Company on Track to Meet Aug. 1. Deadline

Combined, Agreements Will Save Customers More Than $300 Million

(Albuquerque, N.M.) - PNM today filed with the New Mexico Public Regulation Commission (NMPRC) key documents needed to implement the company's plan for San Juan Generating Station (SJGS). The filing includes the ownership restructuring agreement, coal supply agreement, and the purchase and sale agreement for San Juan Mine between BHP Billiton and Westmoreland Coal Company. Combined, the agreements will reduce the cost to customers by more than $300 million over six years, reducing monthly bills for customers by about 5 percent beginning in 2016.

The coal supply agreement for SJGS, and the mine purchase and sale agreement are final, fully executed documents. The final ownership restructuring agreement has been executed by PNM, PNMR Development, the City of Farmington and Tucson Electric Power. The six remaining owners are obtaining approval from their respective governing bodies and plan to provide their executed signature pages by Aug. 1, as ordered by the NMPRC.

"The agreements are complete, and today's filing clearly shows that PNM is in position to submit the remaining signatures by Aug. 1," said Pat Vincent-Collawn, PNM chairman, president and CEO. "These documents reinforce the fact that our plan for SJGS is the lowest cost alternative, and is the best for our customers."

The ownership restructuring and coal supply agreements not only increase the value to customers of the PNM plan, the benefits further distance the plan from the more costly alternatives.

"Our priority has always been to minimize the customer bill impact while complying with federal environmental regulations," added Vincent-Collawn. "The lower cost of coal in the new agreement is a major win for our customers and, together with our replacement power proposals, also helps PNM create a cleaner, more balanced fuel portfolio. With Commission approval, we would be able to implement these savings and benefits at the beginning of 2016."

PNM has also filed a request with the NMPRC for a Certificate of Public Convenience and Necessity for a 187 megawatt, $132 million natural gas-fired generator located adjacent to SJGS near Farmington. The plant is part of PNM's proposal to replace the power lost by the retirement of two of SJGS's four units if the PNM plan is approved by the Commission.