TXNM Energy

TXNM Energy Strengthens Banking Relationships While Securing Market-Aligned Pricing

TXNM Energy, the utility provider serving New Mexico and Texas, engaged Redbridge to conduct a Cash Management Advisory review. TXNM Energy was focused on cash management efficiency and sought to harmonize and optimize pricing, increase yield, and improve bank service utilization.

Challenge

After several years without a formal review, TXNM Energy took the initiative to reassess its cash management pricing. Guided by a new Assistant Treasurer, the company prioritized securing market-aligned, standardized pricing across all accounts while uncovering opportunities to streamline services. The goal was twofold: identify cost savings and enhance yield. At the same time, it was important for TXNM Energy to maintain strong relationships with trusted banking partners and preserve the value of its regional presence in New Mexico.

Solution

Redbridge worked side by side with TXNM Energy to evaluate each proposal and frame a negotiation strategy that reflected benchmarked data while respecting the importance of the Company’s existing banking partnerships. Rather than seeking disruption, the focus was on harmonizing pricing and updating agreements to meet best-in-market standards. Redbridge’s benchmarking analysis and cost scenarios gave TXNM Energy a clear view of the market standards, while ensuring that the banks had a transparent process that acknowledged their long-standing commitment to the client.

Results

This optimization engagement delivered material savings to TXNM Energy on bank fees and increased yield, providing the Company with pricing aligned to market benchmarks. Just as important, the company achieved these improvements while preserving its trusted banking relationships and securing long-term commitments from its partners. The outcome significantly improved the Company’s visibility on cash management fee structure and positioned it to withstand evolving rates.

Key Takeaways

• Periodic reviews of cash management pricing unlock opportunities that may not surface for years
• Two rounds of negotiations ensured agreements that reflected market standards and long-term stability
• TXNM Energy achieved harmonized pricing and improved yield while preserving valued banking relationships
• Redbridge’s analysis provided TXNM Energy with a stronger foundation for future strategic decisions, including a plan to revisit lockbox pricing in the coming years