Public Service Company of New Mexico reported a 59 percent jump in net income during the first quarter of 2019.
Earnings increased by $14 million compared with first-quarter 2018, from $7.7 million then to $19 million in the January-March period this year.
That growth helped boost net income for the utility’s parent firm, PNM Resources, which reported nearly 4 percent growth in earnings to $18.7 million, up from $15 million in first-quarter 2018.
Given PNM’s robust performance, the company raised its earnings guidance by 2 cents for 2019 to a range of $2.10 to $2.20 per share.
“First quarter financial results reflect continued growth in New Mexico that has increased our expectations for 2019 earnings,” said PNM Resources Chairman, President and CEO Pat Vincent-Collawn in a prepared statement.
PNM benefitted from a number of things during the first quarter, including the second phase of new base rates that state regulators approved in late 2017. The rate hike was scheduled for staggered implementation over two years, with the first phase taking effect in January 2018 and the second one this year.
Lower outage costs and improved earnings from investment securities also contributed to growth. But the biggest factor was increased customer demand during the quarter, reflecting both higher usage from particularly cold weather this winter, plus an improvement in the New Mexico economy, said PNM Resources Chief Financial Officer Chuck Eldred.
“Load growth was up 1.2 percent in the first quarter, which was higher than expected,” Eldred said in a conference call with investors Tuesday morning. “The weather was colder…and we saw higher industrial usage, including from Facebook, which opened its data center (in Los Lunas) during the quarter.”
PNM’s performance offset an unusually sluggish quarter at PNM Resources’ other utility, Texas New Mexico Power.
TNMP’s net earnings dropped by 56 percent, from $9.4 million in January-March 2018 to $4.1 million this year. It did benefit from new base rates that took effect last December, but a reduction in its allowed return on equity, from 10.125 percent previously to 9.65 percent now, eclipsed the higher rates. TNMP also faced increased depreciation rates and the return of excess deferred income taxes to customers during the quarter.