Upload
others
View
5
Download
0
Embed Size (px)
Citation preview
EEI Financial ConferenceNovember 2019
Contact Information and Safe Harbor Statement
2
Investor Relations Contact Information
Lisa Goodman Director, Investor Relations and Shareholder Services U.S. [email protected]
Safe Harbor StatementStatements made in this presentation for PNM Resources, Inc. (“PNMR”), Public Service Company of New Mexico (“PNM”), or Texas-New Mexico Power Company (“TNMP”) (collectively, the “Company”) that relate to future events or 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 bymany 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 MeasuresFor an explanation of the non-GAAP financial measures that appear on certain slides in this presentation (ongoing earnings, ongoing earnings per diluted share and ongoing earnings guidance measures), 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: $4B
• Energy holding company• Based in Albuquerque, New Mexico
• Located in New Mexico• 530,977 customers• 15,158 miles transmission and
distribution lines• 2,701 MW generation capacity
• Located in Texas• 255,879 end-users• 9,408 miles transmission and
distribution lines
PNM Resources Strategic Direction and Financial Goals
5
• Plans to be coal-free by 2031• Goal to be emissions-free by 2040• Retire and replace coal-fired generation with
cleaner energy portfolio• Invest to maintain system reliability
Transform to Cleaner Energy
Portfolio
• Provide reliable, affordable energy while enhancing customer experience
• Integrate technologies and customer insights to new products and services
• Enhance grid to facilitate evolving customer needs
Meet Customer
Expectations
• Deliver earnings and dividend growth at or above industry-average
• Earn allowed returns• Maintain investment grade credit ratings
Provide Earnings and
Dividend Growth
$255 $275$306 $322
$345
$245 $337 $270
$342 $348
$125
$176 $173
$182 $202
$128
$99
$94 $82
$77
$68
$60 $53
$109 $268 $48
$177
$72$37
$27
$22
$27
$21
$21 $25
2019 2020 2021 2022 2023
(in m
illio
ns)
TNMP PNM T&D PV Lease Purchases/Other Replacement PowerPNM Existing Generation PNM Renewable Additions PNM Transmission ExpansionSJGS Replacement Power 50% NMRD Renewable Additions Business Technology Services/General ServicesDepreciation
$641
$771
$991
$818
$694
$3.9B investment plan results in 9.6% rate base growth$317M increase in TNMP investments
6
2019 – 2023 Investment Plan
(1) Depreciation does not include amounts associated with NMRD(2) Western Spirit acquisition of $285M reflects assumed purchase price of $360M, net of $75M customer funding(3) For Palo Verde leases that expire in 2023, capex assumes either the purchase of the leases or replacement of the power through new resources
(1)
(2)
Targeted 2018-2023 Rate Base CAGR (2018 base): Total 9.6% / PNM 6.6% / TNMP 17.3%
(3)
Chart1
2019
2020
2021
322
345
Depreciation
255
275
306
Sheet1
20192020202120222023
PNM Generation
PNM T&D
PNM Renewables
TNMP
Other
Total
Depreciation255275306322345
Check
2019 - 2023 Potential Earnings Power
7This table is not intended to represent a forward-looking projection of 2020 - 2023 earnings guidance.
Refer to Slide 31 for additional details and disclosures.
Earnings Growth Target 5-6%; reflects updated investment plan• Additional earnings potential at TNMP strengthens target• Equity financing plans continue to reflect modeling assumptions that will be optimized
(1) Assumes mid-year implementation(2) Optimization of timing/size not definitive, total equity need of $590M focused on forward block sale and/or mandatory convertiblesNote: 2018-2023 CAGR measured from 2018 Ongoing EPS of $2.00
Allowed Return / Equity Ratio
2019 Ongoing Earnings
Guidance Midpoint
2020 Earnings Potential
2021 Earnings Potential
2022 Earnings Potential
2023 Earnings Potential
Avg Rate Base Return EPS
Avg Rate Base
EPSAvgRate Base
EPSAvgRate Base
EPSAvgRate Base
EPS
PNM Retail 9.575% / 50% $2.4 B 8.9% $1.37 $2.4 B $1.44 $2.5 B $1.52 $2.4 B $1.48 $2.4 B $1.48
San JuanReplacement(1)
9.575% / 50% $150 M $0.09 $280 M $0.17
PNM Renewables 9.575% / 50% $115 M 9.575% $0.07 $150 M $0.09 $145 M $0.09 $140 M $0.08 $130 M $0.07
PNM FERC 10% / ~50% $275 M 6.9% $0.12 $330 M $0.15-$0.20 $530 M $0.26-$0.30 $740 M $0.37-$0.42 $780 M $0.39-$0.44
Items not in Rates $0.04 ($0.04)-($0.02) ($0.03)-($0.01) ($0.03)-($0.01) ($0.03)-($0.01)Total PNM $2.7 B $1.60 $2.9 B $1.64-$1.71 $3.2 B $1.84-$1.90 $3.5 B $1.99-$2.06 $3.6 B $2.08-$2.15
TNMP 9.65% / 45% $1.1 B 9.65% $0.67 $1.3 B $0.73 $1.5 B $0.84 $1.6 B $0.89 $1.9 B $1.02
Corporate/Other ($0.19) ($0.21)-($0.19) ($0.21)-($0.19) ($0.19) - ($0.17) ($0.23)-($0.21)Equity Financing Plans(2) ($0.01)-$0.00 ($0.10)-($0.09) ($0.20) - ($0.19) ($0.24)-($0.23)Total PNM Resources $3.8 B $2.08 $4.2 B $2.15 - $2.25 $4.7 B $2.37 - $2.46 $5.1 B $2.49 - $2.59 $5.6 B $2.63 - $2.73
Earnings Growth
8
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$1.49 $1.64 $1.65
$1.94 $2.00 $2.08
$2.20 $2.42
$2.54 5-6% Target: $2.55-$2.68
Actual Ongoing EPS Midpoint Guidance / Earnings Potential
$2.68
2018 – 2023: Targeting 5 - 6% Ongoing EPS CAGR• 2014 - 2018: Achieved 7.6% Ongoing EPS CAGR• 2014 - 2023: Reflects 6-7% Ongoing EPS CAGR
$0.74Dec ‘13
$0.80Dec ‘14
$0.88Dec’ 15
$0.97Dec ‘16
$1.06Dec ‘17
$1.16Dec ‘18
$1.22-$1.23
$1.28-$1.30
$1.34-$1.38
$1.41-$1.46
8%
10%10%
9%9%
55-56% payout
53-54% payout
53-54% payout
53-55% payout
Dividend Growth
9
Indicative annual dividend rate
• Expect dividend growth at or above industry average (~5%) in the future while targeting the middle of a 50% - 60% payout ratio range
• Next dividend review in December 2019
Consistent Delivery of Dividend Growth At or Above Industry AverageExpect future dividend growth to mirror earnings growth (approximately 5-6%)
Payout based upon midpoint earnings potential
Liquidity and Debt Maturity Outlook
10
• Completed:• Extended $700M revolving credit facilities through 2023• Refinanced $172 million of 9.5% TNMP First Mortgage Bonds
• Equity issuances of up to $590 million through forward block and/or mandatory convertibles are projected to fund 2020 -2023 expenditures
• New debt issuances projected at utilities through 2023 of ~$800 million and $361 million securitization bonds
Maintain appropriate credit metrics
Remain a solid investment grade
rated company
Target regulatory capital structures at PNM
and TNMP
Moody’s Rating/Outlook
S&P Rating/Outlook
PNM Resources Baa3(1) / Stable BBB+(1) / Negative
PNM Baa2(2) / Stable BBB+(2) / Negative
TNMP A1(3) / Stable A(3) / Negative
PNM Resources FFO-to-Debt is maintained well within Moody’s Baa investment grade
target range of 13% to 22%
(1) Issuer rating (2) Senior unsecured rating (3) Senior secured rating
$350 $306 $57$1,003$35
$658
$140 $300
2020 2021 2022 2023 and Beyond
Long-term Debt Maturities(in millions)
PNM TNMP Corporate
Generation Portfolio Transformation
New Mexico Energy Policy
12
Nuclear 30%
Senate Bill 489 (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 Goal• Current: 20% renewables by 2020• Proposed:
• 40% renewables by 2025• 50% renewables by 2030• 80% renewables by 2040• 100% carbon-free by 2045
• Securitization measure for abandonment of coal-fired generating facilities reduces customer bills
• Economic development funds provide needed financial assistance to workers and the communities impacted by retirement of coal-fired generating facilities
50%
Ren
ewab
les
80%
Ren
ewab
les
40%
Ren
ewab
les
100%
Car
bon-
Free2045
20402030
2025
Exit from Coal Generation, Emission Reductions
13
• The shutdown of Units 2 and 3 at PNM San Juan Generating Station in December 2017 reduced CO₂ emissions at this plant by 54% below 2005 levels
• The 2017 Integrated Resource Plan called for a complete exit from coal generation by the end of 2031
• New Mexico’s Energy Transaction Act, effective June 14, 2019, calls for 100% carbon-free energy by 2045
• PNM has stated a goal to be 100% emissions-free by 2040
983
762
200
2005 2018 2023 2031
Reduction of MW Coal Capacity
22% reduction
80%reduction
100% coal free
Read more in our Climate Change Report at http://www.pnmresources.com/about-us/sustainability-portal.aspx
San Juan Abandonment, Securitization and Replacement Power
14
Aban
donm
ent ● Requests
abandonment of San Juan coal plant after participation agreement and coal supply contracts end June 30, 2022 Se
curit
izatio
n ● $283M undepreciated investment in San Juan, proceeds available to fund replacement power
● $29M decommissioning and reclamation costs
● $20M job training and severance costs
● $20M economic development funds
● $9M financing costs
Total $361M securitization
Repl
acem
ent P
ower ● Recommended
scenario balances environment, cost and reliability
● 350MW solar drives 62% reduction in carbon emissions
● 130MW battery storage capacity responsibly integrates new technology
● 280MW natural gas peaking plants ensure reliability during energy transition, provides San Juan property tax base
Total $298M investment
Timing• Filed July 1, 2019• NMPRC decision on abandonment and
securitization expected by April 2020; decision on replacement power expected by October 2020
Energy Transition Act Applicability - Intervenor Positions
15
Intervenor(s) BriefsAbandonment/Securitization(19-00018-UT)
Replacement Power
(19-00195-UT)Comments
Board of County Commissioners for the County of San Juan and the City of Farmington
Contingent upon provision of funds to the San Juan community
Central Consolidated School District Contingent upon provision of funds to the San Juan communityCitizens for Fair Rates and the Environment Commission should disregard provisions that conflict with the New Mexico ConstitutionCoalition for Clean Affordable Energy IBEW/IUOE Interwest Energy Alliance New Energy Economy X X Cannot apply; ETA is unconstitutionalNMPRC Staff X X Cannot be applied to pending caseSan Juan Legislative Delegation Contingent upon provision of funds to the San Juan communitySierra Club Southwest Generation Operating Company No position on ETA applicability to abandonment/securitizationWestern Resource Advocates Parties that did not file a brief on ETA applicability: ABCWUA, Attorney General, Bernalillo County, City of Albuquerque, County of Los Alamos, Diné Citizens Against Ruining Our Environment, Greg Sonnenfeld, M-S-R Public Power Agency, Navajo Power, NM AREA, Prosperity Works, REIA, San Juan Citizen Alliance, and Westmoreland Coal, Inc.
PNM Owned Resources Third Party Resources
__________________Total 350 MW
________________Total 410 MW
Recommended Replacement Power Scenario Details
16
• Competitive RFP processes resulted in a cost-effective mix of resources owned by PNM and third-party providers
• To manage the risks of integrating new battery storage technology, total storage capacity does not exceed 5% of peak load and the capacity at each location is limited to 40 MW
280 MW Gas Peaking Units at San Juan$191M investmentin-service June 2022
40 MW Storage$50M investment in-service June 2022
30 MW Storage$37M investmentin-service June 2022
300 MW Solar PPA + 40 MW Storage ESA$20M transmission investmentbegins June 2022
50 MW Solar PPA + 20 MW Storage ESAbegins Jan 2022
Note: All potential replacement power scenarios incorporated 140 MW wind energy PPA included in June 3, 2019 RPS Filing
Integration of Renewable Generation
17
2018 2020 2025 2035
137 333 721
1,137 356
521
681
956
Growing Solar and Wind Capacity Based on Recommended San Juan
Replacement Scenario (MW)
Solar Wind
Integration of renewable generation requires T&D investment and addition of supporting backup capacity
493
854
1,402
1,955
Note: Resources above and beyond the resources purchased to support the Facebook data center in New Mexico
Transmission and Renewable Expansion in New Mexico
18
Source: American Wind Energy Association, Oct. 2019New Mexico ranks:
New Mexico added wind capacity at a higher growth rate than any other state in 2017 and currently has projects under construction or in advanced development that will more than double current installed capacity
• 1,953 MW installed capacity• 1,227 MW under construction• 1,328 MW in advanced
development
Wind
Solar
Source: NREL
New Mexico has abundant solar and wind resources Third-party development increases demand for transmission capacity
Source: WINDExchange.energy.gov, Q3 2019in US wind capacity potential
in US concentrating solar power technical potential
Source: NREL, July 2012
PNM
PNM Load and Economic Conditions
20
Regulated Retail Energy Sales and Customers
Economic indicators continue to be positive
Weather and Load improved Q3 EPS by $0.05 • 14% increase in cooling degree days• Industrial, Residential growth partially offset by
Commercial energy efficiency impacts
PNMQ3 2019
vs. Q3 2018
YTD 2019vs.
YTD 20182019E
Total PNM Retail Load(1) 0.3% 0.0% 0.0% – 1.0%PNM Avg. Customers 0.7% 0.8% 0.8% – 1.0%(1) Weather normalized, excludes Economy customers
20-y
r Avg
20-y
r Avg
20-y
r Avg
20-y
r Avg
2014
2014
2014
2014
2015
2015
2015
2015
2016
2016
2016
2016
2017
2017
2017
2017
2018
2018
2018
2018
2019
2019
2019
Q1 HeatingDegree-Days
Q2 CoolingDegree-Days
Q3 CoolingDegree-Days
Q4 HeatingDegree-Days
Weather Volatility
NMPRC Commissioners and Districts
21
District Name Term Ends Party
District 1 Cynthia Hall 2020(1) Democrat
District 2 Jefferson Byrd 2022(1) Republican
District 3 Valerie Espinoza,Vice-Chairman 2020 Democrat
District 4 Theresa Becenti-Aguilar,Chairman 2022(1) Democrat
District 5 Stephen Fischmann 2022(1) Democrat
NMPRC Districts and PNM Service Areas
(1) Eligible for re-election to a second four-year term
2019 Legislative Update – Appointed vs Elected:• A Senate Joint Resolution was passed in the New Mexico legislature to
include a state constitutional amendment on the ballot in the next general election (2020) to move to a 3-member, appointed Commission
• If the amendment is passed by a simple majority:• The legislature defines the nominating committee and the
requirements for Commissioners• The terms for Commissioners elected in Districts 1 and 3 in 2020 will
be for a two-year term ending in 2022; the terms for Commissioners in Districts 2, 4 and 5 already expire in 2022
• Three appointed Commissioners would begin terms January 1, 2023
PNM Regulatory Agenda
22
Filing Action Timing Docket No.PNM:
Western Spirit Transmission LineNMPRC approved acquisition on October 2, 2019; FERC approved acquisition on August 8, 2019 and incremental rate effective July 9, 2019
Acquisition planned for mid-202119-00129-UT
ER19-1824-000EC19-90-000
Consolidated Application for San Juan (Abandonment, Securitizationand Replacement)
PNM filed July 1, 2019; NMPRC bifurcated application on July 10, 2019
NMPRC decision on abandonment/ securitization expected by April 2020, decision on replacement power expected by October 2020
19-00018-UT19-00195-UT
Appeal of 2015 General Rate Case to New Mexico Supreme Court
New Mexico Supreme Court issued opinion May 16, 2019 affirming NMPRC decision but denying the disallowance of future Palo Verde decommissioning costs; full order was remanded back to the NMPRC
No statutory timeline; oral arguments on remand held July 17, 2019
15-00261-UTS-1-SC-36115
Solar Direct ProgramPNM filed May 31, 2019 for approval of voluntary renewable program expected to begin March 31, 2021
NMPRC decision expected in Q1 2020 19-00158-UT
2020 Renewable Plan PNM filed June 3, 2019; hearings held October 24-25, 2019 NMPRC decision expected in Q1 2020 19-00159-UT
$68.59
$76.12
$106.17
$115.42
$137.51
$50 $100 $150
City of Seattle - (WA)Public Service Co of Colorado (CO)
El Paso Electric Co (NM)El Paso Electric Co (TX)
PacifiCorp (UT)Public Service Co of NM (NM)
Montana-Dakota Utilities Co (MT)PacifiCorp (WY)
City of Colorado Springs - (CO)NorthWestern Energy LLC - (MT)
Avista Corp (ID)Avista Corp (WA)
PacifiCorp (ID)Idaho Power Co (ID)
Southern California Edison Co (CA)Sacramento Municipal Util Dist (CA)
City of Tacoma - (WA)San Diego Gas & Electric Co (CA)
Southwestern Public Service Co (NM)Montana-Dakota Utilities Co (WY)
Tucson Electric Power Co (AZ)Portland General Electric Co (OR)
PacifiCorp (OR)Regional Average Bill
Black Hills Power, Inc. d/b/a (WY)PacifiCorp (WA)
Pacific Gas & Electric Co. (CA)Nevada Power Co (NV)
PacifiCorp (CA)US Average Bill
City of San Antonio - (TX)Southwestern Electric Power Co (TX)
Modesto Irrigation District (CA)Entergy Texas Inc. (TX)Salt River Project (AZ)
Imperial Irrigation District (CA)LADWP (CA)
Arizona Public Service Co (AZ)
Comparison of Average Residential Bills(1)Western Region Average Bills by Utility
PNM Bills Remain Below National and Regional Averages
23(1)Based on U.S. Energy Information Administration's Residential Rate increases through June 2019
- Current US Avg
- Current Regional Avg
- PNM 2019
Customer bill impacts of increased investments are mitigated by:‘
• Return of federal tax savings to customers
• Load growth reduces per-customer cost of new investments
• Energy Imbalance Market and renewable investments result in lower costs for fuel
TNMP
TNMP Load and Economic Conditions
25
Regulated Retail Energy Sales and Customers
• Texas is the largest energy-producing state and the largest energy-consuming state in the nation(1)
• ERCOT summer peak demand projected to grow by ~20% over next 10 years(2), extensive regional studies call for increased transmission infrastructure to support reliability and growth, particularly in West Texas
TNMP Demand
(1) Source: Energy Information Administration (EIA) (2) Source: ERCOT 2019-2028 forecast
TNMP Investment Plan by Region
West Texas ~44%
North/Central TX ~31%
Gulf Coast ~25%● TNMP Service Area
(1) Changes in load do not have a significant impacts on quarterly EPS; however, demand-based load growth is an indicator of increased infrastructure needs
(2) Commercial and Industrial per-kw monthly peak billings; excludes retail Transmission customers
TNMPQ3 2019
vs. Q3 2018
YTD 2019vs.
YTD 20182019E
Demand-Based Load(2) 5.4% 4.3% 4.0% – 5.0%TNMP Avg. End Users 1.4% 1.5% 1.5% – 2.0%
Texas growth continues to lead nation
Weather and Load improved Q3 EPS by $0.02 • 10% increase in cooling degree days• Strong demand-based load growth(1)
PUCT Commissioners and TNMP Regulatory Agenda
26
Commissioners are appointed by the Governor of Texas and confirmed by the Senate.
Name Term Began Term Ends Party
DeAnn Walker (Chair) Sept. 2017 Aug. 2021 Republican
Arthur D’Andrea Nov. 2017 Aug. 2023 Republican
Shelly Botkin June 2018 Sept. 2019 Republican
PUCT Commissioners
Filing Action Timing Docket No.
General Rate Review Settlement approved December 2, 2018 Rates implemented January 2019 48401
TCOS Filing Filed January 25, 2019 Rates implemented March 2019 49143
TCOS Filing Filed July 23, 2019 Rates implemented September 2019 49785
TNMP Regulatory Agenda
TNMP General Rate Review Settlement
27
Key Components of Approved Settlement
Annual revenue increase $10.0M
ROE (prior authorized 10.125%) 9.65%
Capital structure (prior authorized 45% equity) 45% Equity
Cost of debt 6.4%
Increase to rate base $73M
Return of excess deferred federal income taxes $11.0M
• Settlement approved December 20, 2018• Rates implemented January 2019
TNMP Rates Comparable in Texas
28
$-
$10
$20
$30
$40
$50
$60
Oncor Centerpoint TNMP AEP North AEP Central
Residential Total Wires Charge for 1,000 kWh
Current rate filing pending
Current rate filing pending
Current rate filing pending
Current rate filing pending
Source: TDU tariffs for retail delivery service effective September 1, 2019 and PUCT Filings Interchange.1Rates effective January 2019
New Rates1
Rates expected to be comparable to other IOUs after pending rate filings
Appendix
2019 Consolidated Ongoing Earnings Guidance
30
$2.05 Consolidated EPS $2.11
PNM$1.59 – $1.62
TNMP$0.66 – $0.68
Corp/Other($0.20) – ($0.19)
2019 Earnings Guidance
2019 - 2023 Potential Earnings Power
31
(1) Average rate base has been reduced by approximately $130M to represent ($0.05) of Earnings Potential for the lost equity return on Four Corners investment determined in the 2018 general rate review. 2022 and 2023 rate base also reflects the removal of $283M undepreciated SJGS investment upon its retirement in mid-2022 to be recovered through securitization.
(2) Replacement Power includes $298M investment implemented mid-2022; $278M of generation investment and $20M of transmission investment.(3) PNM Renewables reflect assets collected through the Renewable Rate Rider. (4) PNM FERC in 2021-2023 reflects a return of 8%-9% to account for Western Spirit investment recovered through incremental rates.(5) Consists primarily of decommissioning/reclamation trust income (net of fees/taxes), AFUDC, certain incentive compensation, and the 65MW ownership of San Juan Unit 4 (prior to retirement).(6) TNMP earnings include additional recovery for Energy Efficiency, along with items excluded from rates (primarily AFUDC) and interest savings from the refinancing of existing debt. (7) Corporate/Other includes the earnings impacts associated with short and intermediate term bank debt and the 50% equity interest in NMRD.(8) Equity Financing Plans to fund capital growth reflect financing alternatives, including ATM Program or block sale of up to $290M (dilution impacts
assume $50M issued in 2020, $90M to $140M in 2021, $50M in 2022 and $50M in 2023), and $300M mandatory convertibles beginning mid-2021.
This table is not intended to represent a forward-looking projection of 2020 - 2023 earnings guidance.
Allowed Return / Equity Ratio
2019 Ongoing Earnings Guidance Midpoint
2020 Earnings Potential
2021 Earnings Potential
2022 Earnings Potential
2023 Earnings Potential
AvgRate Base
Return EPSAvg Rate Base
EPSAvgRate Base
EPSAvgRate Base
EPSAvgRate Base
EPS
PNM Retail(1) 9.575% / 50% $2.4 B 8.9% $1.37 $2.4 B $1.44 $2.5 B $1.52 $2.4 B $1.48 $2.4 B $1.48
San JuanReplacement(2)
9.575% / 50% $150 M $0.09 $280 M $0.17
PNM Renewables(3) 9.575% / 50% $115 M 9.575% $0.07 $150 M $0.09 $145 M $0.09 $140 M $0.08 $130 M $0.07
PNM FERC(4) 10% / ~50% $275 M 6.9% $0.12 $330 M $0.15-$0.20 $530 M $0.26-$0.30 $740 M $0.37-$0.42 $780 M $0.39-$0.44
Items not in Rates(5) $0.04 ($0.04)-($0.02) ($0.03)-($0.01) ($0.03)-($0.01) ($0.03)-($0.01)Total PNM $2.7 B $1.60 $2.9 B $1.64-$1.71 $3.2 B $1.84-$1.90 $3.5 B $1.99-$2.06 $3.6 B $2.08-$2.15
TNMP(6) 9.65% / 45% $1.1 B 9.65% $0.67 $1.3 B $0.73 $1.5 B $0.84 $1.6 B $0.89 $1.9 B $1.02
Corporate/Other(7) ($0.19) ($0.21)-($0.19) ($0.21)-($0.19) ($0.19)-($0.17) ($0.23)-($0.21)
Equity Financing Plans(8) ($0.01)-$0.00 ($0.10)-($0.09) ($0.20)-($0.19) ($0.24)-($0.23)
Total PNM Resources $3.8 B $2.08 $4.2 B $2.15 - $2.25 $4.7 B $2.37 - $2.46 $5.1 B $2.49 - $2.59 $5.6 B $2.63 - $2.73
Liquidity as of October 25, 2019
32
PNM TNMP
PNMR
PNM Resources
Consolidated
PNMR Develop-
mentCorporate
/Other
Financing Capacity(1): (In millions)
Revolving credit facilities $440.0 $75.0 $40.0 $300.0 $855.0
As of 10/25/19:
Short-term debt and LOCbalances $2.5 $15.4 $38.9 $84.1 $140.9
Remaining availability 437.5 59.6 1.1 215.9 714.1
Invested cash 20.5 - - 0.9 21.4
Total Available Liquidity $458.0 $59.6 $1.1 $216.8 $735.5(1) Excludes intercompany debt and term loans
San Juan and Four Corners Generating StationsOwnership and Participants
33
Unit TotalMWPNM MW
PNM Ownership Other Participants/Ownership
1 340 170 50% Tucson Electric 50% (170 MW)
4 507 392 77.3%City of Farmington 8.5% (43 MW)Los Alamos County 7.2% (36.5 MW)Utah Associated Municipal Power Systems (UAMPS) 7.0% (35.5 MW)
Total 847 562
Unit TotalMWPNM MW
PNM Ownership Other Participants/Ownership
4 770 100 13%Arizona Public Service Company 70% (539 MW)Salt River Project 10% (77 MW)Tucson Electric Power 7% (54 MW)
5 770 100 13%Arizona Public Service Company 70% (539 MW)Salt River Project 10% (77 MW)Tucson Electric Power 7% (54 MW)
Total 1,540 200
San Juan Generating Station
Four Corners Generating Station
Palo Verde Nuclear Generating Station Ownership and Leases
34
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
Unit 3
Owned 10.2% 134 MW
Leased 0% 0 MW
Total 10.2% 134 MW
Battery Storage Integration
35
The following slides come to life with Augmented Reality (AR) powered by RealityX2
This new technology runs in your smartphone or tablet and overlays a digital/virtual world on top of your physical reality.
Experience AR for yourself by visiting the App store to download and open the RealityX2 app, then pointing your device at the images contained in these slides to learn more about
battery storage and plans for the integration of battery storage at PNM.
The Case for Battery Storage
36
• Historically, large fossil fuel and nuclear plants were constructed to meet a constantly growing energy demand with 24/7 reliability
• Battery storage provides a solution for an increasing amount of intermittent renewables resources without sacrificing reliability
Utilize the app to visualize how energy flows under the “old” and “new” ways
Battery Technology
37
• Battery storage technology has evolved from lead acid batteries to lithium ion batteries in a variety of applications, including utility-scale energy storage
• Flow batteries represent the next evolution of battery technology
Utilize the app to see inside each battery and hear about each technology
Utility Integration and PNM Plans
38
• The PNM Prosperity Project was an early pioneer for grid-connected battery storage
• PNM has proposed plans for future integration of battery storage through purchase power agreements and utility-owned facilities
Utilize the app to tour the PNM Prosperity Project and hear our plans and considerations for future battery integration
Slide Number 1Contact Information and Safe Harbor StatementSlide Number 3PNM Resources OverviewPNM Resources Strategic Direction and Financial Goals2019 – 2023 Investment Plan2019 - 2023 Potential Earnings PowerEarnings GrowthDividend GrowthLiquidity and Debt Maturity OutlookSlide Number 11New Mexico Energy PolicyExit from Coal Generation, Emission ReductionsSan Juan Abandonment, Securitization and Replacement PowerEnergy Transition Act Applicability - Intervenor PositionsRecommended Replacement Power Scenario DetailsIntegration of Renewable GenerationTransmission and Renewable Expansion in New MexicoSlide Number 19PNM Load and Economic ConditionsNMPRC Commissioners and DistrictsPNM Regulatory AgendaPNM Bills Remain Below National and Regional AveragesSlide Number 24TNMP Load and Economic ConditionsPUCT Commissioners and TNMP Regulatory AgendaTNMP General Rate Review SettlementTNMP Rates Comparable in TexasSlide Number 292019 Consolidated Ongoing Earnings Guidance 2019 - 2023 Potential Earnings Power Liquidity as of October 25, 2019San Juan and Four Corners Generating Stations�Ownership and ParticipantsPalo Verde Nuclear Generating Station Ownership and LeasesBattery Storage IntegrationThe Case for Battery StorageBattery TechnologyUtility Integration and PNM Plans