Logo of jester cap with thought bubble.

Image source: The Motley Fool.

PNM Resources Inc  (NYSE:PNM)
Q4 2018 Earnings Conference Call
Feb. 27, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. Welcome to the PNM Resources Fourth Quarter Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Jimmie Blotter, Director of Investor Relations. Please go ahead.

Jimmie Blotter -- Director of Investor Relations

Thank you, Debbie, and thank you, everyone, for joining us this morning for the PNM Resources Fourth Quarter 2018 Earnings Conference Call. Please note that the presentation for this conference call and other supporting documents are available on our website at pnmresources.com. Joining me today are PNM Resources' Chairman, President and CEO, Pat Vincent-Collawn; and Chuck Eldred, our Executive Vice President and Chief Financial Officer, as well as several other members of our executive management team.

Before I turn the call over to Pat, I need to remind you that some of the information provided this morning should be considered forward-looking statements, pursuant to the Private Securities Litigation Reform Act of 1995. We caution you that all of the forward-looking statements are based upon current expectations and estimates and that PNM Resources assumes no obligation to update this information. For a detailed discussion of factors affecting PNM Resources results, please refer to our current and future annual reports on Form 10-K, quarterly reports on Form 10-Q, as well as reports on Form 8-K filed with the SEC.

And with that, I will turn the call over to Pat.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Thank you, Jimmie, and good morning, everyone. Thank you for joining us today on our fourth quarter earnings call, which for those of you keeping track is our second consecutive year of announcing earnings on International Polar Bear Day, and for those of you that are wondering, none of us are dressed up as a Polar Bear. So, let's begin on Slide 4, with the financial results and some company updates.

Our GAAP earnings per share in the fourth quarter of 2018 reflect the loss of $0.69 compared to a loss of $0.68 in the fourth quarter of 2017. Ongoing earnings per share are $0.18 compared to $0.24 in the fourth quarter of last year. For the full year, GAAP earnings per share are $1.07 in 2018 compared to a $1 in 2017, and ongoing earnings are $2 compared to a $1.94 in 2017.

During the fourth quarter, we experienced continued increases in customer usage attributed to both load growth and weather in New Mexico. These factors contributed to earnings above the top end of our guidance range for 2018. For 2019, we have also narrowed consolidated earning guidance to $2.10 to $2.18. Chuck will provide further details on the financials in a few minutes.

We began 2018 with the implementation of tax reform and working toward regulatory approval of our settlement in the general rate review at PNM. We noted that 2018 would be a transitional year as the phasing of rates in our settlement at PNM and our inability to make TCOS filings during our general rate review at TNMP, would limit our earnings potential in 2018.

We believe that we had started to turn the corner with load growth at PNM and which seems in positive impacts albeit not until 2019. By the time we finished the second quarter though, the positive impacts of weather and load growth had exceeded our expectations. The number of interconnection request at TNMP, which building rapidly and PNM was no longer showing only leading indicators of the building economy as load growth had reached positive territory. Earnings from third-party transmission were higher than expected. And to top things off, an early start to the cooling season in New Mexico brought about opportunities to dedicate some additional O&M dollars to support the new level of growth at PNM and support system reliability. We raised our expectations for load growth and earnings.

Our highlights for 2018 go beyond earnings, however, we remain committed to providing our customers with safe, reliable, affordable and environmentally sustainable power. By modifying our rate settlement to incorporate tax savings in the rate, PNM became the first utility to begin returning those savings to customers. We began installing industry leading transmission relay equipment on the PNM grid to more quickly identify and restore power after outages.

We partnered with the City of Albuquerque to announce a new program designed to support governmental, tribal and large customers in meeting their sustainable energy goals. We announced the addition of another 100 megawatts of solar at New Mexico Renewable Development to serve Facebook. Continued down the path laid out in our 2017 integrated resource plan to transform the PNM generation portfolio and to be coal-free by 2031.

We have repeatedly allocated additional investments to Texas to meet the unprecedented level of growth in our service territory, while still remaining -- maintaining reliability. We are doing all these things with our shareholders in mind also. We work to earn our allowed return by efficiently managing the business and seeking authorization for the recovery of certain investments before spending the capital.

We utilized financing plans to support growth with our credit metrics in mind to maintain investment grade credit ratings. And finally, we increased the dividend by 9% in December, bringing our expected payout ratio to 54% of the 2019 ongoing earnings guidance midpoint. All in all, 2018 proved to be a pretty successful year.

Moving into 2019, the New Mexico legislative session, which ends on March 16th has taken center stage. The majority of the House and Senate, along with the Governor in New Mexico are Democrats and energy policy has been a focus, several bills have been brought forward in this year's legislative session that's favor the addition of renewable and carbon-free energy sources.

Renewable portfolio standards have been proposed to take us from the current standard of 20% renewables by 2020 to new standards of 40% by 2025, 50% by 2030, and 80% by 2040. A 100% carbon-free goal by 2045 has also been introduced. Senate Bill 489, also known as the Energy Transition Act or ETA includes these standards, along with the securitization measure that PNM has supported. This bill also has the Governor's strong support. The bill provides needed assistance to workers in the San Juan area communities and helps keep costs low for customers.

The bill passed the Senate Conservation Committee with a vote of five to three on Saturday, and is expected to be heard by the Senate Corporations and Transportation Committee soon. The Energy Transition Act through the securitization financing provides the means for PNM to be able to accomplish the energy policy goals of the State of New Mexico.

As we think about the challenging renewable and carbon-free goals that are being considered in the legislature, we are encouraged by what we are seeing across the industry in terms of declining cost for renewable resources and storage. We are confident in our ability to maintain cost effective, reliable and ultimately emissions free energy for our customers.

I know that some of you today will want to ask questions about how our commission or others in New Mexico maybe thinking about Senate Bill 489 or other proposed legislation. As you can imagine with the legislature still in session, it's a highly political environment right now. So, we're not going to be taking any questions on those issues today. We continue to stand by our plans to make a complete abandonment filing for San Juan following the best and final pricing evaluation for the replacement power in our RFP along with the completion of an updated load forecast and decommissioning study.

So now, let's turn to Slide 5. First off, unfortunately I do not have any updates on our appeal with the New Mexico Supreme Court related to our 2015 general rate case. The next item relates to the San Juan generating station compliance filing that we made at the end of the year. We agreed under the terms of our BART settlement to make a filing stating our intentions for the San Juan plant after 2022. All but one of the San Juan participants have provided notice that they do not wish to extend the coal supply agreement beyond 2022.

Farmington expressed an interest in keeping San Juan open. However, the deadline to consider plans for operations beyond 2022 under the San Juan owner participation agreement have passed. On December 31st, 2018, we provided our notice to the New Mexico Commission for the BART settlement agreement that we do not intend to continue serving PNM customers with energy from San Juan post 2022.

Following our December 31st notice filing, the commission chose to open a new docket and ask parties from the previous docket and from the integrated resource plan to provide comment on the compliance filing, an opinion on whether PNM should be required to initiate an abandonment filing. On January 30th, the commission ordered us to file an application by March 1st with testimony and support of abandonment and the status of replacement power alternatives.

We requested that the commission reconsider the order, noting the reasons against forcing a premature and incomplete filing by March 1st, since updated information required to complete the filing is not yet available or finalized. Although parties provided responses last week, the case is not on the commission's agenda for today's open meeting. If the commission does not address the version for rehearing today, it will be deemed denied by operation of law. We would then expect to promptly petition the New Mexico Supreme Court for an immediate stay.

We agree that it is important to understand the financial impacts of something as significant as closing down a coal plant and replacing it with new resources, and efforts have been under way for some time to focus in on those impacts. We have been very transparent over the last year in communicating our plans to complete the tasks required to file for abandonment of San Juan in the second quarter of 2019. We are working through the proposal submitted through our RFP process and the decommissioning study is under way at the plant.

Separately, we believe that it's prudent to wait until the New Mexico legislative session is complete, to understand how the proposed changes to the state's energy policy could impact our plans. Changes to renewable portfolio standards or the introduction of carbon-free standards should be considered before plans to add resources or submitted for commission approval. The Energy Transition Act also considers a preference for the location of replacement resources and outlines considerations for battery storage, both of which could directly impact plants for replacement power. We are the largest electric utility in New Mexico and have communicated a plan to close a large coal plant and make a significant change to our resource mix over the next five years. We recognize that the legislators and numerous parties who have worked on the Energy Transition Act along with many other proposed energy bills have done this work with the intent to have new legislation play a significant role in our plans. These voices also represent the voices of our customers and if new legislation emerges from this session, we want to incorporate it into our plans. Again, because this is all part of an open docket with the commission and the legislative process continues for a few more weeks, we aren't going to comment beyond these points that we have already communicated in our filings.

Moving on to the Western Energy Imbalance Market Filing. The commission issued an order, allowing us to create a regulatory asset as we began investing in the hardware and software needed for our planned participation in this market in 2021. PNM's participation is a net benefit for customers and the benefit automatically flow through to customers through our fuel clause. The initial investments, however, would need to be recovered to a rate case, so we are looking for some assurance that we can recover those investments.

After our newly elected commissioners came on board, an intervening party requested that the commission reconsider their order and the commission agreed. As a result, we have stopped all related work. It is typically taken utilities 24 months to 28 months to build up their systems to begin trading in the imbalance market and the market only allows new participants in April of each year. So, we may not be able to join the market in April 2021 as planned without an affirmation of the commission's original order for recovery of associated costs to join.

Two other parties noted this and joined filing with commission and requested an expedited decision. We are hopeful that we'll be able to get back to work on this project that has such significant financial benefits to customers and furthers the renewable energy potential in New Mexico. I'll also note that the San Juan entities provided notice of appeal with the New Mexico Supreme Court on our 2017 Integrated Resource Plan. Their arguments will be due to the court in March. Similar to our rate case appeal, there is no statutory timeline for this type of case.

We have also provided some updates on other open dockets or dockets that have been closed since our last update. At PNM, the 2019 renewable plan was approved in November. At TNMP, our general rate review settlement was approved in December and rates were implemented in January. As previously communicated, we filed for a TCOS filing in January that would update recovery on transmission rate base through 2018, and we expect that new rates will be implemented in March. The requested increase is $14.3 million, which is higher than our prior year request, because we were not able to file for updates in rates during our general rate review.

With that, I'll turn it over to Chuck for a detailed look at the numbers.

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Thank you, Pat, and good morning, everyone, and thank you for joining. I apologize in advance I have a slight cold, so there may be a little coffee in order to clear my throat as I go through the information this morning. But again, let me start with Slide 7, with a recap of 2018 segment earnings results. Ongoing earnings per share is strong at $2 for the year. PNM's earnings were up $0.06 for the year. We have several items affecting earnings that were included in our guidance for the year, such as the combined effects of the retail rate phase-in, changes in tax rates and the generation portfolio changes that included bringing Palo Verde Unit 3 into rate base.

Lower gains from decommissioning and reclamation trust and depreciation in property tax expense increases from our capital investment. We also had some additional O&M expenses in the second half of the year to support growth across the PNM system, including routine maintenance at our plants, as well as some additional work on our distribution system to support growth and maintain system reliability. These were offset by the lower interest expense at PNM due to refinancing's. Additionally, the increased load that Pat mentioned and colder temperatures in New Mexico during the fourth quarter further improved results, with heating degree days 17% higher than normal and 65% higher than the prior year.

Earnings from third-party transmission customers also came in at the top of our expectations. TNMP is up $0.11 for the year compared to 2017. Drivers include continued strong load, TCOS filings that have been implemented during the timeframe and AFUDC. These are partially offset by an increase in depreciation and property tax expense.

Finally, Corporate and Other was down $0.11 for the year. This was primarily for increased interest expense and reduction to the interest income that resulted from the earlier repayment of the Westmoreland loan in May. The quarter information as well as the full list of annual drivers are in the appendix.

Now, turning to Slide 8, for our load information. 2018 results reflect a 0.6% increase in PNM load, just above the top end of our revised guidance of 0.5% for the year. Our 2019 guidance reflects a range of a 0.3% to 1%, which includes the additional load from the Facebook data center. The economy in New Mexico continues to be a positive story.

Last quarter we reported that Netflix had announced its plans to bring $1 billion in production to New Mexico over the next 10 years, creating up to 1,000 production jobs annually. Since then there have been announcements of new developments, including business perks, hotels, retailers and restaurants. Employment growth in Albuquerque outpaced the US average throughout the second half of 2018 and has continued that momentum into 2019.

Earlier this month, the City of Albuquerque reported the expansion of Chicago-based lending solutions to downtown Albuquerque. The expansion brings over 150 jobs without the use of any Local Economic Development Act funding incentives, demonstrating that Albuquerque has a growing economy that is getting the attention of companies looking to expand or relocate.

TNMP reported a 3.2% increase in volumetric load for 2018, just over our guidance range of 2% to 3% for the year. Demand-based load came in at 6.8%, which was at the top end of our 5% to 7% guidance range. We continue to see customers line-up with a request to interconnect to our system. Additionally, a recent study determined that even with our increased investment assumptions discussed in November, the system requires additional investments in voltage control equipment to support the continued level of growth on the system. You'll see in a few slides that we've added $30 million of capital in 2019 for these items.

Now, turning to Slide 9. We are starting the year off by narrowing our 2019 ongoing earnings guidance. During the first two months of the year weather has been coming in stronger than expected at PNM. This impact alone has improved earnings by $0.02. As a result, our new range is $2.10 to $2.18. PNM's range also narrowed by $0.02 and is now a $1.61 to $1.65.

On Slide 10, you will see the impact of the continued growth at PNM and TNMP in our capital plans. As we begin to realize the incremental investment opportunities that were introduced last quarter into our plan. We have moved more than $250 million out of the opportunities bucket and in our capital plans at PNM and TNMP.

We have added a $105 million of capital at TNMP over the four years. $30 million in 2019, $25 million each year for 2020 through 2022. This brings the annual run rate for TNMP investment to $245 million, a significant increase for the $170 million run rate forecasted at this time last year.

At PNM, we added $50 million of T&D spending per year for 2020 through 2022. These projects support an increased level of load and replace aging infrastructure that will maintain the stability of our system and reduce ongoing maintenance cost. As you can see on the capital slide, we have incremental growth opportunities at $450 million. This reflects the opportunities for replacement power and new transmission to support renewable energy. As the Energy Transition Act moves through the legislation, we support New Mexico's goals to become a sustainable energy leader.

The bids in the RFP process provide the opportunity to procure the replacement resources at competitive levels, supporting our continued efforts to ensure affordable rates and strong reliable -- reliability for our customers as we migrate to a carbon-free generation portfolio. Further capital investments will continue to be based on prioritization of projects and allocated across the business segments. We have identified about $245 million of future capital that are not currently baked in the chart on Slide 12. These investments would be time to address PNM's aging infrastructure as load and customer growth continues and sport additional development at TNMP and eventually include further grid modernization at PNM including automated metering technology.

Turning to Slide 11, you will see that we continue to target 5% to 6% earnings growth and have updated this calculation to reflect 2018 ongoing result of $2 as the base period. We've also added 2022 to the earnings potential and included the incremental growth opportunities along with the New Mexico Supreme Court appeal at the bottom of the chart. Now at the midpoint of 2019 ongoing earnings guidance of $2.14 does not include the New Mexico Supreme Court decision. Overall, you will see an increase in the earnings potential of our base plan resulting from an increased capital that is supporting both PNM and TNMP. After the realization of these amounts to the base plan, we still have additional growth opportunities of up to $0.10 in 2021 and up to $0.24 in 2022. We remain confident in our plans and our ability to meet the targets and the potential to incorporate the more capital outside of our core investment plan as additional events develop throughout the year.

With that, I'll turn it back over to Pat.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Thanks, Chuck, and thank you all for joining us today. Our team has been working diligently for the last several years to move in the direction of our Integrated Resource Plan and transform PNM's generation portfolio. It's been refreshing to see the number of stakeholders supporting this direction and joining efforts to move down this path together in a way that considers so many different positions. Out of respect for these ongoing efforts, let me remind you that we will not taking any questions on the call today that apply into the open docket to speculate on the outcome of the legislature. You are welcome to contact Investor Relations to catch up on any previously discussed details related to these items, and we will disclose any future events appropriately.

Operator, let's please open it up for questions.

Questions and Answers:

Operator

We will now begin the question-and-answer session. (Operator Instructions) The first question comes from Paul Ridzon with KeyBanc. Please go ahead.

Paul Ridzon -- KeyBanc -- Analyst

Good morning. I hope I'm not going into the forbidden zone with this question, but what's going on with.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

That's OK, Paul, if you do, we'll tell you. Good morning.

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

You're already there, Paul. Nobody answer the question.

Paul Ridzon -- KeyBanc -- Analyst

What's happening with Farmington and Acme?

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

As we've said after interacting with Farmington for about two years we were surprised, that there was a meeting last week from the city of Farmington and Acme, and they hear of their announcement to keep San Juan Generating Station opened. So, as we've said our contract calls for the orderly shutdown of the plant, and we'll have to see, that's all we really know.

Paul Ridzon -- KeyBanc -- Analyst

If for whatever reason that plant stayed open, how could that impact your RFPs?

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Well. At this point...

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Yes.

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

At this point, Paul, we have every intention to shut our ownership interest in San Juan. So regardless of what theoretically has been proposed by Farmington, from our view we're exiting San Juan, and we'll replace the power accordingly to meet the objectives of -- hopefully supporting the energy transition activities in past. But we will in no way accept any sort of PPA or any continued involvement after 2022 for San Juan. We've made that decision, it's up to the commission ultimately decide the abandonment, but that's our plan and we'll continue to pursue it that way.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

And there are several bills, Paul, to talk about higher renewable portfolio standards. So, I can't see any coal fitting into our plants.

Paul Ridzon -- KeyBanc -- Analyst

I just still can't get the coyote out of my head (inaudible) here at Acme.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Well. Yes.

Paul Ridzon -- KeyBanc -- Analyst

Thank you very much.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

And for you younger folks, that's Wile E. Coyote, so look it out.

Operator

The next question comes from Ali Agha with SunTrust. Please go ahead.

Ali Agha -- SunTrust -- Analyst

Thank you. Good morning.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Good morning, Ali.

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Good morning.

Ali Agha -- SunTrust -- Analyst

Pat, just I don't want to get into the politics of the legislation, et cetera, but can you just tell us the timeline of the process and what milestones we should be tracking from the outside?

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Absolutely. I'm happy to talk about the process. It passed the first committee, which is the Senate Conservation, it should soon go to Senate -- Senate Corporations and Transportation, and then after that it would go to the full Senate, and then it goes over to the House. It's probably going to be assigned to a committee in the House, but remember the -- one of the co-sponsors of the bill is the speaker of the House. And then it would be scheduled for a committee hearing, read on the floor, it's got to have another committee hearing if it does have a second committee hearing, and then it would be read out on the floor again. It's got to have a third read for both the Senate and the House, and then it was the Governor, and the Governor has to act on bills by April 5th, if signed, the bill becomes law on June 14th.

Ali Agha -- SunTrust -- Analyst

Okay. And the legislative session itself, when is it scheduled to end?

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

March 16th.

Ali Agha -- SunTrust -- Analyst

March 16th. Okay.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

And just remember that a lot of the work that goes on in the New Mexico legislature in the first, five, six weeks is committee hearings, the budget that kind of stuff. So, most bills in the New Mexico legislature get passed in the last two to three weeks of the session. It's just been a historical pattern. If you went out and did a Pareto of bills passed, you'd see that they're all passed in the last few weeks.

Ali Agha -- SunTrust -- Analyst

I'm glad too. Secondly, I wanted to clarify, Chuck, the earnings follow your slide, particularly the numbers for '20 and '21, the increase in both years, is that all driven by that incremental CapEx that you're now assuming in your base plan for '20 and '21, or is there some other changes embedded in those higher numbers?

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

No. If you -- when you get through and work through the numbers, you'll see where we've added $255 million for both T&D at PNM and TNMP, so it's like $50 million a year for PNM and $25 million a year for next three years for TNMP. On top of that, the $30 million, we just added for 2019. So, the growth on that slide about the earnings potential, if you look at the bottom section, you can see where we've identified the $350 million in 2021, which again represents new transmission and replacement power for San Juan. We assume that, that's half of that amount, just for planning purposes, and then the balance of that would be in 2022. So, that particular amount is really based on the ultimate objectives and decisions that are made through what replacement power in new transmission to support renewable's occurs in New Mexico, but that you can see is outside of the base plan. And again, our base plan that support the earnings growth target of 5% to 6% from '18 through 2022, as we've previously stated.

Ali Agha -- SunTrust -- Analyst

Okay. And last question. To the extent that all of that growth CapEx does make it into base and everything falls in your favor, what kind of incremental rate impact does that sort of imply for New Mexico customers. And is that sort of a constraint in your mind when you're thinking about that incremental CapEx?

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Well. We certainly are very careful of how we think about rate cases and customer impacts, but it's important to realize that we're dropping about $320 million of rate base out of PNM, and we're adding additional rate base. So you're really -- the incremental amount of our rates is going to dependent upon what exceeds that amount of rate base in 2022 after we shut the plant down. So, we're always sensitive about that. That's why we got $245 million of additional capital for both PNM and TNMP, that's in -- call it a prioritization bucket, that's based on timing, and that will be released as we begin to see what the development is on the replacement resources in new transmission in New Mexico, but again, we think we are clearly managing our expectations for an earnings to our growth of 5% to 6%.

Ali Agha -- SunTrust -- Analyst

I got you. And...

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

And Ali, remember there's a couple of offsets, right? Securitization takes customers bills down and then assuming we get the permission to recover our investments in the energy and balance market, that's a significant savings for customers too, that goes through the fuel clause, so there is offsets to what Chuck was talking about.

Ali Agha -- SunTrust -- Analyst

I got you. And Pat, just remind us when is the next rate case in New Mexico expected to be filed?

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

We've been talking about the end of this year.

Ali Agha -- SunTrust -- Analyst

End of this year. Got you. Thank you.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Welcome.

Operator

(Operator Instructions) Our next question comes from Julien Smith with BOA. Please go ahead.

Alex Morgan -- Bank of America -- Analyst

Good morning. This is Alex Morgan calling in for Julien Dumoulin.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Good morning, Alex.

Alex Morgan -- Bank of America -- Analyst

How are you?

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Good.

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Good.

Alex Morgan -- Bank of America -- Analyst

Congratulations on the results.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Thank you.

Alex Morgan -- Bank of America -- Analyst

I have two further questions. First, I wanted to go off with the timeline process question and specifically touch base on when you would expect to release more information of the replacement generations for the San Juan generation facility?

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Yes. As we've said, we really don't see the ability to finalize the announcement until second quarter, probably later part of second quarter, around the June time frame. So, a lot of this is dependent upon other components, updated load growth, finalizing the process for the RFP in replacement power, knowing what the Energy Transition Act ultimately passes and indicates. So, there's a number of factors that are still incomplete in our ability to file for abandonment in that application and identify replacement power. So, I would look for that more along the June time frame.

Alex Morgan -- Bank of America -- Analyst

Okay. Thank you so much. And secondly, I wanted to just ask about amending the legislative bills. I know that at the last PRC meeting, the commissioners asked questions around this, and I was wondering if there's any updates on how easy it is to amend one of the proposed bills?

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Well. You have to get through the committee process. And on Saturday, for example, when it was in Conservation Committee, there were some friendly amendments made by the sponsor to clear up some technicalities, no other amendments were accepted. So you basically have to get your amendments into the committee and have them accepted by the committee. It's not that easy of a process, because I think in general, the people that have written the legislation have spent a lot of time on it. They've had huge involvement in parties. And so, they don't want folks coming in and mucking that up. That said, amendments can be made, but I wouldn't -- I don't consider it that easy of a process. There's a lot of good sponsorship in both the House and the Senate, and they are very protective of the work that they've done and of the trade-offs that they have made with all parties.

Alex Morgan -- Bank of America -- Analyst

Okay. Thank you so much. That's all for me.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Pat Vincent-Collawn for any closing remarks.

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Thank you. And again, thank you all for joining us today. Have a safe and happy rest of your day, and we look forward to seeing you all soon. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 36 minutes

Call participants:

Jimmie Blotter -- Director of Investor Relations

Patricia K. Collawn -- Chairman, President and Chief Executive Officer

Charles N. Eldred -- Executive Vice President and Chief Financial Officer

Paul Ridzon -- KeyBanc -- Analyst

Ali Agha -- SunTrust -- Analyst

Alex Morgan -- Bank of America -- Analyst

More PNM analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.