The TXNM Energy Proposition
Delivering Earnings and Dividend Growth
As a regulated utility, TXNM Energy achieves earnings growth by investing in infrastructure that provides long-term value to customers and earning the authorized return on these rate base investments.
Earnings growth is based on ongoing earnings per diluted share, a non-GAAP financial measure excluding certain non-recurring, infrequent, and other items from earnings disclosed and reconciled in accordance with GAAP.
Rate Base Growth
Our rate base growth is driven by investments to support customer demand and load growth at both TNMP and PNM and expansion of our transmission grid to deliver clean energy, enhance customer satisfaction and increase grid resilience. Our current capital forecast calls for $6.1 billion worth of investments in the years 2024 through 2028. This capital plan translates to 10% rate base growth through 2028, from a 2024 base period of $6.0 billion rate base.
2024-2028 Investment Plan
Earnings Growth
We expect to realize the earnings potential in our businesses by continuing to earn our allowed returns and reducing regulatory lag. At TNMP, we utilize TCOS and DCRF rate mechanisms to allow for more timely recovery of costs during interim periods between rate reviews. For FERC transmission investments in New Mexico, we have implemented an annual formula rate to recover investments made in the previous year. At PNM Retail, we utilize the future test year filing format to minimize the impacts of regulatory lag.
We are targeting 6% - 7% earnings growth 2024 - 2028, based on the midpoint of ongoing earnings guidance of $2.70 per diluted share for 2024.
Dividend Growth
We target a dividend payout ratio of 50% to 60% of ongoing earnings, specifically looking towards the middle of this range. On December 5, 2023, the Board of Directors unanimously voted to increase the company’s annual common stock dividend by $0.08, a 5.4 percent increase, to an indicated annual rate of $1.55 per share of common stock.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this news release for TXNM Energy, Inc. (“TXNM”), Public Service Company of New Mexico (“PNM”), or Texas-New Mexico Power Company (“TNMP”) (collectively, the “Company”) that relate to future events or expectations, projections, estimates, intentions, goals, targets, and strategies, including the unaudited financial results and earnings guidance, 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 and apply only as of the date of this report. TXNM, 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, TXNM, PNM, and TNMP caution readers not to place undue reliance on these statements. TXNM'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, Form 10-Q filings and the information included in the Company’s Forms 8-K with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.
