That marks the third straight quarter of double-digit growth for the utility, driving the company’s net earnings for the first nine months of 2017 up by 71 percent compared to last year. The growth largely reflects a 10 percent rate hike for average residential customers that took effect last October, the utility’s first in six years, said company executives from parent firm PNM Resources in a conference call with investors Friday morning.
The sharp improvement in PNM finances, combined with moderate but steady growth at PNM Resources’ other utility, Texas New Mexico Power, has driven the parent firm’s net income up 46 percent so far this year, from $92 million in the January-September period in 2016 to $132.2 million this year.
Parent firm earnings per share for the first nine months rose from $1.15 to $1.67, and the company reaffirmed its 2017 earnings guidance of between $1.77 to $1.87 per share Friday.
“Third quarter earnings keep us on track with annual earnings guidance and reflect the retail rates implemented last year to pay for our investments in system improvements,” PNM Resources Chairman, President and CEO Pat Vincent-Collawn said in a statement.
Company finances could improve more in 2018 and 2019, depending on the outcome of PNM’s current rate case at the New Mexico Public Regulation Commission. The utility is seeking another 9 percent average rate hike to be phased in over two years. Parties in the case are awaiting a recommendation from hearing examiners, which commissioners are expected to rule on before the end of the year.
The new rate hike would pay for costs to shut down half of the coal-fired San Juan Generating Station next year, replace that power with other resources, and make needed investments in things like transmission and distribution.
In addition, the company is still making up for lost ground from energy efficiency programs and new rooftop solar generation on homes and businesses, which have cut electricity demand.
Those trends continued in the third quarter, with flat or declining consumption among residential, commercial and industrial customers. Overall, the company’s electric load fell by nearly 1 percent from July-September, and by 0.7 percent year to date.
On the other hand, PNM did benefit from new, third-party transmission contracts in the third quarter, plus warm summer weather that drove up revenue from blasting air conditioners.
TNMP, meanwhile, is enjoying stable load growth in Texas. That, combined with transmission rate relief, pushed its net earnings up 5.7 percent in the third quarter, and 8.5 percent year to date.