Investor Meetings January 2018

Contact Information and Safe Harbor Statement

2

Investor Relations Contact Information Lisa Goodman Jimmie Blotter, Assistant Treasurer Manager, Investor Relations Director, Investor Relations and Shareholder Services U.S. 1-505-241-2160 U.S. 1-505-241-2227 Lisa.Goodman@pnmresources.com Jimmie.Blotter@pnmresources.com

Safe Harbor Statement Statements made in this presentation that relate to future events or PNM Resources, Inc.’s (“PNMR”), Public Service Company of New Mexico’s (“PNM”), or Texas-New Mexico Power Company’s (“TNMP”) (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, PNM, and TNMP assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, PNMR, PNM, and TNMP caution readers not to place undue reliance on these statements. PNMR's, PNM's, and TNMP'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 10-Q filings with the Securities and Exchange Commission, which factors are specifically incorporated by reference herein.

Non-GAAP Financial Measures For an explanation of the non-GAAP financial measures that appear on certain slides in this presentation (ongoing earnings and ongoing earnings per diluted share), as well as a reconciliation to GAAP measures, please refer to the Company’s website as follows: http://www.pnmresources.com/investors/results.cfm

http://www.pnmresources.com/investors/results.cfm

Company Overview

PNM Resources Overview

4

Generation Resources and Service Territories

PNM Resources is a regulated electric utility holding company focused on providing environmentally responsible, affordable and

reliable electricity to customers and above industry average earnings and dividend growth to shareholders

NYSE Ticker: PNM Market Cap: $3.0B

• Energy holding company • Based in Albuquerque, New Mexico

• Located in New Mexico • 520,449 customers • 15,049 miles transmission and

distribution lines • 2,791 MW generation capacity • Top quartile reliability • Affordable rates

• Located in Texas • 246,620 end-users • 9,298 miles transmission and

distribution lines • Top quartile reliability • Affordable rates

PNM Resources Strategic Direction

5

Strategic Financial Goals

Earn authorized return on regulated businesses

Above industry average earnings growth

Maintain solid investment grade credit ratings

Above industry average dividend growth

• Investing aligned to policy directives, evolving customer needs and transforming industry opportunities while ensuring reliability, resulting in cleaner generation fleet

Rate Base Growth

• Realizing earnings potential in business • Earning our allowed returns • Reducing regulatory lag

Earnings Growth

• Sustaining and growing the dividend

• Providing above-average dividend growth

Dividend Growth

Staying Focused and Flexible in a Changing Environment

6

• Integrating technologies and customer insights to new products and services

• Energy Efficiency and Electrification Initiatives

• Robust Economy in Texas

• Plans to be Coal-Free in

2031; New Generation Mix of Natural Gas, Renewables and Energy Storage

• 20% Renewable Energy by 2020

• Transparency through Sustainability Portal

• PNM 2018 General Rate Case • PNM 2018 Renewable Plan • NMPRC Proposed

Rulemaking Workshops • TNMP Upcoming General

Rate Case Navigating the Regulatory Environment

Responding to Evolving Customer

Needs

Transforming PNM’s Generation Portfolio

$219$237 $258

$277 $285

$137 $111 $94 $76 $74

$20 $53 $96

$173 $164 $192

$238 $146

$158 $186 $170

$170 $170

$58 $34 $17

$17 $17

2017 2018 2019 2020 2021

(In millions)

PNM Core Generation PNM Renewables PNM SJGS Replacement PowerPNM T&D TNMP DepreciationCorporate/Other

$527 $515 $527

Palo Verde Unit 3

added to rate base

$281

$80

$297

$116

$170

$17

2022

Rate Base Growth: Capital Forecast

7

$681

$504 $500

Targeted Consolidated 2017-2021 Rate Base CAGR(1): 4.5% - 5.5% 2018–2022 Total Capital Plan: $2.7B

Targeted PNM 2017-2021 Rate Base CAGR(1): 2%-4% from 2016 base reflects potential outcomes from the pending NM Supreme Court general rate case appeal of $0-$150M and additional AMI spending of $12/$59/$24 million in 2018/2019/2020 Targeted TNMP 2017-2021 Rate Base CAGR(1): 11.4% from 2016 base

(1) 2017-2021 CAGR measured from a 2016 base Amounts may not visually add due to rounding.

Chart1

2017

2018

2019

2020

285

Depreciation

219

237

258

277

Sheet1

201720182019202020212022

PNM Generation

PNM T&D

PNM Renewables

TNMP

Other

Total

Depreciation219237258277285275

Check

Chart1

281

Depreciation

$281

Sheet1

201720182019202020212022

PNM Generation

PNM T&D

PNM Renewables

TNMP

Other

Total

Depreciation219237263275280281

Check

8

Earnings Growth: PNM 2018 General Rate Case Considerations

Commission Proposed Modifications to Revised Settlement Agreement: • Reduces $62.3M settlement agreement by $47.6M of tax savings and cost of debt true-

up and additional $9.1M related to the return on Four Corners Power Plant investments • Net $5.6M increase proposed to be phased-in (50% each year)

• Calls for prudency determination on Four Corners Power Plant to be made in next rate case with no precedent set in this case

• Maintains rate design as filed in revised settlement agreement • Deadline for parties to the revised settlement agreement to accept modifications is

January 16, 2018; rates expected to be implemented February 1, 2018 (suspension period ends March 6, 2018)

Considerations for 2018 Ongoing Earnings Guidance of $1.70 - $1.80(1)

• 2018 Guidance assumed implementation of Phase I settlement rates ($32.3M) in March: $0.25

• Guidance did not include assumptions for tax reform; PNM rate settlement called for retention of any benefits in 2018

Considerations for 2019 Ongoing Earnings Guidance of $2.00 - $2.16(1)

• 2019 Guidance assumed implementation of full $62.3M settlement January 1: $0.53

• Guidance did not include assumptions for tax reform; settlement provisions had called for implementation of tax reform savings into customer rates January 1, 2019

(1) Earnings Guidance issued on December 8, 2017

9

PNM Resources well-positioned for tax reform, customers benefit

Tax Reform Considerations

Provision Summary Effect on PNM & TNMP Effect on Holding Company

Tax Rate 21% beginning 2018

Reduced tax expense • Under revised rate settlement, PNM

retained cash benefits in 2018. Under Commission’s proposed modifications to the revised rate settlement, benefits reduce the phased-in rate increase beginning in 2018

Excess deferred taxes are returned to customers over time • Negative cash flow • Rate base increases

Reduced tax benefit from holding company losses by ($0.02)

Interest Expense Deductibility

• Deduction limited to 30% of EBITDA

• Exception for regulated utilities

• Interest fully deductible under utility exception

• Small amount of interest allocable to non-utility operations

• No material impact

Tax Depreciation

• 100% immediate expensing of capital costs for five years

• Exception for regulated utilities

• Normal tax depreciation rates under utility exception

Positive cash flow from tax benefit and no effect on tax expense

$1.49 $1.64 $1.65 $1.85 $1.70

$2.00 $1.90 $1.80

2014 2015 2016 2017E 2018E 2019E 2020E 2021E

Ongoing EPS

$2.16

$0.74 Dec ‘13

$0.80 Dec ‘14

$0.88 Dec ‘15

$0.97 Dec ‘16

$1.06 Dec ‘17

Indicated Annual Dividends

Dividend Growth

10 (1) Indicative annual rate 2012 – 2016 Ongoing EPS represents actual results; 2017-2019 represent ongoing earnings guidance issued on December 8, 2017.

• Annual common stock dividend raised by 9.3% to $1.06(1) per share in December 2017

• Expect above industry average dividend growth in the future while targeting the 50% - 60% payout ratio range

• Next dividend review in December 2018

Credit Metrics: Liquidity and Debt Maturity Outlook

11

• Extended TNMP’s $75M revolving credit facility in September 2017 • Extended PNM Resources’ $300M and PNM’s $400M revolving credit

facilities by one year to 2022 • In process of extending PNM’s community bank revolving credit

facility that expires in January 2018 • At-The-Market equity program will be used to fund 2020 - 2022

expenditures in the range of $150 million • New debt issuances 2018 - 2021 of $375 million

$200 $100 $306

$1,060

$172

$293

$250

2018 2019 2020 2021 2022 andBeyond

Long-term Debt Maturities(1) (in millions)

PNM TNMP Corporate

Maintain appropriate credit metrics

Remain a solid

investment grade rated company

Target regulatory

capital structures at PNM and TNMP

(1) Reflects the execution of PNM’s July 2017 note purchase agreement to refinance an aggregate of $450M long-term debt due in 2018 to varying maturity dates beyond 2021. Excludes $50M of debt related to the Westmoreland financing agreements.

Credit Metrics: Rating Agency Perspectives

12

Moody’s Rating/Outlook

S&P Rating/Outlook

PNM Resources Baa3(2) / Positive BBB+(2) / Stable

PNM Baa2(3) / Positive BBB+(3) / Stable

TNMP A1(4) / Stable A(4) / Stable

(1) Issuer/Corporate rating (2) Senior unsecured (3) Senior secured

PNM Resources FFO-to-Debt is maintained well within Moody’s Baa investment grade target range of 13% to 22%

• Moody’s (June 23, 2017): “…its solid financial profile including a ratio of cash flow from operations pre-working capital to

debt in the mid-to-high teens range and a view that capital expenditures will be financed in a balanced manner consistent with PNMR's current financial position.”

“Although the New Mexico regulatory environment remains challenging, PNMR has been able to maintain strong financial metrics that are similar to Baa2 rated peers.”

• S&P (November 3, 2017): “The stable outlook on PMNR reflects S&P Global Ratings' expectation that the company can

continue to manage regulatory risk despite its more challenging regulatory environment in New Mexico, and that the company's financial measures, including funds from operations (FFO) to debt of about 17%, mitigates a modest weakening of the company's business risk.”

PNM Overview

PNM: Regulatory Update

14

Filing Action Timing Docket No. NMPRC:

PNM 2018 General Rate Case

Commission issued order with proposed modifications to revised rate settlement January 10, 2018

Suspension period ends March 6, 2018 16-00276-UT

PNM 2017 Integrated Resource Plan

Procedural order issued September 14, 2017

Briefings and responses on scope of proceeding due December 8, 2017; Hearing Examiner to determine scope and whether to hold hearings

17-00174-UT

PNM Advanced Metering Infrastructure

Hearings held October 25-26, 2017 Decision expected Q1 2018 15-00312-UT

NMPRC Rulemaking on Utility Ratemaking Policies

Public workshops held September 14, 2017 and November 6, 2017

Additional public workshop scheduled for January 23, 2018 17-00046-UT

PNM Appeal of 2015 General Rate Case to New Mexico Supreme Court

Oral arguments held October 30, 2017 No statutory timeline S-1-SC-36115

PNM: 2017 Integrated Resource Plan

15

Note: By December 31, 2018, PNM must make a separate NMPRC filing to determine whether the San Juan Generating Station should continue to serve customers

Roadmap for meeting customer demand over 20-year horizon, provides foundation for the selection of

future resources

Solicits and incorporates public input

Documents four- year

action plan

Revisited every three years

Submitted July 3, 2017

Filed with NMPRC for review and acceptance

Proposed resources approved separately

Most cost effective portfolio includes securing remaining Palo Verde leases beyond 2023 and 2024 expiration dates

Plans for Coal-Free Generation Portfolio by 2031

PNM: New Mexico Supreme Court Appeal

16

Appealed Item Conclusion Resulting Impact Palo Verde Nuclear Generating Station:

64 MW Unit 2 capacity purchase and Units 1 and 2 lease extensions

Purchase and extension deemed

imprudent

Fair market value disallowed; future responsibility for decommissioning

shifted to shareholders

Leasehold Improvements related to previously leased 64MW capacity

Included in net book value of purchased

64MW capacity

Leasehold improvements rate base disallowed

San Juan Generating Station:

Balanced Draft Air permit rejected

and investment deemed imprudent

Rate base disallowed

• PNM filed Notice of Appeal with New Mexico Supreme Court on September 30, 2016 • PNM filed Statement of Issues on October 26, 2016 detailing items for appeal:

Note: At September 30, 2016, the asset value of the Palo Verde and balanced draft investments pending appeal with the New Mexico Supreme Court were reduced by $6.8 million pre-tax to reflect a minimum of fifteen months disallowed recovery during appeal.

• Oral arguments held October 30, 2017 • No statutory timeline; New Mexico Supreme Court to set calendar for remaining process

PNM: Load and Economic Conditions

17

Regulated Retail Energy Sales and Customers (weather-normalized, leap-year adjusted)

(1) U.S. Bureau of Labor Statistics, October 2017

PNM % of 2016

Sales Volumes

Q3 2017 vs.

Q3 2016

YTD 2017 vs.

YTD 2016 2017E 2018E 2019E

Retail Load: Residential 40% 0.0% 0.3%

Commercial 47% (1.5%) (1.2%) Residential & Commercial Load 87% (0.8%) (0.5%) ~(0.7%) ~(0.3%) ~(0.3%)

Industrial/Facebook 11% (2.4%) (2.4%) Total Retail Load (0.9%) (0.7%) ~(0.8%) (0.7%) – 0% (0.5%) – 0.5% Avg. Customers 0.6% 0.7% ~0.7% ~0.5% per year

0.9%

1.5%

0.0%

1.0%

2.0%

3.0%

2014 2015 2016 2017

% C

hang

e

Employment Growth(1) 12-Month Rolling Average

Albuquerque U.S.

PNM: Sustainability Portal

18 http://www.pnmresources.com/about-us/sustainability-portal.aspx

PNM: Pathway to Continued Success

19

• Continue to efficiently manage the business with a customer-centered focus, delivering reliable and affordable energy

• Earn allowed return Minimize regulatory lag through timely rate case filings Synchronize revenues and expenses Use future test year

• Continue to maintain strong investment grade credit metrics

TNMP Overview

TNMP: Regulatory Update

21

Filing Action Timing Docket No.

TNMP TCOS Filed July 19, 2017 Approved September 13, 2017 47422

TNMP General Rate Case N/A Expected to be filed May 2018 N/A

TNMP: Upcoming General Rate Case

22

• TCOS filings update for transmission investments, but distribution assets and other rate base items have not been updated since last rate case filing (test period ending March 2010)

True-up Transmission and Distribution Recovery

• Operating costs and retail load have not been updated since 2010 rate case

True-up Operating Costs and Load

• Expected to be filed May 2018

Timing

Key Elements

TNMP: Load and Economic Conditions

23

Regulated Retail Energy Sales and End Users (weather-normalized, leap-year adjusted)

(1) Primarily Residential usage; represents per-kWh billings (2) Commercial and Industrial usage; represents per-kW monthly peak billings (3) U.S. Bureau of Labor Statistics, October 2017

TNMP % of 2016

Sales Revenues

Q3 2017 vs.

Q3 2016

YTD 2017 vs.

YTD 2016 2017E 2018E 2019E

Volumetric Load(1):

Residential 0.2% 2.0%

Total Volumetric Load 52% 0.0% 1.7% ~2.0% 2% – 3% per year

Demand-Based Load(2) 48% 3.3% 4.3% ~4.0% 2% – 3% 7% – 8%

Avg. End Users 1.3% 1.2% ~1.4% 1.5% – 2.0% per year

3.3%

1.5%

2014 2015 2016 2017

% C

hang

e

Employment Growth(3) 12-Month Rolling Average

Dallas U.S.

TNMP: Pathway to Continued Success

24

• Continue to efficiently manage the business with an end user-centered focus, delivering reliable and affordable energy

• Continue to earn allowed rate of return through timely execution of transmission cost of service and general rate case filings Additional investments in the business to support strong growth Continue to control costs

• Continue to maintain strong investment grade credit metrics

Financial Overview

Financial Overview: Consolidated Earnings Guidance (Ongoing)

26

$2.00 Consolidated EPS $2.16

PNM $1.50- $1.59

TNMP $0.60 - $0.65

Corp/Other ($0.10) – ($0.08)

2018 Earnings Guidance

2019 Earnings Guidance

$1.70 Consolidated EPS $1.80

PNM $1.25- $1.32

TNMP $0.53 - $0.55

Corp/Other ($0.08) – ($0.07)

2017 PNM Resources Ongoing Earnings Guidance: $1.85 to $1.90 PNM: $1.41-$1.44 TNMP: $0.52-$0.53 Corp/Other: ($0.08)-($0.07)

(1) Earnings Guidance issued on December 8, 2017

Financial Overview: Potential Earnings Power

27

Targeted earnings growth of 6% for 2017 - 2021(1) • PNM growth results from the full implementation of retail rates in 2019, the additional investments

to add 50 MW of solar to meet the 20% by 2020 RPS requirement and increased FERC Transmission business to support third party renewable developments

• TNMP growth is driven by incremental investments supporting economic expansion across its service territory

This table is not intended to represent a forward-looking projection of 2020 – 2021 earnings guidance. Refer to Slide 30 for additional details and disclosures.

Allowed Return / Equity Ratio

2018 Ongoing Earnings Guidance Midpoint(2)

2019 Ongoing Earnings Guidance Midpoint(2)

2020 Earnings Potential

2021 Earnings Potential

Avg Rate Base Return EPS

Avg Rate Base Return EPS

Avg Rate Base EPS

Avg Rate Base EPS

PNM Retail 9.575% / 50% $2.3 B 7.5% $1.09 $2.3 B 9.4% $1.36 $2.4 B $1.42 $2.5 B $1.45

Supreme Court Appeal $0-150 M $0.00-$0.09 $0-150 M $0.00-$0.09 $0-150 M $0.00-$0.09

PNM Renewables 9.575% / 50% $90 M 9.575% $0.05 $110 M 9.575% $0.07 $150 M $0.09 $145 M $0.09

PNM FERC 10% / ~50% $220 M 7.1% $0.11 $270 M 8.0% $0.14 $310 M $0.13-$0.15 $340 M $0.14-$0.16

Items not in Rates $0.01 ($0.02) ($0.04)-($0.02) ($0.04)-($0.02) Total PNM $2.6 B $1.26 $2.7-2.9 B $1.55 $2.9–3.0 B $1.60-$1.73 $3.0-3.1 B $1.64-$1.77

TNMP 10.125% / 45% $905 M 8.5% $0.54 $1,020 M 9.9% $0.62 $1,110 M $0.64 $1,185 M $0.67

Corporate/Other ($0.07) ($0.09) ($0.10)-($0.08) ($0.10)-($0.08)

ATM Program ($0.02)-($0.01) ($0.05)-($0.02)

Total PNM Resources $3.5 B $1.73 $3.7-3.9 B $2.08 $3.9–4.1 B $2.12-$2.28 $4.2-4.3 B $2.16-$2.34

(1) Calculated from 2016 EPS of $1.65 (2) Earnings Guidance issued on December 8, 2017

Financial Overview: Liquidity as of October 20, 2017

28

PNM TNMP Corporate/

Other

PNM Resources

Consolidated

Financing Capacity(1): (In millions)

Revolving credit facilities $450.0 $75.0 $300.0 $825.0

As of 10/20/17:

Short-term debt and LOC balances $2.5 $6.0 $181.5 $190.0

Remaining availability 447.5 69.0 118.5 635.0

Invested cash 50.5 - 1.5 52.0

Total Available Liquidity $498.0 $69.0 $120.0 $687.0

(1) Excludes intercompany debt and term loans

Appendix

Potential Earnings Power

30

(1) Authorized ROE of 9.575% has been used for all forecasted years. (2) Reflects a range of outcomes for the New Mexico Supreme Court appeal of the August 2015 General Rate Case final order. For purposes of writing down the value of the assets

under appeal at Sept. 30, 2016, a minimum 15-month appeal timeframe was used. 2019 average rate base presented includes: PV2 64MW Acquisition Adjustment (~$75M), PV2 Leasehold Improvements (~$25M) and Balanced Draft Technology (~$50M).

(3) PNM Renewables reflect assets collected through the Renewable Rate Rider. (4) PNM FERC earnings potential reflects a return of 7-9% versus the allowed return of 10%, as FERC formula rate methodology uses prior year average rate base and provides for mid-

year rate increases. (5) Consists primarily of decommissioning/reclamation trust income (net of fees and taxes), AFUDC, certain incentive compensation, and the 65MW ownership of San Juan Unit 4. (6) TNMP Earnings Potential includes $0.02 of Competitive Transition Charge recovery in 2018 $0.01 in 2019 and $0.01 for Energy Efficiency in 2018 and thereafter. 2018 average rate

base has been held at the year-end 2017 level to reflect the required suspension of TCOS filings during general rate case proceedings. (7) Corporate/Other includes earnings associated with short and intermediate term bank debt and the net impact of Westmoreland financing through NM Capital Utility Corporation. (8) Dilution impact assumes between $50M and $150M equity issuances between 2020 and 2021 at an average price of $42/share. (9) Earnings Guidance issued on December 8, 2017. This table is not intended to represent a forward-looking projection of 2020 - 2021 earnings guidance.

Allowed Return / Equity Ratio

2018 Ongoing Earnings Guidance Midpoint(9)

2019 Ongoing Earnings Guidance Midpoint(9)

2020 Earnings Potential

2021 Earnings Potential

Avg Rate Base Return EPS

Avg Rate Base Return EPS

Avg Rate Base EPS

Avg Rate Base EPS

PNM Retail 9.575% / 50% $2.3 B 7.5% $1.09 $2.3 B 9.4% $1.36 $2.4 B $1.42 $2.5 B $1.45

Supreme Court Appeal $0-150 M $0.00-$0.09 $0-150 M $0.00-$0.09 $0-150 M $0.00-$0.09

PNM Renewables 9.575% / 50% $90 M 9.575% $0.05 $110 M 9.575% $0.07 $150 M $0.09 $145 M $0.09

PNM FERC 10% / ~50% $220 M 7.1% $0.11 $270 M 8.0% $0.14 $310 M $0.13-$0.15 $340 M $0.14-$0.16

Items not in Rates $0.01 ($0.02) ($0.04)-($0.02) ($0.04)-($0.02) Total PNM $2.6 B $1.26 $2.7-2.9 B $1.55 $2.9–3.0 B $1.60-$1.73 $3.0-3.1 B $1.64-$1.77

TNMP 10.125% / 45% $905 M 8.5% $0.54 $1,020 M 9.9% $0.62 $1,110 M $0.64 $1,185 M $0.67

Corporate/Other ($0.07) ($0.09) ($0.10)-($0.08) ($0.10)-($0.08)

ATM Program ($0.02)-($0.01) ($0.05)-($0.02)

Total PNM Resources $3.5 B $1.73 $3.7-3.9 B $2.08 $3.9–4.1 B $2.12-$2.28 $4.2-4.3 B $2.16-$2.34

Financial Impact of Proposed PNM 2018 General Rate Case Settlement Agreement

31

Financial View Proposed Settlement Agreement

Phase I – March 6, 2018

Phase II – January 1, 2019

(in millions, except EPS)

Settlement increase (net revenue increase) $26.9 $62.3

Accelerated amortization of excess deferred state taxes(1) 6.2 7.5 Financial impact $33.1 $69.8

Income tax (38.62% statutory rate) (12.8) (27.0)

After-tax financial impact $20.3 $42.8

EPS (80M shares outstanding) $0.25 $0.53

(1) New Mexico phased-in a lower state corporate income tax rate from 2014 – 2018. Under the proposed settlement, PNM will begin the return of this benefit through customer rates in 2018, over a 3 year period. This also lowers PNM’s income tax expense in 2018, 2019, and 2020.

2018 General Rate Case Drivers (as Filed)

32

Rate Base (in millions)

Incremental Revenue

Requirement (in millions)

Compliance Items: BART Items: Palo Verde Unit 3 $96 $45 Retirement of San Juan Units 2 and 3 (95) (29) 132 MW of San Juan Unit 4 11 16 Accelerated Depreciation on San Juan SNCRs - 3

Subtotal BART Items $12 $35 Four Corners SCRs 61 9 Subtotal Compliance Items (44% of requested increase) $73 $44 Core Rate Base, Depreciation and Property Taxes 33 20 Energy Sales 11 ROE to 10.125% from 9.575% 10 Re-allocation of FERC Wholesale Generation & Transmission 12 9 Other 5

Total $118 $99

$64.48

$72.21

$80.37

$105.68

$111.79

$138.93

$50 $100 $150

City of Seattle - (WA)Montana-Dakota Utilities Co (MT)

PNM (NM) - CurrentPublic Svc Co of Colorado (CO)

LADWP (CA)City of Colorado Springs - (CO)

El Paso Electric Co (NM)PNM (NM) - Proposed Settlement

El Paso Electric Co (TX)NorthWestern Energy LLC - (MT)

City of Tacoma - (WA)PacifiCorp (UT)

PacifiCorp (WY)Avista Corp (ID)

Southern California Edison Co (CA)Montana-Dakota Utilities Co (WY)

Tucson Electric Power Co (AZ)San Diego Gas & Electric Co (CA)

Avista Corp (WA)Southwestern Pub Svc Co (NM)

Portland General Electric Co (OR)Idaho Power Co (ID)

Sacramento Muni Util Dist (CA)Black Hills Power, Inc. d/b/a (WY)

PacifiCorp (ID)Pacific Gas & Electric Co (CA)

PacifiCorp (OR)Regional Average Bill

Southwestern Electric Power Co (TX)US Average Bill

PacifiCorp (WA)Nevada Power Co (NV)

PacifiCorp (CA)City of San Antonio - (TX)

Entergy Texas Inc. (TX)Modesto Irrigation District (CA)

Salt River Project (AZ)Arizona Public Service Co (AZ)

Imperial Irrigation District (CA)

Comparison of Average Residential Bills(2) Western Region Average Bills by Utility • Forecasted PNM customer bills remain

below current national and regional averages

PNM: 2018 General Rate Case Proposed Settlement Bill Impact

33 (2)PNM rates reflect current approved rates and proposed rates under the 2018 General Rate Case Proposed Settlement. All others reflect U.S. Energy Information Administration's Residential Rate increases through March 2017.

Customer Impact Proposed Settlement

Bill Impact(1) Phase I Total

Residential 3.9% 7.5% Commercial 3.4% - 4.0% 6.7% - 7.5% Industrial 2.9% - 3.5% 5.5% - 6.7% System Average 3.7% 7.1% (1) Bill Impact considers impacts of proposed rates under the 2018 General Rate

Case along with Fuel and Purchased Power Cost Adjustment Clause, Renewable Energy Rider and Energy Efficiency Rider changes.

- Current US Avg

- Current Region Avg

- PNM Proposed Settlement

- PNM Current

PNM 2016 General Rate Case Final Order

34

Key Rate Case Elements (PNM Retail Share, net of ADIT)

Commission Order

Original Request

Impact to Rate Increase

ROE 9.575% 10.5% ($17) M

Rate Base:

Palo Verde Unit 2 lease purchase (64 MW) $55 M(1) $153 M(2) ($15) M

Leasehold improvements and common plant associated with the 64 MWs of previously leased Palo Verde Unit 2 capacity

Disallowed $26 M ($4) M

Balanced Draft Technology Disallowed $39 M ($5) M

Five months of CWIP $55 M $55 M No adjustment

Pre-Paid pension asset $83 M $83 M No adjustment

Other Revenue Requirements:

Depreciation Rates $14.2 M $20.6 M ($6.4) M

Palo Verde Lease and Property Tax Expense (remaining 114 MW of leased capacity) $19.5 M $19.5 M

No adjustment

• NMPRC approved final order Sept. 28, 2016: Non-fuel revenue increase of $61.2M versus $121.5M request Retail rate base of $2,263M versus $2,458M request

(1) Reflects 13-month average rate base, equivalent to $1,306/kW (2) Reflects period-end rate base, equivalent to $2,500/kW

NMPRC Commissioners and Districts

35

District Name Term Ends Party

District 1 Cynthia Hall, Vice Chairman 2020(1) Democrat

District 2 Patrick Lyons 2018 Republican

District 3 Valerie Espinoza 2020 Democrat

District 4 Lynda Lovejoy 2018(1) Democrat

District 5 Sandy Jones, Chairman 2018(1) Democrat

NMPRC Districts and PNM Service Areas

(1) Eligible for re-election to a second four-year term

NMPRC Rulemaking on Utility Ratemaking Policies

36

NMPRC opened an investigation and rulemaking to consider: • Developing a standardized method for determining ROE

• After a baseline ROE is determined, should the ROE be adjusted under an incentive/disincentive mechanism?

• Limitation of utility recovery of attorney and expert witness fees to 50%, except in cases that are fully resolved by contested or uncontested stipulations approved by the Commission

• Allowing intervenors to recover their expenses to the extent the Commission adopts the intervener’s position

• If utilities use proprietary software to support their position, should interveners and Staff be given reasonable access to that software at no cost?

• How should regulatory assets be defined and recovered?

Public workshop held September 14, 2017 and November 6, 2017;

additional workshop has been scheduled for January 23, 2018.

PUCT Commissioners

37

Commissioners are appointed by the Governor of Texas and confirmed by the Senate. Length of term is determined by the Governor.

Name Term Began Term Ends Party

DeAnn Walker (Chair) Sept. 2017 Aug. 2021 Republican

Kenneth Anderson Sept. 2008 Aug. 2017 Republican

Brandy Marty Marquez Aug. 2013 Aug. 2019 Republican

TNMP Rates Compare Favorably in Texas

38

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

AEP Central Centerpoint Oncor TNMP AEP North Sharyland

Residential Total Wires Charge for 1,000 kWh

Source: TDU tariffs for retail delivery service effective September 1, 2017 and PUCT Filings Interchange.

PNM Diversified Generation Portfolio: Capacity

39

Coal 29%

Nuclear 15%

Natural Gas 38%

Renewables 18%

Capacity 2018 Forecasted Generation Mix

(includes renewables related to Facebook data center)

Coal 35%

Nuclear 15%

Natural Gas 35%

Renewables 15%

Capacity 2,791 MW As of 12/31/2016

(1) The potential retirement of the San Juan Generating Station in 2022 would result in a decrease of coal to 7% of the forecasted generation capacity mix in 2023.

(1)

PNM Diversified Generation Portfolio: Energy

40

PNM Diversified Generation Portfolio: Energy

Coal 51%

Nuclear 29%

Natural Gas 11%

Renewables 9%

Energy 11,147 GWh

Based on 12 months ending 12/31/16

Coal 41%

Nuclear 28%

Natural Gas 20%

Renewables 11%

Energy 2018 Forecasted Generation Mix

(includes renewables related to Facebook data center)

(1)

(1) The potential retirement of the San Juan Generating Station in 2022 would result in a decrease of coal to 12% of the forecasted generation energy mix in 2023.

PNM Investment in Renewable Energy

41

Portfolio Standard as a % of Retail Sales

15% 2015

20% 2020

Renewable Rider Collection Methodology

Recovery of renewable investments and REC purchases permitted

through Renewable Energy Rider

New Mexico Renewable Energy Act Streamlined proceedings for approval of utilities’ renewable energy procurement

plans

Provides for recovery of program costs under approved procurement plan

Current Renewable Resources

PNM-Owned Renewable Resources

107 MW of solar capacity(1) Solar battery storage facility

Purchase Power Agreements (PPA) 204 MW PPA with NextEra Energy’s Wind Center

102 MW PPA with NextEra Energy’s Red Mesa 4 MW PPA with Dale Burgett Geothermal Generating Station

Customer-Owned Solar Facilities

70 MW of solar capacity

(1) The 40 MW of PNM-owned solar capacity placed in service in 2015 is recovered through base rates rather than through the Renewable Energy Rider.

PNM San Juan Generating Station Ownership and Participants

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Unit Total MW PNM MW

PNM Ownership Other Participants/Ownership

1 340 170 50% Tucson Electric 50% (170 MW)

2 340 170 50% Tucson Electric 50% (170 MW)

3 497 248 50% Southern California Power Authority 41.8% (208 MW) Tri-State 8.2% (41 MW)

4 507 195 38.457%

M-S-R Public Power Agency 28.8% (146 MW) City of Anaheim 10.04% (51 MW) City of Farmington 8.475% (43 MW) Los Alamos County 7.2% (37 MW) Utah Associated Municipal Power Systems (UAMPS) 7.028% (36 MW)

Total 1,684 783

Unit Owner 2018 MW

1 PNM Tucson Electric Power Company

170 170

4 PNM City of Farmington Los Alamos County UAMPS PNMR Development Company

327 43

36.5 35.5 65

Total 847

Exiting Participants:

Southern California Power Authority

Tri-State

M-S-R Public Power Agency

City of Anaheim

Ownership Restructuring Changes

PNM Palo Verde Nuclear Generating Station Unit 1 and 2 Leases

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MW Owned vs. Leased

Lease Expiration • Unit 1: January 15, 2015; exercised option to extend leases to 2023 • Unit 2: January 15, 2016; exercised right to purchase 3 leases in 2016 and option to extend one lease to 2024

Yearly Payment Amounts Total PV Unit 1 - $16.5M Total PV Unit 2 - $1.6M

Unit 1

Owned 2.3% 30 MW

Leased 7.9% 104 MW

Total 10.2% 134 MW

Unit 2

Owned 9.5% 124 MW

Leased 0.7% 10 MW

Total 10.2% 134 MW

Slide Number 1Contact Information and Safe Harbor StatementSlide Number 3PNM Resources OverviewPNM Resources Strategic DirectionStaying Focused and Flexible in a Changing EnvironmentRate Base Growth: Capital ForecastEarnings Growth: PNM 2018 General Rate Case ConsiderationsTax Reform ConsiderationsDividend GrowthCredit Metrics: Liquidity and Debt Maturity OutlookCredit Metrics: Rating Agency PerspectivesSlide Number 13PNM: Regulatory UpdatePNM: 2017 Integrated Resource PlanPNM: New Mexico Supreme Court AppealPNM: Load and Economic ConditionsPNM: Sustainability PortalPNM: Pathway to Continued SuccessSlide Number 20TNMP: Regulatory UpdateTNMP: Upcoming General Rate CaseTNMP: Load and Economic ConditionsTNMP: Pathway to Continued SuccessSlide Number 25Financial Overview: Consolidated Earnings Guidance (Ongoing)Financial Overview: Potential Earnings PowerFinancial Overview: Liquidity as of October 20, 2017 Slide Number 29Potential Earnings PowerFinancial Impact of Proposed PNM 2018 General Rate Case Settlement Agreement2018 General Rate Case Drivers (as Filed)PNM: 2018 General Rate Case Proposed Settlement Bill ImpactPNM 2016 General Rate Case Final Order NMPRC Commissioners and Districts NMPRC Rulemaking on Utility Ratemaking PoliciesPUCT CommissionersTNMP Rates Compare Favorably in TexasPNM Diversified Generation Portfolio: CapacityPNM Diversified Generation Portfolio: EnergyPNM Investment in Renewable EnergyPNM San Juan Generating Station Ownership and ParticipantsPNM Palo Verde Nuclear Generating Station Unit 1 and 2 Leases