Earnings for the first six months are up 87 percent, from $20.7 million in 2011 to $38.6 million.
The company’s sale of its unregulated utilities in Texas last fall, plus recent rate increases for its two regulated utilities, Public Service Company of New Mexico and Texas New Mexico Power, have pushed earnings up.
PNM also benefited from blasting swamp coolers in New Mexico, and TNMP from a 7 percent jump in customer consumption.
“PNM continues to see benefits from the alignment of its cost structure with the retail rates that went into effect last August, as well as the warm June weather in New Mexico,” said PNM Resources Chairman, President and CEO Pat Vincent-Collawn in a prepared statement. “TNMP benefited from strong retail load growth, partially offset by a cooler start to the summer.”
PNM, the state’s largest utility with about 500,000 customers, earned $16.8 million in the second quarter, up from $1.5 million last year. Apart from higher rates and warm weather, the utility benefitted from lower outage costs in the second quarter, and from repurchase of outstanding equity securities in late 2011.
On the other hand, lower sales prices from electricity generated at the Palo Verde Nuclear Generating Station, plus increased interest expenses associated with PNM’s stake in that plant, offset earnings.
TNMP, which serves about 230,000 customers in Texas, earned $8 million in the second quarter, up from $4.1 million last year.
PNM Resources’ positive earnings are a huge improvement from previous years. The recession, a freeze in rates for the company’s New Mexico utility prior to 2008, and losses at the firm’s unregulated utilities in Texas dragged earnings down. The company reported a $270.6 million loss in 2008, and a $42.5 million loss in 2010. That impacted its standing among rating agencies, which bumped the company to below-investment grade, or junk-bond status.
But PNM Resources swung to a $64.4 million profit last year, encouraging Standard & Poor’s and Moody’s Investor Service to raise ratings slightly last fall, although still at below-investment grade.
Higher ratings may depend on further earnings gains.
“Another rate-case filing could trigger a change, or maybe consistent earnings results over time,” said PNM Resources spokesman Frederick Bermudez.