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PNM Resources Announces Stipulation in TNMP Electric Rate Case

ALBUQUERQUE, N.M.--(BUSINESS WIRE)-- PNM Resources' (NYSE: PNM) electric transmission and distribution utility, Texas-New Mexico Power, has filed an unopposed stipulation with Texas state regulators that — if approved — would result in a $10.25 million increase to annual revenues beginning Feb. 1, 2011.

The stipulation, which calls for a return on equity of 10.125 percent and an improved capital structure of 55 percent debt and 45 percent equity, requires approval from the Public Utilities Commission of Texas to be effective. The document was filed with regulators on Dec. 10.

"This is a fair settlement reached by the parties and reflects a regulatory environment that encourages continued infrastructure investment and maintains solid financial footing for utilities like TNMP," said Pat Vincent-Collawn, PNM Resources president and CEO. "While our requested ROE was reduced, the capital structure is improved from the current ratio and, combined with our continued cost-control efforts, is the foundation to help TNMP realize its allowed return."

The key aspects of the stipulation reduce TNMP's requested return on equity from 11.5 percent to 10.125 percent, maintain the utility's existing depreciation rates and modify the requested regulated capital structure from 50-50 debt-to-equity to 55-45 debt-to-equity. TNMP's current regulated capital structure is 60 percent debt and 40 percent equity.

If approved, the rate increase would impact retail electricity providers, or REPs, that serve approximately 230,000 customers in 76 cities in TNMP's service territory in Texas. REPs likely will pass the increases on to their retail customers. Based on 1,200 kilowatt-hours of electricity usage per month, residential bills would increase $2.62 monthly if the stipulation is approved as filed and REPs pass the increase on to customers.

The stipulation is posted on PNM Resources' Web site at http://www.pnmresources.com/investors/regulatory.cfm

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2009 consolidated operating revenues from continuing operations of $1.6 billion. Through its utility and energy subsidiaries, PNM Resources has approximately 2,700 megawatts of generation resources and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources. For more information, visit the company's Web site at www.PNMResources.com.

PNM Resources
Analysts
Gina Jacobi, 505-241-2211
Director, Investor Relations
Analysts & Financial Media
Frederick Bermudez, 505-241-4831

Source: PNM Resources

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