Slide 1: Investor Meetings
Investor Meetings August 2022
Slide 2: Contact Information and Safe Harbor Statement
Contact Information and Safe Harbor Statement Investor Relations Contact Information Lisa Goodman Executive Director, Investor Relations and Shareholder Services 1-505-241-2160 Lisa.Goodman@pnmresources.com Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements m
Slide 3: PNM Resources Overview
PNM Resources Overview Energy holding company based in Albuquerque, New Mexico with two fully regulated electric utility subsidiaries • Vertically integrated utility in NYSE: PNM $4B market cap New Mexico focused on clean Service Territories and Generation Resources energy transformation • $3.1B rat
Slide 4: Create shareholder value, deliver a clean and bright energy future
Create shareholder value, deliver a clean and bright energy future Clean Energy Critical Electricity Strong Corporate Portfolio Infrastructure Profile PNM progress towards T&D investments industry-leading goal of reliably support growth Delivering financial 100% emissions-free and integration of cle
Slide 5: Commitment to ESG Strategy
Commitment to ESG Strategy Environmental Social Governance Industry-leadings goals: Hiring, training, retention 8 of 9 Board members are • Emissions-free by 2040 and engagement programs independent, 7 years reflects full elimination of for our diverse workforce average tenure carbon from generation
Slide 6: Investment Plan 2022 – 2025
Investment Plan 2022 – 2025 Investment plan of $3.5b focused on T&D infrastructure $948 $896 $33 $36 $835 $32 $779 $31 $426 $435 $381 $299 $55 (in millions) $65 $50 $90 $433 $360 $399 $335 $307 $323 $358 $383 2022 2023 2024 2025 PNM T&D PNM Generation TNMP IT Depreciation 6 Note: Amounts may not vis
Slide 7: Rate Base Growth
Rate Base Growth 7.7% rate base growth reflects T&D infrastructure investments ~75% rate base growth recovered through existing FERC formula rates or TNMP TCOS/DCOS recovery Average Rate Base Base (in billions) 2020 2021 2022 2023 2024 2025 PNM transition out of coal PNM Retail Investments(1) $2.7 $
Slide 8: Financial Outlook
Financial Outlook Executing our financial plans Long-term EPS Growth and Ongoing Earnings Guidance • Utility growth driven by • Targeted 5% EPS growth 2020 - 2025(1) recovery of T&D Clean guidance • 2022 ongoing Energy midpointStrong of $2.55Financial per diluted share infrastructure to support Focu
Slide 9: Financing Plans
Financing Plans Up to $200 million equity financing over Long-term Debt Maturities (in millions)(1) 2022 – 2023 to support capital investments and maintain investment-grade credit metrics $1,000 Future debt issuances to fund capital $988 investments at PNM and TNMP, including $80 $1,401 securitizati
Slide 10: 2022 Dividend Increase and Payout Ratio
2022 Dividend Increase and Payout Ratio Annual dividend targets middle of • Board of Directors a 50% - 60% payout ratio range increased the common dividend by $0.08 to $2.55 $2.45 $0.3475 per quarter $2.28 $2.16 • Indicated annual rate $2.00 of $1.39 per share represents 6.1% $1.39 increase $1.31 $1
Slide 11: Pending Merger Agreement with Avangrid
Pending Merger Agreement with Avangrid Merger agreement extended to April 2023 • Retains benefits of $300 million negotiated in New Mexico • Broad community and intervenor support remain in place for merger approval Clean Energy Strong Financial Focus Profile Strategic Rationale • Benefits of scale,
Slide 12: PNM
PNM
Slide 13: PNM Overview
PNM Overview Retail Operations • Generation, Transmission and Distribution service to retail customers regulated by the New Mexico Public Regulation Commission • Recovery of investments through retail rates set through general rate reviews (future test year); current authorized ROE of 9.575% and 50%
Slide 14: NMPRC Move to Appointed Commissioners
NMPRC Move to Appointed Commissioners • Current Commission comprised of 5 elected officials NMPRC Districts and representing geographic districts PNM Service Areas District Name Party District 1 Cynthia Hall, Vice Chairman Democrat District 2 Jefferson Byrd Republican District 3 Joseph Maestas, Chai
Slide 15: PNM Regulatory Agenda
PNM Regulatory Agenda Filing Action Timing Docket No. PNM/AVANGRID filed NM Supreme Court appeal of Merger transaction NMPRC denial on Jan. 3, 2022, briefing schedule 20-00222-UT No statutory timeframe for appeal approval complete with PNM response briefs filed Aug. 5, S-1-SC-39152 2022, oral argume
Slide 16: New Mexico Energy Policy: Energy Transition Act
New Mexico Energy Policy: Energy Transition Act Energy Transition Act passed in 2019 legislative session and signed by New Mexico Governor Lujan Grisham; effective June 14, 2019 • Renewable Portfolio Standards and Carbon-Free Requirement 2045 100% Carbon-Free • Previous: 20% renewables by 2020 2040
Slide 17: Executing the Energy Transition Act
Executing the Energy Transition Act Our Goal: Carbon-Free by 2040 (5 years earlier) Reduction of MW Coal Capacity Step 1: Exit coal generation • Retire San Juan Generating Station: 983 22% reduction Retired Units 2 and 3 in 2017 (221 MWs); 762 80% Retirement of Units 1 and 4 in 2022 (562 MWs) reduct
Slide 18: PNM Retail Transmission Opportunities
PNM Retail Transmission Opportunities • The integration of new renewable resources to meet growing Renewable Portfolio Standards and replacement of coal retirements will require additional T&D expansion Renewable Portfolio Standards Growth 80% Coal Capacity Retirements 2020 - 2040 50% 40% 20% 762 MW
Slide 19: PNM Bills Remain Below National and Regional Averages
PNM Bills Remain Below National and Regional Averages Comparison of Average Residential Bills Western Region Average Bills by Utility Customer bill impacts of Pacific Gas & Electric Co. (CA) Arizona Public Service Co (AZ) $150.51 increased investments are United States Average $122.21 - Current US A
Slide 20: FERC Wholesale Transmission
FERC Wholesale Transmission • High wind and solar energy potential in New Mexico has increased the demand for wholesale transmission capacity from renewable developers • New Mexico has limited available transmission capacity, combined with resource scarcity across the Western US, leading to increase
Slide 21: TNMP
Pres PNV(C Resources’
Slide 22: TNMP Overview
TNMP Overview Transmission and Distribution Utility (TDU) within Deregulated ERCOT Market • Transmission and Distribution service to consumers regulated by the Public Utility Commission of Texas • Recovery of investments through rates set through general rate reviews (historical test year), semi- an
Slide 23: PUCT Commissioners and TNMP Regulatory Agenda
PUCT Commissioners and TNMP Regulatory Agenda PUCT Commissioners Name Term Began Term Ends Party Peter Lake (Chairman) April 12, 2021 Sept. 1, 2023 Republican Will McAdams April 1, 2021 Sept. 1, 2025 Republican Lori Cobos(1) Sept. 1, 2021 Sept. 1, 2027 Republican Jimmy Glotfelty Aug. 6, 2021 Sept. 1
Slide 24: TNMP Rate Recovery Framework
TNMP Rate Recovery Framework DCOS (Distribution TCOS (Transmission General Rate Review Cost of Service) Cost of Service) Standard rate review Pre-defined schedules limited to involving comprehensive distribution investments with filing, discovery, interveners, discovery, interveners, hearings; Pre-d
Slide 25: TNMP Infrastructure Investment
TNMP Infrastructure Investment Investment driven by Economic Growth • Rapid demand-based load growth over recent years in the TNMP Annual Investment Plan Commercial and Industrial classes drives need for increased Historical Growth $435 electrification and reliability / system upgrade investments $
Slide 26: Appendix
Appendix
Slide 27: AVANGRID and PNM Resources Strategic Merger Approvals
AVANGRID and PNM Resources Strategic Merger Approvals Merger agreement extended to April 2023 Filing Date Filed Docket No. Approvals/Clearances Proxy filing / Shareholder approval 1/5/2021 N/A Approved 2/12/2021 Department of Justice (Hart-Scott- 12/21/2020 20210767 Waiting period expired 1/20/2021
Slide 28: New Mexico Supreme Court Appeals – Statement of Issues
New Mexico Supreme Court Appeals – Statement of Issues Four Corners (filed Jan. 21, 2022), case S-1-SC-39152 Merger (filed Feb. 2, 2022), case S-1-SC-39138 • The NMPRC’s denial of abandonment and issuance of • The decision was based on inadmissible hearsay evidence financing order was: and informati
Slide 29: PNM Near Term Resource Portfolio Changes
PNM Near Term Resource Portfolio Changes 2022 2023 2024 • Retirement of • Return of PV • Return of PV SJGS Units 1 and Leases (104 Lease (10 MW) 4 (562 MW) MW) • Proposed exit of • 650 MW solar • 450 MW solar FC (200 MW) and 300 MW and 290 MW • Assumes ~100 storage storage MW solar and approved by a
Slide 30: San Juan Generating Station Ownership and Retirement
San Juan Generating Station Ownership and Retirement Total PNM PNM Unit Other Participants/Ownership MW MW Ownership 1 340 170 50% Tucson Electric 50% (170 MW) City of Farmington 8.5% (43 MW) 4 507 392 77.3% Los Alamos County 7.2% (36.5 MW) Utah Associated Municipal Power Systems (UAMPS) 7.0% (35.5
Slide 31: Four Corners Coal Plant Ownership and Proposed Exit
Four Corners Coal Plant Ownership and Proposed Exit Total PNM PNM Unit Other Participants/Ownership MW MW Ownership Arizona Public Service Company 63% (485 MW) Navajo Transitional Energy Company 7% (54 MW) 4 770 100 13% Salt River Project 10% (77 MW) Tucson Electric Power 7% (54 MW) Arizona Public S
Slide 32: Palo Verde Nuclear Generating Station Ownership and Leases
Palo Verde Nuclear Generating Station Ownership and Leases MW Owned vs Leased Unit 1 Unit 2 Unit 3 Owned 2.3% 30 MW Owned 9.5% 124 MW Owned 10.2% 134 MW Leased 7.9% 104 MW Leased 0.7% 10 MW Leased 0% 0 MW Total 10.2% 134 MW Total 10.2% 134 MW Total 10.2% 134 MW Yearly Payment Amounts Total PV Unit
Slide 33: Debt Balances
Debt Balances (In millions) Dec. 31, 2021 June 30, 2022 Long-Term Debt (incl. current portion) (1) PNM $1,881.1 $1,850.1 TNMP 918.1 983.0 Corporate/Other 899.7 999.6 Consolidated $3,698.9 $3,832.7 Total Debt (incl. short-term) (1,2) PNM $1,888.5 $1,960.9 TNMP 918.5 1,083.0 Corporate/Other 954.6 1,05