N.M. Regulators Modify PNM Renewable Plan, Approve 22 MW of Utility-Scale Solar Build

ALBUQUERQUE, N.M.--(BUSINESS WIRE)--Plans to add utility-scale solar power facilities by PNM Resources’ (NYSE: PNM) New Mexico utility, PNM, were unanimously approved yesterday by state regulators.

“We are pleased that the Commission recognized the significance of adding renewable energy to our existing generation resources”

The New Mexico Public Regulation Commission approved 22 megawatts of utility-scale solar power facilities that will involve various sites throughout New Mexico. Regulators capped the facilities’ cost at $101.7 million. Construction is expected to be completed by the end of 2011.

PNM plans to file for recovery of those costs through a rate rider that would be implemented one year after new PNM rates, which currently are under consideration, are effective. Costs incurred by a New Mexico utility that are consistent with an approved renewable energy plan are deemed reasonable and recoverable in rates under state law.

The solar addition to PNM’s rate base and subsequent recovery is expected add approximately $0.03 to $0.05 to earnings per diluted share in 2012.

“We are pleased that the Commission recognized the significance of adding renewable energy to our existing generation resources,” said Pat Vincent-Collawn, PNM Resources president and CEO. “Our industry, along with regulators, needs to continue to look for ways to add renewable power while balancing the cost impact to consumers. This is the first step toward achieving that goal and meeting the state’s requirement to diversify our energy resources.”

The solar power approval modifies a hearing examiner’s recommendation that rejected PNM’s entire renewable energy plan that called for adding 80 megawatts of solar power, including 45 megawatts of utility-scale facilities. Along with approving the smaller solar utility-scale plan, the Commission also approved a plan to build a one-half megawatt solar power and storage demonstration project that is partially funded by a grant from the U.S. Department of Energy. In addition, the Commission modified other residential and business customer initiatives that could add solar power to New Mexico’s energy mix. New Mexico law requires PNM and other electric utilities to have 10 percent of the energy they generate come from renewable resources such as wind and solar by 2011.

The Commission’s order is available at http://www.pnmresources.com/investors/regulatory.cfm.

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' or PNM's (collectively, the "Companies") expectations, projections or estimates 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 and the Companies assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Companies caution readers not to place undue reliance on these statements. The Companies' projections and estimates 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. These factors include: conditions affecting the Companies' ability to access the financial markets and negotiate new credit facilities for those expiring in 2012, including actions by ratings agencies affecting the Company's credit ratings; state and federal regulatory and legislative decisions and actions, including provisions relating to climate change, reduction of greenhouse gas emissions, coal combustion by-products, and other power plant emissions; the performance of generating units; fluctuations in interest rates; weather; seasonality and other changes in supply and demand in the market for electric power; the impact of mandatory energy efficiency measures on customer energy usage; variability of wholesale power prices and natural gas prices; volatility and liquidity in the wholesale power markets and the natural gas markets; uncertainty regarding the ongoing validity of government programs for emission allowances; changes in the competitive environment in the electric industry; the risk that the Companies may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements including possible future requirements to address concerns about global climate change, and the resultant impacts on the operations and economic viability of generating plants in which PNM has interests; the risks associated with completion of generation projects, including changes in technology, construction delays, fluctuations in the costs of construction materials and labor, and other unanticipated cost overruns; and uncertainty surrounding the status of PNM's participation in jointly-owned projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2015 and potential changes in the objectives of the participants in the projects.

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 more than 2,710 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.