purchases for resale
541,828 — — 541,828 
Trading mark-to-market
(456)— — (456)
Transmission by others
23,230 123,928 — 147,158 
Significant segment expenses
Administrative and general - direct
62,505 3,607 130,336 196,448 
Administrative and general - corporate allocation
115,416 42,293 (157,709)— 
Customer related expenses
26,925 3,692 84 30,701 
Energy production costs
147,347 — — 147,347 
Regulatory disallowances
832 — — 832 
Depreciation and amortization
180,812 98,316 25,725 304,853 
Transmission and distribution costs
58,278 36,406 — 94,684 
Taxes other than income taxes
49,210 38,521 5,258 92,989 
Total operating expenses
1,505,338 346,763 3,694 1,855,795 
Net other income and (deductions)
(62,196)8,653 (999)(54,542)
Interest charges(61,073)(37,192)(29,643)(127,908)
Income taxes (benefit)19,198 15,161 (8,229)26,130 
Valencia non-controlling interest(15,122)— — (15,122)
Subsidiary preferred stock dividends(528)— — (528)
Segment earnings (loss) attributable to TXNM
$103,370 $92,267 $(26,107)$169,530 
At December 31, 2022:
Total Assets$6,272,166 $2,746,601 $238,610 $9,257,377 
Goodwill$51,632 $226,665 $— $278,297 
Schedule of Concentration Risk of Major Customers Two REPs during the years ended December 31, 2024, 2023, and 2022 accounted for more than 10% of the electric operating revenues of TNMP as follows:
Year Ended December 31,
202420232022
REP A26 %25 %27 %
REP B20 19 20 
v3.25.0.1
Accumulated Other Comprehensive Income (Loss) (Tables)
 12 Months Ended
Dec. 31, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of Rollforward of AOCI Information regarding AOCI is as follows:
Accumulated Other Comprehensive Income (Loss)
PNM
TXNM
Unrealized Gains on Available-for-Sale SecuritiesPension
Liability
Adjustment		TotalFair Value Adjustment for Cash Flow HedgesTotal
 (In thousands)
Balance at December 31, 2021
$11,715 $(83,651)$(71,936)$— $(71,936)
 Amounts reclassified from AOCI (pre-tax)(3,827)7,104 3,277 (1,176)2,101 
Income tax impact of amounts reclassified972 (1,804)(832)299 (533)
 Other OCI changes (pre-tax)(1,928)(4,565)(6,493)12,285 5,792 
Income tax impact of other OCI changes490 1,159 1,649 (3,121)(1,472)
Net after-tax change(4,293)1,894 (2,399)8,287 5,888 
Balance at December 31, 2022
7,422 (81,757)(74,335)8,287 (66,048)
 Amounts reclassified from AOCI (pre-tax)(7,199)4,776 (2,423)9,287 6,864 
Income tax impact of amounts reclassified1,828 (1,212)616 (2,359)(1,743)
 Other OCI changes (pre-tax)11,529 1,389 12,918 (15,483)(2,565)
Income tax impact of other OCI changes(2,928)(353)(3,281)3,933 652 
Net after-tax change3,230 4,600 7,830 (4,622)3,208 
Balance at December 31, 202310,652 (77,157)(66,505)3,665 (62,840)
 Amounts reclassified from AOCI (pre-tax)(13,108)4,866 (8,242)10,348 2,106 
Income tax impact of amounts reclassified3,330 (1,236)2,094 (2,629)(535)
 Other OCI changes (pre-tax)(885)(3,210)(4,095)(15,260)(19,355)
Income tax impact of other OCI changes225 815 1,040 3,876 4,916 
Net after-tax change(10,438)1,235 (9,203)(3,665)(12,868)
Balance at December 31, 2024$214 $(75,922)$(75,708)$— $(75,708)
v3.25.0.1
Electric Operating Revenues (Tables)
 12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects ARP revenues and other revenues.
PNMTNMP
TXNM Consolidated
Year Ended December 31, 2024(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$541,581 $203,227 $744,808 
Commercial460,311 166,858 627,169 
Industrial123,754 35,300 159,054 
Public authority23,161 7,329 30,490 
Economy energy service25,481 — 25,481 
Transmission141,058 157,049 298,107 
Wholesale energy sales64,903 — 64,903 
Miscellaneous5,776 3,813 9,589 
Total revenues from contracts with customers
1,386,025 573,576 1,959,601 
Alternative revenue programs(9,720)18,535 8,815 
Other electric operating revenues2,783 — 2,783 
Total Electric Operating Revenues
$1,379,088 $592,111 $1,971,199 


PNMTNMP
TXNM Consolidated
Year Ended December 31, 2023
(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$425,448 $190,953 $616,401 
Commercial391,964 155,254 547,218 
Industrial90,084 45,508 135,592 
Public authority21,018 6,777 27,795 
Economy energy service34,340 — 34,340 
Transmission159,475 135,831 295,306 
Wholesale energy sales248,801 — 248,801 
Miscellaneous5,676 3,739 9,415 
Total revenues from contracts with customers
1,376,806 
1
538,062 1,914,868 
1
Alternative revenue programs9,419 (2,812)6,607 
Other electric operating revenues17,723 — 17,723 
Total Electric Operating Revenues
$1,403,948 $535,250 $1,939,198 
1 Included in revenue from contracts with customers at PNM and TXNM is a $128.7 million reduction associated with the SJGS abandonment settlement and a $38.4 million reduction associated with PVNGS leased capacity as a result of the NMPRC final order in the 2024 Rate Change.
PNMTNMP
TXNM Consolidated
Year Ended December 31, 2022
(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$484,699 $187,951 $672,650 
Commercial422,163 154,059 576,222 
Industrial85,102 36,919 122,021 
Public authority21,330 6,379 27,709 
Economy energy service45,009 — 45,009 
Transmission149,421 113,782 263,203 
Wholesale energy sales534,196 — 534,196 
Miscellaneous5,390 3,817 9,207 
Total revenues from contracts with customers
1,747,310 502,907 2,250,217 
Alternative revenue programs692 (20,177)(19,485)
Other electric operating revenues18,823 — 18,823 
Total Electric Operating Revenues
$1,766,825 $482,730 $2,249,555 
v3.25.0.1
Earnings and Dividends Per Share (Tables)
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Schedule of Computation of Earnings Per Share and Dividends Per Share
Information regarding the computation of earnings per share and dividends per share is as follows:
 Year Ended December 31,
 202420232022
 (In thousands, except per share amounts)
Net Earnings Attributable to TXNM
$242,154 $87,818 $169,530 
Average Number of Common Shares:
Outstanding during year90,214 86,038 85,835 
Vested awards of restricted stock320 258 287 
Average Shares – Basic90,534 86,296 86,122 
Dilutive Effect of Common Stock Equivalents:
TXNM ATM Programs
12 38 — 
Restricted stock
45 35 47 
Average Shares – Diluted90,591 86,369 86,169 
Net Earnings Attributable to TXNM Per Share of Common Stock:
Basic$2.67 $1.02 $1.97 
Diluted$2.67 $1.02 $1.97 
Dividends Declared per Common Share$1.57 $1.49 $1.41 
v3.25.0.1
Financing (Tables)
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Forward Contracts Indexed to Issuer's Equity
Cash proceeds shown below were reduced by $1.0 million in issuance costs resulting in net cash proceeds of $198.2 million.

Forward completion
Initial forward price
Shares
Settlement price
Settlement amount
(in thousands)
March 15, 2023$48.49 504,452 $49.00 $24,720 
March 20, 202348.30 528,082 48.78 25,758
May 30, 202347.56 244,639 47.99 11,741
June 30, 202344.87 804,477 45.07 36,257
September 26, 202344.03 2,283,860 44.11 100,734
4,365,510 $199,210 
Cash proceeds shown below were reduced by $0.8 million in issuance costs resulting in net cash proceeds of $98.6 million.
Forward completion
Initial forward price
Shares
Settlement price
Settlement amount
(in thousands)
May 13, 2024$37.76 262,025 $38.01 $9,960 
August 13, 202439.98 113,014 40.21 4,545
August 16, 202440.26 261,066 40.48 10,568
August 23, 202440.36 284,952 40.56 11,558
August 30, 202440.47 311,583 40.64 12,661
September 16, 202440.77 1,226,311 40.85 50,093
2,458,951 $99,385 
Schedule of Interest Rate Hedging Activities of Hedging Agreements
TXNM has entered into hedging agreements that establish a fixed rate for the indicated amount of variable rate debt, above which a customary spread is applied, which is subject to change if there is a change in TXNM’s credit rating. As of December 31, 2023, TXNM’s hedging agreements were as follows:

Variable Rate Established
Effective DateMaturity DateDebt HedgedFixed Rate
(In millions)(Percent)
March 17, 2023September 30, 2023$150.0 4.57 %
October 31, 2022December 31, 2023100.0 4.65 
October 31, 2022December 31, 2023100.0 4.66 
September 30, 2022December 31, 2023100.0 4.17 
September 30, 2022December 31, 2023100.0 4.18 
May 20, 2022December 31, 2023100.0 2.52 
May 2, 2022December 31, 2023150.0 2.65 
May 2, 2022December 31, 2023200.0 2.65 
January 1, 2024December 31, 2024100.0 3.32 
January 1, 2024December 31, 2024100.0 3.32 
January 1, 2024December 31, 2024100.0 3.38 
January 1, 2024December 31, 2024150.0 3.62 
January 1, 2024December 31, 2024150.0 3.57 
January 1, 2025December 31, 2025100.0 4.18 
January 1, 2025December 31, 2025100.0 4.18 
January 1, 2025December 31, 2025100.0 3.99 
Schedule of Short-Term Debt Outstanding
Short-term debt outstanding consists of:
 December 31,
Short-term Debt20242023
 (In thousands)
PNM:
PNM Revolving Credit Facility$323,800 $107,500 
PNM New Mexico Credit Facility40,000 30,000 
363,800 137,500 
TNMP Revolving Credit Facility151,600 55,100 
TXNM:
TXNM Revolving Credit Facility
93,900 69,300 
$609,300 $261,900 
Schedule of Long-Term Debt Outstanding and Unamortized (Premiums), Discounts, and Debt Issuance Costs Information concerning long-term debt outstanding and unamortized (premiums), discounts, and debt issuance costs is as follows:
 December 31, 2024December 31, 2023
PrincipalUnamortized Discounts, (Premiums), and Issuance Costs, netPrincipalUnamortized Discounts, (Premiums), and Issuance Costs, net
 (In thousands)
PNM Debt
ETBC I - Senior Secured Energy Transition Bonds
Series A-1, 5.64%
$172,471 $1,025 $175,000 $1,093 
Series A-2, 6.03%
168,200 1,014 168,200 1,057 
Senior Unsecured Notes, Pollution Control Revenue Bonds:
2.15% due April 2033
146,000 736 146,000 824 
3.00% due June 2040, mandatory tender - June 1, 2024
— — 37,000 88 
0.875% mandatory tender - October 1, 2026
100,345 257 100,345 403 
3.00% due January 2038, mandatory tender - June 1, 2024
— — 36,000 87 
1.15% due June 2040, mandatory tender - June 1, 2024
— — 125,000 132 
3.90% due June 2040, mandatory tender - June 1, 2028
130,000 796 130,000 1,029 
3.875% due June 2040, mandatory tender - June 1, 2029
162,000 1,158 — — 
3.875% due January 2038, mandatory tender - June 1, 2029
36,000 258 — — 
Senior Unsecured Notes:
3.45% due May 2025
104,000 39 104,000 143 
3.85% due August 2025
250,000 174 250,000 477 
3.68% due May 2028
88,000 209 88,000 271 
3.78% due August 2028
15,000 38 15,000 48 
3.93% due May 2033
38,000 149 38,000 167 
4.22% due May 2038
45,000 212 45,000 228 
4.50% due May 2048
20,000 110 20,000 114 
4.60% due August 2048
85,000 470 85,000 490 
3.21% due April 2030
150,000 852 150,000 1,011 
3.57% due April 2039
50,000 398 50,000 426 
2.59% due July 2033
80,000 328 80,000 366 
December 31, 2024December 31, 2023
PrincipalUnamortized Discounts, (Premiums), and Issuance Costs, netPrincipalUnamortized Discounts, (Premiums), and Issuance Costs, net
(In thousands)
PNM Debt (Continued)
3.14% due July 2041
80,000 381 80,000 404 
2.29% due December 2031
50,000 205 50,000 235 
2.97% due December 2041
100,000 499 100,000 528 
5.51% due April 2035
150,000 779 150,000 854 
5.92% due April 2053
50,000 280 50,000 290 
PNM 2024 $200.0 Million Term Loan due November 2025
200,000 57 — — 
2,470,016 10,424 2,272,545 10,765 
Less current maturities560,907 270 200,529 307 
1,909,109 10,154 2,072,016 10,458 
TNMP Debt
First Mortgage Bonds:
6.95% due April 2043
93,198 (13,056)93,198 (13,771)