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Electric Operating Revenues
 3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]  
Electric Operating Revenues Electric Operating Revenues
PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are PNM and TNMP.

Additional information concerning electric operating revenue is contained in Note 4 of the Notes to Consolidated Financial Statements in the 2020 Annual Reports on Form 10-K.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company estimates the allowance for credit losses on trade receivables based on historical experience and estimated default rates. Accounts receivable balances are reviewed monthly, adjustments to the allowance for credit losses are made as necessary, and amounts that are deemed uncollectible are written off. As a result of the economic conditions resulting from the COVID-19 pandemic, PNM updated its allowance for accounts receivable balances and recorded incremental credit losses of $1.6 million and $0.3 million in the three months ended March 31, 2021 and 2020. The NMPRC issued an order authorizing all public utilities to create a regulatory asset to defer incremental costs related to COVID-19, including increases in uncollectible accounts. See discussion regarding regulatory treatment in Note 12.

In February 2021, Texas experienced a severe winter storm delivering the coldest temperatures in 100 years for many parts of the state. As a result, the ERCOT market was not able to deliver sufficient generation load to the grid resulting in significant, statewide outages as ERCOT directed transmission operators to curtail thousands of firm load megawatts. TNMP complied with ERCOT directives to curtail delivery of electricity in its service territory and did not experience significant outages on its system outside of the ERCOT directed curtailments. During the weather event, generators experienced an
extreme spike in market driven fuel prices and in turn charged REPs excessive market driven power prices which eventually get passed to end users on their electricity bill. Given the uncertainty of the collectability of end users bills by REP’s, ERCOT also increased the collateral required by REPs in order to do business within ERCOT's Balancing Authority. In response to the uncertainty, TNMP has performed an analysis of its accounts receivable balances and has recorded an allowance for credit losses of $1.4 million as of March 31, 2021. TNMP has regulatory authorization to defer bad debt expense (credit losses) from defaulting REPs to a regulatory asset and seek recovery in a general rate case.

Disaggregation of Revenues

A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below. The table also reflects alternative revenue program revenues ("ARP") and other revenues.
PNMTNMPPNMR Consolidated
Three Months Ended March 31, 2021(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$114,669 $35,094 $149,763 
Commercial81,934 29,429 111,363 
Industrial18,900 7,293 26,193 
Public authority4,587 1,482 6,069 
Economy energy service10,581 — 10,581 
Transmission17,503 21,121 38,624 
Miscellaneous3,032 960 3,992 
Total revenues from contracts with customers
251,206 95,379 346,585 
Alternative revenue programs976 (1,885)(909)
Other electric operating revenues19,031 — 19,031 
Total Electric Operating Revenues
$271,213 $93,494 $364,707 

Three Months Ended March 31, 2020
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential$102,809 $31,898 $134,707 
Commercial86,349 28,685 115,034 
Industrial19,466 6,533 25,999 
Public authority4,347 1,423 5,770 
Economy energy service5,253 — 5,253 
Transmission14,167 18,012 32,179 
Miscellaneous3,368 673 4,041 
Total revenues from contracts with customers
235,759 87,224 322,983 
Alternative revenue programs2,161 (1,735)426 
Other electric operating revenues10,213 — 10,213 
Total Electric Operating Revenues
$248,133 $85,489 $333,622 

Contract Balances

Performance obligations related to contracts with customers are typically satisfied when the energy is delivered and the customer or end-user utilizes the energy. Accounts receivable from customers represent amounts billed, including amounts under ARPs. For PNM, accounts receivable reflected on the Condensed Consolidated Balance Sheets, net of allowance for credit losses, includes $73.2 million at March 31, 2021 and $86.2 million at December 31, 2020 resulting from contracts with customers. All of TNMP’s accounts receivable results from contracts with customers.
Contract assets are an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). The Company had no contract assets as of March 31, 2021 or December 31, 2020. Contract liabilities arise when consideration is received in advance from a customer before satisfying the performance obligations. Therefore, revenue is deferred and not recognized until the obligation is satisfied. Under its OATT, PNM accepts upfront consideration for capacity reservations requested by transmission customers, which requires PNM to defer the customer’s transmission capacity rights for a specific period of time. PNM recognizes the revenue of these capacity reservations over the period it defers the customer's capacity rights. Other utilities pay PNM and TNMP in advance for the joint-use of their utility poles. These revenues are recognized over the period of time specified in the joint-use contract, typically for one calendar year. Deferred revenues on these arrangements are recorded as contract liabilities. PNMR's, PNM's, and TNMP's contract liabilities and related revenues are insignificant for all periods presented. The Company has no other arrangements with remaining performance obligations to which a portion of the transaction price would be required to be allocated.