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PNM PNM Resources

Participants
Lisa Goodman Director of Investor Relations
Pat Vincent-Collawn Chairman, President & Chief Executive Officer
Chuck Eldred Executive Vice President, Corporate Development & Finance
Don Tarry Senior Vice President & Chief Financial Officer
Julien Dumoulin-Smith Bank of America
Durgesh Chopra Evercore ISI
Paul Fremont Mizuho
Jonathan Reeder Wells Fargo
Paul Patterson Glenrock Associates
Call transcript
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Operator

Good day, and welcome to the PNM Resources First Quarter 2020 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Lisa Goodman. ahead. go Please

Lisa Goodman

call and morning Jason, Conference everyone joining at this for Please available documents Thank our on the thank PNM this website conference for presentation for that, XXXX other Resources us supporting note are you, pnmresources.com. the you and First Call. Quarter

Tarry, Chairman, Chief Joining President and Development of Resources CEO, our Vice Vincent-Collawn; and President Don President Senior today Officer. me PNM Chuck Pat Financial Corporate Finance; and are Eldred, Vice and Executive

Pat, considered to of some Private no and estimates over upon need pursuant call to provided all that Resources the turn PNM Reform XXXX. that I the you I of that based you this current this of remind Before expectations to Act to caution Litigation obligation assumes update Securities morning forward-looking the and information We are information. the forward-looking should be statements statements

XX-K, current XX-Q, Form to with For annual reports a please results, SEC. X-K detailed refer Form reports discussion Resources' of and reports on future PNM the well as affecting quarterly on our filed factors on as Form

turn call With will the I over to that, Pat.

Pat Vincent-Collawn

Thank and Good morning for you us Lisa. thank today. you, joining everyone,

times. a that distance note, you, ones. we tier healthy, the Our sincerely it's serious are crew unusual case know, unusual your I start the is and such hope but to safe skeleton socially teams on today and loved that is for and your me certainly for these

is that to been helps told on any normalcy thing, One routine. hold get of I've it to some sense to

COVID-XX our our to this earnings first even that call we we're provide impacts provided today, quarter. the month holding in earnings earlier scheduled in spirit, So transparency on previously results though

at of help it Hamburger May Xst, month, a home in National which you in were May menu If I've Egg month, know month that lot cooking one and I stay you're Strawberry all of out Salsa is not options more, have month. you might Today things Barbecue but for a those National some continuing month, prepared Day, try to some been planning I'd so Salad if you. and have I is spread May. May is month, obviously I also meal. out list you, things

about earnings thing to this similar morning. is to that that's going the our So only call be usual

Nothing that has earnings changed in results reported we April the on XX.

to slides earnings today. typical the Our in but cover planning appendix, aren't we are those

we're we've reach an you Instead can Lisa all. provide our doing to any know impacts to enjoys forward our will manage the today, help out our on and I initiatives. she update our what items, You we for strategic service with our customers, with moving hearing company from seen we across those impacts that, on questions. and territory, how regulatory key COVID-XX communities are you and

electricity has just reminded our to or our whether X. COVID-XX also that on our begin that let's look just company homes. how at for So hospitals talking us we're lives, slide reminded is at essential as to us a us about more electricity. communities than It's electricity

the both various now a than proud local New more ever. time employees Texas, of We economic and and and efforts donated company us to need and money have Mexico been who partner across our development have non-profits

those everything priority. from lines team know maintaining to to is that lines, on do environments, our closely bring but most in need. they Our important those are We payment changing has top Not why they with not customers, their help above to our is to electricity have solution. working find to and this rely disappointed. assets team transitioned to and only work beyond continue we to safety customers, a our They go truly power

pandemic. the have network across goals. no They how during paused. plans world when and why that other a for develops creative control lot just of out, and things There's we resource regulators on for much our and country modeling our staging the business and even minimizing essential best to We're great are hoped, same focused a and employee exposure. doing utilities not our before rooms, that use. It's dives limiting has remain would all to into priority we environmental doing is critical that our that protocols of sharing question, figure practices forward We're top this solutions our utility safety team pandemic move and their my bring can access operations to resource continuity the never we us backups to achieve is

In reopening. begin PNM to team on and New council governor's subcommittees recovery help economic reopening determine members participating are our approach to best governor the is Mexico, a safe gradual for the state. looking our the Three of for

In Phase a three is already Texas, opening beginning.

balance our child considered day operations each care education. work, homes are of online many employees While for to for trying our and are while employees essential their critical leaving are working home, and from other

now. that our need to for their the we've have and to arrangements situation, recognized this the folks facilitate of Regardless right families job flexibility made we care necessary

our We're to that protections in customer program we ERCOT also. flexibility puts across market. place to Texas, a extending customers In develop that same the regulators worked with

non-profits plans. first to provide we orders deliver local purchasing like with create New are we're We're customers to In grants from things utilizing responders. to Mexico, individually to more working our and payment restaurants takeout doing to large flexible foundation

to industry. same We've reliability the areas to and suppliers with close that own vendors on. in need the delivered and keeping across time the to at masks we'll materials coordinated and we power the efforts staying entire that ensure regionally we're have of especially system are and working the the sure make our maintain hardest. have And contact We're hit meals been the state in

our in I amazement I move on, say our I have Before accomplished. stand perfectly. plans what have I teams have executed to continue as to watch business they continuity

planned customer review expenditures full and result revisited A a future slide to rate and rate under also the for test year, recovery investments. our base true-up increases regulatory our a rate Turning our on would to general we've five, second plans reflect inflationary costs, to in review current capital in quarter. filing rates

are doesn't that sense facing this customer-focused in right lot make customers challenges given However, for now our this pandemic, business. a of the

narrowed So, important critical ratemaking instead we've health utility. are financial to components of that the the to current our the focus long-term

May shortfalls of to will for full planning small correct file for are the our address and This the fixed inherent We mechanism current to decoupling in help recovery costs customers. a residential fluctuations and in in ratemaking. commercial our

address to there impacts. a critical us with full works COVID-XX rate look around other components can hold commission we a to greater the off certainty to this ratemaking issue, time subsequently address more the of appropriate when is review and Assuming

orders other joined Mexico permission future rate ask commissions costs New that the also in review. country. This other these costs consistent the from COVID-XX and with of utilities defer We've is incurred. in commission to to with Recovery across would track be a are determined

mentioned customers the by bill electricity while to that supports program need. in electric ERCOT At the providers an TNMP, relief creating reprieves solvent fund initial I've entire already providing to system keep retail

cost first We're March. implemented cost and filing We the in for mechanisms service full that received in implemented in of September. the early transmission service We recovery April rates also review. without making use to rates the our filing be approval with distribution Texas of need in rate a encourage approved our XXXX general first of made for investment expected

executing by PNM to on continue strategic On our resources meet initiative system. to emissions-free baseload be we the A cost-effective be foundation our to on transform generation continues that slide important focus amount constant of XXXX. to demand to six, of is

flexible resources value for that there based amount down or up that patterns. increasing is usage Beyond be adjusted can on

we our that availability resources. balancing level the other transform are for to baseload of As flexible we of that will reliability work portfolio, and be renewables needed with cleaner low-cost resources

can state's through coal Energy have only further and can financing real by the the communities Our they are for the meet growing not provide individuals to utilizing savings of financial and also Act, By portfolio real those Transition customer savings that some we relief plans the and plants. environmental closure impacted renewable securitization also will customers benefits. will we

Juan Station approved securitization April on the New Mexico and portfolio. and the working they on one now San determining Generating power replacement abandonment Commission are The of the

brought the solar parts. storage approval The included two hybrid forth and in a to proposal into the in two power hearing our part the were for that recommended replacement have PPAs they And first scenario. examiners proposed separate resource replacement

the commission that While the consider these determined the from support from parties, replacement examiners should wait power to overwhelming a on a hearing had contracts they recommended decision full scenario.

resources June. proposed indicated would on remaining previously of end a examiners by the hearing The the recommended have decision they

we'll to Corners Four Power by last coal Next, ownership look the exiting of Plant. the our eliminate

have at resources to to we've remaining the lower-cost exit until Verde supply made ownership another do against The provides agreements While and flexible sooner. baseload at are that generation it current expire evaluate capacity we lease looking resources. current not opportunities XXXX, clear that we opportunity Palo coal

our megawatts an to will We in and Each us the items look of provides provide Palo Verde with remaining these environment. months. XXX within to the decide benefits of coming customers, opportunity communities lease to on our the capacity

some we the our in scenario more And how financial I'm provide about are Chuck about that, planning then turn analysis going information will to talk With to Chuck? those over presentation and impacts. managing Don light to COVID-XX. of

Chuck Eldred

the different We're good Pat through with environment and lasts scenario slide on impacts looking we introduced the everyone. the of on reminder how started I'll and analysis that based Thank stages seeing. COVID-XX morning, that long March. you, in a three of get X level back we're at

some is our We projects to any So disruptions in in currently any place. are. chain significant other customer where patterns our to in not see disruptions stage load and We're stay-at-home changes experiencing orders our starting place. certainly across needed are with we absenteeism class nor keep restrictions one plans as in supply workforce due

under economy slow of this restrictions chain. months of the also when left earnings supply across customer one higher also normal changes to to stage, course are both business the New that And in the and usage we largest in usage see does could our we and June level assume we rates assumption our we analyze are believe that recovery our the in trend very resulting from seasonal are to disruptions utilities. the strict state after reduced of return of that plans a In portion we not stage into continue stemming our by lifted summer three, capital with generated in two, stage Mexico. In and stage the impacts July,

COVID-XX. to into our early turn let's trends associated QX with March, March we came we In and scenario load slide results Now mid-April, transparency analysis. provided In out with XX.

and Now full that our we're trends ending you providing under analysis. month our more in recent updates we're with April, first COVID-XX restrictions,

to in we what into another are We virtual seeing in expect some be are our lined early continued month investor conferences updates June in the with business. up back so with

how we contingency and to in continue will with really key evaluate we and will to how over our and up temperatures cost the phase results months be shape Summer things coming communicate you. plans

at providing we So don't believe than alarmed can updates and benefit time. communication if be all that more transparent from this frequent we're We usual.

moving slide fundamentals business through Now I on to this to pandemic. want emphasize to intact remain that XX. our continue

investment based We XXXX through X.X% rate on growth our are targeting base capital plans.

Our amount again facilitate this And T&D typical in PNM been is I expected this online any capital that by still not significant capital quarter appendix. note to have customers while small there slide increased new will to the come year. changes, a

changes those our customer evaluate other any or them bring plants capital T&D an and capital, be to needs generation to rebalance is would to up Part on we those hold between needs power priorities rates. and our San projects and safe and balance additional process replacement reliable and to were If have of our continually capital on put dollars been into this with our impacts to the allocate additional of items allocation able T&D service free We business. Juan plans. that ensure

transition to continue assessment due see into territory Texas prices. oil plans any TNMP. Group's West changes we not to needs a about ERCOT play requests number anticipating gas In of service the future and Regional across questions we're at received capital system Texas, In particular, that and we our Planning to service new for have

service our to We evaluate the and across continue territory. situation monitor

are to largely regional tied the longer-term a take And for the capital to of projects groups region. transmission planning region ERCOT's view

have have We across to are few customers. to specific that very opportunity capital And that we if business. individual utilize capital to the change, those the projects were

earnings XXXX. We have through X% to X% targeted also growth

from is slide appendix the may last years without in in adjustments changes our earlier our at recovery you which by the call. We decoupling. plans case included earnings that some Our PNM, the expect see would change since of any will offset fixed be through power costs in some rate

view long-term and to our Our growth support plans target. continue

Don and we're the walk year, affirming guidance For current will through XXXX those assumptions.

walk flexible we changes We plans in proven talk and responsive we COVID-XX. history We'll weather plans year. as changes seeing through we'll that to a financing in of are moved we've like load have the maintaining these and can through --

is growth growth. dividend Our earnings expected to mirror

Board in situations. December dividend liquidity earnings maintain they any long-term Our do a declares dividend the our the of year. or anticipate but business a annual changes We to quarterly, changes growth not considering when view of Directors of long-term to each

no there's dividend. Sufficient the reevaluate liquidity long-term have important to times So secure uncertainty needs support during need is a position to to we the and of the taken of business. steps

and the plans liquidity of in contributed completion Our position. financing forward equity to April offering our our in January have strong

both the December down billion facilities market and Slide we revolving cash to forward necessary. – capital which balances balances capital By $X accessing be shows and before assessing equity, to new drawn down our turning were available we keeping and credit these able XX, in PNM $X.X the at investments Now the available. liquidity multiyear have fund facilities our TNMP, billion April our short-term of if under could capital pay while with market

the of these focus turning financial as COVID-XX. we navigate a little walk XX, each areas to Now Don impacts scenarios highlights will more Slide through of our of detail.

continue what talk about earnings. and we guidance, as we're we stage. work will projected impacts the each the For of to seeing impacts trends provide mitigating to We'll we how to through updates trends load in monitor are load

our in areas and along We'll attention customers without support customers. navigate and require losing and that to incremental to shareholder focus pursue costs we'll investments and strategic pass recovery regulatory continue These long-term the communities for the support to on ways ways of provide appropriate current account value. direction COVID-XX environment that with goals sight

turn I'll over Don now. it to you

Don Tarry

this morning, on about with Thanks, pick a everyone. earnings year. and thinking on discussion I'll for up we Slide Chuck are good how XX, guidance

stage state affirming we range and that to our per assumed. have the guidance $X.XX one current are guidelines share based COVID-XX We of $X.XX on the impacts

left-hand we will from load the changes EPS that you side, in On the see impacts monthly for expect COVID-XX.

not earnings. to our net and March, energy started in see customer of impacts only month we reflect were While significant the trends some how classes the to part quarter in different use offsetting first

seeing of overall April under in New stay-at-home trends. was we decreases on month impact May. these is to At that are offsets low coming and Based from begin would we we Mexico demand-based increase in TNMP load at better Texas. full the first to PNM, And customers. while in the orders a a expect trends, volumetric largely see and load $X.XX picture lower over see April

been the you to lower of at some the give impacts financing On stage. within of comfort We've market costs. overall side and offsetting guidance right-hand us can range rates that some the able advantage interest this the reduced in take see

offset we in help We also to weather in days had also in load have the a April, relatively the and which warmer first some to normal both Mexico quarter and Texas experience New will begun impacts.

our to costs we from period throughout plans the work flat through hold to able year. as and built been this contingency We've move O&M

Stage EPS we impact As we use about expected more begin June get seasonal and moving PNM. higher warmer two, are energy for months into bigger load because think rates into the in as at customers

in Commission our towards incremental contingency plans. to a our COVID-related As makes big quarter consider to on move as make may these a be regulatory can load Chuck also total second asset. that any to to difference. mentioned, will Based key the actively a impacts hotter New decisions costs weather need cost summer monitoring during and the we our We'll Mexico outcomes to defer on decision-making, the request the phasing

decreases we become identified, see more things Obviously, the we've beyond may load to of to it trends these work if low us end difficult the range. against manage the or all guidance

contingency to other we these could against would businesses that hot On start summer load developed. we've things, to any that plans reopen side pickups the back are some and balance see of that patterns mean a we up, trend able

in COVID-XX. how predict things We to may are not progress position with a

through However, and provide month transparency trends the we to into updates each develop. work we additional analysis and we as continue provided our have will

Turning to seen April. talk Slide trends the XX. we about that load in more I'll have

than We analysis one April the increase slide. our scenario into usage trending Stage of at the original their that we the lower load layered to expectation showed stay-at-home have Residential projection. remain full so higher business saw customers New Mexico, on expected an and X%. restrictions was these of and covered month have as limitations. we In maintained last for the already the first usage I've

and as closures hand businesses Commercial customers full the state in reduced restrictions operations other the for certain resulted greater impacts on for saw others.

expectations updated previously assuming analysis our to in to XX% X. Stage class have we usage commercial the XX% our We reduction for compared in the were

The $X.XX to change of or a XX% on thumb months equates April rule commercial Mexico of monthly the to load the impact in these $X.XX New increases through and to in impacts based higher rates months. a in June is either that load September residential This per $X.XX and May. a volumes to impact during

find can appendix. the this You in information

assumption previously ERCOT a data seen versus Texas, updated is as not been has X% load, as assumptions in for our primarily we for load in assuming, of that as coming demand-based In April. demands our supports volumetric a we in decline the reduction customers. a of maintained only impacted large XX% we've analysis increase overall as anticipated. out residential X% were which load strongly our We've to not We've

load businesses or XX% summer amount the monthly remain months. slightly these load steady We $X.XX as $X.XX load improve reopening at to volumetric for through of begin. June per due that during would to the will or phased thumb change September volumetric TNMP volumes month Texas impacts a equates of to high expect during of is increases The that rule EPS. The in demand-based either

we impacts slides, As the some additional I'll through about on service color our territory. think for each to work provide following of region how

and and we our on in continue latter trends current analysis incorporate range communicate Stage year to guidance. would part the our comfort any better additional We load Warmer X. monitor provide the this and will to as could some temperatures with have visibility you of changes into around we

and XX the state's let's New and industry, government profile. include includes at employers largest look local presence of Mexico's large to care for and health turn The slide small a businesses. also Now economy a

this means and expect, might you others. certain As load from load customers coming from steady lower coming

is for for gradual reopening, a the safe mentioned we of As Pat planning reopening different see earlier, sectors. and governor so stages will different

I that do for out industry considered and essential building permits projects the want construction been from to issued has to the start be forward. point to move business allowing

customers residential XX% of Our usage our order. largest and their comprise increased the the at percentage on have stay-at-home revenues based

usage significant customers had These operations essential and Commercial as not load or XX% provides operations. lower only reduce has closed the doors not have identified restrictions, been usage we data have are considered and are customers, small businesses ones the per our have rates whose been impacted to manufacturing that to any our COVID-XX. especially load their of they on include and this Industrial their impacts time. limiting semiconductor their have during negatively customer based services business higher across by as state tied operations center revenues, to

cost As in the load of fluctuations recovery business. Pat at lead mentioned earlier, fixed can in to PNM in the challenges

important not address this load work the from changes of COVID-XX, business. issue remove for it long for in to some filing will to impacts the our term decoupling is and address our uncertainty to immediate While due

XX. to turning slide Now

location type as type rate that our recovery investments. diversified to Texas Our the in of geographic is territory used mechanisms well well of as are customer service

XX% minimizing recovery TCOS and lag. to revenue TCOS impacts be mechanism changes would in Our TNMP load were load in recovery filings to revenues over Wholesale transmission investments in exposure changes in transmission filing, included recovery and transmission the demand. of therefore expense. approved transmission related regulatory the are Any demand next and overall our investments. reduces of and XXXX through the

trued is provides revenue revenue under kilowatt peak These other billed and The rider to any customers those regulatory collected transmission billed our charges remaining twice the a for rate This the TNMP's that is on equally revenue split retail expense eliminating of XX% between of per up TNMP usage. providers. demand customers. of portions recovery hour year billed remaining non-transmission lag. T&D based are that transmission represents from other about The is which half by are

their of XX mentioned, The on increase over billing demand within XX% demand up a Pat $XX.X allows as in current the our our costs helps filing previous DCOS are rates of billed previous to we peak fixed or of the the ratchet peak months, the April. billed ensure us for our The the on customers This new And their have load of recovered. are Also to which filed majority being they an rates. rate year. investments also distribution month requested to for related rates filing first in and impacts our true distribution Texas million. greater mechanism

in go tell the rates change considerations expect that into to rate don't in us load those effect September. revenues. and in changes same equate We to necessarily in These Texas mechanisms

The in from yesterday with weeks. our only that wanted the expired Texas that at reopen Texas deemed the businesses stay-at-home Texas. business for Central as construction limited XX% to essential allowing on XX% come Gulf over order and revenues of XX% continue map region note also from capacity. West also state I projects shows and regional North Coast begin last the across the the coming breakout from will several to to the Texas and region of

gas is that I'll trued of transmission turn and economic the walk been regions these XX% lately wanted of This Now in oil half with this the from is come to productions. revenues that West amount comes recovery Texas. semiannually. its region for each beginning headlines let's to through up you the for slide emphasize region that from considerations load that and has and known I of and XX

and XXXX customers higher to demands see trend from XX% taking we In revenues high-voltage continue service their addition, levels. Texas than West of are peak from the

have dropped companies the prices plans lows gas to making and are from the record and seen we've for that headlines changes to oil their year. Recent

of our to tied While is are region customers gas this not all industry much of oil producers. and

those the Basin efforts lowest and Basin of country. operators one the that here service will not the within area Many reduce have to the utility to the their in points production electrify continue breakeven For are specific a area Delaware Permian have further in do costs.

As are for specific earlier initiatives resources to this to to longer-term change customers. take capital planning regional had Chuck the other region. capital we individual opportunities region mentioned mostly projects transmission the We've those were very view few that of ERCOT's tied a utilize business. those are if to projects And have across that

we within Moving large territory. over do those Fort a our cities seen and fall moving surrounding significant our in Worth on so TNMP that but fall of out grown customer the city mix. to service Dallas we service not and Texas, territory within Slide time sprawl do service have have and territory The cities which the to different region Central people North of very XX have from

those have are and built that as even these decline stay a and communities residential people see COVID-XX and some increases revenues As perspective, from communities from load out demand we volumetric businesses home support offsetting have impacts revenues restricted. as a customers at businesses of residents. pretty From as mix we

from The also of region plastic petrochemical XX Houston that production Slide several Coast of large shown is has lead all refineries to though. everything to the the our chewing tied economy, gum oil surf not Gulf refinery ultimately on largest and boards. customers often region to and cleaners companies are The

from home has the territory region the has Houston staying businesses trending situations are using The trending largest down actually moved more the portion that steady some of come residential been at level. XX% and a rate similar larger that sprawl region's some to classes around from fall TNMP rest our Dallas. has customers customers have and service of our at The are that mostly revenues residential energy. are into who into

We up hand detail negative our on medical hope keep in detail makes their in PPE and the sanitizers. factors of offsetting immediate we how of have For companies impact the are better chemicals each a regions what the experiencing example current and used you from picture they in hope provides petrochemical that an production that boosted with -- that of in business TNMP business environment. the us this

to XX were action with debt other request to open recognize Wednesday where commissioners New that At meeting situation address COVID-XX being a part Mexico track the and impact utilities costs other and be regulate financial to regulatory a Commission's on turn Slide related they filing noted the was I'll let's of debt and account incremental Now the in on Monday joint deferred a costs PNM additional tracked bad asset. considerations. that expense for from there lost would ongoing utilities that states bad taking to and revenues. for into

payment to to They that expressed support able offered. be provide for are customers, flexible could taking so action arrangements to utilities more ensure that support

watching be that will docket next the we So over month.

pandemic to fit their are that type payment that support out available that the to the situations. arrangements customers them ensure that the reaching is impacted them to been with how about for they of and to talk have to any know We customers individual access by

been do to that be debt and to as in event the range percentage increases annual ultimately has of at years. the of bad expense under currently $X.XX Stage debt estimate to In see basis them one revenue historical we for bad two we X.X% on in of our PNM $X.XX an

costs Under Keep mind end the TNMP that quickly other TNMP's risk the related COVID-XX users. electricity a order March. relief is late PUCT the has providers retail by PUCT customers deferring in that Texas also debt electric mitigated in payments of at and program implemented technically In been from are COVID-XX. tracking TNMP to bad who receive

full filing a up a case PNM plans change commercial wrap Slide May in decoupling levels. that to on XX be customers this This and the small year. usage to would general that lieu any revenue make in residential decoupling up meaning rate for I'll of with predetermined trued in is

will the order of provides is revenues rates separation customer the needed use between This amount difference the at better we We business on per based which month. and would our cost usage revenues our some the on actual believe aligns the collected from proposal XXXX implementation of and by the reasonable. of fluctuating based costs fixed revenues a end the fixed request up. customers recover costs with beginning to customer each be authorized trued of our an the Under

under serve PNM Currently is power about is the fixed only for over of through the is over but is customer a through collected customers remainder fixed, XX% Similarly with PNM charge of cost fixed to collected of XX% XX% but a the small the cost collected customers customer volumetric XX% the charge. of cost fixed only cost residential rate.

proposal ensures portion disparity that cost decoupling fixed recovered. customer this bills addresses The the and are these of

already of other demand already PNM's they're a their portion recovering have Our in fixed rates large so costs. of a component classes their customers

much of challenges to this filing point, emphasize To of for be fixed costs to full variable better position solution impact a By instead we created by customers costs opting light our ensuring customers' that ability our will rate promote review COVID-XX. return. or energy because Pat's in we that that better a a reduce make the authorized recovered are earlier efficiency otherwise it's in earn to conservation will programs be our would

targeted growth growth not XXXX. through our indicated, in Chuck trajectory will some to ability does meet term, near our our obviously but the fluctuations As earnings X% earnings of to our focus of in create it X% this the change

it turn to I'll Pat. over you With that

Pat Vincent-Collawn

Don. Thanks

will up for of I here Before thank of I open want team that PNM again shown our at brighter us. they Resources, all the PNM questions, all There have TNMP through members to be and resilience dedication even and for work, will get we will changes certainly we out stronger. There days lasting way stores, bars. impacts return our and through some challenges these offices, come but ahead of and to and eventually to it we'll restaurants the be and all

So, open let's Jason, up for questions. it

Operator

Please Thank question Bank ahead. comes you. first of Dumoulin-Smith from [Operator of Instructions] The Julien go America.

Julien Dumoulin-Smith

I Good well. hope Hi. you all team. are morning doing

Pat Vincent-Collawn

are Good morning, you Julien. Hopefully too.

Julien Dumoulin-Smith

Indeed. Thank you.

wider kind decoupling And the you present? about to can the bit you Commission this to of rate well? at context of into from I out start respect there filing do how of subsequently for what's as if So us a fitting with as line the case little background think same been the give eventual Can decoupling? a then for history

Pat Vincent-Collawn

Don and it little decoupling was an passed Julien, use a you had Use deduct us promote help Energy about the ROE then And of conservation called couldn't let in talk and to the then we encourage efficiency history that. have for Yes. and language and energy to of there specifically I'll decoupling. I'll that When it amended, Efficient Act here saying for actually give

on looking at the that's we're so And which basis it.

see never And the staff. there with let's well we decoupling talked really grew Staff a before said we've always of again. evidence have crisis really never and financial loss. now loss, had the bit had And because load We've we we've load Commission, but after some was any had then about with little the situation.

it's So company of it. And here. kind of the gas decoupling a the background has modified

have it. experience they do So with

rate we filing. talk Don with about a to fits wider of sort So, have you in this how

Don Tarry

of about good of ROE process bit Commission an the kind reduce the little and alluded We're But a you of is will example, I Julien. which does Pat at a give developing to provide of end for we not file still that decoupling in a filing talked as morning, thing. the the mean, we May. Good as that Yes. legislation

a give seek impact To happen kind kind we you of flows give and would example, an you of approval January X. this of as by to feel through

into XXXX. case, a effect gone and the you've If think of bit kind midyear have have about rates that little would approval of happened rate the would

a back XXXX the there on X% last per of litigated front customer this how solar. if work rooftop to cost our in our was little at efficiency driven which feeling look our we've residential now And decrease bit to of use from service, and rate energy fully about And is, seen a it of of is by case, you X%.

our this month our decline, look to you per of would model if $X or and mindset per of about that kind residential a $X customers. to you try a get kind So impact that to at be

of customers shifted And just about a decoupling look the since to if per so XXXX. range customer at take $XX in million at to you $XX range looking how million XXX,XXX use due our you'd of that

Julien Dumoulin-Smith

that the line XXXX How you impact. different to in frankly. You've the them you loss in of and impact? industry the some limitation about what if ongoing do that relative about from you limit follow-up been some across Got little year? time will it. here, would you XXXX thoughtful think bit, that could disclosure extent next in very But always do could roll how would stages load If back i.e. acute impacts providing decoupling for help that to leader frame see given the more this? being and pretty I a how in a great And see you you a can think XXXX

Pat Vincent-Collawn

for know Julien, Chuck I doing and that, in is was for the terms answer decoupling me part. in and will think doesn't don't I anything can obviously, expense only His cuts. XXXX to manage I we we April report tell us O&M if have his please of work impacts XXXX let your you do is if question $XX.XX. in

in of costs are would the go keep But what just, because So we capital up system and putting to for that recover as Don and allow keep reductions. plans fixed as the our way us forward we said. of it we in are our year investing and variable are cost rest set set to the

seeing amount a of And we are still here. fair construction

started and and customer efficiency appliances have will decrease what that will looking for? still is permanent given energy per stronger before we just COVID-XX think So coming buildings I but customers online and codes you're use Is in it new against us that that protect what programs. a better long

Julien Dumoulin-Smith

well. Stage on III, back Again as of the converse details mean, some returns based decoupling XXXX pending. on in of in earned some right? exact of under Stage roll rates see that get could as in you II, I So confidence The it XXXX potentially. a mechanism as that XXXX bad level could new Yes. these

Don Tarry

EPS. through And earned kind of, Yeah. returns walk and on little a bit Julien,

or approved again and the benefits of in There's rate goes But midyear. so… that at in We timing decoupling you look December. We in, yet. usually guidance you do with would reference, haven't as of January, the it, the in if think would associated have for those elements case frame come with XXXX is out came up guidance as place you of into with some think came

Julien Dumoulin-Smith

a power I'll as be quick question it your we of last get right October, as obviously, leave now lot to in noise dockets whatever it that is ownership I about been by that. can. pending. about Super done? your What's replacement Got if And There's, broadly piece say stands clarity it. your as confidence

Pat Vincent-Collawn

a June, as of but about the that confident those that lot out. could for whole having include very have they about commissioners what pulling a at which One we're whole, portfolio -- perspective, which makes that Julien, we it argue getting decision. do And PNM a second PPAs. the now examiners PPAs at The a talked out that two hearing decided where sense. from as take the to or plenty time at sit those a that Okay. will looking of is commission to piece looking gives in also portfolio. But look wanted

ability the that talking on potentially they reopening have things commission's do harmed the and that decided those pleased that. get power that were about we replacement not case they of discussion, And one would time. in rebidding about And the our to and were in is to

think multiple that as frame. on going we look different we one portfolios that is good in the portfolios we portfolio very a have that time of those submitted submitted sign they're so the to the at decide and And appropriate or

to I at as to at wanted bifurcating one whole point in look think the opposed picture it. time just they

Julien Dumoulin-Smith

Excellent. Thank you.

Pat Vincent-Collawn

you, Thank Julien.

Operator

The Durgesh ISI. Chopra next go from Evercore question ahead. from comes Please

Durgesh Chopra

I I you just peak the the charge team. can TNMP but or are minimal of Can and trends, Gulf Thanks West areas? just Hey, good you on putting I and to there. impact out demand appreciate destruction of compliment Coast morning detail to and super. is what want for demand that quantify demand just ask Texas in terms you terms in the in drag seeing the revenue, you

Pat Vincent-Collawn

and take I'll Sure, morning Don for Durgesh. you. have good one that

Don Tarry

Yeah.

demand categories there. large demand seen our them in our So customers. Texas primary demand We West and customers call decreases are no we've

load continuing go fact In up. to they're continues and produce well to

commercial small It's and Our offset that those. at customers X%. been demand those continues we -- quantified really been to being demand up with about residential on side. that the go type factors associated in in that's by That's range

direct demand. So and seen we've pretty between the offset smaller residential the a

Pat Vincent-Collawn

set record I this peak a And ERCOT last think week.

Durgesh Chopra

credit from III get are delayed. ask you any thinking color rate into on the might it can And love looks conversations credit had and Got if you maybe, terms those here you've any you metrics? it. like I conversations. How Thank of, if in the you. And then or about get II with would obviously, Stages your case impacts the agencies,

Don Tarry

about. case. moving Yeah, that we're filing little the we've mechanism not decoupling the talked Durgesh rate We're to bit a

metrics. We alluded liquidity of have rating financings positions and agencies us through our We Chuck the walk on that significant liquidity. just ongoing to our financial discussions amount a with completed lifted well them our that or

So that from we're shape good perspective. in

Durgesh Chopra

guys. Okay. all you. I That’s Thanks Thank had.

Pat Vincent-Collawn

Thank you.

Operator

ahead. The next Please Paul Mizuho. go comes Fremont from from question

Pat Vincent-Collawn

Paul. morning, Good

Paul Fremont

Morning.

sort giving San in to Transition of, were replacement District. the that resources they sounded requirement I be NMPRC, more the the Act During it on weight Juan deliberation your bifurcation built Energy like request, mean,

really unfriendly gasified for So the gas? base as sort company? imply not to alternative if more we, and that the also essentially build that all Scenario investment wouldn't your the being more financeable, of, would really rule is potentially alternative So rate coal scenario would fit environmentally in be that wouldn't only out and X, necessarily expensive, result which the

Pat Vincent-Collawn

for. the expressing putting commissioners So was and the that scenario it discussion Act's up But, yes, a and describing on some X. of say there's there. tweaks weight I be little preference similar I maybe more more take I preference up I their Energy our what that Transition think a discussion, heard from sounded think Paul strong while three There the it like a they I could were think is a they for would solar to Scenario were to,

Paul Fremont

that the Okay. the your proposal adopted, what on base? of rate to effect would your be were also assuming And modified sort then, capital be on spend and WRA

Pat Vincent-Collawn

solar, modified and The WRA some Don? that gas more proposal has more

Don Tarry

Yeah.

a proposal think of -- decreases units couple So, LMXXXXs. I of it modified

LMXXXXs is are that. XX per those about think there LMXXXX to way the about to million related think I So

So mean I balance. be of would that the kind

You'd see the adjustment.

gap customer alluded as associated with well projects we that rates and there that distribution -- can ready that the balance to, go. align with Chuck that additional As could fill we to to they're we always transmission

Paul Fremont

the looks financing XXXX, out put like corporate that down power The And the with completely it then, of earnings the quarter. quarter-to-quarter. numbers and the are the that fourth sort in confusing bit. a Can all? of from the chart at the is of I different sort at question sort charts numbers between guess you of and changing Like sort relationship the the you are distribution keep that of last little discuss than numbers

Chuck Eldred

is talk It this at be Paul, maybe might -- better to just least... Chuck.

Paul Fremont

Take that off-line? That's fine.

Chuck Eldred

reconciling Yeah. understanding. at and numbers, Because we're on can it's get to looking you're -- we're what want we an how clear and some that be to sure we

So take then let's there's anything... And just if off-line. that

Paul Fremont

problem. no problem, No

Chuck Eldred

Appreciate.

the all-gas It of Okay. the you it megawatts XXX checking does And storage. all-gas is XXX numbers also location the combination and talked in a versus too $XXX million. in of of rate we add I base gas scenario two, just million rate want megawatts is to of $XXX add the The here. one scenario piece battery of that recommended base scenario about one gas have that the and gas then

So close, because the it's costs higher. are still storage very battery

a perspectives whole the in have standpoint to of a is rate that that I doesn't path. it that significant want be think base. they had go rate going give I of base they to don't lot So if difference down any

Paul Fremont

it. Got

Okay. Thank you.

Pat Vincent-Collawn

Thanks needs the Lisa Paul. company.

So call. a give her

Paul Fremont

Okay.

Operator

comes from ahead. go Fargo. question next Reeder The Please from Wells Jonathan

Jonathan Reeder

stay-at-home wanted in impacts been slide an of monthly Hey, three of on things. X all. the a Stage Are XX, that full just Most to answered, assumption order? of my is and but I clarify have the couple

Pat Vincent-Collawn

can Jon, Good it's morning. you Pat. --

your on of kind Would last repeat last part. up sentence? broke You the you

Jonathan Reeder

on monthly I impacts the stay-at-home X just -- order Yes. wanted and XX? to in slide full Stage X

Pat Vincent-Collawn

Sure.

three. stay-at-home if in full are asking orders So the scenarios two you're and

Jonathan Reeder

that In sensitivity full Is scenarios a order? two XX. and three, the slide yeah, assuming stay-at-home

Chuck Eldred

Jonathan, good morning.

the open two, into more stage mode end three are a slow assume businesses that stage would go full of we and stay-at-home way assume through to the it would For and all recession the order a year.

Pat Vincent-Collawn

an And a to would but bit the envision stage mean a think fact I stage cases. envisions uptick it's three also when we're in of significant going kind have we wave. know opens uptick in second little a I all it of cases three that

Jonathan Reeder

Yeah. Okay.

a Texas So it, with a seems scenario? doing contemplated about of stage mean like two now reopening and like New obviously it talking I you're ahead kind in partial Mexico anything of

Pat Vincent-Collawn

of drive, been there's the as some out go pueblos the a Yeah. construction still we've here. a concentration where corner think and parts the a of on the doing I here nation Don Governor is. Unfortunately, And the cases I and reopening tribe And And is greater doing New mentioned, of here. I Northwest in when She's the state reopening. lot Mexico construction the faster. for a slow here the are think of in going

spaces, into will think helpful again people open be and can those So move us. when I we for it very

So...

Jonathan Reeder

the trade-off Okay. down almost essentially the essentially expectations, kind sounds by being New what it load not modified load offset And reductions from of thing I just two being you're in relative original then, those higher the land-based Mexico as other the thinking. originally assumption impact mean like commercial to the much. Texas

Don Tarry

Yeah.

the down in Texas residential Texas. on So aligned came side

So we see Texas between almost a commercial. direct residential in and offset

commercial small And see XX% about Mexico and XX%, an total X% residential did April. New the we're On the New sector. in seeing of we what PNM side, Mexico. side, state on increase the in up to That's X% at is our on commercial

Jonathan Reeder

but Okay. like net-net consolidated impact not bit of overall, the headwind much? a little a PNM. But to It's

Don Tarry

that Jonathan. have on Yes. numbers XX with the we aligned It's

So...

Jonathan Reeder

Yeah.

Great. additional I right. appreciate All Thanks the Okay. it. for data. so

Pat Vincent-Collawn

Jonathan. Thanks,

Operator

Paul go The from question from Associates. comes Instructions] ahead. [Operator Patterson next Please Glenrock

Paul Patterson

morning. good Hey,

Pat Vincent-Collawn

Good Paul. morning,

Paul Patterson

I just, follow on Fremont's wanted Paul up So, respect with questions to to CapEx.

that follow do it's of feeling economic there you sense of so ground a -- how with this sort I guys if much could, as of I the of if sort just, on -- CapEx might you might economy you grain what being on salt, us might sensitive, just terms see what And are guess? and sensitivity impacted? I economically outlook. take to be the And Just me. sensitive, a early the economically be sort of unprecedented, it its but know days you how in the of, be remind the

Pat Vincent-Collawn

the Yes. see that for mostly customers Paul, the in resources out and a And, rate the replacement CapEx is securitizing power Juan. San The the stuff And San resources, resources nice day and isn't new Juan. economically goes San base renewable decrease flexible because we're our replaces coming bills, sensitive. in, of the really the Juan

there Mexico some is announced. aging here. customers just that and projects started and replacing here development economic construction haven't have new out still And been in Our that transmission. infrastructure building is going of that of on some here New There's for

reliability. to as Don in want when Texas Texas, And for that of in was because our I Commission in in out time to started electrify. to The last there keep it ERCOT building want Don sure got and as they of its most they lot is this, and said, And doing Texas, I folks with that said, encourage us customers capital the make that of West ready. because come, they've then is a -- it

sensitive the it's to economy. really not So

Paul Patterson

which then, like I -- to and a give little -- your on for re-urgence with you stuff, deferrals bit And everything, is to know could respect great. respect of you far residential deal-paying us but respect commercial are of with with so so experience far? guys looking Okay, customer the sort to a flavor and activities and for

Don Tarry

Yes.

it. listening point basis So, those as that customer folks our We about to group customers. to Again, payment what with we you And the to able the well all the is that seem a alluded other is utilities, state, align the utilities to with receptive in with New publicly no we Mexico. associated costs I in Commission outreaching hearing, disconnect with we're defer as mean, held talked allows up work because filed arrangements this it daily flexible with it. as And they be other and to at on the costs Commission payments. very service to

XX, to have don't And break in turn increase and window. off. write utility ability the We of the have you -- XX, off you we down XXX, times a an to until seen will lot folks XX during it because in pay our that

monitoring. we've another that, goes stage and expected. stage bit increase been $X.XX with for impact seen associated see And we'd about, $X.XX a to impact two. which line with we it's our that So we for have little talked And an stage one stage it if we've one in assumptions and two,

So that through of how working feel monitoring and a we're gives kind of the you bad debt.

Pat Vincent-Collawn

that in what just customers normal you general, give what their would would So as how now rate a -- to many residential us were Can that? the like be? paying say or are flavor bills have percentage not opposed for you

Don Tarry

that We've the folks would of able being payments. have my migrate such disconnect, why or X% me. towards up it debt range -- working we into is, the I would And X% payment don't would in that utilities they'll number to to get I good on guess about go the seen mean, it eventually see. be utility again, we're have and bad kind once arrangements and be low the and will their making make able thing working

be every which feel debt. in To historically, able pay X.X% year had total ability work give And to revenues. Eventually, our you move our Mexico in ranges about because will And, $X low with New total debt disconnect. the very that's they as bad to bad you of customers. to you we've million, a about have the is

Pat Vincent-Collawn

only the us it that think discussion not as the the more strengthening because around giving but setting even work our and I is asset positive, utilities' a very the Commission to And, with customers. Paul, regulatory up was tracker flexibility Commission financing, sees

while they discussion. a So -- acted it it very good was haven't was yet,

Paul Patterson

Good hear. so to Thanks much. Great.

Pat Vincent-Collawn

Thank you.

Operator

like remarks. the more question-and-answer This Pat closing in Vincent-Collawn concludes I session. for back questions to queue. would over turn There our are to no the conference any

Pat Vincent-Collawn

all in for we can Please again. this you. Thank the see forward healthy person safe we you, to time Jason, and joining Thank again you all you stay and morning. and when look thank us

Operator

attending for you concluded. conference presentation. now The has today's Thank

now may disconnect. You