Commission Approved Order in PNM General Rate Review

ALBUQUERQUE, N.M., Jan. 11, 2018 /PRNewswire/ -- The New Mexico Public Regulation Commission (Commission) yesterday approved an order that contained modifications to the previously filed settlement agreement (Order) in the general rate review filing of Public Service Co. of New Mexico (PNM), a wholly owned subsidiary of PNM Resources (NYSE: PNM). After hearing oral arguments, the Commission reconsidered its Dec. 20, 2017 order and voted 3-2 to approve the revised settlement with certain modifications. The written Order has not been released by the Commission.  However, based on the oral hearing, PNM believes the Order would change the previously presented settlement agreement of $62.3 million, effectively reducing this amount by passing to customers the federal tax reform of approximately $48 million in 2018, as proposed by PNM and other parties. While the Order defers the Dec. 20, 2017 finding of imprudence related to PNM's Four Corners Power Plant participation to a later regulatory proceeding, it does include an additional revenue reduction to the settlement agreement of approximately $9 million for the exclusion of the return on $148 million of Four Corners Power Plant investments. The Order maintains the two year phase-in of rates. 

"We are disappointed that the Commission decided to propose modifications in their Order associated with the Four Corners Power Plant that could result in a significant write off," said Pat Vincent-Collawn, PNM Resources' chairman, president and CEO. "This has consequences to both PNM and its customers by increasing the risks related to the financial health of the utility and jeopardizing the company's ability to access the capital markets cost-effectively to raise the debt and equity required to deliver reliable energy to customers."

As the Order reflects modifications to the settlement agreement, the parties to the settlement must decide whether to accept the modifications, which decision is due by Jan. 16, 2018.  PNM and other parties to the settlement will need to review the written order prior to deciding the appropriate course of action.  If the Order is not accepted, the rate review is expected to move to litigation. If the Order is accepted, our preliminary estimate is that it could result in a pre-tax write off in the range of $55 to $60 million. 

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, after it is received from the Commission: 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.

CONTACTS:

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.