ALBUQUERQUE, N.M.--(BUSINESS WIRE)--PNM Resources’ (NYSE: PNM) New Mexico utility, PNM, Friday filed an agreement with the Federal Energy Regulatory Commission that would settle its generation rate case with Navopache Electric Cooperative submitted in September 2011.
“The agreement also allows PNM to file an application for formula rates to be effective in 2015, which will enable us to keep revenues in line with costs in the future.”
The agreement requires approval from FERC and the Navopache Board of Directors. It does not impact retail rates for New Mexico residential or business customers. PNM has been the full requirements wholesale provider for Navopache since July 2000.
As permitted by FERC rules, in April 2012, PNM began billing at the higher rates associated with the filed case, subject to refund. Revenues recorded by PNM since April have been aligned with the agreed-to annual increase of $5.3 million. This is expected to result in a $0.03 improvement in 2012 ongoing diluted earnings per share compared with 2011, which is in line with the previously issued 2012 guidance range of $0.00 - $0.05 and $0.04 for a full year of 2013.
This “black box” settlement has an imputed rate base of $36.7 million and a 10 percent return on equity. The associated debt/equity ratio is 50-50. Under the settlement, the contract with Navopache is extended for ten years, and the rates are locked in until Jan. 1, 2015.
“We are pleased with the outcome and the opportunity to continue serving Navopache,” said Pat Collawn, PNM Resources chairman, president and CEO. “The agreement also allows PNM to file an application for formula rates to be effective in 2015, which will enable us to keep revenues in line with costs in the future.”
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2011 consolidated operating revenues of $1.3 billion, excluding First Choice Power. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,550 megawatts of generation capacity and serves electricity to more than 735,000 homes and businesses in New Mexico and Texas. For more information, visit the company’s Web site at www.PNMResources.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release that relate to future events or PNM Resources’ (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (collectively, the “Company”) expectations, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates. PNMR, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company’s Form 10-K and Form 10-Q filings with the Securities and Exchange Commission, which are specifically incorporated by reference herein.
Non-GAAP Financial Measures
The Company uses ongoing earnings and ongoing earnings per diluted share (or ongoing diluted earnings per share) to evaluate the operations of the Company and to establish goals for management and employees. While the Company believes these financial measures are appropriate and useful for investors, they are not measures presented in accordance with generally accepted accounting principles in the U.S. (GAAP). The Company does not intend for these measures, or any piece of these measures, to represent any financial measure as defined by GAAP. Furthermore, the Company's calculations of these measures as presented may or may not be comparable to similarly titled measures used by other companies. The Company uses ongoing earnings guidance to provide investors with management's expectations of ongoing financial performance over the period presented. While the Company believes ongoing earnings guidance is an appropriate measure, it is not a measure presented in accordance with GAAP. The Company does not intend for ongoing earnings guidance to represent an expectation of net earnings as defined by GAAP. Management is generally not able to estimate the impact of the reconciling items between ongoing earnings guidance and forecasted GAAP earnings, nor their probable impact on GAAP earnings; therefore, management is generally not able to provide a corresponding GAAP equivalent for earnings guidance.