Overview of the PNM Rate Case

Data in this first part applies to customers in Alamogordo, Ruidoso, Ruidoso Downs, Tularosa, Silver City, Lordsburg, Bayard, Santa Clara, Gila, Hurley and Cliff.

It €™s important to note that customers in certain southern New Mexico communities (Alamogordo, Ruidoso, Ruidoso Downs, Tularosa, Silver City, Lordsburg, Bayard, Santa Clara, Gila, Hurley and Cliff) will be significantly less than the overall rate change. The increase in these communities will be 1.70 percent, $1.21 per month or about 4 cents per day.

These communities were previously served by Texas-New Mexico Power Company, joined the PNM system in 2005. In an effort to fairly allocate rates across all customer groups, the customers in these areas have been paying an additional line item on their bill. As part of this rate case, this extra charge will be removed and all customers will pay the same rates. As a result, these customers will see a smaller overall increase.

On August 27, 2015, PNM re-filed its 2014 rate case with the New Mexico Public Regulation Commission. The 2014 filing was dismissed by the Commission on procedural grounds.

Previously, PNM last filed a rate case in 2010, with the new rates going into effect in 2011. The case is necessary for PNM to recover investments made to maintain system reliability and deliver cleaner energy in the communities we serve. PNM has also proposed features that will stabilize revenue going forward, providing more predictability for customers.

Since the last rate case and through 2016, PNM will have invested over $650 million in the transmission and distribution system that delivers reliable power to customers, pollution control technology and new power plants, including four new solar plants and a natural gas peaking facility. At the same time, the revenue PNM receives from customers has continued to fall due to many factors, including increased energy efficiency and economic conditions. This necessitates a rate increase so the company can adequately recover costs of the important investments in the electric system.

Components Included in the Rate Case

A rate increase for each customer class: residential, commercial and industrial.

The system-wide residential average proposed increase is 16 percent. However, thanks to a reduction in fuel charges in 2016, plus additional factors, the net impact on customers' bills will be about 2 percent.

A pilot program to revise the way electric rates are calculated, better aligning what customers pay with how they actually use electricity.

An economic development rate to help New Mexico retain and recruit businesses that create jobs and help grow our economy.

Long-Term Impacts for Consumers

Continue to ensure reliability by allowing PNM to make important investments in the electric system.

Supports the company €™s commitment to continued investment in zero-emission solar and wind power.

Continued support for solar customers who rely on the PNM electric grid for 24-7 service.

Economic development through rates that support businesses in the long-term.

The way electricity is produced and consumed is changing. PNM believes in a long-term view that takes into consideration the needs of all of our customers, while maintaining reliability, protecting the environment and keeping prices as low as possible. The PNM rate case carefully balances these factors for the benefit of our customers. 

(Albuquerque, N.M.) - PNM Resources €™ (NYSE: PNM) New Mexico utility, PNM, today filed with the New Mexico Public Regulation Commission (NMPRC) its request for an increase in electric rates of $123.5 million, or 14.4 percent, which if approved would take effect in the third quarter of 2016. The net customer bill increase would average 5.4 percent when other changes, including savings from a new coal supply contract if the San Juan case is approved by the Commission, are considered. PNM €™s original rate case filing in Dec. 2014 was dismissed by the NMPRC on procedural grounds.

€œSince our last general rate increase in 2011, PNM has continued to make significant investments in the electric system to maintain the company €™s excellent reliability and to protect the environment, benefits our customers are receiving but not yet paying for, € said Pat Vincent- Collawn, PNM Resources €™ chairman, president, and CEO. €œWe €™re also proposing the first significant change to rate structure in more than two decades so that bills may be calculated more accurately to reflect how our customers actually use energy today. €

The rate request reflects $2.5 billion in rate base, which is a $655 million increase since the 2010 rate case. The additional $655 million of investments are not currently recovered in PNM rates, and account for the majority of the company €™s request, including depreciation. Key capital additions to rate base include:
ï‚· Four new solar centers online by 2016 (40 MW, $65 million) capable of powering 16,200 average homes;
ï‚· La Luz Natural Gas Plant online by 2016 (40 MW, $50 million) to serve customers when demand is highest, to support renewable energy growth and to ensure reliable power under a variety of grid conditions;
ï‚· Emission control equipment at San Juan Generating Station to comply with federal haze regulations ($58 million);
ï‚· Critical resources for the future: Purchasing Rio Bravo Generating Station (formerly Delta Person) natural gas plant ($32 million) and purchasing leases for Palo Verde Nuclear Generating Station Unit 2 ($144 million); and
ï‚· Investments to keep our electric system reliable, including a $61 million investment at PNM €™s Rio Puerco Switching Station, $8 million to improve substation security, and modernizing the company €™s distribution system operations center.

Another driver is declining energy usage resulting from the still recovering New Mexico economy and energy efficiency.
In the rate filing PNM also proposes changes to rate design to better align electric rates with the actual costs to serve customers, while encouraging energy efficiency.

Specific regulatory improvements, if approved, would include:
ï‚· A Revenue Balancing Account pilot program for residential and small commercial customers, also known as decoupling. This is designed to support recovery of fixed costs that are critical to reliability of service at the lowest cost to customers; and
ï‚· An economic development tariff to support state and local efforts to retain and attract companies that provide locally based jobs.

PNM management will hold a conference call Friday, Aug. 28 at 11 a.m. Eastern to discuss PNM €™s general rate case filing. Investors and analysts can participate in the live conference call by pre-registering using the following link to receive a special dial-in number and PIN: http://dpregister.com/10070984 . Telephone participants who are unable to pre-register may participate in the live conference call by dialing (866) 807-9684 or (412) 317-5415 fifteen minutes prior to the event and referencing ''the PNM Resources August 2015 General Rate Case Filing conference call.'' Listeners are encouraged to visit the website at least 30 minutes before the event to register, download and install any necessary audio software. A live webcast of the call will be available at http://www.pnmresources.com/investors/events.cfm.

Documents related to the PNM rate filing can be found at www.pnmresources.com/investors/rates- and-filings.aspx 

Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2014 consolidated operating revenues of $1.4 billion. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,707 megawatts of generation capacity and provides electricity to more than 753,000 homes and businesses in New Mexico and Texas.

For more information, visit the company's website at www.PNMResources.com .


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements made in this news release that relate to future events or PNM Resources €™ ( €œPNMR €) or Public Service Company of New Mexico €™s ( €œPNM €) (collectively, the €œCompany €) expectations, projections, estimates, intentions, goals, targets, and strategies are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward- looking statements are based upon current expectations and estimates. PNMR and PNM assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR and PNM caution readers not to place undue reliance on these statements. PNMR's and PNM's business, financial condition, cash flow, and operating results are influenced by many factors, which are often beyond their control that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company €™s Form 10-K and Form 10-Q filings with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.