#1Investor Meetings May 2022 PNM Resources"#2Contact Information and Safe Harbor Statement Investor Relations Contact Information Lisa Goodman Executive Director, Investor Relations and Shareholder Services 1-505-241-2160 [email protected] Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements 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, including the preliminary unaudited financial results and earnings guidance, 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 apply only as of the date of this report. 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. Additionally, there are risks and uncertainties in connection with the proposed acquisition of us by AVANGRID which may adversely affect our business, future opportunities, employees and common stock, including without limitation, (i) the expected timing and likelihood of completion of the pending Merger, including the timing, receipt and terms and conditions of any remaining required governmental and regulatory approvals of the pending Merger that could reduce anticipated benefits or cause the parties to abandon the transaction, (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement, (iii) the risk that the parties may not be able to satisfy the conditions to the proposed Merger in a timely manner or at all, and (iv) the risk that the proposed transaction could have an adverse effect on the ability of PNMR to retain and hire key personnel and maintain relationships with its customers and suppliers, and on its operating results and businesses generally. For a discussion of risk factors and other important factors affecting forward-looking statements, please see the Company's Form 10-K, Form 10-Q filings and the information included in the Company's Forms 8-K 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, 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 at http://www.pnmresources.com/investors/results.cfm. Since the future differences between GAAP and ongoing earnings are frequently outside the control of the Company, management is generally not able to estimate the impact of the reconciling items between forecasted GAAP net earnings and ongoing earnings guidance, nor their probable impact on GAAP net earnings without unreasonable effort, therefore, management is generally not able to provide a corresponding GAAP equivalent for ongoing earnings guidance. PNM②Resources#3. • • • PNM Resources Overview PNM Ⓡ Vertically integrated utility in New Mexico focused on clean energy transformation $3.1B rate base 540k retail customers 3.1 GW resource portfolio 15k miles transmission and distribution lines PNMResources Energy holding company based in Albuquerque, New Mexico with two fully regulated electric utility subsidiaries NYSE: PNM $4B market cap Service Territories and Generation Resources San Juan Generating Station Four Corners Power Plant Red Mesa Wind Farm Reeves Generating Station Rio Bravo Generating Station La Luz Energy Center Valencia Energy Facility New Mexico Wind Energy Center Palo Verde Nuclear Generating Station TNMP T&D utility operating within the ERCOT market in Texas $1.5B rate base 260k consumers 10k miles transmission and distribution lines Lordsburg Generating Station Luna Energy Facility Dale Burgett Geothermal- Generating Station Afton Generating Station PNM Service Area TNMP Service Area • Solar Photovoltaic Generation ⚫All Other Generation ources® PNMResources® 3#4Create shareholder value, deliver a clean and bright energy future Clean Energy Portfolio Critical Electricity Infrastructure Strong Corporate Profile PNM progress towards industry-leading goal of 100% emissions-free energy by 2040 T&D investments reliably support growth and integration of clean energy Delivering financial results, trusted community partner Customer Reliability, Affordability, Satisfaction PNMResources 4#5Commitment to ESG Strategy Environmental iMi Social Governance Industry-leadings goals: Emissions-free by 2040 reflects full elimination of carbon from generation . • 90% reduction in freshwater usage by 2040 Significant reductions in emissions and freshwater usage achieved 2005-2021 through investments and retirements ✓ Infrastructure investment to support rapid growth in owned and purchased renewable resources delivered to customers ✓ Hiring, training, retention ☑ 8 of 9 Board members are and engagement programs for our diverse workforce (52% minority), focus on safety and company culture Diversity and inclusion supported in communities, tribal relationships fostered through meaningful partnerships Transition to clean energy includes support for employees and communities independent, 7 years average tenure ✓ Diverse Board composition (40% women/20% minorities) 78% Board members have environmental / sustainability expertise Robust top-down ethics program with organization-wide commitment PNM②Resources 5#6Investment Plan 2022 – 2025 - Investment plan of $3.5b focused on T&D infrastructure $948 $896 $33 $36 $835 $32 $779 $31 $426 $425 $55 $381 $299 $50 $80 $65 (in millions) $433 $355 $307 $323 $358 $360 $399 $383 2022 2023 2024 2025 PNM T&D PNM Generation TNMP IT Depreciation PNM②Resources 6 Note: Amounts may not visually add due to rounding#7Rate 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 Retail Investments (1) $2.7 | $2.7 $2.9 $3.1 $3.2 $3.3 Coal Plant Retirements (2,3) ($0.1) ($0.3) ($0.3) ($0.6) $2.7 $2.7 $2.8 $2.8 $2.9 $2.7 PNM transition out of coal generation maintains stable, affordable customer rates FERC 21% compound annual PNM Retail growth rate 2020-2025 PNM FERC TNMP 16% compound annual TNMP growth rate 2020 - 2025 Total Rate Base $0.3 | $0.4 $0.7 $0.8 $0.8 $0.9 $1.2 ! $1.5 $1.8 $2.0 $2.3 $2.5 $4.2 $4.6 $5.3 $5.6 $6.0 $6.1 7.7% compound annual growth 2020 - 2025 (1) Includes $130m of Four Corners coal plant investments earning a debt-only return through 2024 (2) $283m of undepreciated San Juan coal plant retired in mid-2022 (3) $271m of undepreciated Four Corners coal plant retired at the end of 2024 PNM②Resources 7#8• Financial Outlook Executing our financial plans Utility growth driven by recovery of T&D infrastructure to support economic growth, grid resilience and New Long-term EPS Growth and Ongoing Earnings Guidance • Targeted 5% EPS growth 2020 - 2025 (1) • • 2022 ongoing guidance midpoint of $2.55 per diluted share 2023 ongoing guidance midpoint of $2.68 per diluted share $2.60 - $2.75 Mexico's transition from $2.50 - $2.60 $2.45 $2.28 coal generation to renewables Growth target incorporates equity needs and maintains solid investment grade credit metrics 2020 2021 2022 Guidance 2023 Guidance PNMResources® (1) Compound annual growth rate calculated from 2020 base period of $2.28 ources 8#9Financing Plans Long-term Debt Maturities (in millions) $828 $1,000 $1,401 $80 $180 $185 $125 2022 2023 2024 2025 and Beyond PNM TNMP Corporate €$ $ Up to $200 million equity financing over 2022- 2023 to support capital investments and maintain investment-grade credit metrics Future debt issuances to fund capital investments at PNM and TNMP, including securitization bonds at PNM: • $361 million San Juan securitization bonds • $290 million Four Corners securitization bonds Corporate financing will be addressed in 2022 2023 corporate debt will be refinanced to diversify the company's maturity exposure while keeping flexibility to allow for early repayment Moody's Rating/Outlook S&P Rating/Outlook PNM Resources Baa3(1)/ Stable BBB-(1)/ Positive PNM TNMP Baa2(1) / Stable A2 (2) / Stable BBB (1) / Positive A(2) / Positive (1) Senior unsecured rating (2) Senior secured rating PNM Resources FFO-to-Debt is maintained within Moody's Baa investment grade target range of 13% to 22% PNM②Resources 9#102022 Dividend Increase and Payout Ratio • Board of Directors increased the common dividend by $0.08 to $0.3475 per quarter ● Annual dividend targets middle of a 50%-60% payout ratio range $2.55 $2.45 $2.28 $2.16 Indicated annual rate of $1.39 per share represents 6.1% $2.00 increase $1.06 $1.16 Dec '18 $1.23 Dec '19 $1.31 Dec '20 $1.39 Feb '22 . Board to address dividend again in December 2022 Dec '17 53% 54% 54% payout payout payout 54% payout 55% payout Dividends continue until close of merger 2018 2019 2020 2021 2022E transaction I Actual Ongoing EPS I Indicated Annual Dividend Midpoint Earnings Guidance PNM@Resources 10#11Pending 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 Strategic Rationale • • • . • Benefits of scale, regulatory diversity and improved credit profile Strong ESG focus with a global and national leader Commitment to maintaining local control of utilities, following through on clean energy commitments, support for economic development and community giving New Mexico Supreme Court Appeal and Process . Commission rejection of the stipulation agreement is not supported by the evidentiary record - Statement of Issues filed February 2 Supreme Court appeal is next step in path forward to close the merger No statutory timeframe, we expect a ~12- to 18-month process Schedule of appeal filings: • 45 days for PNM/AVANGRID to file brief - filed April 7, 2022 • 45 days for NMPRC to file answer brief - due June 13, 2022 AVANGRID PNM@Resources 20 days for PNM/AVANGRID to file response brief - due early July 2022 • Oral arguments at court's discretion PNM@Resources 11#12PNM PNM@Resources®#13PNM 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% equity ratio Investment plans focused on T&D infrastructure to support clean energy transition and meet growing customer needs Forecasted retail load growth driven by economic expansion ■ Retail load growth driven by expansion of 2022E 2023E existing Industrial customers in 2022 and 2023 ■ Residential and Commercial load largely returns to pre-COVID levels in 2022 Total Retail Load (1) 2% -3% 2% -3% PNM Avg. Customers ~1% ~1% Wholesale Transmission Operations • • Transmission service across PNM's system, long-term contracts or short-term network demand, regulated by FERC Formula rate recovery with annual true-up provides more timely recovery of system investments utilizing authorized 10% authorized return on equity and ~50% equity structure Western Spirit acquisition adds $0.17-$0.18 EPS in 2022 $285M acquisition of transmission line and related facilities recovered through long-term contract beginning December 2021 (1) Weather normalized, excludes Economy customers PNM②Resources 13#14NMPRC Move to Appointed Commissioners Current Commission comprised of 5 elected officials representing geographic districts NMPRC Districts and PNM Service Areas Farmington Rio Arriba Taos Colfax San Juan District 3 District 4 McKinley Los Alamos Sandoval District Name Party District 1 Cynthia Hall, Vice Chairman Democrat District 2 Jefferson Byrd Republican Gallup District 3 Joseph Maestas, Chairman Democrat District 4 Theresa Becenti-Aguilar Democrat District 5 Stephen Fischmann Democrat Catron Cibola Raton Union Mora Harding Santa Fe Las Vegas Santa Fe San Miguel Cleyton Rio Rancho Albuquerque -District 1 Quay Bernalillo Guadalupe Valencia District 5 Silver City Grant New Mexico passed a constitutional amendment to move to a 3-member, appointed Commission beginning January 1, 2023 7-member Nominating Committee (defined by legislature) to present list of candidates for current Governor selection in 2022 Lordsburg Hidalgo Candidates must meet education/experience requirements No more than 2 commissioners from same political party 6-year staggered terms Torrance District 2 Curry Clovis DeBaca Socorro Lincoln Ruidoso Roswell Chaves Sierra Alamogordo Otero Doña Ana Deming Las Cruces Luna Eddy Carlsbad Roosevelt PRC District 1 2 3 4 5 PNM Service Areas PNM②Resources 14 Lea Hobbs 3-2015#15FERC PNM NMPRC PNM Regulatory Agenda Filing Merger transaction approval Four Corners Power Plant Abandonment/ Securitization Palo Verde Leased Capacity Abandonment/ Replacement San Juan Units 1 and 4 Abandonment/ Securitization 2020 Integrated Resource Plan Decoupling Filing Action NMPRC issued order denying stipulation on Dec. 8, 2021; PNM filed appeal with NM Supreme Court, PNM/AVANGRID Brief filed April 7, 2022 NMPRC issued order denying application on Dec. 15, 2021; PNM filed appeal with NM Supreme Court, PNM Brief filed Mar. 24, 2022 Abandonment Order deemed not necessary; Case bifurcated, NMPRC issued limited order approving replacement power Feb 16, 2022; monthly replacement resource updates being filed PNM filed Feb. 17, 2022 to extend Unit 4 operations until Sept. 30, 2022; approval deemed not necessary Procedural schedule established in response to Joint Motion for Order to Show Cause and Enforce Financing Order and Supporting Brief Staff filed recommendation to accept plan on Nov. 12, 2021; Order requiring notice of material event and update to IRP issued Apr. 6, 2022 Declaratory Order issued Apr. 27, 2022 limiting rate adjustment mechanism to energy efficiency savings Section 206 Show Cause Order issued Apr. 21, 2022 regarding formula rate Investigation protocols for transparency of information exchange Timing NMPRC answer brief due June 13, 2022, no statutory timeframe for appeal, expect a ~12- to 18-month process NMPRC answer brief due by May 12, 2022, no statutory timeframe for appeal Separate order on remaining issues, Docket No. S-1-SC-39152 S-1-SC-39138 21-00215-UT including RFP and replacement resource modeling, to be issued following completion 21-00083-UT of procedural schedule Bi-weekly meetings with stakeholders and monthly filings updating status Decision expected by June 30, 2022 19-00195-UT 20-00182-UT 19-00018-UT Notice and update filed April 27, 2022; Pending NMPRC order 21-00033-UT PNM evaluating next steps Response due June 20, 2022 20-00121-UT EL22-40-000 PNMResourc ources® 15#16. . 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 Previous: 20% renewables by 2020 • • Current: • 40% renewables by 2025 . 50% renewables by 2030 80% renewables by 2040 • 100% carbon-free by 2045 2025 40% Renewables 2030 50% Renewables 2045 2040 80% Renewables 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 PNM②Resources 16 100% Carbon-Free#17Executing the Energy Transition Act Our Goal: Carbon-Free by 2040 (5 years earlier) Step 1: Exit coal generation • Retire San Juan Generating Station: Reduction of MW Coal Capacity 983 22% reduction Retired Units 2 and 3 in 2017 (221 MWs); Retirement of Units 1 and 4 in 2022 (562 MWs) 2021 Renewables Coal Renewables 31% 24% 2022 Coal 7% 2015 2020 762 80% reduction Coal- 200 free 2025 2031 41% Natural Nuclear Natural 13% Gas 32% Storage Nuclear 13% Gas 33% Emission Reduction Goals: 2025 2035 2040 6% MW Capacity CO2 60% 80% 100% • Exit Four Corners Coal Plant: NOX 70% 90% 100% SO2 90% 100% 100% Exit from ownership participation no later than expiration of existing agreements in 2031 (200 MWs) Step 2: Eliminate natural gas generation emissions by 2040 • Exit from Valencia gas plant in 2028 (158 MWs) • Transform existing and transitional gas plants to carbon-free capacity Step 3: Actively pursue the development of carbon-free Freshwater Reduction Goals: 2025 2035 2040 Freshwater 70% 80% 90% PNM-owned facilities, as reported to EPA, compared to 2005 levels replacement power alternatives to reach 100%, including renewable/storage combinations, transitional gas, regional market participation, next-generation battery, pumped hydro, emissions-free combustion turbines through hydrogen or other clean fuels, emerging technologies PNMResour Resources 17#18• 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% 20% Coal Capacity Retirements 2020 - 2040 40% 50% 762 MW 200 MW 200 MW 0 MW 2020 2025 2030 2040 PNMResources □ Coal Capacity Renewable Portfolio Standard 18#19PNM Bills Remain Below National and Regional Averages Customer bill impacts of increased investments are mitigated by: Load growth reduces per-customer cost of new investments • Energy Imbalance Market and renewable investments result in lower fuel costs • Retirement/exit from coal plants and securitization results in lower base rates Pacific Gas & Electric Co. (CA) Arizona Public Service Co (AZ) United States Average Southern California Edison Co (CA) PacifiCorp (CA) Nevada Power Co (NV) Southwestern Public Service Co (TX) Western Region San Diego Gas & Electric Co (CA) Black Hills Colorado Electric, LLC (CO) Portland General Electric Co (OR) Idaho Power Co (OR) Tucson Electric Power Co (AZ) PacifiCorp (WA) Southwestern Public Service Co (NM) Puget Sound Energy Inc (WA) PacifiCorp (OR) UNS Electric, Inc (AZ) Idaho Power Co (ID) Montana-Dakota Utilities Co (WY) PacifiCorp (ID) Avista Corp (WA) Cheyenne Light Fuel & Power (WY) Avista Corp (ID) NorthWestern Energy LLC - (MT) (MT) Montana-Dakota Utilities Co (MT) El Paso Electric Co (TX) Public Service Co of NM (NM) El Paso Electric Co (NM) PacifiCorp (UT) PacifiCorp (WY) Public Service Co of Colorado (CO) Sierra Pacific Power Co (NV) Comparison of Average Residential Bills Western Region Average Bills by Utility $84.92 - PNM ]$150.51 $122.21 Current US Avg - $111.85 Current Regional Avg (1) Based on U.S. Energy Information Administration's Residential Rate increases through October 2021 $77.55 $50 $100 $150 PNM Resour sources 19#20• 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 increased short-term network transmission rates New renewable development requires FERC wholesale transmission rate base investment Wind Resource of the United States Annual Average Wind Speed at 100 Meters above Surface Level Minnesota Michigan Colomia Missouri Kentucky Alaska Cuvortly available CANADA € 3000 Parc Oce NoDa Oncoth Asalkble Arkansas Louisara Virginitis-S Alabama Georgia Mi papi När Carulla South Carolina About the late Thedale shown are avenge wird speech bow afreleve, nerved fan madeled estures:inat:s deve apa by NFC. Curely, Jela fur Alaska and Hawai For no informatio WndSpocd (ieters/enc 9.0 to 3.9 8.0 to 1.9 7.0 to 7.9 6.0 6.9 5.0 to 5.9 1.0 to 1.9 5.010 5.9 <30 ttps://www.rel.gov/vind-toolkal NREL IONAL NEMALE ENERGY LIGATORY Bily Roberts, September 18, 201 Flonds Hawaii 1ot available quit of Mexico Calford Aladka Washington Alex CANADA Global Horizontal Solar Irradiance National Solar Radiation Database Physical Solar Model North Dakota Alontanal Minnesota Wisconsin South Dakota woning exico Hawall lowa Nebraska Kansas Missouri Allchigan New York Pennsylvania Ohi Illinois Indiana West Virginia Myisia- Kentucky Tennessee Oklahoma Arkansas Louisara • active PNM $285 million acquisition of Western Spirit transmission line and related facilities to provide transmission service for approximately 800 MW of new wind generation in eastern New Mexico beginning December 2021, recovered through FERC wholesale transmission rates Alabama Georgia Missippi 130 Nur Carolina South Carolina, About the lata Honda Mane Atlantic Onc This map provides annual average day tot solar resourc 25.75 5.50 to 5.75 5.25 to 5.50 using 1994-2:16dala 5.00 to 5.25 (PSM); veri 4.25 5.00 0.000- laude 4.50 In 4.75 by 0.038-cla 1.25 to 1.50 langitude nominally For more information, it Hipsallure.gov Email us at nardo nel gov 1.00 to 1.25 4.00 NREL NATIONAL RENEWAa.ccm Rily I Robes Sc February 22, 201 PNMResourc ources® 20#21TNMP PNM②Resources®#22TNMP 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- annual recovery of transmission investments and annual recovery of distribution investments; current authorized ROE of 9.65% and 45% equity ratio Consistent growth in TNMP service territory டுப் ■ Volumetric load growth consistent with customer growth in 2022 and 2023 Demand-based growth in 2022 and 2023 incorporates new service requests 2023E 2022E Volumetric Load (1) Demand-Based Load (2) TNMP Avg. End Users 1% - 2% 1% - 2% 2.5% - 3.5% 2.5% - 3.5% ~1.5% ~1.5% Low-risk revenue profile $ ■ Transmission investment and expense recovery (~50% of revenues) trued up twice per year Distribution investment recovery trued up annually Majority of demand-based bills based on greater of peak monthly usage, or 80% of previous 11 months peak, increasing revenue stability (1) Primarily Residential per-kwh billings, weather-normalized (2) Commercial and Industrial per-kw monthly peak billings, weather-normalized; excludes retail Transmission customers PNM②Resources 22#23PUCT 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, 2025 Republican Vacant Sept. 1, 2025 Commissioners are appointed by the Governor of Texas and confirmed by the Senate for 6-year staggered terms (1) Commissioner Cobos was re-appointed by Governor Abbott in 2021 but has not yet been confirmed by the Senate TNMP Regulatory Agenda Filing Action Timing Docket No. TCOS Filing Filed January 26, 2022 (first 2022 filing) DCOS Filing Filed April 5, 2022 TCOS Filing Expected to be filed in July 2022 Approved and implemented March 25, 2022 Expected to be implemented Sept. 2022 Expected to be implemented Sept. 2022 53146 53436 TBD (second 2022 filing) PNM Resour ources® 23#24TNMP Rate Recovery Framework Process General Rate Review Standard rate review involving comprehensive filing, discovery, interveners, hearings, etc.; Staff recommendation and PUCT approval; 180-day clock (potential for settlement) Yes DCOS (Distribution Cost of Service) Pre-defined schedules limited to distribution investments with discovery, interveners, hearings; Staff recommendation and PUCT approval; filed 1st week of April with rates implemented Sept 1 (potential for settlement) No TCOS (Transmission Cost of Service) Pre-defined schedules; Staff recommendation and PUCT approval, 60-day clock No Capital Structure / ROE/Cost of Debt Rate Base/ Property Yes Tax/Depreciation Other expenses Yes Timing (allowed) Current TNMP Filings PUCT defined (1) Historical: filed May 2018 (test year of FY 2017), approved December 2018, rates implemented January 2019: 9.65% ROE, 45% Equity Distribution only No Once per year 2021 Filings: Filed Apr 5, 2021, settlement approved 98% of requested recovery, rates implemented Sept 1, 2021 2022 Filings: Filed Apr 5, 2022 Transmission only No Twice per year 2022 Filings: 1) Jan 2022 filing, approved/ implemented in Mar 2022 2) Expected July filing, with rates expected to be implemented in September (1) PUCT rule calls for general rate review within 48 months of most recent order setting rates (TNMP order issued December 2018), unless earning less than 50 basis points over the average authorized ROE of ERCOT investor-owned utilities (based on year-end rate base, weather-normalized). PNMResources 24#25TNMP Infrastructure Investment Investment driven by Economic Growth • • Rapid demand-based load growth over recent years in the Commercial and Industrial classes drives need for increased electrification and reliability / system upgrade investments System-wide transmission investments coordinated within ERCOT regional planning groups $ Millions TNMP Annual Investment Plan Historical Growth $425 $160 $90 $40 • Texas continues to be one of the fastest-growing economies in the nation 2007 2012 2017 2022 • Home to 49 Fortune 500 corporate headquarters Top-ranked state (1) for investment trends in infrastructure projects and corporate end-user facility projects Diverse service territory mitigates industry risk " North/Central Texas: adjacent to Dallas/Fort Worth, TNMP load profile split between Residential and Commercial customers Gulf Coast: regional economy driven by oil refining and petrochemical industries, ~60% of TNMP revenues in this region from Residential customers West Texas: driven by oil & gas, ~50% retail transmission customers (transmission cost recovery trued up twice per year) TNMP Revenues by Region North/ ° Amarillo Central TX ~35% West Texas ~15% El Paso TNMP Service Area Dallas Austin Houston San Antonio * Gulf Coast ~50% (1) Global Groundwork Index published by Site Selection Magazine, 2021 PNMResour sources 25#26Appendix#27AVANGRID and PNM Resources Strategic Merger Approvals Filing Merger agreement extended to April 2023 Proxy filing / Shareholder approval Department of Justice (Hart-Scott- Rodino Clearance) (1) Committee on Foreign Investment in the United States (CFIUS) Federal Communications Commission (1) Date Filed Docket No. 1/5/2021 N/A 12/21/2020 20210767 Approvals/Clearances Approved 2/12/2021 Waiting period expired 1/20/2021 12/11/2020 20-191 Clearance received 2/01/2021 1/25/2021 PNM: 0009366813 TNMP: 0009366682 Approved 3/11/2021 Federal Energy Regulatory 11/23/2020 EC21-25-000 Approved 4/20/2021 Commission (FERC) Nuclear Regulatory Commission (1) 12/2/2020 STN 50-528, 50-529 and 50-530 Approved 5/25/2021 Public Utility Commission of Texas (PUCT) 11/23/2020 51547 New Mexico Public Regulation Commission (NMPRC) 11/23/2020 20-00222-UT Approved 5/6/2021 Denied 12/8/2021, appeal filed with New Mexico Supreme Court 1/3/2022, estimated 12-18 month appeal process (1) Additional filing/extension necessary for merger extension KKKK PNM@Resources® 27#28New 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 financing order was: . • . Contrary to the ETA's language for considering replacement resources and allowing a subsequent case for new resources, and therefore also not sufficient for failing to issue a financing order Unsupported by a determination of public convenience and necessity of the plant, or application of other statutory standards (including net public benefit / no net detriment tests) Inconsistent with the record containing uncontested substantial evidence on adequate potential new resources and acknowledgment of the status of PNM's competitive bid process The determination for further prudency review was: Contrary to the ETA language authorizing recovery of defined undepreciated investments • • . Unresponsive to PNM's legal arguments on litigating prudence for investments already included in rates Contrary to the NMPRC Feb. 2021 order to decide prudence during the current case Unsupported by the case record's calling for evidence on this issue and inclusion of evidence and expert testimony on the issue • The decision was based on inadmissible hearsay evidence and information outside the evidentiary record Examples: written testimony of a witness that was not present for cross examination; public comment and letters to Commissioners that are not evidence; audit materials relating to a non-jurisdictional utility that had no proper foundation; investigative materials from a foreign jurisdiction with a presumption whereby the Commission presumed guilt; and an accusation of an attorney conflict of interest that this Court's Disciplinary Board rejected as unsubstantiated The determination of "public interest" was based on imposing arbitrary standards, improperly weighing benefits and risks, and ignoring the weight of the admissible evidence • Stipulation provided unprecedented benefits, weighed against perceived risks or fears (as opposed to real risks supported in the record) that were contrary to stipulated commitments The handling of matters concerning Avangrid's responses in the discovery process violates due process and was unsupported by the record. PNMResources 28#29PNM Near Term Resource Portfolio Changes 2022 • Retirement of SJGS Units 1 and 4 (562 MW) • 650 MW solar and 300 MW storage approved by NMPRC 2023 • Return of PV Leases (104 MW) 450 MW solar and 290 MW storage approved 2024 • Return of PV Lease (10 MW) • Proposed exit of FC (200 MW) • Assumes ~100 MW solar and ~150 MW of battery • • • San Juan Generating Station (SJGS) Replacement resource developers have provided notice to PNM of inability to meet 2022 in-service date PNM has secured firm commitments for 140 MW in 2022 In February 2022, PNM announced plan to keep Unit 4 open three additional months to meet summer peak demand; NMPRC deemed no approval required . Palo Verde Generating Station (PV) Approval issued later than PNM requested, which provides minimal time for new resources to come online • PNM is currently evaluating options to ensure summer 2023 peak demand can be met • Four Corners Power Plant (FC) PNM filed for abandonment of FC but deferred filing of replacement resources based on SJGS case precedent NMPRC denied abandonment and PNM has appealed to Supreme Court Replacement resource to be selected and filed with the NMPRC PNMResources 29#30San 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) 4 507 392 77.3% Los Alamos County 7.2% (36.5 MW) City of Farmington 8.5% (43 MW) Utah Associated Municipal Power Systems (UAMPS) 7.0% (35.5 MW) Total 847 562 Abandonment, Securitization and Replacement Power . ⚫ July 1, 2019: PNM filed for abandonment, securitization and replacement after existing participation agreement · and coal supply contracts ended on June 30, 2022 ⚫ January 2020: NM Supreme Court confirmed applicability of Energy Transition Act to PNM's application • Case bifurcated: Abandonment/Securitization approved April 1, 2020, order selecting 950 MW PPA/ESA replacement resources issued July 29, 2020, with final contracts negotiated subsequently • During 2021, each PPA/ESA developer provided notice of inability to meet June 30, 2022 in-service date PNM filed on February 17, 2022 for variance to keep Unit 4 open until September 30, 2022 in response to resource adequacy issues; NMPRC deemed approval not necessary Securitization reduces customer financing costs, supports impacted workers and communities $283M undepreciated investment 29M decommissioning costs 20M job training and severance costs 20M economic development funds 9M financing costs $361M total securitization PNMResources 30#31Four Corners Coal Plant Ownership and Proposed Exit Unit Total MW PNM MW PNM Ownership 4 770 100 13% 5 770 100 13% Total 1,540 200 Other Participants/Ownership Arizona Public Service Company 63% (485 MW) Navajo Transitional Energy Company 7% (54 MW) Salt River Project 10% (77 MW) Tucson Electric Power 7% (54 MW) Arizona Public Service Company 63% (485 MW) Navajo Transitional Energy Company 7% (54 MW) Salt River Project 10% (77 MW) Tucson Electric Power 7% (54 MW) Abandonment and Securitization • . January 18, 2021: PNM filed for abandonment and securitization (replacement deferred based on NMPRC San Juan proceeding precedent) . $75 million shareholder payment to relieve remaining PNM obligation under coal contract (2031 expiration) March 15, 2021: Amended filing to incorporate sale of ownership and prudency of investments • December 15, 2021: NMPRC Order denying sale, abandonment and securitization • December 22, 2021: PNM files appeal at New Mexico Supreme Court Securitization reduces customer financing costs, supports impacted workers and communities $271M undepreciated investment 5M decommissioning costs 17M economic development funds 7M financing costs $300M total securitization PNM②Resources 31#32Palo Verde Nuclear Generating Station Ownership and Leases MW Owned vs Leased Unit 1 Unit 2 Unit 3 Owned Leased 2.3% 7.9% 30 MW Owned 9.5% 124 MW Owned 10.2% 134 MW 104 MW Leased Total 10.2% 134 MW Total 0.7% 10.2% 10 MW 134 MW Leased 0% 0 MW Total 10.2% 134 MW Yearly Payment Amounts ■ Total PV Unit 1 - $16.5M ■ Total PV Unit 2 - $1.6M Lease Expiration and Replacement ⚫ June 11, 2020: PNM gave irrevocable notice to return leased assets upon expiration of the extended leases on January 15, 2023 (Unit 1) and January 15, 2021 (Unit 2) • April 2, 2021: PNM filed for abandonment and replacement of leased capacity • 450 MW solar PPA, 290 MW storage ESA ⚫ August 25, 2021: NMPRC deemed abandonment previously approved • February 16, 2022: NMPRC approved proposed replacement power PNMResources 32#33Debt Balances (In millions) Dec. 31, 2021 Mar. 31, 2022 Long-Term Debt (incl. current portion) (1) PNM TNMP Corporate/Other Consolidated Total Debt (incl. short-term) (1,2) PNM TNMP Corporate/Other Consolidated (1) Net of unamortized debt issuance costs, premiums and discounts (2) Excludes intercompany debt $1,881.1 $1,881.6 918.1 918.0 899.7 999.9 $3,698.9 $3,799.5 $1,888.5 $1,886.3 918.5 993.0 954.6 1,006.2 $3,761.6 $3,885.5 PNMResources 33