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) January 10, 2003
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(January 10, 2003)
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PNM RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
New Mexico 85-0468296
---------------------------- Commission ----------------------
(State or Other Jurisdiction File Number 333-32170 (I.R.S. Employer
of Incorporation) --------- Identification) Number)
Alvarado Square, Albuquerque, New Mexico 87158
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(Address of principal executive offices) (Zip Code)
(505) 241-2700
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(Registrant's telephone number, including area code)
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(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 January 10, 2003 and
other select financial information.
Press Release:
PNM Resources Utility Unit Seeks Increase in Natural Gas Cost of Service
ALBUQUERQUE, N.M., January 10, 2003- PNM Resources (NYSE:PNM) utility subsidiary
PNM today will ask regulators to approve an increase in the service fees charged
the company's 441,000 natural-gas customers.
The proposal would increase both the set monthly service fee and the charge tied
to monthly usage. Those fees are separate from the cost of gas charged to
customers. The monthly cost of gas charge would not be affected by the fee
increase.
"Although PNM has done an excellent job of holding down expenses where it can,
the reality is that PNM's gas system grows every month, and so do the ongoing
costs of operating and maintaining that system," said PNM Senior Vice President
Bill Real. "In spite of achieving efficiencies in its operations, PNM is not
earning a fair return on its investment in gas operations."
Real cited a number of factors driving the need for the $37.6 million rate
increase, including: o The addition of 97,000 new customers to the PNM gas
system since 1991, and 3,200 miles of new pipeline; o An investment in new gas
infrastructure of approximately $300 million since January 1991; o Costs
associated with the new federal pipeline safety law; and o The rising cost of
construction materials, adoption of new technologies, and employee safety and
reliability training.
The proposed rate increase would provide PNM's gas utility a 12 percent return
on equity, which is consistent with the return allowed 15 comparable natural gas
utilities. For the 12 months ended September 30, 2002, the company's return on
equity in its gas utility was less than 3 percent. Real said company officials
hope the PRC will set a timetable for public hearings and deliberation that
allows the new rates to become effective in December 2003. The rate case is
based on revenues and expenditures during a 12-month "test year" that ended in
September 2002.
PNM, the principal subsidiary of PNM Resources, provides natural gas service to
441,000 gas customers and electric utility service to 378,000 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.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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Statements made in this news release that relate to future events are made
pursuant to the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based upon current expectations and the company
assumes no obligation to update this information. Because actual results may
differ materially from expectations, the company cautions readers not to place
undue reliance on these statements. Future financial results will be affected by
a number of factors, including interest rates, weather, fuel costs, changes in
supply and demand in the market for electric power, wholesale power prices,
market liquidity, the performance of generating units and transmission system,
and state and federal regulatory and legislative decisions and actions. For a
detailed discussion of the important factors affecting PNM Resources, please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Form 10-K for the year ended December 31, 2001,
Form 10-Q for the quarter ended September 30, 2002 and Form 8-K filings with the
Securities and Exchange Commission.
Other Select Financial Information:
PNM Gas Rates Filing
1/10/2003
PNM's filing for a rate increase is based on the following factors:
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- Rate increase amount $37.6 million
- Total rate base $366 million
- Capital structure 48% equity
- Return on equity 12%
- Test Period 12 months ended 9/30/02
(Each 1% of ROE is worth $3 million)
Rate Case Timing
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- NM Public Regulation Commission will start the formal hearing process
30 days after PNM files the rate case
- PRC then has nine months to decide the rate case
- PRC may take an additional three months if it needs more time
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SIGNATURES
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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: January 10, 2003 /s/ Robin Lumney
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Robin Lumney
Vice President, Controller
and Chief Accounting Officer
(Officer duly authorized to sign this report)
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