PNM Files Comprehensive Settlement Agreement in FERC Transmission Rate Case

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PNM Resources'
PNM
New Mexico Utility, PNM, filed a comprehensive settlement agreement with the Federal Energy Regulatory Commission (FERC) on March 20, 2015, that would settle its transmission formula rate case originally submitted in December 2012. The agreement with key parties resolves all matters relating to the proposed formula transmission mechanism used to adjust transmission rates annually. Under the terms of the agreement, PNM will use a return on equity of 10 percent in the calculation of formula-based rates, which will be updated annually in June. The calculation is based on a historical test year with adjustments for projected changes to certain rate base items, including utility plant. PNM will also recalculate the rates originally charged during the period from Aug. 2, 2013, through March 31, 2015, under the terms of the settlement. Appropriate changes to earnings were recorded in December 2014 based on the settlement agreement; therefore, the settlement will not result in any significant changes to 2015 earnings when compared to 2014. PNM's total transmission rate base under this calculation is approximately $350 million, approximately 42 percent of which is allocated to the FERC jurisdiction. "We are pleased to have reached a fair compromise with the settling parties on the matters involved in calculating transmission rates and transitioning to formula-based transmission rates," said Pat Vincent-Collawn, PNM Resources' chairman, president and CEO. "The agreement demonstrates broad support of our efforts to improve the timely recovery of necessary capital investments in our infrastructure." The agreement requires FERC approval and does not impact retail rates for New Mexico residential or business customers. Background: PNM Resources
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' ("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. PNM Resources Analysts Jimmie Blotter, 505-241-2227 Media Pahl Shipley, 505-241-2782
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