What's Happening?
Texas-New Mexico Power Company (TNMP), a subsidiary of TXNM Energy, has filed a base rate review request with the Public Utility Commission of Texas. The filing seeks recovery of $2.8 billion in rate base,
a return on equity of 10.4%, and a 47.54% equity ratio. This request reflects significant growth in TNMP's system over the past seven years and includes increased operations and maintenance costs, changes in deferred federal income tax amortizations, and updates to depreciation rates. Additionally, TNMP is requesting $20.5 million in rate rider recovery for Hurricane Beryl restoration costs, separate from the base rate request.
Why It's Important?
The base rate review is crucial for TNMP as it aims to recover costs associated with system growth and maintenance, ensuring continued service reliability and infrastructure development. Approval of the rate increase would impact utility rates for consumers in Texas, potentially leading to higher electricity bills. The request also highlights the financial strategies utilities employ to manage operational costs and infrastructure investments, which are essential for maintaining service quality and meeting regulatory requirements.
What's Next?
If approved, the new rates are expected to become effective in mid-2026. The Public Utility Commission of Texas will review the filing, considering the proposed rate adjustments and their implications for consumers and the utility's financial health. Stakeholders, including consumer advocacy groups and industry representatives, may provide input during the review process, influencing the final decision.
