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PNM Resources' New Mexico Affiliate Files for Rate Increase
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PNM, the New Mexico affiliate of PNM Resources, Inc. , has filed for a rate hike proposal with the New Mexico Public Regulation Commission. On approval, it would result in an increase of $99 million in electric rates and be effective from Jan 1, 2018. The average customer bill would increase 11.2%.
Rationale of the Rate Hike
The proposal for the rate hike is consistent with PNM’s objective of delivering electricity from environmentally sustainable sources. With similar aim, the company has recently closed operations of the coal-fired San Juan Generating Station Units 2 and 3, while trying to meet customer demand with eco-friendly nuclear energy produced by the Palo Verde Nuclear Generating Station Unit 3.
The proposal includes other environmental upgrades of PNM’s power generation resources and capital expenditure for providing uninterrupted service to customers.
Through this filing, PNM has proposed changes in the pricing structure that will better align rates with the actual costs of delivering electricity, and offer room for energy efficiency measures while eliminating the disincentives associated with the same alongside load management programs.
Forecast
PNM Resources projects capital investment of $1.9 billion over the 2016-2019 timeframe, primarily to invest in acquisition and replacement of generating assets and to comply with environment regulations. These will drive a rate base growth of 4-6% compounded annually at PNM, over 2015-2019.
Price Movement
PNM Resources has outdone the Zacks categorized Utility – Electric Power industry over the last 12 months. During this timeframe, share price of PNM Resources gained 11.8% while that of the industry improved 5 %.
Robust third-quarter results, above-average rate base and earnings growth projection, and high capital investments are the key catalysts for growth.
Zacks Rank & Key Picks
PNM Resources carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space include Avista Corp. (AVA - Free Report) , Ameren Corporation (AEE - Free Report) and DTE Energy Company (DTE - Free Report) .
Ameren Corp., another Zacks Rank #2 stock, has seen five upward estimate revisions for 2016 over the last 60 days. During this period, its estimates increased 6.7% from $2.53 to $2.70.
DTE Energy has seen three upward estimate revisions for 2016 over the last 60 days. DTE Energy carries a Zacks Rank #2 as well. During this time frame, its estimates were up 2.1% from $5.16 to $5.27.
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PNM Resources' New Mexico Affiliate Files for Rate Increase
PNM, the New Mexico affiliate of PNM Resources, Inc. , has filed for a rate hike proposal with the New Mexico Public Regulation Commission. On approval, it would result in an increase of $99 million in electric rates and be effective from Jan 1, 2018. The average customer bill would increase 11.2%.
Rationale of the Rate Hike
The proposal for the rate hike is consistent with PNM’s objective of delivering electricity from environmentally sustainable sources. With similar aim, the company has recently closed operations of the coal-fired San Juan Generating Station Units 2 and 3, while trying to meet customer demand with eco-friendly nuclear energy produced by the Palo Verde Nuclear Generating Station Unit 3.
The proposal includes other environmental upgrades of PNM’s power generation resources and capital expenditure for providing uninterrupted service to customers.
Through this filing, PNM has proposed changes in the pricing structure that will better align rates with the actual costs of delivering electricity, and offer room for energy efficiency measures while eliminating the disincentives associated with the same alongside load management programs.
Forecast
PNM Resources projects capital investment of $1.9 billion over the 2016-2019 timeframe, primarily to invest in acquisition and replacement of generating assets and to comply with environment regulations. These will drive a rate base growth of 4-6% compounded annually at PNM, over 2015-2019.
Price Movement
PNM Resources has outdone the Zacks categorized Utility – Electric Power industry over the last 12 months. During this timeframe, share price of PNM Resources gained 11.8% while that of the industry improved 5 %.
Robust third-quarter results, above-average rate base and earnings growth projection, and high capital investments are the key catalysts for growth.
Zacks Rank & Key Picks
PNM Resources carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space include Avista Corp. (AVA - Free Report) , Ameren Corporation (AEE - Free Report) and DTE Energy Company (DTE - Free Report) .
Avista has seen one upward estimate revision for 2016 over the last 60 days. During this period, its estimates increased from $2.08 to $2.09. The stock carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ameren Corp., another Zacks Rank #2 stock, has seen five upward estimate revisions for 2016 over the last 60 days. During this period, its estimates increased 6.7% from $2.53 to $2.70.
DTE Energy has seen three upward estimate revisions for 2016 over the last 60 days. DTE Energy carries a Zacks Rank #2 as well. During this time frame, its estimates were up 2.1% from $5.16 to $5.27.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>