Feb 27, 2015
Executives
Jimmie Blotter - Manager of Investor Relations Patricia K. Vincent-Collawn - Chairman, President and Chief Executive Officer Chuck N.
Eldred - Executive Vice President and Chief Financial Officer
Analysts
Paul T. Ridzon - KeyBanc Capital Markets Anthony C.
Crowdell - Jefferies & Co. Inc.
Brian J. Russo - Ladenburg Thalmann & Co Ali Agha - SunTrust Robinson Humphrey
Operator
Good morning, and welcome to the PNM Resources Fourth Quarter Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions.
Please not this event is being recorded. I would now like to turn the conference over to Jimmie Blotter, Investor Relations Director.
Please go ahead ma'am.
Jimmie Blotter
Thank you, Dan, and thank you, everyone, for joining us this morning for the PNM Resources Fourth Quarter 2014 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 CFO 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. Vincent-Collawn
Thank you, Jimmie. Good morning, everyone and thank you for joining us on this late February snowy Albuquerque morning.
2014 was a good year for PNM Resources, we continued to make progress in key areas, including reliability and customer satisfaction and we’re pushing forward with important filings including the BART plan for San Juan Generating Station, in PNM’s 2015 future test year rate case. Let’s start this morning on Slide 4 with headlines from the fourth quarter.
The company finished the year with a solid fourth quarter with ongoing earnings increasing $0.03 over the fourth quarter in 2013. GAAP earnings were up $0.14 per share compared to the same period in 2013.
I often talk about the Company's focus on managing the business well and about our commitment to serving our customers. Our research shows that the most important thing to our customers even more than price is reliability and for three out of the last five years, both PNM and TNMP have ranked in the top quartile nationally for reliability.
In 2014, PNM delivered its best reliability performance in the past seven years and TNMP's reliability was its best in a decade. At PNM, we have worked extremely hard to create a culture that top to bottom considers how every decision impacts our customers.
That effort is making a difference. According to our research, customers' overall impressions of and trust in PNM are steadily improving.
We still want to do even better, but I am pleased with the progress that has been made. We are looking to build on this momentum and we are confident the Company is well-positioned as we move forward in 2015.
On that note, we are reaffirming our 2015 consolidated ongoing earnings guidance range of $1.50 to $1.62 per diluted share. Let’s go to Slide 5 now for an update on BART.
The hearing on the settlement agreement for the San Juan plan ran from January 5 through January 27 and it was a very active proceeding. We feel good about the case we presented.
At the end of the day, all of the evidence shows that the plan outlined in the stipulated settlement is the most cost- effective for customers and provides significant environmental benefits. During the hearing, none of the intervenors were able to show that any other plan was more cost-effective for customers while providing the same environmental benefits.
There were however some bumps in the road. During the hearing process, the city of Farmington announced that it would not take on the additional 65 megawatts in Unit 4.
At the same time, the city reaffirmed its commitment to maintaining the share it already owns and in a continued viability of the plant. We are still working with the other owners to find a home for that 65 megawatts of capacity.
In addition, three of the participants in the stipulated settlement decided to withdraw. However, in addition to PNM, three key participants remain committed to the agreement, the Commission's staff, the State Attorney General's office and the New Mexico Industrial Energy consumers.
These are very important groups. Response briefs are due today and then the hearing examiner will make a recommended ruling.
After that, the Commissioners will make their decision which we anticipate will happen in the second quarter. Let's move to slide six now to talk about PNM's rate case.
As we outlined for you during our December meetings, PNM filed a general rate case with the 2016 future test year with a requested increase of $107 million which if approved would take effect January 1, 2016, PNM's proposal reflects $2.4 billion in rate base which is a $585 million increase since our 2010 rate filing. The Company is also proposing to update its rate structure including a decoupling pilot program, revising rates across customer classes to better align prices with how customers actually use electricity, and changes to our distributed generation programs including an access fee for new customers.
We are taking on a lot but we believe that this is the right time to have this discussion. The tentative procedural schedule for the case looks like this.
May 6, is the deadline for intervention; staff and intervenor testimony is due June 5, rebuttal testimony is due June 29; and the hearing is tentatively scheduled for July 20 through August 7. As always, we would work to create a settlement agreement for this case.
As you might expect, we have inspired some enthusiastic opposition, much of it on the proposed rate structure changes. We expect a vigorous debate going forward and we are prepared for it.
We have developed a strong communications plan around the rate case and we are working diligently to engage our stakeholders. Let's move on now to slide seven for a quick overview of all of our regulatory filings.
We have already discussed the BART and the rate case filings so I will turn to the 2015 renewable plan. On November 26 of last year, PNM received final approval from the Commission for its 2015 renewable plan.
The plan includes a CCN for the construction of 40 megawatts of solar generation at a cost of approximately $79 million. This is part of the replacement plan power for BART.
The renewable plant settlement calls for the cost of the plant to be recovered in a rate case, not in our renewable rider and we included that solar cost in our December rate filing. On FERC, we anticipate that we will file a settlement in the near future.
Turning to TNMP, we made our first TCOS filing of the year, which would add $4.4 million in revenue if approved. We expect a ruling in March.
Now I will turn it over to Chuck for an in-depth look at the numbers.
Chuck N. Eldred
Thank you, Pat, and good morning to everyone. Let's begin on Slide 9, with the 2014 financial results.
Our guidance for 2014 $1.44 to $1.51we came in at a $1.49 which was above the midpoint and above consensus. As we have continued to demonstrate, we were able to deliver solid financial results for the year in spite a facing challenges from a soft load environment at PNM.
Looking at the segments, you see that PNM came in at a $1.10 this is $0.01 below the range as a result of an accelerated 2015 planned outage at the Afton generating station in 2014. Offsetting this both TNMP and corporate and other exceed their guidance ranges.
TNMP came in at $0.47 driven by strong load, good cost control and their energy efficiency bonus. That business has provided consistent earnings growth over the past several years.
Corporate and other was driven by lower interest expense. Now moving the Slide 10.
For PNM total retail load was down 1.7% for the year which was a slight improvement compared to our guidance of down 2% to 3% for the year. This improvement was driven largely by the commercial class performing better than anticipated.
In the fourth quarter, total retail load was down 0.9% from the same period in 2013. Declines in residential and commercial were partially offset by an increase in industrial load.
In the industrial segment, we saw our largest customers have declines in their load, however, in Q4 2014 we did see some smaller industrial customers having increased that more than compensated for the large customers and brought the total to 1.9% increase. We continue to see customer growth at PNM holding steady at about 0.5%.
New Mexico’s unemployment rate 6.1% which is above the f 5.6% national rate. While unemployment is high, we are beginning to see positive employment growth in both Albuquerque and the state overall.
In December 2014 Albuquerque was up 1% over December 2013, for the same time period New Mexico overall was up 1.6%. According to local economists, there are signs that the New Mexico economy has bottomed out.
However, New Mexico is an oil and gas state and the oil price drop is having an impact on the economy. It is reducing state revenues and affecting the communities in the oil patch area.
Although PNM does not serve those areas, we are seeing some impact on our customers who provide equipment and services to these industries. Overall we believe it’s still too soon to be confident of when the New Mexico economies will rebound.
At TNMP both the year and the quarter comparisons show total retail load up 3.2% driven primarily by the increase in the commercial class. Looking at Q4 2014, compared to the prior year, residential was down, we believe that’s due to the fact that the Texas experienced abnormally cold weather in late fourth quarter 2013 and early first quarter 2014 and the weather was not as extreme in Q4 2014.
As we all know, weather normalization can be more of an art than a science and that likely affected the base period in this comparison. In the Texas economy, oil is a big factor.
The drop in oil prices will have an effect. However, even with this downturn, economists are saying that Texas will continue to grow at about 2% annually.
In spite of declining oil prices, we actually saw the Texas economy accelerate its growth in the first half of 2014, the last half of 2014 with December 2014 nonagricultural employment being 4% higher than December 2013. We actually saw a similar trend in our customer counts.
Residential grew at 1.5% in the second half as opposed to the typical 1% that we normally see. It is also important to note that our service territory in the West Texas oil patch makes up less than 10% of TNMP's load.
The bulk of TNMP's business is north of Dallas and around the Houston ship channel, an area that supports a diverse set of businesses including petrochemical manufacturers. Texas unemployment is 4.6% which is 100 basis points lower than the national average.
Texas had 3.4% employment growth on a rolling 12-month basis as of December 2014. When we look at the overall landscape in both Texas and New Mexico, we are confident that the diversification in the economies will continue to help us meet our earnings targets until we adjust the PNM load levels in the 2016 general rate case.
Now turning to Slide 11 for the quarter financial summary. Fourth quarter ongoing EPS was $0.24, up $0.03 compared to the fourth quarter in 2013.
PNM and TNMP were each up $0.02. Corporate and other was down $0.01.
Now for more detail on PNM and TNMP's drivers on slide 12. Starting with PNM, rate relief improved results by $0.02.
This is made up of a $0.01 increase for the renewable rider and $0.01 for the FERC transmission rate relief. As Pat indicated, we are making progress in the confidential settlement discussion in the FERC transmission case and we expect to file a settlement in the near future.
The revenue continues to be subject to refund until the Commission approval is received. In the fourth quarter of 2013, both PNM and TNMP recorded contributions to the PNM Resources Foundation.
This was not repeated in 2014. As a result, both PNM and TNMP show a pickup related to this item.
AFUDC contributed $0.01 in the fourth quarter of 2014. This is attributable to a higher capital spending.
However, Unit 3 market prices were also up $0.01 compared to Q4 2013. The termination of the Gallup FERC generation contract caused results to be $0.01 lower compared to the fourth quarter of last year.
We have requested that these assets be dedicated to the PNM retail jurisdiction in our 2016 rate case. Load at PNM was down $0.01 compared to the fourth quarter of 2013.
We had the outage at Afton that I mentioned earlier and this caused outage expenses to be higher by $0.01. Mild weather resulted in an additional $0.02 hit, heating degree days were 9% below normal, and 17% below Q4 2013.
In fact, we saw the mildest winter in more than a decade. Moving to TNMP, we saw an improvement for rate relief from the semiannual TCOS filings of $0.01 I have already mentioned the PNM Resources Foundation donation.
Moving on to weather, it was down $0.01. Heating degree days were 7% higher than normal but 22% lower than Q4 2013.
Now turning to slide 13, we are affirming our 2015 guidance range of $1.50 to $1.62. PNM will have the benefit of the one-half price Palo Verde Unit 1 leases which began in January and will help us offset load and outage costs until new rates are implemented in 2016.
TNMP is expected to continue performing well. While, we should have revenue improvements from TCOS filings and load, we also have increased expenses like depreciation, property taxes that will offset this.
Now to wrap up on slide 14, we expect to see strong growth in both our dividend and earnings as we look out to 2019. We have a steady track record of increasing our dividends over the past few years and expect continued above industry average growth in our dividend while targeting 50% to 60% payout range.
From 2015 to 2019, we expect to see 7% to 9% earnings growth. During this timeframe, our five-year plan show $2.2 billion in capital spending which represents 5% to 7% rate base growth.
We have provided a 2019 earnings power slide in the appendix. We did this to provide information that is in sync with the earnings growth and capital spending projections.
We have also added 20 megawatts of renewables to the five-year CapEx slide in the appendix for 2019. As you think about the timeframe between now and 2019, we will stay focused on executing the BART plan.
The hearing record shows that the BART stipulation is the most cost-effective solution for customers, about half of the cost of their federal plan. And it provides a balanced generation portfolio that is compliant with the EPA mandates.
The environmental benefits are significant, reducing seven different emissions at the plant including carbon by about 50% and using about half the water that is used today at San Juan. Looking at the big picture of executing on this plan, we continue to work productively with other San Juan owners toward the final fuel supply and restructuring agreements.
In the mean time the process at the commission is moving forward that mentioned although we had a few special interest parties back out of our stipulation for BART, we have to continue to have the support of the remaining parties which are Staff, AG and New Mexico Industrial Energy consumers. The hearings resulted in a record that supports the stipulation and we look forward to find a resolution in this case.
Looking forward to 2015, this is going to be a milestone year for PNM Resources. We will be establishing important fundamentals of our business going forward, defining our generation portfolio through BART decision and setting new rate design and addressing load through the general rate case.
Our team here has proven a strong record of managing this business well and I'm confident that we will continue to execute our plans for strong dividend and earnings growth. With that I’ll turn it back over.
Patricia K. Vincent-Collawn
Thanks Chuck. I would like to share a few comments on our efforts to continue to spur New Mexico’s economy.
The states legislative session is in progress and there are several initiatives being considered that are designed continue to improve the business climate. The Governor is looking to build on the significantly tax reform that she passed last year as well as increased support for job training and investment in local communities.
PNM continues to work with state and local government and the business community to support economic development efforts. In fact, our general rate case filing includes several provisions to both retain and recruit businesses that create economic based jobs.
We are proposing an economic development tariff for these types of businesses and we are holding the line on rates for large business customers. We have received a lot of positive feedbacks on that part of the filing and the economic developers say it will definitely help us compete with other states.
Before opening up the line for questions, I want to take a moment to thank our employees for all of their hard work and dedication. The company’s success is a result of their efforts.
I would also like to thank our valued customers and you our investors who continue to show your support for the company. Now, operator lets please open up the line for questions.
Q - Paul T. Ridzon
Good morning Pat and Chuck.
Patricia K. Vincent-Collawn
Good morning Paul.
Chuck N. Eldred
Good morning.
Paul T. Ridzon
Just wondering, I know you are in discussions with the various parties around the 65 megawatts, but what would your appetite be if there is no resolution there for taking that on a merchant basis?
Chuck N. Eldred
Paul, certainly you pointed out we are in discussions now with the other participants, but I will say that the Company is prepared in the event that we reach to this conclusion to take the 65 megawatts, Because we feel so committed and so certain that the case that we put out to the Commission and our commitment towards meeting the expectations that supported the filing that we had just completed the hearings on was important for the customers and also the shareholders. So that if we did end up taking the 65 megawatts, we would take it potentially at the holding company.
We have done some analysis on this and we consider it to be what I would say a minimal impact even though a slight merchant, but given prices where they are today without going into detail, some of our assumptions on fuel prices, that could be as little as a $0.02 to $0.03 impact to the Company. So not material enough for us to not want to support the filing with the Commission and the case that we put out for the BART settlement.
Paul T. Ridzon
And what would the outlook be at some point in time to get that into rates?
Chuck N. Eldred
That is a Commission decision. That is not something that we are going to speculate on.
We feel that we just need to be prepared if in the event we need to take the megawatts and then we will continue to manage that as a resource for the Company until such time other alternatives or solutions might appear to be better.
Paul T. Ridzon
Thank you very much.
Chuck N. Eldred
You bet.
Operator
Our next question comes from Anthony Crowdell of Jefferies. Please go ahead.
Anthony C. Crowdell
Good morning. Just a quick question.
I guess earlier this week or maybe late last week, the bill proposing that a fuel adjustment clause I guess be terminated in the state was tabled in one of the committees. I was just curious, the parties that are still supporting your BART settlement were they vocal, were they involved in the fuel adjustment clause expiration?
Patricia K. Vincent-Collawn
Hi, Anthony, it is Pat. As you did mention, there was a bill that would have terminated the fuel clause, it would have required the Commission to have a hearing before the fuel adjustment.
It was tabled 6 to 4 in the Senate Corporations Commission. There was, most of the people leading that were either the environmental groups or the Water Authority and the impetus behind that from the environmental groups was the fact that what goes through the fuel clause are fossil fuels so trying to shut that down.
No one from the staff was over there that evening so I think that people realize the negativity that would cause not only to PNM, but to the state in taking a step backwards in regulatory certainty and the governor has really wanted us to be a business friendly state. So I think we had a good outcome on that.
Anthony C. Crowdell
Does that stay in committee or is there a process where how that could advance to the House? And I am just - my understanding of New Mexico politics or the regulatory prospects there.
What happens, does that bill just stay there or does it move on?
Patricia K. Vincent-Collawn
No, it stays there. Because it was tabled it doesn't get out of committee so it couldn't go on.
It would have to go through whatever committees it is assigned to then gets passed by the Senate and then go over to the House and since it didn’t make it out of its first committee, it is effectively dead.
Anthony C. Crowdell
Great. Thanks for taking my question.
Patricia K. Vincent-Collawn
Thank you.
Operator
Our next question comes from [Paul Fremont of Nexus]. Please go ahead.
Unidentified Analyst
Thank you very much. A couple of questions.
The first is where do you guys stand in your discussions to purchase the San Juan coal mine and how would those coal costs be treated after the purchase becomes effective - if you end up buying it?
Chuck N. Eldred
You know, obviously we are in discussions with BHP in the purchase of the mine but it is really a discussion of a third-party purchasing the mine, not PNM Resources or PNM. So we do have without going into any detail, some very capable and strong interest in some miners that are going through a process and bidding on the purchase of the mine and also establishing the fuel supply contract.
So we are confident that we are in a very good place at this point and the process continues and hopefully we will have some pretty strong indications in the near future as to the results of this.
Unidentified Analyst
Okay. So you would not end up being an owner?
Chuck N. Eldred
No, no, no. No, it is clearly not our intent nor our interest in being an owner of the mine.
We already have a process underway that clearly involves some very established mining companies that have expressed a very strong interest in purchasing the mine and providing long-term fuel supply for San Juan.
Unidentified Analyst
And then looking at slide 21 which is I guess your 2019 earnings potential. If I take 75% average FERC rate base [indiscernible] the return that you are currently earning, that alone pretty much gets you to the high end of your $0.08 to $0.10.
So does that mean that you are not assuming any type of return on the generation or how should we think about sort of the remaining piece?
Chuck N. Eldred
Paul, it might be better just to kind of take that off-line to make sure I understand what specifically you are referring to. Are you looking at just the retail or are you breaking the renewable…
Unidentified Analyst
I am just looking at PNM FERC.
Chuck N. Eldred
PNM FERC. Yes its we continue to - part of the earnings drag on that is the wholesale contracts and as you know, we have Navopache and another smaller contract there that continues to be competitively against market prices that are very low given where gas prices are.
So I would look at there is some slight under earnings relative to those contracts and how we negotiate even through formula rates that we have with those parties that have some impact on the earnings drag, but when we announce the FERC, we will be able to discuss more clearly what the settlement is and what the ROE expectations are there. But really to break out those two rate bases to get an understanding of what the returns are relative to transmission and also the wholesale contracts.
But in total, the drag is really driven by the wholesale contracts that we are serving.
Unidentified Analyst
Last question, what was the nuclear decommissioning trust income in 2014 and 2013?
Chuck N. Eldred
$0.08 in 2014 and what did you say, I'm sorry what was your last question?
Unidentified Analyst
In 2013? 2013.
Chuck N. Eldred
Oh 2013 it was it was on ENDT? Yes, it was $0.06.
Unidentified Analyst
And is $0.08 the delta or is $0.08 the total contribution for the year?
Chuck N. Eldred
Total contribution for the year. And I think I gave guidance too in 2015 it would be zero to $0.02 in 2015, incremental to what we would have in 2014.
Unidentified Analyst
Thanks.
Chuck N. Eldred
Paul, how do you like your new job?
Unidentified Analyst
Just getting used to it and so far, it is very different.
Patricia K. Vincent-Collawn
You are welcome back Paul. Yes.
Chuck N. Eldred
Congratulations, glad to see you back.
Unidentified Analyst
Thank you.
Operator
Our next question comes from Brian Russo of Ladenburg Thalmann. Please go ahead
Brian J. Russo
Hi, good morning.
Patricia K. Vincent-Collawn
Hey Brian.
Chuck N. Eldred
Hi Brian.
Patricia K. Vincent-Collawn
Could you just maybe outline some scenarios for the 65 megawatts at San Juan? I mean are you negotiating with the current owners for maybe a pro rata incremental ownership of that 65 megawatts?
Are there any other scenarios other than you taking it on as merchant?
Chuck N. Eldred
You know, I think the safest way to look at it is we have such a short timeframe to work through resolution if there is an interest by the other parties which is probably more likely than not in pursuing the 65, then our view is going to be prepared to step up. And again without going through the actual assumptions on fuel, et cetera, but our analysis would show under today's prices if we did take the 65 at the holding company.
And again, this doesn’t take effect until 2018 as you well know, we would anticipate about a $0.02 or $09.03 loss for the company, but there may be other solutions, other ways to serve that incremental power for wholesale contracts if we had those opportunities would certainly and we do get inquiries from time to time. So we would look at ways if we did end up taking the 65 of finding long-term solutions and stabilize the earnings relative to that commitment.
But the important point right now is that that is not significant enough for us to not to stand behind the BART filing and the stipulation in our commitment to the Commission and others that have been involved to fulfill the plan that we put in place.
Brian J. Russo
Got it. And can I summarize your comments from earlier that you are fairly confident in the BART settlement and the fact that a few of the parties to the settlement exited the settlement really should have no bearing on an examiner's decision and then an ultimate TC decision?
Patricia K. Vincent-Collawn
That is correct, Brian.
Brian J. Russo
Okay, got it. Thank you very much.
Chuck N. Eldred
Thank you.
Operator
Our next question comes from Ali Agha of SunTrust. Please go ahead.
Ali Agha
Thank you, good morning.
Chuck N. Eldred
Hey, Ali.
Patricia K. Vincent-Collawn
Hi, Ali.
Ali Agha
Good morning. Listen, first question, recently I think about a few weeks ago there was a comment made by one of the New Mexico Commissioners on the BART settlement.
I think he was quoted as saying, expect some changes before this thing gets approved. What do you make of that and how should we think about that?
Patricia K. Vincent-Collawn
I wouldn’t think much about it. I think the Commissioners first need to see what the hearing proposes and then they would comment on it.
So I think we will just wait and see what the hearing examiner says.
Ali Agha
Okay, but was there a context in terms of why he made that statement?
Patricia K. Vincent-Collawn
Not to my knowledge, Ali.
Ali Agha
Okay, okay. Secondly, coming back to the PNM load numbers for the fourth quarter, as I went back and checked, this was one of the more easier comparisons I think fourth quarter of 2013 load was down about 2.9% for PNM.
And yet we are again seeing a negative 0.9 in this fourth quarter. So what is it going to take for this to at least stabilize and stop being negative given you have had such easy comparisons and still seeing negative numbers out there?
Patricia K. Vincent-Collawn
Well, I think Ali, a couple of things. I think we would say we are cautiously optimistic about the economy turning around.
I think as you have seen here at PNM, not at TNMP and at a lot of other utilities, you are seeing residential use per customer being flat to down because of energy efficiency measures and where most utilities are increasing either through customer growth or through the industrial pickup. You started to see our industrial pickup in the last quarter of the year.
So we just think that the governor's continued leadership on economic development and our working with the state is going to help slowly build our economy back up.
Chuck N. Eldred
Ali, do you want to move to New Mexico? You could help start this process here.
Ali Agha
Absolutely, Chuck.
Patricia K. Vincent-Collawn
Our weather is a lot better.
Chuck N. Eldred
The miserable weather you have got in New York, this would be great. But no, to Pat's point, the economy is very sluggish and continues to be slow.
We don't have a strong allocation of industrial load so it really depends on customer growth to kind of pick up on the residential which eventually as the economy comes back, the commercial starts to pick up. So we were pleased that we did better than what we anticipated last year.
And to Pat's point, we are not far enough along to be comfortable with a trend at this point. But we are comfortable that it will take some time but we will address this in the 2016 rate case which is very important for PNM to begin to adjust for the load implications that we have had for the last couple of years.
But meanwhile, we will continue to manage this as we work towards the filing for the rate case and get through 2015.
Ali Agha
Chuck, now that you have moved your outlook on another year into 2019, just remind us the CapEx budget 2015 through 2019, you are still confident that you can fund that over that time period without the need for new equity?
Chuck N. Eldred
That’s correct. No additional equity required to execute on the plan that we have outstanding.
Ali Agha
And last question. I know you put this out as kind of earnings power more so than anything else, but if you look at TNMP and run through your slide on the 2016 earnings power, when you're talking about a $0.45 base there versus $0.47 that we earned in 2014, so is the expectation a flat to negative growth in TNMP for the next two years?
Chuck N. Eldred
Well, we obviously did well this last year and exceeded expectations. We are taking on more depreciable property tax and some O&M costs so it begins to become certainly some impact to that earnings growth.
But the rate base is going to be driven by the transmission investment which we have continuously been able to pick up $3 million to $4 million a year for twice a year semiannual filings and so the load will really probably be the delta between how that looks year-over-year. And if load continues to be strong, we certainly see there is some upside potential for TNMP but we will just have to wait and see.
Ali Agha
Got it. Thank you.
End of Q&A
Operator
[Operator Instructions]. And at this time I'm seeing no further questions.
I would like to turn the conference back over to Pat Vincent-Collawn for any closing remarks.
Patricia K. Vincent-Collawn
Thank you. And thank you all, for joining us this morning.
We will be out visiting with many of you in the next month or so. So we look forward to seeing you all and I hope you all manage to stay warm.
Have a great day.
Operator
The conference is now concluded. Thank you for attending today’s presentation.
You may now disconnect.