SEC Comment Letter for TXNM ENERGY INC (TXNM) (CIK 0001108426) (TXNM) — Apr 15, 2005
TXNM ENERGY INC (TXNM) (CIK 0001108426)
Date: April 15, 2005 · CIK: 0001108426 · Accession: 0000000000-05-018344
AI Filing Summary & Sentiment
File numbers found in text: 333-32170
Referenced dates: April 4, 2005, November 1, 2002
Letter
April 13, 2005 By Facsimile and U.S. Mail John Loyack Chief Financial Officer, Sr. VP PNM Resources Inc. Alvarado Square Albuquerque, NM 87158
RE: PNM Resources Inc. File No. 333-32170 Form 10-K for the year ended December 31, 2004
Dear Mr. Loyack:
We reviewed your responses to our prior comments on the above referenced filings as set forth in your letter dated April 4, 2005. Our review resulted in the following accounting comment.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004
We note your response to comment 3. We are aware of our letter dated November 1, 2002. Please note the difference between the timing of discontinuance of SFAS No. 71 requested in our November 1, 2002 comment No. 25 and comment No. 3 in our preceding letter relating to income statement classification of adoption of Statement No. 143. We do not believe such comments requested similar information. We also realize that the inclusion of a cost of removal component in rates, in and of itself, does not constitute a legal asset retirement obligation ("ARO"). However, the EEI October 2002 ARO whitepaper indicates that promises made by utilities in rate case proceedings or specific orders issued by regulatory bodies in rate cases should be evaluated as a potential legal obligation. Please describe in detail how you arrived at the conclusion that you did not have a legal obligation associated with decommissioning your fossil fuel generating plants. In this regard, help us understand how you reached the conclusion to record a cumulative income effect for amounts that were previously approved and collected in rates for decommissioning. Furthermore, please explain if you have any legal commitment to return such amounts to ratepayers. Lastly, please tell us whether these fossil generating assets are still included in rate base. The EEI ARO whitepaper indicates that a regulated company may reverse previous cost of removal accruals to a regulatory liability. We may have further comment. 1.
As appropriate, please respond to this comment within 10 business days or tell us when you will provide us with a response. Please provide us with a response letter that keys your response to our comment and provides any requested supplemental information. Please file your response letter on EDGAR as a correspondence file.
If you have any questions regarding these comments, please direct them to Robert Babula, Staff Accountant, at (202) 824-5562 or, in his absence, to the undersigned at (202) 942-1885. Any other questions regarding disclosure issues may be directed to H. Christopher Owings, Assistant Director at (202) 942-1900.
Sincerely,
Jim Allegretto
Senior Assistant Chief
Accountant
Show Raw Text
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<TEXT>
Mail Stop 3-8
April 13, 2005
By Facsimile and U.S. Mail
John Loyack
Chief Financial Officer, Sr. VP
PNM Resources Inc.
Alvarado Square
Albuquerque, NM 87158
RE: PNM Resources Inc.
File No. 333-32170
Form 10-K for the year ended December 31, 2004
Dear Mr. Loyack:
We reviewed your responses to our prior comments on the above
referenced filings as set forth in your letter dated April 4,
2005.
Our review resulted in the following accounting comment.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004
We note your response to comment 3. We are aware of our letter
dated
November 1, 2002. Please note the difference between the timing
of
discontinuance of SFAS No. 71 requested in our November 1, 2002
comment No. 25 and comment No. 3 in our preceding letter relating
to
income statement classification of adoption of Statement No. 143.
We
do not believe such comments requested similar information. We
also
realize that the inclusion of a cost of removal component in
rates,
in and of itself, does not constitute a legal asset retirement
obligation ("ARO"). However, the EEI October 2002 ARO whitepaper
indicates that promises made by utilities in rate case proceedings
or
specific orders issued by regulatory bodies in rate cases should
be
evaluated as a potential legal obligation. Please describe in
detail
how you arrived at the conclusion that you did not have a legal
obligation associated with decommissioning your fossil fuel
generating plants. In this regard, help us understand how you
reached the conclusion to record a cumulative income effect for
amounts that were previously approved and collected in rates for
decommissioning. Furthermore, please explain if you have any
legal
commitment to return such amounts to ratepayers. Lastly, please
tell
us whether these fossil generating assets are still included in
rate
base. The EEI ARO whitepaper indicates that a regulated company
may
reverse previous cost of removal accruals to a regulatory
liability.
We may have further comment. 1.
As appropriate, please respond to this comment within 10
business days or tell us when you will provide us with a response.
Please provide us with a response letter that keys your response
to
our comment and provides any requested supplemental information.
Please file your response letter on EDGAR as a correspondence
file.
If you have any questions regarding these comments, please
direct them to Robert Babula, Staff Accountant, at (202) 824-5562
or,
in his absence, to the undersigned at (202) 942-1885. Any other
questions regarding disclosure issues may be directed to H.
Christopher Owings, Assistant Director at (202) 942-1900.
Sincerely,
Jim Allegretto
Senior Assistant Chief
Accountant
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