TXNM Energy Inc. 2026 Q1 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026, for TXNM Energy, Inc. (TXNM) and its subsidiaries: Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP). TXNM is a holding company operating two regulated electric utilities serving approximately 844,000 customers in New Mexico and Texas. The filing highlights ongoing regulatory proceedings regarding a proposed merger with an affiliate of Blackstone Infrastructure, expected to close in the second half of 2026.
Key Financial Metrics
| Metric (in millions) | Q1 2026 | Q1 2025 |
|---|---|---|
| Electric Operating Revenues | $505.0 | $482.8 |
| Operating Income | $77.0 | $71.9 |
| Net Earnings Attributable to TXNM | $3.7 | $8.9 |
| Diluted EPS | $0.03 | $0.10 |
| Operating Cash Flow | $153.2 | $141.3 |
| Investing Cash Flow | ($315.4) | ($345.0) |
| Financing Cash Flow | $142.0 | $197.6 |
| Total Debt (Short-term + Long-term) | $5.68B | $5.60B |
| Cash & Equivalents | $5.6M | $18.3M |
Note: Total Debt includes short-term debt of $263.2M and long-term debt of $5.11B as of March 31, 2026.
Material Changes vs. Prior Period
- Net Earnings Decline: Net earnings attributable to TXNM decreased by $5.2 million (58%) to $3.7 million. This was primarily driven by a $16.8 million loss in the PNM segment, offset by an $8.4 million increase in earnings from the TNMP segment.
- PNM Segment Performance: PNM reported a net loss of $15.9 million compared to $0.9 million in Q1 2025. Key drivers included a $7.7 million decrease in investment securities performance (NDT and coal mine reclamation trusts), higher operating expenses ($9.4M increase), and milder weather reducing load.
- TNMP Segment Performance: TNMP earnings increased to $30.7 million from $22.3 million. Growth was driven by higher transmission and distribution rates, revenue impacts from Texas HB 5247, and increased demand-based load, despite milder weather.
- Investment Losses: The consolidated statement of earnings reflects a loss on investment securities of $8.9 million in Q1 2026, compared to $1.2 million in Q1 2025.
- Capital Expenditures: Utility plant additions totaled $312.7 million in Q1 2026, a decrease from $342.6 million in the prior year, largely due to reduced spending on transmission and distribution at TNMP.
Guidance, Outlook, and Risks
- Merger Status: TXNM is pursuing a merger with Blackstone Infrastructure affiliates. FERC and PUCT have approved the merger; however, the NMPRC has stayed the procedural schedule pending a "show cause" investigation regarding a $400 million stock purchase. The merger is expected to close in H2 2026.
- Regulatory Environment:
- PNM: The 2025 Rate Change is effective. PNM is proceeding with a supplemental Request for Proposal (RFP) for gas-fired resources due to accelerated data center demand. The Grid Modernization Plan investment was updated to $367 million for the first six years.
- TNMP: A Base Rate Review is pending with the PUCT, requesting recovery of $2.8 billion in rate base. Parties are negotiating a settlement.
- Capital Requirements: TXNM projects total capital requirements of $11.1 billion for 2026-2030, including construction expenditures and dividends.
- Climate and Environmental Risks: The company faces ongoing regulatory uncertainty regarding EPA greenhouse gas standards, the New Mexico Energy Transition Act (ETA), and coal mine reclamation costs. The EPA is currently proposing to repeal GHG standards for power plants, creating regulatory volatility.
- Liquidity: As of April 24, 2026, total remaining availability under revolving credit facilities was $742.0 million. The company maintains investment-grade credit ratings.
Investor Verification Checklist
- Merger Regulatory Approval: Monitor the NMPRC "show cause" investigation and the final outcome of the rehearing request filed with FERC, as these are critical conditions for the Blackstone merger closing.
- PNM Investment Trust Performance: Verify the volatility and performance of the Nuclear Decommissioning Trust (NDT) and coal mine reclamation trusts, which significantly impacted Q1 2026 earnings.
- TNMP Rate Case Settlement: Track the status of the TNMP Base Rate Review settlement negotiations with the PUCT, which impacts future revenue recovery.
- Capital Expenditure Execution: Review the execution of the $1.57 billion projected construction expenditures for 2026, particularly regarding the Grid Modernization Plan and System Resiliency Plan.
- Debt Maturities: Confirm refinancing plans for the $195 million PNM 2025 Term Loan due in July 2026 and the $100.3 million PCRBs due in October 2026.