TXNM Energy, Inc. Q3 FY2024 earnings call

• Positive regulatory outcomes seen this year, including grid modernization plans approved and DOE funding received. - TNMP set new system peak records, filed system resiliency plan, and has ERCOT project proposals. - PNM had grid modernization plan approved, DOE funding for virtual power plant, added solar and storage, and upcoming resource filings. - Third quarter earnings $1.43 per share, narrowing full-year guidance to $2.70-$2.75 per share, and updated capital plan including TNMP's $600M system resiliency plan.

TNMP: Continues to set new system peak records, with a 16% higher peak than last year and a 13% annual growth rate since 2020. Interconnection requests this year are nearly double 2020 levels. Expected 2%-3% growth in traditional volumetric and demand-based rate classes in 2024. Residential customer counts are increasing, and interconnection requests for housing units are stronger than statewide. Data centers in the service territory total over 400 megawatts. PNM: Grid modernization plan approved, DOE funding for virtual power plant project, added 450 MW of solar and storage, grid modernization application approved, filed for new resources in 2028, upcoming RFP for 2029-2032, regional market decision expected by end of year, and a 20-year transmission planning study to be published.

• Narrowed full-year earnings guidance to $2.70 to $2.75 per share. - Target 6%-7% earnings growth through 2028. - Incorporated TNMP's resiliency investments into earnings power and plan to finance with equity, aiming for average $100M of equity per year to fund capital investments through 2028.

• Uncertainty around ERCOT project allocations and potential delays in regulatory approvals. - Impact of market growth on capital recovery and regulatory changes affecting cost recovery.

Q: CapEx trick or treat?

A: Pat Vincent-Collawn responds it's a treat.

Q: $600M to $900M ERCOT projects?

A: Don Tarry says incremental starting 2026-2027.

Q: New Mexico rate case settlement?

A: Don Tarry says in discussions with intervenors and hopeful for settlement.

Q: West Texas transmission pathway?

A: Don Tarry says will wait to see commission's selection.

Q: PNM low growth and load acceleration?

A: Don Tarry says industrial load ramping up closing the gamut to 2%-3% guidance.

Q: Equity financing for Texas System Resiliency Plan?

A: Lisa Eden says spread over 2025-2027 and depends on market conditions Q: Load growth forecast for 2024 and beyond?

A: Lisa Eden says industrial customers ramping up, positive load growth in both states with economic development efforts