Regulator Rejects PNM Resources’ Attempt to Recover Coal and Nuke Plant Expenses
January 5, 2024
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PNM ($NYSE:PNM) Resources, a company that specializes in providing energy to New Mexico and Texas, recently experienced a major setback when a regulator rejected their attempt to recover costs associated with their coal and nuclear plant. This critical decision made by the regulator has left PNM Resources searching for a new solution to the financial problems they are faced with. PNM Resources is an energy holding company based in Albuquerque, New Mexico. They own subsidiary companies that provide electricity to customers in Texas and New Mexico, as well as natural gas in New Mexico. The decision by the regulator to reject PNM Resources’ bid to recoup expenses from their coal and nuclear plant means that the company must now seek out alternative financial solutions for realizing their goals.
This could not come at a worse time, as PNM Resources is already feeling the strain of rising fuel costs and increased competition. The future of the company is now uncertain, and many investors are left wondering what this decision will mean for the future of PNM Resources. Only time will tell what will come of this decision and how the company will ultimately be affected.
Market Price
On Thursday, the Public Utility Commission of Texas (PUCT) rejected PNM Resources‘ attempt to recover expenses related to coal and nuclear power plants. As a result, the stock for the company opened at $39.1 and closed at the same price, down by 0.8% from its previous closing price of 39.4. PNM Resources sought to increase the base rate it charges customers for electricity, and the PUCT determined that the increase was not justified. This ruling was a blow to PNM Resources, as it prevents them from recovering costs associated with their coal and nuclear power plants. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Pnm Resources. More…
| Total Revenues | Net Income | Net Margin |
| 2.1k | 153.79 | 7.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Pnm Resources. More…
| Operations | Investing | Financing |
| 552.39 | -1.05k | 500.55 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Pnm Resources. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 10.05k | 7.75k | 26.18 |
Key Ratios Snapshot
Some of the financial key ratios for Pnm Resources are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.7% | 1.3% | 17.6% |
| FCF Margin | ROE | ROA |
| -22.1% | 10.2% | 2.3% |
Analysis
GoodWhale recently conducted an analysis of PNM RESOURCES‘ wellbeing. According to the GoodWhale Star Chart, PNM RESOURCES has an intermediate health score of 4/10 with regard to its cashflows and debt, meaning that the company is likely to safely ride out any crisis without the risk of bankruptcy. Additionally, PNM RESOURCES is strong in dividend, with a medium performance in growth, profitability and weak performance in asset. Based on this data, we classify PNM RESOURCES as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Such companies may be of interest to investors who are looking for steady, reliable returns and are not necessarily looking for high-growth opportunities. Additionally, those investors who are looking for some capital appreciation and have a longer term investment horizon may find investing in PNM RESOURCES attractive. More…
Peers
PNM Resources Inc is an electric utility company that serves New Mexico and Texas. The company has two main subsidiaries: Public Service Company of New Mexico and Texas-New Mexico Power Company. PNM Resources is the holding company for these two subsidiaries. The company has a market capitalization of $2.79 billion and its shares are traded on the New York Stock Exchange under the ticker symbol PNM. The company’s main competitors are Rosseti PJSC, Portland General Electric Co, and Centrais Eletricas Brasileiras SA.
– Rosseti PJSC ($NYSE:POR)
General Electric Co is an American multinational conglomerate corporation headquartered in Boston, Massachusetts. As of 2018, the company operates through the following segments: Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation, and Capital. The company has a market cap of 3.91B as of 2022 and a return on equity of 9.64%.
– Portland General Electric Co ($NYSE:EBR.B)
Centrais Eletricas Brasileiras SA is a Brazilian electric utility company. The company is involved in the generation, transmission, and distribution of electricity in Brazil. The company has a market cap of 23.13B as of 2022 and a Return on Equity of 9.75%. The company is headquartered in Rio de Janeiro, Brazil.
Summary
PNM Resources, a utility holding company based in New Mexico, recently had its bid to recoup expenses related to two coal-fired and one nuclear power plant rejected by the New Mexico Public Regulation Commission (NMPRC). The company had been attempting to increase customer rates to pay for the higher costs associated with the plants, but the NMPRC argued that the rate increase was not justified. This decision is likely to have a negative effect on PNM Resources’ finances, as it was counting on recovering these expenses. Investors should take note of this development, as it could have an impact on PNM Resources’ share price in the near future.
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