TNMP reaches settlement in system resiliency plan

ALBUQUERQUE – Texas-New Mexico Power (TNMP), a subsidiary of TXNM Energy (NYSE: TXNM), has reached a settlement in principle regarding its System Resiliency Plan, which was scheduled for a hearing today. The administrative law judge has accepted TNMP's motion to cancel the hearing and has abated the procedural schedule.

The joint motion filed by TNMP requested the cancellation of the hearing on the merits, initially set for November 19-20, 2024, and the abatement of the scheduling order. The parties involved in the proceeding are in agreement with the settlement in principle and are working to finalize and file a formal settlement agreement. A status update or the settlement agreement itself is expected to be filed by December 5, 2024.

TNMP's System Resiliency Plan proposes a significant investment in the energy infrastructure, with capital investments totaling $600 million and an additional $151 million in related costs over a three-year period. This plan is designed to enhance the resilience of TNMP's distribution system against various risks and to ensure safe and reliable operations.

The filing and the application details for the System Resiliency Plan are available to the public on the TNMP website. TXNM Energy, based in Albuquerque, New Mexico, serves over 800,000 homes and businesses in Texas and New Mexico through its regulated utilities, TNMP and PNM.

This settlement in principle is part of TXNM Energy's broader strategy to maintain and improve its energy delivery systems. The company's commitment to infrastructure investment reflects its ongoing efforts to meet the energy needs of its customers in a secure and reliable manner.

The information for this article is based on a press release statement from TXNM Energy, Inc.

In other recent news, TXNM Energy reported second quarter 2024 earnings per share at $0.60, affirming its guidance range of $2.65 to $2.75 per share for the year. The company also announced a $600 million infrastructure investment plan in Texas and New Mexico. After an unsuccessful merger attempt with Avangrid (NYSE:), Jefferies initiated coverage on TXNM Energy shares with a Buy rating, citing the company's growth potential despite regulatory challenges. Scotiabank (TSX:), however, recommended caution, assigning a Sector Perform rating due to the regulatory and headline risks present in the states where TXNM Energy operates.

The company declared a quarterly dividend of $0.3875 per share, continuing its practice of rewarding shareholders. Changes in executive compensation were reported, with increases for Joseph D. Tarry and Elisabeth A. Eden. TXNM Energy also announced the retirement of its CFO, Elisabeth A. Eden, no sooner than March 15, 2025, and the appointment of Brian G. Iverson as the new General Counsel. These are among the recent developments for TXNM Energy.

InvestingPro Insights

TXNM Energy's recent settlement in principle regarding its System Resiliency Plan aligns with several key financial indicators and trends highlighted by InvestingPro data. The company's commitment to significant infrastructure investment, totaling $751 million over three years, is reflected in its financial position and market performance.

According to InvestingPro data, TXNM Energy has a market capitalization of $4.32 billion, indicating its substantial presence in the utility sector. The company's P/E ratio of 24.24 suggests that investors are willing to pay a premium for its shares, possibly due to expectations of future growth and the stability offered by its regulated utilities business.

Notably, TXNM Energy has demonstrated a strong commitment to shareholder returns. An InvestingPro Tip reveals that the company has raised its dividend for 13 consecutive years, with a current dividend yield of 3.28%. This consistent dividend growth, coupled with the company's infrastructure investment plans, may appeal to income-focused investors looking for stable returns in the utility sector.

The company's financial health appears solid, with a gross profit margin of 58.43% for the last twelve months as of Q3 2024. This robust profitability could provide TXNM Energy with the financial flexibility to fund its ambitious System Resiliency Plan without overly straining its balance sheet.

Investors seeking a more comprehensive analysis can find 11 additional InvestingPro Tips for TXNM Energy, offering deeper insights into the company's financial position and market performance.

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