Regulatory Assets and Liabilities

12 Months Ended

Dec. 31, 2024

The operations of PNM and TNMP are regulated by the NMPRC, PUCT, and FERC and the provisions of GAAP for rate-regulated enterprises are applied to its regulated operations. Regulatory assets represent probable future recovery of previously incurred costs that will be collected from customers through the ratemaking process. Regulatory liabilities represent probable future reductions in revenues associated with amounts that are to be credited to customers through the ratemaking process. Regulatory assets and liabilities reflected in the Consolidated Balance Sheets are presented below.


	PNM				TNMP
	December 31,				December 31,
	2024		2023		2024		2023
Assets:	(In thousands)
Current:
FPPAC	$	30,487	$	65,251	$	—	$	—
NMPRC Hedging Plan	5,737		—		—		—
Transmission cost recovery factor	—		—		5,268		—
Energy efficiency costs	—		—		—		50
Renewable energy rider	—		5,021		—		—
SJGS Energy Transition Property	—		2,724		—		—
	36,224		72,996		5,268		50






Non-Current:
SJGS Energy Transition Property	$	336,079	$	340,629	$	—	$	—
SJGS ETA	24,996		—		—		—
SJGS - non-ETA	114,333		122,246		—		—
PVNGS leased interest	82,982		80,777		—		—

EIM	15,189		18,731		—		—
TEP	4,942		2,644		—		—
Loss on reacquired debt	12,507		13,806		23,721		25,019
Pension and OPEB	176,171		172,508		21,087		21,854
Deferred income taxes	74,925		71,359		8,570		8,882

Excess ADIT	—		—		6,542		—
AMS retirement and other costs	—		—		12,851		12,343
Deferred COVID-19 costs	3,328		5,664		—		—
Hurricane Beryl	—		—		20,958		—
Other	11,858		10,363		10,964		7,556
	857,310		838,727		104,693		75,654
Total regulatory assets	$	893,534	$	911,723	$	109,961	$	75,704



	PNM				TNMP
	December 31,				December 31,
	2024		2023		2024		2023



Liabilities:	(In thousands)
Current:

SJGS rate refunds	$	(157)	$	(113,372)	$	—	$	—
PVNGS rate refunds	(19,194)		(19,194)		—		—
Renewable energy rider	(4,786)		—		—		—
Energy efficiency costs	(2,459)		(1,454)		(602)		—
Transmission Cost Recovery Factor	—		—		—		(5,159)
SJGS Energy Transition Property	(6,975)		—
NMPRC hedging plan	—		(826)		—		—
	(33,571)		(134,846)		(602)		(5,159)
Non-Current:
Cost of removal	$	(247,280)	$	(247,627)	$	(147,296)	$	(117,759)
Deferred income taxes	(253,158)		(281,588)		(80,152)		(83,459)

Renewable energy tax benefits	(13,317)		(14,463)		—		—



PVNGS rate refunds	(3,277)		(19,194)		—		—
Pension and OPEB	—		—		(2,589)		(3,644)
COVID-19 cost savings	(469)		(900)		—		—
Other	(1,200)		(1,249)		—		(1,434)
	(518,701)		(565,021)		(230,037)		(206,296)
Total regulatory liabilities	$	(552,272)	$	(699,867)	$	(230,639)	$	(211,455)

The Company’s regulatory assets and regulatory liabilities are reflected in rates charged to customers or have been addressed in a regulatory proceeding. The Company does not receive or pay a rate of return on the following regulatory assets and regulatory liabilities (and their remaining amortization periods): SJGS Energy Transition Property (over the life of the ETBC I Securitized Bonds); portions of PVNGS Leased Interest (through 2044); SJGS rate refunds (through 2024); PVNGS rate refunds (through 2025); deferred income taxes (over the remaining life of the taxable item, up to the remaining life of utility plant); pension and OPEB costs (through 2040).

The Company is permitted, under rate regulation, to accrue and record a regulatory liability for the estimated cost of removal and salvage associated with certain of its assets through depreciation expense. Actuarial losses and prior service costs for pension plans are required to be recorded in AOCI; however, to the extent authorized for recovery through the regulatory process these amounts are recorded as regulatory assets or liabilities. Based on prior regulatory approvals, the amortization of these amounts will be included in the Company’s rates. Based on a current evaluation of the various factors and conditions that are expected to impact future cost recovery, the Company believes that future recovery of its regulatory assets is probable.