UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest events reported) June 26, 2003
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(June 25, 2003)
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Commission Name of Registrants, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
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333-32170 PNM Resources, Inc. 85-0468296
(A New Mexico Corporation)
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
1-6986 Public Service Company of New Mexico 85-0019030
(A New Mexico Corporation)
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
______________________________
(Former name, former address and former fiscal year,
if changed since last report)
Item 9. Regulation FD Disclosure
The following is a press release issued by the Company on June 25, 2003 and
other select financial information.
PNM Resources Utility Unit Agrees to Settle Gas Rate Case
Albuquerque, N.M., June 25, 2003 -- PNM Resources (NYSE:PNM) announced today
that its electric and gas utility subsidiary PNM has reached a negotiated
settlement of its pending gas rate case. If approved by state regulators, the
agreement will increase PNM's revenues by approximately $22.0 million. The
settlement provides for an increase in base rates of $20 million, an additional
$1.6 million increase in miscellaneous customer charges and approximately $0.4
million in interest income related to the recovery of previously deferred costs.
"This compromise agreement keeps customer bills below most other gas utilities
in the region and provides PNM Resources shareholders with a fair return on
their investment," said PNM Resources Chairman President and CEO Jeff Sterba.
The additional revenues are expected to provide PNM with a 10.25 percent return
on equity in its gas utility, compared to a return of less than 3.0 percent in
2002. With an increase in off-system, market-based transportation revenues above
the amounts embedded in the rate settlement, the company could add up to an
additional 1% ROE. If approved by the state Public Regulation Commission in
September 2003, the new rates would take effect in November 2003.
Parties to the agreement include the commission staff and the New Mexico
Industrial Energy Consumers. Parties that have not signed on to the stipulation
have until July 8 to sign on or oppose. A hearing is set for July 14. The new
rates will increase the average customer's bill by $3.56 a month, an increase of
about 7.5 percent based on the recent cost of gas.
The agreement also allows PNM to recover $4.4 million in costs previously
approved by the commission but not yet collected from customers. Those costs
will be recovered from customers over a three-year period.
The company's previously provided earnings guidance for 2003 remains at $1.80 to
$2.05.
PNM Resources is an energy holding company based in Albuquerque, New Mexico.
PNM, the principal subsidiary of PNM Resources, serves 452,162 average natural
gas customers and 392,529 average electric customers in New Mexico. The company
also sells power on the wholesale market in the Western U.S. PNM Resources stock
is traded primarily on the NYSE under the symbol PNM.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
Statements made in this filing and documents the Company files with the
Securities and Exchange Commission that relate to future events or the Company's
expectations, projections, estimates, intentions, goals, targets and strategies
are made pursuant to the Private Securities Litigation Reform Act of 1995.
Readers are cautioned that all forward-looking statements are based upon current
expectations and estimates and the Company assumes no obligation to update this
information.
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Because actual results may differ materially from those expressed or implied by
the forward-looking statements, PNM Resources cautions readers not to place
undue reliance on these statements. Many factors could cause actual results to
differ, and will affect the Company's future financial condition, cash flow and
operating results. These factors include interest rates, weather, fuel costs,
changes in supply and demand in the market for electric power, wholesale power
prices, market liquidity, the competitive environment in the electric and
natural gas industries, the performance of generating units and transmission
system, state and federal regulatory and legislative decisions and actions, the
outcome of legal proceedings and the performance of state, regional and national
economies. For a detailed discussion of the important factors that affect the
Company and that could cause actual results to differ from those expressed or
implied by the Company's forward-looking statements, please see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Company's current and future Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q and the Company's current and future Current Reports on Form 8-K,
filed with the SEC.
Other Select Financial Information
PNM Gas Rate Settlement Terms
Requested Settlement
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Increase in Cost of Delivery fees $37.6 Million $20.0 Million
Increase in misc fees/charges $1.6 Million $1.6 Million
Interest on regulatory assets $0 $0.4 Million
Recovery of regulatory asset
(Gas take-or-pay contracts) $4.4 Million $4.4 Million
Rate of Return on Equity 12.0% 10.25%
% Increase in avg residential bill 14.0% 7.5%
Rate increase takes effect Dec. 2003 Nov. 2003
Capital Structure 48% equity 48% equity
Total Rate Base $366 Million $351 Million
OTHER HIGHLIGHTS:
o With additional annual off-system market-based gas transportation
revenues ranging from $2 to $4 million added, the ROE will increase
by about 1.0%, bringing the rate of return on our gas utility in
line with the return allowed on our electric utility in the global
electric agreement approved in January 2003.
o PNM will be able to collect on its only remaining regulatory asset
over 3 years. This will allow PNM to collect $4.4 million in costs
associated with gas take or pay contracts entered into back in
1997.
o The weather normalization period was shortened significantly
reducing the impact of weather volatility on gas revenues.
o There is no rate freeze associated with the settlement and no
restriction on filing another rate case in the future if
circumstances warrant.
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o Parties to the settlement agreement include commission staff and
the New Mexico Industrial Energy Consumers. PNM is continuing
discussion with the Attorney General. Other intervenors, including
ConocoPhillips Company, Los Alamos County, University of New
Mexico, United States Executive Agency and the City of Albuquerque
have until July 8 to file their positions on the agreement.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PNM RESOURCES, INC.
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(Registrant)
Date: June 26, 2003 /s/ Robin A. Lumney
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Robin A. Lumney
Vice President, Controller
and Chief Accounting Officer
(Officer duly authorized to sign this report)
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