Commission Approves Modified Hearing Examiner Recommendation in PNM General Rate Review

ALBUQUERQUE, N.M., Dec. 21, 2017 /PRNewswire/ -- The New Mexico Public Regulation Commission (Commission) approved an Order Partially Adopting Certification of Stipulation (Order) yesterday in the general rate review filing of Public Service Co. of New Mexico (PNM), a wholly owned subsidiary of PNM Resources (NYSE: PNM). The Order accepts the Oct. 31, 2017 Hearing Examiners' Recommended Decision with certain modifications. These modifications include reflecting the impacts of federal tax reform in customer rates in 2018 rather than in 2019, and further evaluation of PNM's prudence related to the Four Corners Power Plant through additional Commission proceedings. The Order adopts a non-fuel revenue increase of $62.3 million (before tax reform) phased-in over two years for services rendered after Jan. 1, 2018. Next steps include the parties to the settlement making a decision as to whether they will accept the Order's modifications to the revised stipulation within the next five business days.  If the parties do not accept the Order, then the case will move to a litigated path.

"We are very disappointed with the Commission's Order, and their position related to the prudency of the Four Corners Power Plant," said Pat Vincent-Collawn, PNM Resources' chairman, president and CEO. "The parties to the settlement agreement have worked together to strike a fair and balanced outcome, but based on comments from some of the Commissioners today, it would seem that the possibility for future rate review settlements is very limited. This is disappointing as settlements provide an efficient means to reach fair and balanced outcomes for all parties. PNM, however, will continue its customer-centric focus on the delivery of affordable, reliable and environmentally responsible energy for New Mexicans."

Based on a preliminary assessment of the Order, the other key elements appear to be:

• The previously agreed-upon 9.575% Return on Equity;
• Identifies the continuation in Four Corners Power Plant as imprudent, permitting the recovery of approximately $148 million of investments in the plant but disallows the return on these assets; and
• Temporarily disallows approximately $36 million of investments for improvements in the San Juan Generating Station, but allows PNM to request recovery of such investments in its future rate cases.

Parties to the settlement include: PNM; NM Attorney General; the Utility Division Staff; City of Albuquerque; Bernalillo County; New Mexico Industrial Energy Consumers; Albuquerque Bernalillo County Water Authority; Coalition for Clean Affordable Energy; Wal-Mart Stores East, LP and Sam's East, Inc.; Kroger Co.; Sierra Club; Renewable Energy Industries Association; and Western Resource Advocates.

The Order will be posted at the following website: http://www.pnmresources.com/investors/rates-and-filings.aspx.

Background:
PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2016 consolidated operating revenues of $1.4 billion. Through its regulated utilities, PNM and TNMP, PNM Resources has approximately 2,791 megawatts of generation capacity and provides electricity to more than 767,000 homes and businesses in New Mexico and Texas. For more information, visit the Company's website at www.PNMResources.com.

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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, Inc.'s ("PNMR") or Public Service Company of New Mexico's ("PNM") (collectively, the "Company") 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.

SOURCE PNM Resources, Inc.