10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Name of Registrant, State of Incorporation, Address Of Principal Executive Offices, Telephone Number, Commission File No., IRS Employer Identification No.

PNM Resources, Inc.

(A New Mexico Corporation)

414 Silver Ave. SW

Albuquerque, New Mexico 87102-3289

Telephone Number - (505) 241-2700

Commission File No. - 001-32462

IRS Employer Identification No. - 85-0468296

Public Service Company of New Mexico

(A New Mexico Corporation)

414 Silver Ave. SW

Albuquerque, New Mexico 87102-3289

Telephone Number - (505) 241-2700

Commission File No. - 001-06986

IRS Employer Identification No. - 85-0019030

Texas-New Mexico Power Company

(A Texas Corporation)

577 N. Garden Ridge Blvd.

Lewisville, Texas 75067

Telephone Number - (972) 420-4189

Commission File No. - 002-97230

IRS Employer Identification No. - 75-0204070

Securities registered pursuant to Section 12(b) of the Act:

Registrant	Title of each class	Trading Symbol(s)	Name of exchange on which registered
PNM Resources, Inc.	Common Stock, no par value	PNM	New York Stock Exchange

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

PNM Resources, Inc. (“PNMR”)	Yes	☑	No	☐
Public Service Company of New Mexico (“PNM”)	Yes	☑	No	☐
Texas-New Mexico Power Company (“TNMP”)	Yes	☐	No	☑

(NOTE: As a voluntary filer, not subject to the filing requirements, TNMP filed all reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.)

Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

PNMR	Yes	☑	No	☐
PNM	Yes	☑	No	☐
TNMP	Yes	☑	No	☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer		Accelerated filer		Non-accelerated filer		Smaller reporting company		Emerging growth company
PNMR		☑		☐		☐		☐		☐
	Large accelerated filer		Accelerated filer		Non-accelerated filer		Smaller reporting company		Emerging growth company
PNM		☐		☐		☑		☐		☐
	Large accelerated filer		Accelerated filer		Non-accelerated filer		Smaller reporting company		Emerging growth company
TNMP		☐		☐		☑		☐		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether any of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☑

As of April 26, 2024, 90,200,384 shares of common stock, no par value per share, of PNMR were outstanding.

The total number of shares of common stock of PNM, no par value per share, outstanding as of April 26, 2024, was 39,117,799 all held by PNMR (and none held by non-affiliates).

The total number of shares of common stock of TNMP, $10 par value per share, outstanding as of April 26, 2024, was 6,358 all held indirectly by PNMR (and none held by non-affiliates).

PNM AND TNMP MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H) (1) (a) AND (b) OF FORM 10-Q AND ARE THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTION (H) (2).

This combined Form 10-Q is separately filed by PNMR, PNM, and TNMP.  Information contained herein relating to any individual registrant is filed by such registrant on its own behalf.  Each registrant makes no representation as to information relating to the other registrants.  When this Form 10-Q is incorporated by reference into any filing with the SEC made by PNMR, PNM, or TNMP, as a registrant, the portions of this Form 10-Q that relate to each other registrant are not incorporated by reference therein.

2

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

INDEX

	Page No.
GLOSSARY	4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
PNM RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings	8
Condensed Consolidated Statements of Comprehensive Income	9
Condensed Consolidated Statements of Cash Flows	10
Condensed Consolidated Balance Sheets	12
Condensed Consolidated Statements of Changes in Equity	14
PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings	15
Condensed Consolidated Statements of Comprehensive Income	16
Condensed Consolidated Statements of Cash Flows	17
Condensed Consolidated Balance Sheets	19
Condensed Consolidated Statements of Changes in Equity	21
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings	22
Condensed Consolidated Statements of Cash Flows	23
Condensed Consolidated Balance Sheets	24
Condensed Consolidated Statements of Changes in Common Stockholder’s Equity	26
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	27
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	70
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	99
ITEM 4. CONTROLS AND PROCEDURES	101
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	101
ITEM 1A. RISK FACTORS	102
ITEM 5. OTHER INFORMATION	102
ITEM 6. EXHIBITS	102
SIGNATURE	104

3

GLOSSARY

Definitions:
2023 Forward Sale Agreements	PNMR’s forward sale agreements under the PNMR 2022 ATM Program
2024 Rate Change	PNM’s request for a general increase in electric rates filed with the NMPRC on December 5, 2022 using a calendar year 2024 FTY
2025 Rate Change	PNM’s request for a general increased in electric rates expected to be filed with the NMPRC on or before June 14, 2024 using a FTY beginning July 1, 2025
2026 Resource Application	PNM’s October 25, 2023 application with the NMPRC seeking approval of resources to be available for the 2026 summer peak
ABCWUA	Albuquerque Bernalillo County Water Utility Authority
ACE Rule	Affordable Clean Energy Rule
AEP OnSite Partners	AEP OnSite Partners, LLC, a subsidiary of American Electric Power, Inc.
AFUDC	Allowance for Funds Used During Construction
AMI	Advanced Metering Infrastructure
AMS	Advanced Meter System
AOCI	Accumulated Other Comprehensive Income
APS	Arizona Public Service Company, the operator and a co-owner of PVNGS and Four Corners
ARO	Asset Retirement Obligation
ARP	Alternative Revenue Program
ASU	Accounting Standards Update
Avangrid	Avangrid, Inc., a New York corporation
BART	Best Available Retrofit Technology
Board	Board of Directors of PNMR
BSER	Best system of emission reduction technology
CAA	Clean Air Act
CAISO	California Independent System Operator
CCN	Certificate of Convenience and Necessity
CCR	Coal Combustion Residuals
CCS	Carbon Capture and Storage/Sequestration
CIAC	Contributions in Aid of Construction
CO2	Carbon Dioxide
CSA	Coal Supply Agreement
CWIP	Construction Work in Progress
DC Circuit	United States Court of Appeals for the District of Columbia Circuit
DCRF	TNMP’s applications for a distribution cost recovery factor
DOE	United States Department of Energy
EGU	Electric Generating Unit
EIM	Western Energy Imbalance Market developed and operated by CAISO
ELG	Effluent Limitation Guidelines
Energy Transition Charge(s)	Rate rider established to collect non-bypassable customer charges for repayment of the Securitized Bonds
EPA	United States Environmental Protection Agency
ERCOT	Electric Reliability Council of Texas
ESG	Environmental, Social, and Governance principles
ETA	The New Mexico Energy Transition Act
ETBC I	PNM Energy Transition Bond Company I, LLC, formed on August 25, 2023
EUEA	The New Mexico Efficient Use of Energy Act
Exchange Act	Securities Exchange Act of 1934
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FMB	First Mortgage Bond
Four Corners	Four Corners Power Plant
Four Corners Abandonment Application	PNM’s January 8, 2021 application for approval for the abandonment of Four Corners and issuance of a securitized financing order
Four Corners CSA	Four Corners’ coal supply contract with NTEC
Four Corners Purchase and Sale Agreement	PNM’s pending sale of its 13% ownership interest in Four Corners to NTEC
FPPAC	Fuel and Purchased Power Adjustment Clause
FTY	Future Test Year

4

GAAP	Generally Accepted Accounting Principles in the United States of America
GHG	Greenhouse Gas Emissions
Grid Modernization Application	PNM’s October 3, 2022 application for approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy
GWh	Gigawatt hours
Iberdrola	Iberdrola, S.A., a corporation organized under the laws of the Kingdom of Spain, and 81.5% owner of Avangrid
INDC	Intended Nationally Determined Contribution
IRA	Inflation Reduction Act
IRP	Integrated Resource Plan
IRS	Internal Revenue Service
kV	Kilovolt
KW	Kilowatt
KWh	Kilowatt Hour
La Joya Wind II	La Joya Wind Facility generating 140 MW of output that became operational in June 2021
La Luz	La Luz Generating Station
Leased Interest	Leased capacity in PVNGS Unit 1 and Unit 2
Lightning Dock Geothermal	Lightning Dock geothermal power facility, also known as the Dale Burgett Geothermal Plant
Luna	Luna Energy Facility
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Merger	The merger of Merger Sub with and into PNMR pursuant to the Merger Agreement, with PNMR surviving the Merger as a direct, wholly-owned subsidiary of Avangrid
Merger Agreement	The Agreement and Plan of Merger, dated October 20, 2020, between PNMR, Avangrid and Merger Sub, as amended by the amendments to the Merger Agreement dated January 3, 2022, April 12, 2023, and June 19, 2023. Subsequently terminated December 31, 2023.
Merger Sub	NM Green Holdings, Inc., a New Mexico corporation and wholly-owned subsidiary of Avangrid which will merge with and into PNMR at the effective time of the Merger
Meta	Meta Platform, Inc., formerly known as Facebook Inc.
MMBTU	Million British Thermal Units
Moody’s	Moody’s Investor Services, Inc.
MW	Megawatt
MWh	Megawatt Hour
NAAQS	National Ambient Air Quality Standards
NDT	Nuclear Decommissioning Trusts for PVNGS
NEE	New Energy Economy
New Mexico Wind	New Mexico Wind Energy Center
NM 2015 Rate Case	Request for a General Increase in Electric Rates Filed by PNM on August 27, 2015
NM 2016 Rate Case	Request for a General Increase in Electric Rates Filed by PNM on December 7, 2016
NM Supreme Court	New Mexico Supreme Court
NMED	New Mexico Environment Department
NMMMD	The Mining and Minerals Division of the New Mexico Energy, Minerals and Natural Resources Department
NMPRC	New Mexico Public Regulation Commission
NMRD	NM Renewable Development, LLC, owned 50% each by PNMR Development and AEP OnSite Partners, LLC
NOx	Nitrogen Oxides
NPDES	National Pollutant Discharge Elimination System
NTEC	Navajo Transitional Energy Company, LLC, an entity owned by the Navajo Nation
OCI	Other Comprehensive Income
OPEB	Other Post-Employment Benefits
OSM	United States Office of Surface Mining Reclamation and Enforcement
Paris Agreement	A legally binding international treaty on climate change adopted on December 12, 2015
Pattern Wind	Pattern New Mexico Wind, LLC, an affiliate of Western Spirit and Pattern Development
PCRBs	Pollution Control Revenue Bonds
PM	Particulate Matter
PNM	Public Service Company of New Mexico and Subsidiaries
PNM New Mexico Credit Facility	PNM’s $40.0 million Unsecured Revolving Credit Facility
PNM 2023 Note Purchase Agreement	PNM’s agreement for sale of PNM’s 2023 SUNs

5

PNM 2023 SUNs	PNM’s $200.0 million Senior Unsecured Notes issued on April 28, 2023
PNM Revolving Credit Facility	PNM’s $400.0 million Unsecured Revolving Credit Facility
PNMR	PNM Resources, Inc. and Subsidiaries
PNMR 2021 Delayed-Draw Term Loan	PNMR’s $1.0 billion Unsecured Delayed-Draw Term Loan that matures on May 18, 2025
PNMR 2022 ATM Program	PNMR’s distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $200.0 million of its common stock, no par value, through the sales agents
PNMR 2023 Term Loan	PNMR’s $500.0 million term loan that matures on June 30, 2026
PNMR Development	PNMR Development and Management Company, an unregulated wholly-owned subsidiary of PNMR
PNMR Revolving Credit Facility	PNMR’s $300.0 million Unsecured Revolving Credit Facility
PPA	Power Purchase Agreement
PSPS Plan	PNM’s Public Safety Power Shutoff Plan filed with the NMPRC on May 1, 2024
PUCT	Public Utility Commission of Texas
PV	Photovoltaic
PVNGS	Palo Verde Nuclear Generating Station
PVNGS Leased Interest Abandonment Application	Application with the NMPRC requesting approval for the decertification and abandonment of 114MW of leased PVNGS capacity
RD	Recommended Decision
REA	New Mexico’s Renewable Energy Act of 2004
RECs	Renewable Energy Certificates
Red Mesa Wind	Red Mesa Wind Energy Center
REP	Retail Electricity Provider
Rio Bravo	Rio Bravo Generating Station, formerly known as Delta
ROE	Return on Equity
RPS	Renewable Energy Portfolio Standard
S&P	Standard and Poor’s Ratings Services
SEC	United States Securities and Exchange Commission
Securitized Bonds	Energy transition bonds
SIP	State Implementation Plan
SJCC	San Juan Coal Company
SJGS	San Juan Generating Station
SJGS Abandonment Application	PNM’s July 1, 2019 consolidated application seeking NMPRC approval to retire PNM’s share of SJGS in 2022, for related replacement generating resources, and for the issuance of Securitized Bonds under the ETA
SJGS CSA	San Juan Generating Station Coal Supply Agreement
SO2	Sulfur Dioxide
SOFR	Secured Overnight Financing Rate
SRP	Salt River Project
SUNs	Senior Unsecured Notes
Tax Act	Federal tax reform legislation enacted on December 22, 2017, commonly referred to as the Tax Cuts and Jobs Act
TCOS	Transmission Cost of Service
TECA	Texas Electric Choice Act
TEP	Transportation Electrification Program
TNMP	Texas-New Mexico Power Company and Subsidiaries
TNMP 2018 Rate Case	TNMP’s General Rate Case Application filed on May 30, 2018
TNMP 2023 Bonds	TNMP’s First Mortgage Bonds to be issued under the TNMP 2023 Bond Purchase Agreement
TNMP 2023 Bond Purchase Agreement	TNMP’s Agreement for the sale of an aggregate $185.0 million of TNMP’s 2023 Bonds
TNMP 2024 Bonds	TNMP’s First Mortgage Bonds to be issued under the TNMP 2024 Bond Purchase Agreement
TNMP 2024 Bond Purchase Agreement	TNMP’s Agreement for the sale of an aggregate $285.0 million of TNMP’s 2024 Bonds
TNMP Revolving Credit Facility	TNMP’s $75.0 million Secured Revolving Credit Facility ($100.0 million as of May 13, 2022)
TOD	Time of Day
U.S.	The Unites States of America

6

US Supreme Court	United States Supreme Court
Valencia	Valencia Energy Facility
VIE	Variable Interest Entity
Western Spirit Line	An approximately 150-mile 345-kV transmission line that PNM purchased in December 2021
Westmoreland	Westmoreland Coal Company
WFB LOC Facility	Letter of credit arrangements with Wells Fargo Bank, N.A., entered into in August 2020
WMP	PNM’s Wildfire Mitigation Plan filed with the NMPRC on May 1, 2024
WRA	Western Resource Advocates
WSJ LLC	Westmoreland San Juan, LLC, a subsidiary of Westmoreland Mining Holdings, LLC, and current owner of SJCC

7

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands, except per share amounts)
Electric Operating Revenues	$	436,877	$	544,077
Operating Expenses:
Cost of energy	132,304		241,686
Administrative and general	55,427		55,110
Energy production costs	22,212		22,358
Regulatory disallowances	4,459		—
Depreciation and amortization	93,187		78,074
Transmission and distribution costs	22,764		22,196
Taxes other than income taxes	25,934		25,562
Total operating expenses	356,287		444,986
Operating income	80,590		99,091
Other Income and Deductions:
Interest income	4,580		4,843
Gains on investment securities	17,998		6,442
Other income	4,911		3,093
Other (deductions)	(16,522)		(2,493)
Net other income and deductions	10,967		11,885
Interest Charges	53,762		40,923
Earnings before Income Taxes	37,795		70,053
Income Taxes (Benefits)	(12,571)		9,780
Net Earnings	50,366		60,273
(Earnings) Attributable to Valencia Non-controlling Interest	(3,044)		(5,127)
Preferred Stock Dividend Requirements of Subsidiary	(132)		(132)
Net Earnings Attributable to PNMR	$	47,190	$	55,014
Net Earnings Attributable to PNMR per Common Share:
Basic	$	0.52	$	0.64
Diluted	$	0.52	$	0.64
Dividends Declared per Common Share	$	0.3875	$	0.3675

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

8

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Net Earnings	$	50,366	$	60,273
Other Comprehensive Income:
Unrealized Gains on Available-for-Sale Debt Securities:
Net increase in unrealized holding gains arising during the period, net of income tax (expense) benefit of $(125) and $(1,059)	366		3,111
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $2,771 and $178	(8,139)		(524)
Pension Liability Adjustment:
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(309) and $(303)	907		891
Fair Value Adjustment for Cash Flow Hedges:
Change in fair market value, net of income tax (expense) of $(17) and $43	50		(125)
Reclassification adjustment for gains (losses) included in net earnings, net of income tax (expense) benefit of $(697) and $565	2,048		(1,659)
Total Other Comprehensive Income (Loss)	(4,768)		1,694
Comprehensive Income	45,598		61,967
Comprehensive (Income) Attributable to Valencia Non-controlling Interest	(3,044)		(5,127)
Preferred Stock Dividend Requirements of Subsidiary	(132)		(132)
Comprehensive Income Attributable to PNMR	$	42,422	$	56,708

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

9

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cash Flows From Operating Activities:
Net earnings	$	50,366	$	60,273
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	103,004		87,128
Deferred income tax expense	6,935		9,576
(Gain) on sale of NMRD	(4,449)		—
(Gains) losses on investment securities	(17,998)		(6,442)
Stock based compensation expense	4,608		3,490
Regulatory disallowances	4,459		—
Allowance for equity funds used during construction	(3,292)		(1,964)
Other, net	1,031		810
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	29,296		64,919
Materials, supplies, and fuel stock	(6,457)		2,443
Other current assets	24,662		(1,305)
Other assets	(7,341)		(2,074)
Accounts payable	(31,482)		(56,306)
Accrued interest and taxes	(9,823)		(4,514)
Other current liabilities	(39,860)		(16,844)
Other liabilities	(10,843)		(7,689)
Net cash flows from operating activities	92,816		131,501
Cash Flows From Investing Activities:
Additions to utility plant and non-utility plant	(289,100)		(264,368)
Proceeds from sale of plant assets (Note 13)	2,840		28,372
Proceeds from sales of investment securities	302,510		91,830
Purchases of investment securities	(304,971)		(95,773)
Proceeds from sale of NMRD	116,936		—
Investments in NMRD	(12,550)		(11,500)
Other, net	(23)		6
Net cash flows used in investing activities	(184,358)		(251,433)

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

10

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	$	658,800	$	635,200
Revolving credit facilities repayments	(676,200)		(457,800)
Long-term borrowings	117,000		—
Awards of common stock	(5,440)		(8,394)
Dividends paid	(35,085)		(31,677)
Valencia’s transactions with its owner	(4,003)		(5,510)
Transmission interconnection and security deposit arrangements	57,875		3,894
Refunds paid under transmission interconnection and security deposit arrangements	(12,003)		(15,167)
Debt issuance costs and other, net	(1,435)		(560)
Net cash flows from financing activities	99,509		119,986
Change in Cash, Cash Equivalents, and Restricted Cash	7,967		54
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,943		4,078
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	11,910	$	4,132
Restricted Cash Included in Other Current Assets and Other Deferred Assets on Consolidated Balance Sheets:
At beginning of period	$	1,728	$	—
At end of period	$	8,922	$	—
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	$	48,912	$	39,794
Income taxes paid (refunded), net	$	(488)	$	—
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	$	40,223	$	37,148

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

11

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024		December 31, 2023
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,988	$	2,215
Accounts receivable, net of allowance for credit losses of $3,203 and $3,388	105,002		126,291
Unbilled revenues	55,142		64,072
Other receivables	39,808		76,509
Materials, supplies, and fuel stock	104,491		98,034
Regulatory assets	61,453		73,046
Prepaid assets	16,792		19,759
Income taxes receivable	6,168		6,697
Other current assets	15,999		8,920
Total current assets	407,843		475,543
Other Property and Investments:
Investment securities	448,164		444,408
Equity investment in NMRD	—		119,570
Other investments	193		171
Non-utility property, net	28,023		29,367
Total other property and investments	476,380		593,516
Utility Plant:
Plant in service, held for future use, and to be abandoned	9,807,524		9,701,180
Less accumulated depreciation and amortization	2,812,846		2,755,823
	6,994,678		6,945,357
Construction work in progress	693,502		589,834
Nuclear fuel, net of accumulated amortization of $39,681 and $35,840	72,190		74,671
Net utility plant	7,760,370		7,609,862
Deferred Charges and Other Assets:
Regulatory assets	930,752		914,381
Goodwill	278,297		278,297
Operating lease right-of-use assets, net of accumulated amortization	179,480		182,201
Other deferred charges	224,531		198,805
Total deferred charges and other assets	1,613,060		1,573,684
	$	10,257,653	$	10,252,605

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

12

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024		December 31, 2023
	(In thousands, except share information)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	244,500	$	261,900
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	283,776		280,169
Accounts payable	133,470		205,175
Customer deposits	6,256		6,237
Accrued interest and taxes	88,302		98,655
Regulatory liabilities	108,429		140,005
Operating lease liabilities	11,811		12,267
Dividends declared	35,085		35,085
Transmission interconnection arrangement liabilities	124,248		96,870
Other current liabilities	71,251		94,397
Total current liabilities	1,107,128		1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	4,355,049		4,241,642
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	835,835		845,280
Regulatory liabilities	777,752		771,317
Asset retirement obligations	246,908		245,531
Accrued pension liability and postretirement benefit cost	18,700		21,429
Operating lease liabilities	165,842		167,000
Other deferred credits	334,180		319,066
Total deferred credits and other liabilities	2,379,217		2,369,623
Total liabilities	7,841,394		7,842,025
Commitments and Contingencies (Note 11)
Cumulative Preferred Stock of Subsidiary
without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares)	11,529		11,529
Equity:
PNMR common stockholders’ equity:
Common stock (no par value; 120,000,000 shares authorized; issued and outstanding 90,200,384 shares)	1,623,991		1,624,823
Accumulated other comprehensive income (loss), net of income taxes	(67,608)		(62,840)
Retained earnings	799,348		787,110
Total PNMR common stockholders’ equity	2,355,731		2,349,093
Non-controlling interest in Valencia	48,999		49,958
Total equity	2,404,730		2,399,051
	$	10,257,653	$	10,252,605

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

13

PNM RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

	Attributable to PNMR								Non- controlling Interest in Valencia
	Common Stock		AOCI		Retained Earnings		Total PNMR Common Stockholders’ Equity				Total Equity
	(In thousands)
Balance at December 31, 2023	$	1,624,823	$	(62,840)	$	787,110	$	2,349,093	$	49,958	$	2,399,051
Net earnings before subsidiary preferred stock dividends	—		—		47,322		47,322		3,044		50,366
Total other comprehensive income (loss)	—		(4,768)		—		(4,768)		—		(4,768)
Subsidiary preferred stock dividends	—		—		(132)		(132)		—		(132)
Dividends declared on common stock	—		—		(34,952)		(34,952)		—		(34,952)
Awards of common stock	(5,440)		—		—		(5,440)		—		(5,440)
Stock based compensation expense	4,608		—		—		4,608		—		4,608
Valencia’s transactions with its owner	—		—		—		—		(4,003)		(4,003)
Balance at March 31, 2024	$	1,623,991	$	(67,608)	$	799,348	$	2,355,731	$	48,999	$	2,404,730

Balance at December 31, 2022	$	1,429,102	$	(66,048)	$	828,878	$	2,191,932	$	52,994	$	2,244,926
Net earnings before subsidiary preferred stock dividends	—		—		55,146		55,146		5,127		60,273
Total other comprehensive income	—		1,694		—		1,694		—		1,694
Subsidiary preferred stock dividends	—		—		(132)		(132)		—		(132)
Dividends declared on common stock	—		—		(31,545)		(31,545)		—		(31,545)
Awards of common stock	(8,394)		—		—		(8,394)		—		(8,394)
Stock based compensation expense	3,490		—		—		3,490		—		3,490
Valencia’s transactions with its owner	—		—		—		—		(5,510)		(5,510)
Balance at March 31, 2023	$	1,424,198	$	(64,354)	$	852,347	$	2,212,191	$	52,611	$	2,264,802

The accompanying notes, as they relate to PNMR, are an integral part of these condensed consolidated financial statements.

14

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Electric Operating Revenues	$	308,115	$	430,165
Operating Expenses:
Cost of energy	97,412		209,853
Administrative and general	51,736		48,973
Energy production costs	22,212		22,358
Regulatory disallowances	4,459		—
Depreciation and amortization	53,287		43,686
Transmission and distribution costs	14,350		13,887
Taxes other than income taxes	13,709		13,504
Total operating expenses	257,165		352,261
Operating income	50,950		77,904
Other Income and Deductions:
Interest income	4,527		4,849
Gains on investment securities	17,998		6,442
Other income	3,418		2,451
Other (deductions)	(870)		(1,860)
Net other income and deductions	25,073		11,882
Interest Charges	25,116		18,122
Earnings before Income Taxes	50,907		71,664
Income Taxes	5,811		11,829
Net Earnings	45,096		59,835
(Earnings) Attributable to Valencia Non-controlling Interest	(3,044)		(5,127)
Net Earnings Attributable to PNM	42,052		54,708
Preferred Stock Dividend Requirements	(132)		(132)
Net Earnings Available for PNM Common Stock	$	41,920	$	54,576

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

15

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Net Earnings	$	45,096	$	59,835
Other Comprehensive Income:
Unrealized Gains on Available-for-Sale Debt Securities:
Net increase in unrealized holding gains arising during the period, net of income tax (expense) benefit of $(125) and $(1,059)	366		3,111
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $2,771, and $178	(8,139)		(524)
Pension Liability Adjustment:
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(309) and $(303)	907		891
Total Other Comprehensive Income (Loss)	(6,866)		3,478
Comprehensive Income	38,230		63,313
Comprehensive (Income) Attributable to Valencia Non-controlling Interest	(3,044)		(5,127)
Comprehensive Income Attributable to PNM	$	35,186	$	58,186

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

16

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cash Flows From Operating Activities:
Net earnings	$	45,096	$	59,835
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	60,356		51,438
Deferred income tax expense	6,030		11,829
(Gains) losses on investment securities	(17,998)		(6,442)
Regulatory disallowances	4,459		—
Allowance for equity funds used during construction	(3,015)		(1,862)
Other, net	927		866
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	22,352		54,042
Materials, supplies, and fuel stock	(3,612)		2,916
Other current assets	3,864		(7,306)
Other assets	293		(897)
Accounts payable	(29,330)		(50,299)
Accrued interest and taxes	19,787		11,770
Other current liabilities	(27,435)		(12,083)
Other liabilities	(7,407)		(6,006)
Net cash flows from operating activities	74,367		107,801
Cash Flows From Investing Activities:
Utility plant additions	(154,975)		(143,348)
Proceeds from sale of plant assets (Note 13)	2,840		28,372
Proceeds from sales of investment securities	302,510		91,830
Purchases of investment securities	(304,971)		(95,773)
Other, net	(23)		6
Net cash flows used in investing activities	(154,619)		(118,913)

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

17

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	$	292,500	$	275,700
Revolving credit facilities repayments	(243,800)		(250,700)
Short-term borrowings (repayments) – affiliate, net	2,300		—
Dividends paid	(132)		(132)
Valencia’s transactions with its owner	(4,003)		(5,510)
Transmission interconnection and security deposit arrangements	51,125		3,894
Refunds paid under transmission interconnection and security deposit arrangements	(9,103)		(11,667)
Debt issuance costs and other, net	(474)		(377)
Net cash flows from financing activities	88,413		11,208
Change in Cash, Cash Equivalents, and Restricted Cash	8,161		96
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	2,586		2,985
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	10,747	$	3,081
Restricted Cash Included in Other Current Assets and Other Deferred Assets on Consolidated Balance Sheets:
At beginning of period	$	1,728	$	—
At end of period	$	8,922	$	—
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	$	9,121	$	12,778
Income taxes paid (refunded), net	$	—	$	—
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	$	14,770	$	17,849

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

18

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024		December 31, 2023
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,825	$	858
Accounts receivable, net of allowance for credit losses of $3,203 and $3,388	75,437		94,879
Unbilled revenues	43,092		46,925
Other receivables	33,849		51,975
Affiliate receivables	9,237		9,253
Materials, supplies, and fuel stock	85,184		81,572
Regulatory assets	61,453		72,996
Prepaid assets	8,957		9,941
Income taxes receivable	7,900		7,682
Other current assets	8,492		1,756
Total current assets	335,426		377,837
Other Property and Investments:
Investment securities	448,164		444,408
Other investments	91		69
Non-utility property, net	12,382		13,538
Total other property and investments	460,637		458,015
Utility Plant:
Plant in service, held for future use, and to be abandoned	6,210,692		6,151,510
Less accumulated depreciation and amortization	2,009,722		1,976,657
	4,200,970		4,174,853
Construction work in progress	537,488		490,178
Nuclear fuel, net of accumulated amortization of $39,681 and $35,840	72,190		74,671
Net utility plant	4,810,648		4,739,702
Deferred Charges and Other Assets:
Regulatory assets	855,120		838,727
Goodwill	51,632		51,632
Operating lease right-of-use assets, net of accumulated amortization	177,865		180,370
Other deferred charges	187,247		166,782
Total deferred charges and other assets	1,271,864		1,237,511
	$	6,878,575	$	6,813,065

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

19

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024		December 31, 2023
	(In thousands, except share information)
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities:
Short-term debt	$	186,200	$	137,500
Short-term debt - affiliate	2,300		—
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	203,802		200,222
Accounts payable	97,603		141,704
Affiliate payables	11,157		16,388
Customer deposits	6,256		6,237
Accrued interest and taxes	61,342		41,337
Regulatory liabilities	105,690		134,846
Operating lease liabilities	10,925		11,371
Dividends declared	132		132
Transmission interconnection arrangement liabilities	124,248		96,870
Other current liabilities	45,672		52,587
Total current liabilities	855,327		839,194
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	2,058,523		2,061,558
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	692,069		684,037
Regulatory liabilities	562,842		565,021
Asset retirement obligations	245,991		244,633
Accrued pension liability and postretirement benefit cost	17,367		19,949
Operating lease liabilities	165,199		166,191
Other deferred credits	234,858		220,178
Total deferred credits and liabilities	1,918,326		1,900,009
Total liabilities	4,832,176		4,800,761
Commitments and Contingencies (Note 11)
Cumulative Preferred Stock
without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares)	11,529		11,529
Equity:
PNM common stockholder’s equity:
Common stock (no par value; 40,000,000 shares authorized; issued and outstanding 39,117,799 shares)	1,547,918		1,547,918
Accumulated other comprehensive income (loss), net of income taxes	(73,371)		(66,505)
Retained earnings	511,324		469,404
Total PNM common stockholder’s equity	1,985,871		1,950,817
Non-controlling interest in Valencia	48,999		49,958
Total equity	2,034,870		2,000,775
	$	6,878,575	$	6,813,065

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

20

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

	Attributable to PNM
							Total PNM Common Stockholder’s Equity		Non- controlling  Interest in Valencia
	Common Stock		AOCI		Retained Earnings						Total Equity
	(In thousands)
Balance at December 31, 2023	$	1,547,918	$	(66,505)	$	469,404	$	1,950,817	$	49,958	$	2,000,775
Net earnings	—		—		42,052		42,052		3,044		45,096
Total other comprehensive income (loss)	—		(6,866)		—		(6,866)		—		(6,866)
Dividends declared on preferred stock	—		—		(132)		(132)		—		(132)
Valencia’s transactions with its owner	—		—		—		—		(4,003)		(4,003)
Balance at March 31, 2024	$	1,547,918	$	(73,371)	$	511,324	$	1,985,871	$	48,999	$	2,034,870

Balance at December 31, 2022	$	1,547,918	$	(74,335)	$	433,747	$	1,907,330	$	52,994	$	1,960,324
Net earnings	—		—		54,708		54,708		5,127		59,835
Total other comprehensive income	—		3,478		—		3,478		—		3,478
Dividends declared on preferred stock	—		—		(132)		(132)		—		(132)
Valencia’s transactions with its owner	—		—		—		—		(5,510)		(5,510)
Balance at March 31, 2023	$	1,547,918	$	(70,857)	$	488,323	$	1,965,384	$	52,611	$	2,017,995

The accompanying notes, as they relate to PNM, are an integral part of these condensed consolidated financial statements.

21

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Electric Operating Revenues	$	128,762	$	113,912
Operating Expenses:
Cost of energy	34,892		31,833
Administrative and general	13,669		14,014
Depreciation and amortization	30,382		27,440
Transmission and distribution costs	8,414		8,309
Taxes other than income taxes	10,667		10,529
Total operating expenses	98,024		92,125
Operating income	30,738		21,787
Other Income and Deductions:
Interest income	169		114
Other income	1,173		511
Other (deductions)	(297)		(375)
Net other income and deductions	1,045		250
Interest Charges	13,336		10,425
Earnings before Income Taxes	18,447		11,612
Income Taxes	3,864		1,579
Net Earnings	$	14,583	$	10,033

The accompanying notes, as they relate to TNMP, are an integral part of these condensed consolidated financial statements.

22

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cash Flows From Operating Activities:
Net earnings	$	14,583	$	10,033
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	30,525		27,642
Deferred income tax expense (benefit)	3,428		(15)
Allowance for equity funds used during construction and other, net	(276)		(102)
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	6,944		10,876
Materials and supplies	(2,845)		(473)
Other current assets	20,581		6,765
Other assets	(450)		(804)
Accounts payable	170		(3,235)
Accrued interest and taxes	(19,053)		(15,562)
Other current liabilities	(7,085)		1,267
Other liabilities	(5,028)		(1,238)
Net cash flows from operating activities	41,494		35,154
Cash Flows From Investing Activities:
Utility plant additions	(124,646)		(108,993)
Net cash flows used in investing activities	(124,646)		(108,993)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	127,100		125,100
Revolving credit facilities repayments	(163,900)		(61,800)
Short-term borrowings (repayments) – affiliate, net	—		14,200
Long-term borrowings	117,000		—
Transmission interconnection and security deposit arrangements	6,750		—
Refunds paid under transmission interconnection and security deposit arrangements	(2,900)		(3,500)
Debt issuance costs and other, net	(898)		(161)
Net cash flows from financing activities	83,152		73,839
Change in Cash and Cash Equivalents	—		—
Cash and Cash Equivalents at Beginning of Period	—		—
Cash and Cash Equivalents at End of Period	$	—	$	—
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	$	13,532	$	14,736
Income taxes paid (refunded), net	$	(488)	$	—
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	$	20,472	$	10,986

The accompanying notes, as they relate to TNMP, are an integral part of these condensed consolidated financial statements.

23

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024		December 31, 2023
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	—
Accounts receivable	29,565		31,412
Unbilled revenues	12,050		17,147
Other receivables	7,749		26,983
Materials and supplies	19,307		16,462
Regulatory assets	—		50
Prepaid and other current assets	1,517		2,705
Total current assets	70,188		94,759
Other Property and Investments:
Other investments	102		102
Non-utility property, net	14,470		14,746
Total other property and investments	14,572		14,848
Utility Plant:
Plant in service and plant held for future use	3,252,448		3,210,870
Less accumulated depreciation and amortization	596,669		582,140
	2,655,779		2,628,730
Construction work in progress	149,793		91,274
Net utility plant	2,805,572		2,720,004
Deferred Charges and Other Assets:
Regulatory assets	75,632		75,654
Goodwill	226,665		226,665
Operating lease right-of-use assets, net of accumulated amortization	1,615		1,814
Other deferred charges	10,692		11,287
Total deferred charges and other assets	314,604		315,420
	$	3,204,936	$	3,145,031

The accompanying notes, as they relate to TNMP, are an integral part of these condensed consolidated financial statements.

24

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2024		December 31, 2023
	(In thousands, except share information)
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities:
Short-term debt	$	18,300	$	55,100
Current installments of long-term debt	79,974		79,947
Accounts payable	31,318		51,620
Affiliate payables	4,166		6,932
Accrued interest and taxes	38,505		57,558
Regulatory liabilities	2,739		5,159
Operating lease liabilities	887		895
Other current liabilities	9,158		12,084
Total current liabilities	185,047		269,295
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs	1,297,281		1,180,933
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	182,628		178,748
Regulatory liabilities	214,910		206,296
Asset retirement obligations	917		898
Accrued pension liability and postretirement benefit cost	1,333		1,480
Operating lease liabilities	643		809
Other deferred credits	69,933		68,911
Total deferred credits and other liabilities	470,364		457,142
Total liabilities	1,952,692		1,907,370
Commitments and Contingencies (Note 11)
Common Stockholder’s Equity:
Common stock ($10 par value; 12,000,000 shares authorized; issued and outstanding 6,358 shares)	64		64
Paid-in-capital	846,066		846,066
Retained earnings	406,114		391,531
Total common stockholder’s equity	1,252,244		1,237,661
	$	3,204,936	$	3,145,031

The accompanying notes, as they relate to TNMP, are an integral part of these condensed consolidated financial statements.

25

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

A WHOLLY-OWNED SUBSIDIARY OF PNM RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDER’S EQUITY

(Unaudited)

	Common Stock		Paid-in Capital		Retained Earnings		Total Common Stockholder’s Equity
Balance at December 31, 2023	$	64	$	846,066	$	391,531	$	1,237,661
Net earnings	—		—		14,583		14,583
Balance at March 31, 2024	$	64	$	846,066	$	406,114	$	1,252,244

Balance at December 31, 2022	$	64	$	805,166	$	296,594	$	1,101,824
Net earnings	—		—		10,033		10,033
Balance at March 31, 2023	$	64	$	805,166	$	306,627	$	1,111,857

The accompanying notes, as they relate to TNMP, are an integral part of these condensed consolidated financial statements.

26

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)    Significant Accounting Policies and Responsibility for Financial Statements

Financial Statement Preparation

In the opinion of management, the accompanying unaudited interim Condensed Consolidated Financial Statements reflect all normal and recurring accruals and adjustments that are necessary to present fairly the consolidated financial position at March 31, 2024 and December 31, 2023, and the consolidated results of operations, comprehensive income, and cash flows for the three months ended March 31, 2024 and 2023. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated. Weather causes the Company’s results of operations to be seasonal in nature and the results of operations presented in the accompanying Condensed Consolidated Financial Statements are not necessarily representative of operations for an entire year.

The Notes to Condensed Consolidated Financial Statements include disclosures for PNMR, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to PNMR, PNM, and TNMP. Discussions regarding only PNMR, PNM, or TNMP are so indicated. Certain amounts in the 2023 Condensed Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2024 financial statement presentation.

These Condensed Consolidated Financial Statements are unaudited. Certain information and note disclosures normally included in the annual audited Consolidated Financial Statements have been condensed or omitted, as permitted under the applicable rules and regulations. Readers of these financial statements should refer to PNMR’s, PNM’s, and TNMP’s audited Consolidated Financial Statements and Notes thereto that are included in their respective 2023 Annual Reports on Form 10-K.

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events accordingly.

Principles of Consolidation

The Condensed Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia and ETBC I. See Note 6. PNM owns undivided interests in several jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants.

PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include interest and income tax sharing payments, as well as equity transactions, and interconnection billings. See Note 15. All intercompany transactions and balances have been eliminated.

Dividends on Common Stock

Dividends on PNMR’s common stock are declared by the Board. The timing of the declaration of dividends is dependent on the timing of meetings and other actions of the Board. The Board declared dividends on common stock of $0.3875 per share in February 2024 and $0.3675 per share in February 2023, which are reflected as Dividends Declared per Common Share on the PNMR Condensed Consolidated Statement of Earnings.

PNMR did not make any cash equity contributions to PNM or TNMP in the three months ended March 31, 2024 and 2023. On April 30, 2024 PNMR made a $55.0 million cash equity contribution to PNM. PNM and TNMP did not declare or pay any cash dividends on their common stock to PNMR in the three months ended March 31, 2024 and 2023.

27

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

New Accounting Pronouncements

Information concerning recently issued accounting pronouncements that have not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates.

Accounting Standards Update 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 enhancing disclosures about significant segment expenses. Disclosure requirements of this update include disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”); an amount for other segment items by reportable segment and a description of its composition; the title and position of the CODM and an explanation of how the CODM uses the reported measures in assessing segment performance and deciding how to allocate resources; and that a single reportable segment provides all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendment also clarifies that in addition to the measure most consistent with the measurement principles under GAAP, reporting of additional measures of a segment’s profit or loss used by the CODM in assessing segment performance and determining allocation of resources is allowed. ASU 2023-07 is effective for the Company beginning January 1, 2024 and interim periods beginning January 1, 2025 with early adoption being permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements.

Accounting Standards Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 enhancing the transparency and decision usefulness of income tax disclosures. Disclosure requirements of this update include (on an annual basis) the disclosure of specific categories in the rate reconciliation and the inclusion of additional information for reconciling items that meet a quantitative threshold (if the effect of the reconciling item is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income by the applicable statutory rate). The amendment also requires the disclosure (on an annual basis) of information about income taxes paid (net of refunds) including, the disaggregation by federal, state, and foreign taxes as well as by individual jurisdiction. Additional requirements include the disclosure of income (loss) from continuing operations before income tax expense (benefit) disaggregated between foreign and domestic as well as income tax expense (benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for the Company beginning January 1, 2025 with early adoption being permitted. ASU 2023-09 is to be applied on a prospective basis with retrospective application permitted.

(2)     Segment Information

The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided.

PNM

PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, which includes the asset optimization of PNM’s jurisdictional capacity, as well as providing transmission services to third parties. FERC has jurisdiction over wholesale power and transmission rates. In 2023, ETBC I, a special purpose entity that is wholly-owned by PNM, was formed for the limited purpose of purchasing, owning, and administering energy transition property, issuing Securitized Bonds, and performing related activities. See Note 6.

TNMP

TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities.

28

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Corporate and Other

The Corporate and Other segment includes PNMR holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other, until the close of the sale on February 27, 2024 (Note 16). Eliminations of intercompany transactions are reflected in the Corporate and Other segment.

The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.

PNMR SEGMENT INFORMATION

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2024
Electric operating revenues	$	308,115	$	128,762	$	—	$	436,877
Cost of energy	97,412		34,892		—		132,304
Utility margin	210,703		93,870		—		304,573
Other operating expenses	106,466		32,750		(8,420)		130,796
Depreciation and amortization	53,287		30,382		9,518		93,187
Operating income (loss)	50,950		30,738		(1,098)		80,590
Interest income (expense)	4,527		169		(116)		4,580
Other income (deductions)	20,546		876		(15,035)		6,387
Interest charges	(25,116)		(13,336)		(15,310)		(53,762)
Segment earnings (loss) before income taxes	50,907		18,447		(31,559)		37,795
Income taxes (benefit)	5,811		3,864		(22,246)		(12,571)
Segment earnings (loss)	45,096		14,583		(9,313)		50,366
Valencia non-controlling interest	(3,044)		—		—		(3,044)
Subsidiary preferred stock dividends	(132)		—		—		(132)
Segment earnings (loss) attributable to PNMR	$	41,920	$	14,583	$	(9,313)	$	47,190
At March 31, 2024:
Total Assets	$	6,878,575	$	3,204,936	$	174,142	$	10,257,653
Goodwill	$	51,632	$	226,665	$	—	$	278,297

29

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2023
Electric operating revenues	$	430,165	$	113,912	$	—	$	544,077
Cost of energy	209,853		31,833		—		241,686
Utility margin	220,312		82,079		—		302,391
Other operating expenses	98,722		32,852		(6,348)		125,226
Depreciation and amortization	43,686		27,440		6,948		78,074
Operating income (loss)	77,904		21,787		(600)		99,091
Interest income (expense)	4,849		114		(120)		4,843
Other income (deductions)	7,033		136		(127)		7,042
Interest charges	(18,122)		(10,425)		(12,376)		(40,923)
Segment earnings (loss) before income taxes	71,664		11,612		(13,223)		70,053
Income taxes (benefit)	11,829		1,579		(3,628)		9,780
Segment earnings (loss)	59,835		10,033		(9,595)		60,273
Valencia non-controlling interest	(5,127)		—		—		(5,127)
Subsidiary preferred stock dividends	(132)		—		—		(132)
Segment earnings (loss) attributable to PNMR	$	54,576	$	10,033	$	(9,595)	$	55,014
At March 31, 2023:
Total Assets	$	6,306,396	$	2,803,168	$	243,572	$	9,353,136
Goodwill	$	51,632	$	226,665	$	—	$	278,297

Non-GAAP Financial Measures

The Company defines utility margin as electric operating revenues less cost of energy. Cost of energy consists primarily of fuel and purchase power costs for PNM and costs charged by third-party transmission providers for TNMP. The Company believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since substantially all such costs are offset in revenues as fuel and purchase power costs are passed through to customers under PNM’s FPPAC and third-party transmission costs are passed on to consumers through TNMP’s transmission cost recovery factor. Utility margin is not a financial measure required to be presented and is considered a non-GAAP measure. PNM and TNMP do not intend for utility margin to represent any financial measure as defined by GAAP however, the calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP. Reconciliations between utility margin and gross margin are presented below.

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2024
Gross margin	$	120,854	$	55,074	$	—	$	175,928
Energy production costs	22,212		—		—		22,212
Transmission and distribution costs	14,350		8,414		—		22,764
Depreciation and amortization	53,287		30,382		—		83,669		1
Utility margin	$	210,703	$	93,870	$	—	$	304,573

Three Months Ended March 31, 2023
Gross margin	$	140,381	$	46,330	$	—	$	186,711
Energy production costs	22,358		—		—		22,358
Transmission and distribution costs	13,887		8,309		—		22,196
Depreciation and amortization	43,686		27,440		—		71,126		1
Utility margin	$	220,312	$	82,079	$	—	$	302,391

1 Corporate and Other depreciation and amortization represents corporate level activities that are billed at cost and reflected as general and administrative expenses at PNM and TNMP and therefore are not a component of gross margin or utility margin. See Note 1.

30

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(3)   Accumulated Other Comprehensive Income (Loss)

Information regarding accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 is as follows:

	Accumulated Other Comprehensive Income (Loss)
	PNM						Corporate and Other		PNMR Consolidated
	Unrealized Gains on Available-for-Sale Debt Securities		Pension Liability Adjustment				Fair Value Adjustment for Cash Flow Hedges
					Total				Total
	(In thousands)
Balance at December 31, 2023	$	10,652	$	(77,157)	$	(66,505)	$	3,665	$	(62,840)
Amounts reclassified from AOCI (pre-tax)	(10,910)		1,216		(9,694)		2,745		(6,949)
Income tax impact of amounts reclassified	2,771		(309)		2,462		(697)		1,765
Other OCI changes (pre-tax)	491		—		491		67		558
Income tax impact of other OCI changes	(125)		—		(125)		(17)		(142)
Net after-tax change	(7,773)		907		(6,866)		2,098		(4,768)
Balance at March 31, 2024	$	2,879	$	(76,250)	$	(73,371)	$	5,763	$	(67,608)

Balance at December 31, 2022	$	7,422	$	(81,757)	$	(74,335)	$	8,287	$	(66,048)
Amounts reclassified from AOCI (pre-tax)	(702)		1,194		492		(2,224)		(1,732)
Income tax impact of amounts reclassified	178		(303)		(125)		565		440
Other OCI changes (pre-tax)	4,170		—		4,170		(168)		4,002
Income tax impact of other OCI changes	(1,059)		—		(1,059)		43		(1,016)
Net after-tax change	2,587		891		3,478		(1,784)		1,694
Balance at March 31, 2023	$	10,009	$	(80,866)	$	(70,857)	$	6,503	$	(64,354)

The Condensed Consolidated Statements of Earnings include pre-tax amounts reclassified from AOCI related to Unrealized Gains on Available-for-Sale Debt Securities in gains (losses) on investment securities, related to Pension Liability Adjustment in other (deductions), and related to Fair Value Adjustment for Cash Flow Hedges in interest charges. The income tax impacts of all amounts reclassified from AOCI are included in income taxes in the Condensed Consolidated Statements of Earnings.

31

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(4)    Earnings Per Share

Dual presentation of basic and diluted earnings per share is presented in the Condensed Consolidated Statements of Earnings of PNMR. Diluted earnings per share was computed using the treasury stock method for both restricted stock and the 2023 Forward Sale Agreements. Information regarding the computation of earnings per share is as follows:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands, except per share amounts)
Net Earnings Attributable to PNMR	$	47,190	$	55,014
Average Number of Common Shares:
Outstanding during period	90,200		85,835
Vested awards of restricted stock	283		266
Average Shares – Basic	90,483		86,101
Dilutive Effect of Common Stock Equivalents:
Restricted stock	31		37
2023 Forward Sale Agreements	—		3
Average Shares – Diluted	90,514		86,141
Net Earnings Per Share of Common Stock:
Basic	$	0.52	$	0.64
Diluted	$	0.52	$	0.64

(5)   Electric Operating Revenues

PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are PNM and TNMP. Additional information concerning electric operating revenue is contained in Note 4 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company estimates the allowance for credit losses on trade receivables based on historical experience and estimated default rates. Accounts receivable balances are reviewed monthly, adjustments to the allowance for credit losses are made as necessary and amounts that are deemed uncollectible are written off. In addition to the allowance for credit losses on trade receivables, the Company has evaluated other receivables for potential credit related losses. These balances include potential exposures for other non-retail utility services. In the three months ended March 31, 2024 and 2023, there were no estimated credit losses related to these transactions.

Contract Balances

Performance obligations related to contracts with customers are typically satisfied when the energy is delivered and the customer or end-user utilizes the energy. Accounts receivable from customers represent amounts billed, including amounts under ARPs. For PNM, accounts receivable reflected on the Condensed Consolidated Balance Sheets, net of allowance for credit losses, includes $75.4 million at March 31, 2024 and $93.6 million at December 31, 2023 resulting from contracts with customers. All of TNMP’s accounts receivable results from contracts with customers.

Contract assets are an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). Upon the completion of the Western Spirit Line, PNM entered into a Transmission Service Agreement (“TSA”) with Pattern Wind under an incremental tariff rate approved by FERC. The terms of the agreement provide for a financing component that benefits the customer. As such, the revenue that PNM recognizes will be in excess of the consideration received at the beginning of the service term resulting in a contract asset. The balance of the contract asset is $24.6 million at March 31, 2024 and $22.1 million at December 31, 2023. This contract asset is presented in Other deferred charges on the Condensed Consolidated Balance Sheets.

32

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Contract liabilities arise when consideration is received in advance from a customer before satisfying the performance obligations. Therefore, revenue is deferred and not recognized until the obligation is satisfied. Other utilities pay PNM and TNMP in advance for the joint-use of their utility poles. These revenues are recognized over the period of time specified in the joint-use contract, typically for one calendar year. Deferred revenues on these arrangements are recorded as contract liabilities. PNMR’s, PNM’s, and TNMP’s contract liabilities and related revenues are not material for any of the periods presented. The Company has no other arrangements with remaining performance obligations to which a portion of the transaction price would be required to be allocated.

Disaggregation of Revenues

A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below.

	PNM		TNMP		PNMR Consolidated
Three Months Ended March 31, 2024	(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	120,385	$	41,495	$	161,880
Commercial	99,338		35,544		134,882
Industrial	24,769		9,856		34,625
Public authority	4,398		1,717		6,115
Economy energy service	7,563		—		7,563
Transmission	36,149		35,809		71,958
Wholesale energy sales (1)	11,690		—		11,690
Miscellaneous	1,422		954		2,376
Total revenues from contracts with customers	305,714		125,375		431,089
Alternative revenue programs	1,906		3,387		5,293
Other electric operating revenues	495		—		495
Total Electric Operating Revenues	$	308,115	$	128,762	$	436,877

Three Months Ended March 31, 2023
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	119,885	$	36,366	$	156,251
Commercial	98,062		34,730		132,792
Industrial	19,478		12,765		32,243
Public authority	4,417		1,619		6,036
Economy energy service	9,309		—		9,309
Transmission	49,007		30,058		79,065
Wholesale energy sales (1)	112,986		—		112,986
Miscellaneous	1,410		940		2,350
Total revenues from contracts with customers	414,554		116,478		531,032
Alternative revenue programs	7,325		(2,566)		4,759
Other electric operating revenues	8,286		—		8,286
Total Electric Operating Revenues	$	430,165	$	113,912	$	544,077

(1) Includes sales for resale activity resulting from PNM’s participation in the EIM.

33

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(6)     Variable Interest Entities

How an enterprise evaluates and accounts for its involvement with variable interest entities, focuses primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a VIE. This evaluation requires continual reassessment of the primary beneficiary of a VIE. Additional information concerning PNM’s VIEs is contained in Note 10 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Valencia

PNM has a PPA to purchase all of the electric capacity and energy from Valencia, a 155 MW natural gas-fired power plant near Belen, New Mexico, through May 2028. A third party built, owns, and operates the facility while PNM is the sole purchaser of the electricity generated. PNM is obligated to pay fixed operation and maintenance and capacity charges in addition to variable operation and maintenance charges under this PPA. For the three months ended March 31, 2024 and 2023, PNM paid $5.1 million and $5.0 million for fixed charges and $0.1 million and $1.6 million for variable charges. PNM does not have any other financial obligations related to Valencia. The assets of Valencia can only be used to satisfy its obligations and creditors of Valencia do not have any recourse against PNM’s assets. During the term of the PPA, PNM has the option, under certain conditions, to purchase and own up to 50% of the plant or the VIE. The PPA specifies that the purchase price would be the greater of 50% of book value reduced by related indebtedness or 50% of fair market value.

PNM sources fuel for the plant, controls when the facility operates through its dispatch, and receives the entire output of the plant, which factors directly and significantly impact the economic performance of Valencia. Therefore, PNM has concluded that the third-party entity that owns Valencia is a VIE and that PNM is the primary beneficiary of the entity since PNM has the power to direct the activities that most significantly impact the economic performance of Valencia and will absorb the majority of the variability in the cash flows of the plant. As the primary beneficiary, PNM consolidates Valencia in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of Valencia are included in the Condensed Consolidated Financial Statements of PNM although PNM has no legal ownership interest or voting control of the VIE. The assets and liabilities of Valencia are set forth below and are not shown separately on the Condensed Consolidated Balance Sheets. The owner’s equity and net income of Valencia are considered attributable to non-controlling interest.

Summarized financial information for Valencia is as follows:

	Results of Operations
	Three Months Ended March 31,
	2024		2023
	(In thousands)
Operating revenues	$	5,189	$	6,604
Operating expenses	2,145		1,477
Earnings attributable to non-controlling interest	$	3,044	$	5,127

	Financial Position
	March 31,		December 31,
	2024		2023
	(In thousands)
Current assets	$	3,265	$	3,422
Net property, plant, and equipment	46,543		47,253
Total assets	49,808		50,675
Current liabilities	809		717
Owners’ equity – non-controlling interest	$	48,999	$	49,958

34

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Westmoreland San Juan Mining, LLC

As discussed in the subheading Coal Supply in Note 11, PNM purchased coal for SJGS under the SJGS CSA. PNM and Westmoreland also entered into agreements under which CCR disposal and mine reclamation services for SJGS would be provided. In 2019, Westmoreland emerged from Chapter 11 bankruptcy as a privately held company owned and operated by a group of its former creditors. Under the reorganization, the assets of SJCC were sold to Westmoreland San Juan Mining, LLC (“WSJ LLC”), a subsidiary of Westmoreland Mining Holdings, LLC. As successor entity to SJCC, WSJ LLC assumed all rights and obligations of SJCC including obligations to PNM under the SJGS CSA and to PNMR under letter of credit support agreements. In conjunction with the retirement of SJGS, the SJGS CSA expired under its terms on September 30, 2022.

PNMR issued $30.3 million in letters of credit to facilitate the issuance of reclamation bonds required in order for SJCC to mine coal to be supplied to SJGS. As discussed above, WSJ LLC assumed the rights and obligations of SJCC, including obligations to PNMR for the letters of credit. The letters of credit support results in PNMR having a variable interest in WSJ LLC since PNMR is subject to possible loss in the event performance by PNMR is required under the letters of credit support. PNMR considers the possibility of loss under the letters of credit support to be remote since the purpose of posting the bonds is to provide assurance that WSJ LLC performs the required reclamation of the mine site in accordance with applicable regulations and the reclamation services agreement provides WSJ LLC the ability to recover the cost of reclamation. Additionally, much of the mine reclamation activities have been and will continue to be performed after the SJGS CSA expired on September 30, 2022. As discussed in Note 11, each of the SJGS participants has established and actively fund trusts to meet future reclamation obligations.

WSJ LLC is considered a VIE.  PNMR’s analysis of its arrangements with WSJ LLC concluded that WSJ LLC had the ability to direct its mining operations and reclamation services, which are the factors that most significantly impact the economic performance of WSJ LLC.  Other than PNM being able to ensure that coal was supplied in adequate quantities and of sufficient quality to provide the fuel necessary to operate SJGS in a normal manner and monitoring of reclamation activities, the mining operations and reclamation services were solely under the control of WSJ LLC, including developing mining and reclamation plans, hiring of personnel, and incurring operating and maintenance expenses. Neither PNMR nor PNM had any ability to direct or influence the mining operation or reclamation activities.  PNM’s involvement through the SJGS CSA and the reclamation services agreement is a protective right rather than a participating right and WSJ LLC still has the power to direct the activities that most significantly impact the economic performance of WSJ LLC.  If WSJ LLC had been able to mine or performs reclamation services more efficiently than anticipated, its economic performance would improve.  Conversely, if WSJ LLC had not been able to mine or does not perform reclamation services as efficiently as anticipated, its economic performance would be negatively impacted.  Accordingly, PNMR believes WSJ LLC is the primary beneficiary and, therefore, WSJ LLC is not consolidated by either PNMR or PNM. The amounts outstanding under the letters of credit support continue to be PNMR’s maximum exposure to loss from the VIE at March 31, 2024.

ETBC I

ETBC I is a wholly-owned, special purpose, subsidiary of PNM that was formed in August 2023 for the limited purpose of purchasing, owning, and administering energy transition property, issuing Securitized Bonds, and performing related activities authorized by the NMPRC. On November 15, 2023, ETBC I issued Securitized Bonds and used the proceeds to purchase energy transition property from PNM. The energy transition property purchased includes the right to impose, bill, collect, and adjust a non-bypassable energy transition charge from all PNM retail customers until the Securitized Bonds are paid in full and all allowed financing costs have been recovered. The Securitized Bonds are secured by the energy transition property and cash collections from the energy transition charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to PNM.

PNM acts as the servicer of the energy transition property on behalf of ETBC I and is responsible for metering, calculating, billing, and collecting the Energy Transition Charges. On behalf of ETBC I, PNM is required to remit all collections of the Energy Transition Charges to the trustee for the Securitized Bonds. PNM has the power to direct the activities that most significantly impact the economic performance of ETBC I and will absorb the majority of the variability in the cash flows of the entity. As the primary beneficiary, PNM consolidates ETBC I in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of ETBC I are included in the Consolidated Financial Statements of PNM.

35

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following tables summarize the impact of ETBC I on PNM’s Financial Statements:

	Results of Operations
	Three Months Ended March 31, 2024
	(In thousands)
Operating Revenues	$	5,946
Depreciation and amortization	821
Interest charges	5,025
Other	100
Net Earnings	$	—

	Financial Position
	March 31, 2024		December 31, 2023
	(In thousands)
Regulatory Assets - Current	$	559	$	2,724
Restricted Cash (included in Other Current Assets)	7,175		—
Restricted Cash (included in Other Deferred Charges)	1,747		1,728
Securitized Cost (included in Deferred Regulatory Assets)	339,808		340,629
Current Installments of Long-Term Debt	5,935		2,529
Accrued Interest	7,505		2,502
Long-Term Debt	335,137		338,521

(7)    Fair Value of Derivative and Other Financial Instruments

Additional information concerning energy related derivative contracts and other financial instruments is contained in Note 9 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is based on current market quotes as available and is supplemented by modeling techniques and assumptions made by the Company to the extent quoted market prices or volatilities are not available. External pricing input availability varies based on commodity location, market liquidity, and term of the agreement. Valuations of derivative assets and liabilities take into account nonperformance risk, including the effect of counterparties’ and the Company’s credit risk. The Company regularly assesses the validity and availability of pricing data for its derivative transactions. Although the Company uses its best judgment in estimating the fair value of these instruments, there are inherent limitations in any estimation technique.

Energy Related Derivative Contracts

Overview

The primary objective for the use of commodity derivative instruments, including energy contracts, options, swaps, and futures, is to manage price risk associated with forecasted purchases of energy and fuel used to generate electricity, as well as managing anticipated generation capacity in excess of forecasted demand from existing customers. PNM’s energy related derivative contracts manage commodity risk. PNM is required to meet the demand and energy needs of its customers. PNM may be exposed to market risk for the needs of its customers not covered under the FPPAC.

PNM has entered into agreements for the purchase and sale of power from third parties. On April 23, 2024, PNM entered into agreements to purchase a total of 150 MW from July 1, 2024 through July 30, 2024 and 100 MW from August 1, 2024 through August 30, 2024. The agreements will be accounted for as derivative agreements and will be considered economic hedges under the NMPRC approved hedging plan covered by its FPPAC during the second quarter of 2024.

Agreements for the purchase of 85 MW from June through September 2023 as well as agreements for the sale of 50 MW from September 1, 2024 through September 30, 2024 and 50 MW from October 1, 2024 though December 31, 2024 were

36

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

not considered derivatives because there was either no notional amount due to their unit-contingent nature or qualified for a normal purchase, normal sale scope exception.

PNM’s operations are managed primarily through a net asset-backed strategy, whereby PNM’s aggregate net open forward contract position is covered by its forecasted excess generation capabilities or market purchases. PNM could be exposed to market risk if its generation capabilities were to be disrupted or if its load requirements were to be greater than anticipated. If all or a portion of load requirements were required to be covered as a result of such unexpected situations, commitments would have to be met through market purchases. TNMP does not enter into energy related derivative contracts.

Commodity Risk

Marketing and procurement of energy often involve market risks associated with managing energy commodities and establishing positions in the energy markets, primarily on a short-term basis. PNM routinely enters into various derivative instruments such as forward contracts, option agreements, and price basis swap agreements to economically hedge price and volume risk on power commitments and fuel requirements and to minimize the effect of market fluctuations. PNM monitors the market risk of its commodity contracts in accordance with approved risk and credit policies.

Accounting for Derivatives

Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the three months ended March 31, 2024 and the year ended December 31, 2023, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flow hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations on the Condensed Consolidated Statements of Earnings and are classified between Electric operating revenues and Cost of energy according to the intent of the hedge. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC. Changes in the fair value of instruments covered by its FPPAC are recorded as Regulatory assets and Regulatory liabilities on the Condensed Consolidated Balance Sheets. The cash impacts of settled derivatives are recorded as operating activities or financing activities on the Condensed Consolidated Statement of Cash Flows consistent with the classification of the hedged transaction. PNM has no trading transactions.

Commodity Derivatives

PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Condensed Consolidated Balance Sheets:

	Economic Hedges
	March 31, 2024		December 31, 2023
	(In thousands)
Other current assets	$	835	$	826
Other current liabilities	—		—
Net	$	835	$	826

Certain of PNM’s commodity derivative instruments in the above table are subject to master netting agreements whereby assets and liabilities could be offset in the settlement process. PNM does not offset fair value and cash collateral for derivative instruments under master netting arrangements and the above table reflects the gross amounts of fair value assets and liabilities for commodity derivatives.

As discussed above, PNM has NMPRC-approved guidelines for hedging arrangements to manage fuel and purchased power costs related to customers covered by its FPPAC. The table above includes $0.8 million of current assets and zero of current liabilities related to these arrangements at March 31, 2024 and $0.8 million of current assets and zero of current liabilities at December 31, 2023 with changes in fair value recorded as regulatory assets and regulatory liabilities.

37

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At March 31, 2024 and December 31, 2023, PNM had no amounts recognized for the legal right to reclaim cash collateral. However, amounts posted as cash collateral under margin arrangements were $0.3 million at March 31, 2024 and $0.2 million at December 31, 2023. These amounts are included in other current assets on the Condensed Consolidated Balance Sheets. At March 31, 2024 and December 31, 2023, obligations to return cash collateral were $0.2 million, which is included in other current liabilities on the Condensed Consolidated Balance Sheets.

The changes in the fair value of commodity derivative instruments that are considered economic hedges had no impact on PNM’s net earnings during the three months ended March 31, 2024 and 2023. Commodity derivatives had no impact on OCI for any of the periods presented. Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNM’s net buy (sell) volume positions:

	Economic Hedges
	MMBTU	MWh
March 31, 2024	—	(15,360)
December 31, 2023	—	(15,360)

In connection with managing its commodity risks, PNM enters into master agreements with certain counterparties. If PNM is in a net liability position under an agreement, some agreements provide that the counterparties can request collateral if PNM’s credit rating is downgraded; other agreements provide that the counterparty may request collateral to provide it with “adequate assurance” that PNM will perform; and others have no provision for collateral.

PNM has contingent requirements to provide collateral under certain commodity contracts having an objectively determinable collateral provision, that are in net liability positions, and that are not fully collateralized with cash. Contractual liability represents those commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. Cash collateral posted under these contracts does not reflect letters of credit under the Company’s revolving credit facilities that may have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchase and normal sale, offset by existing collateral and by any offsets available under master netting agreements, including both assets and liability positions. At March 31, 2024 and December 31, 2023, PNM had zero contractual liability, zero posted cash collateral, and no such contracts in a net liability position.

Non-Derivative Financial Instruments

The carrying amounts reflected on the Condensed Consolidated Balance Sheets approximate fair value for cash, receivables, and payables due to the short period of maturity. Investment securities are carried at fair value. Investment securities consist of PNM assets held in the NDT for its share of decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners. See Note 11. At March 31, 2024 and December 31, 2023, the fair value of investment securities included $371.0 million and $361.0 million for the NDT, $11.7 million and $12.3 million for the SJGS decommissioning trust, and $65.5 million and $71.1 million for the coal mine reclamation trusts.

PNM records a realized loss as an impairment for any available-for-sale debt security that has a fair value that is less than its carrying value. At March 31, 2024 and December 31, 2023, PNM had no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings.

38

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Gains and losses recognized on the Condensed Consolidated Statements of Earnings related to investment securities in the NDT, SJGS decommissioning, and coal mine reclamation trusts are presented in the following table:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Equity securities:
Net gains (losses) from equity securities sold	$	9,871	$	(844)
Net gains (losses) from equity securities still held	(1,205)		7,477
Total net gains on equity securities	8,666		6,633
Available-for-sale debt securities:
Net gains (losses) on debt securities	9,332		(191)
Net gains on investment securities	$	17,998	$	6,442

The proceeds and gross realized gains and losses on the disposition of securities held in the NDT, SJGS decommissioning trust, and coal mine reclamation trusts are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold.

Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $13.4 million and $2.0 million for the three months ended March 31, 2024 and 2023.

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Proceeds from sales	$	302,510	$	91,211
Gross realized gains	13,679		3,428
Gross realized (losses)	(7,912)		(6,471)

At March 31, 2024, the available-for-sale debt securities held by PNM, had the following final maturities:

	Fair Value
	(In thousands)
Within 1 year	$	34,176
After 1 year through 5 years	11,915
After 5 years through 10 years	8,634
After 10 years through 15 years	9,998
After 15 years through 20 years	5,626
After 20 years	3,953
	$	74,302

Fair Value Disclosures

The Company determines the fair values of its derivative and other financial instruments based on the hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

39

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For investment securities, Level 2 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market values based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. Management of the Company independently verifies the information provided by pricing services. Uncategorized investments include common/collective investment trusts, which are measured at NAV at the end of each reporting period. Audited financial statements are received for each fund and reviewed by the Company annually. Fair value for these collective investment trusts is measured using a practical expedient provided under GAAP that allows the NAV per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Investments valued using this practical expedient are not required to be presented within the GAAP fair value hierarchy.

Items recorded at fair value by PNM on the Condensed Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale debt securities:

			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unrealized Gains
	(In thousands)
March 31, 2024
Cash and cash equivalents	$	122,332	$	122,332	$	—
Equity securities:
Corporate stocks, common	81,045		81,045		—
Corporate stocks, preferred	—		—		—
Mutual funds and other	131,306		131,306		—
Uncategorized Collective Investment Trusts	39,179
Available-for-sale debt securities:
U.S. government	27,041		27,041		—		$	1,874
International government	—		—				—
Municipals	35,260		—		35,260		1,227
Corporate and other	12,001				12,001		795
	$	448,164	$	361,724	$	47,261	$	3,896
December 31, 2023
Cash and cash equivalents	$	93,873	$	93,873	$	—
Equity securities:
Corporate stocks, common	77,422		77,422		—
Corporate stocks, preferred	4,323		504		3,819
Mutual funds and other	57,966		57,966		—
Available-for-sale debt securities:
U.S. government	35,113		34,522		591		$	2,055
International government	8,735		—		8,735		104
Municipals	53,436		—		53,436		2,872
Corporate and other	113,540		—		113,540		9,285
	$	444,408	$	264,287	$	180,121	$	14,316

40

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Condensed Consolidated Balance Sheets, are presented below:

	Carrying Amount		Fair Value
March 31, 2024	(In thousands)
PNMR	$	4,638,825	$	4,335,572
PNM	2,262,325		2,086,662
TNMP	1,377,255		1,248,910
December 31, 2023
PNMR	$	4,521,811	$	4,260,509
PNM	2,261,780		2,107,588
TNMP	1,260,880		1,152,922

The carrying amount and fair value of the Company’s other investments presented on the Condensed Consolidated Balance Sheets are not material and not shown in the above table.

(8)    Stock-Based Compensation

PNMR has various stock-based compensation programs, which provide restricted stock awards, that are performance based and time based, under the Performance Equity Plan (“PEP”). Although certain PNM and TNMP employees are eligible to participate in the PNMR plans, PNM and TNMP do not have separate employee stock-based compensation plans. Performance stock awards awarded under the PEP are awarded for a three-year, overlapping performance period. Performance stock awards with performance periods ending before 2024 or after 2025 are subject to achieving both performance and market targets. Performance stock awards with performance periods ending from 2024 through 2025 do not include market targets. Other awards of restricted stock are only subject to time-based vesting requirements. Additional information concerning stock-based compensation under the PEP is contained in Note 12 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Restricted stock under the PEP refers to awards of stock subject to vesting, performance, or market conditions rather than to shares with contractual post-vesting restrictions. Generally, the awards vest ratably over three years from the grant date of the award. However, awards with performance or market conditions vest upon satisfaction of those conditions. In addition, plan provisions provide that upon retirement, participants become 100% vested in certain stock awards. The vesting period for awards of restricted stock to non-employee members of the Board is one-year.

The stock-based compensation expense related to restricted stock awards without performance or market conditions to participants that are retirement eligible on the grant date is recognized immediately at the grant date and is not amortized. Compensation expense for other such awards is amortized over the shorter of the requisite vesting period or the period until the participant becomes retirement eligible. Compensation expense for performance-based shares is recognized ratably over the performance period as required service is provided and is adjusted periodically to reflect the level of achievement expected to be attained. Compensation expense related to market-based shares is recognized ratably over the measurement period, regardless of the actual level of achievement, provided the employees meet their service requirements. At March 31, 2024, PNMR had unrecognized expense related to stock awards of $8.4 million, which is expected to be recognized over an average of 2.2 years.

The grant date fair value for restricted stock and stock awards with internal PNMR performance targets is determined based on the market price of PNMR common stock on the date of the agreements reduced by the present value of future dividends that will not be received prior to vesting. The grant date fair value is applied to the total number of shares that are anticipated to vest, although the number of performance shares that ultimately vest cannot be determined until after the performance periods end. The grant date fair value of stock awards with market targets were determined using Monte Carlo simulation models, which provide grant date fair values that include an expectation of the number of shares to vest at the end of the measurement period.

41

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:

	Three Months Ended March 31,
Restricted Shares and Performance Based Shares	2024			2023
Expected quarterly dividends per share	$	0.3875		$	0.3675
Risk-free interest rate	4.27		%	4.46		%
Market-Based Shares
Dividend yield	4.21		%	N/A
Expected volatility	13.09		%	N/A
Risk-free interest rate	4.31		%	N/A

The following table summarizes activity in restricted stock awards, including performance-based and market-based shares for the three months ended March 31, 2024:

	Restricted Stock
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2023	212,080	$	40.33
Granted	188,019	32.43
Released	(145,020)	37.18
Forfeited	—	—
Outstanding at March 31, 2024	255,079	$	36.30

Included, as granted and released, in the table above are 80,492 previously awarded shares that were earned for the 2021 - 2023 performance measurement period and ratified by the Board in February 2024 (based upon achieving targets at above “target”, below “maximum” levels). Excluded from the table above are 138,978, 133,960, and 186,951 shares for the three-year performance periods ending in 2024, 2025 and 2026 that will be awarded if all performance and market criteria are achieved at maximum levels and all executives remain eligible.

On December 4, 2023, the Company entered into a retention agreements with its Chairman and Chief Executive Officer and its Senior Vice President and General Counsel under which they would be awarded a total of 26,766 and 8,922 respectively of restricted stock rights if they remained employed through the award’s vesting date which is the earliest of 24 months from the grant date, the closing of the Merger, or six months following the termination of the Merger. As of December 31, 2023, upon the notice from Avangrid regarding the termination of the Merger Agreement, these awards will vest on June 30, 2024.

On December 4, 2023, the Company entered into a retention agreement with its President and Chief Operating Officer under which he would receive a retention bonus of $1.0 million to be paid in increments beginning in December 2023 and continuing each December until 2025. On April 8, 2024, pursuant to the retention agreement, the Board elected to convert the unvested portion of the retention bonus into restricted stock rights equal to $0.8 million of the fair value of one share of Company stock as of the first trading day after expiration of the current black-out period.

The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares:

	Three Months Ended March 31,
Restricted Stock	2024		2023
Weighted-average grant date fair value	$	32.43	$	44.78
Total fair value of restricted shares that vested (in thousands)	$	5,395	$	8,394

42

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(9)   Financing

The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities or refinance other debt. Each of the Company’s revolving credit facilities, term loans, and other debt agreements contains a single financial covenant that requires the maintenance of a debt-to-capitalization ratio. For the PNMR agreements, this ratio must be maintained at less than or equal to 70%, and for the PNM and TNMP agreements, this ratio must be maintained at less than or equal to 65%. The Company’s revolving credit facilities, term loans, and other debt agreements generally also contain customary covenants, events of default, cross-default provisions, and change-of-control provisions. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual informational financing filing and short-term financing plan with the NMPRC. Additional information concerning financing activities is contained in Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

On May 16, 2023, PNM filed a shelf registration statement that provides for the issuance of up to $650.0 million of SUNs that expires in May 2026.

On March 2, 2022, PNMR filed a shelf registration that provides for the issuance of various types of debt and equity securities. The PNMR shelf registration statement expires in March 2025.

Financing Activities

On March 28, 2024, TNMP entered into an agreement (the “TNMP 2024 Bond Purchase Agreement”) with institutional investors for the sale of $285.0 million aggregate principal amount of four series of TNMP first mortgage bonds (the “TNMP 2024 Bonds”) offered in private placement transactions. TNMP issued the first two series on March 28, 2024, consisting of $32.0 million at a 5.26% interest rate, due March 28, 2029, and $85.0 million at a 5.55% interest rate, due March 28, 2036. The third and fourth series of $40.0 million and $128.0 million will be issued on or before July 1, 2024, at a 5.65% and 5.79% interest rate, respectively. The issuance of the third and fourth series is subject to the satisfaction of customary conditions, including continuing compliance with the representations, warranties and covenants of the TNMP 2024 Bond Purchase Agreement. The proceeds were and will be used to repay existing debt, including the $80.0 million of FMBs that are due in July 2024 and borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2024 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2024 Bonds. The terms of the supplemental indentures governing the TNMP 2024 Bonds include the customary covenants discussed above. In the event of certain changes of control of PNMR or TNMP, TNMP will be required to offer to prepay the TNMP 2024 Bonds at par. TNMP has the right to redeem any or all of the TNMP 2024 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On April 28, 2023, PNM entered into an agreement (the “PNM 2023 Note Purchase Agreement”) with institutional investors for the sale and issuance of $200.0 million aggregate principal amount of two series of SUNs (the “PNM 2023 SUNs”) offered in private placement transactions. The PNM 2023 SUNs were issued on April 28, 2023. PNM issued $150.0 million of the PNM 2023 SUNs at 5.51%, due April 28, 2035, and another $50.0 million at 5.92%, due April 28, 2053. Proceeds from the PNM 2023 SUNs were used to repay borrowings under the PNM Revolving Credit Facility and the PNM New Mexico Credit Facility, for funding of capital expenditures, and for general corporate purposes. The PNM 2023 Note Purchase Agreement includes the customary covenants discussed above. In the event of a change of control of PNM, PNM will be required to offer to prepay the PNM 2023 SUNs at par. PNM has the right to redeem any or all of the PNM 2023 SUNs prior to their maturities, subject to payment of a customary make-whole premium.

On April 28, 2023, TNMP entered into an agreement (the “TNMP 2023 Bond Purchase Agreement”) with institutional investors for the sale of $185.0 million aggregate principal amount of two series of TNMP first mortgage bonds (the “TNMP 2023 Bonds”) offered in private placement transactions. TNMP issued the first series of $130.0 million on April 28, 2023, at a 5.01% interest rate, due April 28, 2033. The second series of $55.0 million was issued on July 28, 2023, at a 5.47% interest rate, due July 28, 2053. The proceeds were used to repay borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2023 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2023 Bonds. The terms of the supplemental indentures governing the TNMP 2023 Bonds include the customary covenants discussed above. In the event of certain changes of control of PNMR or TNMP, TNMP will be required to offer to prepay the TNMP 2023 Bonds at

43

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

par. TNMP has the right to redeem any or all of the TNMP 2023 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On November 10, 2022, PNMR entered into a distribution agreement with BofA Securities, Inc., MUFG Securities Americas Inc. and Wells Fargo Securities, LLC, as sales agents and Bank of America, N.A., MUFG Securities EMEA plc and Wells Fargo Bank, N.A., as forward purchasers, pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $200.0 million of its common stock, no par value, through the sales agents (the “PNMR 2022 ATM Program”). Sales of the shares made pursuant to the distribution agreement may be made in “at the market offerings” as defined in Rule 415 of the Securities Act. PNMR did not initially receive any proceeds upon the execution of this agreement.

Throughout 2023, PNMR entered into forward sale agreements listed below, for the sale of shares of PNMR common stock. On December 15, 2023, PNMR physically settled the forward purchases under the PNMR 2022 ATM Program and used the proceeds to repay borrowings under the PNMR Revolving Credit Facility and for other corporate purposes. Gross cash proceeds shown below were reduced by $1.0 million in issuance costs resulting in net cash proceeds of $198.2 million.

Forward completion	Initial forward price		Shares	Settlement price		Settlement amount
						(in thousands)
March 15, 2023	$	48.49	504,452	$	49.00	$	24,720
March 20, 2023	48.30		528,082	48.78		25,758
May 30, 2023	47.56		244,639	47.99		11,741
June 30, 2023	44.87		804,477	45.07		36,257
September 26, 2023	44.03		2,283,860	44.11		100,734
			4,365,510			$	199,210

At March 31, 2024, variable interest rates were 6.38% on the PNMR 2021 Delayed-Draw Term Loan that matures in May 2025 and 6.78% on the PNMR 2023 Term Loan that matures in June 2026.

Hedging Arrangements

PNMR has entered into hedging agreements that establish a fixed rate for the indicated amount of variable rate debt, above which a customary spread is applied, which is subject to change if there is a change in PNMR’s credit rating. As of March 31, 2024, PNMR’s hedging agreements are as follows:

		Variable Rate		Established
Effective Date	Maturity Date	Debt Hedged		Fixed Rate
		(In millions)		(Percent)
January 1, 2024	December 31, 2024	$	100.0	3.32	%
January 1, 2024	December 31, 2024	100.0		3.32
January 1, 2024	December 31, 2024	100.0		3.38
January 1, 2024	December 31, 2024	150.0		3.62
January 1, 2024	December 31, 2024	150.0		3.57
January 1, 2025	December 31, 2025	100.0		4.18
January 1, 2025	December 31, 2025	100.0		4.18
January 1, 2025	December 31, 2025	100.0		3.99

These hedge agreements are accounted for as cash flow hedges. The fair value of these hedges was a gain of $7.8 million and a loss of less than $0.1 million at March 31, 2024. The fair value gain of $7.6 million is included in Other current assets, $0.2 million is included in Other deferred charges, and less than $0.1 million for the loss is included in Other deferred credits on the Condensed Consolidated Balance Sheets. The fair value was determined using Level 2 inputs under GAAP, including using forward SOFR curves under the mid-market convention to discount cash flows over the remaining term of the agreements.

44

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Short-term Debt and Liquidity

As of March 31, 2024, the PNMR Revolving Credit Facility had a financing capacity of $300.0 million and the PNM Revolving Credit Facility had a financing capacity of $400.0 million. On April 1, 2024, PNMR and PNM amended their respective revolving credit facilities, extending their maturity March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to through March 30, 2031, subject to approval by a majority of the lenders. PNM also has the $40.0 million PNM New Mexico Credit Facility with a maturity of May 20, 2026. As of March 31, 2024, the TNMP Revolving Credit Facility had a capacity of $100.0 million and was secured by $100.0 million aggregate principal amount of TNMP first mortgage bonds. On April 1, 2024, TNMP entered into a new $200.0 million Revolving Credit Facility that replaced the $100.0 million Revolving Credit Facility. The new $200.0 million Revolving Credit Facility is secured by $200.0 million aggregate principal amount of TNMP first mortgage bonds and has a maturity of March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to March 30, 2031, subject to approval by a majority of the lenders. Variable interest rates under the PNMR, PNM, and TNMP revolving credit facilities are based on SOFR.

Short-term debt outstanding consists of:

	March 31, 2024			December 31, 2023
	Balance Outstanding		Weighted Average Interest Rate	Balance Outstanding		Weighted Average Interest Rate
	(In thousands)			(In thousands)
PNM:
PNM Revolving Credit Facility	$	146,200	6.67%	$	107,500	6.69%
PNM New Mexico Credit Facility	40,000		6.68	30,000		6.71
	186,200			137,500
TNMP Revolving Credit Facility	18,300		6.29	55,100		6.32
PNMR Revolving Credit Facility	40,000		6.92	69,300		6.96
	$	244,500		$	261,900

In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $3.1 million, zero, and zero at March 31, 2024 that reduce the available capacity under their respective revolving credit facilities. PNMR also had $30.3 million of letters of credit outstanding under the WFB LOC Facility. The above table excludes intercompany debt. As of March 31, 2024, PNM and TNMP had $2.3 million and zero in intercompany borrowings from PNMR. As of December 31, 2023, neither PNM nor TNMP had any intercompany borrowings from PNMR. PNMR Development had $2.3 million and $0.1 million in short-term borrowings outstanding from PNMR at December 31, 2023 and March 31, 2024. PNMR had no intercompany borrowings from PNMR Development at December 31, 2023 or March 31, 2024.

PNM has $198.0 million of PCRBs that must be remarketed by June 1, 2024 as well as $2.5 million and $3.4 million in scheduled payments due for the ETBC I Securitized Bonds in August 2024 and February 2025. TNMP has $80.0 million of FMBs that are due in July 2024, which will be repaid with the $128.0 million proceeds from the TNMP 2024 Bonds that will be issued on or before July 1, 2024. The Company’s debt arrangements have various maturities and expiration dates. Additional information on debt maturities is contained in Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

(10)   Pension and Other Postretirement Benefit Plans

PNMR and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). PNMR maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. The Company presents the service cost component of its net periodic benefit costs in administrative and general expenses and the non-service costs components in other income (deductions), net of amounts capitalized or deferred to regulatory assets and liabilities, on the Condensed Consolidated Statements of Earnings. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of accumulated periodic cost or income to the extent included in retail rates (a “prepaid pension asset”).

45

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Additional information concerning pension and OPEB plans is contained in Note 11 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K. Annual net periodic benefit cost for the plans is actuarially determined using the methods and assumptions set forth in that note and is recognized ratably throughout the year. Differences between TNMP’s annual net periodic costs (income) and amounts included in its regulated rates are deferred to regulatory assets or liabilities, for recovery or refund in future rate proceedings.

PNM Plans

The following table presents the components of the PNM Plans’ net periodic benefit cost:

	Three Months Ended March 31,
	Pension Plan				OPEB Plan				Executive Retirement Program
	2024		2023		2024		2023		2024		2023
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	5,427		5,913		597		676		124		135
Expected return on plan assets	(7,757)		(7,299)		(1,391)		(1,243)		—		—
Amortization of net loss	2,661		2,646		—		—		50		38
Amortization of prior service cost	—		—		—		—		—		—
Net Periodic Benefit Cost (Income)	$	331	$	1,260	$	(794)	$	(567)	$	174	$	173

PNM did not make any contributions to its pension plan trust in the three months ended March 31, 2024 and 2023 and does not anticipate making any contributions to the pension plan in 2024 through 2028 based on current law, funding requirements, and estimates of portfolio performance. Funding assumptions were developed using a discount rate of 5.5%. Actual amounts to be funded in the future will be dependent on the actuarial assumptions at that time, including the appropriate discount rate. PNM may make additional contributions at its discretion. PNM did not make any cash contributions to the OPEB trust in the three months ended March 31, 2024 and 2023, however, a portion of the disbursements attributable to the OPEB trust is paid by PNM and are therefore considered to be contributions to the OPEB plan. Payments by PNM on behalf of the PNM OPEB plan were less than $0.1 million for the three months ended March 31, 2024 and $0.8 million for the three months ended March 31, 2023. These payments are expected to total $0.2 million in 2024 and $10.1 million for 2025-2028. Disbursements under the executive retirement program, which are funded by PNM and considered to be contributions to the plan, were $0.3 million in the three months ended March 31, 2024 and $0.1 million in the three months ended March 31, 2023 and are expected to total $1.2 million during 2024 and $4.4 million for 2025-2028.

TNMP Plans

The following table presents the components of the TNMP Plans’ net periodic benefit cost:

	Three Months Ended March 31,
	Pension Plan				OPEB Plan				Executive Retirement Program
	2024		2023		2024		2023		2024		2023
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	5	$	5	$	—	$	—
Interest cost	553		601		96		106		4		3
Expected return on plan assets	(687)		(674)		(129)		(120)		—		—
Amortization of net (gain) loss	139		110		(161)		(190)		—		—
Amortization of prior service cost	—		—		—		—		—		—
Net Periodic Benefit Cost (Income)	$	5	$	37	$	(189)	$	(199)	$	4	$	3

46

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

TNMP did not make any contributions to its pension plan trust in the three months ended March 31, 2024 and 2023 and does not anticipate making any contributions to the pension plan in 2024 through 2027 based on current law, funding requirements, and estimates of portfolio performance. In 2028, TNMP does anticipate making a contribution of $0.2 million based on current law, funding requirements, and estimates of portfolio performance. Funding assumptions were developed using a discount rate of 5.5%. Actual amounts to be funded in the future will depend on the actuarial assumptions at that time, including the appropriate discount rate. TNMP may make additional contributions at its discretion. TNMP did not make any contributions to the OPEB trust in the three months ended March 31, 2024 and 2023 and does not expect to make contributions to the OPEB trust during the period 2024-2028. Disbursements under the executive retirement program, which are funded by TNMP and considered to be contributions to the plan, were less than $0.1 million in the three months ended March 31, 2024 and 2023 and are expected to total $0.1 million during 2024 and $0.2 million in 2025-2028.

(11)   Commitments and Contingencies

Overview

There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory proceedings in the normal course of its business. See Note 12. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows.

With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. The Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimatable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, or commitments will have a material effect on its financial condition, results of operations, or cash flows.

Additional information concerning commitments and contingencies is contained in Note 16 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Commitments and Contingencies Related to the Environment

Nuclear Spent Fuel and Waste Disposal

Nuclear power plant operators are required to enter into spent fuel disposal contracts with the DOE that require the DOE to accept and dispose of all spent nuclear fuel and other high-level radioactive wastes generated by domestic power reactors. Although the Nuclear Waste Policy Act required the DOE to develop a permanent repository for the storage and disposal of spent nuclear fuel by 1998, the DOE announced that it would not be able to open the repository by 1998 and sought to excuse its performance of these requirements. In November 1997, the DC Circuit issued a decision preventing the DOE from excusing its own delay but refused to order the DOE to begin accepting spent nuclear fuel. Based on this decision and the DOE’s delay, a number of utilities, including APS (on behalf of itself and the other PVNGS owners, including PNM), filed damages actions against the DOE in the Court of Federal Claims. The lawsuits filed by APS alleged that damages were incurred due to DOE’s continuing failure to remove spent nuclear fuel and high-level waste from PVNGS. APS and the DOE entered into a settlement agreement, subsequently extended, that established a process for the payment of claims for costs incurred through December 31, 2025. Under the settlement agreement, APS must submit claims annually for payment of allowable costs. PNM records estimated claims on a quarterly basis. The benefit from the claims is passed through to customers under the FPPAC.

PNM estimates that it will incur approximately $55.6 million (in 2023 dollars) for its share of the costs related to the on-site interim storage of spent nuclear fuel at PVNGS for the remaining term of the operating licenses. PNM accrues these

47

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

costs as a component of fuel expense as the nuclear fuel is consumed. At March 31, 2024 and December 31, 2023, PNM had a liability for interim storage costs of $11.7 million and $11.0 million, which is included in other deferred credits.

PVNGS has sufficient capacity at its on-site Independent Spent Fuel Storage Installation (“ISFSI”) to store all of the nuclear fuel that will be irradiated during the initial operating license period, which ends in December 2027.  Additionally, PVNGS has sufficient capacity at its on-site ISFSI to store a portion of the fuel that will be irradiated during the period of extended operation, which ends in November 2047.  If uncertainties regarding the U.S. government’s obligation to accept and store spent fuel are not favorably resolved, APS will evaluate alternative storage solutions that may obviate the need to expand the ISFSI to accommodate all of the fuel that will be irradiated during the period of extended operation.

The Energy Transition Act

In 2019, the Governor signed into New Mexico state law Senate Bill 489, known as the Energy Transition Act (“ETA”). The ETA became effective as of June 14, 2019 and sets a statewide standard that requires investor-owned electric utilities to have specified percentages of their electric-generating portfolios be from renewable and zero-carbon generating resources. The ETA requires utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. The ETA also allows for the recovery of undepreciated investments and decommissioning costs related to qualifying EGUs that the NMPRC has required be removed from retail jurisdictional rates, provided replacement resources to be included in retail rates have lower or zero-carbon emissions. The ETA requires the NMPRC to review and approve utilities’ annual renewable portfolio plans to ensure compliance with the RPS. The ETA also directs the New Mexico Environmental Improvement Board to adopt standards of performance that limit CO2 emissions to no more than 1,100 lbs. per MWh beginning January 1, 2023 for new or existing coal-fired EGUs with original installed capacities exceeding 300 MW.

The ETA provides for a transition from fossil-fuel generation resources to renewable and other carbon-free resources through certain provisions relating to the abandonment of coal-fired generating facilities. These provisions include the use of energy transition bonds, which are designed to be highly rated bonds that can be issued to finance certain costs of abandoning coal-fired facilities that are retired prior to January 1, 2023 for facilities operated by a “qualifying utility,” or prior to January 1, 2032 for facilities that are not operated by a qualifying utility. The amount of energy transition bonds that can be issued to recover abandonment costs is limited to the lesser of $375.0 million or 150% of the undepreciated investment of the facility as of the abandonment date. Proceeds provided by energy transition bonds must be used only for purposes related to providing utility service to customers and to pay energy transition costs (as defined by the ETA). These costs may include plant decommissioning and coal mine reclamation costs provided those costs have not previously been recovered from customers or disallowed by the NMPRC or by a court order. Proceeds from energy transition bonds may also be used to fund severances for employees of the retired facility and related coal mine and to promote economic development, education and job training in areas impacted by the retirement of the coal-fired facilities. Energy transition bonds must be issued under a NMPRC-approved financing order, are secured by “energy transition property,” are non-recourse to the issuing utility, and are repaid by a non-bypassable charge paid by all customers of the issuing utility. These customer charges are subject to an adjustment mechanism designed to provide for timely and complete payment of principal and interest due under the energy transition bonds.

The ETA also provides that utilities must obtain NMPRC approval of competitively procured replacement resources that shall be evaluated based on their cost, economic development opportunity, ability to provide jobs with comparable pay and benefits to those lost upon retirement of the facility, and that do not exceed emissions thresholds specified in the ETA. In determining whether to approve replacement resources, the NMPRC must give preference to resources with the least environmental impacts, those with higher ratios of capital costs to fuel costs, and those located in the school district of the abandoned facility. The ETA also provides for the procurement of energy storage facilities and gives utilities discretion to maintain, control, and operate these systems to ensure reliable and efficient service.

The ETA has had and will have a significant impact on PNM’s future generation portfolio, including PNM’s retirement of SJGS in 2022. PNM cannot predict the full impact of the ETA with respect to Four Corners or the outcome of its future generating resource abandonment and replacement resource filings with the NMPRC. See additional discussion in Note 12 of PNM’s Four Corners Abandonment Application.

48

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Clean Air Act

Regional Haze

Pursuant to the CAA, states are required to establish goals for improving visibility in national parks and wilderness areas (also known as Class I areas) and to develop long-term strategies for reducing emissions of air pollutants that cause visibility impairment in their own states and for preventing degradation in other states. States must establish a series of interim goals to ensure continued progress by adopting a new SIP every ten years. In the first SIP planning period, states were required to conduct BART determinations for certain covered facilities, including utility boilers, built between 1962 and 1977 that have the potential to emit more than 250 tons per year of visibility impairing pollution. For all future SIP planning periods, states must evaluate whether additional emissions reduction measures may be needed to continue making reasonable progress toward natural visibility conditions.

In 2017, EPA published revisions to the regional haze rule in the Federal Register that delayed the due date for the next cycle of SIPs from 2019 to 2021 and altered the planning process that states must employ in determining whether to impose “reasonable progress” emission reduction measures. EPA’s new rule was challenged by numerous parties, but the litigation was held in abeyance after EPA granted various petitions for reconsideration.

In 2018, EPA released a new guidance document on tracking visibility progress for the second planning period. EPA is allowing states discretion to develop SIPs that may differ from EPA’s guidance as long as they are consistent with the CAA and other applicable regulations. In 2019, EPA finalized the draft guidance that was previously released as a companion to the regional haze rule revisions, and EPA clarified that guidance in a memorandum issued in 2021. SIPs for the second planning period were due in July 2021, which deadline NMED was unable to meet. NMED is currently preparing its SIP for the second compliance period and has notified PNM that it will not be required to submit a regional haze four-factor analysis for SJGS since PNM retired its share of SJGS in 2022. On August 30, 2022, EPA published in the Federal Register an official “Finding of Failure to Submit” for states, including New Mexico, that have not yet submitted a round 2 regional haze SIP. This action by EPA starts a 2-year clock for it to issue a Federal Implementation Plan (FIP). NMED’s current timeline indicates the proposed SIP will be submitted to EPA by Summer 2024.

Carbon Dioxide Emissions

In 2015, EPA established standards to limit CO2 emissions from power plants, including (1) Carbon Pollution Standards for new, modified, and reconstructed power plants; and (2) the Clean Power Plan for existing power plants.

Multiple states, utilities, and trade groups challenged both the Carbon Pollution Standards for new sources and the Clean Power Plan for existing sources in separate cases. Challengers successfully petitioned the US Supreme Court for a stay of the Clean Power Plan. However, before the DC Circuit could issue an opinion regarding either the Carbon Pollution Standards or the Clean Power Plan, the Trump Administration asked that the case be held in abeyance while the rules were reevaluated, which was granted.

In 2019, EPA repealed the Clean Power Plan, promulgated the ACE Rule, and revised the implementing regulations for all emission guidelines. EPA set the BSER for existing coal-fired power plants as heat rate efficiency improvements based on a range of “candidate technologies” that can be applied inside the fence line of an individual facility. The DC Circuit issued an order that granted motions by various petitioners, including industry groups and EPA, to dismiss the cases challenging the Clean Power Plan as moot due to EPA’s issuance of the ACE Rule.

The ACE Rule was also challenged, and on January 19, 2021, the DC Circuit issued an opinion in American Lung Association and American Public Health Association v. EPA, et al., vacating the ACE Rule. While the DC Circuit rejected the ACE Rule, it did not reinstate the Clean Power Plan. Rather, the DC Circuit granted an EPA motion asking the court to withhold issuance of the mandate with respect to the repeal of the Clean Power Plan until EPA responds to the court’s remand in a new rulemaking action.

Numerous parties sought review by the US Supreme Court, and on June 30, 2022, the Court held that the “generation shifting” approach in the Clean Power Plan exceeded the powers granted to EPA by Congress, though the Court did not address the related issue of whether Section 111 of the CAA only authorizes EPA to require measures that can be implemented entirely within the fence line at an individual source. Of broader significance in administrative law, the Court’s opinion expressly invoked the “major question” doctrine, which requires rules involving issues of “vast economic or political significance” to be supported by clear statutory authorization. In cases where there is no clear statement of authority, courts need not defer to the

49

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

agency’s statutory interpretation on “major questions.” The decision sets legal precedent for future rulemakings by EPA and other federal regulatory agencies whereby the agencies’ authority may be limited based upon similar reasoning.

The litigation over the Carbon Pollution Standards remains held in abeyance but could be reactivated by the parties upon a determination by the court that reconsideration of the rule has concluded.

On May 23, 2023, EPA published in the Federal Register proposed regulatory actions under CAA sections 111(b) and (d) to replace the Clean Power Plan and the ACE Rule. The proposed regulations cover: (1) New natural gas-based EGUs under section 111(b); (2) Existing large and frequently operated natural gas-based EGUs under section 111(d); and (3) Existing coal-based EGUs under section 111(d). Standards of performance for existing coal EGUs will be based on two technologies depending on retirement date: CCS or co-firing gas in lieu of coal. For gas-based EGUs, the standards will be based on CCS or the use of green hydrogen in lieu of natural gas. States will be required to develop SIPs to EPA that provide for the establishment, implementation and enforcement of these standards as they apply to existing sources. States may take into account remaining useful life and other factors when establishing the standards. EPA is proposing that existing coal units must start complying with their gas co-firing or CCS based standards of performance on January 1, 2030, unless they commit to retirement before 2032 (or retirement by 2035 if they also commit to a 20% annual operating limit). Existing combustion turbine units must start complying with their hydrogen or CCS based standards of performance on January 1, 2032, or January 1, 2035, depending on their subcategory, which is based on the control technology selected. The package also includes a proposed repeal of the ACE Rule and revisions to the standard for modified and reconstructed units, along with a notice of public rulemaking seeking data and information about setting standards for existing smaller natural gas-based generators. Comments on the rule were due to EPA by August 8, 2023. PNM filed company-specific comments and continues to review the proposed rule and its potential impacts on the company’s fossil generation resources. On April 25, 2024, EPA signed a final rule promulgating emission guidelines under Section 111 of the CAA requiring states to develop standards of performance for greenhouse gas emissions from new gas-fired combustion turbines and existing fossil-fuel-fired electric steam generating units. The standards for existing coal- or gas-fired steam generating units must be based on the use of CCS, natural gas co-firing, or early retirement, and the standards for new combustion turbines must be based on CCS (base load), efficient simple cycle design (intermediate load), or lower-emitting fuels (low load). We are currently determining what impact, if any, the final rule will have on our business, results of operation, and financial condition.

In late February 2024, EPA indicated that the CAA 111 rule will not contain provisions for existing natural gas units and will issue a new proposal for existing gas in the future after conducting additional stakeholder outreach. On March 26, 2024, EPA announced it was opening a non-regulatory docket and issued framing questions to gather input about ways to design a stronger, more durable approach to GHG regulation of existing gas combustion turbines. The docket will be open for public comment from March 26, 2024 to May 28, 2024 and the agency will hold a May 17 policy forum to bring stakeholders together to share ideas with EPA and others. The agency has indicated that it plans to promulgate a final rule by Summer 2024.

On January 27, 2021, President Biden signed an extensive Executive Order aimed at addressing climate change concerns domestically and internationally. The order is intended to build on the initial climate-related actions the Biden Administration took on January 20, 2021. It addresses a wide range of issues, including establishing climate change concerns as an essential element of U.S. foreign and security policy, identifying a process to determine the U.S. INDC under the Paris Agreement, and establishing a Special Presidential Envoy for Climate that will sit on the National Security Council. On April 22, 2021, at the Earth Day Summit, as part of the U.S.’s re-entry into the Paris Agreement, President Biden unveiled the goal to cut U.S. emissions by 50% - 52% from 2005 levels by 2030, nearly double the GHG emissions reduction target set by the Obama Administration. The 2030 goal joins President Biden’s other climate goals which include a carbon pollution-free power sector by 2035 and a net-zero emissions economy by no later than 2050.

PNM’s review of the GHG emission reductions standards that may occur as a result of legislation or regulation under the Biden Administration and in response to the court’s ruling on the ACE Rule is ongoing. PNM cannot predict the impact these standards may have on its operations or a range of the potential costs of compliance, if any.

National Ambient Air Quality Standards (“NAAQS”)

The CAA requires EPA to set NAAQS for pollutants reasonably anticipated to endanger public health or welfare. EPA has set NAAQS for certain pollutants, including NOx, SO2, ozone, and particulate matter.

NOx Standard – In 2018, EPA published the final rule to retain the current primary health-based NOx standards of which NO2 is the constituent of greatest concern and is the indicator for the primary NAAQS. EPA concluded that the current

50

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1-hour and annual primary NO2 standards are requisite to protect public health with an adequate margin of safety. The rule became effective on May 18, 2018. The State of New Mexico has attained the current NOx NAAQS standards.

SO2 Standard – In 2019, EPA announced its final decision to retain, without changes, the primary health-based NAAQS for SO2. Specifically, EPA will retain the current 1-hour standard for SO2, which is 75 parts per billion, based on the 3-year average of the 99th percentile of daily maximum 1-hour SO2 concentrations.

On March 26, 2021, EPA published in the Federal Register the initial air quality designations for all remaining areas not yet designated under the 2010 SO2 Primary NAAQS. All areas of New Mexico have been designated attainment/unclassifiable through four rounds of designations by EPA.

Ozone Standard – In 2015, EPA finalized the new ozone NAAQS and lowered both the primary and secondary 8-hour standard from 75 to 70 parts per billion. With ozone standards becoming more stringent, fossil-fueled generation units will come under increasing pressure to reduce emissions of NOx and volatile organic compounds since these are the pollutants that form ground-level ozone. On July 13, 2020, EPA proposed to retain the existing ozone NAAQS based on a review of the full body of currently available scientific evidence and exposure/risk information. EPA finalized its decision to retain the ozone NAAQS in a notice published on December 31, 2020 making it immediately effective. In response to lawsuits brought by states and environmental groups, on October 29, 2021, EPA filed a motion in the DC Circuit indicating it will reconsider the 2020 ozone NAAQS. On August 21, 2023, EPA announced an entirely new review of the ozone standard that will incorporate the work to date on the reconsideration, likely indicating a delay in the schedule for a decision on whether the standard should be revised. On January 3, 2024, EPA filed in the DC Circuit an unopposed motion for voluntary remand, without vacatur, of EPA’s final rule retaining the current ozone NAAQS. The filing was made in the consolidated cases challenging the 2020 ozone NAAQS rule.

During 2017 and 2018, EPA released rules establishing area designations for ozone. In those rules, San Juan County, New Mexico, where Four Corners is located, is designated as attainment/unclassifiable and only a small area in Doña Ana County, New Mexico is designated as marginal non-attainment. Although Afton Generating Station is located in Doña Ana County, it is not located within the small area designated as non-attainment for the 2015 ozone standard. The rule became effective May 8, 2018.

NMED has responsibility for bringing the small area in Doña Ana County designated as marginal/non-attainment for ozone into compliance and will look at all sources of NOx and volatile organic compounds. NMED has submitted the required elements for the Sunland Park Ozone Non-attainment Area SIP. This includes a transportation conformity demonstration, a 2017 baseline emissions inventory and emissions statement, and an amendment to the state’s Non-attainment Permitting rules at 20.2.79 New Mexico Administrative Code to conform to EPA’s SIP Requirements Rule for 2015 Q3 NAAQS (i.e., “implementation rule”).

The SIP elements had staggered deadlines and were done in three submissions: (1) the transportation conformity demonstration was completed by the El Paso Metropolitan Planning Organization on behalf of New Mexico in 2019, which is responsible for transportation planning in that area, and the submission received concurrence from EPA and the Federal Highway Administration; (2) the emissions inventory and statement SIP was submitted to EPA in September 2020; and (3) the Non-attainment New Source Review SIP was submitted to EPA on August 10, 2021. On October 15, 2021, EPA proposed to approve New Mexico’s SIP to meet the emissions inventory and statement requirements of the CAA for the Sunland Park Ozone Non-Attainment Area.

PNM does not believe there will be material impacts to its facilities because of NMED’s non-attainment designation of the small area within Doña Ana County. Until EPA approves attainment designations for the Navajo Nation and releases a proposal to implement the revised ozone NAAQS, PNM is unable to predict what impact the adoption of these standards may have on Four Corners. With respect to EPA’s reconsideration of the 2020 decision to retain the 2015 ozone standards, EPA is statutorily obligated to complete its review of the ozone standards by December 2025. PNM cannot predict the outcome of this matter.

In 2019, EPA issued findings that several states, including New Mexico, had failed to submit interstate transport SIPs for the 2015 8-hour ozone NAAQS, triggering an obligation for EPA to issue a federal implementation plan within two years. In response, NMED submitted a Good Neighbor SIP on July 27, 2021 that demonstrates that there are no significant contributions from New Mexico to downwind problems in meeting the federal ozone standard. Nevertheless, when EPA failed to approve the SIP or issue a FIP within two years of the finding of failure to submit, multiple parties filed a deadline suit

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against EPA, resulting in a consent decree requiring EPA to issue a FIP or approve a SIP for New Mexico by a deadline of no later than June 1, 2024, which was later extended to August 30, 2024. On March 15, 2023, EPA Administrator Regan signed a final action imposing a FIP on multiple states but did not include a FIP for New Mexico because EPA had not proposed a FIP for the state because the most up to date modeling available at proposal confirmed the state did not contribute to downwind ozone nonattainment or maintenance areas. However, the updated modeling EPA used in the final rule indicated that New Mexico may be significantly contributing to one or more non-attainment or maintenance areas. In light of that modeling result, on February 16, 2024, the EPA published a proposed rule partially disapproving the SIPs for New Mexico and four other states (Arizona, Iowa, Kansas, Tennessee) and expanding the Good Neighbor Federal Implementation Plan (FIP) to apply to these states. In denying the NMED-submitted SIP, the EPA concluded that the SIP was incomplete and did not contain the necessary provisions to prohibit emission from sources within the state from interfering with maintenance of the 2015 ozone NAAQS in downwind areas, specifically a maintenance-only receptor in the El Paso area. The FIP aspect of the proposed rule would require fossil fuel-fired power plants in these five states to participate in an allowance-based ozone season NOX emissions trading program beginning in 2025. Comments on the proposed rule are due May 16, 2024. PNM is reviewing the impact of this proposal and will be submitting company-specific comments by the due date. EPA is targeting summer of 2024 for a final rule.

Of importance in considering the possibility of a Good Neighbor plan FIP for New Mexico, are the many court challenges to EPA’s earlier rulemaking imposing a FIP on 23 states. On February 21, 2024, the US Supreme Court heard oral arguments on an Emergency Stay Application. Court issuances of state-by-state stays and remands may impact the viability of a multi-state trading program.

PM Standard – On January 30, 2020, EPA published, in the Federal Register, a notice announcing the availability of a final Policy Assessment for the Review of the NAAQS for Particulate Matter (the “PA”). The 2020 final PA was prepared as part of the review of the primary and secondary PM NAAQS. In the 2020 final PA, EPA recommended lowering the primary annual PM 2.5 standard to between 8 µg/m3 and 10 µg/m3. However, on April 30, 2020, EPA published a proposed rule to retain the current standards for PM due to uncertainties in the data relied upon in the 2020 final PA and EPA published a notice of that final action on December 18, 2020, making it immediately effective. On January 14, 2021, several states and New York City filed a petition for review in the DC Circuit, challenging EPA’s final rule retaining the current primary and secondary PM NAAQS and a similar lawsuit was filed by the Center for Biological Diversity in the DC Circuit. On June 10, 2021, EPA announced that it will reconsider the previous administration’s December 2020 decision to retain the current primary and secondary PM NAAQS and on October 8, 2021, EPA announced the release of a new draft PA stating that available scientific evidence and technical information indicate that the current standards may not be adequate to protect public health and welfare, as required by the CAA. On June 1, 2022, EPA issued a new final PA that likewise indicates current standards may not be adequate and that available scientific evidence could support lowering the standards.

On January 27, 2023, EPA published, in the Federal Register, a proposal to lower the annual fine PM standard to between 9-10 µg/m3 but retain the rest of its PM standards, including the current daily fine particulate matter standard, the daily coarse particulate matter standard, and the secondary PM standards. The final rule was published on March 6, 2024, lowering the primary annual PM 2.5 NAAQS to 9 ug/m3. The rule is effective May 6, 2024. States will have until March 2032 to attain compliance with the new standard. During the multi-year implementation process, the NMED will designate attainment/nonattainment areas by March 6, 2026, and submit a State Implementation Plan to EPA by September 6, 2027. This implementation process also applies to the Albuquerque-Bernalillo County Environmental Health Department who may combine efforts with NMED. Bernalillo County does not currently meet the 9 ug/m3 standard which may impact future air permitting activities at Rio Bravo and Reeves Generating Stations if the county is designated as nonattainment. Beginning May 6, 2024, the new standard will be used when conducting required modeling for permit applications and revisions. Although the lower standard is expected to result in new nonattainment areas throughout the country and could prompt additional PM control requirements, PNM cannot predict the impacts of the outcome of future rulemaking.

Cooling Water Intake Structures

In 2014, EPA issued a rule establishing national standards for certain cooling water intake structures at existing power plants and other facilities under the Clean Water Act to protect fish and other aquatic organisms by minimizing impingement mortality (the capture of aquatic wildlife on intake structures or against screens) and entrainment mortality (the capture of fish or shellfish in water flow entering and passing through intake structures).

To minimize impingement mortality, the rule provides operators of facilities, such as Four Corners, seven options for meeting Best Technology Available (“BTA”) standards for reducing impingement. The permitting authority must establish the

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BTA for entrainment on a site-specific basis, taking into consideration an array of factors, including endangered species and social costs and benefits. Affected sources must submit source water baseline characterization data to the permitting authority to assist in the determination. Compliance deadlines under the rule are tied to permit renewal and will be subject to a schedule of compliance established by the permitting authority.

In 2018, several environmental groups sued EPA Region IX in the U.S. Court of Appeals for the Ninth Circuit Court over EPA’s failure to timely reissue the Four Corners NPDES permit. The petitioners asked the court to issue a writ of mandamus compelling EPA Region IX to take final action on the pending NPDES permit by a reasonable date. EPA subsequently reissued the NPDES permit. The permit did not contain conditions related to the cooling water intake structure rule, as EPA determined that the facility has achieved BTA for both impingement and entrainment by operating a closed-cycle recirculation system. Several environmental groups filed a petition for review with EPA’s Environmental Appeals Board (“EAB”) concerning the reissued permit. The environmental groups alleged that the permit was reissued in contravention of several requirements under the Clean Water Act and did not contain required provisions concerning certain revised ELG, existing-source regulations governing cooling-water intake structures, and effluent limits for surface seepage and subsurface discharges from coal-ash disposal facilities. EPA withdrew the Four Corners NPDES permit in order to examine issues raised by the environmental groups. Withdrawal of the permit moots the appeal pending before the EAB. EAB thereafter dismissed the environmental groups’ appeal. EPA issued an updated NPDES permit in 2019. The permit was once again appealed to the EAB and was stayed before the effective date. Oral argument was heard on September 3, 2020. The EAB issued an order denying the petition for review on September 30, 2020. The denial was based on the EAB’s determination that the petitioners had failed to demonstrate that review of the permit was warranted on any of the grounds presented in the petition. Thereafter, the Regional Administrator of the EPA signed a notice of final permit decision, and the NPDES permit was issued on November 9, 2020. The permit became effective December 1, 2020 and will expire on November 30, 2025. On January 22, 2021, the environmental groups filed a petition for review of the EAB’s decision with the U.S. Court of Appeals for the Ninth Circuit. The September 2019 permit remains in effect pending this appeal. On March 21, 2022, EPA provided notice in the Federal Register of a proposed settlement agreement with the environmental groups. The parties subsequently executed the settlement agreement as of May 2, 2022. Under the settlement, the associated case was administratively closed through September 6, 2023, during which time a third-party consultant spent 12 months sampling discharges from Four Corners and EPA spent three months completing an analysis. On December 1, 2023, EPA issued a modification, effective December 31, 2023, to the NPDES permit issued on November 9, 2020. The modification applies to permit elements related to effluent discharge. PNM cannot predict whether the analysis under the settlement agreement will result in changes to the NPDES permit but does not anticipate that it will have a material impact on PNM’s financial position, results of operations, or cash flows.

Effluent Limitation Guidelines

In 2013, EPA published proposed revised wastewater ELG establishing technology-based wastewater discharge limitations for fossil fuel-fired electric power plants.  EPA signed the final Steam Electric ELG rule in 2015. The final rule, which became effective on January 4, 2016, phased in the new, more stringent requirements in the form of effluent limits for arsenic, mercury, selenium, and nitrogen for wastewater discharged from wet scrubber systems and zero discharge of pollutants in ash transport water that must be incorporated into plants’ NPDES permits. The 2015 rule required each plant to comply between 2018 and 2023 depending on when it needs a new or revised NPDES permit.

The Steam Electric ELG rule was challenged in the U.S. Court of Appeals for the Fifth Circuit by numerous parties. In 2017, EPA signed a notice indicating its intent to reconsider portions of the rule, and the Fifth Circuit issued an order severing the issues under reconsideration and holding the case in abeyance as to those issues. However, the court allowed challenges to other portions of the rule to proceed. In 2019, the Fifth Circuit granted those challenges and issued an opinion vacating several portions of the rule, specifically those related to legacy wastewater and leachate, for which the court deemed the standards selected by EPA arbitrary and capricious.

In 2017, EPA published a final rule for postponement of certain compliance dates. The rule postponed the earliest date on which compliance with the ELG for these waste streams would be required from November 1, 2018 until November 1, 2020. In 2019, EPA published a proposed rule revising the original ELG while maintaining the compliance dates. In 2020, EPA published in the Federal Register the final Steam Electric ELG and standards for the Steam Electric Power Generating Point Source Category, revising the final 2015 guidelines for both flue gas desulfurization wastewater and bottom ash transport water. The rule requires compliance with new limits as soon as possible on or after October 13, 2021, but no later than December 31, 2025.

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On August 3, 2021, EPA published notice that it will undertake a supplemental rulemaking to revise the ELG after completing its review of the rules reconsidered in 2020. As part of this process, EPA will determine whether more stringent limitations and standards are appropriate. On March 29, 2023, EPA published the proposed ELG Rule in the Federal Register. The proposed rule includes stricter limitations on bottom ash transport water, flue gas desulfurization, and coal combustion residual leachate. Also included are flexibilities for coal-powered facilities that will soon decommission or repower. With this proposed rule EPA has extended the date of decommissioning or repowering from December 31, 2028, to December 31, 2032. Comments on the proposed rule were due May 30, 2023.

On April 24, 2024, EPA signed a final rule to revise ELGs under the Clean Water Act for the Steam Electric Power Generating Point Source Category. This final supplemental rule updates the technology-based ELGs applicable to flue gas desulfurization wastewater, bottom ash transport water, and legacy wastewater at existing sources, and combustion residual leachate at new and existing sources.

Reeves Station discharges cooling tower blowdown to a publicly owned treatment plant and no longer holds an NPDES permit; therefore, it is expected that no requirements will be imposed.

See “Cooling Water Intake Structures” above for additional discussion of Four Corners’ current NPDES permit. Four Corners may be required to change equipment and operating practices affecting boilers and ash handling systems, as well as change its waste disposal techniques during the next NPDES permit renewal in 2023. PNM is unable to predict the outcome of these matters or a range of the potential costs of compliance.

Santa Fe Generating Station

PNM and NMED are parties to agreements under which PNM has installed a remediation system to treat water from a City of Santa Fe municipal supply well and an extraction well to address gasoline contamination in the groundwater at the site of PNM’s former Santa Fe Generating Station and service center. A 2008 NMED site inspection report states that neither the source nor extent of contamination at the site has been determined and that the source may not be the former Santa Fe Generating Station. During 2013 and 2014, PNM and NMED collected additional samples that showed elevated concentrations of nitrate and volatile organic compounds in some of the monitoring wells at the site. In addition, one monitoring well contained free-phase hydrocarbon products. PNM collected a sample of the product for “fingerprint” analysis. The results of this analysis indicated the product was a mixture of older and newer fuels. The presence of newer fuels in the sample suggests the hydrocarbon product likely originated from off-site sources. In 2015, PNM and NMED entered into a memorandum of understanding to address changing groundwater conditions at the site under which PNM agreed to continue hydrocarbon investigation under the supervision of NMED. Qualified costs are eligible for payment through the New Mexico Corrective Action Fund (“CAF”), which is administered by the NMED Petroleum Storage Tank Bureau. In 2019, PNM received notice from NMED that an abatement plan for the site is required to address concentrations of previously identified compounds, unrelated to those discussed above, found in the groundwater. NMED approved PNM’s abatement plan proposal, which covers field work and reporting.

Field work related to the investigation under both the CAF and abatement plan requirements was completed and activities and findings associated with the field work were presented in two separate reports and released to stakeholders in early 2020. Subsequent field work was completed in July 2020 and two reports were released supporting PNM’s contention that off-site sources have impacted, and are continuing to impact, the local groundwater in the vicinity of the former Santa Fe Generating Station.

PNM submitted work plans to NMED in January 2021 for review and approval. In December 2021, NMED approved both work plans and work activities were completed by the end of 2022 and a report was submitted to the NMED in the first quarter of 2023.

Groundwater sampling for the abatement plan’s first semiannual work commenced at the beginning of March 2023 and was completed in April 2023. The associated report was completed and submitted to the NMED in July 2023. In addition, the work plan for the 2023 CAF work was completed and submitted to the NMED in July 2023. NMED approved the work plan in December 2023 and PNM is working to schedule the associated activities.

The City of Santa Fe has stopped operating its well at the site, which is needed for PNM’s groundwater remediation system to operate. As a result, PNM has stopped performing remediation activities at the site. However, PNM’s monitoring and other abatement activities at the site are ongoing and will continue until the groundwater meets applicable federal and state standards or until the NMED determines remediation is not required, whichever is earlier. PNM is not able to assess the

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duration of this project or estimate the impact on its obligations if PNM is required to resume groundwater remediation activities at the site. PNM is unable to predict the outcome of these matters.

Coal Combustion Residuals Waste Disposal

CCRs consisting of fly ash, bottom ash, and gypsum generated from coal combustion and emission control equipment at SJGS are currently disposed of in the surface mine pits adjacent to the plant. SJGS does not operate any CCR impoundments or landfills. The NMMMD currently regulates mine reclamation activities at the San Juan mine, including placement of CCRs in the surface mine pits, with federal oversight by the OSM. APS disposes of CCRs in ponds and dry storage areas at Four Corners.  Ash management at Four Corners is regulated by EPA and the New Mexico State Engineer’s Office.

EPA’s final coal ash rule, which became effective in 2015, included a non-hazardous waste determination for coal ash and sets minimum criteria for existing and new CCR landfills and surface impoundments. In 2016, the Water Infrastructure Improvements for the Nation Act (the “WIIN Act”) was signed into law to address critical water infrastructure needs in the U.S. and contains a number of provisions related to the CCR rules. Among other things, the WIIN Act allows, but does not require, states to develop and submit CCR permit programs for EPA approval, provides flexibility for states to incorporate EPA’s final rule for CCRs or develop other criteria that are at least as protective as EPA’s final rule, and requires EPA to approve state permit programs within 180 days of submission by the state. Because states are not required to implement their own CCR permit programs, EPA will implement the permit program in states that choose not to implement a program, subject to Congressional funding. Until permit programs are in effect, EPA has authority to directly enforce the CCR rule. For facilities located within the boundaries of Native American reservations, such as the Navajo Nation where Four Corners is located, EPA is required to develop a federal permit program regardless of appropriated funds.

In 2018, EPA published a rule that constitutes “Phase One, Part One” of its ongoing reconsideration and revision of the April 17, 2015, CCR rule. The final Phase One, Part One rule includes two types of revisions. The first revision extended the deadline to allow EGUs with unlined impoundments or that fail to meet the uppermost aquifer requirement to continue to receive coal ash until October 31, 2020. This deadline was again extended by subsequent amendments. The rule also authorized a “Participating State Director” or EPA to approve suspension of groundwater monitoring requirements and to issue certifications related to the location restrictions, design criteria, groundwater monitoring, remedy selection and implementation. The rule also modified groundwater protection standards for certain constituents, which include cobalt, molybdenum, lithium, and lead without a maximum contamination level.

In 2019, EPA published a second round of revisions, which are commonly referred to as the “Phase Two” revisions. Phase Two proposed revisions to reporting and accessibility to public information, the “CCR piles” and “beneficial use” definitions and the requirements for management of CCR piles. EPA has reopened and extended the Phase Two comment period several times. EPA has not yet finalized provisions in Phase Two related to beneficial use of CCR and CCR piles. This activity is on EPA’s long-term agenda, which means EPA has no plans to address these issues in the next 12 months.

Since promulgating its Phase Two proposal, EPA has finalized two other rules addressing various CCR rule provisions. In 2019, EPA promulgated its proposed Holistic Approach to Closure Part A (“Part A”), which proposed a new deadline of August 31, 2020, for companies to initiate closure of unlined CCR impoundments. In accordance with the DC Circuit Court of Appeals’ vacatur of portions of the CCR Rule, Part A also proposed changing the classification of compacted soil-lined or clay-lined surface impoundments from “lined” to “unlined”. In addition, Part A delineated a process for owners/operators to submit requests for alternative closure deadlines based on lack of alternate disposal capacity. EPA issued the final Part A, which became effective on September 28, 2020. This rule finalized the classification of soil-lined and clay-lined surface impoundments as unlined, thus, triggering closure or retrofit requirements for those impoundments. The final Part A also gave operators of unlined impoundments until April 11, 2021 to cease receipt of waste at these units and initiate closure.

In 2020, EPA issued the proposed Holistic Approach to Closure Part B (“Part B”), which delineated the process for owners/operators to submit alternate liner demonstrations for clay-lined surface impoundments that could otherwise meet applicable requirements. Part B also proposed regulations addressing beneficial use for closure of surface impoundments. EPA issued the final Part B rule, which became effective on December 14, 2020. This rule did not include beneficial use of CCR for closure, which EPA explains will be addressed in subsequent rulemaking actions. On May 18, 2023, EPA published a proposed rule on the regulatory requirements for inactive surface impoundments at inactive facilities including groundwater monitoring, corrective action, closure, and post-closure care requirements for all CCR management units (regardless of how or when that CCR was placed), and several technical corrections to the existing regulations. Comments on the proposed rule were due July 17, 2023. EPA intends to issue other rulemakings and finalizing parts of previously proposed rules, including a final rule in October 2024 on remaining Part B issues regarding closure options and annual reporting.

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On April 24, 2024, EPA Administrator Regan signed a final rule that extends federal CCR regulatory requirements to (1) inactive CCR surface impoundments at inactive utilities and (2) CCR management units (“CCRMU”), including CCR impoundments and landfills that closed prior to the effective date of the 2015 CCR rule, inactive CCR landfills, and other areas where CCR is managed directly on the land. EPA included deferral options for smaller CCRMU containing between one and 1,000 tons of CCR, CCRMU located beneath critical infrastructure or large buildings or structures vital to the continuation of current site activities, and CCRMU that closed prior to the effective date of the new rule. EPA also codified the controversial definitions of infiltration and liquids that are being litigated in the DC Circuit.

In 2020, EPA published a proposed rule establishing a federal permitting program for the handling of CCR within the boundaries of Native American reservations and in states without their own federally authorized state programs. Permits for units within the boundaries of Native American reservations would be due 18 months after the effective date of the rule. According to the Fall 2023 Regulatory Agenda the final rule is expected in March 2026. EPA is coordinating with the affected permits for the three facilities with CCR disposal units located on Native American lands. PNM cannot predict the outcome of EPA’s rulemaking activity or the outcome of any related litigation, and whether or how such a ruling would affect operations at Four Corners.

The CCR rule does not cover mine placement of coal ash. OSM is expected to publish a proposed rule covering mine placement in the future and will likely be influenced by EPA’s rule and the determination by EPA that CCRs are non-hazardous. PNM cannot predict the outcome of OSM’s proposed rulemaking regarding CCR regulation, including mine placement of CCRs, or whether OSM’s actions will have a material impact on PNM’s operations, financial position, or cash flows. Based upon the requirements of the final Part A CCR rule, PNM conducted a CCR assessment at SJGS and made minor modifications at the plant to ensure that there are no facilities that would be considered impoundments or landfills under the rule. PNM would seek recovery from its retail customers of all CCR costs for jurisdictional assets that are ultimately incurred.

Utilities that own or operate CCR disposal units, such as those at Four Corners, as indicated above, were required to collect sufficient groundwater sampling data to initiate a detection monitoring program.  Four Corners completed the analysis for its CCR disposal units, which identified several units that needed corrective action or needed to cease operations and initiate closure by April 11, 2021. Work is ongoing. Four Corners continues to gather additional groundwater data and perform remedial evaluations and activities. At this time, PNM does not anticipate its share of the cost to complete these corrective actions to close the CCR disposal units, or to gather and perform remedial evaluations on groundwater at Four Corners, will have a significant impact on its operations, financial position, or cash flows.

Other Commitments and Contingencies

Coal Supply

Four Corners

APS purchases all of Four Corners’ coal requirements from NTEC, an entity owned by the Navajo Nation, under the Four Corners CSA that expires in 2031. The coal comes from reserves located within the Navajo Nation. The contract provides for pricing adjustments over its term based on economic indices and certain minimum payments that may be required if no deliveries of coal are taken. PNM’s share of the coal costs is being recovered through the FPPAC. See additional discussion of the Four Corners CSA in Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Coal Mine Reclamation

As indicated under Coal Combustion Residuals Waste Disposal above, SJGS disposed of CCRs in the surface mine pits adjacent to the plant and Four Corners disposes of CCRs in ponds and dry storage areas.

Under the terms of the SJGS CSA, PNM and the other SJGS owners are obligated to compensate WSJ LLC for all reclamation costs associated with the supply of coal from the San Juan mine. PNM and Westmoreland have entered into an agreement under which mine reclamation services for SJGS would be provided. A mine reclamation costs study was completed in 2024 and PNM remeasured its liability, which resulted in an increase in overall reclamation costs of $20.9 million, due primarily to higher inflationary factors. As a result, PNM recorded an increase of $17.0 million in the liability at March 31, 2024 related to the underground mine in regulatory assets on the Condensed Consolidated Balance Sheets. In addition, PNM recorded an increase of $4.0 million in the liability and a decrease of $0.5 million in Deferred Regulatory assets at March 31, 2024 related to the surface mine as a regulatory disallowance of $4.5 million on the Condensed Consolidated Statements of

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Earnings, due to the fact that the NMPRC has capped the amount that can be collected from retail customers for final reclamation of the surface mines at $100.0 million. PNM’s estimate of the costs necessary to reclaim the mine that serves SJGS is subject to many assumptions, including the timing of reclamation, generally accepted practices at the time reclamation activities occur, and current inflation and discount rates. PNM cannot predict the ultimate cost to reclaim the mine that serves SJGS and would seek to recover all costs related to reclaiming the underground mine from its customers but could be exposed to additional loss related to surface mine reclamation. In connection with certain mining permits relating to the operation of the San Juan mine, Westmoreland was required to post reclamation bonds of $118.7 million with the NMMMD. In order to facilitate the posting of reclamation bonds by sureties on behalf of Westmoreland, PNMR entered into the WFB LOC Facility under which letters of credit aggregating $30.3 million have been issued.

A coal mine reclamation study for the mine that serves Four Corners was issued in 2019. The study reflected operation of the mine through 2031, the term of the Four Corners CSA.

Based on the most recent estimates, PNM’s remaining payments as of March 31, 2024 for mine reclamation, in future dollars, are estimated to be $51.4 million for the surface mines at both SJGS and Four Corners and $59.7 million for the underground mine at SJGS. At March 31, 2024 and December 31, 2023, liabilities, in current dollars, of $44.5 million and $50.0 million for surface mine reclamation and $47.9 million and $26.2 million for underground mine reclamation were recorded in other deferred credits.

The SJGS owners are parties to a reclamation trust funds agreement to provide financial assurance for post-term coal mine reclamation obligations. The trust funds agreement requires each owner to enter into an individual trust agreement with a financial institution as trustee, create an irrevocable reclamation trust, and meet year-end funding targets set by funding curves that are approved by the SJGS ownership. PNM funded $2.7 million in 2023. The recently completed and approved mine reclamation cost study resulted in an update to the trust’s funding curves. Based on PNM’s reclamation trust fund balance at March 31, 2024, and current funding curves, PNM anticipates contributing $20.7 million in 2024, $3.9 million in 2025, and $4.0 million in 2026. Additional contributions may be necessary in future years in order to meet the year end funding targets.

Under the Four Corners CSA, PNM is required to fund its share of estimated final reclamation costs in annual installments into an irrevocable escrow account solely dedicated to the final reclamation cost of the surface mine at Four Corners. PNM contributed $0.2 million in 2023 and $2.4 million in 2022. PNM anticipates providing additional funding of $3.1 million in 2024, $1.3 million in 2025, and $1.5 million in 2026.

PNM recovers from retail customers reclamation costs associated with the underground mine. However, the NMPRC capped the amount collected from retail customers for final reclamation of the surface mines at $100.0 million for both SJGS and Four Corners. If future estimates increase the liability for surface mine reclamation, the excess would be expensed at that time. The impacts of changes in New Mexico state law as a result of the enactment of the ETA and regulatory determinations made by the NMPRC may also affect PNM’s financial position, results of operations, and cash flows. PNM is currently unable to determine the outcome of these matters or the range of possible impacts.

SJGS Decommissioning

On November 9, 2021, the San Juan County Commission approved the Coal-Fired Electricity Generating Facility Demolition and Remediation Ordinance (“Ordinance 121”), requiring the full demolition of SJGS upon its complete and permanent closure. Ordinance 121 required the SJGS owners to submit a proposed demolition and remediation plan no later than three months after SJGS was retired. The SJGS owners submitted the decommissioning and remediation plan on December 28, 2022. In connection with restructuring of the SJGS ownership on December 31, 2017, PNM and the other SJGS owners entered into the San Juan Decommissioning and Trust Funds Agreement, which requires PNM to fund its ownership share of final decommissioning costs into an irrevocable trust. Under the agreement, PNM made an initial funding of $14.7 million in December 2022. The amount and timing of additional trust funding is subject to revised decommissioning cost studies and agreement among the SJGS owners. PNM has posted a surety bond in the amount of $46.0 million in connection with certain environmental decommissioning obligations and must maintain the bond or other financial assurance until those obligations are satisfied. The surety bond only represents a liability if the SJGS owners fail to deliver on its contractual liability. For information regarding the impact of Ordinance 121 on PNM’s SJGS decommissioning ARO see Note 15 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PNM records its share of the SJGS decommissioning obligation as an ARO on its Condensed Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. In the third quarter of 2022, a new decommissioning cost study was completed, which required PNM to remeasure its

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PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

SJGS decommissioning ARO. The new study resulted in an estimated decrease to PNM’s share of the decommissioning obligation of $21.1 million, which was recorded in September 2022. Additional information concerning the Company’s SJGS decommissioning ARO is contained in Note 15 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PVNGS Liability and Insurance Matters

Public liability for incidents at nuclear power plants is governed by the Price-Anderson Nuclear Industries Indemnity Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both commercial sources and an industry-wide retrospective payment plan. The insurance limit is subject to an adjustment every five years based upon the aggregate percentage change in the CPI. The most recent adjustment took effect on October 5, 2023. As of that date, in accordance with this act, the PVNGS participants are insured against public liability exposure for a nuclear incident up to $16.3 billion per occurrence. PVNGS maintains the maximum available nuclear liability insurance in the amount of $500 million, which is provided by American Nuclear Insurers. The remaining $15.8 billion is provided through a mandatory industry-wide retrospective assessment program. If losses at any nuclear power plant covered by the program exceed the accumulated funds, PNM could be assessed retrospective premium adjustments. After the expiration of the PVNGS Unit 1 and Unit 2 leases in January 2023 and January 2024, PNM’s maximum potential retrospective premium assessment per incident for all three units is $36.3 million, with a maximum annual payment limitation of $5.4 million, to be adjusted periodically for inflation.

The PVNGS participants maintain insurance for damage to, and decontamination of, property at PVNGS in the aggregate amount of $2.8 billion, a substantial portion of which must first be applied to stabilization and decontamination. These coverages are provided by Nuclear Electric Insurance Limited (“NEIL”). The primary policy offered by NEIL contains a sublimit of $2.25 billion for non-nuclear property damage. If NEIL’s losses in any policy year exceed accumulated funds, PNM is subject to retrospective premium adjustments of $4.9 million. The insurance coverages discussed in this and the previous paragraph are subject to certain policy conditions, sublimits, and exclusions.

(12)   Regulatory and Rate Matters

The Company is involved in various regulatory matters, some of which contain contingencies that are subject to the same uncertainties as those described in Note 11. Additional information concerning regulatory and rate matters is contained in Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PNM

New Mexico General Rate Case

2024 Rate Change

On December 5, 2022, PNM filed an application with the NMPRC for a general increase in retail electric rates including recovery on total rate base of $2.7 billion based on a calendar year 2024 FTY, an increase of $63.8 million in retail non-fuel revenues, and an ROE 10.25%. The application also proposed ratemaking treatment of PVNGS Leased Interest and testimony supporting the prudence of PNM’s decisions to renew the five leases and repurchase 64.1 MW of PVNGS Unit 2 capacity.

On January 3, 2024, the NMPRC issued a final order authorizing PNM to implement an increase in non-fuel base rates of $15.3 million, effective for service beginning January 15, 2024. Major components of the difference compared to PNM’s application include:

•A ROE of 9.26%.

•A capital structure of 49.61% equity, 50.10% debt, and 0.29% preferred stock.

•Finding of imprudence regarding PNM’s decision to remain in Four Corners and a remedy for the imprudence resulting in a disallowance of $81.0 million to PNM’s total Four Corners net book value.

•Approval of $51.3 million of PNM’s requested $96.3 million regulatory asset for PVNGS undepreciated investments, but disallowance of a return on the remaining $45.0 million or any CWIP associated with it.

•Requiring that the $38.4 million regulatory liability associated with leased capacity at PVNGS after the Unit 1 lease expired on January 15, 2023, be returned to ratepayers over two years through a separate rate rider.

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PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

•The approval of new depreciation rates, reflecting shorter useful lives, of PNM’s gas plants with service lives and depreciable lives extending beyond January 1, 2045, which would include PNM’s La Luz and Luna generating stations.

•The approval of PNM’s TOD pilot program, with a requirement to make annual compliance filings and to adjust certain rate schedules.

For additional details related to the initial application, see Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

In the year ended December 31, 2023, PNM evaluated the outcome of the NMPRC final order in the 2024 Rate Change and recorded a regulatory disallowance of $55.5 million on the Consolidated Statement of Earnings and a corresponding reduction to Utility Plant, after accounting for previous impairments, to reflect the remedy adopted in the Final Order for Four Corners. In addition, PNM recorded a reduction to electric operating revenues of $38.4 million with a corresponding current regulatory liability of $19.2 million and a deferred regulatory liability of $19.2 million for the PVNGS rate refunds that will be returned to customers over a two-year period. PNM also recorded a regulatory disallowance of $8.2 million on the Consolidated Statement of Earnings and a corresponding reduction to Utility Plant for the disallowance of CWIP from PVNGS.

In March 2024, notice of appeals were separately filed with the NM Supreme Court by NEE and PNM, and a joint notice of appeal was filed by the NM Department of Justice, Bernalillo County, and ABCWUA. Statements of issues from appellants are due June 5, 2024.

2025 Rate Change

As previously indicated, PNM anticipates filing a general rate case during 2024 with rates requested to be implemented during 2025. On March 18, 2024, PNM filed a motion for variance with the NMPRC, requesting a 16-day variance which would allow for the filing of its next general rate case to be on or before June 14, 2024. The proposed rate case will include a FTY beginning on July 1, 2025 and a base period ending December 31, 2023. On April 18, 2024, the motion for variance was granted.

Renewable Energy Portfolio Standard

As discussed in Note 11, the ETA amends the REA including removal of diversity requirements and certain customer caps and exemptions relating to the application of the RPS under the REA. The REA provides for streamlined proceedings for approval of utilities’ renewable energy procurement plans, assures that utilities recover costs incurred consistent with approved procurement plans, and requires the NMPRC to establish a Reasonable Cost Threshold (“RCT”) for the procurement of renewable resources to prevent excessive costs being added to rates. The ETA sets a RCT of $60 per MWh, adjusted for inflation, using an average annual levelized resource cost basis. PNM makes renewable procurements consistent with the NMPRC approved plans and recovers certain renewable procurement costs from customers through the renewable energy rider billed on a KWh basis.

Included in PNM’s approved procurement plans are the following renewable energy resources:

•158 MW of PNM-owned solar-PV facilities

•A PPA through 2044 for the output of New Mexico Wind, having a current aggregate capacity of 200 MW, and a PPA through 2035 for the output of Red Mesa Wind, having an aggregate capacity of 102 MW

•A PPA through 2040 for 140 MW of output from La Joya Wind II

•A PPA through 2042 for the output of the Lightning Dock Geothermal facility with a capacity of 11 MW

•Solar distributed generation, aggregating 289.3 MW at March 31, 2024, owned by customers or third parties from whom PNM purchases any net excess output and RECs

The NMPRC has authorized PNM to recover certain renewable procurement costs through a rate rider billed on a per KWh basis. In its 2024 renewable energy procurement plan, which became effective on January 1, 2024, PNM proposed to collect $59.0 million for the year. PNM recorded revenues from the rider of $15.3 million and $18.6 million in the three months ended March 31, 2024 and 2023.

Under the renewable rider, if PNM’s earned rate of return on jurisdictional equity in a calendar year, adjusted for items not representative of normal operations, exceeds the NMPRC-approved rate by 0.5%, PNM is required to refund the excess to

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PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

customers during May through December of the following year. PNM did not exceed such limitation in 2023.

Energy Efficiency and Load Management

Program Costs and Incentives/Disincentives

The New Mexico Efficient Use of Energy Act (“EUEA”) requires public utilities to achieve specified levels of energy savings and to obtain NMPRC approval to implement energy efficiency and load management programs. The EUEA requires the NMPRC to remove utility disincentives to implementing energy efficiency and load management programs and to provide incentives for such programs. The NMPRC has adopted a rule to implement this act. PNM’s costs to implement approved programs and incentives are recovered through a rate rider. During the 2019 New Mexico legislative session, the EUEA was amended to, among other things, include a decoupling mechanism for disincentives, preclude a reduction to a utility’s ROE based on approval of disincentive or incentive mechanisms, establish energy savings targets for the period 2021 through 2025, and require that annual program funding be 3% to 5% of an electric utility’s annual customer bills excluding gross receipt taxes, franchise and right-of-way access fees, provided that a customer’s annual cost does not exceed seventy-five thousand dollars.

On April 17, 2023, PNM filed an application for energy efficiency and load management programs to be offered in 2024, 2025, and 2026 (the “2024 Plan”). The 2024 Plan proposed to continue ten existing energy efficiency programs with modification and a total annual budget of $34.5 million in 2024, $35.4 million in 2025, and $36.5 million in 2026. The application also sought approval of an annual base incentive of 7.1% of the portfolio budget and a sliding scale that provides additional incentive for additional energy saved as a percentage of program cost, up to the maximum allowed by the energy efficiency rule which for PNM is 8.82%. On January 26, 2024, the hearing examiners in the case issued a RD. The RD largely approved PNM’s 2024 Plan but with modifications that include the pursuit of demand response resources, additional analysis in future filings, adjustments to certain energy efficiency programs, and modification of the incentive sliding scale cap to reflect a new maximum. On March 7, 2024, the NMPRC approved the RD in its entirety.

2020 Decoupling Petition

As discussed above, the legislature amended the EUEA to, among other things, include a decoupling mechanism for disincentives. On May 28, 2020, PNM filed a petition for approval of a rate adjustment mechanism that would decouple the rates of its residential and small power rate classes. Decoupling is a rate design principle that severs the link between the recovery of fixed costs of the utility through volumetric charges. On July 13, 2020, NEE, ABCWUA, the City of Albuquerque, and Bernalillo County filed motions to dismiss the petition on the grounds that approving PNM’s proposed rate adjustment mechanism outside of a general rate case would result in retroactive ratemaking and piecemeal ratemaking. The motions to dismiss also alleged that PNM’s proposed rate adjustment mechanism is inconsistent with the EUEA. On October 2, 2020, PNM requested an order to vacate the public hearing, scheduled to begin October 13, 2020, and staying the proceeding until the NMPRC decides whether to entertain a petition to issue a declaratory order resolving the issues raised in the motions to dismiss. On October 7, 2020, the hearing examiner approved PNM’s request to stay the proceeding and vacate the public hearing and required PNM to file a petition for declaratory order by October 30, 2020. On October 30, 2020, PNM filed a petition for declaratory order asking the NMPRC to issue an order finding that full revenue decoupling is authorized by the EUEA. On November 4, 2020, ABCWUA and Bernalillo County jointly filed a competing petition asking the NMPRC to issue a declaratory order on the EUEA’s requirements related to disincentives. On March 17, 2021, the NMPRC issued an order granting the petitions for declaratory order, commencing a declaratory order proceeding to address the petitions and appointing a hearing examiner to preside over the declaratory order proceeding.

On January 14, 2022, the hearing examiner issued a RD recommending the NMPRC find that the EUEA does not mandate the NMPRC to authorize or approve a full decoupling mechanism, defining full decoupling as limited to energy efficiency and load management measures and programs. The RD also states that a utility may request approval of a rate adjustment mechanism to remove regulatory disincentives to energy efficiency and load management measures and programs through a stand-alone petition, as part of the utility’s triennial energy efficiency application or a general rate case and that PNM is not otherwise precluded from petitioning for a rate adjustment mechanism prior to its next general rate case. Finally, the RD stated that the EUEA does not permit the NMPRC to reduce a utility’s ROE based on approval of a disincentive removal mechanism founded on removing regulatory disincentives to energy efficiency and load management measures and programs. The RD does not specifically prohibit a downward adjustment to a utility’s capital structure, based on approval of a disincentive removal mechanism. On April 27, 2022, the NMPRC issued an order adopting the RD in its entirety. On May 24, 2022, PNM filed a notice of appeal with the NM Supreme Court. The NM Supreme Court held oral arguments on November 13, 2023. PNM cannot predict the outcome of this matter.

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PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Integrated Resource Plans

NMPRC rules require that investor-owned utilities file an IRP every three years. The IRP is required to cover a 20-year planning period and contain an action plan covering the first three years of that period. On September 14, 2022, the NMPRC adopted revisions to the IRP Rule. The new rule revamps and modernizes the planning process to accommodate increased stakeholder involvement. The IRP Rule establishes a collaborative facilitated process for a utility and stakeholders to agree on a statement of need for potential new or additional resources, as well as an action plan to guide procurement or development of resources to meet the stated need. A most-cost-effective portfolio of resources shall be derived from the statement of need analysis. The statement of need and action plan must be accepted before the utility begins the resource solicitation process pursuant to the IRP Rule. Following acceptance of the statement of need and action plan, a utility will provide the NMPRC and intervenors drafts of the request for proposals (“RFP”) and a timeline for issuing, receiving, evaluating, and ranking bids. The NMPRC will then appoint an Independent Monitor (“IM”) to oversee the RFP process, which allows for parties and the IM to comment on the RFP consistency with the IRP, after which the utility issues the RFP. Within 120 days of receiving bids the utility shall provide the IM with results including pricing and non-price evaluation criteria, ranking of bids, chosen portfolio and alternatives that also meet the needs; the IM then rules on the fairness of the RFP execution. Acceptance of the statement of need and action plan will not constitute a finding of prudency or pre-approval of costs associated with the additional resources. Following the RFP and IM processes, the utility may apply for approvals, and any costs incurred to implement the action plan will be considered in a general rate case and/or resource acquisition proceeding. On October 14, 2022, PNM and other investor-owned utilities filed motions for rehearing with the NMPRC. On October 26, 2022, the NMPRC issued an order partially granting and partially denying certain aspects of PNM’s and the other investor-owned utilities’ motions for rehearing. On November 2, 2022, the NMPRC adopted an amended IRP Rule. On December 2, 2022, PNM filed an appeal with the NM Supreme Court. Two other investor-owned utilities also separately filed appeals at the NM Supreme Court. On January 3, 2023, PNM and the two other investor-owned utilities filed statements of issues with the NM Supreme Court. Among other things, the investor-owned utilities question whether the IRP Rule exceeds the NMPRC authority by imposing unauthorized requirements on utilities and extending NMPRC jurisdiction through over-broad interpretation of the statutes and state that the IRP Rule is contrary to law in its provisions for NMPRC regulation of a utility’s resource procurement decision-making. On June 5, 2023, PNM and the other two investor-owned utilities filed their Joint Brief in Chief and request for oral arguments at the NM Supreme Court. On November 22, 2023, the NM Supreme Court scheduled oral arguments for May 13, 2024. PNM cannot predict the outcome of this matter.

2023 IRP

On December 15, 2023, PNM filed its 2023 IRP with a continued focus on a carbon-free energy system by 2040. The plan highlights the need for the significant sustained addition of resources over the next two decades, replacing retiring or expiring capacity, meeting concurrent load growth, while reducing the carbon intensity of PNM’s portfolio. On April 4, 2024, the NMPRC accepted PNM’s 2023 IRP. On May 2, 2024, the NMPRC issued an order appointing an independent monitor who will report the results of PNM’s 2023 IRP.

Four Corners Abandonment Application

In 2020, PNM entered into the Four Corners Purchase and Sale Agreement with NTEC, pursuant to which PNM agreed to sell its 13% ownership interest (other than certain transmission assets) in Four Corners to NTEC, contingent upon NMPRC approval. In connection with the sale, PNM would make payments of $75.0 million to NTEC for relief from its obligations under the coal supply agreement for Four Corners after December 31, 2024. PNM made an initial payment to NTEC of $15.0 million in November 2020, subject to refund with interest upon termination of the Four Corners Purchase and Sale Agreement prior to closing. Under the terms of the Four Corners Purchase and Sale Agreement, upon receipt of the NMPRC approval, PNM was expected to make a final payment of $60.0 million.

On January 8, 2021, PNM filed the Four Corners Abandonment Application, which sought NMPRC approval to exit PNM’s share of Four Corners as of December 31, 2024, and issuance of approximately $300 million of Securitized Bonds as provided by the ETA. On December 15, 2021, the NMPRC issued a final order denying approval of the Four Corners Abandonment Application and the corresponding request for issuance of securitized financing. On December 22, 2021, PNM filed a Notice of Appeal with the NM Supreme Court of the NMPRC decision to deny the application and on July 6, 2023, the NM Supreme Court affirmed the NMPRC decision concluding that the NMPRC reasonably and lawfully denied PNM’s application for abandonment. On April 23, 2024, PNM filed an interim notice informing the NMPRC that PNM’s updated analysis indicates it is in the interest of customers for PNM to remain as a participant in Four Corners until the expiration of the current coal supply agreement in 2031. PNM continues to work with the other Four Corners owners to update the necessary project agreements to reflect this continued participation.

61

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Summer Peak Resource Adequacy

Beginning in 2021 PNM began providing notices of delays, as received from developers, and status updates to the NMPRC for the approved SJGS replacement resource projects as well as delays in replacement resources for the PVNGS leased capacity that expired in January 2023 and January 2024. While PNM continues to experience new system peaks, PNM’s generation resources performed sufficiently with no challenges to resource adequacy during the 2023 summer peak season. While some of the replacement resources have come online, other replacement resources have experienced additional developer delays and PNM has entered into additional firm energy market purchases necessary to meet customer load during the 2024 summer season. See Note 7.

2026 Resource Application

On October 25, 2023, PNM filed an application with the NMPRC seeking approval of resources to be available for the 2026 summer peak. The application includes approval of a 100 MW solar PPA and three battery storage agreements of 100 MW, 100 MW, and 50 MW. In addition, PNM is seeking approval of a CCN for a 60 MW battery storage system to be owned by PNM. The resources are necessary for PNM to safely and reliably meet its projected system load. A hearing was held on March 20 and 21, 2024. PNM is unable to predict the outcome of this matter.

Grid Modernization Application

On October 3, 2022, in compliance with New Mexico Grid Modernization Statute, PNM filed its Grid Modernization Application with the NMPRC. The projects included in the Grid Modernization Application improve customers’ ability to customize their use of energy and ensure that customers, including low-income customers, are a top priority and will benefit consistent with the Grid Modernization Statute. PNM’s proposal to modernize its electricity grid through infrastructure and technology improvements also increases the efficiency, reliability, resilience, and security of PNM’s electric system. PNM’s application seeks approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy. The proposed Grid Modernization Rider would recover capital costs, operating expenses, and taxes associated with the investments included in the Grid Modernization Application. PNM also requested authorization to create related regulatory assets and liabilities, permitting PNM to record costs incurred for the development and implementation of PNM’s plan between the requested approval of the application on July 1, 2023, and the implementation of the Grid Modernization Rider by September 1, 2023; undepreciated investments associated with legacy meters being replaced with AMI meters; and over- or under-collection of costs through the Grid Modernization Rider. In addition, PNM requested approval of the proposed format of an Opt-Out Consent Form and methodology to determine PNM’s proposed cost-based opt-out fees, which includes a one-time fee and a monthly fee. Following a hearing and subsequent briefs, on May 31, 2023, the NMPRC issued an order requiring the hearing examiner to direct PNM to file a cost benefit analysis as a supplement to the application. On November 22, 2023, PNM filed the required cost benefit analysis supporting PNM’s proposed Grid Modernization plan. A hearing began on April 23, 2024. PNM is unable to predict the outcome of this matter.

The Community Solar Act

In 2021, the Community Solar Act established a program that allows for the development of community solar facilities and provides customers of a qualifying utility with the option of subscribing to community solar facilities, and in exchange would receive a bill credit from their utility, while the utility received energy from the community solar facility. The NMPRC is charged with administering the Community Solar Act program, establishing a total maximum capacity of 200 MW community solar (applicable until November 2024) facilities and allocating proportionally to the New Mexico electric investor-owned utilities and participating cooperatives. On March 30, 2022, the NMPRC issued an order that adopted a rule on the administration of the Community Solar Act program. The rule required utilities to file proposed community solar tariffs with the NMPRC within 60 days from the publication of the rule. A number of motions for rehearing and requests for clarification were filed between April 7 and May 2, 2022. On May 18, 2022, the NMPRC issued an order partially granting motions for rehearing, reconsideration and clarification and staying implementation pending further rulemaking. On June 16, 2022, PNM requested clarification related to the existing interconnection queue, which would not delay implementation of the Community Solar Act program. On July 12, 2022, the NMPRC provided notice of publication of its final rule in the New Mexico Register, starting the 60-day clock for utilities to file their proposed community solar tariffs, forms, and other relevant agreements. On September 14, 2022, PNM filed Community Solar tariffs. On October 12, 2022, the NMPRC issued an order to suspend PNM’s and two other investor-owned utilities tariffs and required the utilities to file information NMPRC Staff has identified as necessary for a complete evaluation of the tariffs but did not appoint a hearing examiner or schedule a public hearing. Another investor-owned utility has filed an appeal with the NM Supreme Court seeking review of the NMPRC’s decisions, to which

62

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

PNM has intervened. The NM Supreme Court held oral arguments on March 11, 2024 and issued an order upholding the Community Solar Rule and affirming without further delay the implementation of the Community Solar Act program.

On November 16, 2022, PNM filed its Community Solar tariff which establishes the Community Solar bill credit to be applied to an eligible retail customer of PNM who is a subscriber to a community solar facility. On December 23, 2022, PNM filed an updated Community Solar tariff under protest and filed a motion for clarification, suspension, and timely hearing on PNM’s Community Solar tariff. On January 18, 2023, the NMPRC suspended PNM’s Community Solar tariff. On March 1, 2023, the NMPRC issued an Order Opening a New Docket for Two-Phase Proceedings. The first phase addressed issues concerning the proposed subscriber organization agreements and the proposed customer data forms. The second phase will address all issues concerning proposed tariffs, agreements and forms that are not addressed in the first phase. On May 31, 2023, the utilities filed a Consolidated Reply Brief to the NMPRC and the Joint Intervenors-Appellee filed Answer Briefs in the NM Supreme Court proceeding. On September 21, 2023, the NMPRC issued an order approving an uncontested stipulation on the first phase and on October 30, 2023, PNM’s advice notice conforming to the stipulation became effective. A hearing for the second phase was held from January 17 through January 19, 2024. PNM cannot predict the outcome of the pending matters.

Transportation and Electrification Program (TEP)

On June 1, 2023, PNM filed its 2024-2026 TEP with the NMPRC, requesting approval of a $37.1 million total three-year budget and continuation of the current TEP Rider. Approximately 22% of the budget, $8.0 million, will be dedicated to low-income customers. A hearing was held on December 13, 2023. On February 2, 2024, the hearing examiners in the case issued a RD largely approving PNM’s 2024 Plan but with modifications to certain TEP programs. On February 23, 2024, the NMPRC approved the RD with additional modifications that reduced the three-year budget by $4.0 million, for a total revised budget of $32.9 million.

TNMP

Transmission Cost of Service Rates

TNMP can update its TCOS rates twice per year to reflect changes in its invested capital although updates are not allowed while a general rate case is in process. Updated rates reflect the addition and retirement of transmission facilities, including appropriate depreciation, federal income tax and other associated taxes, and the approved rate of return on such facilities. The following sets forth TNMP’s recent interim transmission cost rate increases:

Effective Date	Approved Increase in Rate Base		Annual Increase in Revenue
	(In millions)
May 12, 2023	$	150.5	$	19.4
September 6, 2023	21.4		4.2
March 15, 2024	97.4		13.1

Periodic Distribution Rate Adjustment

PUCT rules permit interim rate adjustments to reflect changes in investments in distribution assets. Historically, distribution utilities have been restricted to a single, annual periodic rate adjustment through a DCRF submitted between April 1 and April 8 of each year as long as the electric utility was not earning more than its authorized rate of return using weather-normalized data. However, the recent passage of Senate Bill 1015 now permits DCRF proceedings to be filed twice per year with a 60-day administrative deadline that can be extended for 15 days on good cause. Additionally, a DCRF may be filed during a pending rate case proceeding as long as that DCRF request is not filed until the 185th day after the rate case proceeding was initiated. The following sets forth TNMP’s recent interim distribution rate increases:

Effective Date	Approved Increase in Rate Base		Annual Increase in Revenue
	(In millions)
September 1, 2022	$	95.7	$	6.8
September 1, 2023	157.0		14.5

63

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On April 1, 2024, TNMP filed its 2024 DCRF that requested an increase in TNMP annual distribution revenue requirement of $15.9 million based on an increase in rate base of $207.4 million. The case is pending review by the PUCT.

Energy Efficiency

TNMP recovers the costs of its energy efficiency programs through an energy efficiency cost recovery factor (“EECRF”), which includes projected program costs, under and over collected costs from prior years, rate case expenses, and performance bonuses (if programs exceed mandated savings goals). TNMP’s 2022 EECRF filing requested recovery of $7.3 million, including a performance bonus of $1.9 million, and became effective March 1, 2023. On May 26, 2023, TNMP filed its request to adjust the EECRF to reflect changes in costs for 2024. On September 28, 2023, the PUCT approved a unanimous stipulation, authorizing recovery of $6.6 million, including a performance bonus of $1.2 million based on TNMP’s energy efficiency achievements in the 2022 plan year.

(13)     Lease Commitments

The Company leases office buildings, vehicles, battery storage facilities, and other equipment. In addition certain rights-of-way agreements are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the balance sheet by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Condensed Consolidated Statements of Earnings. See additional discussion of the Company’s leasing activities in Note 8 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PVNGS

In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2.

On April 5, 2021, PNM and SRP entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to SRP certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $33.7 million, of which $28.4 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and is presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $5.3 million was recorded as a reduction to materials, supplies, and fuel stock on the Condensed Consolidated Balance Sheets and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and is presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Condensed Consolidated Balance Sheets and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows.

Land Easements and Rights-of-Ways

Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2023 payment for the amount due under the Navajo Nation right-of-way lease was $8.3 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019 are considered variable lease payments.

PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Condensed

64

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Condensed Consolidated Statement of Earnings over their term. As of March 31, 2024 and December 31, 2023, the unamortized balance of these rights-of-ways was $71.3 million and $56.2 million. PNM recognized amortization expense associated with these agreements of $1.1 million and $0.9 million in the three months ended March 31, 2024 and 2023.

Fleet Vehicles and Equipment

Fleet vehicle and equipment leases commencing on or after January 1, 2019 are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018 are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At March 31, 2024, residual value guarantees on fleet vehicle and equipment leases are $0.8 million, $1.0 million, and $1.8 million for PNM, TNMP, and PNMR Consolidated.

Battery Storage Agreements

The Company has entered into various battery storage agreements for 20-year terms and have fixed payments over the life of the agreements. The Company accounts for these agreements as operating leases and records the initial lease liabilities with corresponding right-of-use assets. In addition, the Company has elected to separate lease components from non-lease components for battery storage agreements and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components, currently not included in the measurement of the lease liability or the corresponding right-of-use asset, comprise of 25.5% of the value of the agreements.

Information related to the Company’s operating leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating leases:
Operating lease assets, net of amortization	$	177,865	$	1,615	$	179,480	$	180,370	$	1,814	$	182,201
Current portion of operating lease liabilities	10,925		887		11,811		11,371		895		12,267
Long-term portion of operating lease liabilities	165,199		643		165,842		166,191		809		167,000

As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019 as financing leases. Information related to the Company’s financing leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Financing leases:
Non-utility property	$	23,262	$	25,400	$	48,826	$	25,425	$	24,487	$	49,981
Accumulated depreciation	(10,975)		(13,058)		(24,095)		(11,984)		(11,869)		(23,905)
Non-utility property, net	12,287		12,342		24,731		13,441		12,618		26,076
Other current liabilities	$	3,836	$	4,604	$	8,473	$	4,146	$	4,616	$	8,776
Other deferred credits	8,469		7,760		16,299		9,300		8,023		17,326

65

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities as of March 31, 2024 is presented below:

	PNM		TNMP		PNMR Consolidated
Weighted average remaining lease term (years):
Operating leases	16.59		1.57		16.46
Financing leases	3.67		3.02		3.35
Weighted average discount rate:
Operating leases	5.61	%	4.22	%	5.60	%
Financing leases	4.65	%	4.80	%	4.72	%

Information for the components of lease expense is as follows:

	Three Months Ended March 31, 2024
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:
Battery storage leases	$	2,947	$	—	$	2,947
Other operating leases	2,059		270		2,329
Amounts capitalized	(35)		(232)		(267)
Total operating lease expense	4,971		38		5,009
Financing lease cost:
Amortization of right-of-use assets	1,218		1,316		2,542
Interest on lease liabilities	144		152		297
Amounts capitalized	(841)		(1,182)		(2,023)
Total financing lease expense	521		286		816
Variable lease expense	360		—		360
Short-term lease expense	204		6		216
Total lease expense for the period	$	6,056	$	330	$	6,401

	Three Months Ended March 31, 2023
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:	$	3,908	$	429	$	4,337
Amounts capitalized	(160)		(353)		(513)
Total operating lease expense	3,748		76		3,824
Financing lease cost:
Amortization of right-of-use assets	1,008		1,064		2,093
Interest on lease liabilities	122		111		234
Amounts capitalized	(690)		(1,000)		(1,690)
Total financing lease expense	440		175		637
Variable lease expense	262		—		262
Short-term lease expense	147		—		151
Total lease expense for the period	$	4,597	$	251	$	4,874

66

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Supplemental cash flow information related to the Company’s leases is as follows:

	Three Months Ended						Three Months Ended
	March 31, 2024						March 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,826	$	14	$	3,840	$	9,193	$	126	$	9,319
Operating cash flows from financing leases	44		29		74		42		14		55
Finance cash flows from financing leases	464		256		728		377		161		560
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27	$	63	$	90	$	—	$	—	$	—
Financing leases	263		1,040		1,398		2,730		1,347		4,077

Capitalized lease costs are reflected as investing activities on the Company’s Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023.

Future expected lease payments are shown below:

	As of March 31, 2024
	PNM						TNMP				PNMR Consolidated
			Operating										Operating
	Financing		Battery Storage		Other		Financing		Operating		Financing		Battery Storage		Other
	(In thousands)
Remainder of 2024	$	3,333	$	8,840	$	7,117	$	3,909	$	708	$	7,271	$	8,840	$	7,825
2025	3,636		11,786		7,082		4,262		785		7,926		11,786		7,867
2026	3,117		11,786		7,031		3,038		90		6,181		11,786		7,121
2027	1,885		11,786		7,035		1,615		14		3,526		11,786		7,049
2028	856		11,786		7,038		383		11		1,241		11,786		7,049
Later years	614		172,254		10,587		93		—		707		172,254		10,587
Total minimum lease payments	13,441		228,238		45,890		13,300		1,608		26,852		228,238		47,498
Less: Imputed interest	1,136		92,547		5,457		936		78		2,080		92,547		5,536
Lease liabilities	$	12,305	$	135,691	$	40,433	$	12,364	$	1,530	$	24,772	$	135,691	$	41,962

The above table includes $11.9 million, $12.0 million, and $23.8 million for PNM, TNMP, and PNMR at March 31, 2024 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties.

At March 31, 2024, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to battery storage agreements. The Company currently expects lease commencement dates in 2024, with lease terms expiring in 2045, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $1.1 billion over the 20-year terms of the agreements.

(14)   Income Taxes

The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before income taxes. Certain unusual or infrequently occurring items are excluded from the estimated annual rate calculation. Such items include regulatory disallowances and excess tax benefits or deficiencies related to stock

67

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

awards. At March 31, 2024, PNMR, PNM, and TNMP estimated their effective income tax rates for the year ended December 31, 2024 would be 14.64%, 13.09%, and 20.72%. The primary difference between the statutory income tax rates and the effective tax rates is the effect of the reduction in income tax expense resulting from the amortization of excess deferred federal income taxes.

During the three months ended March 31, 2024, income tax expense calculated by applying the expected annual effective income tax rate to earnings before income taxes was further increased by excess tax benefits related to stock awards of $0.2 million for PNMR, of which $0.1 million was allocated to PNM and $0.1 million was allocated to TNMP.

Beginning February 2018, PNM’s NM 2016 Rate Case reflected the reduction in the federal corporate income tax rate resulting from enactment of legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), including amortization of excess deferred federal income taxes. In accordance with the order in that case, PNM is returning the protected portion of excess deferred federal income taxes to customers over the average remaining life of plant in service as of December 31, 2017, and had been returning the unprotected portion of excess deferred federal income taxes to customers over a period of approximately twenty-three years. Pursuant to the final order in the PNM 2024 Rate Change, the remaining balance of $62.7 million of unprotected excess deferred income taxes is being returned over a five-year period. The approved settlement in the TNMP 2018 Rate Case includes a reduction in customer rates to reflect the impacts of the Tax Act beginning on January 1, 2019. PNMR, PNM, and TNMP will amortize federal excess deferred income taxes of $23.3 million, $20.7 million, and $2.6 million in 2024. See additional discussion of the impacts of the Tax Act in Note 18 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

(15)   Related Party Transactions

PNMR, PNM, TNMP, and NMRD are considered related parties, as is PNMR Services Company, a wholly-owned subsidiary of PNMR that provides corporate services to PNMR and its subsidiaries in accordance with shared services agreements. These services are billed at cost on a monthly basis to the business units. In addition, PNM purchases renewable energy from certain NMRD-owned facilities at a fixed price per MWh of energy produced. On February 27, 2024, PNMR Development and AEP Onsite Partners sold their respective interests in NMRD and the table below reflects transactions with NMRD prior to the sale. See Note 16 for additional discussion of NMRD. The table below summarizes the nature and amount of related party transactions of PNMR, PNM, TNMP, and NMRD:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Services billings:
PNMR to PNM	$	35,407	$	31,539
PNMR to TNMP	14,237		12,413
PNM to TNMP	81		65
TNMP to PNMR	10		35
PNMR to NMRD	66		82
Renewable energy purchases:
PNM from NMRD	1,523		2,361
Interest billings:
PNMR to PNM	14		3
PNM to PNMR	155		130
PNMR to TNMP	14		11
Income tax sharing payments:
PNMR to PNM	—		—
TNMP to PNMR	—		—

68

PNM RESOURCES, INC. AND SUBSIDIARIES

PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES

TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(16)   Equity Method Investment

As discussed in Note 21 of the Company’s 2023 Annual Reports on Form 10-K, PNMR Development and AEP OnSite Partners created NMRD in September 2017 to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. On February 27, 2024, PNMR Development and AEP Onsite Partners sold their respective interests in NMRD. PNMR Development received net proceeds of $117.0 million and recognized an after-tax gain of $4.4 million, which includes the recognition of deferred investment tax credits of $15.7 million.

In the three months ended March 31, 2024 and 2023, PNMR Development and AEP OnSite Partners each made cash contributions to NMRD of $12.6 million and $11.5 million for its construction activities.

Until the sale closing on February 27, 2024, PNMR presented its share of net earnings from NMRD in Other income on the Condensed Consolidated Statements of Earnings. Summarized financial information for NMRD through the closing date of the sale is as follows:

	Results of Operations
	Three Months Ended March 31,
	2024		2023
	(In thousands)
Operating revenues	$	3,204	$	2,531
Operating expenses	3,378		2,434
Net earnings (loss)	$	(174)	$	97

	Financial Position
	March 31,		December 31,
	2024		2023
	(In thousands)
Current assets	$	—	$	2,589
Net property, plant, and equipment	—		235,791
Non-current assets	—		1,849
Total assets	—		240,229
Current liabilities	—		730
Non-current liabilities	—		358
Owners’ equity	$	—	$	239,141

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations for PNMR is presented on a combined basis, including certain information applicable to PNM and TNMP. The MD&A for PNM and TNMP is presented as permitted by Form 10-Q General Instruction H(2). This report uses the term “Company” when discussing matters of common applicability to PNMR, PNM, and TNMP. A reference to a “Note” in this Item 2 refers to the accompanying Notes to Condensed Consolidated Financial Statements (Unaudited) included in Item 1, unless otherwise specified. Certain of the tables below may not appear visually accurate due to rounding.

MD&A FOR PNMR

EXECUTIVE SUMMARY

Overview and Strategy

PNMR is a holding company with two regulated utilities serving approximately 827,000 residential, commercial, and industrial customers and end-users of electricity in New Mexico and Texas. PNMR’s electric utilities are PNM and TNMP. PNMR strives to create a clean and bright energy future for customers, communities, and shareholders. PNMR’s strategy and decision-making are focused on safely providing reliable, affordable, and environmentally responsible power built on a foundation of Environmental, Social and Governance (ESG) principles.

Business and Financial Objectives

The Company is dedicated to achieving four key business objectives:

•Maintaining strong employee safety, plant performance, and system reliability

•Delivering a superior customer experience

•Demonstrating environmental stewardship in business operations, including transitioning to an emissions-free generating portfolio by 2040

•Supporting the communities in their service territories

Meeting the business objectives above will drive key financial results:

•Earning authorized returns on regulated businesses

•Delivering at or above industry-average earnings and dividend growth

•Maintaining investment grade credit ratings

Business Focus

To achieve its business objectives, focus is directed in key areas: Safe, Reliable and Affordable Power; Utility Plant and Strategic Investments; Environmentally Responsible Power; and Customer, Stakeholders, and Community Engagement. The Company works closely with its stakeholders to ensure that resource plans and infrastructure investments benefit from robust public dialogue and balance the diverse needs of our communities. Equally important is the focus of PNMR’s utilities on customer satisfaction and community engagement.

Safe, Reliable, and Affordable Power

Safety is the first priority of our business and a core value of the Company. PNMR utilizes a Safety Management System to provide clear direction, objectives and targets for managing safety performance and minimizing risks and empowers employees to “Be the Reason Everyone Goes Home Safe”.

PNMR measures reliability and benchmark performance of PNM and TNMP against other utilities using industry-standard metrics, including System Average Interruption Duration Index (“SAIDI”) and System Average Interruption Frequency Index (“SAIFI”). PNM’s and TNMP’s investment plans include projects designed to support reliability and reduce the amount of time customers are without power.

PNMR and its utilities are aware of the important roles they play in enhancing economic vitality in their service territories. Management believes that maintaining strong and modern electric infrastructure is critical to ensuring reliability and supporting economic growth. When contemplating expanding or relocating their operations, businesses consider energy affordability and reliability to be important factors. PNM and TNMP strive to balance service affordability with infrastructure investment to maintain a high level of electric reliability and to deliver a safe and superior customer experience. Investing in PNM’s and TNMP’s infrastructure is critical to ensuring reliability and meeting future energy needs. Both utilities have long-

70

established records of providing customers with safe and reliable electric service.

PNM participates in the EIM, a real-time wholesale energy trading market operated by the CAISO, that enables participating electric utilities to buy and sell energy. The EIM aggregates the variability of electricity generation and load for multiple balancing authority areas and utility jurisdictions. In addition, the EIM facilitates greater integration of renewable resources through the aggregation of flexible resources by capturing diversity benefits from the expanding geographic footprint and the expanded potential uses for those resources. The NMPRC approved collection of PNM’s regulatory asset to recover the initial capital investments and implementation and ongoing costs necessary to participate in the EIM in the 2024 Rate Change final order. PNM passes the cost savings through to customers under PNM’s FPPAC.

PNM joined the Western Resource Adequacy Program (“WRAP”) in April 2023 to bolster PNM’s preparations for times of critical need. WRAP is a first-of-its-kind program in the West that adds a region-wide coordination between power providers for assessing and addressing resource adequacy. This step helps ensure regional resource availability is visible and coordinated in the event PNM customers are critically impacted by a resource emergency. WRAP is currently in the non-binding phases of the program, which is expected to continue through the winter of 2025.

On May 1, 2024, PNM filed its updated WMP and its PSPS Plan with the NMPRC. The plans enhance Company wildfire prevention efforts and identify conditions for preventive shutoffs. PNM’s WMP addresses the increasing severity and frequency of extreme weather events and increasing wildfire risk and is focused on situational awareness, field personnel safety practices and operational wildfire mitigation strategies to prevent the accidental ignition of wildfires. PNM’s PSPS Plan is designed to proactively de-energize electrical facilities in identified areas of extreme wildfire risk under certain conditions to reduce the potential of those electrical facilities becoming a wildfire ignition source or contributing to the spread of wildfires.

Utility Plant Investments

During the 2022 and 2023 periods, PNM and TNMP together invested $1.9 billion in utility plant, including transmission and distribution systems, substations, power plants, and nuclear fuel. Investment plans emphasize new investments in transmission and distribution infrastructure to support growing demand with grid reliability and resilience and to deliver clean energy. The Company has been improving the diversification of its rate base among regulatory jurisdictions, moving TNMP and FERC transmission rate base to over half of the consolidated rate base.

Investments at TNMP support the continued high growth across each region of its service territory. Economic growth across Texas continues to push the demands on TNMP’s system to new levels, including a new system peak in January 2024. Additionally, the Texas legislature in 2023 passed a series of bills aimed at encouraging investments to enhance grid reliability and resilience. The PUCT has developed, and continues to develop, rules associated with the new legislation. TNMP will submit filings for investments and recovery in accordance with these new rules in addition to the existing rate recovery mechanisms.

PNM has also experienced growing demand, including a new system peak recorded in 2023. PNM investments are aimed at advancing the infrastructure beyond its original architecture to a more flexible and redundant system accommodating growing amounts of intermittent and distributed generation resources and integrating evolving technologies that provide long-term customer value. New Mexico’s clean energy future depends on a reliable, resilient, secure grid to deliver an evolving mix of energy resources to customers. In addition, projects included in the Grid Modernization Application improve customers’ ability to customize their use of energy and modernize PNM’s electric grid through infrastructure and technology improvements. Under New Mexico legislation for grid modernization, any approved investments may be recovered under a rate rider.

At PNM, an increase in transmission investments also supports growing transmission demands across the system and are recovered through an annual FERC formula rate mechanism based on a usage-based system allocation.

See the subheading Capital Requirements included in the full discussion of Liquidity and Capital Resources below for additional discussion of the Company’s projected capital requirements.

Integrated Resource Plan

NMPRC rules require that investor-owned utilities file an IRP every three years. The IRP is required to cover a 20-year planning period and contain an action plan covering the first three years of that period. On December 15, 2023, PNM filed its 2023 IRP with a continued focus on a carbon-free energy system by 2040. The plan highlights the need for the significant sustained addition of resources over the next two decades, replacing retiring or expiring capacity, meeting concurrent load growth, while reducing the carbon intensity of PNM’s portfolio. On April 4, 2024, the NMPRC accepted PNM’s 2023 IRP. See Note 12.

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Superior Customer Experience

The Company strives to deliver a superior customer experience. In 2023, PNM implemented in-person residential and business customer advisory councils to build and improve customer relationships as well as to provide PNM with a way to enhance its understanding of customers’ needs, gauge interest levels, develop and guide programs and solutions to be highly customer centric. Additionally, PNM continues to focus its efforts to enhance the customer experience through customer service improvements, including enhanced customer service engagement options, strategic customer outreach, and improved communications. These efforts are supported by market research to understand the varying needs of customers, identifying and establishing valued services and programs, and proactively communicating and engaging with customers. In 2023, PNM and the electric utility industry as a whole, continued to experience a decline in customer satisfaction as measured by J.D. Power. However, PNM remains focused on continuously improving its customers’ experience at every touchpoint and placing greater focus on customer assistance through economic uncertainty.

With reliability being the primary role of a transmission and distribution service provider in Texas’ deregulated market, TNMP continues to focus on keeping end-users updated about interruptions and to encourage consumer preparation when severe weather is forecasted. In both 2021 and 2022, TNMP provided 30-person teams in support of other utilities that experienced significant damage to their transmission and distribution system as a result of Hurricane Ida and Hurricane Ian. TNMP has been honored by the Edison Electric Institute eight times since 2012 for its assistance to out-of-state utilities affected by hurricanes. TNMP has also been honored three times since 2008 for hurricane response in its own territory.

PNM continues to focus on addressing energy affordability by promoting participation in utility programs among households with high energy burden to offset high bills. PNM has implemented efforts to increase participation in low income energy efficiency programs, providing additional aid through the PNM Good Neighbor Fund, the establishment of a temporary Summer High Heat Fund that provided bill assistance to low and moderate income customers, partnering with state agencies to make it easier to access funding, improving access to clean energy through expanded outreach and communication, and the implementation of low income transportation electrification programs. As a result of these communication efforts, 6,769 families in need received emergency assistance through the PNM Good Neighbor Fund during 2023. Additionally, PNM has worked closely with the New Mexico Department of Finance and Administration to implement strategies ensuring customers receive rent benefits, including utility bill assistance, from the Emergency Rental Assistance Program (“ERAP”). As a result of these efforts, the ERAP has paid over $8.8 million in customer arrears since the launch of the program in March 2021.

Environmentally Responsible Power

PNMR has a long-standing record of environmental stewardship. PNM’s environmental focus is in three key areas:

•Developing strategies to provide reliable and affordable power while transitioning to a 100% emissions-free generating portfolio by 2040

•Preparing PNM’s system to meet New Mexico’s increasing renewable energy requirements as cost-effectively as possible

•Increasing energy efficiency participation

PNMR’s corporate website (www.pnmresources.com) includes a dedicated section providing key environmental and other sustainability information related to PNM’s and TNMP’s operations and other information that collectively demonstrates the Company’s commitment to ESG principles. This information highlights plans for PNM to be coal-free no later than 2031 and to achieve an emissions-free generating portfolio by 2040.

PNM has a Chief Sustainability Officer responsible for developing and implementing the Company’s business strategy and positions on environmental and sustainability policy issues and is charged with establishing organization-wide policies, strategies, goals, objectives and programs that advance sustainability and ensure compliance with regulations. The role serves as the Company’s primary contact with various regulatory and stakeholder agencies on environmental matters. In addition, the role leads environmental justice work, incorporating impacts to tribal, worker and affected communities and advancing ESG reporting.

PNM’s grid modernization plan is a major step forward to providing reliable, affordable and sustainable energy. As part of that plan, PNM will promote energy equity where technology like smart meters and distribution upgrades will be provided to low-income areas first in order to allow customers to gain insights into their energy usage in order to improve affordability and create fairer access to energy.

In 2020, PNM announced an agreement to partner with Sandia National Laboratories in research and development projects focused on energy resiliency, clean energy, and national security. The partnership demonstrates PNMR’s commitment to ESG principles and its support of projects that further its emissions-free generation goals and plans for a reliable, resilient, and secure grid to deliver New Mexico’s clean energy future. PNM also recently joined the Electric Power Research Institute (“EPRI”) Climate READi (Resilience and Adaptation) Initiative, a three-year initiative to develop a comprehensive and

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consistent approach to physical climate risk and facilitate the analysis and application of appropriate climate data among all stakeholders to enhance the planning, design and operation of a resilient power system. In addition, PNM’s Time-of-Day pilot approved in the 2024 Rate Change final order incentivizes customers, through price signals, to use energy during the day when renewable generation is abundant.

The Infrastructure Investment and Jobs Act, also commonly known as the Bipartisan Infrastructure Law (“BIL”), was signed into law on November 15, 2021. This act represents a “once-in-a-generation” investment designed to modernize and upgrade America’s infrastructure. The BIL includes historic investments to upgrade the transmission and distribution systems to improve reliability and resilience, and to facilitate the deployment of more affordable and cleaner energy across the country. In collaboration with a coalition of both private and public entities and with the principal grantee GridBeyond Ltd, PNM applied for a BIL grant through DOE in the Advanced Reliability and Resiliency Operations for Wind and Solar (“ARROWS”) program. GridBeyond Ltd, as principal grantee, will receive $3.9 million in BIL funding and PNM will provide the in-kind, $3.9 million local match. The project aims to boost confidence in renewable power investments using GridBeyond Ltd artificial intelligence (“AI”) -powered distributed energy resource management system (“iDERMS”) technology. The AI-powered platform will be used to forecast, optimize, and control resources such as wind, solar, and batteries on PNM’s power grid in real-time and will enable GridBeyond Ltd to collect, analyze, and quantify the overall energy savings to determine how successfully PNM is able to integrate these resources against a backdrop of variable renewable power output and storage.

PNM also recently submitted concept papers for a second round of Grid Resilience and Innovation Partnership (“GRIP”) funding through DOE for the following projects:

•$25.0 million for a total grid orchestration project to develop a means of managing the operational risk of a carbon-free grid composed of highly distributed, predominantly third party owned, generation and virtual generation assets, allowing for optimal dispatching to increase Distributed Energy Resources’ (“DER”) hosting capacity, improve service quality, provide DER value stacking, and increase equity among the communities of New Mexico;

•$15.0 million to enable Virtual Power Plant (“VPP”) control on PNM’s power grid, enhancing PNM’s control systems to integrate VPP, deploying distribution and behind-the-meter assets to enable a pilot area, and enabling a VPP program between PNM and third party VPP aggregators for five substations; and

•$25.0 million for Artificial Intelligence Management (“AIM”) for the Rockies: Wildfire Mitigation to create a smart grid and advance New Mexico’s plans to implement cutting-edge technologies for wildfire mitigation. AIM for the Rockies will implement an ignition management program, using data collection on ignitions in hazardous fire areas and use wildfire cameras, acoustic sensors and AI software to model an innovative approach to wildfire mitigation that will help PNM make more informed decisions on asset and operations deployment in critical situations.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law. The IRA provides benefits for PNMR and its customers by extending and enhancing clean energy incentives such as the investment tax credit and production tax credit. As the Company continues its transition away from carbon emitting sources, these credits will reduce the cost of renewable investments. In addition, the IRA includes a new production tax credit for existing nuclear facilities that is expected to create an added benefit for PNM’s ownership in the carbon-free PVNGS. Other IRA provisions will encourage transportation electrification with new electric vehicle credits and added incentives for vehicle charging infrastructure. For many of the IRA provisions, additional clarification and detailed guidance from the IRS is still pending.

Electric Vehicles

PNMR is building upon its ESG goal of 100% emissions-free generation by 2040 with plans for additional emissions reductions through the electrification of its vehicle fleet. Growing the number of electric vehicles within the Company’s fleet will benefit the environment and lower fuel costs furthering the commitment to ESG principles. Under the commitment, existing fleet vehicles will be replaced as they are retired with an increasing percentage of electric vehicles. The goals call for 25% of all light duty fleet purchases to be electric by 2025 and 50% to be electric by 2030.

To demonstrate PNMR’s commitment to increase the electrification of vehicles in its service territory, PNM implemented the TEP in 2022, and on February 23, 2024, PNM received approval of its 2024-2026 plan. TEP supports customer adoption of electric vehicles by addressing barriers to adoption. PNM’s TEP program budget provides both residential and non-residential customers funding towards the purchase of chargers and/or behind-the-meter infrastructure, as well as customer education and outreach on EV-specific electricity rates to encourage charging during off-peak periods. Over 25% of the program budget is dedicated to low- and moderate-income customers to plan for an equitable transition to an electrified transportation sector.

In 2021, PNM joined the National Electric Highway Coalition, which plans to build fast-charging ports along major U.S. travel corridors. The coalition, with approximately 50 investor-owned electric companies is committed to providing EV fast charging ports that will allow the public to drive EVs with confidence throughout the country’s major roadways. To support this initiative, PNM’s TEP program includes the installation of a charging network along major roadways in New Mexico.

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Renewable Energy

PNM’s renewable procurements in service as of March 31, 2024 with a total net generation capacity of 1,577 MW include utility-owned solar capacity, as well as solar, wind, geothermal, and battery storage. In addition to PNM’s owned solar facilities, PNM also has a customer distributed solar generation program that represented 289.3 MW at March 31, 2024. The NMPRC has approved plans for PNM to procure energy and RECs from additional renewable resources to serve retail customers and a data center located in PNM’s service territory, including the portfolio to replace SJGS and the PVNGS Leased Interest Abandonment Application. PNM’s approved renewable resource plans have a generation capacity of 1,392 MW and are expected in operation by 2025. In addition, PNM filed an application with the NMPRC seeking approval of 410 MW of renewable resources for the 2026 summer peak. The majority of these renewable resources are key means for PNM to meet the RPS and related regulations that require PNM to achieve prescribed levels of energy sales from renewable sources, including those set by the ETA, without exceeding cost requirements. For additional discussion of the ETA and 2026 Resource Application see Notes 11 and 12.

PNM will continue to procure renewable resources while balancing the impact to customers’ electricity costs in order to meet New Mexico’s escalating RPS and carbon-free resource requirements.

Energy Efficiency

Energy efficiency plays a significant role in helping to keep customers’ electricity costs low while meeting their energy needs and is one of the Company’s approaches to supporting environmentally responsible power. PNM’s and TNMP’s energy efficiency and load management portfolios continue to achieve robust results. In 2023, incremental energy saved as a result of new participation in PNM’s portfolio of energy efficiency programs was 92 GWh. This is equivalent to the annual consumption of approximately 12,781 homes in PNM’s service territory. PNM’s load management and annual energy efficiency programs also help lower peak demand requirements. In 2023, TNMP’s incremental energy saved as a result of new participation in TNMP’s energy efficiency programs is estimated to be approximately 17 GWh. This is equivalent to the annual consumption of approximately 2,296 homes in TNMP’s service territory. TNMP’s high-performance homes residential new construction energy efficiency program has earned the Energy Star Partner of the Year award for 8 years, including 6 years receiving the Sustained Excellence Award, recognizing long-term commitment to fighting climate change and protecting public health through energy efficiency. For information on PNM’s and TNMP’s energy efficiency filing with the NMPRC and PUCT see Note 12.

Water Conservation and Solid Waste Reduction

PNM continues its efforts to reduce the amount of fresh water used to make electricity (about 45% more efficient than in 2005). Continued growth in PNM’s fleet of solar and wind energy sources, energy efficiency programs, and innovative uses of air-cooling technology have contributed to this reduction. Water usage has continued to decline as PNM has substituted less fresh-water-intensive generation resources to replace SJGS. As the Company moves forward with its mission to achieve 100% carbon-free generation by 2040, it expects that more significant water savings will be gained. Shutting down SJGS in 2022 and Four Corners in 2031 will allow the Company to reach our goals for reduced freshwater use at 80% by 2035 and 90% by 2040 from 2005 levels. Focusing on responsible stewardship of New Mexico’s scarce water resources improves PNM’s water-resilience in the face of persistent drought and ever-increasing demands for water to spur the growth of New Mexico’s economy.

In addition to the above areas of focus, the Company is working to reduce the amount of solid waste going to landfills through increased recycling and reduction of waste. In 2023, 20 of the Company’s 21 facilities met or exceeded the solid waste diversion goal of a 65% diversion rate. The Company expects to continue to do well in this area in the future.

Stakeholder and Community Engagement

The Company is committed to fostering relationships with its customers, stakeholders, and communities. Through outreach, collaboration, and various community-oriented programs, the Company has demonstrated a commitment to building productive relationships with stakeholders, including customers, community partners, regulators, intervenors, legislators, and shareholders. Local relationships and one-on-one communications remain two of the most valuable ways both PNM and TNMP connect with their stakeholders. Both companies maintain long-standing relationships with governmental representatives and key electricity consumers to ensure that these stakeholders are updated on Company investments and initiatives. Key electricity consumers also have dedicated Company contacts that support their important service needs.

The Company utilizes a number of communications channels and strategic content to serve and engage its many stakeholders. PNM’s website provides the details of major regulatory filings, including general rate requests, as well as the background on PNM’s efforts to maintain reliability, keep prices affordable, and protect the environment. The Company’s website is also a resource for information about PNM’s operations and community outreach efforts, including plans for building a sustainable energy future for New Mexico and to transition to an emissions-free generating portfolio by 2040. PNM also

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leverages social media in communications with customers on various topics such as education, outage alerts, safety, customer service, and PNM’s community partnerships in philanthropic projects. As discussed above, PNMR’s corporate website includes a dedicated section providing additional information regarding the Company’s commitment to ESG principles and other sustainability efforts.

During the three years ended December 31, 2023, corporate giving contributed $12.5 million to civic, educational, environmental, low income, and economic development organizations. During 2023, corporate giving has maintained a strategic focus on these pillars and continues to highlight corporate citizenship through active involvement with sponsorships demonstrating PNM’s commitment to the community. In 2023, this corporate giving included $1.0 million to support New Mexico high school students and their ability to participate in electric trade programs. In the third quarter of 2023, PNM shareholders donated $0.6 million to a newly created PNM Summer Heat Bill Help Fund which delivered crucial relief to low and moderate income customers struggling to pay their electric bills during the record-breaking 2023 summer heatwave and $0.5 million was given to the PNM Good Neighbor Fund.

The Company is also committed to supporting the communities it serves in New Mexico and Texas. This support extends beyond corporate giving and financial donations from the PNM Resources Foundation to also include collaborations on community projects, low-income customer assistance programs, and employee volunteerism.

PNMR recognizes its responsibility to support programs and organizations that enrich the quality of life across its service territories and seeks opportunities to further demonstrate its commitment in these areas as needs arise. In response to community needs, PNMR partners with other corporate funders to support nonprofits and small businesses. While its service territory does not include the Navajo Nation, PNM’s operations include generating facilities and employees in this region. The PNM Navajo Nation Workforce Training Scholarship Program provides support for Navajo tribal members and encourages the pursuit of education and training in existing and emerging jobs in the communities in which they live. PNM has invested in paid summer college engineering internship programs for American Indian students available in the greater Albuquerque area, established the PNM Pueblo Education Scholarship Endowment to invest in higher education for Native American Indian students, and supported the development of an entrepreneur complex located in Albuquerque and operated by the Indian Pueblo Cultural Center, owned by the 19 pueblo nations of New Mexico. PNM also continues to partner with the Navajo Nation in the Light up Navajo project, piloted in 2019 and modeled as a mutual aid project with over 25 utilities nationwide participating to connect Navajo homes without electricity to the power grid. PNM has partnered with New Mexico universities to enhance intern programs and developed a business coalition model to drive economic development through intern partnerships. PNM has also partnered with key nonprofit organizations to initiate funding and action for programs focused on diversity, equity and inclusion.

Employee volunteers are the lifeblood of a healthy corporate culture. Community giving through volunteers’ time and effort is at the heart of employee engagement. Throughout 2023, the Company held large-scale volunteer events, working alongside nonprofits, schools, and vulnerable communities throughout New Mexico and Texas. More than 500 employees in both states participated in the “Day of Service”, a workday event encouraging employee volunteerism. Throughout the year, employees volunteer their time generously through independent volunteer activities and board participation. Employees strengthen community resilience by giving at least 9,000 volunteer hours each year to support the health, safety, and well-being of diverse communities.

In addition to the extensive engagement both PNM and TNMP have with nonprofit organizations in their communities, the PNM Resources Foundation provides an annual average of nearly $1.4 million in grant funding over the past three years across New Mexico and Texas. These grants help nonprofits innovate or sustain programs to grow and develop their mission, develop and implement environmental programs, and provide educational opportunities. The PNM Resources Foundation continued to expand its matching and volunteer grant programs and the annual amount of matching donations available to each of its employees was increased. The PNM Resources Foundation also approved an increase to the amount awarded to employees, through the employee crisis management fund, who have been affected by the wildfires. Throughout 2023, the Foundation celebrated its 40th year of serving community needs highlighting education, inclusion, the environment and community vitality and awarded $0.7 million to 44 organizations in New Mexico and Texas.

Financial Focus

Earning Authorized Returns on Regulated Businesses

PNMR’s success in accomplishing its financial objectives is highly dependent on two key factors: fair and timely regulatory treatment for its utilities and the utilities’ strong operating performance. The Company has multiple strategies to achieve favorable regulatory treatment, all of which have as their foundation a focus on the basics: safety, operational excellence, and customer satisfaction, while engaging stakeholders to build productive relationships. Both PNM and TNMP seek cost recovery for their investments through general rate cases, periodic cost of service filings, and various rate riders. PNM will file a general rate case with the NMPRC on or before June 14, 2024. See Note 12.

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Fair and timely rate treatment from regulators is crucial to PNM and TNMP in earning their allowed returns and critical for PNMR to achieve its financial objectives. PNMR believes that earning allowed returns is viewed positively by credit rating agencies and that improvements in the Company’s ratings could lower costs to utility customers.

The rates PNM and TNMP charge customers are subject to traditional rate regulation by the NMPRC, FERC, and the PUCT. Additional information about rate filings is provided in Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

State Regulation and Legislation

TNMP

In the 2023 Texas Legislative session several bills were passed to support utility reliability and resiliency by encouraging and protecting utility infrastructure investments. The bill with the largest near-term financial impact to TNMP is the DCRF legislation that adds a second filing per year and shortens the regulatory timeframe for the proceedings. Other bills include system resiliency and temporary mobile generation, which provide opportunities for added investment in TNMP’s service territory and reduce uncertainty around rate recovery. Another bill directs ERCOT to develop reliability plans for the Permian Basin which could result in the need for additional investments in the West Texas service territory. Additionally, the Damaging Critical Infrastructure Bill helps protect TNMP’s investments in response to criminal offenses damaging critical infrastructure facilities. These pieces of legislation demonstrate that Texas continues to encourage utility investment and prioritizes timely rate recovery. TNMP will look to prioritize investments aligned with these measures that improve the quality of service for current and future customers.

The regulatory framework in Texas strongly encourages investments into the grid by providing timely recovery through rate mechanisms outside of general rate cases. The PUCT has approved mechanisms that allow TNMP to recover capital invested in transmission and distribution projects without having to file a general rate case. The PUCT also approved rate riders that allow TNMP to recover amounts related to energy efficiency and third-party transmission costs. In 2024, TNMP anticipates filing its first resiliency plan under the new rules implementing the legislation passed in 2023. An independent evaluation and development of a system resiliency plan covering three years is required in the filing. Under the rules, TNMP may choose to recover the associated capital investments under the existing TCOS and DCRF rules. The rules also allow for recovery of certain O&M costs, such as vegetation management expenditures that exceed the amount authorized for recovery in base rates. TNMP also has approximately 275,000 advanced meters across its service territory, the costs of which are being recovered through base rates.

PNM

The Energy Transition Act (“ETA”)

The ETA requires utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. The ETA also allows for the recovery of undepreciated investments and decommissioning costs related to qualifying EGUs that the NMPRC has required be removed from retail jurisdictional rates, provided replacement resources to be included in retail rates have lower or zero-carbon emissions. The ETA provides for a transition from fossil-fueled generating resources to renewable and other carbon-free resources by allowing utilities to issue Securitized Bonds, or “energy transition bonds,” related to the retirement of certain coal-fired generating facilities to qualified investors. See additional discussion of the ETA in Notes 11 and 12 and the issuance of Securitized Bonds in Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

The ETA has and will have a significant impact on PNM’s future generation portfolio. PNM cannot predict the full impact of the ETA on potential future generating resource abandonment and replacement filings with the NMPRC.

2024 Rate Change

In December 2022, PNM filed the 2024 Rate Change with the NMPRC. The application proposed an increase of $63.8 million in base non-fuel revenues. The requested increase is based on a calendar year 2024 FTY and reflects an ROE of 10.25%. On January 3, 2024, the NMPRC issued a final order authorizing PNM to implement an increase in non-fuel base rates of $15.3 million, effective for service beginning January 15, 2024. Major components of the final order, included:

•A ROE of 9.26%

•A capital structure of 49.61% equity, 50.10% debt, and 0.29% preferred stock

•Finding of imprudence regarding PNM’s decision to remain in Four Corners and a remedy for the imprudence resulting in a disallowance of $81.0 million to PNM’s total Four Corners net book value.

•Approval of $51.3 million of PNM’s requested $96.3 million regulatory asset for PVNGS undepreciated investments, but disallowance of a return on the remaining $45.0 million or any CWIP associated with it.

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The final order also requires that the regulatory liability associated with leased capacity at PVNGS after the Unit 1 lease expired on January 15, 2023, be returned to ratepayers over two years through a rate rider. In addition, the NMPRC approved new depreciation rates for specific gas plants, reflecting shorter useful lives, approval of PNM’s TOD pilot program, and ordered PNM to update the remedy associated with Four Corners. See Note 12.

Grid Modernization Application

On October 3, 2022, in compliance with New Mexico Grid Modernization Statute, PNM filed its Grid Modernization Application with the NMPRC. The projects included in the Grid Modernization Application improve customers’ ability to customize their use of energy and ensure that customers, including low-income customers, are a top priority and will benefit from the electricity grid consistent with the Grid Modernization Statute. PNM’s proposal to modernize its electricity grid through infrastructure and technology improvements also increases the efficiency, reliability, resilience, and security of PNM’s electric system. PNM’s application seeks approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy. The proposed Grid Modernization Rider would recover capital costs, operating expenses, and taxes associated with the investments included in the Grid Modernization Application. See Note 12.

2026 Resource Application

On October 25, 2023, PNM filed an application with the NMPRC seeking approval of resources to be available for the 2026 summer peak. The application includes approval of a 100 MW solar PPA and three battery storage agreements of 100 MW, 100 MW, and 50 MW. In addition, PNM is seeking approval of a CCN for a 60 MW battery storage system to be owned by PNM. The resources are necessary for PNM to safely and reliably meet its projected system load. A hearing was held on March 20 and 21, 2024. PNM is unable to predict the outcome of this matter.

PNM Rate Riders and other - The NMPRC has approved PNM recovering fuel costs through the FPPAC, as well as rate riders for renewable energy, energy efficiency, and the TEP. These mechanisms allow for more timely recovery of investments. PNM’s Grid Modernization Application includes proposals for installation and deployment of advanced metering infrastructure investments and recovery under a rate rider permitted by New Mexico legislation. See Note 12.

FERC Regulation

Rates PNM charges wholesale transmission customers are subject to traditional rate regulation by FERC. Rates charged to wholesale electric transmission customers, other than customers on the Western Spirit Line, are based on a formula rate mechanism pursuant to which rates for wholesale transmission service are calculated annually in accordance with an approved formula. The formula includes updating cost of service components, including investment in plant and operating expenses, based on information contained in PNM’s annual financial report filed with FERC, as well as including projected transmission capital projects to be placed into service in the following year. The projections included are subject to true-up. Certain items, including changes to return on equity and depreciation rates, require a separate filing to be made with FERC before being included in the formula rate.

Delivering At or Above Industry-Average Earnings and Dividend Growth

PNMR’s financial objective to deliver at or above industry-average earnings and dividend growth enables investors to realize the value of their investment in the Company’s business. Earnings growth is based on ongoing earnings, which is a non-GAAP financial measure that excludes from GAAP earnings certain non-recurring, infrequent, and other items that are not indicative of fundamental changes in the earnings capacity of the Company’s operations. PNMR uses ongoing earnings to evaluate the operations of the Company and to establish goals, including those used for certain aspects of incentive compensation, for management and employees.

PNMR targets a dividend payout ratio in the 50% to 60% range of its ongoing earnings. PNMR expects to provide at or above industry-average dividend growth in the near-term. The Board will continue to evaluate the dividend on an annual basis, considering sustainability and growth, capital planning, and industry standards.

The Board approved the following increases in the indicated annual common stock dividend:

Approval Date	Percent Increase
December 2022	5.8%
December 2023	5.4%

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Maintaining Investment Grade Credit Ratings

The Company is committed to maintaining investment grade credit ratings in order to reduce the cost of debt financing and to help ensure access to credit markets, when required. On January 15, 2024, S&P revised PNMR, PNM, and TNMP’s outlook to stable from positive. See the subheading Liquidity included in the full discussion of Liquidity and Capital Resources below for the specific credit ratings for PNMR, PNM, and TNMP. All of the credit ratings issued by both Moody’s and S&P on the Company’s debt continue to be investment grade.

Economic Factors

TNMP – In the three months ended March 31, 2024, TNMP experienced an increase of 2.7% in volumetric weather normalized retail load compared to 2023. Weather normalized demand-based load, excluding retail transmission consumers increased 1.3% in the three months ended March 31, 2024 compared to 2023.

PNM – In the three months ended March 31, 2024, PNM experienced a decrease of 1.5% in weather normalized residential load. Weather normalized commercial load experienced an increase of 1.6% compared to 2023. In addition, PNM experienced an increase in industrial load of 10.0% compared to 2023.

The Company is closely monitoring the impacts on the capital markets of other macroeconomic conditions, including actions by the Federal Reserve to address inflationary concerns or other market conditions, and geopolitical activity. The Company has not experienced, nor does it expect significant negative impacts to customer usage at PNM and TNMP resulting from these economic impacts. However, if current economic conditions worsen, the Company may be required to implement additional measures such as reducing or delaying operating and maintenance expenses and planned capital expenditures.

Results of Operations

Net earnings attributable to PNMR were $47.2 million, or $0.52 per diluted share in the three months ended March 31, 2024 compared to $55.0 million, or $0.64 per diluted share in 2023. Among other things, earnings in the three months ended March 31, 2024 benefited from rate relief approved in PNM’s 2024 Rate Change, higher transmission margin and distribution rates at TNMP, higher volumetric load at TNMP, higher weather normalized retail load at PNM, increased performance on PNM’s NDT, coal mine reclamation and SJGS decommissioning investment securities, and decreased operational and maintenance expense at PNM primarily due to the disposition of the PVNGS Unit 2 Leased Interest. These increases were more than offset by higher employee related, outside services and vegetation management expenses at PNM and TNMP, increased depreciation and amortization approved in PNM’s 2024 Rate Change and increased plant in service at PNM and TNMP, regulatory disallowance at PNM related to San Juan Coal Mine reclamation remeasurement, lower transmission margin at PNM, capacity arrangements at PNM, milder weather at PNM, and higher interest charges at PNM, TNMP and Corporate and Other. Additional information on factors impacting results of operations for each segment is discussed below under Results of Operations.

Liquidity and Capital Resources

As of April 1, 2024, PNMR, PNM, and TNMP have revolving credit facilities with capacities of $300.0 million, $440.0 million, and $200.0 million. Total availability for PNMR on a consolidated basis was $644.0 million at April 26, 2024. The Company utilizes these credit facilities and cash flows from operations to provide funds for both construction and operational expenditures. PNMR also has intercompany loan agreements with each of its subsidiaries. For additional details regarding the Company’s revolving credit facilities see Note 9.

PNMR projects that its consolidated capital requirements, consisting of construction expenditures and dividends, will total $6.8 billion for 2024 - 2028, including amounts expended through March 31, 2024. These construction expenditures include TNMP’s investments to support continued high growth in system demand across TNMP’s service territories and growing encouragement for infrastructure investments from the Texas legislature to support grid reliability and resilience. PNM’s capital initiatives for investments in transmission and distribution infrastructure to deliver clean energy, enhance customer satisfaction, and increase grid resilience. Construction expenditures also include investments proposed in PNM’s Grid Modernization Application.

To fund capital spending requirements to meet growth that balances earnings goals, credit metrics and liquidity needs, the Company has entered into a number of other financing arrangements. A complete listing of current financing arrangements is contained in Note 9 and Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

After considering the effects of these financings and the Company’s short-term liquidity position as of April 26, 2024, the Company has consolidated maturities of long-term and short-term debt aggregating approximately $576.8 million through April 2025. In addition to internal cash generation, the Company anticipates that it will be necessary to obtain additional long-term financing in the form of debt refinancing, new debt issuances, and/or new equity in order to fund its capital requirements

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during the 2024-2028 period. The Company currently believes that its internal cash generation, existing credit arrangements, and access to public and private capital markets will provide sufficient resources to meet the Company’s capital requirements for at least the next twelve months. As of March 31, 2024 and April 26, 2024, the Company was in compliance with its debt covenants.

RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto. Trends and contingencies of a material nature are discussed to the extent known. Refer also to Disclosure Regarding Forward Looking Statements and to Part II, Item 1A. Risk Factors.

A summary of net earnings attributable to PNMR is as follows:

	Three Months Ended March 31,
	2024		2023		Change
	(In millions, except per share amounts)
Net earnings attributable to PNMR	$	47.2	$	55.0	$	(7.8)
Average diluted common and common equivalent shares	90.5		86.1		4.4
Net earnings attributable to PNMR per diluted share	$	0.52	$	0.64	$	(0.12)

The components of the change in net earnings attributable to PNMR are:

	Three Months Ended
	March 31, 2024
	(In millions)
TNMP	$	4.6
PNM	(12.7)
Corporate and Other	0.3
Net change	$	(7.8)

Information regarding the factors impacting PNMR’s operating results by segment are set forth below.

Segment Information

The following discussion is based on the segment methodology that PNMR’s management uses for making operating decisions and assessing performance of its various business activities. See Note 2 for more information on PNMR’s operating segments.

TNMP

Non-GAAP Financial Measures

TNMP defines utility margin as electric operating revenues less cost of energy, which consists of costs charged by third-party transmission providers. TNMP believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since all third-party transmission costs are passed on to consumers through a transmission cost recovery factor. Utility margin is not a financial measure required to be presented and is considered a non-GAAP measure. TNMP does not intend for utility margin to represent any financial measure as defined by GAAP however, the calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP. Reconciliations between utility margin and gross margin are presented below.

	Three Months Ended March 31,
	2024		2023		Change
	(In millions)
Gross margin	$	55.1	$	46.3	$	8.8
Transmission and distribution costs	8.4		8.3		0.1
Depreciation and amortization	30.4		27.4		3.0
Utility margin	$	93.9	$	82.1	$	11.8

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The following table summarizes the operating results for TNMP:

	Three Months Ended March 31,
	2024		2023		Change
	(In millions)
Electric operating revenues	$	128.8	$	113.9	$	14.9
Cost of energy	34.9		31.8		3.1
Utility margin	93.9		82.1		11.8
Operating expenses	32.8		32.9		(0.1)
Depreciation and amortization	30.4		27.4		3.0
Operating income	30.7		21.8		8.9
Other income	1.0		0.3		0.7
Interest charges	(13.3)		(10.4)		(2.9)
Segment earnings before income taxes	18.4		11.6		6.8
Income (taxes)	(3.9)		(1.6)		(2.3)
Segment earnings	$	14.6	$	10.0	$	4.6

The following table shows total sales, including the impacts of weather, by retail tariff consumer class and average number of consumers:

	Three Months Ended March 31,
			Percentage
	2024	2023	Change
Volumetric load (1) (GWh)	654.2	628.4	4.1	%
Demand-based load (2) (MW)	7,409.0	6,701.6	10.6	%
Average retail consumers (thousands) (3)	275.1	270.3	1.8	%

(1) Volumetric load consumers are billed on KWh usage.

(2) Demand-based load includes consumers billed on monthly KW peak and also includes retail transmission customers that are primarily billed under rate riders.

(3) TNMP provides transmission and distribution services to REPs that provide electric service to customers in TNMP’s service territories. The number of consumers above represents the customers of these REPs. Under TECA, consumers in Texas have the ability to choose any REP to provide energy.

Operating Results – Three Months Ended March 31, 2024, compared to 2023

The following table summarizes the significant changes to gross margin:

		Three Months Ended March 31, 2024
		Change
Gross margin:		(In millions)
	Utility margin (see below)	$	11.8
	Depreciation and amortization (see below)	(3.0)
	Higher employee related, outside services, and vegetation management expenses, excluding administrative costs	(0.1)
	Other	0.1
	Net Change	$	8.8

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The following table summarizes the significant changes to utility margin:

		Three Months Ended March 31, 2024
		Change
Utility margin:		(In millions)
	Transmission rate relief/load – Transmission cost of service rate increases in May 2023, September 2023, and March 2024	$	5.8
	Distribution rate relief – Distribution cost of service rate increase in September 2023	2.4
	Volumetric-based consumer usage/load – Weather normalized KWh sales increased 2.7%; the number of volumetric consumers increased 2.0%	0.4
	Demand-based consumer usage/load – Weather normalized demand-based MW sales for large commercial and industrial consumers excluding retail transmission consumers increased 1.3%, offset by lower prices	(0.2)
	Weather – Normal weather in the first quarter of 2024	—
	Leap Year – Increase in revenue due to additional day in 2024	0.3
	Impacts of fully amortized AMS charges	1.6
	Deferral of excess deferred income tax benefits refunded through base rates	1.0
	Rate Riders and other – Impacts of rate riders, including the transmission cost recovery factor, energy efficiency rider, and rate case expense rider, which are partially offset in operating expenses	0.5
	Net Change	$	11.8

The following tables summarize the primary drivers for changes in operating expenses, depreciation and amortization, other income (deductions), interest charges, and income taxes:

		Three Months Ended March 31, 2024
		Change
Operating expenses:		(In millions)
	Higher employee related, outside services, and vegetation management expenses	$	0.5
	Higher capitalization of administrative and general expenses due to higher construction expenditures	(0.8)
	Higher property taxes primarily due to increased utility plant in service	0.2
	Net Change	$	(0.1)

Depreciation and amortization:
	Increased utility plant in service	$	3.3
	Other	(0.3)
	Net Change	$	3.0

Other income (deductions):
	Higher equity AFUDC	$	0.2
	Higher CIAC	0.4
	Other	0.1
	Net Change	$	0.7

Interest charges:
	Issuance of first mortgage bonds in 2023	$	(2.4)
	Higher interest on revolving short-term borrowings	(0.2)
	Other	(0.3)
	Net Change	$	(2.9)

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		Three Months Ended March 31, 2024
		Change
Income (taxes) benefits:		(In millions)
	Higher segment earnings before income taxes	$	(1.4)
	Lower amortization of federal excess deferred income taxes (Note 14)	(0.6)
	Other	(0.3)
	Net Change	$	(2.3)

PNM

Non-GAAP Financial Measures

PNM defines utility margin as electric operating revenues less cost of energy, which consists primarily of fuel and purchase power costs. PNM believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since substantially all fuel and purchase power costs are offset in revenues as those costs are passed through to customers under PNM’s FPPAC. Utility margin is not a financial measure required to be presented and is considered a non-GAAP measure. PNM does not intend for utility margin to represent any financial measure as defined by GAAP however, the calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP.

Reconciliations between utility margin and gross margin are presented below.

	Three Months Ended March 31,
	2024		2023		Change
	(In millions)
Gross margin	$	120.9	$	140.4	$	(19.5)
Energy production costs	22.2		22.4		(0.2)
Transmission and distribution costs	14.4		13.9		0.5
Depreciation and amortization	53.3		43.7		9.6
Utility margin	$	210.7	$	220.3	$	(9.6)

The following table summarizes the operating results for PNM:

	Three Months Ended March 31,
	2024		2023		Change
	(In millions)
Electric operating revenues	$	308.1	$	430.2	$	(122.1)
Cost of energy	97.4		209.9		(112.5)
Utility margin	210.7		220.3		(9.6)
Operating expenses	106.5		98.7		7.8
Depreciation and amortization	53.3		43.7		9.6
Operating income	51.0		77.9		(26.9)
Other income	25.1		11.9		13.2
Interest charges	(25.1)		(18.1)		(7.0)
Segment earnings before income taxes	50.9		71.7		(20.8)
Income (taxes) benefit	(5.8)		(11.8)		6.0
Valencia non-controlling interest	(3.0)		(5.1)		2.1
Preferred stock dividend requirements	(0.1)		(0.1)		—
Segment earnings	$	41.9	$	54.6	$	(12.7)

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The following table shows total GWh sales, including the impacts of weather, by customer class and average number of customers:

	Three Months Ended March 31,
			Percentage
	2024	2023	Change
	(Gigawatt hours, except customers)
Residential	776.5	805.1	(3.6)	%
Commercial	848.0	834.3	1.6
Industrial (1)	484.9	460.6	5.3
Public authority	43.4	42.8	1.4
Economy energy service (2)	164.3	147.9	11.1
Wholesale energy sales (3)	754.2	1,324.7	(43.1)
	3,071.3	3,615.4	(15.0)	%
Average retail customers (thousands)	551.1	546.5	0.8	%

(1) Includes special service contract for a large customer. Energy is provided by PNM for renewable energy resources to match the energy and capacity requirements the customer. PNM purchases renewable energy which is passed through to the customer under a rate rider. A special service rate is applied to customer’s energy consumption in those hours of the month when their consumption exceeds the energy production from the renewable resources.

(2) PNM purchases energy for a large customer on the customer’s behalf and delivers the energy to the customer’s location through PNM’s transmission system. PNM charges the customer for the cost of the energy as a direct pass through to the customer with only a minor impact in utility margin resulting from providing ancillary services.

(3) Includes sales for resale activity resulting from PNM’s participation in the EIM.

Operating Results – Three Months Ended March 31, 2024, compared to 2023

The following table summarizes the significant changes to gross margin:

		Three Months Ended March 31, 2024
		Change
Gross margin:		(In millions)
	Utility margin (see below)	$	(9.6)
	Depreciation and amortization (see below)	(9.6)
	Lower plant maintenance costs primarily due to the disposition of PVNGS Unit 2 Leased Interest, and lower costs at Four Corners and gas fired plants, partially offset by higher costs in the remaining interests in PVNGS	1.2
	Higher employee related, outside services, and vegetation management expenses, excluding administrative costs	(0.6)
	Other	(0.9)
	Net Change	$	(19.5)

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The following table summarizes the significant changes to utility margin:

		Three Months Ended March 31, 2024
		Change
Utility margin:		(In millions)
	Retail customer usage/load – Weather normalized retail KWh sales increased 1.6% for commercial customers and 10.0% for industrial customers, partially offset by decreased sales to residential customers of 1.5%	$	2.3
	Weather – Milder weather in 2024	(3.2)
	Rate relief – Increase in revenue approved in 2024 Rate Change	3.4
	Leap Year – Increase in revenue due to additional day in 2024	1.9
	Transmission – Decrease in revenues primarily due to lower market prices and lower volumes in 2024	(12.7)
	Capacity arrangements – Battery storage agreements starting in the third quarter of 2023	(4.7)
	Rate riders and other – Includes renewable energy, FPPAC, energy efficiency, energy transition charge, and transportation electrification riders	3.4
	Net Change	$	(9.6)

The following tables summarize the primary drivers for changes in operating expenses, depreciation and amortization, other income (deductions), interest charges, and income taxes:

		Three Months Ended March 31, 2024
		Change
Operating expenses:		(In millions)
	Lower plant maintenance and administrative costs primarily due to the disposition of PVNGS Unit 2 Leased Interest, and lower costs at Four Corners and gas fired plants, partially offset by higher costs related to the remaining interests in PVNGS	$	(1.2)
	Higher employee related, outside services, and vegetation management expenses	1.9
	Unrecoverable portion of San Juan Coal Mine reclamation remeasurement related to the capped surface mine liability (Note 11)	4.5
	Higher allocated depreciation and amortization expense from Corporate and Other	2.3
	Other	0.3
	Net Change	$	7.8

Depreciation and amortization:
	Increased utility plant in service	$	2.1
	Increase in depreciation approved in the 2024 Rate Change	4.2
	Amortization of regulatory assets approved in the 2024 Rate Change	2.3
	Amortization related to ETBC I Securitized Costs, offset in utility margin	0.8
	Other	0.2
	Net Change	$	9.6

Other income (deductions):
	Increased performance on investment securities in the NDT partially offset by decreased performance in the coal mine reclamation trusts	$	11.6
	Lower interest income and higher trust expenses related to investment securities in the NDT, coal mine reclamation and SJGS decommissioning trusts	(1.5)
	Lower non-service post-retirement benefit costs	1.2
	Higher equity AFUDC	1.2
	Other	0.7
	Net Change	$	13.2

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		Three Months Ended March 31, 2024
		Change
Interest charges:		(In millions)
	Lower interest on term loan	$	3.0
	Issuance of SUNs in April 2023	(2.8)
	Higher interest on transmission interconnections and other customer deposit arrangements	(1.7)
	Interest related to ETBC I Securitized Bonds, offset in utility margin	(5.0)
	Other	(0.5)
	Net Change	$	(7.0)

Income (taxes) benefits:
	Lower segment earnings before income taxes	$	4.7
	Higher amortization of federal excess deferred income taxes (Note 14)	1.0
	Other	0.3
	Net Change	$	6.0

Corporate and Other

The table below summarizes the operating results for Corporate and Other:

	Three Months Ended March 31,
	2024		2023		Change
	(In millions)
Electric operating revenues	$	—	$	—	$	—
Cost of energy	—		—		—
Utility margin	—		—		—
Operating expenses	(8.4)		(6.3)		(2.1)
Depreciation and amortization	9.5		6.9		2.6
Operating (loss)	(1.1)		(0.6)		(0.5)
Other income	(15.2)		(0.2)		(15.0)
Interest charges	(15.3)		(12.4)		(2.9)
Segment (loss) before income taxes	(31.6)		(13.2)		(18.4)
Income (taxes) benefit	22.2		3.6		18.6
Segment (loss)	$	(9.3)	$	(9.6)	$	0.3

Corporate and Other operating expenses shown above are net of amounts allocated to PNM and TNMP under shared services agreements. The amounts allocated include certain expenses shown as depreciation and amortization and other income (deductions) in the table above. The change in operating expense for the three months ended March 31, 2024 include increases of $0.6 million in costs related to the Merger that were not allocated to PNM or TNMP. Substantially all depreciation and amortization expense is offset in operating expenses as a result of allocation of these costs to other business segments.

Operating Results – Three Months Ended March 31, 2024 compared to 2023

The following tables summarize the primary drivers for changes in other income (deductions), interest charges, and income taxes:

		Three Months Ended March 31, 2024
		Change
Other income (deductions):		(In millions)
	Sale of NMRD equity method investment (Note 16)	$	(15.1)
	Other	0.1
	Net Change	$	(15.0)

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		Three Months Ended March 31, 2024
		Change
Interest charges:		(In millions)
	Higher interest on term loans	$	(2.4)
	Higher interest on short-term borrowings	(0.7)
	Other	0.2
		$	(2.9)

Income (taxes) benefits:
	Investment Tax Credits related to the sale of NMRD (Note 16)	$	15.7
	Higher segment loss before income taxes	4.7
	Impact of difference in effective tax rates used by PNMR and it subsidiaries in the calculation of income taxes in interim periods	(2.4)
	Other	0.6
	Net Change	$	18.6

LIQUIDITY AND CAPITAL RESOURCES

Statements of Cash Flows

The changes in PNMR’s cash flows for the three months ended March 31, 2024, compared to March 31, 2023, are summarized as follows:

	Three Months Ended March 31,
	2024		2023		Change
	(In millions)
Net cash flows from (used in):
Operating activities	$	92.8	$	131.5	$	(38.7)
Investing activities	(184.4)		(251.4)		67.0
Financing activities	99.5		120.0		(20.5)
Net change in cash and cash equivalents	$	8.0	$	0.1	$	7.9

Cash Flows from Operating Activities

Changes in PNMR’s cash flow from operating activities result from net earnings, adjusted for items impacting earnings that do not provide or use cash. See Results of Operations above. Certain changes in assets and liabilities resulting from normal operations, including the effects of the seasonal nature of the Company’s operations, also impact operating cash flows.

Cash Flows from Investing Activities

The changes in PNMR’s cash flows used in investing activities relate primarily to changes in utility plant additions. Cash flows from investing activities include purchases and sales of investment securities in the NDT, SJGS decommissioning trust, and coal mine reclamation trusts as well as the sale of NMRD on February 27, 2024.

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Major components of PNMR’s cash inflows and (outflows) from investing activities are shown below:

	Three Months Ended March 31,
	2024		2023		Change
Cash (Outflows) for Utility Plant Additions	(In millions)
PNM:
Generation	$	(29.6)	$	(18.8)	$	(10.8)
Transmission and distribution	(121.2)		(119.1)		(2.1)
Nuclear fuel	(4.2)		(5.4)		1.2
	(155.0)		(143.3)		(11.7)
TNMP:
Transmission	(34.6)		(31.0)		(3.6)
Distribution	(90.0)		(78.0)		(12.0)
	(124.6)		(109.0)		(15.6)
Corporate and Other:
Computer hardware, software, general services, and other	(9.5)		(12.1)		2.6
	(289.1)		(264.4)		(24.7)
Other Cash Flows from Investing Activities
Proceeds from sale of plant assets (Note 13)	$	2.8	$	28.4	$	(25.6)
Proceeds from sales of investment securities	302.5		91.8		210.7
Purchases of investment securities	(305.0)		(95.8)		(209.2)
Proceeds from sale of NMRD	116.9		—		116.9
Investments in NMRD	(12.6)		(11.5)		(1.1)
Other, net	0.1		0.1		—
	104.7		13.0		91.7
Net cash flows used in investing activities	$	(184.4)	$	(251.4)	$	67.0

Cash Flows from Financing Activities

The changes in PNMR’s cash flows from financing activities include:

•Short-term borrowings decreased $17.4 million in 2024 compared to an increase of $177.4 million in 2023, resulting in a net decrease in cash flows from financing activities of $194.8 million

•In 2024, TNMP issued $117.0 million aggregate principal amount of TNMP 2024 Bonds and used the proceeds to repay borrowings under the TNMP Revolving Credit Facility, to fund capital expenditures, and for other corporate purposes

Financing Activities

See Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K and Note 9 for additional information concerning the Company’s financing activities. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual informational financing filing and short-term financing plan with the NMPRC.

The Company’s ability to access the credit and capital markets at a reasonable cost is largely dependent upon its:

•Ability to earn a fair return on equity

•Results of operations

•Ability to obtain required regulatory approvals

•Conditions in the financial markets

•Credit ratings

The Company is closely monitoring the impacts on the capital markets of other macroeconomic conditions, including actions by the Federal Reserve to address inflationary concerns or other market conditions, and geopolitical activity. The Company currently believes it has adequate liquidity but cannot predict the effects of any of these macroeconomic conditions on the global, national, or local economy, including the Company’s ability to access capital in the financial markets, or on the Company’s financial position, results of operations, and cash flows.

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Each of the Company’s revolving credit facilities and term loans contain a single financial covenant that requires the maintenance of a debt-to-capitalization ratio. For the PNMR agreements, this ratio must be maintained at less than or equal to 70%, and for the PNM and TNMP agreements, this ratio must be maintained at less than or equal to 65%. The Company’s revolving credit facilities, term loans, and other debt agreements generally also contain customary covenants, events of default, cross-default provisions, and change-of-control provisions. The Company is in compliance with its debt covenants.

On March 28, 2024, TNMP entered into the TNMP 2024 Bond Purchase Agreement for the sale of $285.0 million aggregate principal amount of four series of TNMP first mortgage bonds. TNMP issued the first two series on March 28, 2024, consisting of $32.0 million at a 5.26% interest rate, due March 28, 2029, and $85.0 million at a 5.55% interest rate, due March 28, 2036. The third and fourth series of $40.0 million and $128.0 million will be issued on or before July 1, 2024, at a 5.65% and 5.79% interest rate, respectively. The issuance of the third and fourth series is subject to the satisfaction of customary conditions, including continuing compliance with the representations, warranties and covenants of the TNMP 2024 Bond Purchase Agreement. The proceeds were and will be used to repay borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes.

PNMR has entered into multiple hedging arrangements, with maturity dates on December 31, 2024 and December 31, 2025. See Note 9 for the related effective dates and terms of each arrangement. All of these hedging agreements establish a fixed rate for the indicated amount of variable rate debt, above which a customary spread is applied, which is subject to change if there is a change in PNMR’s credit rating. These hedge agreements have been accounted for as cash flow hedges.

Capital Requirements

PNMR’s total capital requirements consist of construction expenditures and cash dividend requirements for PNMR common stock and PNM preferred stock.

Key activities in PNMR’s current construction program include:

•Investments in transmission and distribution infrastructure

•Upgrading generation resources and delivering clean energy

•Purchasing nuclear fuel

Projected capital requirements, including amounts expended through March 31, 2024, are:

	2024		2025-2028		Total
	(In millions)
Construction expenditures	$	1,176.3	$	4,876.9	$	6,053.2
Dividends on PNMR common stock	139.8		559.3		699.1
Dividends on PNM preferred stock	0.5		2.1		2.6
Total capital requirements	$	1,316.6	$	5,438.3	$	6,754.9

The construction expenditure estimates are under continuing review and subject to ongoing adjustment, as well as to Board review and approval. The construction expenditures above include TNMP’s investments to support continued high growth in system demand across TNMP’s service territories and growing encouragement for infrastructure investments from the Texas legislature to support grid reliability and resilience. PNM’s capital initiative that includes investments in transmission and distribution infrastructure to deliver clean energy, enhance customer satisfaction, and increase grid resilience. Construction expenditures also include investments proposed in PNM’s Grid Modernization Application. These investments provide for a more resilient, reliable, efficient, and decarbonized electric system. Not included in the table above are incremental expenditures for new customer growth in New Mexico and Texas, and other transmission and renewable energy expansion in New Mexico. The ability of PNMR to pay dividends on its common stock is dependent upon the ability of PNM and TNMP to pay dividends to PNMR. See Note 6 of the Notes to the Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K for a discussion of regulatory and contractual restrictions on the payment of dividends by PNM and TNMP.

During the three months ended March 31, 2024, PNMR met its capital requirements and construction expenditures through cash generated from operations, as well as its liquidity arrangements and the borrowings discussed in Financing Activities above.

In addition to the capital requirements for construction expenditures and dividends, the Company has long-term debt and term loans that must be paid or refinanced at maturity. PNM has $198.0 million of PCRBs that must be remarketed by June 1, 2024 as well as $2.5 million and $3.4 million in scheduled payments due for the ETBC I Securitized Bonds in August 2024 and February 2025. TNMP has $80.0 million of FMBs that are due in July 2024, which will be repaid with the $128.0 million proceeds from the TNMP 2024 Bonds that will be issued on or before July 1, 2024. See Note 9 for additional information

88

about the Company’s long-term debt and equity arrangements. The Company may also enter into new arrangements similar to the existing agreements, borrow under the revolving credit facilities, or issue new long-term debt or equity in the public or private capital markets, or a combination of these sources. The Company has from time to time refinanced or repurchased portions of its outstanding debt before scheduled maturity. Depending on market conditions, the Company may refinance other debt issuances or make additional debt repurchases in the future.

Liquidity

PNMR’s liquidity arrangements include the $300.0 million PNMR Revolving Credit Facility, the $400.0 million PNM Revolving Credit Facility, and the new $200.0 million TNMP Revolving Credit Facility, which replaced the $100.0 million TNMP Revolving Credit Facility on April 1, 2024. On April 1, 2024, PNMR and PNM amended their respective revolving credit facilities, extending their maturity to March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to March 30, 2031, subject to approval by a majority of the lenders. PNM also has the $40.0 million PNM New Mexico Credit Facility with a maturity of May 20, 2026. The TNMP $200.0 million Revolving Credit Facility has a maturity of March 30, 2029 with two one-year extension options that, if exercised, would extend the maturity to March 30, 2031, subject to approval by a majority of the lenders. Variable interest rates under the PNMR, PNM, and TNMP revolving credit facilities are based on SOFR. The Company believes the terms and conditions of these facilities are consistent with those of other investment grade revolving credit facilities in the utility industry. The Company expects that it will be able to extend or replace these credit facilities under similar terms and conditions prior to their expirations.

The revolving credit facilities and the PNM New Mexico Credit Facility provide short-term borrowing capacity. The revolving credit facilities also allow letters of credit to be issued. Letters of credit reduce the available capacity under the facilities. The Company utilizes these credit facilities and cash flows from operations to provide funds for both construction and operational expenditures. The Company’s business is seasonal with more revenues and cash flows from operations being generated in the summer months. In general, the Company relies on the credit facilities to be the initial funding source for construction expenditures. Accordingly, borrowings under the facilities may increase over time. Depending on market and other conditions, the Company will periodically issue long-term debt and use the proceeds to reduce the borrowings under the credit facilities or refinance other debt.

Information regarding the range of borrowings for each facility is as follows:

	Three Months Ended March 31, 2024
Range of Borrowings	Low		High
	(In millions)
PNM:
PNM Revolving Credit Facility	$	89.8	$	155.7
PNM New Mexico Credit Facility	10.0		40.0
TNMP Revolving Credit Facility	11.2		100.0
PNMR Revolving Credit Facility	32.3		139.1

At March 31, 2024, the weighted average interest rates were 6.67% for the PNM Revolving Credit Facility, 6.68% for the PNM New Mexico Credit Facility, 6.29% for the TNMP Revolving Credit Facility and 6.92% for the PNMR Revolving Credit Facility.

The Company currently believes that its capital requirements for at least the next twelve months can be met through internal cash generation, existing, extended, or new credit arrangements, and access to public and private capital markets as discussed above and in Note 9. The Company anticipates that it will be necessary to obtain additional long-term financing to fund its capital requirements and to balance its capital structure during the 2024-2028 period. This could include new debt and/or equity issuances. To cover the difference in the amounts and timing of internal cash generation and cash requirements, the Company intends to use short-term borrowings under its current and future liquidity arrangements or other short-term loans. Market conditions, such as rising interest rates, may raise the cost of borrowing under the Company’s current and future liquidity arrangements or other variable debt. In addition, if market conditions worsen, the Company may not be able to access the capital markets or renew credit facilities when they expire. Should that occur, the Company would seek to improve cash flows by reducing capital expenditures and exploring other available alternatives.

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As of April 26, 2024, ratings on the Company’s securities were as follows:

	PNMR	PNM	TNMP
S&P
Issuer rating	BBB	BBB	BBB+
Senior secured debt	*	*	A
Senior unsecured debt	BBB-	BBB	*
Preferred stock	*	BB+	*
Moody’s
Issuer rating	Baa3	Baa2	Baa1
Senior secured debt	*	*	A2
Senior unsecured debt	Baa3	Baa2	*
* Not applicable

Investors are cautioned that a security rating is not a recommendation to buy, sell, or hold securities, that each rating is subject to revision or withdrawal at any time by the rating organization, and that each rating should be evaluated independently of any other rating.

A summary of liquidity arrangements as of April 26, 2024, is as follows:

	PNM		TNMP		PNMR Separate		PNMR Consolidated
	(In millions)
Financing capacity:
Revolving Credit Facility	$	400.0	$	200.0	$	300.0	$	900.0
PNM New Mexico Credit Facility	40.0		—		—		40.0
Total financing capacity	440.0		200.0		300.0		940.0
Amounts outstanding as of April 26, 2024:
Revolving Credit Facility	170.2		42.0		40.7		252.9
PNM New Mexico Credit Facility	40.0		—		—		40.0
Letters of credit	—		—		3.1		3.1
Total short-term debt and letters of credit	210.2		42.0		43.8		296.0
Remaining availability as of April 26, 2024	$	229.8	$	158.0	$	256.2	$	644.0
Invested cash as of April 26, 2024	$	—	$	—	$	0.9	$	0.9

In addition to the above, PNMR has $30.3 million of letters of credit issued under the WFB LOC Facility. See Note 9. The above table excludes intercompany debt. As of April 26, 2024, PNM had no borrowings and TNMP had $1.2 million in borrowings from PNMR under their respective intercompany loan agreements. The remaining availability under the revolving credit facilities at any point in time varies based on a number of factors, including the timing of collections of accounts receivables and payments for construction and operating expenditures.

PNMR has an automatic shelf registration that provides for the issuance of various types of debt and equity securities that expires March 2025. PNM has a shelf registration statement for up to $650.0 million of SUNs that expires in May 2026.

Other Material Cash Requirements

PNMR, PNM, and TNMP have contractual obligations for long-term debt, minimum lease payments, coal contracts, coal mine reclamation, nuclear decommissioning, SJGS plant decommissioning, pension and retiree medical contributions, and certain other long-term obligations. See MD&A – Other Material Cash Requirements in the 2023 Annual Reports on Form 10-K.

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Contingent Provisions of Certain Obligations

As discussed in the 2023 Annual Reports on Form 10-K, PNMR, PNM, and TNMP have a number of debt obligations and other contractual commitments that contain contingent provisions. Some of these, if triggered, could affect the liquidity of the Company. In the unlikely event that the contingent requirements were to be triggered, PNMR, PNM, or TNMP could be required to provide security, immediately pay outstanding obligations, or be prevented from drawing on unused capacity under certain credit agreements. The contingent provisions also include contractual increases in the interest rate charged on certain of the Company’s short-term debt obligations in the event of a downgrade in credit ratings. The Company believes its financing arrangements are sufficient to meet the requirements of the contingent provisions. No conditions have occurred that would result in any of the above contingent provisions being implemented.

Capital Structure

The capitalization tables below include the current maturities of long-term debt, but do not include short-term debt and do not include lease obligations as debt.

	March 31, 2024		December 31, 2023
PNMR
PNMR common equity	33.6	%	34.1	%
Preferred stock of subsidiary	0.2		0.2
Long-term debt	66.2		65.7
Total capitalization	100.0	%	100.0	%
PNM
PNM common equity	46.6	%	46.2	%
Preferred stock	0.3		0.3
Long-term debt	53.1		53.5
Total capitalization	100.0	%	100.0	%
TNMP
Common equity	47.6	%	49.5	%
Long-term debt	52.4		50.5
Total capitalization	100.0	%	100.0	%

OTHER ISSUES FACING THE COMPANY

Climate Change Issues

Background

For the past several years, management has identified multiple risks and opportunities related to climate change, including the impacts of climate change and severe weather events, potential environmental regulation, technological innovation, and availability of fuel and water for operations, as among the most significant risks facing the Company. Accordingly, these risks are overseen by the Board in order to facilitate more integrated risk and strategy oversight and planning. Board oversight includes understanding the various challenges and opportunities presented by these risks, including the financial consequences that might result from enacted and potential federal and/or state regulation of GHG; plans to mitigate these risks; and the impacts these risks may have on the Company’s strategy. In addition, the Board approves certain procurements of grid modernization technologies and replacement resources.

Management is also responsible for assessing significant risks, developing and executing appropriate responses, and reporting to the Board on the status of risk activities. For example, management periodically updates the Board on the implementation of corporate environmental policy, and the Company’s environmental management systems, including the promotion of energy efficiency programs, and the use of renewable resources.  The Board is also informed of the Company’s practices and procedures to assess the impacts of operations on the environment. The Board considers issues associated with climate change, the Company’s GHG exposures, and the financial consequences that might result from enacted and potential federal and/or state regulation of GHG. Management has published, with Board oversight, a Climate Change Report available at http://www.pnmresources.com/about-us/sustainability-portal.aspx, that details the Company’s efforts to transition to an emissions-free generating portfolio by 2040.

As part of management’s continuing effort to monitor climate-related risks and assess opportunities, the Company has advanced its understanding of climate change by participating in the “2 Degree Scenario” planning by participating in the Electric Power Research Institute (“EPRI”) Understanding Climate Scenarios & Goal Setting Activities program. The program focused on characterizing and analyzing the relationship of individual electric utility company’s carbon emissions and global

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temperature goals. Activities include analyzing the scientific understanding of global emissions pathways that are consistent with limiting global warming and providing insight to assist companies in developing approaches to climate scenario planning. As PNM expands its sustainability efforts, EPRI’s environmental and climate analysis programs have also been useful in gaining a better understanding of energy and environmental policy and regulations, advanced clean energy technologies, decarbonization trends and climate impacts. In 2022, PNM joined EPRI’s Climate READi program which is a strategic initiative convening a global collaborative of electric utilities, thought leaders, scientific researchers and other key stakeholders to strengthen the power sector’s collective approach to managing climate risk to the power system. The program is a three-year initiative, through work across three concurrent workstreams, and PNM will benefit from the development of a first-of-its-kind comprehensive framework for managing physical climate risk and investment prioritization.

The Company cannot anticipate or predict the potential long-term effects of climate change or climate change related regulation on its results of operations, financial position, or cash flows.

Greenhouse Gas Emissions Exposures

In 2023, GHG emissions associated with PNM’s interests in its fossil-fueled generating plants included approximately 2.7 million metric tons of CO2, which comprises the vast majority of PNM’s GHG emissions.

As of March 31, 2024, approximately 39% of PNM’s generating capacity, including resources owned, leased, under PPAs or battery storage agreements, all of which is located within the U.S., consisted of coal or gas-fired generation that produces GHG emissions. As PNM shifts its generation to cleaner energy resources, the Company’s output of GHG emissions continues to decrease. Many factors affect the amount of GHG emitted, including total electricity sales, plant performance, economic dispatch, and the availability of renewable resources. For example, wind generation performance from PNM’s largest single renewable energy resource, New Mexico Wind, varies each year as a result of highly seasonal wind patterns and annual wind resource variability. Similarly, if PVNGS experienced prolonged outages or if PNM’s entitlement from PVNGS were reduced, PNM might be required to utilize other power supply resources such as gas-fired generation, which could increase GHG emissions.

PNM has several programs underway to reduce or offset GHG emissions from its generation resource portfolio, thereby reducing its exposure to climate change regulation. PNM shutdown SJGS Units 2 and 3 as part of its strategy to address the regional haze requirements of the CAA. The shutdown of SJGS Units 2 and 3 resulted in a reduction of GHG emissions for the entire station of approximately 54% for 2018, reflecting a reduction of 32% of GHG emissions from the Company’s owned interests in SJGS, below 2005 levels. PNM shut down the remaining SJGS Units 1 and 4 on June 30, 2022 and September 30, 2022, respectively, resulting in additional reductions GHG emissions. Retiring PNM’s share of SJGS in 2022 resulted in a GHG emissions reduction from 2021 levels of 67% of PNM’s GHG emissions based upon 2021 GHG emissions from generation.

PNM’s renewable procurements in service as of March 31, 2024 with a total net generation capacity of 1,577 MW include utility-owned solar capacity, as well as solar, wind, geothermal, and battery storage. The NMPRC has approved plans for PNM to procure energy and RECs from additional renewable resources to serve retail customers and a data center located in PNM’s service territory, including the portfolio to replace SJGS and the PVNGS Leased Interest Abandonment Application. PNM’s approved renewable resource plans have a generation capacity of 1,392 MW and are expected in operation by 2025. In addition, PNM filed an application with the NMPRC seeking approval of 410 MW of renewable resources for the 2026 summer peak. The majority of these renewable resources are key means for PNM to meet the RPS and related regulations that require PNM to achieve prescribed levels of energy sales from renewable sources, including those set by the ETA, without exceeding cost requirements. Approval of these renewable energy and battery resources supports PNM’s transition to a carbon-free portfolio by 2040. These estimates are subject to change due to underlying variables, including changes in PNM’s generation portfolio, supplier’s ability to meet contractual in-service dates and complex relationships between several factors. See additional discussion of these resources in Notes 11 and 12.

PNM also has a customer distributed solar generation program that represented 289.3 MW at March 31, 2024. PNM’s distributed solar programs will generate an estimated 578.6 GWh of emission-free solar energy available this year to offset PNM’s annual production from fossil-fueled electricity generation. Under the Community Solar Act PNM will receive 125 MW of capacity to provide customers the option of accessing solar energy. PNM has offered its customers a comprehensive portfolio of energy efficiency and load management programs since 2007. PNM’s cumulative savings from these programs was approximately 7,454 GWh of electricity through 2023. Over the next 20 years, PNM projects energy efficiency and load management programs will provide the equivalent of approximately 12,900 GWh of electricity savings, which will avoid approximately 220,000 tons of CO2 based upon projected emissions from PNM’s portfolio of resources. These estimates are subject to change because of the uncertainty of many of the underlying variables, including changes in PNM’s generation portfolio, demand for electricity, energy efficiency, and complex relationships between those variables.

Because of PNM’s dependence on fossil-fueled generation, legislation or regulation that imposes a limit or cost on GHG could impact the cost at which electricity is produced. While PNM expects to recover any such costs through rates, the timing and outcome of proceedings for cost recovery are uncertain. In addition, to the extent that any additional costs are

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recovered through rates, customers may reduce their usage, relocate facilities to other areas with lower energy costs, or take other actions that ultimately could adversely impact PNM.

Other Climate Change Risks

PNM’s generating stations are located in the arid southwest. Access to water for cooling for some of these facilities is critical to continued operations. Forecasts for the impacts of climate change on water supply in the southwest range from reduced precipitation to changes in the timing of precipitation. In either case, PNM’s generating facilities requiring water for cooling will need to mitigate the impacts of climate change through adaptive measures. Current measures employed by PNM generating stations include the use of sustainable, less variable groundwater supplies, and investments in technologies such as air cooling and cooling water recycling. These types of actions will continue to be important to sustain operations.

PNM’s service areas occasionally experience periodic high winds and severe thunderstorms. TNMP has operations in the Gulf Coast area of Texas, which experiences periodic hurricanes and other extreme weather conditions. In addition to potentially causing physical damage to Company-owned facilities, which disrupts the ability to transmit and/or distribute energy, weather and other events of nature can temporarily reduce customers’ usage and demand for energy. In addition, other events influenced by climate change, such as wildfires, could disrupt Company operations or result in third-party claims against the Company. PNM has enhanced its wildfire prevention efforts and maintains a wildfire mitigation plan and a public safety power shutoff plan. TNMP has also developed a wildfire mitigation plan. However, both PNM and TNMP remain at risk for wildfires outside of their control and the resulting damages in their service areas.

EPA Regulation

In 2007, the US Supreme Court held that EPA has the authority to regulate GHG emissions under the CAA, and in 2009, EPA released its endangerment finding for GHG from new motor vehicles, stating that the atmospheric concentrations of six key greenhouse gases (CO2, methane, nitrous oxides, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride) endanger the public health and welfare. These actions triggered new GHG permitting requirements for stationary sources, including the energy industry, under the Prevention of Significant Deterioration (“PSD”) and Title V program, although the US Supreme Court held the CAA does not authorize EPA to require a source to obtain a PSD permit solely on the basis of its potential GHG emissions.

EPA also determined that its finding of endangerment requires it to issue performance standards under Section 111 of the CAA to regulate GHG emissions from new and existing stationary sources, including fossil fuel fired electric generating units. Accordingly, in 2015, EPA issued Carbon Pollution Standards for new, modified, and reconstructed power plants (under Section 111(b)) and the Clean Power Plan for existing power plants (under Section 111(d)).

EPA’s Carbon Pollution Standards for new sources (those constructed after January 8, 2014) established separate standards for gas and coal-fired units deemed achievable through the application of what EPA determined to be the BSER demonstrated for each type of unit efficient natural gas combined cycle technology for gas units, and partial carbon capture and sequestration for coal units. The Clean Power Plan established numeric “emission standards” for existing electric generating units based on emission reduction opportunities that EPA deemed achievable using technical assumptions for three “building blocks”: efficiency improvements at coal-fired EGUs, displacement of affected EGUs with renewable energy, and displacement of coal-fired generation with natural gas-fired generation. EPA used those “emission standards” to set state emission reduction goals that formed the basis of a trading program that relied on “generation shifting” to reduce emissions from the power sector as a whole.

Multiple states, utilities, and trade groups challenged both the Carbon Pollution Standards for new sources and the Clean Power Plan for existing sources in separate cases, and the challengers successfully petitioned the US Supreme Court for a stay of the Clean Power Plan. However, before the DC Circuit could issue an opinion regarding either the Carbon Pollution Standards or the Clean Power Plan, President Trump took office and his administration asked the court to hold both cases in abeyance while the rules were re-evaluated, which the court granted.

In 2019, EPA repealed the Clean Power Plan, promulgated the ACE Rule, and revised the implementing regulations for all emission guidelines issued under CAA Section 111(d). EPA set the BSER for existing coal-fired power plants as heat rate efficiency improvements based on a range of “candidate technologies” to be applied inside the fence-line of an individual facility. The ACE Rule was also challenged, and on January 19, 2021, the DC Circuit issued an opinion in American Lung Association and American Public Health Association v. EPA, et al. vacating the ACE Rule. While the D.C. Circuit rejected the ACE Rule, it did not reinstate the Clean Power Plan. Rather, the DC Circuit granted an EPA motion asking the court to withhold issuance of the mandate with respect to the repeal of the Clean Power Plan until EPA responds to the court’s remand in a new rulemaking action.

Numerous parties sought review by the US Supreme Court and on June 30, 2022, the Court held that the “generation shifting” approach in the Clean Power Plan exceeded the powers granted to EPA by Congress, though the Court did not address the related issue of whether Section 111 of the CAA only authorizes EPA to require measures that can be implemented entirely

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within the fence line at an individual source. Of broader significance in administrative law, the Court’s opinion expressly invoked the major question doctrine, which requires rules involving issues of “vast economic or political significance,” to be supported by clear statutory authorization. In cases where there is no clear statement of authority, courts need not defer to the agency’s statutory interpretation on “major questions.” The decision sets legal precedent for future rulemakings by EPA and other federal regulatory agencies whereby the agency’s authority may be limited based upon similar reasoning.

The litigation over the Carbon Pollution Standards remains held in abeyance but could be reactivated by the parties upon a determination by the court that reconsideration of the rule has concluded.

On May 23, 2023, EPA published in the Federal Register proposed regulatory actions under CAA sections 111(b) and (d) to replace the Clean Power Plan and the ACE Rule. The proposed regulations cover: (1) New natural gas-based EGUs under section 111(b); (2) Existing large and frequently operated natural gas-based EGUs under section 111(d); and (3) Existing coal-based EGUs under section 111(d). Standards of performance for existing coal EGUs will be based on two technologies depending on retirement date: CCS or co-firing gas in lieu of coal. For gas-based EGUs, the standards will be based on CCS or the use of green hydrogen in lieu of natural gas. States will be required to develop SIPs to EPA that provide for the establishment, implementation and enforcement of these standards as they apply to existing sources. States may take into account remaining useful life and other factors when establishing the standards. EPA is proposing that existing coal units must start complying with their gas co-firing or CCS based standards of performance on January 1, 2030, unless they commit to retirement before 2032 (or retirement by 2035 if they also commit to a 20% annual operating limit). Existing combustion turbine units must start complying with their hydrogen or CCS based standards of performance on January 1, 2032, or January 1, 2035, depending on their subcategory, which is based on the control technology selected. The package also includes a proposed repeal of the ACE Rule and revisions to the standard for modified and reconstructed units, along with a notice of public rulemaking seeking data and information about setting standards for existing smaller natural gas-based generators. Comments on the rule were due to EPA by August 8, 2023. PNM filed company-specific comments and continues to review the proposed rule and its potential impacts on the Company’s fossil-fueled generation resources. In late February 2024, EPA indicated that the CAA 111 rule will not contain provisions for existing natural gas units and will issue a new proposal for existing gas in the future after conducting additional stakeholder outreach. On April 25, 2024, EPA signed a final rule promulgating emission guidelines under Section 111 of the CAA requiring states to develop standards of performance for greenhouse gas emissions from new gas-fired combustion turbines and existing fossil-fuel-fired electric steam generating units. The standards for existing coal- or gas-fired steam generating units must be based on the use of CCS, natural gas co-firing, or early retirement, and the standards for new combustion turbines must be based on CCS (base load), efficient simple cycle design (intermediate load), or lower-emitting fuels (low load).

On March 26, 2024, EPA announced it was opening a non-regulatory docket and issued framing questions to gather input about ways to design a stronger, more durable approach to GHG regulation of existing gas combustion turbines. The docket will be open for public comment from March 26 to May 28, 2024 and the agency will hold a May 17 policy forum to bring shareholders together to share ideas with EPA and others. The agency has indicated that it plans to issue a new proposal by Summer 2024.

In 2021, President Biden signed an executive order “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” which instructs agency heads to review all Trump Administration actions for inconsistency with the Biden Administration’s policy “to listen to the science; to improve public health and protect our environment; to ensure access to clean air and water; to limit exposure to dangerous chemicals and pesticides; to hold polluters accountable, including those who disproportionately harm communities of color and low-income communities; to reduce greenhouse gas emissions; to bolster resilience to the impacts of climate change; to restore and expand our national treasures and monuments; and to prioritize both environmental justice and the creation of the well-paying union jobs necessary to deliver on these goals.” Agency heads were directed to consider suspending, revising or rescinding any action that is inconsistent with the stated policy. Within 30 days of the executive order, agency heads submitted to the United States Office of Management and Budget (“OMB”) a preliminary list of those actions being considered for suspension, revision or rescission that would be completed by December 31, 2021, and would be subject to OMB review. Within 90 days of the executive order, agency heads submitted to OMB an updated list of such actions that would be completed by December 31, 2025.

Federal Legislation

President Biden has indicated that climate change is a top priority for his administration. On April 22, 2021, at the Earth Day Summit, as part of the U.S.’ re-entry into the Paris Agreement, President Biden unveiled the goal to cut U.S. emissions by 50% - 52% from 2005 levels by 2030, nearly double the GHG emissions reduction target set by the Obama Administration. The 2030 goal joins President Biden’s other climate goals which include a carbon pollution-free power sector by 2035 and a net-zero emissions economy by no later than 2050.

In 2022, President Biden signed the IRA providing nearly $370 billion in climate action over the next decade. The legislation is aimed at reducing carbon emissions by investing in a variety of efforts, including tax credits for renewables, battery storage, carbon capture, and electric vehicle sales.

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State and Regional Activity

Pursuant to New Mexico law, each utility must submit an IRP to the NMPRC every three years to evaluate renewable energy, energy efficiency, load management, distributed generation, and conventional supply-side resources on a consistent and comparable basis.  The IRP is required to take into consideration risk and uncertainty of fuel supply, price volatility, and costs of anticipated environmental regulations when evaluating resource options to meet supply needs of the utility’s customers.  The NMPRC requires that New Mexico utilities factor a standardized cost of carbon emissions into their IRPs using prices ranging between $8 and $40 per metric ton of CO2 emitted and escalating these costs by 2.5% per year.  Under the NMPRC order, each utility must analyze these standardized prices as projected operating costs.  Reflecting the evolving nature of this issue, the NMPRC order states that these prices may be changed in the future to account for additional information or changed circumstances.  Although these prices may not reflect the costs that ultimately will be incurred, PNM is required to use these prices for purposes of its IRP.  PNM’s 2023 filing has a continued focus on a carbon-free energy system by 2040. The plan highlights the need for the significant sustained addition of resources over the next two decades, replacing retiring or expiring capacity, meeting concurrent load growth, while reducing the carbon intensity of PNM’s portfolio. See Note 12.

The ETA was signed into New Mexico state law and became effective in 2019. The ETA, among other things, requires that investor-owned utilities obtain specified percentages of their energy from renewable and carbon-free resources. The ETA requires utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. Under the ETA provisions, PNM will also be required to meet a generation emission standard of no more than 400 lbs. of CO2 per MWh beginning in 2023 and not more than 200 lbs. per MWh beginning in 2032. PNM takes this requirement into account in its resource planning, and it is expected that the standards will be met with the approved resource retirements and replacements. The ETA provides for a transition from fossil-fuel generating resources to renewable and other carbon-free resources by allowing investor-owned utilities to issue securitized bonds, or “energy transition bonds,” related to the retirement of coal-fired generating facilities to qualified investors. Proceeds provided by energy transition bonds must be used only for purposes related to providing utility service to customers and to pay energy transition costs (as defined by the ETA). These costs may include plant decommissioning and coal mine reclamation costs, and other costs that have not yet been charged to customers or disallowed by the NMPRC or by a court order. Proceeds from energy transition bonds may also be used to fund severances for employees of the retired facility and related coal mine and to promote economic development, education and job training in areas impacted by the retirement of coal-fired facilities. Energy transition bonds must be issued under a NMPRC approved financing order, are secured by “energy transition property”, are non-recourse to the issuing utility, and are repaid by a non-bypassable charge paid by all customers of the issuing utility. See additional discussion of the ETA in Note 11.

The ETA has a significant impact on PNM’s future generation portfolio. In compliance with the ETA, on June 15, 2022, the NMED announced a new rulemaking, Carbon Dioxide Emission Standards for Electric Generating Facilities, to develop carbon emission standards for new and existing electric coal-fired generating facilities. An informal comment period for the draft proposal ran from June 15, 2022 through June 29, 2022. On July 1, 2022, NMED requested the Environmental Improvement Board to docket the matter and set a schedule for pre-filed technical testimony which was filed on September 14, 2022, pre-filed rebuttal testimony which was filed on October 12, 2022, and a public hearing that was held on October 26 and 27, 2022. On October 28, 2022, the rule was passed which adopts new carbon emission standards for new and existing coal-fired power plants.

In 2020, the NMPRC approved PNM’s San Juan abandonment application and for the issuance of Securitized Bonds consistent with the requirements of the ETA and in 2023 PNM issued Securitized Bonds. PNM cannot predict the full impact of the ETA with respect to Four Corners. See additional discussion of PNM’s Four Corners Abandonment Application in Note 12.

International Accords

The United Nations Framework Convention on Climate Change (“UNFCCC”) is an international environmental treaty that was negotiated at the 1992 United Nations Conference on Environment and Development (informally known as the Earth Summit) and entered into force in March 1994.  The objective of the treaty is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”  Parties to the UNFCCC, including the U.S., have been meeting annually in Conferences of the Parties (“COP”) to assess progress in meeting the objectives of the UNFCCC. 

In 2015, the Paris Agreement was finalized during the 2015 COP. The aim of the Paris Agreement is to limit global temperature rise to two degrees Celsius above pre-industrial levels. The agreement, which was agreed to by approximately 200 parties, requires that countries submit INDCs. INDCs reflect national targets and actions that arise out of national policies and elements relating to oversight, guidance and coordination of actions to reduce emissions by all countries. In November 2014, then President Obama announced the United States’ commitment to reduce GHG, on an economy-wide basis, by 26%-28% from 2005 levels by the year 2025. The U.S. INDC was part of an overall effort by the former administration to have the U.S. achieve economy-wide reductions of around 80% by 2050.  The former administration’s GHG reduction target for the electric

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utility industry was a key element of its INDC and was based on EPA’s GHG regulations for new, existing, and modified and reconstructed sources at that time. Thresholds for the number of countries necessary to ratify or accede to the Paris Agreement and total global GHG percentage were achieved on October 5, 2016 and the Paris Agreement entered into force on November 4, 2016.  In 2017, President Trump announced that the U.S. would withdraw from the Paris Agreement. As a result of the President’s notice to the United Nations, the U.S. officially withdrew from the Paris Agreement on November 4, 2020. On January 20, 2021, President Biden signed an instrument that will allow the United States to rejoin the Paris Agreement on Climate Change. The instrument was deposited with the United Nations on January 21, 2021, and the United States officially became a party to the Agreement on February 19, 2021.

PNM has calculated GHG reductions that would result from scenarios that assume PNM’s retirement of its share of the SJGS in 2022 and exiting Four Corners in 2031 and PNM has set a goal to have a 100% emissions-free generating portfolio by 2040. While the Company has not conducted an independent 2 Degree Scenario analysis, our commitment to becoming 100% emissions-free by 2040 produces a carbon emissions reduction pathway that tracks within the ranges of climate scenario pathways that are consistent with limiting the global warming average to less than 2 degrees Celsius. In addition, as an investor-owned utility operating in the state of New Mexico, PNM is required to comply with the ETA, which requires utilities’ generating portfolio be 100% carbon-free by 2045. The requirements of the ETA and the Company’s goal compare favorably to the U.S. INDC of 50% to 52% carbon emissions reduction by 2030 and the Biden Administration’s goal of net-zero carbon emissions economy-wide by 2050. On April 1, 2020, the NMPRC approved PNM’s application to retire its share of SJGS in 2022.

PNM will continue to monitor the United States’ participation in the Paris Agreement and other parties’ involvement in these types of international accords, but the potential impact that such accords may have on the Company cannot be determined at this time.

Assessment of Legislative/Regulatory Impacts

The Company has assessed, and continues to assess, the impacts of climate change legislation and regulation on its business.  This assessment is ongoing and future changes arising out of the legislative or regulatory process could impact the assessment significantly.  PNM’s assessment includes assumptions regarding specific GHG limits; the timing of implementation of these limits; the possibility of a market-based trading program, including the associated costs and the availability of emission credits or allowances; the development of emission reduction and/or renewable energy technologies; and provisions for cost containment. Moreover, the assessment assumes various market reactions such as the price of coal and gas and regional plant economics.  These assumptions are, at best, preliminary and speculative. However, based upon these assumptions, the enactment of climate change legislation or regulation could, among other things, result in significant compliance costs, including large capital expenditures by PNM, and could jeopardize the Company’s reputation as well as the economic viability of certain generating facilities. The ultimate consequences of increased stakeholder scrutiny related to climate change and environmental regulation could lead to increased costs to customers and affect results of operations, cash flows, and financial condition if the incurred costs are not fully recovered through regulated rates. Higher rates could also contribute to reduced usage of electricity.  PNM’s assessment process is evolving and is too speculative at this time for a meaningful prediction of the long-term financial impact.

Transmission Issues

At any given time, FERC has various notices of inquiry and rulemaking dockets related to transmission issues pending. Such actions may lead to changes in FERC administrative rules or ratemaking policy but have no time frame in which action must be taken or a docket closed with no further action. Further, such notices and rulemaking dockets do not apply strictly to PNM but will have industry-wide effects in that they will apply to all FERC-regulated entities. PNM monitors and often submits comments taking a position in such notices and rulemaking dockets or may join in larger group responses. PNM often cannot determine the full impact of a proposed rule and policy change until the final determination is made by FERC and PNM is unable to predict the outcome of these matters.

Other Matters

See Notes 11 and 12 herein and Notes 16 and 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K for a discussion of commitments and contingencies and rate and regulatory matters.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with GAAP requires Company management to select and apply accounting policies that best provide the framework to report the results of operations and financial position for PNMR, PNM, and TNMP. The selection and application of those policies requires management to make difficult, subjective, and/or complex judgments concerning reported amounts of revenue and expenses during the reporting period and the reported amounts of assets and liabilities at the date of the financial statements. As a result, there exists the likelihood that materially different amounts would be reported under different conditions or using different assumptions.

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As of March 31, 2024, there have been no significant changes with regard to the critical accounting policies disclosed in PNMR’s, PNM’s, and TNMP’s 2023 Annual Reports on Forms 10-K. The policies disclosed included regulatory accounting, impairments, decommissioning and reclamation costs, pension and other postretirement benefits, accounting for contingencies, and income taxes.

MD&A FOR PNM

RESULTS OF OPERATIONS

PNM operates in only one reportable segment, as presented above in Results of Operations for PNMR.

MD&A FOR TNMP

RESULTS OF OPERATIONS

TNMP operates in only one reportable segment, as presented above in Results of Operations for PNMR.

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

Statements made in this filing that relate to future events or PNMR’s, PNM’s, or TNMP’s 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 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 flows, 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. These factors, which are neither presented in order of importance nor weighted, include:

•The ability of PNM and TNMP to recover costs and earn allowed returns in regulated jurisdictions and the impact on service levels for PNM customers if the ultimate outcomes do not provide for the recovery of costs and operating and capital expenditures, as well as other impacts of federal or state regulatory and judicial actions

•The ability of the Company to successfully forecast and manage its operating and capital expenditures, including aligning expenditures with the revenue levels resulting from the ultimate outcomes of regulatory proceedings

•Uncertainty surrounding the status of PNM’s participation in jointly-owned generation projects, including Four Corners

•Uncertainty regarding the requirements and related costs of decommissioning power plants and reclamation of coal mines, as well as the ability to recover those costs from customers, including the potential impacts of current and future regulatory proceedings

•The impacts on the electricity usage of customers and consumers due to performance of state, regional, and national economies, energy efficiency measures, weather, seasonality, alternative sources of power, advances in technology, and other changes in supply and demand

•Uncertainty related to the potential for regulatory orders, legislation or rulemakings that provide for municipalization of utility assets or public ownership of utility assets, including generation resources, or which would delay or otherwise impact the procurement of necessary resources in a timely manner

•The Company’s ability to maintain its debt and access the financial markets in order to repay or refinance debt as it comes due and for ongoing operations and construction expenditures due to disruptions in the capital or credit markets, actions by ratings agencies, and fluctuations in interest rates resulting from any negative impacts from regulatory proceedings, actions by the Federal Reserve, geopolitical activity, or the risk of wildfires

•The risks associated with the cost and completion of generation, transmission, distribution, and other projects, including uncertainty related to regulatory approvals and cost recovery, the ability of counterparties to meet their obligations under certain arrangements (including renewable energy resources, approved PPAs and battery storage agreements related to replacement resources for facilities retired or for which the leases terminated), and supply chain or other outside support services that may be disrupted

•The potential unavailability of cash from PNMR’s subsidiaries due to regulatory, statutory, or contractual restrictions or subsidiary earnings or cash flows

•The performance of generating units, transmission systems, and distribution systems, which could be negatively affected by operational issues, fuel quality and supply chain issues (disruptions), unplanned outages, extreme weather conditions, wildfires, terrorism, cybersecurity breaches, and other catastrophic events, including the costs the Company may incur to repair its facilities and/or the liabilities the Company may incur to third parties in connection with such issues beyond the extent of insurance coverage

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•State and federal regulation or legislation relating to environmental matters and renewable energy requirements, the resultant costs of compliance, and other impacts on the operations and economic viability of PNM’s generating plants

•State and federal regulatory, legislative, executive, and judicial decisions and actions on ratemaking, and taxes, including guidance related to the interpretation of changes in tax laws, the Inflation Reduction Act of 2022, the Infrastructure Investment and Jobs Act, and other matters

•Risks related to climate change, including potential financial and reputational risks resulting from increased stakeholder scrutiny related to climate change, litigation, legislative and regulatory efforts to limit GHG, including the impacts of the ETA

•Employee workforce factors, including cost control efforts and issues arising out of collective bargaining agreements and labor negotiations with union employees

•Variability of prices and volatility and liquidity in the wholesale power and natural gas markets, including the impacts to transmission margins

•Changes in price and availability of fuel and water supplies, including the ability of the mine supplying coal to Four Corners and the companies involved in supplying nuclear fuel to provide adequate quantities of fuel

•Regulatory, financial, and operational risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainties

•The impacts of decreases in the values of marketable securities maintained in trusts to provide for decommissioning, reclamation, pension benefits, and other postretirement benefits, including potential increased volatility resulting from actions by the Federal Reserve to address inflationary concerns, and international developments

•Uncertainty surrounding counterparty performance and credit risk, including the ability of counterparties to supply fuel and perform reclamation activities and impacts to financial support provided to facilitate reclamation and decommissioning at SJGS

•The effectiveness of risk management regarding commodity transactions and counterparty risk

•The outcome of legal proceedings, including the extent of insurance coverage

•Changes in applicable accounting principles or policies

Any material changes to risk factors occurring after the filing of PNMR’s, PNM’s, and TNMP’s 2023 Annual Reports on Form 10-K are disclosed in Item 1A, Risk Factors, in Part II of this Form 10-Q.

For information about the risks associated with the use of derivative financial instruments, see Item 3. “Quantitative and Qualitative Disclosures About Market Risk.”

SECURITIES ACT DISCLAIMER

Certain securities described or cross-referenced in this report have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be reoffered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. This Form 10-Q does not constitute an offer to sell or the solicitation of an offer to buy any securities.

WEBSITES

The PNMR website, www.pnmresources.com, is an important source of Company information. New or updated information for public access is routinely posted.  PNMR encourages analysts, investors, and other interested parties to register on the website to automatically receive Company information by e-mail. This information includes news releases, notices of webcasts, and filings with the SEC. Participants will not receive information that was not requested and can unsubscribe at any time.

Our corporate internet addresses are:

•PNMR: www.pnmresources.com

•PNM: www.pnm.com

•TNMP: www.tnmp.com

PNMR’s corporate website (www.pnmresources.com) includes a dedicated section providing key environmental and other sustainability information related to PNM’s and TNMP’s operations and other information that collectively demonstrates the Company’s commitment to ESG principles. This information highlights plans for PNM to be coal-free no later than 2031 and to have an emissions-free generating portfolio by 2040.

The contents of these websites are not a part of this Form 10-Q. The SEC filings of PNMR, PNM, and TNMP, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are accessible free of charge on the PNMR website as soon as reasonably practicable after they are filed with, or furnished to, the SEC. Reports filed with the SEC are available on its website, www.sec.gov. These reports are also available in print upon request from PNMR free of charge.

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Also available on the Company’s website at https://www.pnmresources.com/esg-commitment/governance.aspx and in print upon request from any shareholder are PNMR’s:

•Corporate Governance Principles

•Code of Ethics (Do the Right Thing – Principles of Business Conduct; Supplier Code of Conduct)

•Charters of the Audit and Ethics Committee, Nominating and Governance Committee, Compensation and Human Resources Committee, and Finance Committee

•Restated Articles of Incorporation and Bylaws

The Company will post amendments to or waivers from its code of ethics (to the extent applicable to the Company’s executive officers and directors) on its website.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company manages the scope of its various forms of market risk through a comprehensive set of policies and procedures with oversight by senior level management through the Risk Management Committee (“RMC”). The Board’s Finance Committee sets the risk limit parameters. The RMC has oversight over the risk control organization. The RMC is assigned responsibility for establishing and enforcing the policies, procedures, and limits and evaluating the risks inherent in proposed transactions on an enterprise-wide basis. The RMC’s responsibilities include:

•Establishing policies regarding risk tolerance levels and activities in each of the business segments

•Approving new types of derivatives entered into for marketing and hedging

•Reviewing and approving hedging risk activities

•Establishing policies regarding counterparty credit exposure and limits

•Authorizing and delegating transaction limits

•Reviewing and approving controls and procedures for derivative activities

•Reviewing and approving models and assumptions used to calculate mark-to-market and market risk exposure

•Proposing risk limits to the Board’s Finance Committee for its approval

•Reporting to the Board’s Audit and Finance Committees on these activities

To the extent an open position exists, fluctuating commodity prices, interest rates, equity prices, and economic conditions can impact financial results and financial position, either favorably or unfavorably. As a result, the Company cannot predict with certainty the impact that its risk management decisions may have on its businesses, operating results, or financial position.

Commodity Risk

Information concerning accounting for derivatives and the risks associated with commodity contracts is set forth in Note 7, including a summary of the fair values of mark-to-market energy related derivative contracts included in the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2024, and the year ended December 31, 2023, the Company had no commodity derivative instruments designated as cash flow hedging instruments.

Commodity contracts that meet the definition of a derivative are recorded at fair value on the Condensed Consolidated Balance Sheets. In the three months ended March 31, 2024 and 2023, the effects of mark-to-market commodity derivative instruments had no impact to PNM’s net earnings and less than $0.1 million of fair value gains and $17.2 million of fair value losses have been recorded as a regulatory asset. All of the fair values as of March 31, 2024, were determined based on prices provided by external sources other than actively quoted market prices. The net mark-to-market amounts will settle by the end of 2024.

The Company manages risks associated with market fluctuations by utilizing various commodity instruments that may qualify as derivatives, including futures, forwards, options, and swaps. PNM uses such instruments to hedge its exposure to changes in the market prices of electricity and natural gas. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC.

Credit Risk

The Company is exposed to credit risk from its retail and wholesale customers, as well as the counterparties to derivative instruments. The Company conducts counterparty risk analysis across business segments and uses a credit management process to assess the financial conditions of counterparties.

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The following table provides information related to credit exposure by the credit worthiness (credit rating) and concentration of credit risk for wholesale counterparties, all of which will mature in less than two years.

Schedule of Credit Risk Exposure
March 31, 2024
Rating (1)	Credit Risk Exposure(2)		Number of Counter-parties >10%	Net Exposure of Counter-parties >10%
	(Dollars in thousands)
External ratings:
Investment grade	$	184	2	$	166
Non-investment grade	—		—	—
Split ratings	—		—	—
Internal ratings:
Investment grade	25		—	—
Non-investment grade	—		—	—
Total	$	209		$	166

(1)The rating “Investment Grade” is for counterparties, or a guarantor, with a minimum S&P rating of BBB- or Moody’s rating of Baa3. The category “Internal Ratings – Investment Grade” includes those counterparties that are internally rated as investment grade in accordance with the guidelines established in the Company’s credit policy.

(2)The Credit Risk Exposure is the gross credit exposure, including long-term contracts, forward sales, and short-term sales. The gross exposure captures the amounts from receivables/payables for realized transactions, delivered and unbilled revenues, and mark-to-market gains/losses. Gross exposures can be offset according to legally enforceable netting arrangements but are not reduced by posted credit collateral. At March 31, 2024, PNMR held $0.2 million of cash collateral to offset its credit exposure.

Net credit risk for the Company’s largest counterparty as of March 31, 2024, was $0.1 million.

Other investments have no significant counterparty credit risk.

Interest Rate Risk

The majority of PNM’s and TNMP’s long-term debt is fixed-rate debt, which does not expose earnings to adverse changes in market interest rates. PNM and TNMP earnings are exposed to adverse changes in market interest rates when long-term debt must be refinanced, repriced or redeemed. PNMR’s debt and the revolving credit facilities of PNM and TNMP are exposed to interest rate risk to the extent variable interest rates continue to rise. The Company periodically makes plans to reduce its variable interest rate exposures through various instruments including fixed rate debt and equity and hedging arrangements like those executed by PNMR in 2022 and 2023, and otherwise expects that it will be able to extend or replace variable rate debt under similar terms and conditions prior to their expirations. Variable interest rates under the PNMR, PNM, and TNMP revolving credit facilities and term loans are based on SOFR.

At April 26, 2024, variable rate debt balances and weighted average interest rates were as follows:

Variable Rate Debt	Weighted Average Interest Rate		Balance Outstanding		Capacity
			(In thousands)
Short-term Debt:
PNMR Revolving Credit Facility	6.92	%	$	40,700	$	300,000
PNM Revolving Credit Facility	6.68		170,200		400,000
PNM New Mexico Credit Facility	6.68		40,000		40,000
TNMP Revolving Credit Facility	6.29		42,000		200,000
			$	292,900	$	940,000
Long-term Debt:
PNMR 2021 Delayed-Draw Term Loan	6.38	%	$	500,000
PNMR 2023 Term Loan	6.78		500,000
			$	1,000,000

The investments held by PNM in trusts for decommissioning and reclamation had an estimated fair value of $448.2 million at March 31, 2024, of which 16.6% were fixed-rate debt securities that subject PNM to risk of loss of fair value

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with increases in market interest rates. If interest rates were to increase by 50 basis points from their levels at March 31, 2024, the decrease in the fair value of the fixed-rate securities would be 1.3%, or $1.0 million.

PNM does not directly recover or return through rates any losses or gains on the securities, including equity investments discussed below, in the trusts for decommissioning and reclamation. However, the overall performance of these trusts does enter into the periodic determinations of expense and funding levels, which are factored into the rate making process to the extent applicable to regulated operations. The NMPRC ruled in the NM 2015 Rate Case that PNM would not be able to include future contributions made by PNM for decommissioning of PVNGS to the extent applicable to certain capacity purchased and leased by PNM in rates charged to retail customers. The NM Supreme Court ruled that the NMPRC’s decision to disallow recovery of such future contributions for decommissioning denied PNM due process and remanded the matter back to the NMPRC for further proceedings. On November 18, 2022, the NMPRC issued an order requiring, among other things, PNM to address unresolved issues on whether PNM should be denied recovery of future decommissioning expense as a remedy for imprudence in the 2024 Rate Change. See Note 12. PNM is at risk for shortfalls in funding of obligations due to investment losses, including those from the equity market risks discussed below, to the extent not ultimately recovered through rates charged to customers.

Equity Market Risk

The investments held by PNM in trusts for decommissioning and reclamation include certain equity securities at March 31, 2024. These equity securities expose PNM to losses in fair value should the market values of the underlying securities decline. Equity securities comprised 56.1% of the securities held by the trusts as of March 31, 2024. A hypothetical 10% decrease in equity prices would reduce the fair values of these funds by $25.2 million.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As of the end of the period covered by this quarterly report, each of PNMR, PNM, and TNMP conducted an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon this evaluation, the Chief Executive Officer and the Chief Financial Officer of each of PNMR, PNM, and TNMP concluded that the disclosure controls and procedures are effective.

Changes in internal controls over financial reporting

There have been no changes in each of PNMR’s, PNM’s, and TNMP’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, each of PNMR’s, PNM’s, and TNMP’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Notes 11 and 12 for information related to the following matters, for PNMR, PNM, and TNMP, incorporated in this item by reference.

Note 11

•Cooling Water Intake Structures

•Santa Fe Generating Station

Note 12

•PNM – 2024 Rate Change

•PNM – 2025 Rate Change

•PNM – 2020 Decoupling Petition

•PNM – Grid Modernization Application

•PNM – Community Solar Act

•TNMP – Transmission Cost of Service Rates

•TNMP – Periodic Distribution Rate Adjustment

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ITEM 1A. RISK FACTORS

As of the date of this report, there have been no material changes with regard to the Risk Factors disclosed in PNMR’s, PNM’s, and TNMP’s Annual Reports on Form 10-K for the year ended December 31, 2023, except as set forth below.

The impact of wildfires could negatively affect PNM’s and TNMP’s results of operations.

PNM and TNMP have large networks of electric transmission and distribution facilities. Weather conditions including severe drought, high winds, and the natural vegetation in the U.S. Southwest region and certain parts of Texas, could contribute to wildfires in or near PNM’s and TNMP’s service territories. The risk of wildfires could result in higher maintenance costs, increased insurance premiums, and the inability to maintain adequate insurance coverage. PNM and TNMP take proactive steps to mitigate wildfire risk. However, wildfire risk is always present and PNM and TNMP could be held liable for damages incurred as a result of wildfires caused, or allegedly caused, by their transmission and distribution systems. In addition, wildfires could cause damage to PNM’s and TNMP’s assets that could result in loss of service to customers or make it difficult to supply power in sufficient quantities to meet customer needs. Wildfire avoidance measures, such as intentional power interruptions, also may lead to customer claims for lost service, business interruption, and other injuries.

Failure to adequately address the risk of wildfires could also result in civil liability arising out of government enforcement actions or private claims. These actions could also result in reputational harm, which may cause stock price decreases, increased insurance premiums or the inability to maintain adequate insurance coverage, or cause certain investors and financial institutions not to purchase the Company’s debt securities or otherwise provide the Company with capital or credit on favorable terms, which may cause the cost of capital to increase. In addition, PNMR and its operating subsidiaries may underestimate the costs of litigation due to the uncertainty inherent in these matters. These events could have negative impacts on the Company’s financial position, results of operations, and cash flows.

ITEM 5. OTHER INFORMATION

During the three months ended March 31, 2024, no director or officer (as defined by Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

3.1	PNMR	Articles of Incorporation of PNMR, as amended to date (incorporated by reference to Exhibit 3.1 to PNMR’s Current Report on Form 8-K filed November 21, 2008)
3.2	PNM	Restated Articles of Incorporation of PNM, as amended through May 31, 2002 (incorporated by reference to Exhibit 3.1.1 to PNM’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002)
3.3	TNMP	Articles of Incorporation of TNMP, as amended through July 7, 2005 (incorporated by reference to Exhibit 3.1.2 to TNMP’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005)
3.4	PNMR	Bylaws of PNMR, with all amendments to and including October 24, 2017 (incorporated by reference to Exhibit 3.1 to PNMR’s Current Report on Form 8-K filed October 25, 2017)
3.5	PNM	Bylaws of PNM, with all amendments to and including July 1, 2022 (incorporated by reference to Exhibit 3.5 to PNM’s Current Report on Form 8-K filed July 1, 2022)
3.6	TNMP	Bylaws of TNMP, with all amendments to and including June 18, 2013 (incorporated by reference to Exhibit 3.6 to TNMP’s Current Report on Form 8-K filed June 20, 2013)
4.1	TNMP	Twentieth Supplemental Indenture, dated as of March 28, 2024, between TNMP and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to TNMP’s Current Report on Form 8-K filed March 28, 2024)
4.2	TNMP	Twenty-First Supplemental Indenture, dated as of April 1, 2024, between TNMP and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to TNMP’s Current Report on Form 8-K filed April 1, 2024)
10.1	TNMP	Bond Purchase Agreement, dated March 28, 2024, between Texas-New Mexico Power Company and the purchasers named therein (incorporated by reference to Exhibit 10.1 to TNMP’s Current Report on Form 8-K filed March 28, 2024)
10.2	PNMR	Twelfth Amendment to and Restatement of Credit Agreement, dated as of April 1, 2024, among PNMR, the lenders party thereto and Wells Fargo Bank, National Association as Administrative Agent (incorporated by reference to Exhibit 10.1 to PNMR’s Current Report on Form 8-K filed April 1, 2024)

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10.3	PNM	Seventh Amendment to and Restatement of Credit Agreement, dated as of April 1, 2024, among PNM, the lenders party thereto and Wells Fargo Bank, National Association as Administrative Agent (incorporated by reference to Exhibit 10.2 to PNM’s Current Report on Form 8-K filed April 1, 2024)
10.4	TNMP	Credit Agreement, dated as of April 1, 2024, among TNMP the lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.3 to TNMP’s Current Report on Form 8-K filed April 1, 2024)
10.5	PNMR	2024 Long-Term Incentive Plan dated May 1, 2024
10.6	PNMR	First Amendment to 2023 Long-Term Incentive Plan
10.7	PNMR	2024 Officer Annual Incentive Plan dated May 1, 2024
31.1	PNMR	Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	PNMR	Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	PNM	Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4	PNM	Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.5	TNMP	Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.6	TNMP	Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	PNMR	Chief Executive Officer and Chief Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	PNM	Chief Executive Officer and Chief Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3	TNMP	Chief Executive Officer and Chief Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	PNMR, PNM, and TNMP	XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the Inline XBRL document
101.SCH	PNMR, PNM, and TNMP	Inline XBRL Taxonomy Extension Schema Document
101.CAL	PNMR, PNM, and TNMP	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	PNMR, PNM, and TNMP	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	PNMR, PNM, and TNMP	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	PNMR, PNM, and TNMP	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	PNMR, PNM, and TNMP	Cover Page Inline XBRL File (included in Exhibits 101)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

		PNM RESOURCES, INC. PUBLIC SERVICE COMPANY OF NEW MEXICO TEXAS-NEW MEXICO POWER COMPANY
		(Registrants)
Date:	May 3, 2024	/s/ Gerald R. Bischoff
		Gerald R. Bischoff
		Vice President and Corporate Controller
		(Officer duly authorized to sign this report)

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EX-10.5

PNM RESOURCES, INC.
2024 LONG-TERM INCENTIVE PLAN

Introduction

•The 2024 Long-Term Incentive Plan (the “Plan” or the “2024 Plan”) provides eligible Officers of PNM Resources, Inc. (the “Company” or “PNMR”) with the opportunity to earn Performance Share Awards (70% of the total opportunity) and time-vested Restricted Stock Rights Awards (30% of the total opportunity). For purposes of the Plan, “Officer” means any Officer of the Company who: (1) has the title of Chief Executive Officer, President, Senior Vice President, Vice President or higher; and (2) who is in salary grade H18 or higher.

•The Company is proposing to change its name to TXNM Energy, Inc., and may make corresponding name changes to certain Affiliates (the “Name Change”). The Name Change will be effective only upon (a) shareholder approval of the proposed change, and (b) delivery of the articles of amendment of the Restated Articles of Incorporation to the New Mexico Secretary of State, provided that the New Mexico Secretary of State does not disapprove of such articles of amendment. If the Name Change becomes effective, the Company intends that its new name (and that of any Affiliate) shall automatically apply to the Plan and will be incorporated herein without the need for any formal amendment.  For the avoidance of doubt, the Name Change, if effective, will not affect the rights of any Officer under the Plan, and the Plan will be construed to include the new name of the Company and any Affiliates.

•The number of Performance Shares earned by an Officer for the Performance Period (as described below) will depend on the Officer’s position (e.g., Chief Executive Officer, President, Senior Vice President or Vice President), the Officer’s base salary and the Company’s level of attainment of (1) an Earnings Growth Goal, (2) a Relative TSR Goal and (3) a FFO/Debt Ratio Goal, as described below and in Attachment A.

•The number of time-vested Restricted Stock Rights granted to an Officer at the end of each Performance Period will depend on the Officer’s position, the Officer’s base salary and the discretion of the Committee.

Performance Period

•The Performance Period began on January 1, 2024 and will end on December 31, 2026.

Performance Goals

•The number of Performance Shares that an Officer will receive for the Performance Period will depend on the Company’s level of attainment of an Earnings Growth Goal, a Relative TSR Goal and a FFO/Debt Ratio Goal.

•These goals and the corresponding Awards are described in the Performance Goal Table (Attachment A).

Performance Share Award Opportunities

•The Company’s level of attainment (Threshold, Target or Maximum) of the Earnings Growth Goal, Relative TSR Goal and the FFO/Debt Ratio Goal determines the level of the Officer’s Performance Share Awards.

4877-3571-4208.3

•An Officer’s Performance Share Award opportunities also will vary depending on the Officer’s position and the Officer’s base salary, all as determined in accordance with the Performance Share Award Opportunity Table (Attachment B).

•For purposes of determining the number of Performance Shares to which an Officer is entitled at any particular Award level, the value of one Performance Share shall be equal to the Fair Market Value of one share of the Company’s Stock on the relevant Grant Date and the Officer’s base salary shall equal the Officer’s base salary as of the first day of the Performance Period.

Time-Vested Restricted Stock Rights Award Opportunities

•After the Performance Period (generally between the next following January 1 and March 15), the Committee will consider whether to grant time-vested Restricted Stock Rights Awards to the participating Officers.

•If the Committee, with the approval of the Board, decides to make a time-vested Restricted Stock Rights Award to a particular Officer, it must adopt a written resolution to that effect. In the resolution, the Committee will establish the Grant Date for the time-vested Restricted Stock Rights Award.

•An Officer’s time-vested Restricted Stock Rights Award opportunity will vary depending on the Officer’s position and the Officer’s base salary, all as determined in accordance with the attached Time-Vested Restricted Stock Rights Award Opportunity Table (Attachment C). The Committee reserves the discretion to grant an Award that is less than the opportunity set forth in the Time-Vested Restricted Stock Rights Award Opportunity Table or to grant no time-vested Restricted Stock Rights Award to a particular Officer.

•For purposes of determining the number of time-vested Restricted Stock Rights to which an Officer will be entitled, the value of one time-vested Restricted Stock Right shall be equal to the Fair Market Value of one share of the Company’s Stock on the Grant Date specified in the Committee’s resolution and the Officer’s base salary shall equal the Officer’s base salary on the Grant Date.

Other Provisions

•All of the Awards will be made pursuant to the PNM Resources, Inc. 2023 Performance Equity Plan, as amended (the “PEP”) or any successor to the PEP. Any references in the Plan to the PEP shall be deemed to be a reference to the corresponding provisions of any successor to the PEP.

•All of the Awards will be subject to the standard Terms and Conditions attached hereto as Attachment D.

•The Grant Date for the Performance Share Awards is March 1, 2024.

•A full Performance Share Award will be provided to an Officer upon an Officer’s Separation from Service at any time during the Performance Period due to a Qualifying Change in Control Termination. In addition, a prorated Performance Share Award will be provided to an Officer who has a Separation from Service in the second half of the Performance Period (in other words, between July 1, 2025 and December 31, 2026) due to death, Disability, Retirement or Impaction. A prorated Performance Share Award will not be paid to an Officer who incurs a Separation from Service for any of these reasons during

    2

the first half of the Performance Period or to an Officer who incurs a Separation from Service for any other reason other than a Qualifying Change in Control Termination prior to the last day of the Performance Period.

•The prorated Performance Share Award will be calculated at the end of the Performance Period based on actual performance during the Performance Period. The proration will be made based on the number of full months of service completed by the Officer during the Performance Period, using the proration rules described in Section 10.1(a)(iv)(2) of the PEP. The prorated Performance Share Award then will be paid at the same time as Awards are paid to other participants in the Plan.

•Upon an Officer’s Separation from Service at any time during the Performance Period due to a Qualifying Change in Control Termination, all Performance Shares will vest at the end of the Performance Period, or such earlier time as determined under the terms of the PEP, based on the level of achievement of the performance goals in accordance with the applicable provisions of the PEP

•If an individual ceases to be an Officer during a Performance Period but remains employed by the Company or its Affiliates, the Committee may pay a prorated Performance Share Award to the former Officer on such terms and conditions as the Committee deems to be appropriate as long as the individual was an Officer for at least half of the Performance Period. If an individual ceases to be an Officer during the Performance Period and subsequently terminates employment due to death, Disability, Retirement or Impaction, the Committee may pay a prorated Performance Share Award to the former Officer, provided the individual was an Officer for at least half of the Performance Period.

•If an individual becomes an Officer during a Performance Period or is promoted to a new Officer position during the Performance Period, the Committee may grant a prorated Performance Share Award to the new Officer on such terms and conditions as the Committee deems to be appropriate.

•All Awards issued under this Plan are subject to potential forfeiture or recovery to the fullest extent called for by the Company’s Clawback Policy. By accepting an Award, an Officer consents to the Clawback Policy and agrees to be bound by and comply with the Clawback Policy and to return the full amount required by the Clawback Policy. To satisfy any recoupment obligation arising under the Clawback Policy or otherwise under applicable laws, rules, or stock exchange listing standards, among other things, the Officer expressly and explicitly authorizes the Company to issue instructions, on the Officer’s behalf, to any brokerage firm or service provider engaged by the Company to hold any shares of Stock or other amounts required pursuant to the Award to re-convey, transfer or otherwise return such shares of Stock and/or other amounts to the Company upon the Company’s enforcement of the Clawback Policy.

/s/ Patrick V. Apodaca

Patrick V. Apodaca

SVP and General Counsel

Dated: May 1 , 2024

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ATTACHMENT A

Performance Goal Table

Goal	Threshold Level1	Target Level1	Maximum Level1,2
Earnings Growth3	At least 3% but less than 5%	At least 5%, but less than 8%	At least 8%
If the Company’s Earnings Growth on the last day of the Performance Period places it in the Threshold, Target or Maximum Level range for the Performance Period, the Officer will be entitled to receive 50% of the Threshold, Target or Maximum Award as determined in accordance with the Performance Share Award Opportunity Table.
Relative TSR4 If the Company’s Relative TSR for the Performance Period places it in the Threshold, Target or Maximum Level range shown to the right, the Officer will be entitled to receive 25% of the Threshold, Target or Maximum Award as determined in accordance with the Performance Share Award Opportunity Table.	Greater than or equal to the 35th percentile and less than the 50th percentile	Greater than or equal to the 50th percentile and less than the 90th percentile	Greater than or equal to the 90th percentile
FFO/Debt Ratio5 If the Company’s FFO/Debt Ratio on the last day of the Performance Period places it in the Threshold, Target or Maximum Level range for the Performance Period, the Officer will be entitled to receive 25% of the Threshold, Target or Maximum Award as determined in accordance with the Performance Share Award Opportunity Table.	At least 13% but less than 14%	At least 14%, but less than 16%	At least 16%

______________________

1 If the Company’s Earnings Growth, Relative TSR or FFO/Debt Ratio falls between two Award levels (e.g., the Threshold Level and the Target Level shown in the Performance Goal Table), the number of Performance Shares to which an Officer is entitled will be interpolated between the two Award levels in accordance with uniform procedures prescribed by the Committee.

2 In no event will an Officer receive more than the Maximum Award for an Officer of his or her level as listed in the Performance Share Award Opportunity Table.

3 Earnings Growth, for the Performance Period, will be calculated by measuring the compounded annual growth rate by dividing the Earnings Per Share (as defined below) for the year ended December 31, 2026 by the Midpoint Earnings Per Share of $2.70 included in the 2024 earnings guidance dated February 6, 2024. The resulting earnings growth

    A-1

______________________________________________________________________________

multiple will then be multiplied to the 1/3 power and subtract 1. The calculation would be as follows: [(2026 Earnings Per Share/$2.70) ^ (1/3)] -1.

Earnings Per Share for the above calculation equals PNMR's diluted EPS for the fiscal year ending December 31, 2026 calculated in accordance with Generally Accepted Accounting Principles and reported in the Company's Form 10-K for PNMR adjusted to exclude the following items: (1) mark-to-market impact of economic hedges, (2) regulatory disallowances, (3) net change in unrealized gains and losses on investment securities, (4) gains or losses on reacquired debt, (5) goodwill or other asset impairments, (6) impacts of acquisition and disposition activities, including but not limited to pension expense or income associated with Public Service Company of New Mexico's ("PNM") former gas utility operations, (7) impact of the Company's adoption of an accounting pronouncement or the Company's adoption of a change in accounting pronouncement on or after March 1, 2024, (8) the loss, impairment, or write-up of any deferred tax asset or liability that was earned and recognized in a prior tax year, but that must be revalued in the current year, (9) judgments entered or settlements reached in litigation or other regulatory proceedings, (10) increases or decreases in the liabilities associated with PNM's retired generating stations, including but not limited to expenses incurred in demolition or environmental work of such generating stations, (11) costs associated with process improvement initiatives, (12) expected credit loss allowances or reversals, and (13) changes to the liabilities associated with mine reclamation costs including but not limited to: (a) changes in the discount rate used to measure those liabilities, (b) an early retirement of generating stations, or (c) actions taken by the New Mexico Public Regulation Commission.

4 The “Relative TSR” Goal refers to the Company’s “Total Shareholder Return” for the Performance Period as compared to the “Total Shareholder Return” of the other utilities included in the EEI Index.

For this purpose, the Total Shareholder Return of the Company and the other utilities included in the Index will be determined by adding any dividends paid by the Company (or such other utilities) to the change in value of the Company’s Stock (or the other utilities’ common stock). The change in value shall be measured by comparing the “Beginning Stock Price” and “Ending Stock Price.”The “Beginning Stock Price” is the average closing price of the Company’s Stock (or the common stock of the other utilities) on the first 20 trading days of the Performance Period. The “Ending Stock Price” is the average closing price of the Company’s Stock (or the common stock of the other utilities) on the last 20 trading days of the Performance Period.

5 The FFO/Debt Goal equals PNMR's funds from operations for the fiscal year ending December 31, 2026 divided by PNMR's total debt outstanding (including any long-term leases other than battery storage agreements and unfunded pension plan obligations, excluding any outstanding debt associated with securitization) as of December 31, 2026. Funds from operations are equal to the amount of PNMR's net cash flow from operating activities (as reflected on the Consolidated Statement of Cash Flows) as reported in the Company's Form 10-K for PNMR adjusted by the following items: (1) including amounts attributable to principal payments on imputed debt from long-term leases other than battery storage agreements, (2) excluding changes in PNMR's working capital, including bad debt expense, (3) excluding the impacts of any consolidation required by the Variable Interest Entities accounting rules and regulations, (4) subtracting the amount of capitalized interest, (5) excluding impacts on material changes to the federal and state tax rate, (6) excluding any contributions to the PNMR or TNMP qualified pension plans, (7) excluding cash invested in cloud computing projects that are treated as operating cash flows, (8) excluding impacts of securitization, and (9) impacts of acquisition activities. The calculation is intended to be consistent with Moody's calculation of FFO/Debt (which Moody's refers to as "CFO Pre-WC/Debt") and includes any other adjustments be consistent with Moody’s methodology as of March 1, 2024.

    A-2

ATTACHMENT B

Performance Share Award Opportunity Table

Officer Level	Threshold Award	Target Award	Maximum Award
CEO	Performance Shares = 101.5% of base salary	Performance Shares = 203% of base salary	Performance Shares = 406% of base salary
President and COO	Performance Shares = 57.75% of base salary	Performance Shares = 115.5% of base salary	Performance Shares = 231% of base salary
SVP	Performance Shares = 29.75% of base salary	Performance Shares = 59.5% of base salary	Performance Shares = 119% of base salary
VP, NM Operations as of April 27, 2024	Performance Shares = 22.75% of base salary	Performance Shares = 45.5% of base salary	Performance Shares = 91% of base salary
All other VPs	Performance Shares = 19.25% of base salary	Performance Shares = 38.5% of base salary	Performance Shares = 77% of base salary

    B-1

ATTACHMENT C

Time-Vested Restricted Stock Rights Award Opportunity Table

Officer Level	Award
CEO	Restricted Stock Rights = 87% of base salary
President and COO	Restricted Stock Rights = 49.5% of base salary
SVP	Restricted Stock Rights = 25.5% of base salary
VP, NM Operations as of April 27, 2024	Restricted Stock Rights = 19.5% of base salary
VP	Restricted Stock Rights = 16.5% of base salary

    C-1

ATTACHMENT D

2024 LONG-TERM INCENTIVE PLAN

TERMS AND CONDITIONS

PNM Resources, Inc. (the “Company” or “PNMR”) has adopted the PNM Resources, Inc. 2023 Performance Equity Plan, as amended (the “PEP”) or any successor to the PEP. Pursuant to the PEP, the Committee has developed the PNM Resources, Inc. 2024 Long-Term Incentive Plan (the “Plan” or the “2024 Plan”) pursuant to which eligible Officers may receive Performance Share Awards and time-vested Restricted Stock Rights Awards.

All of the Awards granted under the 2024 Plan are made pursuant to the PEP and are subject to the provisions of the PEP. In addition, all of the Awards under the 2024 Plan are made subject to these Terms and Conditions. All of the terms of the PEP are incorporated into this document by reference.

Capitalized terms used in but not otherwise defined in this document shall have the meanings given to them in the PEP. Any references in the Plan to the PEP shall be deemed to be a reference to the corresponding provisions of any successor to the PEP.

1.    Performance Share Awards.

(a)    Determination of Earnings Growth Goal, Relative TSR Goal and FFO/Debt Ratio Goal. The Committee will determine the Earnings Growth, Relative TSR and the FFO/Debt Ratio for the Performance Period and the Officer’s corresponding Performance Share Award, if any, by March 6, 2027. The Committee then will submit its recommendations to the Board of Directors for review and approval. The Performance Shares to which an Officer is entitled shall become payable at the times described below.

(b)    Separation from Service; Forfeiture. Unless an Officer qualifies for a full or prorated Award as described in the Plan due to a Qualifying Change in Control Termination or a Separation from Service during the second half of the Performance Period due to death, Disability, Retirement, or Impaction, or as otherwise described in the Plan, the Officer’s Award will be forfeited upon the Officer’s Separation from Service prior to the end of the Performance Period. If the Company terminates an Officer’s employment for Cause during or following the expiration of the Performance Period, all vested and unvested Performance Shares shall be canceled and forfeited immediately, regardless of whether the Officer elects Retirement.

(c)    Form and Timing of Delivery of Stock. All of the Performance Shares awarded and vested pursuant to the Plan will be paid in Stock on or before March 15 of the calendar year following the calendar year in which the Performance Period ends (in other words, by March 15, 2027). The Performance Shares granted under this Plan are intended to fit within the short-term deferral exception to Section 409A of the Code. If the Company determines that the Performance Shares do not qualify for the short-term deferral exception to Section 409A, the restrictions described in Section 17.3 of the PEP will apply to the Performance Shares.

    D-1

2.    Time-Vested Restricted Stock Rights Awards.

(a)    Vesting.

(1)    Except as set forth below, the time-vested Restricted Stock Rights shall vest in the following manner: (i) 33% of the time-vested Restricted Stock Rights will vest on March 7, 2028; (ii) an additional 34% of the time-vested Restricted Stock Rights will vest on March 7, 2029; and (iii) the final 33% of the time-vested Restricted Stock Rights will vest on March 7, 2030 (each a “Vesting Date”).

(2)    Upon an Officer’s involuntary or voluntary Separation from Service for any reason other than those set forth in Section 2(a)(3), the time-vested Restricted Stock Rights, if not previously vested, shall be canceled and forfeited immediately.

(3)    Upon an Officer’s Separation from Service due to death, Disability, Retirement, Impaction or a Qualifying Change in Control Termination, any unvested time-vested Restricted Stock Rights shall become 100% vested in accordance with the applicable provisions of the PEP.

(b)    Form and Timing of Delivery of Certificate. All of the time-vested Restricted Stock Rights awarded pursuant to this Plan will be paid in Stock in accordance with the following provisions:

(1)    If any time-vested Restricted Stock Rights vest in accordance with Section 2(a)(1), the Officer will generally receive the Stock payable with respect to such vested time-vested Restricted Stock Rights within 90 days following each Vesting Date and in all cases by December 31 following the applicable Vesting Date.

(2)    If any time-vested Restricted Stock Rights vest in accordance with Section 2(a)(3), the Officer will receive the Stock payable with respect to such time-vested Restricted Stock Rights within 90 days following the date of the Officer’s Separation from Service, subject to the provisions of Section 17.3 of the PEP.

(3)    If the 90-day period during which payments may be made pursuant to Section 2(a)(1) or (3) begins in one calendar year and ends in another, the Officer will receive the Stock in the second calendar year.

(4)    All Stock will be awarded in accordance with the requirements of Section 409A of the Code and Section 17.3 of the PEP.

3.    Adjustments. Neither the existence of the Plan nor the Awards shall affect, in any way, the right or power of the Company to make or authorize: any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business; or any merger or consolidation of the Company; or any corporate act or proceeding, whether of a similar character or otherwise; all of which, and the resulting adjustments in, or impact on, the Awards are more fully described in Section 4.3 of the PEP.

    D-2

4.    Dividend Equivalents. An Officer will not be entitled to receive a dividend equivalent for any of the Performance Shares or time-vested Restricted Stock Rights granted under the Plan.

5.    Withholding. The Company shall have the power to withhold, or require an Officer to remit to the Company, up to the maximum amount necessary to satisfy federal, state, and local tax withholding requirements in the applicable jurisdiction on any Award under the Plan, all in accordance with the provisions of the PEP.

6.    Securities Law Compliance. The delivery of the time-vested Restricted Stock Rights or earned Performance Shares may be delayed to the extent necessary to comply with Federal securities laws.

7.    Status of Plan and Administration. The Plan and these Terms and Conditions shall at all times be subject to the terms and conditions of the PEP and shall in all respects be administered by the Committee in accordance with the terms of and as provided in the PEP. The Committee shall have the sole and complete discretion with respect to the interpretation of the Plan, these Terms and Conditions and the PEP, and all matters reserved to it by the PEP. The decisions of the majority of the Committee shall be final and binding upon an Officer and the Company. In the event of any conflict between the terms and conditions of the Plan or these Terms and Conditions and the PEP, the provisions of the PEP shall control.

8.    Waiver and Modification. The provisions of the Plan and these Terms and Conditions may not be waived or modified unless such waiver or modification is in writing signed by an authorized representative of the Committee.

9.    Amendment or Suspension. The Committee, in its sole discretion, reserves the right to adjust, amend or suspend the Plan and these Terms and Conditions during the Performance Period except as otherwise provided in the PEP. The President and Chief Operating Officer or the Senior Vice President and General Counsel is hereby authorized to correct any typographical or similar errors in the Plan, the Terms and Conditions and any other documents issued in connection with the Plan.

10.    Ethics. The purpose of the Plan is to fairly reward performance achievement. Any Officer who manipulates or attempts to manipulate the Plan for personal gain at the expense of customers, shareholders, other employees, or the Company or its Affiliates will be subject to disciplinary action, up to and including termination of employment, and will forfeit and be ineligible to receive any Award under the Plan.

    D-3

EX-10.6

FIRST AMENDMENT

TO THE

PNM RESOURCES, INC.

2023 LONG-TERM INCENTIVE PLAN

The 2023 Long-Term Incentive Plan (the “Plan”) was adopted pursuant to the PNM Resources, Inc. 2014 Performance Equity Plan (the “PEP”). By this instrument, the Company desires to amend the Plan as set forth below.

1.The fourth, fifth, and sixth bullet points (out of 13 bullet points in the Section) under the “Other Provisions” Section of the Plan is hereby amended and restated in its entirety to read as follows:

•A full Performance Share Award will be provided to an Officer upon an Officer’s Separation from Service due to a Qualifying Change in Control Termination. In addition, a prorated Performance Share Award will be provided to an Officer under the circumstances described below.

oAll Officers, except Terminating Officers, shall be entitled to receive a prorated Performance Share Award if the Officer has a Separation from Service in the second half of the Performance Period (in other words, between July 1, 2024 and December 31, 2025) due to death, Disability, Retirement or Impaction. A prorated Performance Share Award will not be paid to an Officer who incurs a Separation from Service for any of these reasons during the first half of the Performance Period or to an Officer who incurs a Separation from Service for any other reason other than a Qualifying Change in Control Termination prior to the last day of the Performance Period.

oA Terminating Officer shall be entitled to receive a prorated Performance Share Award if the Terminating Officer becomes Disabled during the second half of the Performance Period or incurs a Separation from Service in the second half of the Performance Period due to death, Retirement or Impaction. A prorated Performance Share Award will not be paid to a Terminating Officer who becomes Disabled during the first half of the Performance Period or incurs a Separation from Service

DM #: 6968169

for any of these reasons during the first half of the Performance Period. If a Terminating Officer incurs a Separation from Service prior to the last day of the Performance Period for any reason other than as set forth in this paragraph or due to a Qualifying Change in Control Termination, the Terminating Officer will not be entitled to receive an Award. Solely for purposes of this Plan, a “Terminating Officer” is defined as the Company’s Chief Executive Officer and Senior Vice President and General Counsel (each determined as of the first day of the Performance Period).

2.The eighth bullet point (out of 13 bullet points in the Section) under the “Other Provisions” Section of the Plan is hereby amended and restated in its entirety to read as follows:

•Except as set forth below in the “Special Rules for Avangrid Merger” section, upon an Officer’s Separation from Service at any time during the Performance Period due to a Qualifying Change in Control Termination, all Performance Shares will vest at the end of the Performance Period, or such earlier time as determined under the terms of the PEP, based on the level of achievement of the performance goals in accordance with the applicable provisions of the PEP.

3.The eleventh bullet point (out of 13 bullet points in the Section) under the “Other Provisions” Section of the Plan is hereby amended and restated in its entirety to read as follows:

oIf a Terminating Officer ceases to be an Officer and subsequently becomes Disabled or terminates employment due to death, Retirement or Impaction, the Committee may pay a prorated Performance Share Award to the former Terminating Officer, provided the individual was an Officer for at least half of the Performance Period.

4.Section 1(b) (Performance Share Awards – Separation from Service; Forfeiture) of Attachment D (2023 Long-Term Incentive Plan Terms and Conditions) of the Plan is hereby amended and restated in its entirety to read as follows:

(b)    Separation from Service; Forfeiture. Unless an Officer qualifies for a full or prorated Award as described in the Plan due to a Qualifying Change in Control Termination, a Disability, a Separation from Service during the second half of the

    2    DM #: 6968169

Performance Period due to death, Disability, Retirement, or Impaction, or as otherwise described in the Plan, the Officer’s Award will be forfeited upon the Officer’s Separation from Service prior to the end of the Performance Period. If the Company terminates an Officer’s employment for Cause during or following the expiration of the Performance Period, all vested and unvested Performance Shares shall be canceled and forfeited immediately, regardless of whether the Officer elects Retirement.

5.Section 1(d)(2) (Performance Share Awards – Special Rules for Avangrid Merger) of Attachment D (2023 Long-Term Incentive Plan Terms and Conditions) of the Plan is hereby amended and restated in its entirety to read as follows:

(2)    Except as otherwise provided by Section 18.3 of the PEP, the Avangrid Restricted Stock Rights for Terminating Officers shall vest and be delivered to the Terminating Officers within thirty (30) days following the earliest of (i) his or her Qualifying Change in Control Termination, (ii) his or her Disability following the closing of the Merger, (iii) his or her termination of employment following the closing of the Merger due to death, Retirement or Impaction, or (iv) the last day of the Performance Period.

6.This First Amendment amends only the provisions of the Plan as noted above, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this First Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and intent of this First Amendment.

IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative on this 12 day of March, 2024.

PNM RESOURCES, INC.

By:	/s/ Joseph D. Tarry
	Joseph D. Tarry
Its:	President and Chief Operating Officer

    3    DM #: 6968169

EX-10.7

PNM RESOURCES, INC.

2024 OFFICER ANNUAL INCENTIVE PLAN

Introduction

PNM Resources, Inc. (the “Company” or “PNMR”) has adopted this 2024 Officer Annual Incentive Plan (the “Plan”) for the purpose of providing annual cash-based incentive awards (each an “Award”) to eligible Officers (as defined below).

Capitalized terms that are used, but not defined, in this Plan document shall have the meanings given to them in the PNM Resources, Inc. 2023 Performance Equity Plan (the “PEP”).

The Company is proposing to change its name to TXNM Energy, Inc., and may make corresponding name changes to certain Affiliates (the “Name Change”). The Name Change will be effective only upon (a) shareholder approval of the proposed change, and (b) delivery of the articles of amendment of the Restated Articles of Incorporation to the New Mexico Secretary of State, provided that the New Mexico Secretary of State does not disapprove of such articles of amendment. If the Name Change becomes effective, the Company intends that its new name (and that of any Affiliate) shall automatically apply to the Plan and will be incorporated herein without the need for any formal amendment.  For the avoidance of doubt, the Name Change, if effective, will not affect the rights of any Officer under the Plan, and the Plan will be construed to include the new name of the Company and any Affiliates.

Eligibility

All Officers of the Company are eligible to participate in the Plan. For purposes of the Plan, the term “Officer” means any employee who: (1) has the title of Chief Executive Officer, President, Senior Vice President, Vice President or higher; and (2) who is in salary grade H18 or higher.

Award Determinations in General

Awards are based on: (1) the Incentive Earnings Per Share (“Incentive EPS”) levels (as described below and as set forth in Table 1 of Attachment A) for the Performance Period; (2) the weighting between Corporate and Business Area Goals (as set forth in Table 2 of Attachment A); and (3) Award levels (as set forth in Table 3 of Attachment A) achieved during the Performance Period. For purposes of the Plan, the “Performance Period” means the period beginning on January 1, 2024 and ending on December 31, 2024.

An Officer’s Award will equal the Officer’s share of the Incentive EPS Award Pool as described below. If, however, the Officer’s share of the appropriate Performance Award Pool as described below is less than the Officer’s share of the Incentive EPS Award Pool, the Officer will receive the smaller amount.

An Officer’s share of the Incentive EPS Award Pool or the Performance Award Pool (each, an “Award Pool”), as applicable, will be based upon the amount potentially payable to the Officer for the attained level of performance (Threshold, Target or Maximum, as determined in accordance

with Table 3 of Attachment A), as compared to the aggregate amounts potentially payable for the attained level of performance to all of the Officers who are entitled to share in that Award Pool. In determining the amount potentially payable to an Officer, the Officer’s base salary will be determined as of December 31, 2024. In no event will the amount payable to an Officer exceed the indicated percentage of the Officer’s base salary for the attained performance level set forth in Table 3 of Attachment A. In addition, in no event will the amount payable to one Officer be increased due to a decrease in the amount payable to any other Officer.

Incentive EPS Award Pool

In order for any Awards to be payable to eligible Officers, the Company must achieve the Threshold Incentive EPS level set forth in Table 1 of Attachment A. If the Company does not achieve the Threshold Incentive EPS level (calculated before any charges for amounts due pursuant to this Plan), no Awards are payable under the Plan to any Officer. If the Company achieves the Threshold Incentive EPS level (calculated before any charges for amounts due pursuant to this Plan), but the charges for amounts due pursuant to this Plan reduce the Incentive EPS to an amount below the Threshold Incentive EPS level, the Threshold level Incentive EPS Award Pool shall be reduced by the amount necessary to assure that the Incentive EPS is equal to the Threshold Incentive EPS level, unless the Committee, in the exercise of its discretion concludes that no Awards should be payable.

If the Threshold, Target or Maximum Incentive EPS levels set forth in Table 1 of Attachment A are achieved, the aggregate potential Awards payable to the Officers at that level of performance (e.g., the aggregate level of Awards payable at Threshold, Target or Maximum set forth in Table 3 of Attachment A) will make up the “Incentive EPS Award Pool.” If the actual Incentive EPS exceeds the minimum level for a performance level by at least $0.01, but is less than the maximum level for that performance level (e.g., if the actual Incentive EPS exceeds $2.65 but is less than $2.70), the Incentive EPS Award Pool will be increased by using straight-line interpolation between the size of the Incentive EPS Award Pool based on the attained level (e.g., Threshold) and the size of the Incentive EPS Award Pool at the next higher level (e.g., Target). The Committee has the discretion to increase the Incentive EPS Award Pool by a lesser amount than would otherwise apply under straight-line interpolation. The Incentive EPS Award Pool is capped by the aggregate Maximum Awards set forth in Table 3 of Attachment A for all eligible Officers.

Performance Award Pool

A Corporate Goals Scorecard and an Officer Business Area Goals Scorecard listing each performance measure established by the Committee will be maintained by the PNMR Services Company Human Resources Department. As set forth in Table 2 of Attachment A, the performance of the Chief Executive Officer and the Senior Officers (i.e., Officers with the title of Senior Vice President or higher) are measured 100% on the Corporate Goals Scorecard. Vice Presidents are measured 60% on the Corporate Goals Scorecard and 40% on the Officer Business Area Goals Scorecard.

    2

The “Performance Award Pool” for each Business Area is the amount that could be paid in the aggregate to the Vice Presidents assigned to that Business Area based on performance alone, determined by using the following multi-step process:

a)Select the scorecard results from the appropriate Corporate Goals Scorecard and Officer Business Area Goals Scorecard;

b)Then multiply each result by the appropriate weighting for the scorecard as set forth in Table 2 of Attachment A;

c)Then multiply the total Vice President salaries for that Business Area by the Target Award Level as set forth in Table 3 of Attachment A;

d)Then multiply the result of each scorecard (Step b), expressed as a percentage of Target, by the aggregate base salaries of the Vice Presidents included in that Business Area (Step c); and

e)Sum the results for the Vice President participants.

The Performance Award Pool for the Chief Executive Officer and the Senior Officers will be constructed by using the same process but will be based solely upon the Corporate Goals Scorecard.

Award Approval and Payout Timing

In early 2025, management will review the level of Awards, if any, and will provide the final Awards calculation to the Committee. The Committee will review the level of Awards and the Awards calculation and will approve the Awards for all Officers, other than the Chief Executive Officer. The independent directors of the Board will approve the Chief Executive Officer’s Award. To the extent Awards are payable under the Plan, the Company will make the payment on or before March 15, 2025 in a single lump sum cash payment, subject to applicable withholding.

The Committee shall retain the authority to adjust the Incentive EPS Award Pool and the Performance Award Pool, to adjust the level of attainment of the Incentive EPS or Corporate Goals and Officer Business Area Goals Scorecards or to otherwise increase or decrease the amount payable with respect to any Award made pursuant to this Plan.

Pro-rata Awards for Partial Service Periods

In certain circumstances (as set forth below and in the above “Award Approval and Payout Timing” section) Officers may or may not be eligible for a pro-rata Award under the Plan.

The following Officers are not eligible for any Award, including a pro-rata Award:

–Officers who terminate employment with the Company or an Affiliate on or before the date on which Awards are distributed for the Performance Period for any reason other than death, Impaction, Retirement, or Disability. Officers who terminate employment with the Company or an Affiliate during the Performance Period due to a Qualifying Change in Control Termination may be entitled to receive a special payment pursuant to the PNM Resources, Inc. Officer Retention Plan in lieu of any payments under this Plan.

    3

–Officers who elect voluntary separation or Retirement in lieu of termination for performance or misconduct.

The following Officers may be eligible for a pro-rata Award:

–Officers who are newly hired during the Performance Period and are employed by the Company or an Affiliate on the day on which Awards are distributed for the Performance Period.

–Employees or Officers who are promoted, transferred or demoted during the Performance Period and are employed by the Company or an Affiliate on the day on which Awards are distributed for the Performance Period. An employee or Officer who is promoted, transferred or demoted during the Performance Period and subsequently terminates employment due to death, Impaction, Retirement or Disability during the Performance Period will remain eligible for a pro-rata Award.

–Officers who are on leave of absence for any full month(s) during the Performance Period and are employed by the Company or an Affiliate on the day on which Awards are distributed for the Performance Period.

–Officers who terminate employment with the Company or an Affiliate during the Performance Period due to Impaction, Retirement or Disability.

–Officers who die during the Performance Period, in which case the Award will be paid to the spouse of a married Officer or the estate of an unmarried Officer.

If an Officer is eligible for a pro-rata Award under this section, it will be calculated based on the number of days that the Officer was actively employed at each eligibility level during the Performance Period compared to the number of days included in the Performance Period. If an Officer who is eligible for a pro-rata Award is not employed on December 31, 2024, the pro-rata Award for the eligible Officer will be calculated using the Officer’s base salary on the date of his termination of employment. Any pro-rata Award to which an Officer becomes eligible pursuant to this paragraph will be paid to the Officer in accordance with the “Award Approval and Payout Timing” section above.

Provisions for a Change in Control

If a Change in Control occurs during the Performance Period and the Officer remains employed by the Company or an Affiliate at the end of the Performance Period, the Officer may be entitled to receive an Award for the Performance Period as determined in accordance with the provisions of this Plan.

If the Plan is modified after the occurrence of a Change in Control in a manner that has the effect of reducing the amounts otherwise payable under the Plan, an Officer who remains employed by the Company or an Affiliate at the end of the Performance Period will receive, at a minimum, an Award equal to the Target Award available under this Plan for the Performance Period.

If an Officer terminates employment with the Company or an Affiliate during the Performance Period due to a Qualifying Change in Control Termination, the Officer may be entitled to receive

    4

a special payment pursuant to the PNM Resources, Inc. Officer Retention Plan in lieu of any payments under this Plan.

Ethics

The purpose of the Plan is to fairly reward performance achievement. Any Officer who manipulates or attempts to manipulate the Plan for personal gain at the expense of customers, shareholders, other employees or the Company or its Affiliates will be subject to disciplinary action, up to and including termination of employment, and will forfeit and be ineligible to receive any Award under the Plan.

Continuation of Employment

This Plan does not confer upon any Officer any right to continue in the employment of the Company or any Affiliate and does not limit the right of the Company or any Affiliate, in its sole discretion, to terminate the employment of any Officer at any time. This Plan also does not limit any right that the Company or any Affiliate has to terminate the employment of any Officer in accordance with any written employment agreement the Company and Officer may have.

Clawbacks

All Awards issued under this Plan are subject to potential forfeiture or recovery to the fullest extent called for by the Company’s Clawback Policy. By accepting an Award, an Officer consents to the Clawback Policy and agrees to be bound by and comply with the Clawback Policy and to return the full amount required by the Clawback Policy.

Amendments

The Committee, in its sole discretion, reserves the right to adjust, amend or suspend the Plan during the Performance Period. The President and Chief Operating Officer or the Senior Vice President and General Counsel is hereby authorized to correct any typographical or similar errors in the Plan and any other documents issued in connection with the Plan.

/s/ Patrick V. Apodaca

Patrick V. Apodaca

SVP and General Counsel

Dated: May 1 , 2024

    5

ATTACHMENT A

Incentive EPS Table

(Table 1)

	Incentive EPS1
No Award	Less than $2.65
Threshold	Greater than or equal to $2.65 and less than $2.70
Target	Greater than or equal to $2.70 and less than $2.80
Maximum	Greater than or equal to $2.80

Scorecard Weighting Table

(Table 2)

Scorecard Results
Scorecard Level	Corporate Weighting	Officer Business Area Scorecard Weighting
CEO & Senior Officers	100%	0%
Vice Presidents	60%	40%

1 Equals PNMR's diluted EPS for the fiscal years ending December 31, 2024 calculated in accordance with Generally Accepted Accounting Principles and reported in the Company's Form 10-K for PNMR adjusted to exclude the following items: (1) mark-to-market impact of economic hedges, (2) regulatory disallowances, (3) net change in unrealized gains and losses on investment securities, (4) gains or losses on reacquired debt, (5) goodwill or other asset impairments, (6) impacts of acquisition and disposition activities, including but not limited to pension expense or income associated with Public Service Company of New Mexico's ("PNM") former gas utility operations, (7) impact of the Company's adoption of an accounting pronouncement or the Company's adoption of a change in accounting pronouncement on or after March 1, 2024, (8) the loss, impairment, or write-up of any deferred tax asset or liability that was earned and recognized in a prior tax year, but that must be revalued in the current year, (9) judgments entered or settlements reached in litigation or other regulatory proceedings, (10) increases or decreases in the liabilities associated with PNM's retired generating stations, including but not limited to expenses incurred in demolition or environmental work of such generating stations, (11) costs associated with process improvement initiatives, (12) expected credit loss allowances or reversals, and (13) changes to the liabilities associated with mine reclamation costs including but not limited to: (a) changes in the discount rate used to measure those liabilities, (b) an early retirement of generating stations, or (c) actions taken by the New Mexico Public Regulation Commission.

    A-1

Award Levels Table

(Table 3)

Award Levels	Threshold	Target	Maximum
CEO	57.5%	115%	230%
President and COO	35%	70%	140%
SVP, CFO	30%	60%	120%
SVPs (other than SVP, CFO)	27.5%	55%	110%
Vice President, NM Operations (as of April 27, 2024) and Vice President, Human Resources	25%	50%	100%
Vice Presidents (other than VP, NM Operations and VP, Human Resources)	22.5%	45%	90%

    A-2

EX-31.1

PNM Resources

414 Silver Ave. SW

Albuquerque, NM 87102-3289

EXHIBIT 31.1

CERTIFICATION

I, Patricia K. Collawn, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of PNM Resources, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 3, 2024	By:	/s/ Patricia K. Collawn
			Patricia K. Collawn
			Chairman and Chief Executive Officer
			PNM Resources, Inc.

EX-31.2

PNM Resources

414 Silver Ave. SW

Albuquerque, NM 87102-3289

EXHIBIT 31.2

CERTIFICATION

I, Elisabeth A. Eden, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of PNM Resources, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 3, 2024	By:	/s/ Elisabeth A. Eden
			Elisabeth A. Eden
			Senior Vice President and Chief Financial Officer
			PNM Resources, Inc.

EX-31.3

Public Service Company of New Mexico

414 Silver Ave. SW

Albuquerque, NM 87102-3289

EXHIBIT 31.3

CERTIFICATION

I, Joseph D. Tarry, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Public Service Company of New Mexico;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 3, 2024	By:	/s/ Joseph D. Tarry
			Joseph D. Tarry
			President and Chief Executive Officer
			Public Service Company of New Mexico

EX-31.4

Public Service Company of New Mexico

414 Silver Ave. SW

Albuquerque, NM 87102-3289

EXHIBIT 31.4

CERTIFICATION

I, Elisabeth A. Eden, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Public Service Company of New Mexico;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 3, 2024	By:	/s/ Elisabeth A. Eden
			Elisabeth A. Eden
			Senior Vice President and Chief Financial Officer
			Public Service Company of New Mexico

EX-31.5

Texas-New Mexico Power Company

577 N. Garden Ridge Blvd.

Lewisville, Texas 75067

EXHIBIT 31.5

CERTIFICATION

I, Joseph D. Tarry, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Texas-New Mexico Power Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 3, 2024	By:	/s/ Joseph D. Tarry
			Joseph D. Tarry
			Chief Executive Officer
			Texas-New Mexico Power Company

EX-31.6

Texas-New Mexico Power Company

577 N. Garden Ridge Blvd.

Lewisville, Texas 75067

EXHIBIT 31.6

CERTIFICATION

I, Elisabeth A. Eden, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Texas-New Mexico Power Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (each registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 3, 2024	By:	/s/ Elisabeth A. Eden
			Elisabeth A. Eden
			Senior Vice President and Chief Financial Officer
			Texas-New Mexico Power Company

EX-32.1

PNM Resources

414 Silver Ave. SW

Albuquerque, NM 87102-3289

www.pnmresources.com

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO § 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2024, for PNM Resources, Inc. (“Company”), as filed with the Securities and Exchange Commission on May 3, 2024 (“Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 3, 2024	By:	/s/ Patricia K. Collawn
			Patricia K. Collawn
			Chairman and Chief Executive Officer
			PNM Resources, Inc.
		By:	/s/ Elisabeth A. Eden
			Elisabeth A. Eden
			Senior Vice President and Chief Financial Officer
			PNM Resources, Inc.

EX-32.2

Public Service Company of New Mexico

414 Silver Ave. SW

Albuquerque, NM 87102-3289

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO § 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2024, for Public Service Company of New Mexico (“Company”), as filed with the Securities and Exchange Commission on May 3, 2024 (“Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 3, 2024	By:	/s/ Joseph D. Tarry
			Joseph D. Tarry
			President and Chief Executive Officer
			Public Service Company of New Mexico
		By:	/s/ Elisabeth A. Eden
			Elisabeth A. Eden
			Senior Vice President and Chief Financial Officer
			Public Service Company of New Mexico

EX-32.3

Texas-New Mexico Power Company

577 N. Garden Ridge Blvd.

Lewisville, Texas 75067

EXHIBIT 32.3

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO § 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2024, for Texas-New Mexico Power Company (“Company”), as filed with the Securities and Exchange Commission on May 3, 2024 (“Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Report fully complies with the requirements of § 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 3, 2024	By:	/s/ Joseph D. Tarry
			Joseph D. Tarry
			Chief Executive Officer
			Texas-New Mexico Power Company
		By:	/s/ Elisabeth A. Eden
			Elisabeth A. Eden
			Senior Vice President and Chief Financial Officer
			Texas-New Mexico Power Company

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2024	Apr. 26, 2024
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity Registrant Name	PNM Resources, Inc.
Entity Incorporation, State or Country Code	NM
Entity Address, Address Line One	414 Silver Ave. SW
Entity Address, City or Town	Albuquerque
Entity Address, State or Province	NM
Entity Address, Postal Zip Code	87102-3289
City Area Code	505
Local Phone Number	241-2700
Entity File Number	001-32462
Entity Tax Identification Number	85-0468296
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	PNM
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		90,200,384
Entity Central Index Key	0001108426
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Amendment Flag	false
PNM
Entity Information [Line Items]
Entity Registrant Name	Public Service Company of New Mexico
Entity Address, Address Line One	414 Silver Ave. SW
Entity Address, City or Town	Albuquerque
Entity Address, State or Province	NM
Entity Address, Postal Zip Code	87102-3289
City Area Code	505
Local Phone Number	241-2700
Entity File Number	001-06986
Entity Tax Identification Number	85-0019030
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		39,117,799
Entity Central Index Key	0000081023
Current Fiscal Year End Date	--12-31
Texas-New Mexico Power Company
Entity Information [Line Items]
Entity Registrant Name	Texas-New Mexico Power Company
Entity Address, Address Line One	577 N. Garden Ridge Blvd.
Entity Address, City or Town	Lewisville
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75067
City Area Code	972
Local Phone Number	420-4189
Entity File Number	002-97230
Entity Tax Identification Number	75-0204070
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		6,358
Entity Central Index Key	0000022767
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Statements of Earnings - PNMR - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Electric Operating Revenues	$ 436,877	$ 544,077
Operating Expenses:
Administrative and general	55,427	55,110
Regulatory disallowances	4,459	0
Depreciation and amortization	93,187	78,074
Transmission and distribution costs	22,764	22,196
Taxes other than income taxes	25,934	25,562
Total operating expenses	356,287	444,986
Operating income	80,590	99,091
Other Income and Deductions:
Interest income	4,580	4,843
Gains on investment securities	17,998	6,442
Other income	4,911	3,093
Other (deductions)	(16,522)	(2,493)
Net other income and deductions	10,967	11,885
Interest Charges	53,762	40,923
Earnings before Income Taxes	37,795	70,053
Income Taxes	(12,571)	9,780
Net Earnings	50,366	60,273
(Earnings) Attributable to Valencia Non-controlling Interest	(3,044)	(5,127)
Preferred Stock Dividend Requirements	(132)	(132)
Net Earnings Available for PNM Common Stock	$ 47,190	$ 55,014
Net Earnings Attributable to PNMR per Common Share:
Basic (dollars per share)	$ 0.52	$ 0.64
Diluted (dollars per share)	0.52	0.64
Dividends Declared per Common Share (dollars per share)	$ 0.3875	$ 0.3675
Energy
Electric Operating Revenues	$ 436,877	$ 544,077
Operating Expenses:
Energy costs	132,304	241,686
Energy Production
Operating Expenses:
Energy costs	$ 22,212	$ 22,358

XML

Condensed Consolidated Statements of Comprehensive Income - PNMR - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net Earnings	$ 50,366	$ 60,273
Unrealized Gains on Available-for-Sale Debt Securities:
Net increase in unrealized holding gains arising during the period, net of income tax (expense) benefit of $(125) and $(1,059)	366	3,111
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $2,771, and $178	(8,139)	(524)
Pension Liability Adjustment:
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(309) and $(303)	907	891
Fair Value Adjustment for Cash Flow Hedges:
Change in fair market value, net of income tax (expense) of $(17) and $43	50	(125)
Reclassification adjustment for gains (losses) included in net earnings, net of income tax (expense) benefit of $(697) and $565	2,048	(1,659)
Total Other Comprehensive Income (Loss)	(4,768)	1,694
Comprehensive Income	45,598	61,967
Comprehensive (Income) Attributable to Valencia Non-controlling Interest	(3,044)	(5,127)
Preferred Stock Dividend Requirements of Subsidiary	(132)	(132)
Comprehensive Income Attributable to PNM	$ 42,422	$ 56,708

XML

Condensed Consolidated Statements of Comprehensive Income - PNMR (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit	$ (125)	$ (1,059)
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit)	2,771	178
Pension liability adjustment, income tax expense (benefit)	(309)	(303)
Change in fair market value, income tax (expense) benefit	(17)	43
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit)	$ (697)	$ 565

XML

Condensed Consolidated Statements of Cash Flows - PNMR - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities:
Net Earnings	$ 50,366	$ 60,273
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	103,004	87,128
Deferred income tax expense	6,935	9,576
(Gain) on sale of NMRD	(4,449)	0
(Gains) losses on investment securities	(17,998)	(6,442)
Stock based compensation expense	4,608	3,490
Regulatory disallowances	4,459	0
Allowance for equity funds used during construction	(3,292)	(1,964)
Other, net	1,031	810
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	29,296	64,919
Materials, supplies, and fuel stock	(6,457)	2,443
Other current assets	24,662	(1,305)
Other assets	(7,341)	(2,074)
Accounts payable	(31,482)	(56,306)
Accrued interest and taxes	(9,823)	(4,514)
Other current liabilities	(39,860)	(16,844)
Other liabilities	(10,843)	(7,689)
Net cash flows from operating activities	92,816	131,501
Cash Flows From Investing Activities:
Utility plant additions	(289,100)	(264,368)
Proceeds from sale of plant assets (Note 13)	2,840	28,372
Proceeds from sales of investment securities	302,510	91,830
Purchases of investment securities	(304,971)	(95,773)
Proceeds from sale of NMRD	116,936	0
Investments in NMRD	(12,550)	(11,500)
Other, net	(23)	6
Net cash flows used in investing activities	(184,358)	(251,433)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	658,800	635,200
Revolving credit facilities repayments	(676,200)	(457,800)
Long-term borrowings	117,000	0
Awards of common stock	(5,440)	(8,394)
Dividends paid	(35,085)	(31,677)
Valencia’s transactions with its owner	(4,003)	(5,510)
Transmission interconnection and security deposit arrangements	57,875	3,894
Refunds paid under transmission interconnection and security deposit arrangements	12,003	15,167
Debt issuance costs and other, net	(1,435)	(560)
Net cash flows from financing activities	99,509	119,986
Change in Cash, Cash Equivalents, and Restricted Cash	7,967	54
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,943	4,078
Cash, Cash Equivalents, and Restricted Cash at End of Period	11,910	4,132
Restricted Cash Included in Other Current Assets and Other Deferred Assets on Consolidated Balance Sheets:
At beginning of period	1,728	0
At end of period	8,922	0
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	48,912	39,794
Income taxes paid (refunded), net	(488)	0
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	$ 40,223	$ 37,148

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Condensed Consolidated Balance Sheets - PNMR - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 2,988	$ 2,215
Accounts receivable, net of allowance for credit losses of $3,203 and $3,388	105,002	126,291
Unbilled revenues	55,142	64,072
Other receivables	39,808	76,509
Materials, supplies, and fuel stock	104,491	98,034
Regulatory assets	61,453	73,046
Prepaid assets	16,792	19,759
Income taxes receivable	6,168	6,697
Other current assets	15,999	8,920
Total current assets	407,843	475,543
Other Property and Investments:
Investment securities	448,164	444,408
Equity investment in NMRD	0	119,570
Other investments	193	171
Non-utility property, net	28,023	29,367
Total other property and investments	476,380	593,516
Utility Plant:
Plant in service, held for future use, and to be abandoned	9,807,524	9,701,180
Less accumulated depreciation and amortization	2,812,846	2,755,823
Net plant in service and plant held for future use	6,994,678	6,945,357
Construction work in progress	693,502	589,834
Nuclear fuel, net of accumulated amortization of $39,681 and $35,840	72,190	74,671
Net utility plant	7,760,370	7,609,862
Deferred Charges and Other Assets:
Regulatory assets	930,752	914,381
Goodwill	278,297	278,297
Operating lease right-of-use assets, net of accumulated amortization	179,480	182,201
Other deferred charges	224,531	198,805
Total deferred charges and other assets	1,613,060	1,573,684
Assets	10,257,653	10,252,605
Current Liabilities:
Short-term debt	244,500	261,900
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	283,776	280,169
Accounts payable	133,470	205,175
Customer deposits	6,256	6,237
Accrued interest and taxes	88,302	98,655
Regulatory liabilities	108,429	140,005
Operating lease liabilities	11,811	12,267
Dividends declared	35,085	35,085
Transmission interconnection arrangement liabilities	124,248	96,870
Other current liabilities	71,251	94,397
Total current liabilities	1,107,128	1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	4,355,049	4,241,642
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	835,835	845,280
Regulatory liabilities	777,752	771,317
Asset retirement obligations	246,908	245,531
Accrued pension liability and postretirement benefit cost	18,700	21,429
Operating lease liabilities	165,842	167,000
Other deferred credits	334,180	319,066
Total deferred credits and liabilities	2,379,217	2,369,623
Total liabilities	7,841,394	7,842,025
Commitments and Contingencies (Note 11)
Cumulative Preferred Stock of Subsidiary without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares)	11,529	11,529
PNM common stockholder’s equity:
Common stock (no par value; 120,000,000 shares authorized; issued and outstanding 90,200,384 shares)	1,623,991	1,624,823
Accumulated other comprehensive income (loss), net of income taxes	(67,608)	(62,840)
Retained earnings	799,348	787,110
Total PNM common stockholder’s equity	2,355,731	2,349,093
Non-controlling interest in Valencia	48,999	49,958
Total equity	2,404,730	2,399,051
Total liabilities and stockholders' equity	$ 10,257,653	$ 10,252,605

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Condensed Consolidated Balance Sheets - PNMR (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Allowance for uncollectible accounts	$ 3,203	$ 3,388
Accumulated depreciation, nuclear fuel	39,681	35,840
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	283,776	280,169
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	$ 4,355,049	$ 4,241,642
Cumulative preferred stock of subsidiary, stated value (in dollars per share)	$ 100	$ 100
Cumulative preferred stock of subsidiary, shares authorized (in shares)	10,000,000	10,000,000
Cumulative preferred stock of subsidiary, shares issued (in shares)	115,293	115,293
Cumulative preferred stock of subsidiary, shares outstanding (in shares)	115,293	115,293
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	90,200,384	90,200,384
Common stock, shares outstanding (in shares)	90,200,384	90,200,384
ETBC 1
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	$ 5,935	$ 2,529
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	$ 335,137	$ 338,521

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Condensed Consolidated Statements of Changes in Equity - PNMR - USD ($) $ in Thousands	Total	Total PNMR Common Stockholders’ Equity	Common Stock	AOCI	Retained Earnings	Non- controlling Interest in Valencia
Beginning balance at Dec. 31, 2022	$ 2,244,926	$ 2,191,932	$ 1,429,102	$ (66,048)	$ 828,878	$ 52,994
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings before subsidiary preferred stock dividends	60,273	55,146			55,146	5,127
Total other comprehensive income (loss)	1,694	1,694		1,694
Subsidiary preferred stock dividends	(132)	(132)			(132)
Dividends declared on common stock	(31,545)	(31,545)			(31,545)
Awards of common stock	(8,394)	(8,394)	(8,394)
Stock based compensation expense	3,490	3,490	3,490
Valencia’s transactions with its owner	(5,510)					(5,510)
Ending balance at Mar. 31, 2023	2,264,802	2,212,191	1,424,198	(64,354)	852,347	52,611
Beginning balance at Dec. 31, 2023	2,399,051	2,349,093	1,624,823	(62,840)	787,110	49,958
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings before subsidiary preferred stock dividends	50,366	47,322			47,322	3,044
Total other comprehensive income (loss)	(4,768)	(4,768)		(4,768)
Subsidiary preferred stock dividends	(132)	(132)			(132)
Dividends declared on common stock	(34,952)	(34,952)			(34,952)
Awards of common stock	(5,440)	(5,440)	(5,440)
Stock based compensation expense	4,608	4,608	4,608
Valencia’s transactions with its owner	(4,003)					(4,003)
Ending balance at Mar. 31, 2024	$ 2,404,730	$ 2,355,731	$ 1,623,991	$ (67,608)	$ 799,348	$ 48,999

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Condensed Consolidated Statements of Earnings - PNM - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Electric Operating Revenues	$ 436,877	$ 544,077
Operating Expenses:
Administrative and general	55,427	55,110
Regulatory disallowances	4,459	0
Depreciation and amortization	93,187	78,074
Transmission and distribution costs	22,764	22,196
Taxes other than income taxes	25,934	25,562
Total operating expenses	356,287	444,986
Operating income	80,590	99,091
Other Income and Deductions:
Interest income	4,580	4,843
Gains on investment securities	17,998	6,442
Other income	4,911	3,093
Other (deductions)	(16,522)	(2,493)
Net other income and deductions	10,967	11,885
Interest Charges	53,762	40,923
Earnings before Income Taxes	37,795	70,053
Income Taxes	(12,571)	9,780
Net Earnings	50,366	60,273
(Earnings) Attributable to Valencia Non-controlling Interest	(3,044)	(5,127)
Preferred Stock Dividend Requirements	(132)	(132)
Net Earnings Available for PNM Common Stock	47,190	55,014
Energy
Electric Operating Revenues	436,877	544,077
Operating Expenses:
Energy costs	132,304	241,686
Energy Production
Operating Expenses:
Energy costs	22,212	22,358
PNM
Electric Operating Revenues	308,115	430,165
Operating Expenses:
Administrative and general	51,736	48,973
Regulatory disallowances	4,459	0
Depreciation and amortization	53,287	43,686
Transmission and distribution costs	14,350	13,887
Taxes other than income taxes	13,709	13,504
Total operating expenses	257,165	352,261
Operating income	50,950	77,904
Other Income and Deductions:
Interest income	4,527	4,849
Gains on investment securities	17,998	6,442
Other income	3,418	2,451
Other (deductions)	(870)	(1,860)
Net other income and deductions	25,073	11,882
Interest Charges	25,116	18,122
Earnings before Income Taxes	50,907	71,664
Income Taxes	5,811	11,829
Net Earnings	45,096	59,835
(Earnings) Attributable to Valencia Non-controlling Interest	(3,044)	(5,127)
Net Earnings Attributable to PNM	42,052	54,708
Preferred Stock Dividend Requirements	(132)	(132)
Net Earnings Available for PNM Common Stock	41,920	54,576
PNM | Energy
Operating Expenses:
Energy costs	97,412	209,853
PNM | Energy Production
Operating Expenses:
Energy costs	$ 22,212	$ 22,358

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Condensed Consolidated Statements of Comprehensive Income - PNM - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Net Earnings	$ 50,366	$ 60,273
Unrealized Gains on Available-for-Sale Debt Securities:
Net increase in unrealized holding gains arising during the period, net of income tax (expense) benefit of $(125) and $(1,059)	366	3,111
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $2,771, and $178	(8,139)	(524)
Pension Liability Adjustment:
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(309) and $(303)	907	891
Total Other Comprehensive Income (Loss)	(4,768)	1,694
Comprehensive Income	45,598	61,967
Comprehensive (Income) Attributable to Valencia Non-controlling Interest	(3,044)	(5,127)
Comprehensive Income Attributable to PNM	42,422	56,708
PNM
Net Earnings	45,096	59,835
Unrealized Gains on Available-for-Sale Debt Securities:
Net increase in unrealized holding gains arising during the period, net of income tax (expense) benefit of $(125) and $(1,059)	366	3,111
Reclassification adjustment for (gains) included in net earnings, net of income tax expense of $2,771, and $178	(8,139)	(524)
Pension Liability Adjustment:
Reclassification adjustment for amortization of experience losses recognized as net periodic benefit cost, net of income tax (benefit) of $(309) and $(303)	907	891
Total Other Comprehensive Income (Loss)	(6,866)	3,478
Comprehensive Income	38,230	63,313
Comprehensive (Income) Attributable to Valencia Non-controlling Interest	(3,044)	(5,127)
Comprehensive Income Attributable to PNM	$ 35,186	$ 58,186

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Condensed Consolidated Statements of Comprehensive Income - PNM (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit	$ (125)	$ (1,059)
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit)	2,771	178
Pension liability adjustment, income tax expense (benefit)	(309)	(303)
PNM
Unrealized holding gains (losses) arising during the period, income tax (expense) benefit	(125)	(1,059)
Reclassification adjustment for (gains) losses included in net earnings, income tax expense (benefit)	2,771	178
Pension liability adjustment, income tax expense (benefit)	$ (309)	$ (303)

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Condensed Consolidated Statements of Cash Flows - PNM - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities:
Net Earnings	$ 50,366	$ 60,273
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	103,004	87,128
Deferred income tax expense	6,935	9,576
(Gains) losses on investment securities	(17,998)	(6,442)
Regulatory disallowances	4,459	0
Allowance for equity funds used during construction	(3,292)	(1,964)
Other, net	1,031	810
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	29,296	64,919
Materials, supplies, and fuel stock	(6,457)	2,443
Other current assets	24,662	(1,305)
Other assets	(7,341)	(2,074)
Accounts payable	(31,482)	(56,306)
Accrued interest and taxes	(9,823)	(4,514)
Other current liabilities	(39,860)	(16,844)
Other liabilities	(10,843)	(7,689)
Net cash flows from operating activities	92,816	131,501
Cash Flows From Investing Activities:
Utility plant additions	(289,100)	(264,368)
Proceeds from sale of plant assets (Note 13)	2,840	28,372
Proceeds from sales of investment securities	302,510	91,830
Purchases of investment securities	(304,971)	(95,773)
Other, net	(23)	6
Net cash flows used in investing activities	(184,358)	(251,433)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	658,800	635,200
Revolving credit facilities repayments	(676,200)	(457,800)
Dividends paid	(35,085)	(31,677)
Valencia’s transactions with its owner	(4,003)	(5,510)
Transmission interconnection and security deposit arrangements	57,875	3,894
Refunds paid under transmission interconnection and security deposit arrangements	(12,003)	(15,167)
Debt issuance costs and other, net	(1,435)	(560)
Net cash flows from financing activities	99,509	119,986
Change in Cash, Cash Equivalents, and Restricted Cash	7,967	54
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,943	4,078
Cash, Cash Equivalents, and Restricted Cash at End of Period	11,910	4,132
Restricted Cash Included in Other Current Assets and Other Deferred Assets on Consolidated Balance Sheets:
At beginning of period	1,728	0
At end of period	8,922	0
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	48,912	39,794
Income taxes paid (refunded), net	(488)	0
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	40,223	37,148
PNM
Cash Flows From Operating Activities:
Net Earnings	45,096	59,835
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	60,356	51,438
Deferred income tax expense	6,030	11,829
(Gains) losses on investment securities	(17,998)	(6,442)
Regulatory disallowances	4,459	0
Allowance for equity funds used during construction	(3,015)	(1,862)
Other, net	927	866
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	22,352	54,042
Materials, supplies, and fuel stock	(3,612)	2,916
Other current assets	3,864	(7,306)
Other assets	293	(897)
Accounts payable	(29,330)	(50,299)
Accrued interest and taxes	19,787	11,770
Other current liabilities	(27,435)	(12,083)
Other liabilities	(7,407)	(6,006)
Net cash flows from operating activities	74,367	107,801
Cash Flows From Investing Activities:
Utility plant additions	(154,975)	(143,348)
Proceeds from sale of plant assets (Note 13)	2,840	28,372
Proceeds from sales of investment securities	302,510	91,830
Purchases of investment securities	(304,971)	(95,773)
Other, net	(23)	6
Net cash flows used in investing activities	(154,619)	(118,913)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	292,500	275,700
Revolving credit facilities repayments	(243,800)	(250,700)
Short-term borrowings (repayments) – affiliate, net	2,300	0
Dividends paid	(132)	(132)
Valencia’s transactions with its owner	(4,003)	(5,510)
Transmission interconnection and security deposit arrangements	51,125	3,894
Refunds paid under transmission interconnection and security deposit arrangements	(9,103)	(11,667)
Debt issuance costs and other, net	(474)	(377)
Net cash flows from financing activities	88,413	11,208
Change in Cash, Cash Equivalents, and Restricted Cash	8,161	96
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	2,586	2,985
Cash, Cash Equivalents, and Restricted Cash at End of Period	10,747	3,081
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	9,121	12,778
Income taxes paid (refunded), net	0	0
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	$ 14,770	$ 17,849

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Condensed Consolidated Balance Sheets - PNM - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 2,988	$ 2,215
Accounts receivable, net of allowance for credit losses	105,002	126,291
Unbilled revenues	55,142	64,072
Other receivables	39,808	76,509
Materials, supplies, and fuel stock	104,491	98,034
Regulatory assets	61,453	73,046
Prepaid assets	16,792	19,759
Income taxes receivable	6,168	6,697
Other current assets	15,999	8,920
Total current assets	407,843	475,543
Other Property and Investments:
Investment securities	448,164	444,408
Other investments	193	171
Non-utility property, net	28,023	29,367
Total other property and investments	476,380	593,516
Utility Plant:
Plant in service, held for future use, and to be abandoned	9,807,524	9,701,180
Less accumulated depreciation and amortization	2,812,846	2,755,823
Net plant in service and plant held for future use	6,994,678	6,945,357
Construction work in progress	693,502	589,834
Nuclear fuel, net of accumulated amortization of $39,681 and $35,840	72,190	74,671
Net utility plant	7,760,370	7,609,862
Deferred Charges and Other Assets:
Regulatory assets	930,752	914,381
Goodwill	278,297	278,297
Operating lease right-of-use assets, net of accumulated amortization	179,480	182,201
Other deferred charges	224,531	198,805
Total deferred charges and other assets	1,613,060	1,573,684
Assets	10,257,653	10,252,605
Current Liabilities:
Short-term debt	244,500	261,900
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	283,776	280,169
Accounts payable	133,470	205,175
Customer deposits	6,256	6,237
Accrued interest and taxes	88,302	98,655
Regulatory liabilities	108,429	140,005
Operating lease liabilities	11,811	12,267
Dividends declared	35,085	35,085
Transmission interconnection arrangement liabilities	124,248	96,870
Other current liabilities	71,251	94,397
Total current liabilities	1,107,128	1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	4,355,049	4,241,642
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	835,835	845,280
Regulatory liabilities	777,752	771,317
Asset retirement obligations	246,908	245,531
Accrued pension liability and postretirement benefit cost	18,700	21,429
Operating lease liabilities	165,842	167,000
Other deferred credits	334,180	319,066
Total deferred credits and liabilities	2,379,217	2,369,623
Total liabilities	7,841,394	7,842,025
Commitments and Contingencies (Note 11)
Cumulative Preferred Stock without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares)	11,529	11,529
PNM common stockholder’s equity:
Common stock (no par value; 40,000,000 shares authorized; issued and outstanding 39,117,799 shares)	1,623,991	1,624,823
Accumulated other comprehensive income (loss), net of income taxes	(67,608)	(62,840)
Retained earnings	799,348	787,110
Total PNM common stockholder’s equity	2,355,731	2,349,093
Non-controlling interest in Valencia	48,999	49,958
Total equity	2,404,730	2,399,051
Total liabilities and stockholders' equity	10,257,653	10,252,605
PNM
Current Assets:
Cash and cash equivalents	1,825	858
Accounts receivable, net of allowance for credit losses	75,437	94,879
Unbilled revenues	43,092	46,925
Materials, supplies, and fuel stock	85,184	81,572
Regulatory assets	61,453	72,996
Prepaid assets	8,957	9,941
Income taxes receivable	7,900	7,682
Other current assets	8,492	1,756
Total current assets	335,426	377,837
Other Property and Investments:
Investment securities	448,164	444,408
Other investments	91	69
Non-utility property, net	12,382	13,538
Total other property and investments	460,637	458,015
Utility Plant:
Plant in service, held for future use, and to be abandoned	6,210,692	6,151,510
Less accumulated depreciation and amortization	2,009,722	1,976,657
Net plant in service and plant held for future use	4,200,970	4,174,853
Construction work in progress	537,488	490,178
Nuclear fuel, net of accumulated amortization of $39,681 and $35,840	72,190	74,671
Net utility plant	4,810,648	4,739,702
Deferred Charges and Other Assets:
Regulatory assets	855,120	838,727
Goodwill	51,632	51,632
Operating lease right-of-use assets, net of accumulated amortization	177,865	180,370
Other deferred charges	187,247	166,782
Total deferred charges and other assets	1,271,864	1,237,511
Assets	6,878,575	6,813,065
Current Liabilities:
Short-term debt	186,200	137,500
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	203,802	200,222
Customer deposits	6,256	6,237
Accrued interest and taxes	61,342	41,337
Regulatory liabilities	105,690	134,846
Operating lease liabilities	10,925	11,371
Dividends declared	132	132
Transmission interconnection arrangement liabilities	124,248	96,870
Other current liabilities	45,672	52,587
Total current liabilities	855,327	839,194
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	2,058,523	2,061,558
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	692,069	684,037
Regulatory liabilities	562,842	565,021
Asset retirement obligations	245,991	244,633
Accrued pension liability and postretirement benefit cost	17,367	19,949
Operating lease liabilities	165,199	166,191
Other deferred credits	234,858	220,178
Total deferred credits and liabilities	1,918,326	1,900,009
Total liabilities	4,832,176	4,800,761
Commitments and Contingencies (Note 11)
Cumulative Preferred Stock without mandatory redemption requirements ($100 stated value; 10,000,000 shares authorized; issued and outstanding 115,293 shares)	11,529	11,529
PNM common stockholder’s equity:
Common stock (no par value; 40,000,000 shares authorized; issued and outstanding 39,117,799 shares)	1,547,918	1,547,918
Accumulated other comprehensive income (loss), net of income taxes	(73,371)	(66,505)
Retained earnings	511,324	469,404
Total PNM common stockholder’s equity	1,985,871	1,950,817
Non-controlling interest in Valencia	48,999	49,958
Total equity	2,034,870	2,000,775
Total liabilities and stockholders' equity	6,878,575	6,813,065
PNM | Nonrelated Party
Current Assets:
Other receivables	33,849	51,975
Current Liabilities:
Short-term debt	186,200	137,500
Accounts payable	97,603	141,704
PNM | Related Party
Current Assets:
Other receivables	9,237	9,253
Current Liabilities:
Short-term debt	2,300	0
Accounts payable	$ 11,157	$ 16,388

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Condensed Consolidated Balance Sheets - PNM (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Allowance for uncollectible accounts	$ 3,203	$ 3,388
Accumulated depreciation, nuclear fuel	39,681	35,840
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	283,776	280,169
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	$ 4,355,049	$ 4,241,642
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	90,200,384	90,200,384
Common stock, shares outstanding (in shares)	90,200,384	90,200,384
ETBC 1
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	$ 5,935	$ 2,529
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	335,137	338,521
PNM
Allowance for uncollectible accounts	3,203	3,388
Accumulated depreciation, nuclear fuel	39,681	35,840
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	203,802	200,222
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	$ 2,058,523	$ 2,061,558
Cumulative preferred stock, stated value (in dollars per share)	$ 100	$ 100
Cumulative preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Cumulative preferred stock, shares issued (in shares)	115,293	115,293
Cumulative preferred stock, shares outstanding (in shares)	115,293	115,293
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	39,117,799	39,117,799
Common stock, shares outstanding (in shares)	39,117,799	39,117,799
PNM | ETBC 1
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	$ 5,935	$ 2,529
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	$ 335,137	$ 338,521

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Condensed Consolidated Statements of Changes in Equity - PNM - USD ($) $ in Thousands	Total	Total PNMR Common Stockholders’ Equity	Common Stock	AOCI	Retained Earnings	Non- controlling Interest in Valencia	PNM	PNM Total PNMR Common Stockholders’ Equity	PNM Common Stock	PNM AOCI	PNM Retained Earnings	PNM Non- controlling Interest in Valencia
Beginning balance at Dec. 31, 2022	$ 2,244,926	$ 2,191,932	$ 1,429,102	$ (66,048)	$ 828,878	$ 52,994	$ 1,960,324	$ 1,907,330	$ 1,547,918	$ (74,335)	$ 433,747	$ 52,994
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Earnings	60,273	55,146			55,146	5,127	59,835	54,708			54,708	5,127
Total other comprehensive income (loss)	1,694	1,694		1,694			3,478	3,478		3,478
Dividends declared on preferred stock							(132)	(132)			(132)
Dividends declared on common stock	(31,545)	(31,545)			(31,545)
Valencia’s transactions with its owner	(5,510)					(5,510)	(5,510)					(5,510)
Ending balance at Mar. 31, 2023	2,264,802	2,212,191	1,424,198	(64,354)	852,347	52,611	2,017,995	1,965,384	1,547,918	(70,857)	488,323	52,611
Beginning balance at Dec. 31, 2023	2,399,051	2,349,093	1,624,823	(62,840)	787,110	49,958	2,000,775	1,950,817	1,547,918	(66,505)	469,404	49,958
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Earnings	50,366	47,322			47,322	3,044	45,096	42,052			42,052	3,044
Total other comprehensive income (loss)	(4,768)	(4,768)		(4,768)			(6,866)	(6,866)		(6,866)
Dividends declared on preferred stock							(132)	(132)			(132)
Dividends declared on common stock	(34,952)	(34,952)			(34,952)
Valencia’s transactions with its owner	(4,003)					(4,003)	(4,003)					(4,003)
Ending balance at Mar. 31, 2024	$ 2,404,730	$ 2,355,731	$ 1,623,991	$ (67,608)	$ 799,348	$ 48,999	$ 2,034,870	$ 1,985,871	$ 1,547,918	$ (73,371)	$ 511,324	$ 48,999

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Condensed Consolidated Statements of Earnings - TNMP - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Electric Operating Revenues	$ 436,877	$ 544,077
Operating Expenses:
Administrative and general	55,427	55,110
Depreciation and amortization	93,187	78,074
Transmission and distribution costs	22,764	22,196
Taxes other than income taxes	25,934	25,562
Total operating expenses	356,287	444,986
Operating income	80,590	99,091
Other Income and Deductions:
Interest income	4,580	4,843
Other income	4,911	3,093
Other (deductions)	(16,522)	(2,493)
Net other income and deductions	10,967	11,885
Interest Charges	53,762	40,923
Earnings before Income Taxes	37,795	70,053
Income Taxes	(12,571)	9,780
Texas-New Mexico Power Company
Electric Operating Revenues	128,762	113,912
Operating Expenses:
Cost of energy	34,892	31,833
Administrative and general	13,669	14,014
Depreciation and amortization	30,382	27,440
Transmission and distribution costs	8,414	8,309
Taxes other than income taxes	10,667	10,529
Total operating expenses	98,024	92,125
Operating income	30,738	21,787
Other Income and Deductions:
Interest income	169	114
Other income	1,173	511
Other (deductions)	(297)	(375)
Net other income and deductions	1,045	250
Interest Charges	13,336	10,425
Earnings before Income Taxes	18,447	11,612
Income Taxes	3,864	1,579
Net Earnings Attributable to PNM	$ 14,583	$ 10,033

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Condensed Consolidated Statements of Cash Flows - TNMP - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities:
Net Earnings	$ 50,366	$ 60,273
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	103,004	87,128
Deferred income tax expense	6,935	9,576
Allowance for equity funds used during construction	(3,292)	(1,964)
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	29,296	64,919
Materials, supplies, and fuel stock	(6,457)	2,443
Other current assets	24,662	(1,305)
Other assets	(7,341)	(2,074)
Accounts payable	(31,482)	(56,306)
Accrued interest and taxes	(9,823)	(4,514)
Other current liabilities	(39,860)	(16,844)
Other liabilities	(10,843)	(7,689)
Net cash flows from operating activities	92,816	131,501
Cash Flows From Investing Activities:
Utility plant additions	(289,100)	(264,368)
Net cash flows used in investing activities	(184,358)	(251,433)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	658,800	635,200
Revolving credit facilities repayments	(676,200)	(457,800)
Long-term borrowings	117,000	0
Transmission interconnection and security deposit arrangements	57,875	3,894
Refunds paid under transmission interconnection and security deposit arrangements	(12,003)	(15,167)
Debt issuance costs and other, net	(1,435)	(560)
Net cash flows from financing activities	99,509	119,986
Change in Cash, Cash Equivalents, and Restricted Cash	7,967	54
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	3,943	4,078
Cash, Cash Equivalents, and Restricted Cash at End of Period	11,910	4,132
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	48,912	39,794
Income taxes paid (refunded), net	(488)	0
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	40,223	37,148
Texas-New Mexico Power Company
Cash Flows From Operating Activities:
Net Earnings	14,583	10,033
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization	30,525	27,642
Deferred income tax expense	3,428	(15)
Allowance for equity funds used during construction	(276)	(102)
Changes in certain assets and liabilities:
Accounts receivable and unbilled revenues	6,944	10,876
Materials, supplies, and fuel stock	(2,845)	(473)
Other current assets	20,581	6,765
Other assets	(450)	(804)
Accounts payable	170	(3,235)
Accrued interest and taxes	(19,053)	(15,562)
Other current liabilities	(7,085)	1,267
Other liabilities	(5,028)	(1,238)
Net cash flows from operating activities	41,494	35,154
Cash Flows From Investing Activities:
Utility plant additions	(124,646)	(108,993)
Net cash flows used in investing activities	(124,646)	(108,993)
Cash Flows From Financing Activities:
Revolving credit facilities borrowings	127,100	125,100
Revolving credit facilities repayments	(163,900)	(61,800)
Short-term borrowings (repayments) – affiliate, net	0	14,200
Long-term borrowings	117,000	0
Transmission interconnection and security deposit arrangements	6,750	0
Refunds paid under transmission interconnection and security deposit arrangements	(2,900)	(3,500)
Debt issuance costs and other, net	(898)	(161)
Net cash flows from financing activities	83,152	73,839
Change in Cash, Cash Equivalents, and Restricted Cash	0	0
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	0	0
Cash, Cash Equivalents, and Restricted Cash at End of Period	0	0
Supplemental Cash Flow Disclosures:
Interest paid, net of amounts capitalized	13,532	14,736
Income taxes paid (refunded), net	(488)	0
Supplemental schedule of noncash investing activities:
Decrease in accrued plant additions	$ 20,472	$ 10,986

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Condensed Consolidated Balance Sheets - TNMP - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 2,988	$ 2,215
Accounts receivable	105,002	126,291
Unbilled revenues	55,142	64,072
Other receivables	39,808	76,509
Materials, supplies, and fuel stock	104,491	98,034
Regulatory assets	61,453	73,046
Total current assets	407,843	475,543
Other Property and Investments:
Other investments	193	171
Non-utility property, net	28,023	29,367
Total other property and investments	476,380	593,516
Utility Plant:
Plant in service, held for future use, and to be abandoned	9,807,524	9,701,180
Less accumulated depreciation and amortization	2,812,846	2,755,823
Net plant in service and plant held for future use	6,994,678	6,945,357
Construction work in progress	693,502	589,834
Net utility plant	7,760,370	7,609,862
Deferred Charges and Other Assets:
Regulatory assets	930,752	914,381
Goodwill	278,297	278,297
Operating lease right-of-use assets, net of accumulated amortization	179,480	182,201
Other deferred charges	224,531	198,805
Total deferred charges and other assets	1,613,060	1,573,684
Assets	10,257,653	10,252,605
Current Liabilities:
Short-term debt	244,500	261,900
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	283,776	280,169
Accounts payable	133,470	205,175
Accrued interest and taxes	88,302	98,655
Regulatory liabilities	108,429	140,005
Operating lease liabilities	11,811	12,267
Other current liabilities	71,251	94,397
Total current liabilities	1,107,128	1,230,760
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	4,355,049	4,241,642
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	835,835	845,280
Regulatory liabilities	777,752	771,317
Asset retirement obligations	246,908	245,531
Accrued pension liability and postretirement benefit cost	18,700	21,429
Operating lease liabilities	165,842	167,000
Other deferred credits	334,180	319,066
Total deferred credits and liabilities	2,379,217	2,369,623
Total liabilities	7,841,394	7,842,025
Commitments and Contingencies (Note 11)
PNM common stockholder’s equity:
Common stock ($10 par value; 12,000,000 shares authorized; issued and outstanding 6,358 shares)	1,623,991	1,624,823
Retained earnings	799,348	787,110
Total PNM common stockholder’s equity	2,355,731	2,349,093
Total liabilities and stockholders' equity	10,257,653	10,252,605
Texas-New Mexico Power Company
Current Assets:
Cash and cash equivalents	0	0
Accounts receivable	29,565	31,412
Unbilled revenues	12,050	17,147
Other receivables	7,749	26,983
Materials, supplies, and fuel stock	19,307	16,462
Regulatory assets	0	50
Prepaid and other current assets	1,517	2,705
Total current assets	70,188	94,759
Other Property and Investments:
Other investments	102	102
Non-utility property, net	14,470	14,746
Total other property and investments	14,572	14,848
Utility Plant:
Plant in service, held for future use, and to be abandoned	3,252,448	3,210,870
Less accumulated depreciation and amortization	596,669	582,140
Net plant in service and plant held for future use	2,655,779	2,628,730
Construction work in progress	149,793	91,274
Net utility plant	2,805,572	2,720,004
Deferred Charges and Other Assets:
Regulatory assets	75,632	75,654
Goodwill	226,665	226,665
Operating lease right-of-use assets, net of accumulated amortization	1,615	1,814
Other deferred charges	10,692	11,287
Total deferred charges and other assets	314,604	315,420
Assets	3,204,936	3,145,031
Current Liabilities:
Short-term debt	18,300	55,100
Current installments of long-term debt (includes $5,935 and $2,529 related to ETBC I)	79,974	79,947
Accrued interest and taxes	38,505	57,558
Regulatory liabilities	2,739	5,159
Operating lease liabilities	887	895
Other current liabilities	9,158	12,084
Total current liabilities	185,047	269,295
Long-term Debt, net of Unamortized Premiums, Discounts, and Debt Issuance Costs (includes $335,137 and $338,521 related to ETBC I)	1,297,281	1,180,933
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	182,628	178,748
Regulatory liabilities	214,910	206,296
Asset retirement obligations	917	898
Accrued pension liability and postretirement benefit cost	1,333	1,480
Operating lease liabilities	643	809
Other deferred credits	69,933	68,911
Total deferred credits and liabilities	470,364	457,142
Total liabilities	1,952,692	1,907,370
Commitments and Contingencies (Note 11)
PNM common stockholder’s equity:
Common stock ($10 par value; 12,000,000 shares authorized; issued and outstanding 6,358 shares)	64	64
Paid-in-capital	846,066	846,066
Retained earnings	406,114	391,531
Total PNM common stockholder’s equity	1,252,244	1,237,661
Total liabilities and stockholders' equity	3,204,936	3,145,031
Texas-New Mexico Power Company | Nonrelated Party
Current Liabilities:
Accounts payable	31,318	51,620
Texas-New Mexico Power Company | Related Party
Current Liabilities:
Accounts payable	$ 4,166	$ 6,932

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Condensed Consolidated Balance Sheets - TNMP (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	90,200,384	90,200,384
Common stock, shares outstanding (in shares)	90,200,384	90,200,384
Texas-New Mexico Power Company
Common stock, par value (in dollars per share)	$ 10	$ 10
Common stock, shares authorized (in shares)	12,000,000	12,000,000
Common stock, shares issued (in shares)	6,358	6,358
Common stock, shares outstanding (in shares)	6,358	6,358

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Condensed Consolidated Statements of Changes in Common Stockholder's Equity - TNMP - USD ($) $ in Thousands	Total	Texas-New Mexico Power Company	Texas-New Mexico Power Company Common Stock	Texas-New Mexico Power Company Paid-in Capital	Texas-New Mexico Power Company Retained Earnings
Beginning balance TNMP at Dec. 31, 2022		$ 1,101,824	$ 64	$ 805,166	$ 296,594
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings		10,033			10,033
Ending balance TNMP at Mar. 31, 2023		1,111,857	64	805,166	306,627
Beginning balance TNMP at Dec. 31, 2023	$ 2,349,093	1,237,661	64	846,066	391,531
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings		14,583			14,583
Ending balance TNMP at Mar. 31, 2024	$ 2,355,731	$ 1,252,244	$ 64	$ 846,066	$ 406,114

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Significant Accounting Policies and Responsibility for Financial Statements

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Significant Accounting Policies and Responsibility for Financial Statements

Significant Accounting Policies and Responsibility for Financial Statements

Financial Statement Preparation

In the opinion of management, the accompanying unaudited interim Condensed Consolidated Financial Statements reflect all normal and recurring accruals and adjustments that are necessary to present fairly the consolidated financial position at March 31, 2024 and December 31, 2023, and the consolidated results of operations, comprehensive income, and cash flows for the three months ended March 31, 2024 and 2023. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could ultimately differ from those estimated. Weather causes the Company’s results of operations to be seasonal in nature and the results of operations presented in the accompanying Condensed Consolidated Financial Statements are not necessarily representative of operations for an entire year.

The Notes to Condensed Consolidated Financial Statements include disclosures for PNMR, PNM, and TNMP. This report uses the term “Company” when discussing matters of common applicability to PNMR, PNM, and TNMP. Discussions regarding only PNMR, PNM, or TNMP are so indicated. Certain amounts in the 2023 Condensed Consolidated Financial Statements and Notes thereto have been reclassified to conform to the 2024 financial statement presentation.

These Condensed Consolidated Financial Statements are unaudited. Certain information and note disclosures normally included in the annual audited Consolidated Financial Statements have been condensed or omitted, as permitted under the applicable rules and regulations. Readers of these financial statements should refer to PNMR’s, PNM’s, and TNMP’s audited Consolidated Financial Statements and Notes thereto that are included in their respective 2023 Annual Reports on Form 10-K.

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude, and timing, certain subsequent events may be required to be reflected at the balance sheet date and/or required to be disclosed in the financial statements. The Company has evaluated subsequent events accordingly.

Principles of Consolidation

The Condensed Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia and ETBC I. See Note 6. PNM owns undivided interests in several jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants.

PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include interest and income tax sharing payments, as well as equity transactions, and interconnection billings. See Note 15. All intercompany transactions and balances have been eliminated.

Dividends on Common Stock

Dividends on PNMR’s common stock are declared by the Board. The timing of the declaration of dividends is dependent on the timing of meetings and other actions of the Board. The Board declared dividends on common stock of $0.3875 per share in February 2024 and $0.3675 per share in February 2023, which are reflected as Dividends Declared per Common Share on the PNMR Condensed Consolidated Statement of Earnings.

PNMR did not make any cash equity contributions to PNM or TNMP in the three months ended March 31, 2024 and 2023. On April 30, 2024 PNMR made a $55.0 million cash equity contribution to PNM. PNM and TNMP did not declare or pay any cash dividends on their common stock to PNMR in the three months ended March 31, 2024 and 2023.

New Accounting Pronouncements

Information concerning recently issued accounting pronouncements that have not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates.

Accounting Standards Update 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 enhancing disclosures about significant segment expenses. Disclosure requirements of this update include disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”); an amount for other segment items by reportable segment and a description of its composition; the title and position of the CODM and an explanation of how the CODM uses the reported measures in assessing segment performance and deciding how to allocate resources; and that a single reportable segment provides all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendment also clarifies that in addition to the measure most consistent with the measurement principles under GAAP, reporting of additional measures of a segment’s profit or loss used by the CODM in assessing segment performance and determining allocation of resources is allowed. ASU 2023-07 is effective for the Company beginning January 1, 2024 and interim periods beginning January 1, 2025 with early adoption being permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements.

Accounting Standards Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 enhancing the transparency and decision usefulness of income tax disclosures. Disclosure requirements of this update include (on an annual basis) the disclosure of specific categories in the rate reconciliation and the inclusion of additional information for reconciling items that meet a quantitative threshold (if the effect of the reconciling item is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income by the applicable statutory rate). The amendment also requires the disclosure (on an annual basis) of information about income taxes paid (net of refunds) including, the disaggregation by federal, state, and foreign taxes as well as by individual jurisdiction. Additional requirements include the disclosure of income (loss) from continuing operations before income tax expense (benefit) disaggregated between foreign and domestic as well as income tax expense (benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for the Company beginning January 1, 2025 with early adoption being permitted. ASU 2023-09 is to be applied on a prospective basis with retrospective application permitted.

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Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

The following segment presentation is based on the methodology that management uses for making operating decisions and assessing performance of its various business activities. A reconciliation of the segment presentation to the GAAP financial statements is provided.

PNM

PNM includes the retail electric utility operations of PNM that are subject to traditional rate regulation by the NMPRC. PNM provides integrated electricity services that include the generation, transmission, and distribution of electricity for retail electric customers in New Mexico. PNM also includes the generation and sale of electricity into the wholesale market, which includes the asset optimization of PNM’s jurisdictional capacity, as well as providing transmission services to third parties. FERC has jurisdiction over wholesale power and transmission rates. In 2023, ETBC I, a special purpose entity that is wholly-owned by PNM, was formed for the limited purpose of purchasing, owning, and administering energy transition property, issuing Securitized Bonds, and performing related activities. See Note 6.

TNMP

TNMP is an electric utility providing services in Texas under the TECA. TNMP’s operations are subject to traditional rate regulation by the PUCT. TNMP provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service to consumers within TNMP’s service area. TNMP also provides transmission services at regulated rates to other utilities that interconnect with TNMP’s facilities.

Corporate and Other

The Corporate and Other segment includes PNMR holding company activities, primarily related to corporate level debt and PNMR Services Company. The activities of PNMR Development and the equity method investment in NMRD are also included in Corporate and Other, until the close of the sale on February 27, 2024 (Note 16). Eliminations of intercompany transactions are reflected in the Corporate and Other segment.

The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.

PNMR SEGMENT INFORMATION

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2024
Electric operating revenues	$	308,115	$	128,762	$	—	$	436,877
Cost of energy	97,412		34,892		—		132,304
Utility margin	210,703		93,870		—		304,573
Other operating expenses	106,466		32,750		(8,420)		130,796
Depreciation and amortization	53,287		30,382		9,518		93,187
Operating income (loss)	50,950		30,738		(1,098)		80,590
Interest income (expense)	4,527		169		(116)		4,580
Other income (deductions)	20,546		876		(15,035)		6,387
Interest charges	(25,116)		(13,336)		(15,310)		(53,762)
Segment earnings (loss) before income taxes	50,907		18,447		(31,559)		37,795
Income taxes (benefit)	5,811		3,864		(22,246)		(12,571)
Segment earnings (loss)	45,096		14,583		(9,313)		50,366
Valencia non-controlling interest	(3,044)		—		—		(3,044)
Subsidiary preferred stock dividends	(132)		—		—		(132)
Segment earnings (loss) attributable to PNMR	$	41,920	$	14,583	$	(9,313)	$	47,190
At March 31, 2024:
Total Assets	$	6,878,575	$	3,204,936	$	174,142	$	10,257,653
Goodwill	$	51,632	$	226,665	$	—	$	278,297

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2023
Electric operating revenues	$	430,165	$	113,912	$	—	$	544,077
Cost of energy	209,853		31,833		—		241,686
Utility margin	220,312		82,079		—		302,391
Other operating expenses	98,722		32,852		(6,348)		125,226
Depreciation and amortization	43,686		27,440		6,948		78,074
Operating income (loss)	77,904		21,787		(600)		99,091
Interest income (expense)	4,849		114		(120)		4,843
Other income (deductions)	7,033		136		(127)		7,042
Interest charges	(18,122)		(10,425)		(12,376)		(40,923)
Segment earnings (loss) before income taxes	71,664		11,612		(13,223)		70,053
Income taxes (benefit)	11,829		1,579		(3,628)		9,780
Segment earnings (loss)	59,835		10,033		(9,595)		60,273
Valencia non-controlling interest	(5,127)		—		—		(5,127)
Subsidiary preferred stock dividends	(132)		—		—		(132)
Segment earnings (loss) attributable to PNMR	$	54,576	$	10,033	$	(9,595)	$	55,014
At March 31, 2023:
Total Assets	$	6,306,396	$	2,803,168	$	243,572	$	9,353,136
Goodwill	$	51,632	$	226,665	$	—	$	278,297

Non-GAAP Financial Measures

The Company defines utility margin as electric operating revenues less cost of energy. Cost of energy consists primarily of fuel and purchase power costs for PNM and costs charged by third-party transmission providers for TNMP. The Company believes that utility margin provides a more meaningful basis for evaluating operations than electric operating revenues since substantially all such costs are offset in revenues as fuel and purchase power costs are passed through to customers under PNM’s FPPAC and third-party transmission costs are passed on to consumers through TNMP’s transmission cost recovery factor. Utility margin is not a financial measure required to be presented and is considered a non-GAAP measure. PNM and TNMP do not intend for utility margin to represent any financial measure as defined by GAAP however, the calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP. Reconciliations between utility margin and gross margin are presented below.

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2024
Gross margin	$	120,854	$	55,074	$	—	$	175,928
Energy production costs	22,212		—		—		22,212
Transmission and distribution costs	14,350		8,414		—		22,764
Depreciation and amortization	53,287		30,382		—		83,669		1
Utility margin	$	210,703	$	93,870	$	—	$	304,573

Three Months Ended March 31, 2023
Gross margin	$	140,381	$	46,330	$	—	$	186,711
Energy production costs	22,358		—		—		22,358
Transmission and distribution costs	13,887		8,309		—		22,196
Depreciation and amortization	43,686		27,440		—		71,126		1
Utility margin	$	220,312	$	82,079	$	—	$	302,391

1 Corporate and Other depreciation and amortization represents corporate level activities that are billed at cost and reflected as general and administrative expenses at PNM and TNMP and therefore are not a component of gross margin or utility margin. See Note 1.

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Information regarding accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 is as follows:

	Accumulated Other Comprehensive Income (Loss)
	PNM						Corporate and Other		PNMR Consolidated
	Unrealized Gains on Available-for-Sale Debt Securities		Pension Liability Adjustment				Fair Value Adjustment for Cash Flow Hedges
					Total				Total
	(In thousands)
Balance at December 31, 2023	$	10,652	$	(77,157)	$	(66,505)	$	3,665	$	(62,840)
Amounts reclassified from AOCI (pre-tax)	(10,910)		1,216		(9,694)		2,745		(6,949)
Income tax impact of amounts reclassified	2,771		(309)		2,462		(697)		1,765
Other OCI changes (pre-tax)	491		—		491		67		558
Income tax impact of other OCI changes	(125)		—		(125)		(17)		(142)
Net after-tax change	(7,773)		907		(6,866)		2,098		(4,768)
Balance at March 31, 2024	$	2,879	$	(76,250)	$	(73,371)	$	5,763	$	(67,608)

Balance at December 31, 2022	$	7,422	$	(81,757)	$	(74,335)	$	8,287	$	(66,048)
Amounts reclassified from AOCI (pre-tax)	(702)		1,194		492		(2,224)		(1,732)
Income tax impact of amounts reclassified	178		(303)		(125)		565		440
Other OCI changes (pre-tax)	4,170		—		4,170		(168)		4,002
Income tax impact of other OCI changes	(1,059)		—		(1,059)		43		(1,016)
Net after-tax change	2,587		891		3,478		(1,784)		1,694
Balance at March 31, 2023	$	10,009	$	(80,866)	$	(70,857)	$	6,503	$	(64,354)

The Condensed Consolidated Statements of Earnings include pre-tax amounts reclassified from AOCI related to Unrealized Gains on Available-for-Sale Debt Securities in gains (losses) on investment securities, related to Pension Liability Adjustment in other (deductions), and related to Fair Value Adjustment for Cash Flow Hedges in interest charges. The income tax impacts of all amounts reclassified from AOCI are included in income taxes in the Condensed Consolidated Statements of Earnings.

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Earnings Per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Dual presentation of basic and diluted earnings per share is presented in the Condensed Consolidated Statements of Earnings of PNMR. Diluted earnings per share was computed using the treasury stock method for both restricted stock and the 2023 Forward Sale Agreements. Information regarding the computation of earnings per share is as follows:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands, except per share amounts)
Net Earnings Attributable to PNMR	$	47,190	$	55,014
Average Number of Common Shares:
Outstanding during period	90,200		85,835
Vested awards of restricted stock	283		266
Average Shares – Basic	90,483		86,101
Dilutive Effect of Common Stock Equivalents:
Restricted stock	31		37
2023 Forward Sale Agreements	—		3
Average Shares – Diluted	90,514		86,141
Net Earnings Per Share of Common Stock:
Basic	$	0.52	$	0.64
Diluted	$	0.52	$	0.64

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Electric Operating Revenues

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Electric Operating Revenues

Electric Operating Revenues

PNMR is an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are PNM and TNMP. Additional information concerning electric operating revenue is contained in Note 4 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consists primarily of trade receivables from customers. In the normal course of business, credit is extended to customers on a short-term basis. The Company estimates the allowance for credit losses on trade receivables based on historical experience and estimated default rates. Accounts receivable balances are reviewed monthly, adjustments to the allowance for credit losses are made as necessary and amounts that are deemed uncollectible are written off. In addition to the allowance for credit losses on trade receivables, the Company has evaluated other receivables for potential credit related losses. These balances include potential exposures for other non-retail utility services. In the three months ended March 31, 2024 and 2023, there were no estimated credit losses related to these transactions.

Contract Balances

Performance obligations related to contracts with customers are typically satisfied when the energy is delivered and the customer or end-user utilizes the energy. Accounts receivable from customers represent amounts billed, including amounts under ARPs. For PNM, accounts receivable reflected on the Condensed Consolidated Balance Sheets, net of allowance for credit losses, includes $75.4 million at March 31, 2024 and $93.6 million at December 31, 2023 resulting from contracts with customers. All of TNMP’s accounts receivable results from contracts with customers.

Contract assets are an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). Upon the completion of the Western Spirit Line, PNM entered into a Transmission Service Agreement (“TSA”) with Pattern Wind under an incremental tariff rate approved by FERC. The terms of the agreement provide for a financing component that benefits the customer. As such, the revenue that PNM recognizes will be in excess of the consideration received at the beginning of the service term resulting in a contract asset. The balance of the contract asset is $24.6 million at March 31, 2024 and $22.1 million at December 31, 2023. This contract asset is presented in Other deferred charges on the Condensed Consolidated Balance Sheets.

Contract liabilities arise when consideration is received in advance from a customer before satisfying the performance obligations. Therefore, revenue is deferred and not recognized until the obligation is satisfied. Other utilities pay PNM and TNMP in advance for the joint-use of their utility poles. These revenues are recognized over the period of time specified in the joint-use contract, typically for one calendar year. Deferred revenues on these arrangements are recorded as contract liabilities. PNMR’s, PNM’s, and TNMP’s contract liabilities and related revenues are not material for any of the periods presented. The Company has no other arrangements with remaining performance obligations to which a portion of the transaction price would be required to be allocated.

Disaggregation of Revenues

A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below.

	PNM		TNMP		PNMR Consolidated
Three Months Ended March 31, 2024	(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	120,385	$	41,495	$	161,880
Commercial	99,338		35,544		134,882
Industrial	24,769		9,856		34,625
Public authority	4,398		1,717		6,115
Economy energy service	7,563		—		7,563
Transmission	36,149		35,809		71,958
Wholesale energy sales (1)	11,690		—		11,690
Miscellaneous	1,422		954		2,376
Total revenues from contracts with customers	305,714		125,375		431,089
Alternative revenue programs	1,906		3,387		5,293
Other electric operating revenues	495		—		495
Total Electric Operating Revenues	$	308,115	$	128,762	$	436,877

Three Months Ended March 31, 2023
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	119,885	$	36,366	$	156,251
Commercial	98,062		34,730		132,792
Industrial	19,478		12,765		32,243
Public authority	4,417		1,619		6,036
Economy energy service	9,309		—		9,309
Transmission	49,007		30,058		79,065
Wholesale energy sales (1)	112,986		—		112,986
Miscellaneous	1,410		940		2,350
Total revenues from contracts with customers	414,554		116,478		531,032
Alternative revenue programs	7,325		(2,566)		4,759
Other electric operating revenues	8,286		—		8,286
Total Electric Operating Revenues	$	430,165	$	113,912	$	544,077

(1) Includes sales for resale activity resulting from PNM’s participation in the EIM.

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Variable Interest Entities

3 Months Ended

Mar. 31, 2024

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities

How an enterprise evaluates and accounts for its involvement with variable interest entities, focuses primarily on whether the enterprise has the power to direct the activities that most significantly impact the economic performance of a VIE. This evaluation requires continual reassessment of the primary beneficiary of a VIE. Additional information concerning PNM’s VIEs is contained in Note 10 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Valencia

PNM has a PPA to purchase all of the electric capacity and energy from Valencia, a 155 MW natural gas-fired power plant near Belen, New Mexico, through May 2028. A third party built, owns, and operates the facility while PNM is the sole purchaser of the electricity generated. PNM is obligated to pay fixed operation and maintenance and capacity charges in addition to variable operation and maintenance charges under this PPA. For the three months ended March 31, 2024 and 2023, PNM paid $5.1 million and $5.0 million for fixed charges and $0.1 million and $1.6 million for variable charges. PNM does not have any other financial obligations related to Valencia. The assets of Valencia can only be used to satisfy its obligations and creditors of Valencia do not have any recourse against PNM’s assets. During the term of the PPA, PNM has the option, under certain conditions, to purchase and own up to 50% of the plant or the VIE. The PPA specifies that the purchase price would be the greater of 50% of book value reduced by related indebtedness or 50% of fair market value.

PNM sources fuel for the plant, controls when the facility operates through its dispatch, and receives the entire output of the plant, which factors directly and significantly impact the economic performance of Valencia. Therefore, PNM has concluded that the third-party entity that owns Valencia is a VIE and that PNM is the primary beneficiary of the entity since PNM has the power to direct the activities that most significantly impact the economic performance of Valencia and will absorb the majority of the variability in the cash flows of the plant. As the primary beneficiary, PNM consolidates Valencia in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of Valencia are included in the Condensed Consolidated Financial Statements of PNM although PNM has no legal ownership interest or voting control of the VIE. The assets and liabilities of Valencia are set forth below and are not shown separately on the Condensed Consolidated Balance Sheets. The owner’s equity and net income of Valencia are considered attributable to non-controlling interest.

Summarized financial information for Valencia is as follows:

	Results of Operations
	Three Months Ended March 31,
	2024		2023
	(In thousands)
Operating revenues	$	5,189	$	6,604
Operating expenses	2,145		1,477
Earnings attributable to non-controlling interest	$	3,044	$	5,127

	Financial Position
	March 31,		December 31,
	2024		2023
	(In thousands)
Current assets	$	3,265	$	3,422
Net property, plant, and equipment	46,543		47,253
Total assets	49,808		50,675
Current liabilities	809		717
Owners’ equity – non-controlling interest	$	48,999	$	49,958

Westmoreland San Juan Mining, LLC

As discussed in the subheading Coal Supply in Note 11, PNM purchased coal for SJGS under the SJGS CSA. PNM and Westmoreland also entered into agreements under which CCR disposal and mine reclamation services for SJGS would be provided. In 2019, Westmoreland emerged from Chapter 11 bankruptcy as a privately held company owned and operated by a group of its former creditors. Under the reorganization, the assets of SJCC were sold to Westmoreland San Juan Mining, LLC (“WSJ LLC”), a subsidiary of Westmoreland Mining Holdings, LLC. As successor entity to SJCC, WSJ LLC assumed all rights and obligations of SJCC including obligations to PNM under the SJGS CSA and to PNMR under letter of credit support agreements. In conjunction with the retirement of SJGS, the SJGS CSA expired under its terms on September 30, 2022.

PNMR issued $30.3 million in letters of credit to facilitate the issuance of reclamation bonds required in order for SJCC to mine coal to be supplied to SJGS. As discussed above, WSJ LLC assumed the rights and obligations of SJCC, including obligations to PNMR for the letters of credit. The letters of credit support results in PNMR having a variable interest in WSJ LLC since PNMR is subject to possible loss in the event performance by PNMR is required under the letters of credit support. PNMR considers the possibility of loss under the letters of credit support to be remote since the purpose of posting the bonds is to provide assurance that WSJ LLC performs the required reclamation of the mine site in accordance with applicable regulations and the reclamation services agreement provides WSJ LLC the ability to recover the cost of reclamation. Additionally, much of the mine reclamation activities have been and will continue to be performed after the SJGS CSA expired on September 30, 2022. As discussed in Note 11, each of the SJGS participants has established and actively fund trusts to meet future reclamation obligations.

WSJ LLC is considered a VIE.  PNMR’s analysis of its arrangements with WSJ LLC concluded that WSJ LLC had the ability to direct its mining operations and reclamation services, which are the factors that most significantly impact the economic performance of WSJ LLC.  Other than PNM being able to ensure that coal was supplied in adequate quantities and of sufficient quality to provide the fuel necessary to operate SJGS in a normal manner and monitoring of reclamation activities, the mining operations and reclamation services were solely under the control of WSJ LLC, including developing mining and reclamation plans, hiring of personnel, and incurring operating and maintenance expenses. Neither PNMR nor PNM had any ability to direct or influence the mining operation or reclamation activities.  PNM’s involvement through the SJGS CSA and the reclamation services agreement is a protective right rather than a participating right and WSJ LLC still has the power to direct the activities that most significantly impact the economic performance of WSJ LLC.  If WSJ LLC had been able to mine or performs reclamation services more efficiently than anticipated, its economic performance would improve.  Conversely, if WSJ LLC had not been able to mine or does not perform reclamation services as efficiently as anticipated, its economic performance would be negatively impacted.  Accordingly, PNMR believes WSJ LLC is the primary beneficiary and, therefore, WSJ LLC is not consolidated by either PNMR or PNM. The amounts outstanding under the letters of credit support continue to be PNMR’s maximum exposure to loss from the VIE at March 31, 2024.

ETBC I

ETBC I is a wholly-owned, special purpose, subsidiary of PNM that was formed in August 2023 for the limited purpose of purchasing, owning, and administering energy transition property, issuing Securitized Bonds, and performing related activities authorized by the NMPRC. On November 15, 2023, ETBC I issued Securitized Bonds and used the proceeds to purchase energy transition property from PNM. The energy transition property purchased includes the right to impose, bill, collect, and adjust a non-bypassable energy transition charge from all PNM retail customers until the Securitized Bonds are paid in full and all allowed financing costs have been recovered. The Securitized Bonds are secured by the energy transition property and cash collections from the energy transition charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to PNM.

PNM acts as the servicer of the energy transition property on behalf of ETBC I and is responsible for metering, calculating, billing, and collecting the Energy Transition Charges. On behalf of ETBC I, PNM is required to remit all collections of the Energy Transition Charges to the trustee for the Securitized Bonds. PNM has the power to direct the activities that most significantly impact the economic performance of ETBC I and will absorb the majority of the variability in the cash flows of the entity. As the primary beneficiary, PNM consolidates ETBC I in its financial statements. Accordingly, the assets, liabilities, operating expenses, and cash flows of ETBC I are included in the Consolidated Financial Statements of PNM.

The following tables summarize the impact of ETBC I on PNM’s Financial Statements:

	Results of Operations
	Three Months Ended March 31, 2024
	(In thousands)
Operating Revenues	$	5,946
Depreciation and amortization	821
Interest charges	5,025
Other	100
Net Earnings	$	—

	Financial Position
	March 31, 2024		December 31, 2023
	(In thousands)
Regulatory Assets - Current	$	559	$	2,724
Restricted Cash (included in Other Current Assets)	7,175		—
Restricted Cash (included in Other Deferred Charges)	1,747		1,728
Securitized Cost (included in Deferred Regulatory Assets)	339,808		340,629
Current Installments of Long-Term Debt	5,935		2,529
Accrued Interest	7,505		2,502
Long-Term Debt	335,137		338,521

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Fair Value of Derivative and Other Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value of Derivative and Other Financial Instruments [Abstract]

Fair Value of Derivative and Other Financial Instruments

Fair Value of Derivative and Other Financial Instruments

Additional information concerning energy related derivative contracts and other financial instruments is contained in Note 9 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is based on current market quotes as available and is supplemented by modeling techniques and assumptions made by the Company to the extent quoted market prices or volatilities are not available. External pricing input availability varies based on commodity location, market liquidity, and term of the agreement. Valuations of derivative assets and liabilities take into account nonperformance risk, including the effect of counterparties’ and the Company’s credit risk. The Company regularly assesses the validity and availability of pricing data for its derivative transactions. Although the Company uses its best judgment in estimating the fair value of these instruments, there are inherent limitations in any estimation technique.

Energy Related Derivative Contracts

Overview

The primary objective for the use of commodity derivative instruments, including energy contracts, options, swaps, and futures, is to manage price risk associated with forecasted purchases of energy and fuel used to generate electricity, as well as managing anticipated generation capacity in excess of forecasted demand from existing customers. PNM’s energy related derivative contracts manage commodity risk. PNM is required to meet the demand and energy needs of its customers. PNM may be exposed to market risk for the needs of its customers not covered under the FPPAC.

PNM has entered into agreements for the purchase and sale of power from third parties. On April 23, 2024, PNM entered into agreements to purchase a total of 150 MW from July 1, 2024 through July 30, 2024 and 100 MW from August 1, 2024 through August 30, 2024. The agreements will be accounted for as derivative agreements and will be considered economic hedges under the NMPRC approved hedging plan covered by its FPPAC during the second quarter of 2024.

Agreements for the purchase of 85 MW from June through September 2023 as well as agreements for the sale of 50 MW from September 1, 2024 through September 30, 2024 and 50 MW from October 1, 2024 though December 31, 2024 were

not considered derivatives because there was either no notional amount due to their unit-contingent nature or qualified for a normal purchase, normal sale scope exception.

PNM’s operations are managed primarily through a net asset-backed strategy, whereby PNM’s aggregate net open forward contract position is covered by its forecasted excess generation capabilities or market purchases. PNM could be exposed to market risk if its generation capabilities were to be disrupted or if its load requirements were to be greater than anticipated. If all or a portion of load requirements were required to be covered as a result of such unexpected situations, commitments would have to be met through market purchases. TNMP does not enter into energy related derivative contracts.

Commodity Risk

Marketing and procurement of energy often involve market risks associated with managing energy commodities and establishing positions in the energy markets, primarily on a short-term basis. PNM routinely enters into various derivative instruments such as forward contracts, option agreements, and price basis swap agreements to economically hedge price and volume risk on power commitments and fuel requirements and to minimize the effect of market fluctuations. PNM monitors the market risk of its commodity contracts in accordance with approved risk and credit policies.

Accounting for Derivatives

Under derivative accounting and related rules for energy contracts, PNM accounts for its various instruments for the purchase and sale of energy, which meet the definition of a derivative, based on PNM’s intent. During the three months ended March 31, 2024 and the year ended December 31, 2023, PNM was not hedging its exposure to the variability in future cash flows from commodity derivatives through designated cash flow hedges. The derivative contracts recorded at fair value that do not qualify or are not designated for cash flow hedge accounting are classified as economic hedges. Economic hedges are defined as derivative instruments, including long-term power agreements, used to economically hedge generation assets, purchased power and fuel costs, and customer load requirements. Changes in the fair value of economic hedges are reflected in results of operations on the Condensed Consolidated Statements of Earnings and are classified between Electric operating revenues and Cost of energy according to the intent of the hedge. PNM also uses such instruments under an NMPRC approved hedging plan to manage fuel and purchased power costs related to customers covered by its FPPAC. Changes in the fair value of instruments covered by its FPPAC are recorded as Regulatory assets and Regulatory liabilities on the Condensed Consolidated Balance Sheets. The cash impacts of settled derivatives are recorded as operating activities or financing activities on the Condensed Consolidated Statement of Cash Flows consistent with the classification of the hedged transaction. PNM has no trading transactions.

Commodity Derivatives

PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Condensed Consolidated Balance Sheets:

	Economic Hedges
	March 31, 2024		December 31, 2023
	(In thousands)
Other current assets	$	835	$	826
Other current liabilities	—		—
Net	$	835	$	826

Certain of PNM’s commodity derivative instruments in the above table are subject to master netting agreements whereby assets and liabilities could be offset in the settlement process. PNM does not offset fair value and cash collateral for derivative instruments under master netting arrangements and the above table reflects the gross amounts of fair value assets and liabilities for commodity derivatives.

As discussed above, PNM has NMPRC-approved guidelines for hedging arrangements to manage fuel and purchased power costs related to customers covered by its FPPAC. The table above includes $0.8 million of current assets and zero of current liabilities related to these arrangements at March 31, 2024 and $0.8 million of current assets and zero of current liabilities at December 31, 2023 with changes in fair value recorded as regulatory assets and regulatory liabilities.

At March 31, 2024 and December 31, 2023, PNM had no amounts recognized for the legal right to reclaim cash collateral. However, amounts posted as cash collateral under margin arrangements were $0.3 million at March 31, 2024 and $0.2 million at December 31, 2023. These amounts are included in other current assets on the Condensed Consolidated Balance Sheets. At March 31, 2024 and December 31, 2023, obligations to return cash collateral were $0.2 million, which is included in other current liabilities on the Condensed Consolidated Balance Sheets.

The changes in the fair value of commodity derivative instruments that are considered economic hedges had no impact on PNM’s net earnings during the three months ended March 31, 2024 and 2023. Commodity derivatives had no impact on OCI for any of the periods presented. Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNM’s net buy (sell) volume positions:

	Economic Hedges
	MMBTU	MWh
March 31, 2024	—	(15,360)
December 31, 2023	—	(15,360)

In connection with managing its commodity risks, PNM enters into master agreements with certain counterparties. If PNM is in a net liability position under an agreement, some agreements provide that the counterparties can request collateral if PNM’s credit rating is downgraded; other agreements provide that the counterparty may request collateral to provide it with “adequate assurance” that PNM will perform; and others have no provision for collateral.

PNM has contingent requirements to provide collateral under certain commodity contracts having an objectively determinable collateral provision, that are in net liability positions, and that are not fully collateralized with cash. Contractual liability represents those commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. Cash collateral posted under these contracts does not reflect letters of credit under the Company’s revolving credit facilities that may have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchase and normal sale, offset by existing collateral and by any offsets available under master netting agreements, including both assets and liability positions. At March 31, 2024 and December 31, 2023, PNM had zero contractual liability, zero posted cash collateral, and no such contracts in a net liability position.

Non-Derivative Financial Instruments

The carrying amounts reflected on the Condensed Consolidated Balance Sheets approximate fair value for cash, receivables, and payables due to the short period of maturity. Investment securities are carried at fair value. Investment securities consist of PNM assets held in the NDT for its share of decommissioning costs of PVNGS, a trust for PNM’s share of decommissioning costs at SJGS, and trusts for PNM’s share of final reclamation costs related to the coal mines serving SJGS and Four Corners. See Note 11. At March 31, 2024 and December 31, 2023, the fair value of investment securities included $371.0 million and $361.0 million for the NDT, $11.7 million and $12.3 million for the SJGS decommissioning trust, and $65.5 million and $71.1 million for the coal mine reclamation trusts.

PNM records a realized loss as an impairment for any available-for-sale debt security that has a fair value that is less than its carrying value. At March 31, 2024 and December 31, 2023, PNM had no available-for-sale debt securities for which carrying value exceeds fair value and there are no impairments considered to be “other than temporary” that are included in AOCI and not recognized in earnings. All gains and losses resulting from sales and changes in the fair value of equity securities are recognized immediately in earnings.

Gains and losses recognized on the Condensed Consolidated Statements of Earnings related to investment securities in the NDT, SJGS decommissioning, and coal mine reclamation trusts are presented in the following table:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Equity securities:
Net gains (losses) from equity securities sold	$	9,871	$	(844)
Net gains (losses) from equity securities still held	(1,205)		7,477
Total net gains on equity securities	8,666		6,633
Available-for-sale debt securities:
Net gains (losses) on debt securities	9,332		(191)
Net gains on investment securities	$	17,998	$	6,442

The proceeds and gross realized gains and losses on the disposition of securities held in the NDT, SJGS decommissioning trust, and coal mine reclamation trusts are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold.

Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $13.4 million and $2.0 million for the three months ended March 31, 2024 and 2023.

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Proceeds from sales	$	302,510	$	91,211
Gross realized gains	13,679		3,428
Gross realized (losses)	(7,912)		(6,471)

At March 31, 2024, the available-for-sale debt securities held by PNM, had the following final maturities:

	Fair Value
	(In thousands)
Within 1 year	$	34,176
After 1 year through 5 years	11,915
After 5 years through 10 years	8,634
After 10 years through 15 years	9,998
After 15 years through 20 years	5,626
After 20 years	3,953
	$	74,302

Fair Value Disclosures

The Company determines the fair values of its derivative and other financial instruments based on the hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

For investment securities, Level 2 fair values are provided by fund managers utilizing a pricing service. For Level 2 fair values, the pricing provider predominantly uses the market approach using bid side market values based upon a hierarchy of information for specific securities or securities with similar characteristics. Fair values of Level 2 investments in mutual funds are equal to net asset value. For commodity derivatives, Level 2 fair values are determined based on market observable inputs, which are validated using multiple broker quotes, including forward price, volatility, and interest rate curves to establish expectations of future prices. Credit valuation adjustments are made for estimated credit losses based on the overall exposure to each counterparty. For the Company’s long-term debt, Level 2 fair values are provided by an external pricing service. The pricing service primarily utilizes quoted prices for similar debt in active markets when determining fair value. Management of the Company independently verifies the information provided by pricing services. Uncategorized investments include common/collective investment trusts, which are measured at NAV at the end of each reporting period. Audited financial statements are received for each fund and reviewed by the Company annually. Fair value for these collective investment trusts is measured using a practical expedient provided under GAAP that allows the NAV per share to be used as fair value for investments in certain entities that do not have readily determinable fair values and are considered to be investment companies. Investments valued using this practical expedient are not required to be presented within the GAAP fair value hierarchy.

Items recorded at fair value by PNM on the Condensed Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale debt securities:

			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unrealized Gains
	(In thousands)
March 31, 2024
Cash and cash equivalents	$	122,332	$	122,332	$	—
Equity securities:
Corporate stocks, common	81,045		81,045		—
Corporate stocks, preferred	—		—		—
Mutual funds and other	131,306		131,306		—
Uncategorized Collective Investment Trusts	39,179
Available-for-sale debt securities:
U.S. government	27,041		27,041		—		$	1,874
International government	—		—				—
Municipals	35,260		—		35,260		1,227
Corporate and other	12,001				12,001		795
	$	448,164	$	361,724	$	47,261	$	3,896
December 31, 2023
Cash and cash equivalents	$	93,873	$	93,873	$	—
Equity securities:
Corporate stocks, common	77,422		77,422		—
Corporate stocks, preferred	4,323		504		3,819
Mutual funds and other	57,966		57,966		—
Available-for-sale debt securities:
U.S. government	35,113		34,522		591		$	2,055
International government	8,735		—		8,735		104
Municipals	53,436		—		53,436		2,872
Corporate and other	113,540		—		113,540		9,285
	$	444,408	$	264,287	$	180,121	$	14,316

The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Condensed Consolidated Balance Sheets, are presented below:

	Carrying Amount		Fair Value
March 31, 2024	(In thousands)
PNMR	$	4,638,825	$	4,335,572
PNM	2,262,325		2,086,662
TNMP	1,377,255		1,248,910
December 31, 2023
PNMR	$	4,521,811	$	4,260,509
PNM	2,261,780		2,107,588
TNMP	1,260,880		1,152,922

The carrying amount and fair value of the Company’s other investments presented on the Condensed Consolidated Balance Sheets are not material and not shown in the above table.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

PNMR has various stock-based compensation programs, which provide restricted stock awards, that are performance based and time based, under the Performance Equity Plan (“PEP”). Although certain PNM and TNMP employees are eligible to participate in the PNMR plans, PNM and TNMP do not have separate employee stock-based compensation plans. Performance stock awards awarded under the PEP are awarded for a three-year, overlapping performance period. Performance stock awards with performance periods ending before 2024 or after 2025 are subject to achieving both performance and market targets. Performance stock awards with performance periods ending from 2024 through 2025 do not include market targets. Other awards of restricted stock are only subject to time-based vesting requirements. Additional information concerning stock-based compensation under the PEP is contained in Note 12 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Restricted stock under the PEP refers to awards of stock subject to vesting, performance, or market conditions rather than to shares with contractual post-vesting restrictions. Generally, the awards vest ratably over three years from the grant date of the award. However, awards with performance or market conditions vest upon satisfaction of those conditions. In addition, plan provisions provide that upon retirement, participants become 100% vested in certain stock awards. The vesting period for awards of restricted stock to non-employee members of the Board is one-year.

The stock-based compensation expense related to restricted stock awards without performance or market conditions to participants that are retirement eligible on the grant date is recognized immediately at the grant date and is not amortized. Compensation expense for other such awards is amortized over the shorter of the requisite vesting period or the period until the participant becomes retirement eligible. Compensation expense for performance-based shares is recognized ratably over the performance period as required service is provided and is adjusted periodically to reflect the level of achievement expected to be attained. Compensation expense related to market-based shares is recognized ratably over the measurement period, regardless of the actual level of achievement, provided the employees meet their service requirements. At March 31, 2024, PNMR had unrecognized expense related to stock awards of $8.4 million, which is expected to be recognized over an average of 2.2 years.

The grant date fair value for restricted stock and stock awards with internal PNMR performance targets is determined based on the market price of PNMR common stock on the date of the agreements reduced by the present value of future dividends that will not be received prior to vesting. The grant date fair value is applied to the total number of shares that are anticipated to vest, although the number of performance shares that ultimately vest cannot be determined until after the performance periods end. The grant date fair value of stock awards with market targets were determined using Monte Carlo simulation models, which provide grant date fair values that include an expectation of the number of shares to vest at the end of the measurement period.

The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:

	Three Months Ended March 31,
Restricted Shares and Performance Based Shares	2024			2023
Expected quarterly dividends per share	$	0.3875		$	0.3675
Risk-free interest rate	4.27		%	4.46		%
Market-Based Shares
Dividend yield	4.21		%	N/A
Expected volatility	13.09		%	N/A
Risk-free interest rate	4.31		%	N/A

The following table summarizes activity in restricted stock awards, including performance-based and market-based shares for the three months ended March 31, 2024:

	Restricted Stock
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2023	212,080	$	40.33
Granted	188,019	32.43
Released	(145,020)	37.18
Forfeited	—	—
Outstanding at March 31, 2024	255,079	$	36.30

Included, as granted and released, in the table above are 80,492 previously awarded shares that were earned for the 2021 - 2023 performance measurement period and ratified by the Board in February 2024 (based upon achieving targets at above “target”, below “maximum” levels). Excluded from the table above are 138,978, 133,960, and 186,951 shares for the three-year performance periods ending in 2024, 2025 and 2026 that will be awarded if all performance and market criteria are achieved at maximum levels and all executives remain eligible.

On December 4, 2023, the Company entered into a retention agreements with its Chairman and Chief Executive Officer and its Senior Vice President and General Counsel under which they would be awarded a total of 26,766 and 8,922 respectively of restricted stock rights if they remained employed through the award’s vesting date which is the earliest of 24 months from the grant date, the closing of the Merger, or six months following the termination of the Merger. As of December 31, 2023, upon the notice from Avangrid regarding the termination of the Merger Agreement, these awards will vest on June 30, 2024.

On December 4, 2023, the Company entered into a retention agreement with its President and Chief Operating Officer under which he would receive a retention bonus of $1.0 million to be paid in increments beginning in December 2023 and continuing each December until 2025. On April 8, 2024, pursuant to the retention agreement, the Board elected to convert the unvested portion of the retention bonus into restricted stock rights equal to $0.8 million of the fair value of one share of Company stock as of the first trading day after expiration of the current black-out period.

The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares:

	Three Months Ended March 31,
Restricted Stock	2024		2023
Weighted-average grant date fair value	$	32.43	$	44.78
Total fair value of restricted shares that vested (in thousands)	$	5,395	$	8,394

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Financing

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Financing

Financing

The Company’s financing strategy includes both short-term and long-term borrowings. The Company utilizes short-term revolving credit facilities, as well as cash flows from operations, to provide funds for both construction and operating expenditures. Depending on market and other conditions, the Company will periodically sell long-term debt or enter into term loan arrangements and use the proceeds to reduce borrowings under the revolving credit facilities or refinance other debt. Each of the Company’s revolving credit facilities, term loans, and other debt agreements contains a single financial covenant that requires the maintenance of a debt-to-capitalization ratio. For the PNMR agreements, this ratio must be maintained at less than or equal to 70%, and for the PNM and TNMP agreements, this ratio must be maintained at less than or equal to 65%. The Company’s revolving credit facilities, term loans, and other debt agreements generally also contain customary covenants, events of default, cross-default provisions, and change-of-control provisions. PNM must obtain NMPRC approval for any financing transaction having a maturity of more than 18 months. In addition, PNM files its annual informational financing filing and short-term financing plan with the NMPRC. Additional information concerning financing activities is contained in Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

On May 16, 2023, PNM filed a shelf registration statement that provides for the issuance of up to $650.0 million of SUNs that expires in May 2026.

On March 2, 2022, PNMR filed a shelf registration that provides for the issuance of various types of debt and equity securities. The PNMR shelf registration statement expires in March 2025.

Financing Activities

On March 28, 2024, TNMP entered into an agreement (the “TNMP 2024 Bond Purchase Agreement”) with institutional investors for the sale of $285.0 million aggregate principal amount of four series of TNMP first mortgage bonds (the “TNMP 2024 Bonds”) offered in private placement transactions. TNMP issued the first two series on March 28, 2024, consisting of $32.0 million at a 5.26% interest rate, due March 28, 2029, and $85.0 million at a 5.55% interest rate, due March 28, 2036. The third and fourth series of $40.0 million and $128.0 million will be issued on or before July 1, 2024, at a 5.65% and 5.79% interest rate, respectively. The issuance of the third and fourth series is subject to the satisfaction of customary conditions, including continuing compliance with the representations, warranties and covenants of the TNMP 2024 Bond Purchase Agreement. The proceeds were and will be used to repay existing debt, including the $80.0 million of FMBs that are due in July 2024 and borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2024 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2024 Bonds. The terms of the supplemental indentures governing the TNMP 2024 Bonds include the customary covenants discussed above. In the event of certain changes of control of PNMR or TNMP, TNMP will be required to offer to prepay the TNMP 2024 Bonds at par. TNMP has the right to redeem any or all of the TNMP 2024 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On April 28, 2023, PNM entered into an agreement (the “PNM 2023 Note Purchase Agreement”) with institutional investors for the sale and issuance of $200.0 million aggregate principal amount of two series of SUNs (the “PNM 2023 SUNs”) offered in private placement transactions. The PNM 2023 SUNs were issued on April 28, 2023. PNM issued $150.0 million of the PNM 2023 SUNs at 5.51%, due April 28, 2035, and another $50.0 million at 5.92%, due April 28, 2053. Proceeds from the PNM 2023 SUNs were used to repay borrowings under the PNM Revolving Credit Facility and the PNM New Mexico Credit Facility, for funding of capital expenditures, and for general corporate purposes. The PNM 2023 Note Purchase Agreement includes the customary covenants discussed above. In the event of a change of control of PNM, PNM will be required to offer to prepay the PNM 2023 SUNs at par. PNM has the right to redeem any or all of the PNM 2023 SUNs prior to their maturities, subject to payment of a customary make-whole premium.

On April 28, 2023, TNMP entered into an agreement (the “TNMP 2023 Bond Purchase Agreement”) with institutional investors for the sale of $185.0 million aggregate principal amount of two series of TNMP first mortgage bonds (the “TNMP 2023 Bonds”) offered in private placement transactions. TNMP issued the first series of $130.0 million on April 28, 2023, at a 5.01% interest rate, due April 28, 2033. The second series of $55.0 million was issued on July 28, 2023, at a 5.47% interest rate, due July 28, 2053. The proceeds were used to repay borrowings under the TNMP Revolving Credit Facility, for funding of capital expenditures, and for other corporate purposes. The TNMP 2023 Bonds are subject to continuing compliance with the representations, warranties and covenants set forth in the supplemental indentures governing the TNMP 2023 Bonds. The terms of the supplemental indentures governing the TNMP 2023 Bonds include the customary covenants discussed above. In the event of certain changes of control of PNMR or TNMP, TNMP will be required to offer to prepay the TNMP 2023 Bonds at

par. TNMP has the right to redeem any or all of the TNMP 2023 Bonds prior to their maturity, subject to payment of a customary make-whole premium.

On November 10, 2022, PNMR entered into a distribution agreement with BofA Securities, Inc., MUFG Securities Americas Inc. and Wells Fargo Securities, LLC, as sales agents and Bank of America, N.A., MUFG Securities EMEA plc and Wells Fargo Bank, N.A., as forward purchasers, pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $200.0 million of its common stock, no par value, through the sales agents (the “PNMR 2022 ATM Program”). Sales of the shares made pursuant to the distribution agreement may be made in “at the market offerings” as defined in Rule 415 of the Securities Act. PNMR did not initially receive any proceeds upon the execution of this agreement.

Throughout 2023, PNMR entered into forward sale agreements listed below, for the sale of shares of PNMR common stock. On December 15, 2023, PNMR physically settled the forward purchases under the PNMR 2022 ATM Program and used the proceeds to repay borrowings under the PNMR Revolving Credit Facility and for other corporate purposes. Gross cash proceeds shown below were reduced by $1.0 million in issuance costs resulting in net cash proceeds of $198.2 million.

Forward completion	Initial forward price		Shares	Settlement price		Settlement amount
						(in thousands)
March 15, 2023	$	48.49	504,452	$	49.00	$	24,720
March 20, 2023	48.30		528,082	48.78		25,758
May 30, 2023	47.56		244,639	47.99		11,741
June 30, 2023	44.87		804,477	45.07		36,257
September 26, 2023	44.03		2,283,860	44.11		100,734
			4,365,510			$	199,210

At March 31, 2024, variable interest rates were 6.38% on the PNMR 2021 Delayed-Draw Term Loan that matures in May 2025 and 6.78% on the PNMR 2023 Term Loan that matures in June 2026.

Hedging Arrangements

PNMR has entered into hedging agreements that establish a fixed rate for the indicated amount of variable rate debt, above which a customary spread is applied, which is subject to change if there is a change in PNMR’s credit rating. As of March 31, 2024, PNMR’s hedging agreements are as follows:

		Variable Rate		Established
Effective Date	Maturity Date	Debt Hedged		Fixed Rate
		(In millions)		(Percent)
January 1, 2024	December 31, 2024	$	100.0	3.32	%
January 1, 2024	December 31, 2024	100.0		3.32
January 1, 2024	December 31, 2024	100.0		3.38
January 1, 2024	December 31, 2024	150.0		3.62
January 1, 2024	December 31, 2024	150.0		3.57
January 1, 2025	December 31, 2025	100.0		4.18
January 1, 2025	December 31, 2025	100.0		4.18
January 1, 2025	December 31, 2025	100.0		3.99

These hedge agreements are accounted for as cash flow hedges. The fair value of these hedges was a gain of $7.8 million and a loss of less than $0.1 million at March 31, 2024. The fair value gain of $7.6 million is included in Other current assets, $0.2 million is included in Other deferred charges, and less than $0.1 million for the loss is included in Other deferred credits on the Condensed Consolidated Balance Sheets. The fair value was determined using Level 2 inputs under GAAP, including using forward SOFR curves under the mid-market convention to discount cash flows over the remaining term of the agreements.

Short-term Debt and Liquidity

As of March 31, 2024, the PNMR Revolving Credit Facility had a financing capacity of $300.0 million and the PNM Revolving Credit Facility had a financing capacity of $400.0 million. On April 1, 2024, PNMR and PNM amended their respective revolving credit facilities, extending their maturity March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to through March 30, 2031, subject to approval by a majority of the lenders. PNM also has the $40.0 million PNM New Mexico Credit Facility with a maturity of May 20, 2026. As of March 31, 2024, the TNMP Revolving Credit Facility had a capacity of $100.0 million and was secured by $100.0 million aggregate principal amount of TNMP first mortgage bonds. On April 1, 2024, TNMP entered into a new $200.0 million Revolving Credit Facility that replaced the $100.0 million Revolving Credit Facility. The new $200.0 million Revolving Credit Facility is secured by $200.0 million aggregate principal amount of TNMP first mortgage bonds and has a maturity of March 30, 2029, with two one-year extension options that, if exercised, would extend the maturity to March 30, 2031, subject to approval by a majority of the lenders. Variable interest rates under the PNMR, PNM, and TNMP revolving credit facilities are based on SOFR.

Short-term debt outstanding consists of:

	March 31, 2024			December 31, 2023
	Balance Outstanding		Weighted Average Interest Rate	Balance Outstanding		Weighted Average Interest Rate
	(In thousands)			(In thousands)
PNM:
PNM Revolving Credit Facility	$	146,200	6.67%	$	107,500	6.69%
PNM New Mexico Credit Facility	40,000		6.68	30,000		6.71
	186,200			137,500
TNMP Revolving Credit Facility	18,300		6.29	55,100		6.32
PNMR Revolving Credit Facility	40,000		6.92	69,300		6.96
	$	244,500		$	261,900

In addition to the above borrowings, PNMR, PNM, and TNMP had letters of credit outstanding of $3.1 million, zero, and zero at March 31, 2024 that reduce the available capacity under their respective revolving credit facilities. PNMR also had $30.3 million of letters of credit outstanding under the WFB LOC Facility. The above table excludes intercompany debt. As of March 31, 2024, PNM and TNMP had $2.3 million and zero in intercompany borrowings from PNMR. As of December 31, 2023, neither PNM nor TNMP had any intercompany borrowings from PNMR. PNMR Development had $2.3 million and $0.1 million in short-term borrowings outstanding from PNMR at December 31, 2023 and March 31, 2024. PNMR had no intercompany borrowings from PNMR Development at December 31, 2023 or March 31, 2024.

PNM has $198.0 million of PCRBs that must be remarketed by June 1, 2024 as well as $2.5 million and $3.4 million in scheduled payments due for the ETBC I Securitized Bonds in August 2024 and February 2025. TNMP has $80.0 million of FMBs that are due in July 2024, which will be repaid with the $128.0 million proceeds from the TNMP 2024 Bonds that will be issued on or before July 1, 2024. The Company’s debt arrangements have various maturities and expiration dates. Additional information on debt maturities is contained in Note 7 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

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Pension and Other Postretirement Benefit Plans

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefit Plans

Pension and Other Postretirement Benefit Plans

PNMR and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). PNMR maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. The Company presents the service cost component of its net periodic benefit costs in administrative and general expenses and the non-service costs components in other income (deductions), net of amounts capitalized or deferred to regulatory assets and liabilities, on the Condensed Consolidated Statements of Earnings. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of accumulated periodic cost or income to the extent included in retail rates (a “prepaid pension asset”).

Additional information concerning pension and OPEB plans is contained in Note 11 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K. Annual net periodic benefit cost for the plans is actuarially determined using the methods and assumptions set forth in that note and is recognized ratably throughout the year. Differences between TNMP’s annual net periodic costs (income) and amounts included in its regulated rates are deferred to regulatory assets or liabilities, for recovery or refund in future rate proceedings.

PNM Plans

The following table presents the components of the PNM Plans’ net periodic benefit cost:

	Three Months Ended March 31,
	Pension Plan				OPEB Plan				Executive Retirement Program
	2024		2023		2024		2023		2024		2023
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	5,427		5,913		597		676		124		135
Expected return on plan assets	(7,757)		(7,299)		(1,391)		(1,243)		—		—
Amortization of net loss	2,661		2,646		—		—		50		38
Amortization of prior service cost	—		—		—		—		—		—
Net Periodic Benefit Cost (Income)	$	331	$	1,260	$	(794)	$	(567)	$	174	$	173

PNM did not make any contributions to its pension plan trust in the three months ended March 31, 2024 and 2023 and does not anticipate making any contributions to the pension plan in 2024 through 2028 based on current law, funding requirements, and estimates of portfolio performance. Funding assumptions were developed using a discount rate of 5.5%. Actual amounts to be funded in the future will be dependent on the actuarial assumptions at that time, including the appropriate discount rate. PNM may make additional contributions at its discretion. PNM did not make any cash contributions to the OPEB trust in the three months ended March 31, 2024 and 2023, however, a portion of the disbursements attributable to the OPEB trust is paid by PNM and are therefore considered to be contributions to the OPEB plan. Payments by PNM on behalf of the PNM OPEB plan were less than $0.1 million for the three months ended March 31, 2024 and $0.8 million for the three months ended March 31, 2023. These payments are expected to total $0.2 million in 2024 and $10.1 million for 2025-2028. Disbursements under the executive retirement program, which are funded by PNM and considered to be contributions to the plan, were $0.3 million in the three months ended March 31, 2024 and $0.1 million in the three months ended March 31, 2023 and are expected to total $1.2 million during 2024 and $4.4 million for 2025-2028.

TNMP Plans

The following table presents the components of the TNMP Plans’ net periodic benefit cost:

	Three Months Ended March 31,
	Pension Plan				OPEB Plan				Executive Retirement Program
	2024		2023		2024		2023		2024		2023
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	5	$	5	$	—	$	—
Interest cost	553		601		96		106		4		3
Expected return on plan assets	(687)		(674)		(129)		(120)		—		—
Amortization of net (gain) loss	139		110		(161)		(190)		—		—
Amortization of prior service cost	—		—		—		—		—		—
Net Periodic Benefit Cost (Income)	$	5	$	37	$	(189)	$	(199)	$	4	$	3

TNMP did not make any contributions to its pension plan trust in the three months ended March 31, 2024 and 2023 and does not anticipate making any contributions to the pension plan in 2024 through 2027 based on current law, funding requirements, and estimates of portfolio performance. In 2028, TNMP does anticipate making a contribution of $0.2 million based on current law, funding requirements, and estimates of portfolio performance. Funding assumptions were developed using a discount rate of 5.5%. Actual amounts to be funded in the future will depend on the actuarial assumptions at that time, including the appropriate discount rate. TNMP may make additional contributions at its discretion. TNMP did not make any contributions to the OPEB trust in the three months ended March 31, 2024 and 2023 and does not expect to make contributions to the OPEB trust during the period 2024-2028. Disbursements under the executive retirement program, which are funded by TNMP and considered to be contributions to the plan, were less than $0.1 million in the three months ended March 31, 2024 and 2023 and are expected to total $0.1 million during 2024 and $0.2 million in 2025-2028.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Overview

There are various claims and lawsuits pending against the Company. In addition, the Company is subject to federal, state, and local environmental laws and regulations and periodically participates in the investigation and remediation of various sites. In addition, the Company periodically enters into financial commitments in connection with its business operations. Also, the Company is involved in various legal and regulatory proceedings in the normal course of its business. See Note 12. It is not possible at this time for the Company to determine fully the effect of all litigation and other legal and regulatory proceedings on its financial position, results of operations, or cash flows.

With respect to some of the items listed below, the Company has determined that a loss is not probable or that, to the extent probable, cannot be reasonably estimated. In some cases, the Company is not able to predict with any degree of certainty the range of possible loss that could be incurred. The Company assesses legal and regulatory matters based on current information and makes judgments concerning their potential outcome, giving due consideration to the nature of the claim, the amount and nature of any damages sought, and the probability of success. Such judgments are made with the understanding that the outcome of any litigation, investigation, or other legal proceeding is inherently uncertain. The Company records liabilities for matters where it is probable a loss has been incurred and the amount of loss is reasonably estimatable. The actual outcomes of the items listed below could ultimately differ from the judgments made and the differences could be material. The Company cannot make any assurances that the amount of reserves or potential insurance coverage will be sufficient to cover the cash obligations that might be incurred as a result of litigation or regulatory proceedings. Except as otherwise disclosed, the Company does not expect that any known lawsuits, environmental costs, or commitments will have a material effect on its financial condition, results of operations, or cash flows.

Additional information concerning commitments and contingencies is contained in Note 16 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Commitments and Contingencies Related to the Environment

Nuclear Spent Fuel and Waste Disposal

Nuclear power plant operators are required to enter into spent fuel disposal contracts with the DOE that require the DOE to accept and dispose of all spent nuclear fuel and other high-level radioactive wastes generated by domestic power reactors. Although the Nuclear Waste Policy Act required the DOE to develop a permanent repository for the storage and disposal of spent nuclear fuel by 1998, the DOE announced that it would not be able to open the repository by 1998 and sought to excuse its performance of these requirements. In November 1997, the DC Circuit issued a decision preventing the DOE from excusing its own delay but refused to order the DOE to begin accepting spent nuclear fuel. Based on this decision and the DOE’s delay, a number of utilities, including APS (on behalf of itself and the other PVNGS owners, including PNM), filed damages actions against the DOE in the Court of Federal Claims. The lawsuits filed by APS alleged that damages were incurred due to DOE’s continuing failure to remove spent nuclear fuel and high-level waste from PVNGS. APS and the DOE entered into a settlement agreement, subsequently extended, that established a process for the payment of claims for costs incurred through December 31, 2025. Under the settlement agreement, APS must submit claims annually for payment of allowable costs. PNM records estimated claims on a quarterly basis. The benefit from the claims is passed through to customers under the FPPAC.

PNM estimates that it will incur approximately $55.6 million (in 2023 dollars) for its share of the costs related to the on-site interim storage of spent nuclear fuel at PVNGS for the remaining term of the operating licenses. PNM accrues these

costs as a component of fuel expense as the nuclear fuel is consumed. At March 31, 2024 and December 31, 2023, PNM had a liability for interim storage costs of $11.7 million and $11.0 million, which is included in other deferred credits.

PVNGS has sufficient capacity at its on-site Independent Spent Fuel Storage Installation (“ISFSI”) to store all of the nuclear fuel that will be irradiated during the initial operating license period, which ends in December 2027.  Additionally, PVNGS has sufficient capacity at its on-site ISFSI to store a portion of the fuel that will be irradiated during the period of extended operation, which ends in November 2047.  If uncertainties regarding the U.S. government’s obligation to accept and store spent fuel are not favorably resolved, APS will evaluate alternative storage solutions that may obviate the need to expand the ISFSI to accommodate all of the fuel that will be irradiated during the period of extended operation.

The Energy Transition Act

In 2019, the Governor signed into New Mexico state law Senate Bill 489, known as the Energy Transition Act (“ETA”). The ETA became effective as of June 14, 2019 and sets a statewide standard that requires investor-owned electric utilities to have specified percentages of their electric-generating portfolios be from renewable and zero-carbon generating resources. The ETA requires utilities operating in New Mexico to have renewable portfolios equal to 40% by 2025, 50% by 2030, 80% by 2040, and 100% zero-carbon energy by 2045. The ETA also allows for the recovery of undepreciated investments and decommissioning costs related to qualifying EGUs that the NMPRC has required be removed from retail jurisdictional rates, provided replacement resources to be included in retail rates have lower or zero-carbon emissions. The ETA requires the NMPRC to review and approve utilities’ annual renewable portfolio plans to ensure compliance with the RPS. The ETA also directs the New Mexico Environmental Improvement Board to adopt standards of performance that limit CO2 emissions to no more than 1,100 lbs. per MWh beginning January 1, 2023 for new or existing coal-fired EGUs with original installed capacities exceeding 300 MW.

The ETA provides for a transition from fossil-fuel generation resources to renewable and other carbon-free resources through certain provisions relating to the abandonment of coal-fired generating facilities. These provisions include the use of energy transition bonds, which are designed to be highly rated bonds that can be issued to finance certain costs of abandoning coal-fired facilities that are retired prior to January 1, 2023 for facilities operated by a “qualifying utility,” or prior to January 1, 2032 for facilities that are not operated by a qualifying utility. The amount of energy transition bonds that can be issued to recover abandonment costs is limited to the lesser of $375.0 million or 150% of the undepreciated investment of the facility as of the abandonment date. Proceeds provided by energy transition bonds must be used only for purposes related to providing utility service to customers and to pay energy transition costs (as defined by the ETA). These costs may include plant decommissioning and coal mine reclamation costs provided those costs have not previously been recovered from customers or disallowed by the NMPRC or by a court order. Proceeds from energy transition bonds may also be used to fund severances for employees of the retired facility and related coal mine and to promote economic development, education and job training in areas impacted by the retirement of the coal-fired facilities. Energy transition bonds must be issued under a NMPRC-approved financing order, are secured by “energy transition property,” are non-recourse to the issuing utility, and are repaid by a non-bypassable charge paid by all customers of the issuing utility. These customer charges are subject to an adjustment mechanism designed to provide for timely and complete payment of principal and interest due under the energy transition bonds.

The ETA also provides that utilities must obtain NMPRC approval of competitively procured replacement resources that shall be evaluated based on their cost, economic development opportunity, ability to provide jobs with comparable pay and benefits to those lost upon retirement of the facility, and that do not exceed emissions thresholds specified in the ETA. In determining whether to approve replacement resources, the NMPRC must give preference to resources with the least environmental impacts, those with higher ratios of capital costs to fuel costs, and those located in the school district of the abandoned facility. The ETA also provides for the procurement of energy storage facilities and gives utilities discretion to maintain, control, and operate these systems to ensure reliable and efficient service.

The ETA has had and will have a significant impact on PNM’s future generation portfolio, including PNM’s retirement of SJGS in 2022. PNM cannot predict the full impact of the ETA with respect to Four Corners or the outcome of its future generating resource abandonment and replacement resource filings with the NMPRC. See additional discussion in Note 12 of PNM’s Four Corners Abandonment Application.

The Clean Air Act

Regional Haze

Pursuant to the CAA, states are required to establish goals for improving visibility in national parks and wilderness areas (also known as Class I areas) and to develop long-term strategies for reducing emissions of air pollutants that cause visibility impairment in their own states and for preventing degradation in other states. States must establish a series of interim goals to ensure continued progress by adopting a new SIP every ten years. In the first SIP planning period, states were required to conduct BART determinations for certain covered facilities, including utility boilers, built between 1962 and 1977 that have the potential to emit more than 250 tons per year of visibility impairing pollution. For all future SIP planning periods, states must evaluate whether additional emissions reduction measures may be needed to continue making reasonable progress toward natural visibility conditions.

In 2017, EPA published revisions to the regional haze rule in the Federal Register that delayed the due date for the next cycle of SIPs from 2019 to 2021 and altered the planning process that states must employ in determining whether to impose “reasonable progress” emission reduction measures. EPA’s new rule was challenged by numerous parties, but the litigation was held in abeyance after EPA granted various petitions for reconsideration.

In 2018, EPA released a new guidance document on tracking visibility progress for the second planning period. EPA is allowing states discretion to develop SIPs that may differ from EPA’s guidance as long as they are consistent with the CAA and other applicable regulations. In 2019, EPA finalized the draft guidance that was previously released as a companion to the regional haze rule revisions, and EPA clarified that guidance in a memorandum issued in 2021. SIPs for the second planning period were due in July 2021, which deadline NMED was unable to meet. NMED is currently preparing its SIP for the second compliance period and has notified PNM that it will not be required to submit a regional haze four-factor analysis for SJGS since PNM retired its share of SJGS in 2022. On August 30, 2022, EPA published in the Federal Register an official “Finding of Failure to Submit” for states, including New Mexico, that have not yet submitted a round 2 regional haze SIP. This action by EPA starts a 2-year clock for it to issue a Federal Implementation Plan (FIP). NMED’s current timeline indicates the proposed SIP will be submitted to EPA by Summer 2024.

Carbon Dioxide Emissions

In 2015, EPA established standards to limit CO2 emissions from power plants, including (1) Carbon Pollution Standards for new, modified, and reconstructed power plants; and (2) the Clean Power Plan for existing power plants.

Multiple states, utilities, and trade groups challenged both the Carbon Pollution Standards for new sources and the Clean Power Plan for existing sources in separate cases. Challengers successfully petitioned the US Supreme Court for a stay of the Clean Power Plan. However, before the DC Circuit could issue an opinion regarding either the Carbon Pollution Standards or the Clean Power Plan, the Trump Administration asked that the case be held in abeyance while the rules were reevaluated, which was granted.

In 2019, EPA repealed the Clean Power Plan, promulgated the ACE Rule, and revised the implementing regulations for all emission guidelines. EPA set the BSER for existing coal-fired power plants as heat rate efficiency improvements based on a range of “candidate technologies” that can be applied inside the fence line of an individual facility. The DC Circuit issued an order that granted motions by various petitioners, including industry groups and EPA, to dismiss the cases challenging the Clean Power Plan as moot due to EPA’s issuance of the ACE Rule.

The ACE Rule was also challenged, and on January 19, 2021, the DC Circuit issued an opinion in American Lung Association and American Public Health Association v. EPA, et al., vacating the ACE Rule. While the DC Circuit rejected the ACE Rule, it did not reinstate the Clean Power Plan. Rather, the DC Circuit granted an EPA motion asking the court to withhold issuance of the mandate with respect to the repeal of the Clean Power Plan until EPA responds to the court’s remand in a new rulemaking action.

Numerous parties sought review by the US Supreme Court, and on June 30, 2022, the Court held that the “generation shifting” approach in the Clean Power Plan exceeded the powers granted to EPA by Congress, though the Court did not address the related issue of whether Section 111 of the CAA only authorizes EPA to require measures that can be implemented entirely within the fence line at an individual source. Of broader significance in administrative law, the Court’s opinion expressly invoked the “major question” doctrine, which requires rules involving issues of “vast economic or political significance” to be supported by clear statutory authorization. In cases where there is no clear statement of authority, courts need not defer to the

agency’s statutory interpretation on “major questions.” The decision sets legal precedent for future rulemakings by EPA and other federal regulatory agencies whereby the agencies’ authority may be limited based upon similar reasoning.

The litigation over the Carbon Pollution Standards remains held in abeyance but could be reactivated by the parties upon a determination by the court that reconsideration of the rule has concluded.

On May 23, 2023, EPA published in the Federal Register proposed regulatory actions under CAA sections 111(b) and (d) to replace the Clean Power Plan and the ACE Rule. The proposed regulations cover: (1) New natural gas-based EGUs under section 111(b); (2) Existing large and frequently operated natural gas-based EGUs under section 111(d); and (3) Existing coal-based EGUs under section 111(d). Standards of performance for existing coal EGUs will be based on two technologies depending on retirement date: CCS or co-firing gas in lieu of coal. For gas-based EGUs, the standards will be based on CCS or the use of green hydrogen in lieu of natural gas. States will be required to develop SIPs to EPA that provide for the establishment, implementation and enforcement of these standards as they apply to existing sources. States may take into account remaining useful life and other factors when establishing the standards. EPA is proposing that existing coal units must start complying with their gas co-firing or CCS based standards of performance on January 1, 2030, unless they commit to retirement before 2032 (or retirement by 2035 if they also commit to a 20% annual operating limit). Existing combustion turbine units must start complying with their hydrogen or CCS based standards of performance on January 1, 2032, or January 1, 2035, depending on their subcategory, which is based on the control technology selected. The package also includes a proposed repeal of the ACE Rule and revisions to the standard for modified and reconstructed units, along with a notice of public rulemaking seeking data and information about setting standards for existing smaller natural gas-based generators. Comments on the rule were due to EPA by August 8, 2023. PNM filed company-specific comments and continues to review the proposed rule and its potential impacts on the company’s fossil generation resources. On April 25, 2024, EPA signed a final rule promulgating emission guidelines under Section 111 of the CAA requiring states to develop standards of performance for greenhouse gas emissions from new gas-fired combustion turbines and existing fossil-fuel-fired electric steam generating units. The standards for existing coal- or gas-fired steam generating units must be based on the use of CCS, natural gas co-firing, or early retirement, and the standards for new combustion turbines must be based on CCS (base load), efficient simple cycle design (intermediate load), or lower-emitting fuels (low load). We are currently determining what impact, if any, the final rule will have on our business, results of operation, and financial condition.

In late February 2024, EPA indicated that the CAA 111 rule will not contain provisions for existing natural gas units and will issue a new proposal for existing gas in the future after conducting additional stakeholder outreach. On March 26, 2024, EPA announced it was opening a non-regulatory docket and issued framing questions to gather input about ways to design a stronger, more durable approach to GHG regulation of existing gas combustion turbines. The docket will be open for public comment from March 26, 2024 to May 28, 2024 and the agency will hold a May 17 policy forum to bring stakeholders together to share ideas with EPA and others. The agency has indicated that it plans to promulgate a final rule by Summer 2024.

On January 27, 2021, President Biden signed an extensive Executive Order aimed at addressing climate change concerns domestically and internationally. The order is intended to build on the initial climate-related actions the Biden Administration took on January 20, 2021. It addresses a wide range of issues, including establishing climate change concerns as an essential element of U.S. foreign and security policy, identifying a process to determine the U.S. INDC under the Paris Agreement, and establishing a Special Presidential Envoy for Climate that will sit on the National Security Council. On April 22, 2021, at the Earth Day Summit, as part of the U.S.’s re-entry into the Paris Agreement, President Biden unveiled the goal to cut U.S. emissions by 50% - 52% from 2005 levels by 2030, nearly double the GHG emissions reduction target set by the Obama Administration. The 2030 goal joins President Biden’s other climate goals which include a carbon pollution-free power sector by 2035 and a net-zero emissions economy by no later than 2050.

PNM’s review of the GHG emission reductions standards that may occur as a result of legislation or regulation under the Biden Administration and in response to the court’s ruling on the ACE Rule is ongoing. PNM cannot predict the impact these standards may have on its operations or a range of the potential costs of compliance, if any.

National Ambient Air Quality Standards (“NAAQS”)

The CAA requires EPA to set NAAQS for pollutants reasonably anticipated to endanger public health or welfare. EPA has set NAAQS for certain pollutants, including NOx, SO2, ozone, and particulate matter.

NOx Standard – In 2018, EPA published the final rule to retain the current primary health-based NOx standards of which NO2 is the constituent of greatest concern and is the indicator for the primary NAAQS. EPA concluded that the current

1-hour and annual primary NO2 standards are requisite to protect public health with an adequate margin of safety. The rule became effective on May 18, 2018. The State of New Mexico has attained the current NOx NAAQS standards.

SO2 Standard – In 2019, EPA announced its final decision to retain, without changes, the primary health-based NAAQS for SO2. Specifically, EPA will retain the current 1-hour standard for SO2, which is 75 parts per billion, based on the 3-year average of the 99th percentile of daily maximum 1-hour SO2 concentrations.

On March 26, 2021, EPA published in the Federal Register the initial air quality designations for all remaining areas not yet designated under the 2010 SO2 Primary NAAQS. All areas of New Mexico have been designated attainment/unclassifiable through four rounds of designations by EPA.

Ozone Standard – In 2015, EPA finalized the new ozone NAAQS and lowered both the primary and secondary 8-hour standard from 75 to 70 parts per billion. With ozone standards becoming more stringent, fossil-fueled generation units will come under increasing pressure to reduce emissions of NOx and volatile organic compounds since these are the pollutants that form ground-level ozone. On July 13, 2020, EPA proposed to retain the existing ozone NAAQS based on a review of the full body of currently available scientific evidence and exposure/risk information. EPA finalized its decision to retain the ozone NAAQS in a notice published on December 31, 2020 making it immediately effective. In response to lawsuits brought by states and environmental groups, on October 29, 2021, EPA filed a motion in the DC Circuit indicating it will reconsider the 2020 ozone NAAQS. On August 21, 2023, EPA announced an entirely new review of the ozone standard that will incorporate the work to date on the reconsideration, likely indicating a delay in the schedule for a decision on whether the standard should be revised. On January 3, 2024, EPA filed in the DC Circuit an unopposed motion for voluntary remand, without vacatur, of EPA’s final rule retaining the current ozone NAAQS. The filing was made in the consolidated cases challenging the 2020 ozone NAAQS rule.

During 2017 and 2018, EPA released rules establishing area designations for ozone. In those rules, San Juan County, New Mexico, where Four Corners is located, is designated as attainment/unclassifiable and only a small area in Doña Ana County, New Mexico is designated as marginal non-attainment. Although Afton Generating Station is located in Doña Ana County, it is not located within the small area designated as non-attainment for the 2015 ozone standard. The rule became effective May 8, 2018.

NMED has responsibility for bringing the small area in Doña Ana County designated as marginal/non-attainment for ozone into compliance and will look at all sources of NOx and volatile organic compounds. NMED has submitted the required elements for the Sunland Park Ozone Non-attainment Area SIP. This includes a transportation conformity demonstration, a 2017 baseline emissions inventory and emissions statement, and an amendment to the state’s Non-attainment Permitting rules at 20.2.79 New Mexico Administrative Code to conform to EPA’s SIP Requirements Rule for 2015 Q3 NAAQS (i.e., “implementation rule”).

The SIP elements had staggered deadlines and were done in three submissions: (1) the transportation conformity demonstration was completed by the El Paso Metropolitan Planning Organization on behalf of New Mexico in 2019, which is responsible for transportation planning in that area, and the submission received concurrence from EPA and the Federal Highway Administration; (2) the emissions inventory and statement SIP was submitted to EPA in September 2020; and (3) the Non-attainment New Source Review SIP was submitted to EPA on August 10, 2021. On October 15, 2021, EPA proposed to approve New Mexico’s SIP to meet the emissions inventory and statement requirements of the CAA for the Sunland Park Ozone Non-Attainment Area.

PNM does not believe there will be material impacts to its facilities because of NMED’s non-attainment designation of the small area within Doña Ana County. Until EPA approves attainment designations for the Navajo Nation and releases a proposal to implement the revised ozone NAAQS, PNM is unable to predict what impact the adoption of these standards may have on Four Corners. With respect to EPA’s reconsideration of the 2020 decision to retain the 2015 ozone standards, EPA is statutorily obligated to complete its review of the ozone standards by December 2025. PNM cannot predict the outcome of this matter.

In 2019, EPA issued findings that several states, including New Mexico, had failed to submit interstate transport SIPs for the 2015 8-hour ozone NAAQS, triggering an obligation for EPA to issue a federal implementation plan within two years. In response, NMED submitted a Good Neighbor SIP on July 27, 2021 that demonstrates that there are no significant contributions from New Mexico to downwind problems in meeting the federal ozone standard. Nevertheless, when EPA failed to approve the SIP or issue a FIP within two years of the finding of failure to submit, multiple parties filed a deadline suit

against EPA, resulting in a consent decree requiring EPA to issue a FIP or approve a SIP for New Mexico by a deadline of no later than June 1, 2024, which was later extended to August 30, 2024. On March 15, 2023, EPA Administrator Regan signed a final action imposing a FIP on multiple states but did not include a FIP for New Mexico because EPA had not proposed a FIP for the state because the most up to date modeling available at proposal confirmed the state did not contribute to downwind ozone nonattainment or maintenance areas. However, the updated modeling EPA used in the final rule indicated that New Mexico may be significantly contributing to one or more non-attainment or maintenance areas. In light of that modeling result, on February 16, 2024, the EPA published a proposed rule partially disapproving the SIPs for New Mexico and four other states (Arizona, Iowa, Kansas, Tennessee) and expanding the Good Neighbor Federal Implementation Plan (FIP) to apply to these states. In denying the NMED-submitted SIP, the EPA concluded that the SIP was incomplete and did not contain the necessary provisions to prohibit emission from sources within the state from interfering with maintenance of the 2015 ozone NAAQS in downwind areas, specifically a maintenance-only receptor in the El Paso area. The FIP aspect of the proposed rule would require fossil fuel-fired power plants in these five states to participate in an allowance-based ozone season NOX emissions trading program beginning in 2025. Comments on the proposed rule are due May 16, 2024. PNM is reviewing the impact of this proposal and will be submitting company-specific comments by the due date. EPA is targeting summer of 2024 for a final rule.

Of importance in considering the possibility of a Good Neighbor plan FIP for New Mexico, are the many court challenges to EPA’s earlier rulemaking imposing a FIP on 23 states. On February 21, 2024, the US Supreme Court heard oral arguments on an Emergency Stay Application. Court issuances of state-by-state stays and remands may impact the viability of a multi-state trading program.

PM Standard – On January 30, 2020, EPA published, in the Federal Register, a notice announcing the availability of a final Policy Assessment for the Review of the NAAQS for Particulate Matter (the “PA”). The 2020 final PA was prepared as part of the review of the primary and secondary PM NAAQS. In the 2020 final PA, EPA recommended lowering the primary annual PM 2.5 standard to between 8 µg/m3 and 10 µg/m3. However, on April 30, 2020, EPA published a proposed rule to retain the current standards for PM due to uncertainties in the data relied upon in the 2020 final PA and EPA published a notice of that final action on December 18, 2020, making it immediately effective. On January 14, 2021, several states and New York City filed a petition for review in the DC Circuit, challenging EPA’s final rule retaining the current primary and secondary PM NAAQS and a similar lawsuit was filed by the Center for Biological Diversity in the DC Circuit. On June 10, 2021, EPA announced that it will reconsider the previous administration’s December 2020 decision to retain the current primary and secondary PM NAAQS and on October 8, 2021, EPA announced the release of a new draft PA stating that available scientific evidence and technical information indicate that the current standards may not be adequate to protect public health and welfare, as required by the CAA. On June 1, 2022, EPA issued a new final PA that likewise indicates current standards may not be adequate and that available scientific evidence could support lowering the standards.

On January 27, 2023, EPA published, in the Federal Register, a proposal to lower the annual fine PM standard to between 9-10 µg/m3 but retain the rest of its PM standards, including the current daily fine particulate matter standard, the daily coarse particulate matter standard, and the secondary PM standards. The final rule was published on March 6, 2024, lowering the primary annual PM 2.5 NAAQS to 9 ug/m3. The rule is effective May 6, 2024. States will have until March 2032 to attain compliance with the new standard. During the multi-year implementation process, the NMED will designate attainment/nonattainment areas by March 6, 2026, and submit a State Implementation Plan to EPA by September 6, 2027. This implementation process also applies to the Albuquerque-Bernalillo County Environmental Health Department who may combine efforts with NMED. Bernalillo County does not currently meet the 9 ug/m3 standard which may impact future air permitting activities at Rio Bravo and Reeves Generating Stations if the county is designated as nonattainment. Beginning May 6, 2024, the new standard will be used when conducting required modeling for permit applications and revisions. Although the lower standard is expected to result in new nonattainment areas throughout the country and could prompt additional PM control requirements, PNM cannot predict the impacts of the outcome of future rulemaking.

Cooling Water Intake Structures

In 2014, EPA issued a rule establishing national standards for certain cooling water intake structures at existing power plants and other facilities under the Clean Water Act to protect fish and other aquatic organisms by minimizing impingement mortality (the capture of aquatic wildlife on intake structures or against screens) and entrainment mortality (the capture of fish or shellfish in water flow entering and passing through intake structures).

To minimize impingement mortality, the rule provides operators of facilities, such as Four Corners, seven options for meeting Best Technology Available (“BTA”) standards for reducing impingement. The permitting authority must establish the

BTA for entrainment on a site-specific basis, taking into consideration an array of factors, including endangered species and social costs and benefits. Affected sources must submit source water baseline characterization data to the permitting authority to assist in the determination. Compliance deadlines under the rule are tied to permit renewal and will be subject to a schedule of compliance established by the permitting authority.

In 2018, several environmental groups sued EPA Region IX in the U.S. Court of Appeals for the Ninth Circuit Court over EPA’s failure to timely reissue the Four Corners NPDES permit. The petitioners asked the court to issue a writ of mandamus compelling EPA Region IX to take final action on the pending NPDES permit by a reasonable date. EPA subsequently reissued the NPDES permit. The permit did not contain conditions related to the cooling water intake structure rule, as EPA determined that the facility has achieved BTA for both impingement and entrainment by operating a closed-cycle recirculation system. Several environmental groups filed a petition for review with EPA’s Environmental Appeals Board (“EAB”) concerning the reissued permit. The environmental groups alleged that the permit was reissued in contravention of several requirements under the Clean Water Act and did not contain required provisions concerning certain revised ELG, existing-source regulations governing cooling-water intake structures, and effluent limits for surface seepage and subsurface discharges from coal-ash disposal facilities. EPA withdrew the Four Corners NPDES permit in order to examine issues raised by the environmental groups. Withdrawal of the permit moots the appeal pending before the EAB. EAB thereafter dismissed the environmental groups’ appeal. EPA issued an updated NPDES permit in 2019. The permit was once again appealed to the EAB and was stayed before the effective date. Oral argument was heard on September 3, 2020. The EAB issued an order denying the petition for review on September 30, 2020. The denial was based on the EAB’s determination that the petitioners had failed to demonstrate that review of the permit was warranted on any of the grounds presented in the petition. Thereafter, the Regional Administrator of the EPA signed a notice of final permit decision, and the NPDES permit was issued on November 9, 2020. The permit became effective December 1, 2020 and will expire on November 30, 2025. On January 22, 2021, the environmental groups filed a petition for review of the EAB’s decision with the U.S. Court of Appeals for the Ninth Circuit. The September 2019 permit remains in effect pending this appeal. On March 21, 2022, EPA provided notice in the Federal Register of a proposed settlement agreement with the environmental groups. The parties subsequently executed the settlement agreement as of May 2, 2022. Under the settlement, the associated case was administratively closed through September 6, 2023, during which time a third-party consultant spent 12 months sampling discharges from Four Corners and EPA spent three months completing an analysis. On December 1, 2023, EPA issued a modification, effective December 31, 2023, to the NPDES permit issued on November 9, 2020. The modification applies to permit elements related to effluent discharge. PNM cannot predict whether the analysis under the settlement agreement will result in changes to the NPDES permit but does not anticipate that it will have a material impact on PNM’s financial position, results of operations, or cash flows.

Effluent Limitation Guidelines

In 2013, EPA published proposed revised wastewater ELG establishing technology-based wastewater discharge limitations for fossil fuel-fired electric power plants.  EPA signed the final Steam Electric ELG rule in 2015. The final rule, which became effective on January 4, 2016, phased in the new, more stringent requirements in the form of effluent limits for arsenic, mercury, selenium, and nitrogen for wastewater discharged from wet scrubber systems and zero discharge of pollutants in ash transport water that must be incorporated into plants’ NPDES permits. The 2015 rule required each plant to comply between 2018 and 2023 depending on when it needs a new or revised NPDES permit.

The Steam Electric ELG rule was challenged in the U.S. Court of Appeals for the Fifth Circuit by numerous parties. In 2017, EPA signed a notice indicating its intent to reconsider portions of the rule, and the Fifth Circuit issued an order severing the issues under reconsideration and holding the case in abeyance as to those issues. However, the court allowed challenges to other portions of the rule to proceed. In 2019, the Fifth Circuit granted those challenges and issued an opinion vacating several portions of the rule, specifically those related to legacy wastewater and leachate, for which the court deemed the standards selected by EPA arbitrary and capricious.

In 2017, EPA published a final rule for postponement of certain compliance dates. The rule postponed the earliest date on which compliance with the ELG for these waste streams would be required from November 1, 2018 until November 1, 2020. In 2019, EPA published a proposed rule revising the original ELG while maintaining the compliance dates. In 2020, EPA published in the Federal Register the final Steam Electric ELG and standards for the Steam Electric Power Generating Point Source Category, revising the final 2015 guidelines for both flue gas desulfurization wastewater and bottom ash transport water. The rule requires compliance with new limits as soon as possible on or after October 13, 2021, but no later than December 31, 2025.

On August 3, 2021, EPA published notice that it will undertake a supplemental rulemaking to revise the ELG after completing its review of the rules reconsidered in 2020. As part of this process, EPA will determine whether more stringent limitations and standards are appropriate. On March 29, 2023, EPA published the proposed ELG Rule in the Federal Register. The proposed rule includes stricter limitations on bottom ash transport water, flue gas desulfurization, and coal combustion residual leachate. Also included are flexibilities for coal-powered facilities that will soon decommission or repower. With this proposed rule EPA has extended the date of decommissioning or repowering from December 31, 2028, to December 31, 2032. Comments on the proposed rule were due May 30, 2023.

On April 24, 2024, EPA signed a final rule to revise ELGs under the Clean Water Act for the Steam Electric Power Generating Point Source Category. This final supplemental rule updates the technology-based ELGs applicable to flue gas desulfurization wastewater, bottom ash transport water, and legacy wastewater at existing sources, and combustion residual leachate at new and existing sources.

Reeves Station discharges cooling tower blowdown to a publicly owned treatment plant and no longer holds an NPDES permit; therefore, it is expected that no requirements will be imposed.

See “Cooling Water Intake Structures” above for additional discussion of Four Corners’ current NPDES permit. Four Corners may be required to change equipment and operating practices affecting boilers and ash handling systems, as well as change its waste disposal techniques during the next NPDES permit renewal in 2023. PNM is unable to predict the outcome of these matters or a range of the potential costs of compliance.

Santa Fe Generating Station

PNM and NMED are parties to agreements under which PNM has installed a remediation system to treat water from a City of Santa Fe municipal supply well and an extraction well to address gasoline contamination in the groundwater at the site of PNM’s former Santa Fe Generating Station and service center. A 2008 NMED site inspection report states that neither the source nor extent of contamination at the site has been determined and that the source may not be the former Santa Fe Generating Station. During 2013 and 2014, PNM and NMED collected additional samples that showed elevated concentrations of nitrate and volatile organic compounds in some of the monitoring wells at the site. In addition, one monitoring well contained free-phase hydrocarbon products. PNM collected a sample of the product for “fingerprint” analysis. The results of this analysis indicated the product was a mixture of older and newer fuels. The presence of newer fuels in the sample suggests the hydrocarbon product likely originated from off-site sources. In 2015, PNM and NMED entered into a memorandum of understanding to address changing groundwater conditions at the site under which PNM agreed to continue hydrocarbon investigation under the supervision of NMED. Qualified costs are eligible for payment through the New Mexico Corrective Action Fund (“CAF”), which is administered by the NMED Petroleum Storage Tank Bureau. In 2019, PNM received notice from NMED that an abatement plan for the site is required to address concentrations of previously identified compounds, unrelated to those discussed above, found in the groundwater. NMED approved PNM’s abatement plan proposal, which covers field work and reporting.

Field work related to the investigation under both the CAF and abatement plan requirements was completed and activities and findings associated with the field work were presented in two separate reports and released to stakeholders in early 2020. Subsequent field work was completed in July 2020 and two reports were released supporting PNM’s contention that off-site sources have impacted, and are continuing to impact, the local groundwater in the vicinity of the former Santa Fe Generating Station.

PNM submitted work plans to NMED in January 2021 for review and approval. In December 2021, NMED approved both work plans and work activities were completed by the end of 2022 and a report was submitted to the NMED in the first quarter of 2023.

Groundwater sampling for the abatement plan’s first semiannual work commenced at the beginning of March 2023 and was completed in April 2023. The associated report was completed and submitted to the NMED in July 2023. In addition, the work plan for the 2023 CAF work was completed and submitted to the NMED in July 2023. NMED approved the work plan in December 2023 and PNM is working to schedule the associated activities.

The City of Santa Fe has stopped operating its well at the site, which is needed for PNM’s groundwater remediation system to operate. As a result, PNM has stopped performing remediation activities at the site. However, PNM’s monitoring and other abatement activities at the site are ongoing and will continue until the groundwater meets applicable federal and state standards or until the NMED determines remediation is not required, whichever is earlier. PNM is not able to assess the

duration of this project or estimate the impact on its obligations if PNM is required to resume groundwater remediation activities at the site. PNM is unable to predict the outcome of these matters.

Coal Combustion Residuals Waste Disposal

CCRs consisting of fly ash, bottom ash, and gypsum generated from coal combustion and emission control equipment at SJGS are currently disposed of in the surface mine pits adjacent to the plant. SJGS does not operate any CCR impoundments or landfills. The NMMMD currently regulates mine reclamation activities at the San Juan mine, including placement of CCRs in the surface mine pits, with federal oversight by the OSM. APS disposes of CCRs in ponds and dry storage areas at Four Corners.  Ash management at Four Corners is regulated by EPA and the New Mexico State Engineer’s Office.

EPA’s final coal ash rule, which became effective in 2015, included a non-hazardous waste determination for coal ash and sets minimum criteria for existing and new CCR landfills and surface impoundments. In 2016, the Water Infrastructure Improvements for the Nation Act (the “WIIN Act”) was signed into law to address critical water infrastructure needs in the U.S. and contains a number of provisions related to the CCR rules. Among other things, the WIIN Act allows, but does not require, states to develop and submit CCR permit programs for EPA approval, provides flexibility for states to incorporate EPA’s final rule for CCRs or develop other criteria that are at least as protective as EPA’s final rule, and requires EPA to approve state permit programs within 180 days of submission by the state. Because states are not required to implement their own CCR permit programs, EPA will implement the permit program in states that choose not to implement a program, subject to Congressional funding. Until permit programs are in effect, EPA has authority to directly enforce the CCR rule. For facilities located within the boundaries of Native American reservations, such as the Navajo Nation where Four Corners is located, EPA is required to develop a federal permit program regardless of appropriated funds.

In 2018, EPA published a rule that constitutes “Phase One, Part One” of its ongoing reconsideration and revision of the April 17, 2015, CCR rule. The final Phase One, Part One rule includes two types of revisions. The first revision extended the deadline to allow EGUs with unlined impoundments or that fail to meet the uppermost aquifer requirement to continue to receive coal ash until October 31, 2020. This deadline was again extended by subsequent amendments. The rule also authorized a “Participating State Director” or EPA to approve suspension of groundwater monitoring requirements and to issue certifications related to the location restrictions, design criteria, groundwater monitoring, remedy selection and implementation. The rule also modified groundwater protection standards for certain constituents, which include cobalt, molybdenum, lithium, and lead without a maximum contamination level.

In 2019, EPA published a second round of revisions, which are commonly referred to as the “Phase Two” revisions. Phase Two proposed revisions to reporting and accessibility to public information, the “CCR piles” and “beneficial use” definitions and the requirements for management of CCR piles. EPA has reopened and extended the Phase Two comment period several times. EPA has not yet finalized provisions in Phase Two related to beneficial use of CCR and CCR piles. This activity is on EPA’s long-term agenda, which means EPA has no plans to address these issues in the next 12 months.

Since promulgating its Phase Two proposal, EPA has finalized two other rules addressing various CCR rule provisions. In 2019, EPA promulgated its proposed Holistic Approach to Closure Part A (“Part A”), which proposed a new deadline of August 31, 2020, for companies to initiate closure of unlined CCR impoundments. In accordance with the DC Circuit Court of Appeals’ vacatur of portions of the CCR Rule, Part A also proposed changing the classification of compacted soil-lined or clay-lined surface impoundments from “lined” to “unlined”. In addition, Part A delineated a process for owners/operators to submit requests for alternative closure deadlines based on lack of alternate disposal capacity. EPA issued the final Part A, which became effective on September 28, 2020. This rule finalized the classification of soil-lined and clay-lined surface impoundments as unlined, thus, triggering closure or retrofit requirements for those impoundments. The final Part A also gave operators of unlined impoundments until April 11, 2021 to cease receipt of waste at these units and initiate closure.

In 2020, EPA issued the proposed Holistic Approach to Closure Part B (“Part B”), which delineated the process for owners/operators to submit alternate liner demonstrations for clay-lined surface impoundments that could otherwise meet applicable requirements. Part B also proposed regulations addressing beneficial use for closure of surface impoundments. EPA issued the final Part B rule, which became effective on December 14, 2020. This rule did not include beneficial use of CCR for closure, which EPA explains will be addressed in subsequent rulemaking actions. On May 18, 2023, EPA published a proposed rule on the regulatory requirements for inactive surface impoundments at inactive facilities including groundwater monitoring, corrective action, closure, and post-closure care requirements for all CCR management units (regardless of how or when that CCR was placed), and several technical corrections to the existing regulations. Comments on the proposed rule were due July 17, 2023. EPA intends to issue other rulemakings and finalizing parts of previously proposed rules, including a final rule in October 2024 on remaining Part B issues regarding closure options and annual reporting.

On April 24, 2024, EPA Administrator Regan signed a final rule that extends federal CCR regulatory requirements to (1) inactive CCR surface impoundments at inactive utilities and (2) CCR management units (“CCRMU”), including CCR impoundments and landfills that closed prior to the effective date of the 2015 CCR rule, inactive CCR landfills, and other areas where CCR is managed directly on the land. EPA included deferral options for smaller CCRMU containing between one and 1,000 tons of CCR, CCRMU located beneath critical infrastructure or large buildings or structures vital to the continuation of current site activities, and CCRMU that closed prior to the effective date of the new rule. EPA also codified the controversial definitions of infiltration and liquids that are being litigated in the DC Circuit.

In 2020, EPA published a proposed rule establishing a federal permitting program for the handling of CCR within the boundaries of Native American reservations and in states without their own federally authorized state programs. Permits for units within the boundaries of Native American reservations would be due 18 months after the effective date of the rule. According to the Fall 2023 Regulatory Agenda the final rule is expected in March 2026. EPA is coordinating with the affected permits for the three facilities with CCR disposal units located on Native American lands. PNM cannot predict the outcome of EPA’s rulemaking activity or the outcome of any related litigation, and whether or how such a ruling would affect operations at Four Corners.

The CCR rule does not cover mine placement of coal ash. OSM is expected to publish a proposed rule covering mine placement in the future and will likely be influenced by EPA’s rule and the determination by EPA that CCRs are non-hazardous. PNM cannot predict the outcome of OSM’s proposed rulemaking regarding CCR regulation, including mine placement of CCRs, or whether OSM’s actions will have a material impact on PNM’s operations, financial position, or cash flows. Based upon the requirements of the final Part A CCR rule, PNM conducted a CCR assessment at SJGS and made minor modifications at the plant to ensure that there are no facilities that would be considered impoundments or landfills under the rule. PNM would seek recovery from its retail customers of all CCR costs for jurisdictional assets that are ultimately incurred.

Utilities that own or operate CCR disposal units, such as those at Four Corners, as indicated above, were required to collect sufficient groundwater sampling data to initiate a detection monitoring program.  Four Corners completed the analysis for its CCR disposal units, which identified several units that needed corrective action or needed to cease operations and initiate closure by April 11, 2021. Work is ongoing. Four Corners continues to gather additional groundwater data and perform remedial evaluations and activities. At this time, PNM does not anticipate its share of the cost to complete these corrective actions to close the CCR disposal units, or to gather and perform remedial evaluations on groundwater at Four Corners, will have a significant impact on its operations, financial position, or cash flows.

Other Commitments and Contingencies

Coal Supply

Four Corners

APS purchases all of Four Corners’ coal requirements from NTEC, an entity owned by the Navajo Nation, under the Four Corners CSA that expires in 2031. The coal comes from reserves located within the Navajo Nation. The contract provides for pricing adjustments over its term based on economic indices and certain minimum payments that may be required if no deliveries of coal are taken. PNM’s share of the coal costs is being recovered through the FPPAC. See additional discussion of the Four Corners CSA in Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

Coal Mine Reclamation

As indicated under Coal Combustion Residuals Waste Disposal above, SJGS disposed of CCRs in the surface mine pits adjacent to the plant and Four Corners disposes of CCRs in ponds and dry storage areas.

Under the terms of the SJGS CSA, PNM and the other SJGS owners are obligated to compensate WSJ LLC for all reclamation costs associated with the supply of coal from the San Juan mine. PNM and Westmoreland have entered into an agreement under which mine reclamation services for SJGS would be provided. A mine reclamation costs study was completed in 2024 and PNM remeasured its liability, which resulted in an increase in overall reclamation costs of $20.9 million, due primarily to higher inflationary factors. As a result, PNM recorded an increase of $17.0 million in the liability at March 31, 2024 related to the underground mine in regulatory assets on the Condensed Consolidated Balance Sheets. In addition, PNM recorded an increase of $4.0 million in the liability and a decrease of $0.5 million in Deferred Regulatory assets at March 31, 2024 related to the surface mine as a regulatory disallowance of $4.5 million on the Condensed Consolidated Statements of

Earnings, due to the fact that the NMPRC has capped the amount that can be collected from retail customers for final reclamation of the surface mines at $100.0 million. PNM’s estimate of the costs necessary to reclaim the mine that serves SJGS is subject to many assumptions, including the timing of reclamation, generally accepted practices at the time reclamation activities occur, and current inflation and discount rates. PNM cannot predict the ultimate cost to reclaim the mine that serves SJGS and would seek to recover all costs related to reclaiming the underground mine from its customers but could be exposed to additional loss related to surface mine reclamation. In connection with certain mining permits relating to the operation of the San Juan mine, Westmoreland was required to post reclamation bonds of $118.7 million with the NMMMD. In order to facilitate the posting of reclamation bonds by sureties on behalf of Westmoreland, PNMR entered into the WFB LOC Facility under which letters of credit aggregating $30.3 million have been issued.

A coal mine reclamation study for the mine that serves Four Corners was issued in 2019. The study reflected operation of the mine through 2031, the term of the Four Corners CSA.

Based on the most recent estimates, PNM’s remaining payments as of March 31, 2024 for mine reclamation, in future dollars, are estimated to be $51.4 million for the surface mines at both SJGS and Four Corners and $59.7 million for the underground mine at SJGS. At March 31, 2024 and December 31, 2023, liabilities, in current dollars, of $44.5 million and $50.0 million for surface mine reclamation and $47.9 million and $26.2 million for underground mine reclamation were recorded in other deferred credits.

The SJGS owners are parties to a reclamation trust funds agreement to provide financial assurance for post-term coal mine reclamation obligations. The trust funds agreement requires each owner to enter into an individual trust agreement with a financial institution as trustee, create an irrevocable reclamation trust, and meet year-end funding targets set by funding curves that are approved by the SJGS ownership. PNM funded $2.7 million in 2023. The recently completed and approved mine reclamation cost study resulted in an update to the trust’s funding curves. Based on PNM’s reclamation trust fund balance at March 31, 2024, and current funding curves, PNM anticipates contributing $20.7 million in 2024, $3.9 million in 2025, and $4.0 million in 2026. Additional contributions may be necessary in future years in order to meet the year end funding targets.

Under the Four Corners CSA, PNM is required to fund its share of estimated final reclamation costs in annual installments into an irrevocable escrow account solely dedicated to the final reclamation cost of the surface mine at Four Corners. PNM contributed $0.2 million in 2023 and $2.4 million in 2022. PNM anticipates providing additional funding of $3.1 million in 2024, $1.3 million in 2025, and $1.5 million in 2026.

PNM recovers from retail customers reclamation costs associated with the underground mine. However, the NMPRC capped the amount collected from retail customers for final reclamation of the surface mines at $100.0 million for both SJGS and Four Corners. If future estimates increase the liability for surface mine reclamation, the excess would be expensed at that time. The impacts of changes in New Mexico state law as a result of the enactment of the ETA and regulatory determinations made by the NMPRC may also affect PNM’s financial position, results of operations, and cash flows. PNM is currently unable to determine the outcome of these matters or the range of possible impacts.

SJGS Decommissioning

On November 9, 2021, the San Juan County Commission approved the Coal-Fired Electricity Generating Facility Demolition and Remediation Ordinance (“Ordinance 121”), requiring the full demolition of SJGS upon its complete and permanent closure. Ordinance 121 required the SJGS owners to submit a proposed demolition and remediation plan no later than three months after SJGS was retired. The SJGS owners submitted the decommissioning and remediation plan on December 28, 2022. In connection with restructuring of the SJGS ownership on December 31, 2017, PNM and the other SJGS owners entered into the San Juan Decommissioning and Trust Funds Agreement, which requires PNM to fund its ownership share of final decommissioning costs into an irrevocable trust. Under the agreement, PNM made an initial funding of $14.7 million in December 2022. The amount and timing of additional trust funding is subject to revised decommissioning cost studies and agreement among the SJGS owners. PNM has posted a surety bond in the amount of $46.0 million in connection with certain environmental decommissioning obligations and must maintain the bond or other financial assurance until those obligations are satisfied. The surety bond only represents a liability if the SJGS owners fail to deliver on its contractual liability. For information regarding the impact of Ordinance 121 on PNM’s SJGS decommissioning ARO see Note 15 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PNM records its share of the SJGS decommissioning obligation as an ARO on its Condensed Consolidated Balance Sheets. Studies on the decommissioning costs of SJGS are performed periodically and revisions to the ARO liability are recorded. In the third quarter of 2022, a new decommissioning cost study was completed, which required PNM to remeasure its

SJGS decommissioning ARO. The new study resulted in an estimated decrease to PNM’s share of the decommissioning obligation of $21.1 million, which was recorded in September 2022. Additional information concerning the Company’s SJGS decommissioning ARO is contained in Note 15 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PVNGS Liability and Insurance Matters

Public liability for incidents at nuclear power plants is governed by the Price-Anderson Nuclear Industries Indemnity Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both commercial sources and an industry-wide retrospective payment plan. The insurance limit is subject to an adjustment every five years based upon the aggregate percentage change in the CPI. The most recent adjustment took effect on October 5, 2023. As of that date, in accordance with this act, the PVNGS participants are insured against public liability exposure for a nuclear incident up to $16.3 billion per occurrence. PVNGS maintains the maximum available nuclear liability insurance in the amount of $500 million, which is provided by American Nuclear Insurers. The remaining $15.8 billion is provided through a mandatory industry-wide retrospective assessment program. If losses at any nuclear power plant covered by the program exceed the accumulated funds, PNM could be assessed retrospective premium adjustments. After the expiration of the PVNGS Unit 1 and Unit 2 leases in January 2023 and January 2024, PNM’s maximum potential retrospective premium assessment per incident for all three units is $36.3 million, with a maximum annual payment limitation of $5.4 million, to be adjusted periodically for inflation.

The PVNGS participants maintain insurance for damage to, and decontamination of, property at PVNGS in the aggregate amount of $2.8 billion, a substantial portion of which must first be applied to stabilization and decontamination. These coverages are provided by Nuclear Electric Insurance Limited (“NEIL”). The primary policy offered by NEIL contains a sublimit of $2.25 billion for non-nuclear property damage. If NEIL’s losses in any policy year exceed accumulated funds, PNM is subject to retrospective premium adjustments of $4.9 million. The insurance coverages discussed in this and the previous paragraph are subject to certain policy conditions, sublimits, and exclusions.

XML

Regulatory and Rate Matters

3 Months Ended

Mar. 31, 2024

Regulated Operations [Abstract]

Regulatory and Rate Matters

Regulatory and Rate Matters

The Company is involved in various regulatory matters, some of which contain contingencies that are subject to the same uncertainties as those described in Note 11. Additional information concerning regulatory and rate matters is contained in Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PNM

New Mexico General Rate Case

2024 Rate Change

On December 5, 2022, PNM filed an application with the NMPRC for a general increase in retail electric rates including recovery on total rate base of $2.7 billion based on a calendar year 2024 FTY, an increase of $63.8 million in retail non-fuel revenues, and an ROE 10.25%. The application also proposed ratemaking treatment of PVNGS Leased Interest and testimony supporting the prudence of PNM’s decisions to renew the five leases and repurchase 64.1 MW of PVNGS Unit 2 capacity.

On January 3, 2024, the NMPRC issued a final order authorizing PNM to implement an increase in non-fuel base rates of $15.3 million, effective for service beginning January 15, 2024. Major components of the difference compared to PNM’s application include:

•A ROE of 9.26%.

•A capital structure of 49.61% equity, 50.10% debt, and 0.29% preferred stock.

•Finding of imprudence regarding PNM’s decision to remain in Four Corners and a remedy for the imprudence resulting in a disallowance of $81.0 million to PNM’s total Four Corners net book value.

•Approval of $51.3 million of PNM’s requested $96.3 million regulatory asset for PVNGS undepreciated investments, but disallowance of a return on the remaining $45.0 million or any CWIP associated with it.

•Requiring that the $38.4 million regulatory liability associated with leased capacity at PVNGS after the Unit 1 lease expired on January 15, 2023, be returned to ratepayers over two years through a separate rate rider.

•The approval of new depreciation rates, reflecting shorter useful lives, of PNM’s gas plants with service lives and depreciable lives extending beyond January 1, 2045, which would include PNM’s La Luz and Luna generating stations.

•The approval of PNM’s TOD pilot program, with a requirement to make annual compliance filings and to adjust certain rate schedules.

For additional details related to the initial application, see Note 17 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

In the year ended December 31, 2023, PNM evaluated the outcome of the NMPRC final order in the 2024 Rate Change and recorded a regulatory disallowance of $55.5 million on the Consolidated Statement of Earnings and a corresponding reduction to Utility Plant, after accounting for previous impairments, to reflect the remedy adopted in the Final Order for Four Corners. In addition, PNM recorded a reduction to electric operating revenues of $38.4 million with a corresponding current regulatory liability of $19.2 million and a deferred regulatory liability of $19.2 million for the PVNGS rate refunds that will be returned to customers over a two-year period. PNM also recorded a regulatory disallowance of $8.2 million on the Consolidated Statement of Earnings and a corresponding reduction to Utility Plant for the disallowance of CWIP from PVNGS.

In March 2024, notice of appeals were separately filed with the NM Supreme Court by NEE and PNM, and a joint notice of appeal was filed by the NM Department of Justice, Bernalillo County, and ABCWUA. Statements of issues from appellants are due June 5, 2024.

2025 Rate Change

As previously indicated, PNM anticipates filing a general rate case during 2024 with rates requested to be implemented during 2025. On March 18, 2024, PNM filed a motion for variance with the NMPRC, requesting a 16-day variance which would allow for the filing of its next general rate case to be on or before June 14, 2024. The proposed rate case will include a FTY beginning on July 1, 2025 and a base period ending December 31, 2023. On April 18, 2024, the motion for variance was granted.

Renewable Energy Portfolio Standard

As discussed in Note 11, the ETA amends the REA including removal of diversity requirements and certain customer caps and exemptions relating to the application of the RPS under the REA. The REA provides for streamlined proceedings for approval of utilities’ renewable energy procurement plans, assures that utilities recover costs incurred consistent with approved procurement plans, and requires the NMPRC to establish a Reasonable Cost Threshold (“RCT”) for the procurement of renewable resources to prevent excessive costs being added to rates. The ETA sets a RCT of $60 per MWh, adjusted for inflation, using an average annual levelized resource cost basis. PNM makes renewable procurements consistent with the NMPRC approved plans and recovers certain renewable procurement costs from customers through the renewable energy rider billed on a KWh basis.

Included in PNM’s approved procurement plans are the following renewable energy resources:

•158 MW of PNM-owned solar-PV facilities

•A PPA through 2044 for the output of New Mexico Wind, having a current aggregate capacity of 200 MW, and a PPA through 2035 for the output of Red Mesa Wind, having an aggregate capacity of 102 MW

•A PPA through 2040 for 140 MW of output from La Joya Wind II

•A PPA through 2042 for the output of the Lightning Dock Geothermal facility with a capacity of 11 MW

•Solar distributed generation, aggregating 289.3 MW at March 31, 2024, owned by customers or third parties from whom PNM purchases any net excess output and RECs

The NMPRC has authorized PNM to recover certain renewable procurement costs through a rate rider billed on a per KWh basis. In its 2024 renewable energy procurement plan, which became effective on January 1, 2024, PNM proposed to collect $59.0 million for the year. PNM recorded revenues from the rider of $15.3 million and $18.6 million in the three months ended March 31, 2024 and 2023.

Under the renewable rider, if PNM’s earned rate of return on jurisdictional equity in a calendar year, adjusted for items not representative of normal operations, exceeds the NMPRC-approved rate by 0.5%, PNM is required to refund the excess to

customers during May through December of the following year. PNM did not exceed such limitation in 2023.

Energy Efficiency and Load Management

Program Costs and Incentives/Disincentives

The New Mexico Efficient Use of Energy Act (“EUEA”) requires public utilities to achieve specified levels of energy savings and to obtain NMPRC approval to implement energy efficiency and load management programs. The EUEA requires the NMPRC to remove utility disincentives to implementing energy efficiency and load management programs and to provide incentives for such programs. The NMPRC has adopted a rule to implement this act. PNM’s costs to implement approved programs and incentives are recovered through a rate rider. During the 2019 New Mexico legislative session, the EUEA was amended to, among other things, include a decoupling mechanism for disincentives, preclude a reduction to a utility’s ROE based on approval of disincentive or incentive mechanisms, establish energy savings targets for the period 2021 through 2025, and require that annual program funding be 3% to 5% of an electric utility’s annual customer bills excluding gross receipt taxes, franchise and right-of-way access fees, provided that a customer’s annual cost does not exceed seventy-five thousand dollars.

On April 17, 2023, PNM filed an application for energy efficiency and load management programs to be offered in 2024, 2025, and 2026 (the “2024 Plan”). The 2024 Plan proposed to continue ten existing energy efficiency programs with modification and a total annual budget of $34.5 million in 2024, $35.4 million in 2025, and $36.5 million in 2026. The application also sought approval of an annual base incentive of 7.1% of the portfolio budget and a sliding scale that provides additional incentive for additional energy saved as a percentage of program cost, up to the maximum allowed by the energy efficiency rule which for PNM is 8.82%. On January 26, 2024, the hearing examiners in the case issued a RD. The RD largely approved PNM’s 2024 Plan but with modifications that include the pursuit of demand response resources, additional analysis in future filings, adjustments to certain energy efficiency programs, and modification of the incentive sliding scale cap to reflect a new maximum. On March 7, 2024, the NMPRC approved the RD in its entirety.

2020 Decoupling Petition

As discussed above, the legislature amended the EUEA to, among other things, include a decoupling mechanism for disincentives. On May 28, 2020, PNM filed a petition for approval of a rate adjustment mechanism that would decouple the rates of its residential and small power rate classes. Decoupling is a rate design principle that severs the link between the recovery of fixed costs of the utility through volumetric charges. On July 13, 2020, NEE, ABCWUA, the City of Albuquerque, and Bernalillo County filed motions to dismiss the petition on the grounds that approving PNM’s proposed rate adjustment mechanism outside of a general rate case would result in retroactive ratemaking and piecemeal ratemaking. The motions to dismiss also alleged that PNM’s proposed rate adjustment mechanism is inconsistent with the EUEA. On October 2, 2020, PNM requested an order to vacate the public hearing, scheduled to begin October 13, 2020, and staying the proceeding until the NMPRC decides whether to entertain a petition to issue a declaratory order resolving the issues raised in the motions to dismiss. On October 7, 2020, the hearing examiner approved PNM’s request to stay the proceeding and vacate the public hearing and required PNM to file a petition for declaratory order by October 30, 2020. On October 30, 2020, PNM filed a petition for declaratory order asking the NMPRC to issue an order finding that full revenue decoupling is authorized by the EUEA. On November 4, 2020, ABCWUA and Bernalillo County jointly filed a competing petition asking the NMPRC to issue a declaratory order on the EUEA’s requirements related to disincentives. On March 17, 2021, the NMPRC issued an order granting the petitions for declaratory order, commencing a declaratory order proceeding to address the petitions and appointing a hearing examiner to preside over the declaratory order proceeding.

On January 14, 2022, the hearing examiner issued a RD recommending the NMPRC find that the EUEA does not mandate the NMPRC to authorize or approve a full decoupling mechanism, defining full decoupling as limited to energy efficiency and load management measures and programs. The RD also states that a utility may request approval of a rate adjustment mechanism to remove regulatory disincentives to energy efficiency and load management measures and programs through a stand-alone petition, as part of the utility’s triennial energy efficiency application or a general rate case and that PNM is not otherwise precluded from petitioning for a rate adjustment mechanism prior to its next general rate case. Finally, the RD stated that the EUEA does not permit the NMPRC to reduce a utility’s ROE based on approval of a disincentive removal mechanism founded on removing regulatory disincentives to energy efficiency and load management measures and programs. The RD does not specifically prohibit a downward adjustment to a utility’s capital structure, based on approval of a disincentive removal mechanism. On April 27, 2022, the NMPRC issued an order adopting the RD in its entirety. On May 24, 2022, PNM filed a notice of appeal with the NM Supreme Court. The NM Supreme Court held oral arguments on November 13, 2023. PNM cannot predict the outcome of this matter.

Integrated Resource Plans

NMPRC rules require that investor-owned utilities file an IRP every three years. The IRP is required to cover a 20-year planning period and contain an action plan covering the first three years of that period. On September 14, 2022, the NMPRC adopted revisions to the IRP Rule. The new rule revamps and modernizes the planning process to accommodate increased stakeholder involvement. The IRP Rule establishes a collaborative facilitated process for a utility and stakeholders to agree on a statement of need for potential new or additional resources, as well as an action plan to guide procurement or development of resources to meet the stated need. A most-cost-effective portfolio of resources shall be derived from the statement of need analysis. The statement of need and action plan must be accepted before the utility begins the resource solicitation process pursuant to the IRP Rule. Following acceptance of the statement of need and action plan, a utility will provide the NMPRC and intervenors drafts of the request for proposals (“RFP”) and a timeline for issuing, receiving, evaluating, and ranking bids. The NMPRC will then appoint an Independent Monitor (“IM”) to oversee the RFP process, which allows for parties and the IM to comment on the RFP consistency with the IRP, after which the utility issues the RFP. Within 120 days of receiving bids the utility shall provide the IM with results including pricing and non-price evaluation criteria, ranking of bids, chosen portfolio and alternatives that also meet the needs; the IM then rules on the fairness of the RFP execution. Acceptance of the statement of need and action plan will not constitute a finding of prudency or pre-approval of costs associated with the additional resources. Following the RFP and IM processes, the utility may apply for approvals, and any costs incurred to implement the action plan will be considered in a general rate case and/or resource acquisition proceeding. On October 14, 2022, PNM and other investor-owned utilities filed motions for rehearing with the NMPRC. On October 26, 2022, the NMPRC issued an order partially granting and partially denying certain aspects of PNM’s and the other investor-owned utilities’ motions for rehearing. On November 2, 2022, the NMPRC adopted an amended IRP Rule. On December 2, 2022, PNM filed an appeal with the NM Supreme Court. Two other investor-owned utilities also separately filed appeals at the NM Supreme Court. On January 3, 2023, PNM and the two other investor-owned utilities filed statements of issues with the NM Supreme Court. Among other things, the investor-owned utilities question whether the IRP Rule exceeds the NMPRC authority by imposing unauthorized requirements on utilities and extending NMPRC jurisdiction through over-broad interpretation of the statutes and state that the IRP Rule is contrary to law in its provisions for NMPRC regulation of a utility’s resource procurement decision-making. On June 5, 2023, PNM and the other two investor-owned utilities filed their Joint Brief in Chief and request for oral arguments at the NM Supreme Court. On November 22, 2023, the NM Supreme Court scheduled oral arguments for May 13, 2024. PNM cannot predict the outcome of this matter.

2023 IRP

On December 15, 2023, PNM filed its 2023 IRP with a continued focus on a carbon-free energy system by 2040. The plan highlights the need for the significant sustained addition of resources over the next two decades, replacing retiring or expiring capacity, meeting concurrent load growth, while reducing the carbon intensity of PNM’s portfolio. On April 4, 2024, the NMPRC accepted PNM’s 2023 IRP. On May 2, 2024, the NMPRC issued an order appointing an independent monitor who will report the results of PNM’s 2023 IRP.

Four Corners Abandonment Application

In 2020, PNM entered into the Four Corners Purchase and Sale Agreement with NTEC, pursuant to which PNM agreed to sell its 13% ownership interest (other than certain transmission assets) in Four Corners to NTEC, contingent upon NMPRC approval. In connection with the sale, PNM would make payments of $75.0 million to NTEC for relief from its obligations under the coal supply agreement for Four Corners after December 31, 2024. PNM made an initial payment to NTEC of $15.0 million in November 2020, subject to refund with interest upon termination of the Four Corners Purchase and Sale Agreement prior to closing. Under the terms of the Four Corners Purchase and Sale Agreement, upon receipt of the NMPRC approval, PNM was expected to make a final payment of $60.0 million.

On January 8, 2021, PNM filed the Four Corners Abandonment Application, which sought NMPRC approval to exit PNM’s share of Four Corners as of December 31, 2024, and issuance of approximately $300 million of Securitized Bonds as provided by the ETA. On December 15, 2021, the NMPRC issued a final order denying approval of the Four Corners Abandonment Application and the corresponding request for issuance of securitized financing. On December 22, 2021, PNM filed a Notice of Appeal with the NM Supreme Court of the NMPRC decision to deny the application and on July 6, 2023, the NM Supreme Court affirmed the NMPRC decision concluding that the NMPRC reasonably and lawfully denied PNM’s application for abandonment. On April 23, 2024, PNM filed an interim notice informing the NMPRC that PNM’s updated analysis indicates it is in the interest of customers for PNM to remain as a participant in Four Corners until the expiration of the current coal supply agreement in 2031. PNM continues to work with the other Four Corners owners to update the necessary project agreements to reflect this continued participation.

Summer Peak Resource Adequacy

Beginning in 2021 PNM began providing notices of delays, as received from developers, and status updates to the NMPRC for the approved SJGS replacement resource projects as well as delays in replacement resources for the PVNGS leased capacity that expired in January 2023 and January 2024. While PNM continues to experience new system peaks, PNM’s generation resources performed sufficiently with no challenges to resource adequacy during the 2023 summer peak season. While some of the replacement resources have come online, other replacement resources have experienced additional developer delays and PNM has entered into additional firm energy market purchases necessary to meet customer load during the 2024 summer season. See Note 7.

2026 Resource Application

On October 25, 2023, PNM filed an application with the NMPRC seeking approval of resources to be available for the 2026 summer peak. The application includes approval of a 100 MW solar PPA and three battery storage agreements of 100 MW, 100 MW, and 50 MW. In addition, PNM is seeking approval of a CCN for a 60 MW battery storage system to be owned by PNM. The resources are necessary for PNM to safely and reliably meet its projected system load. A hearing was held on March 20 and 21, 2024. PNM is unable to predict the outcome of this matter.

Grid Modernization Application

On October 3, 2022, in compliance with New Mexico Grid Modernization Statute, PNM filed its Grid Modernization Application with the NMPRC. The projects included in the Grid Modernization Application improve customers’ ability to customize their use of energy and ensure that customers, including low-income customers, are a top priority and will benefit consistent with the Grid Modernization Statute. PNM’s proposal to modernize its electricity grid through infrastructure and technology improvements also increases the efficiency, reliability, resilience, and security of PNM’s electric system. PNM’s application seeks approval of grid modernization investments of approximately $344 million for the first six years of a broader 11-year strategy. The proposed Grid Modernization Rider would recover capital costs, operating expenses, and taxes associated with the investments included in the Grid Modernization Application. PNM also requested authorization to create related regulatory assets and liabilities, permitting PNM to record costs incurred for the development and implementation of PNM’s plan between the requested approval of the application on July 1, 2023, and the implementation of the Grid Modernization Rider by September 1, 2023; undepreciated investments associated with legacy meters being replaced with AMI meters; and over- or under-collection of costs through the Grid Modernization Rider. In addition, PNM requested approval of the proposed format of an Opt-Out Consent Form and methodology to determine PNM’s proposed cost-based opt-out fees, which includes a one-time fee and a monthly fee. Following a hearing and subsequent briefs, on May 31, 2023, the NMPRC issued an order requiring the hearing examiner to direct PNM to file a cost benefit analysis as a supplement to the application. On November 22, 2023, PNM filed the required cost benefit analysis supporting PNM’s proposed Grid Modernization plan. A hearing began on April 23, 2024. PNM is unable to predict the outcome of this matter.

The Community Solar Act

In 2021, the Community Solar Act established a program that allows for the development of community solar facilities and provides customers of a qualifying utility with the option of subscribing to community solar facilities, and in exchange would receive a bill credit from their utility, while the utility received energy from the community solar facility. The NMPRC is charged with administering the Community Solar Act program, establishing a total maximum capacity of 200 MW community solar (applicable until November 2024) facilities and allocating proportionally to the New Mexico electric investor-owned utilities and participating cooperatives. On March 30, 2022, the NMPRC issued an order that adopted a rule on the administration of the Community Solar Act program. The rule required utilities to file proposed community solar tariffs with the NMPRC within 60 days from the publication of the rule. A number of motions for rehearing and requests for clarification were filed between April 7 and May 2, 2022. On May 18, 2022, the NMPRC issued an order partially granting motions for rehearing, reconsideration and clarification and staying implementation pending further rulemaking. On June 16, 2022, PNM requested clarification related to the existing interconnection queue, which would not delay implementation of the Community Solar Act program. On July 12, 2022, the NMPRC provided notice of publication of its final rule in the New Mexico Register, starting the 60-day clock for utilities to file their proposed community solar tariffs, forms, and other relevant agreements. On September 14, 2022, PNM filed Community Solar tariffs. On October 12, 2022, the NMPRC issued an order to suspend PNM’s and two other investor-owned utilities tariffs and required the utilities to file information NMPRC Staff has identified as necessary for a complete evaluation of the tariffs but did not appoint a hearing examiner or schedule a public hearing. Another investor-owned utility has filed an appeal with the NM Supreme Court seeking review of the NMPRC’s decisions, to which

PNM has intervened. The NM Supreme Court held oral arguments on March 11, 2024 and issued an order upholding the Community Solar Rule and affirming without further delay the implementation of the Community Solar Act program.

On November 16, 2022, PNM filed its Community Solar tariff which establishes the Community Solar bill credit to be applied to an eligible retail customer of PNM who is a subscriber to a community solar facility. On December 23, 2022, PNM filed an updated Community Solar tariff under protest and filed a motion for clarification, suspension, and timely hearing on PNM’s Community Solar tariff. On January 18, 2023, the NMPRC suspended PNM’s Community Solar tariff. On March 1, 2023, the NMPRC issued an Order Opening a New Docket for Two-Phase Proceedings. The first phase addressed issues concerning the proposed subscriber organization agreements and the proposed customer data forms. The second phase will address all issues concerning proposed tariffs, agreements and forms that are not addressed in the first phase. On May 31, 2023, the utilities filed a Consolidated Reply Brief to the NMPRC and the Joint Intervenors-Appellee filed Answer Briefs in the NM Supreme Court proceeding. On September 21, 2023, the NMPRC issued an order approving an uncontested stipulation on the first phase and on October 30, 2023, PNM’s advice notice conforming to the stipulation became effective. A hearing for the second phase was held from January 17 through January 19, 2024. PNM cannot predict the outcome of the pending matters.

Transportation and Electrification Program (TEP)

On June 1, 2023, PNM filed its 2024-2026 TEP with the NMPRC, requesting approval of a $37.1 million total three-year budget and continuation of the current TEP Rider. Approximately 22% of the budget, $8.0 million, will be dedicated to low-income customers. A hearing was held on December 13, 2023. On February 2, 2024, the hearing examiners in the case issued a RD largely approving PNM’s 2024 Plan but with modifications to certain TEP programs. On February 23, 2024, the NMPRC approved the RD with additional modifications that reduced the three-year budget by $4.0 million, for a total revised budget of $32.9 million.

TNMP

Transmission Cost of Service Rates

TNMP can update its TCOS rates twice per year to reflect changes in its invested capital although updates are not allowed while a general rate case is in process. Updated rates reflect the addition and retirement of transmission facilities, including appropriate depreciation, federal income tax and other associated taxes, and the approved rate of return on such facilities. The following sets forth TNMP’s recent interim transmission cost rate increases:

Effective Date	Approved Increase in Rate Base		Annual Increase in Revenue
	(In millions)
May 12, 2023	$	150.5	$	19.4
September 6, 2023	21.4		4.2
March 15, 2024	97.4		13.1

Periodic Distribution Rate Adjustment

PUCT rules permit interim rate adjustments to reflect changes in investments in distribution assets. Historically, distribution utilities have been restricted to a single, annual periodic rate adjustment through a DCRF submitted between April 1 and April 8 of each year as long as the electric utility was not earning more than its authorized rate of return using weather-normalized data. However, the recent passage of Senate Bill 1015 now permits DCRF proceedings to be filed twice per year with a 60-day administrative deadline that can be extended for 15 days on good cause. Additionally, a DCRF may be filed during a pending rate case proceeding as long as that DCRF request is not filed until the 185th day after the rate case proceeding was initiated. The following sets forth TNMP’s recent interim distribution rate increases:

Effective Date	Approved Increase in Rate Base		Annual Increase in Revenue
	(In millions)
September 1, 2022	$	95.7	$	6.8
September 1, 2023	157.0		14.5

On April 1, 2024, TNMP filed its 2024 DCRF that requested an increase in TNMP annual distribution revenue requirement of $15.9 million based on an increase in rate base of $207.4 million. The case is pending review by the PUCT.

Energy Efficiency

TNMP recovers the costs of its energy efficiency programs through an energy efficiency cost recovery factor (“EECRF”), which includes projected program costs, under and over collected costs from prior years, rate case expenses, and performance bonuses (if programs exceed mandated savings goals). TNMP’s 2022 EECRF filing requested recovery of $7.3 million, including a performance bonus of $1.9 million, and became effective March 1, 2023. On May 26, 2023, TNMP filed its request to adjust the EECRF to reflect changes in costs for 2024. On September 28, 2023, the PUCT approved a unanimous stipulation, authorizing recovery of $6.6 million, including a performance bonus of $1.2 million based on TNMP’s energy efficiency achievements in the 2022 plan year.

XML

Lease Commitments

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Lease Commitments

Lease Commitments

The Company leases office buildings, vehicles, battery storage facilities, and other equipment. In addition certain rights-of-way agreements are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the balance sheet by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Condensed Consolidated Statements of Earnings. See additional discussion of the Company’s leasing activities in Note 8 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PVNGS

In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2.

On April 5, 2021, PNM and SRP entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to SRP certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $33.7 million, of which $28.4 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and is presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $5.3 million was recorded as a reduction to materials, supplies, and fuel stock on the Condensed Consolidated Balance Sheets and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and is presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Condensed Consolidated Balance Sheets and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows.

Land Easements and Rights-of-Ways

Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2023 payment for the amount due under the Navajo Nation right-of-way lease was $8.3 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019 are considered variable lease payments.

PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Condensed

Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Condensed Consolidated Statement of Earnings over their term. As of March 31, 2024 and December 31, 2023, the unamortized balance of these rights-of-ways was $71.3 million and $56.2 million. PNM recognized amortization expense associated with these agreements of $1.1 million and $0.9 million in the three months ended March 31, 2024 and 2023.

Fleet Vehicles and Equipment

Fleet vehicle and equipment leases commencing on or after January 1, 2019 are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018 are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At March 31, 2024, residual value guarantees on fleet vehicle and equipment leases are $0.8 million, $1.0 million, and $1.8 million for PNM, TNMP, and PNMR Consolidated.

Battery Storage Agreements

The Company has entered into various battery storage agreements for 20-year terms and have fixed payments over the life of the agreements. The Company accounts for these agreements as operating leases and records the initial lease liabilities with corresponding right-of-use assets. In addition, the Company has elected to separate lease components from non-lease components for battery storage agreements and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components, currently not included in the measurement of the lease liability or the corresponding right-of-use asset, comprise of 25.5% of the value of the agreements.

Information related to the Company’s operating leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating leases:
Operating lease assets, net of amortization	$	177,865	$	1,615	$	179,480	$	180,370	$	1,814	$	182,201
Current portion of operating lease liabilities	10,925		887		11,811		11,371		895		12,267
Long-term portion of operating lease liabilities	165,199		643		165,842		166,191		809		167,000

As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019 as financing leases. Information related to the Company’s financing leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Financing leases:
Non-utility property	$	23,262	$	25,400	$	48,826	$	25,425	$	24,487	$	49,981
Accumulated depreciation	(10,975)		(13,058)		(24,095)		(11,984)		(11,869)		(23,905)
Non-utility property, net	12,287		12,342		24,731		13,441		12,618		26,076
Other current liabilities	$	3,836	$	4,604	$	8,473	$	4,146	$	4,616	$	8,776
Other deferred credits	8,469		7,760		16,299		9,300		8,023		17,326

Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities as of March 31, 2024 is presented below:

	PNM		TNMP		PNMR Consolidated
Weighted average remaining lease term (years):
Operating leases	16.59		1.57		16.46
Financing leases	3.67		3.02		3.35
Weighted average discount rate:
Operating leases	5.61	%	4.22	%	5.60	%
Financing leases	4.65	%	4.80	%	4.72	%

Information for the components of lease expense is as follows:

	Three Months Ended March 31, 2024
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:
Battery storage leases	$	2,947	$	—	$	2,947
Other operating leases	2,059		270		2,329
Amounts capitalized	(35)		(232)		(267)
Total operating lease expense	4,971		38		5,009
Financing lease cost:
Amortization of right-of-use assets	1,218		1,316		2,542
Interest on lease liabilities	144		152		297
Amounts capitalized	(841)		(1,182)		(2,023)
Total financing lease expense	521		286		816
Variable lease expense	360		—		360
Short-term lease expense	204		6		216
Total lease expense for the period	$	6,056	$	330	$	6,401

	Three Months Ended March 31, 2023
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:	$	3,908	$	429	$	4,337
Amounts capitalized	(160)		(353)		(513)
Total operating lease expense	3,748		76		3,824
Financing lease cost:
Amortization of right-of-use assets	1,008		1,064		2,093
Interest on lease liabilities	122		111		234
Amounts capitalized	(690)		(1,000)		(1,690)
Total financing lease expense	440		175		637
Variable lease expense	262		—		262
Short-term lease expense	147		—		151
Total lease expense for the period	$	4,597	$	251	$	4,874

Supplemental cash flow information related to the Company’s leases is as follows:

	Three Months Ended						Three Months Ended
	March 31, 2024						March 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,826	$	14	$	3,840	$	9,193	$	126	$	9,319
Operating cash flows from financing leases	44		29		74		42		14		55
Finance cash flows from financing leases	464		256		728		377		161		560
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27	$	63	$	90	$	—	$	—	$	—
Financing leases	263		1,040		1,398		2,730		1,347		4,077

Capitalized lease costs are reflected as investing activities on the Company’s Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023.

Future expected lease payments are shown below:

	As of March 31, 2024
	PNM						TNMP				PNMR Consolidated
			Operating										Operating
	Financing		Battery Storage		Other		Financing		Operating		Financing		Battery Storage		Other
	(In thousands)
Remainder of 2024	$	3,333	$	8,840	$	7,117	$	3,909	$	708	$	7,271	$	8,840	$	7,825
2025	3,636		11,786		7,082		4,262		785		7,926		11,786		7,867
2026	3,117		11,786		7,031		3,038		90		6,181		11,786		7,121
2027	1,885		11,786		7,035		1,615		14		3,526		11,786		7,049
2028	856		11,786		7,038		383		11		1,241		11,786		7,049
Later years	614		172,254		10,587		93		—		707		172,254		10,587
Total minimum lease payments	13,441		228,238		45,890		13,300		1,608		26,852		228,238		47,498
Less: Imputed interest	1,136		92,547		5,457		936		78		2,080		92,547		5,536
Lease liabilities	$	12,305	$	135,691	$	40,433	$	12,364	$	1,530	$	24,772	$	135,691	$	41,962

The above table includes $11.9 million, $12.0 million, and $23.8 million for PNM, TNMP, and PNMR at March 31, 2024 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties.

At March 31, 2024, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to battery storage agreements. The Company currently expects lease commencement dates in 2024, with lease terms expiring in 2045, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $1.1 billion over the 20-year terms of the agreements.

Lease Commitments

Lease Commitments

The Company leases office buildings, vehicles, battery storage facilities, and other equipment. In addition certain rights-of-way agreements are classified as leases. All of the Company’s leases with terms in excess of one year are recorded on the balance sheet by recording a present value lease liability and a corresponding right-of-use asset. Operating lease expense is recognized within operating expenses according to the use of the asset on a straight-line basis. Financing lease costs, which are comprised primarily of fleet and office equipment leases commencing after January 1, 2019, are recognized by amortizing the right-of-use asset on a straight-line basis and by recording interest expense on the lease liability. Financing lease right-of-use assets amortization is reflected in depreciation and amortization and interest on financing lease liabilities is reflected as interest charges on the Company’s Condensed Consolidated Statements of Earnings. See additional discussion of the Company’s leasing activities in Note 8 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

PVNGS

In 1985 and 1986, PNM entered into leases for its interest in PVNGS Unit 1 and 2. The leases initially were scheduled to expire in January 2015 for four Unit 1 leases and January 2016 for four Unit 2 leases. Following procedures set forth in the PVNGS leases, PNM notified four of the lessors under the Unit 1 leases and one lessor under the Unit 2 lease that it would elect to renew those leases on the expiration date of the original leases. The four Unit 1 leases expired in January 2023 and the one Unit 2 lease expired in January 2024. PNM has no further lease payments related to PVNGS Unit 1 or 2.

On April 5, 2021, PNM and SRP entered into an Asset Purchase and Sale Agreement, pursuant to which PNM agreed to sell to SRP certain PNM-owned assets and nuclear fuel necessary to the ongoing operation and maintenance of leased capacity in PVNGS Unit 1 and Unit 2. In January 2023, the Unit 1 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $33.7 million, of which $28.4 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and is presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $5.3 million was recorded as a reduction to materials, supplies, and fuel stock on the Condensed Consolidated Balance Sheets and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows. In January 2024, the Unit 2 leases expired, and PNM closed on the associated sale to SRP, receiving payments of $3.4 million, of which $2.8 million was recorded as a reduction to Net utility plant on the Condensed Consolidated Balance Sheets and is presented as cash flows from investing activities on the Condensed Consolidated Statement of Cash Flows. In addition, $0.6 million was recorded as a reduction to Materials, supplies and fuel stock on the Condensed Consolidated Balance Sheets and is presented as cash flows from operating activities on the Condensed Consolidated Statement of Cash Flows.

Land Easements and Rights-of-Ways

Many of PNM’s electric transmission and distribution facilities are located on lands that require the grant of rights-of-way from governmental entities, Native American tribes, or private parties. PNM has completed several renewals of rights-of-way, the largest of which is a renewal with the Navajo Nation. PNM is obligated to pay the Navajo Nation annual payments of $6.0 million, subject to adjustment each year based on the Consumer Price Index, through 2029. PNM’s April 2023 payment for the amount due under the Navajo Nation right-of-way lease was $8.3 million, which included amounts due under the Consumer Price Index adjustment. Changes in the Consumer Price Index subsequent to January 1, 2019 are considered variable lease payments.

PNM has other prepaid rights-of-way agreements that are not accounted for as leases or recognized as a component of plant in service. PNM reflects the unamortized balance of these prepayments in other deferred charges on the Condensed

Consolidated Balance Sheets and recognizes amortization expense associated with these agreements in the Condensed Consolidated Statement of Earnings over their term. As of March 31, 2024 and December 31, 2023, the unamortized balance of these rights-of-ways was $71.3 million and $56.2 million. PNM recognized amortization expense associated with these agreements of $1.1 million and $0.9 million in the three months ended March 31, 2024 and 2023.

Fleet Vehicles and Equipment

Fleet vehicle and equipment leases commencing on or after January 1, 2019 are classified as financing leases. Fleet vehicle and equipment leases existing as of December 31, 2018 are classified as operating leases. The Company’s fleet vehicle and equipment lease agreements include non-lease components for insignificant administrative and other costs that are billed over the life of the agreement. At March 31, 2024, residual value guarantees on fleet vehicle and equipment leases are $0.8 million, $1.0 million, and $1.8 million for PNM, TNMP, and PNMR Consolidated.

Battery Storage Agreements

The Company has entered into various battery storage agreements for 20-year terms and have fixed payments over the life of the agreements. The Company accounts for these agreements as operating leases and records the initial lease liabilities with corresponding right-of-use assets. In addition, the Company has elected to separate lease components from non-lease components for battery storage agreements and accordingly, does not include non-lease components in the measurement of the lease liability or right-of-use asset. The non-lease components, currently not included in the measurement of the lease liability or the corresponding right-of-use asset, comprise of 25.5% of the value of the agreements.

Information related to the Company’s operating leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating leases:
Operating lease assets, net of amortization	$	177,865	$	1,615	$	179,480	$	180,370	$	1,814	$	182,201
Current portion of operating lease liabilities	10,925		887		11,811		11,371		895		12,267
Long-term portion of operating lease liabilities	165,199		643		165,842		166,191		809		167,000

As discussed above, the Company classifies its fleet vehicle and equipment leases and its office equipment leases commencing on or after January 1, 2019 as financing leases. Information related to the Company’s financing leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Financing leases:
Non-utility property	$	23,262	$	25,400	$	48,826	$	25,425	$	24,487	$	49,981
Accumulated depreciation	(10,975)		(13,058)		(24,095)		(11,984)		(11,869)		(23,905)
Non-utility property, net	12,287		12,342		24,731		13,441		12,618		26,076
Other current liabilities	$	3,836	$	4,604	$	8,473	$	4,146	$	4,616	$	8,776
Other deferred credits	8,469		7,760		16,299		9,300		8,023		17,326

Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities as of March 31, 2024 is presented below:

	PNM		TNMP		PNMR Consolidated
Weighted average remaining lease term (years):
Operating leases	16.59		1.57		16.46
Financing leases	3.67		3.02		3.35
Weighted average discount rate:
Operating leases	5.61	%	4.22	%	5.60	%
Financing leases	4.65	%	4.80	%	4.72	%

Information for the components of lease expense is as follows:

	Three Months Ended March 31, 2024
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:
Battery storage leases	$	2,947	$	—	$	2,947
Other operating leases	2,059		270		2,329
Amounts capitalized	(35)		(232)		(267)
Total operating lease expense	4,971		38		5,009
Financing lease cost:
Amortization of right-of-use assets	1,218		1,316		2,542
Interest on lease liabilities	144		152		297
Amounts capitalized	(841)		(1,182)		(2,023)
Total financing lease expense	521		286		816
Variable lease expense	360		—		360
Short-term lease expense	204		6		216
Total lease expense for the period	$	6,056	$	330	$	6,401

	Three Months Ended March 31, 2023
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:	$	3,908	$	429	$	4,337
Amounts capitalized	(160)		(353)		(513)
Total operating lease expense	3,748		76		3,824
Financing lease cost:
Amortization of right-of-use assets	1,008		1,064		2,093
Interest on lease liabilities	122		111		234
Amounts capitalized	(690)		(1,000)		(1,690)
Total financing lease expense	440		175		637
Variable lease expense	262		—		262
Short-term lease expense	147		—		151
Total lease expense for the period	$	4,597	$	251	$	4,874

Supplemental cash flow information related to the Company’s leases is as follows:

	Three Months Ended						Three Months Ended
	March 31, 2024						March 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,826	$	14	$	3,840	$	9,193	$	126	$	9,319
Operating cash flows from financing leases	44		29		74		42		14		55
Finance cash flows from financing leases	464		256		728		377		161		560
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27	$	63	$	90	$	—	$	—	$	—
Financing leases	263		1,040		1,398		2,730		1,347		4,077

Capitalized lease costs are reflected as investing activities on the Company’s Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023.

Future expected lease payments are shown below:

	As of March 31, 2024
	PNM						TNMP				PNMR Consolidated
			Operating										Operating
	Financing		Battery Storage		Other		Financing		Operating		Financing		Battery Storage		Other
	(In thousands)
Remainder of 2024	$	3,333	$	8,840	$	7,117	$	3,909	$	708	$	7,271	$	8,840	$	7,825
2025	3,636		11,786		7,082		4,262		785		7,926		11,786		7,867
2026	3,117		11,786		7,031		3,038		90		6,181		11,786		7,121
2027	1,885		11,786		7,035		1,615		14		3,526		11,786		7,049
2028	856		11,786		7,038		383		11		1,241		11,786		7,049
Later years	614		172,254		10,587		93		—		707		172,254		10,587
Total minimum lease payments	13,441		228,238		45,890		13,300		1,608		26,852		228,238		47,498
Less: Imputed interest	1,136		92,547		5,457		936		78		2,080		92,547		5,536
Lease liabilities	$	12,305	$	135,691	$	40,433	$	12,364	$	1,530	$	24,772	$	135,691	$	41,962

The above table includes $11.9 million, $12.0 million, and $23.8 million for PNM, TNMP, and PNMR at March 31, 2024 for expected future payments on fleet vehicle and equipment leases that could be avoided if the leased assets were returned and the lessor is able to recover estimated market value for the equipment from third parties.

At March 31, 2024, the Company has various lease arrangements that have been executed but have not yet commenced, which are primarily related to battery storage agreements. The Company currently expects lease commencement dates in 2024, with lease terms expiring in 2045, and will recognize lease assets and liabilities upon lease commencement. The expected total fixed consideration to be paid for these arrangements, which includes non-lease payments, is approximately $1.1 billion over the 20-year terms of the agreements.

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Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company makes an estimate of its anticipated effective tax rate for the year as of the end of each quarterly period within its fiscal year. In interim periods, income tax expense is calculated by applying the anticipated annual effective tax rate to year-to-date earnings before income taxes. Certain unusual or infrequently occurring items are excluded from the estimated annual rate calculation. Such items include regulatory disallowances and excess tax benefits or deficiencies related to stock

awards. At March 31, 2024, PNMR, PNM, and TNMP estimated their effective income tax rates for the year ended December 31, 2024 would be 14.64%, 13.09%, and 20.72%. The primary difference between the statutory income tax rates and the effective tax rates is the effect of the reduction in income tax expense resulting from the amortization of excess deferred federal income taxes.

During the three months ended March 31, 2024, income tax expense calculated by applying the expected annual effective income tax rate to earnings before income taxes was further increased by excess tax benefits related to stock awards of $0.2 million for PNMR, of which $0.1 million was allocated to PNM and $0.1 million was allocated to TNMP.

Beginning February 2018, PNM’s NM 2016 Rate Case reflected the reduction in the federal corporate income tax rate resulting from enactment of legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), including amortization of excess deferred federal income taxes. In accordance with the order in that case, PNM is returning the protected portion of excess deferred federal income taxes to customers over the average remaining life of plant in service as of December 31, 2017, and had been returning the unprotected portion of excess deferred federal income taxes to customers over a period of approximately twenty-three years. Pursuant to the final order in the PNM 2024 Rate Change, the remaining balance of $62.7 million of unprotected excess deferred income taxes is being returned over a five-year period. The approved settlement in the TNMP 2018 Rate Case includes a reduction in customer rates to reflect the impacts of the Tax Act beginning on January 1, 2019. PNMR, PNM, and TNMP will amortize federal excess deferred income taxes of $23.3 million, $20.7 million, and $2.6 million in 2024. See additional discussion of the impacts of the Tax Act in Note 18 of the Notes to Consolidated Financial Statements in the 2023 Annual Reports on Form 10-K.

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Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

PNMR, PNM, TNMP, and NMRD are considered related parties, as is PNMR Services Company, a wholly-owned subsidiary of PNMR that provides corporate services to PNMR and its subsidiaries in accordance with shared services agreements. These services are billed at cost on a monthly basis to the business units. In addition, PNM purchases renewable energy from certain NMRD-owned facilities at a fixed price per MWh of energy produced. On February 27, 2024, PNMR Development and AEP Onsite Partners sold their respective interests in NMRD and the table below reflects transactions with NMRD prior to the sale. See Note 16 for additional discussion of NMRD. The table below summarizes the nature and amount of related party transactions of PNMR, PNM, TNMP, and NMRD:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Services billings:
PNMR to PNM	$	35,407	$	31,539
PNMR to TNMP	14,237		12,413
PNM to TNMP	81		65
TNMP to PNMR	10		35
PNMR to NMRD	66		82
Renewable energy purchases:
PNM from NMRD	1,523		2,361
Interest billings:
PNMR to PNM	14		3
PNM to PNMR	155		130
PNMR to TNMP	14		11
Income tax sharing payments:
PNMR to PNM	—		—
TNMP to PNMR	—		—

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Equity Method Investment

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment

Equity Method Investment

As discussed in Note 21 of the Company’s 2023 Annual Reports on Form 10-K, PNMR Development and AEP OnSite Partners created NMRD in September 2017 to pursue the acquisition, development, and ownership of renewable energy generation projects, primarily in the state of New Mexico. On February 27, 2024, PNMR Development and AEP Onsite Partners sold their respective interests in NMRD. PNMR Development received net proceeds of $117.0 million and recognized an after-tax gain of $4.4 million, which includes the recognition of deferred investment tax credits of $15.7 million.

In the three months ended March 31, 2024 and 2023, PNMR Development and AEP OnSite Partners each made cash contributions to NMRD of $12.6 million and $11.5 million for its construction activities.

Until the sale closing on February 27, 2024, PNMR presented its share of net earnings from NMRD in Other income on the Condensed Consolidated Statements of Earnings. Summarized financial information for NMRD through the closing date of the sale is as follows:

	Results of Operations
	Three Months Ended March 31,
	2024		2023
	(In thousands)
Operating revenues	$	3,204	$	2,531
Operating expenses	3,378		2,434
Net earnings (loss)	$	(174)	$	97

	Financial Position
	March 31,		December 31,
	2024		2023
	(In thousands)
Current assets	$	—	$	2,589
Net property, plant, and equipment	—		235,791
Non-current assets	—		1,849
Total assets	—		240,229
Current liabilities	—		730
Non-current liabilities	—		358
Owners’ equity	$	—	$	239,141

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Significant Accounting Policies and Responsibility for Financial Statements (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The Condensed Consolidated Financial Statements of each of PNMR, PNM, and TNMP include their accounts and those of subsidiaries in which that entity owns a majority voting interest. PNM also consolidates Valencia and ETBC I. See Note 6. PNM owns undivided interests in several jointly-owned power plants and records its pro-rata share of the assets, liabilities, and expenses for those plants. The agreements for the jointly-owned plants provide that if an owner were to default on its payment obligations, the non-defaulting owners would be responsible for their proportionate share of the obligations of the defaulting owner. In exchange, the non-defaulting owners would be entitled to their proportionate share of the generating capacity of the defaulting owner. There have been no such payment defaults under any of the agreements for the jointly-owned plants.

PNMR Services Company expenses, which represent costs that are primarily driven by corporate level activities, are charged to the business segments. These services are billed at cost and are reflected as general and administrative expenses in the business segments. Other significant intercompany transactions between PNMR, PNM, and TNMP include interest and income tax sharing payments, as well as equity transactions, and interconnection billings. See Note 15. All intercompany transactions and balances have been eliminated.

New Accounting Pronouncements

New Accounting Pronouncements

Information concerning recently issued accounting pronouncements that have not yet been adopted by the Company is presented below. The Company does not expect difficulty in adopting these standards by their required effective dates.

Accounting Standards Update 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 enhancing disclosures about significant segment expenses. Disclosure requirements of this update include disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”); an amount for other segment items by reportable segment and a description of its composition; the title and position of the CODM and an explanation of how the CODM uses the reported measures in assessing segment performance and deciding how to allocate resources; and that a single reportable segment provides all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendment also clarifies that in addition to the measure most consistent with the measurement principles under GAAP, reporting of additional measures of a segment’s profit or loss used by the CODM in assessing segment performance and determining allocation of resources is allowed. ASU 2023-07 is effective for the Company beginning January 1, 2024 and interim periods beginning January 1, 2025 with early adoption being permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements.

Accounting Standards Update 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 enhancing the transparency and decision usefulness of income tax disclosures. Disclosure requirements of this update include (on an annual basis) the disclosure of specific categories in the rate reconciliation and the inclusion of additional information for reconciling items that meet a quantitative threshold (if the effect of the reconciling item is equal to or greater than 5 percent of the amount computed by multiplying pre-tax income by the applicable statutory rate). The amendment also requires the disclosure (on an annual basis) of information about income taxes paid (net of refunds) including, the disaggregation by federal, state, and foreign taxes as well as by individual jurisdiction. Additional requirements include the disclosure of income (loss) from continuing operations before income tax expense (benefit) disaggregated between foreign and domestic as well as income tax expense (benefit) from continuing operations disaggregated by federal, state, and foreign. ASU 2023-09 is effective for the Company beginning January 1, 2025 with early adoption being permitted. ASU 2023-09 is to be applied on a prospective basis with retrospective application permitted.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Summary of Financial Information by Segment

The following tables present summarized financial information for PNMR by segment. PNM and TNMP each operate in only one segment. Therefore, tabular segment information is not presented for PNM and TNMP.

PNMR SEGMENT INFORMATION

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2024
Electric operating revenues	$	308,115	$	128,762	$	—	$	436,877
Cost of energy	97,412		34,892		—		132,304
Utility margin	210,703		93,870		—		304,573
Other operating expenses	106,466		32,750		(8,420)		130,796
Depreciation and amortization	53,287		30,382		9,518		93,187
Operating income (loss)	50,950		30,738		(1,098)		80,590
Interest income (expense)	4,527		169		(116)		4,580
Other income (deductions)	20,546		876		(15,035)		6,387
Interest charges	(25,116)		(13,336)		(15,310)		(53,762)
Segment earnings (loss) before income taxes	50,907		18,447		(31,559)		37,795
Income taxes (benefit)	5,811		3,864		(22,246)		(12,571)
Segment earnings (loss)	45,096		14,583		(9,313)		50,366
Valencia non-controlling interest	(3,044)		—		—		(3,044)
Subsidiary preferred stock dividends	(132)		—		—		(132)
Segment earnings (loss) attributable to PNMR	$	41,920	$	14,583	$	(9,313)	$	47,190
At March 31, 2024:
Total Assets	$	6,878,575	$	3,204,936	$	174,142	$	10,257,653
Goodwill	$	51,632	$	226,665	$	—	$	278,297

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2023
Electric operating revenues	$	430,165	$	113,912	$	—	$	544,077
Cost of energy	209,853		31,833		—		241,686
Utility margin	220,312		82,079		—		302,391
Other operating expenses	98,722		32,852		(6,348)		125,226
Depreciation and amortization	43,686		27,440		6,948		78,074
Operating income (loss)	77,904		21,787		(600)		99,091
Interest income (expense)	4,849		114		(120)		4,843
Other income (deductions)	7,033		136		(127)		7,042
Interest charges	(18,122)		(10,425)		(12,376)		(40,923)
Segment earnings (loss) before income taxes	71,664		11,612		(13,223)		70,053
Income taxes (benefit)	11,829		1,579		(3,628)		9,780
Segment earnings (loss)	59,835		10,033		(9,595)		60,273
Valencia non-controlling interest	(5,127)		—		—		(5,127)
Subsidiary preferred stock dividends	(132)		—		—		(132)
Segment earnings (loss) attributable to PNMR	$	54,576	$	10,033	$	(9,595)	$	55,014
At March 31, 2023:
Total Assets	$	6,306,396	$	2,803,168	$	243,572	$	9,353,136
Goodwill	$	51,632	$	226,665	$	—	$	278,297

Public Utilities General Disclosures

PNM and TNMP do not intend for utility margin to represent any financial measure as defined by GAAP however, the calculation of utility margin, as presented, most closely compares to gross margin as defined by GAAP. Reconciliations between utility margin and gross margin are presented below.

	PNM		TNMP		Corporate and Other		PNMR Consolidated
	(In thousands)
Three Months Ended March 31, 2024
Gross margin	$	120,854	$	55,074	$	—	$	175,928
Energy production costs	22,212		—		—		22,212
Transmission and distribution costs	14,350		8,414		—		22,764
Depreciation and amortization	53,287		30,382		—		83,669		1
Utility margin	$	210,703	$	93,870	$	—	$	304,573

Three Months Ended March 31, 2023
Gross margin	$	140,381	$	46,330	$	—	$	186,711
Energy production costs	22,358		—		—		22,358
Transmission and distribution costs	13,887		8,309		—		22,196
Depreciation and amortization	43,686		27,440		—		71,126		1
Utility margin	$	220,312	$	82,079	$	—	$	302,391

1 Corporate and Other depreciation and amortization represents corporate level activities that are billed at cost and reflected as general and administrative expenses at PNM and TNMP and therefore are not a component of gross margin or utility margin. See Note 1.

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Information regarding accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 is as follows:

	Accumulated Other Comprehensive Income (Loss)
	PNM						Corporate and Other		PNMR Consolidated
	Unrealized Gains on Available-for-Sale Debt Securities		Pension Liability Adjustment				Fair Value Adjustment for Cash Flow Hedges
					Total				Total
	(In thousands)
Balance at December 31, 2023	$	10,652	$	(77,157)	$	(66,505)	$	3,665	$	(62,840)
Amounts reclassified from AOCI (pre-tax)	(10,910)		1,216		(9,694)		2,745		(6,949)
Income tax impact of amounts reclassified	2,771		(309)		2,462		(697)		1,765
Other OCI changes (pre-tax)	491		—		491		67		558
Income tax impact of other OCI changes	(125)		—		(125)		(17)		(142)
Net after-tax change	(7,773)		907		(6,866)		2,098		(4,768)
Balance at March 31, 2024	$	2,879	$	(76,250)	$	(73,371)	$	5,763	$	(67,608)

Balance at December 31, 2022	$	7,422	$	(81,757)	$	(74,335)	$	8,287	$	(66,048)
Amounts reclassified from AOCI (pre-tax)	(702)		1,194		492		(2,224)		(1,732)
Income tax impact of amounts reclassified	178		(303)		(125)		565		440
Other OCI changes (pre-tax)	4,170		—		4,170		(168)		4,002
Income tax impact of other OCI changes	(1,059)		—		(1,059)		43		(1,016)
Net after-tax change	2,587		891		3,478		(1,784)		1,694
Balance at March 31, 2023	$	10,009	$	(80,866)	$	(70,857)	$	6,503	$	(64,354)

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Computation of Earnings Per Share

Information regarding the computation of earnings per share is as follows:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands, except per share amounts)
Net Earnings Attributable to PNMR	$	47,190	$	55,014
Average Number of Common Shares:
Outstanding during period	90,200		85,835
Vested awards of restricted stock	283		266
Average Shares – Basic	90,483		86,101
Dilutive Effect of Common Stock Equivalents:
Restricted stock	31		37
2023 Forward Sale Agreements	—		3
Average Shares – Diluted	90,514		86,141
Net Earnings Per Share of Common Stock:
Basic	$	0.52	$	0.64
Diluted	$	0.52	$	0.64

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Electric Operating Revenues (Tables)

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

A disaggregation of revenues from contracts with customers by the type of customer is presented in the table below.

	PNM		TNMP		PNMR Consolidated
Three Months Ended March 31, 2024	(In thousands)
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	120,385	$	41,495	$	161,880
Commercial	99,338		35,544		134,882
Industrial	24,769		9,856		34,625
Public authority	4,398		1,717		6,115
Economy energy service	7,563		—		7,563
Transmission	36,149		35,809		71,958
Wholesale energy sales (1)	11,690		—		11,690
Miscellaneous	1,422		954		2,376
Total revenues from contracts with customers	305,714		125,375		431,089
Alternative revenue programs	1,906		3,387		5,293
Other electric operating revenues	495		—		495
Total Electric Operating Revenues	$	308,115	$	128,762	$	436,877

Three Months Ended March 31, 2023
Electric Operating Revenues:
Contracts with customers:
Retail electric revenue
Residential	$	119,885	$	36,366	$	156,251
Commercial	98,062		34,730		132,792
Industrial	19,478		12,765		32,243
Public authority	4,417		1,619		6,036
Economy energy service	9,309		—		9,309
Transmission	49,007		30,058		79,065
Wholesale energy sales (1)	112,986		—		112,986
Miscellaneous	1,410		940		2,350
Total revenues from contracts with customers	414,554		116,478		531,032
Alternative revenue programs	7,325		(2,566)		4,759
Other electric operating revenues	8,286		—		8,286
Total Electric Operating Revenues	$	430,165	$	113,912	$	544,077

(1) Includes sales for resale activity resulting from PNM’s participation in the EIM.

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2024

Variable Interest Entities [Abstract]

Summarized Financial Information

Summarized financial information for Valencia is as follows:

	Results of Operations
	Three Months Ended March 31,
	2024		2023
	(In thousands)
Operating revenues	$	5,189	$	6,604
Operating expenses	2,145		1,477
Earnings attributable to non-controlling interest	$	3,044	$	5,127

	Financial Position
	March 31,		December 31,
	2024		2023
	(In thousands)
Current assets	$	3,265	$	3,422
Net property, plant, and equipment	46,543		47,253
Total assets	49,808		50,675
Current liabilities	809		717
Owners’ equity – non-controlling interest	$	48,999	$	49,958

The following tables summarize the impact of ETBC I on PNM’s Financial Statements:

	Results of Operations
	Three Months Ended March 31, 2024
	(In thousands)
Operating Revenues	$	5,946
Depreciation and amortization	821
Interest charges	5,025
Other	100
Net Earnings	$	—

	Financial Position
	March 31, 2024		December 31, 2023
	(In thousands)
Regulatory Assets - Current	$	559	$	2,724
Restricted Cash (included in Other Current Assets)	7,175		—
Restricted Cash (included in Other Deferred Charges)	1,747		1,728
Securitized Cost (included in Deferred Regulatory Assets)	339,808		340,629
Current Installments of Long-Term Debt	5,935		2,529
Accrued Interest	7,505		2,502
Long-Term Debt	335,137		338,521

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Fair Value of Derivative and Other Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value of Derivative and Other Financial Instruments [Abstract]

Summary of Derivatives

PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Condensed Consolidated Balance Sheets:

	Economic Hedges
	March 31, 2024		December 31, 2023
	(In thousands)
Other current assets	$	835	$	826
Other current liabilities	—		—
Net	$	835	$	826

Schedule of Commodity Contract Volume Positions

Commodity contract volume positions are presented in MMBTU for gas related contracts and in MWh for power related contracts. The table below presents PNM’s net buy (sell) volume positions:

	Economic Hedges
	MMBTU	MWh
March 31, 2024	—	(15,360)
December 31, 2023	—	(15,360)

Schedule of Gross Realized Gains and Losses

Gains and losses recognized on the Condensed Consolidated Statements of Earnings related to investment securities in the NDT, SJGS decommissioning, and coal mine reclamation trusts are presented in the following table:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Equity securities:
Net gains (losses) from equity securities sold	$	9,871	$	(844)
Net gains (losses) from equity securities still held	(1,205)		7,477
Total net gains on equity securities	8,666		6,633
Available-for-sale debt securities:
Net gains (losses) on debt securities	9,332		(191)
Net gains on investment securities	$	17,998	$	6,442

Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $13.4 million and $2.0 million for the three months ended March 31, 2024 and 2023.

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Proceeds from sales	$	302,510	$	91,211
Gross realized gains	13,679		3,428
Gross realized (losses)	(7,912)		(6,471)

Investments Classified by Contractual Maturity Date

At March 31, 2024, the available-for-sale debt securities held by PNM, had the following final maturities:

	Fair Value
	(In thousands)
Within 1 year	$	34,176
After 1 year through 5 years	11,915
After 5 years through 10 years	8,634
After 10 years through 15 years	9,998
After 15 years through 20 years	5,626
After 20 years	3,953
	$	74,302

Schedule of Investments

Items recorded at fair value by PNM on the Condensed Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale debt securities:

			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unrealized Gains
	(In thousands)
March 31, 2024
Cash and cash equivalents	$	122,332	$	122,332	$	—
Equity securities:
Corporate stocks, common	81,045		81,045		—
Corporate stocks, preferred	—		—		—
Mutual funds and other	131,306		131,306		—
Uncategorized Collective Investment Trusts	39,179
Available-for-sale debt securities:
U.S. government	27,041		27,041		—		$	1,874
International government	—		—				—
Municipals	35,260		—		35,260		1,227
Corporate and other	12,001				12,001		795
	$	448,164	$	361,724	$	47,261	$	3,896
December 31, 2023
Cash and cash equivalents	$	93,873	$	93,873	$	—
Equity securities:
Corporate stocks, common	77,422		77,422		—
Corporate stocks, preferred	4,323		504		3,819
Mutual funds and other	57,966		57,966		—
Available-for-sale debt securities:
U.S. government	35,113		34,522		591		$	2,055
International government	8,735		—		8,735		104
Municipals	53,436		—		53,436		2,872
Corporate and other	113,540		—		113,540		9,285
	$	444,408	$	264,287	$	180,121	$	14,316

Schedule of Carrying Amount and Fair Value of Items Not Recorded at Fair Value

The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Condensed Consolidated Balance Sheets, are presented below:

	Carrying Amount		Fair Value
March 31, 2024	(In thousands)
PNMR	$	4,638,825	$	4,335,572
PNM	2,262,325		2,086,662
TNMP	1,377,255		1,248,910
December 31, 2023
PNMR	$	4,521,811	$	4,260,509
PNM	2,261,780		2,107,588
TNMP	1,260,880		1,152,922

Schedule Of Commodity Contract Contingent Consideration

PNM has contingent requirements to provide collateral under certain commodity contracts having an objectively determinable collateral provision, that are in net liability positions, and that are not fully collateralized with cash. Contractual liability represents those commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. Cash collateral posted under these contracts does not reflect letters of credit under the Company’s revolving credit facilities that may have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchase and normal sale, offset by existing collateral and by any offsets available under master netting agreements, including both assets and liability positions. At March 31, 2024 and December 31, 2023, PNM had zero contractual liability, zero posted cash collateral, and no such contracts in a net liability position.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Activity

The following table summarizes the weighted-average assumptions used to determine the awards grant date fair value:

	Three Months Ended March 31,
Restricted Shares and Performance Based Shares	2024			2023
Expected quarterly dividends per share	$	0.3875		$	0.3675
Risk-free interest rate	4.27		%	4.46		%
Market-Based Shares
Dividend yield	4.21		%	N/A
Expected volatility	13.09		%	N/A
Risk-free interest rate	4.31		%	N/A

The following table summarizes activity in restricted stock awards, including performance-based and market-based shares for the three months ended March 31, 2024:

	Restricted Stock
	Shares	Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2023	212,080	$	40.33
Granted	188,019	32.43
Released	(145,020)	37.18
Forfeited	—	—
Outstanding at March 31, 2024	255,079	$	36.30

The following table provides additional information concerning restricted stock activity, including performance-based and market-based shares:

	Three Months Ended March 31,
Restricted Stock	2024		2023
Weighted-average grant date fair value	$	32.43	$	44.78
Total fair value of restricted shares that vested (in thousands)	$	5,395	$	8,394

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Financing (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of Derivative Liabilities at Fair Value

PNMR has entered into hedging agreements that establish a fixed rate for the indicated amount of variable rate debt, above which a customary spread is applied, which is subject to change if there is a change in PNMR’s credit rating. As of March 31, 2024, PNMR’s hedging agreements are as follows:

		Variable Rate		Established
Effective Date	Maturity Date	Debt Hedged		Fixed Rate
		(In millions)		(Percent)
January 1, 2024	December 31, 2024	$	100.0	3.32	%
January 1, 2024	December 31, 2024	100.0		3.32
January 1, 2024	December 31, 2024	100.0		3.38
January 1, 2024	December 31, 2024	150.0		3.62
January 1, 2024	December 31, 2024	150.0		3.57
January 1, 2025	December 31, 2025	100.0		4.18
January 1, 2025	December 31, 2025	100.0		4.18
January 1, 2025	December 31, 2025	100.0		3.99

Schedule of Short-term Debt

Short-term debt outstanding consists of:

	March 31, 2024			December 31, 2023
	Balance Outstanding		Weighted Average Interest Rate	Balance Outstanding		Weighted Average Interest Rate
	(In thousands)			(In thousands)
PNM:
PNM Revolving Credit Facility	$	146,200	6.67%	$	107,500	6.69%
PNM New Mexico Credit Facility	40,000		6.68	30,000		6.71
	186,200			137,500
TNMP Revolving Credit Facility	18,300		6.29	55,100		6.32
PNMR Revolving Credit Facility	40,000		6.92	69,300		6.96
	$	244,500		$	261,900

Schedule of Forward Contracts Indexed to Issuer's Equity

Throughout 2023, PNMR entered into forward sale agreements listed below, for the sale of shares of PNMR common stock. On December 15, 2023, PNMR physically settled the forward purchases under the PNMR 2022 ATM Program and used the proceeds to repay borrowings under the PNMR Revolving Credit Facility and for other corporate purposes. Gross cash proceeds shown below were reduced by $1.0 million in issuance costs resulting in net cash proceeds of $198.2 million.

Forward completion	Initial forward price		Shares	Settlement price		Settlement amount
						(in thousands)
March 15, 2023	$	48.49	504,452	$	49.00	$	24,720
March 20, 2023	48.30		528,082	48.78		25,758
May 30, 2023	47.56		244,639	47.99		11,741
June 30, 2023	44.87		804,477	45.07		36,257
September 26, 2023	44.03		2,283,860	44.11		100,734
			4,365,510			$	199,210

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Pension and Other Postretirement Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The following table presents the components of the PNM Plans’ net periodic benefit cost:

	Three Months Ended March 31,
	Pension Plan				OPEB Plan				Executive Retirement Program
	2024		2023		2024		2023		2024		2023
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	—	$	—	$	—	$	—
Interest cost	5,427		5,913		597		676		124		135
Expected return on plan assets	(7,757)		(7,299)		(1,391)		(1,243)		—		—
Amortization of net loss	2,661		2,646		—		—		50		38
Amortization of prior service cost	—		—		—		—		—		—
Net Periodic Benefit Cost (Income)	$	331	$	1,260	$	(794)	$	(567)	$	174	$	173

The following table presents the components of the TNMP Plans’ net periodic benefit cost:

	Three Months Ended March 31,
	Pension Plan				OPEB Plan				Executive Retirement Program
	2024		2023		2024		2023		2024		2023
	(In thousands)
Components of Net Periodic Benefit Cost
Service cost	$	—	$	—	$	5	$	5	$	—	$	—
Interest cost	553		601		96		106		4		3
Expected return on plan assets	(687)		(674)		(129)		(120)		—		—
Amortization of net (gain) loss	139		110		(161)		(190)		—		—
Amortization of prior service cost	—		—		—		—		—		—
Net Periodic Benefit Cost (Income)	$	5	$	37	$	(189)	$	(199)	$	4	$	3

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Regulatory and Rate Matters (Tables)

3 Months Ended

Mar. 31, 2024

Regulated Operations [Abstract]

Schedule of Rate Increases for Transmission Costs

The following sets forth TNMP’s recent interim transmission cost rate increases:

Effective Date	Approved Increase in Rate Base		Annual Increase in Revenue
	(In millions)
May 12, 2023	$	150.5	$	19.4
September 6, 2023	21.4		4.2
March 15, 2024	97.4		13.1

Schedule Of Interim Distribution Rate Increases

The following sets forth TNMP’s recent interim distribution rate increases:

Effective Date	Approved Increase in Rate Base		Annual Increase in Revenue
	(In millions)
September 1, 2022	$	95.7	$	6.8
September 1, 2023	157.0		14.5

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Lease Commitments (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Assets and Liabilities, Lessee

Information related to the Company’s operating leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating leases:
Operating lease assets, net of amortization	$	177,865	$	1,615	$	179,480	$	180,370	$	1,814	$	182,201
Current portion of operating lease liabilities	10,925		887		11,811		11,371		895		12,267
Long-term portion of operating lease liabilities	165,199		643		165,842		166,191		809		167,000

Information related to the Company’s financing leases recorded on the Condensed Consolidated Balance Sheets is presented below:

	March 31, 2024						December 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Financing leases:
Non-utility property	$	23,262	$	25,400	$	48,826	$	25,425	$	24,487	$	49,981
Accumulated depreciation	(10,975)		(13,058)		(24,095)		(11,984)		(11,869)		(23,905)
Non-utility property, net	12,287		12,342		24,731		13,441		12,618		26,076
Other current liabilities	$	3,836	$	4,604	$	8,473	$	4,146	$	4,616	$	8,776
Other deferred credits	8,469		7,760		16,299		9,300		8,023		17,326

Information concerning the weighted average remaining lease terms and the weighted average discount rates used to determine the Company’s lease liabilities as of March 31, 2024 is presented below:

	PNM		TNMP		PNMR Consolidated
Weighted average remaining lease term (years):
Operating leases	16.59		1.57		16.46
Financing leases	3.67		3.02		3.35
Weighted average discount rate:
Operating leases	5.61	%	4.22	%	5.60	%
Financing leases	4.65	%	4.80	%	4.72	%

Lease, Cost

Information for the components of lease expense is as follows:

	Three Months Ended March 31, 2024
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:
Battery storage leases	$	2,947	$	—	$	2,947
Other operating leases	2,059		270		2,329
Amounts capitalized	(35)		(232)		(267)
Total operating lease expense	4,971		38		5,009
Financing lease cost:
Amortization of right-of-use assets	1,218		1,316		2,542
Interest on lease liabilities	144		152		297
Amounts capitalized	(841)		(1,182)		(2,023)
Total financing lease expense	521		286		816
Variable lease expense	360		—		360
Short-term lease expense	204		6		216
Total lease expense for the period	$	6,056	$	330	$	6,401

	Three Months Ended March 31, 2023
	PNM		TNMP		PNMR Consolidated
	(In thousands)
Operating lease cost:	$	3,908	$	429	$	4,337
Amounts capitalized	(160)		(353)		(513)
Total operating lease expense	3,748		76		3,824
Financing lease cost:
Amortization of right-of-use assets	1,008		1,064		2,093
Interest on lease liabilities	122		111		234
Amounts capitalized	(690)		(1,000)		(1,690)
Total financing lease expense	440		175		637
Variable lease expense	262		—		262
Short-term lease expense	147		—		151
Total lease expense for the period	$	4,597	$	251	$	4,874

Schedule of Leases, Supplemental Cash Flows

Supplemental cash flow information related to the Company’s leases is as follows:

	Three Months Ended						Three Months Ended
	March 31, 2024						March 31, 2023
	PNM		TNMP		PNMR Consolidated		PNM		TNMP		PNMR Consolidated
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,826	$	14	$	3,840	$	9,193	$	126	$	9,319
Operating cash flows from financing leases	44		29		74		42		14		55
Finance cash flows from financing leases	464		256		728		377		161		560
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	27	$	63	$	90	$	—	$	—	$	—
Financing leases	263		1,040		1,398		2,730		1,347		4,077

Lessee, Operating Lease, Liability, Maturity

Future expected lease payments are shown below:

	As of March 31, 2024
	PNM						TNMP				PNMR Consolidated
			Operating										Operating
	Financing		Battery Storage		Other		Financing		Operating		Financing		Battery Storage		Other
	(In thousands)
Remainder of 2024	$	3,333	$	8,840	$	7,117	$	3,909	$	708	$	7,271	$	8,840	$	7,825
2025	3,636		11,786		7,082		4,262		785		7,926		11,786		7,867
2026	3,117		11,786		7,031		3,038		90		6,181		11,786		7,121
2027	1,885		11,786		7,035		1,615		14		3,526		11,786		7,049
2028	856		11,786		7,038		383		11		1,241		11,786		7,049
Later years	614		172,254		10,587		93		—		707		172,254		10,587
Total minimum lease payments	13,441		228,238		45,890		13,300		1,608		26,852		228,238		47,498
Less: Imputed interest	1,136		92,547		5,457		936		78		2,080		92,547		5,536
Lease liabilities	$	12,305	$	135,691	$	40,433	$	12,364	$	1,530	$	24,772	$	135,691	$	41,962

Finance Lease, Liability, Maturity

Future expected lease payments are shown below:

	As of March 31, 2024
	PNM						TNMP				PNMR Consolidated
			Operating										Operating
	Financing		Battery Storage		Other		Financing		Operating		Financing		Battery Storage		Other
	(In thousands)
Remainder of 2024	$	3,333	$	8,840	$	7,117	$	3,909	$	708	$	7,271	$	8,840	$	7,825
2025	3,636		11,786		7,082		4,262		785		7,926		11,786		7,867
2026	3,117		11,786		7,031		3,038		90		6,181		11,786		7,121
2027	1,885		11,786		7,035		1,615		14		3,526		11,786		7,049
2028	856		11,786		7,038		383		11		1,241		11,786		7,049
Later years	614		172,254		10,587		93		—		707		172,254		10,587
Total minimum lease payments	13,441		228,238		45,890		13,300		1,608		26,852		228,238		47,498
Less: Imputed interest	1,136		92,547		5,457		936		78		2,080		92,547		5,536
Lease liabilities	$	12,305	$	135,691	$	40,433	$	12,364	$	1,530	$	24,772	$	135,691	$	41,962

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The table below summarizes the nature and amount of related party transactions of PNMR, PNM, TNMP, and NMRD:

	Three Months Ended
	March 31,
	2024		2023
	(In thousands)
Services billings:
PNMR to PNM	$	35,407	$	31,539
PNMR to TNMP	14,237		12,413
PNM to TNMP	81		65
TNMP to PNMR	10		35
PNMR to NMRD	66		82
Renewable energy purchases:
PNM from NMRD	1,523		2,361
Interest billings:
PNMR to PNM	14		3
PNM to PNMR	155		130
PNMR to TNMP	14		11
Income tax sharing payments:
PNMR to PNM	—		—
TNMP to PNMR	—		—

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Equity Method Investment (Tables)

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Marketable Securities

Summarized financial information for NMRD through the closing date of the sale is as follows:

	Results of Operations
	Three Months Ended March 31,
	2024		2023
	(In thousands)
Operating revenues	$	3,204	$	2,531
Operating expenses	3,378		2,434
Net earnings (loss)	$	(174)	$	97

	Financial Position
	March 31,		December 31,
	2024		2023
	(In thousands)
Current assets	$	—	$	2,589
Net property, plant, and equipment	—		235,791
Non-current assets	—		1,849
Total assets	—		240,229
Current liabilities	—		730
Non-current liabilities	—		358
Owners’ equity	$	—	$	239,141

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Significant Accounting Policies and Responsibility for Financial Statements (Details) - USD ($)		1 Months Ended		3 Months Ended
	Apr. 30, 2024	Feb. 29, 2024	Feb. 28, 2023	Mar. 31, 2024	Mar. 31, 2023
Subsequent Event [Line Items]
Payment defaults under agreements				$ 0
Dividends declared per common share (dollars per share)		$ 0.3875	$ 0.3675	$ 0.3875	$ 0.3675
Dividends declared on common stock				$ 34,952,000	$ 31,545,000
PNMR | Subsequent event
Subsequent Event [Line Items]
Equity contribution from parent	$ 55,000,000
Texas-New Mexico Power Company
Subsequent Event [Line Items]
Dividends declared on common stock				$ 0	$ 0

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Segment Information - Summarized Financial Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) segment	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	$ 436,877	$ 544,077
Utility margin	175,928	186,711
Other operating expenses	130,796	125,226
Depreciation and amortization	93,187	78,074
Operating income	80,590	99,091
Interest income (expense)	4,580	4,843
Other income (deductions)	6,387	7,042
Interest Charges	(53,762)	(40,923)
Earnings before Income Taxes	37,795	70,053
Income taxes (benefit)	(12,571)	9,780
Net Earnings	50,366	60,273
Valencia non-controlling interest	(3,044)	(5,127)
Subsidiary preferred stock dividends	(132)	(132)
Net Earnings Available for PNM Common Stock	47,190	55,014
Total Assets	10,257,653	9,353,136	$ 10,252,605
Goodwill	$ 278,297	278,297	278,297
PNM
Segment Reporting Information [Line Items]
Number of operating segments | segment	1
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	$ 308,115	430,165
Depreciation and amortization	53,287	43,686
Operating income	50,950	77,904
Interest Charges	(25,116)	(18,122)
Earnings before Income Taxes	50,907	71,664
Income taxes (benefit)	5,811	11,829
Net Earnings	45,096	59,835
Valencia non-controlling interest	(3,044)	(5,127)
Subsidiary preferred stock dividends	(132)	(132)
Net Earnings Available for PNM Common Stock	41,920	54,576
Total Assets	6,878,575		6,813,065
Goodwill	$ 51,632		51,632
TNMP
Segment Reporting Information [Line Items]
Number of operating segments | segment	1
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	$ 128,762	113,912
Cost of energy	34,892	31,833
Depreciation and amortization	30,382	27,440
Operating income	30,738	21,787
Interest Charges	(13,336)	(10,425)
Earnings before Income Taxes	18,447	11,612
Income taxes (benefit)	3,864	1,579
Net Earnings	14,583	10,033
Total Assets	3,204,936		3,145,031
Goodwill	226,665		$ 226,665
PNM
Segment Reporting Information, Profit (Loss) [Abstract]
Utility margin	120,854	140,381
Other operating expenses	106,466	98,722
Depreciation and amortization	53,287	43,686
Operating income	50,950	77,904
Interest income (expense)	4,527	4,849
Other income (deductions)	20,546	7,033
Interest Charges	(25,116)	(18,122)
Earnings before Income Taxes	50,907	71,664
Income taxes (benefit)	5,811	11,829
Net Earnings	45,096	59,835
Valencia non-controlling interest	(3,044)	(5,127)
Subsidiary preferred stock dividends	(132)	(132)
Net Earnings Available for PNM Common Stock	41,920	54,576
Total Assets	6,878,575	6,306,396
Goodwill	51,632	51,632
TNMP
Segment Reporting Information, Profit (Loss) [Abstract]
Utility margin	55,074	46,330
Other operating expenses	32,750	32,852
Depreciation and amortization	30,382	27,440
Operating income	30,738	21,787
Interest income (expense)	169	114
Other income (deductions)	876	136
Interest Charges	(13,336)	(10,425)
Earnings before Income Taxes	18,447	11,612
Income taxes (benefit)	3,864	1,579
Net Earnings	14,583	10,033
Valencia non-controlling interest	0	0
Subsidiary preferred stock dividends	0	0
Net Earnings Available for PNM Common Stock	14,583	10,033
Total Assets	3,204,936	2,803,168
Goodwill	226,665	226,665
Corporate and Other
Segment Reporting Information, Profit (Loss) [Abstract]
Utility margin	0	0
Other operating expenses	(8,420)	(6,348)
Depreciation and amortization	9,518	6,948
Operating income	(1,098)	(600)
Interest income (expense)	(116)	(120)
Other income (deductions)	(15,035)	(127)
Interest Charges	(15,310)	(12,376)
Earnings before Income Taxes	(31,559)	(13,223)
Income taxes (benefit)	(22,246)	(3,628)
Net Earnings	(9,313)	(9,595)
Valencia non-controlling interest	0	0
Subsidiary preferred stock dividends	0	0
Net Earnings Available for PNM Common Stock	(9,313)	(9,595)
Total Assets	174,142	243,572
Goodwill	0	0
Energy
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	436,877	544,077
Cost of energy	132,304	241,686
Utility margin	304,573	302,391
Energy | PNM
Segment Reporting Information, Profit (Loss) [Abstract]
Cost of energy	97,412	209,853
Energy | PNM
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	308,115	430,165
Cost of energy	97,412	209,853
Utility margin	210,703	220,312
Energy | TNMP
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	128,762	113,912
Cost of energy	34,892	31,833
Utility margin	93,870	82,079
Energy | Corporate and Other
Segment Reporting Information, Profit (Loss) [Abstract]
Electric operating revenues	0	0
Cost of energy	0	0
Utility margin	$ 0	$ 0

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Segment Information - Schedule of Gross Margin (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Segment Reporting Information [Line Items]
Gross margin	$ 175,928	$ 186,711
Transmission and distribution costs	22,764	22,196
Depreciation and amortization	83,669	71,126
Utility margin	304,573	302,391
Energy Production
Segment Reporting Information [Line Items]
Energy production costs	22,212	22,358
Public Service Company of New Mexico
Segment Reporting Information [Line Items]
Gross margin	120,854	140,381
Transmission and distribution costs	14,350	13,887
Depreciation and amortization	53,287	43,686
Utility margin	210,703	220,312
Public Service Company of New Mexico | Energy Production
Segment Reporting Information [Line Items]
Energy production costs	22,212	22,358
Texas-New Mexico Power Company
Segment Reporting Information [Line Items]
Gross margin	55,074	46,330
Transmission and distribution costs	8,414	8,309
Depreciation and amortization	30,382	27,440
Utility margin	93,870	82,079
Texas-New Mexico Power Company | Energy Production
Segment Reporting Information [Line Items]
Energy production costs	0	0
Corporate and Other
Segment Reporting Information [Line Items]
Gross margin	0	0
Transmission and distribution costs	0	0
Depreciation and amortization	0	0
Utility margin	0	0
Corporate and Other | Energy Production
Segment Reporting Information [Line Items]
Energy production costs	$ 0	$ 0

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 2,399,051	$ 2,244,926
Total Other Comprehensive Income (Loss)	(4,768)	1,694
Ending balance	2,404,730	2,264,802
Total
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(62,840)	(66,048)
Amounts reclassified from AOCI (pre-tax)	(6,949)	(1,732)
Income tax impact of amounts reclassified	1,765	440
Other OCI changes (pre-tax)	558	4,002
Income tax impact of other OCI changes	(142)	(1,016)
Total Other Comprehensive Income (Loss)	(4,768)	1,694
Ending balance	(67,608)	(64,354)
Fair Value Adjustment for Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	3,665	8,287
Amounts reclassified from AOCI (pre-tax)	2,745	(2,224)
Income tax impact of amounts reclassified	(697)	565
Other OCI changes (pre-tax)	67	(168)
Income tax impact of other OCI changes	(17)	43
Total Other Comprehensive Income (Loss)	2,098	(1,784)
Ending balance	5,763	6,503
PNM
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	2,000,775	1,960,324
Total Other Comprehensive Income (Loss)	(6,866)	3,478
Ending balance	2,034,870	2,017,995
PNM | Total
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(66,505)	(74,335)
Amounts reclassified from AOCI (pre-tax)	(9,694)	492
Income tax impact of amounts reclassified	2,462	(125)
Other OCI changes (pre-tax)	491	4,170
Income tax impact of other OCI changes	(125)	(1,059)
Total Other Comprehensive Income (Loss)	(6,866)	3,478
Ending balance	(73,371)	(70,857)
PNM | Unrealized Gains on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	10,652	7,422
Amounts reclassified from AOCI (pre-tax)	(10,910)	(702)
Income tax impact of amounts reclassified	2,771	178
Other OCI changes (pre-tax)	491	4,170
Income tax impact of other OCI changes	(125)	(1,059)
Total Other Comprehensive Income (Loss)	(7,773)	2,587
Ending balance	2,879	10,009
PNM | Pension Liability Adjustment
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(77,157)	(81,757)
Amounts reclassified from AOCI (pre-tax)	1,216	1,194
Income tax impact of amounts reclassified	(309)	(303)
Other OCI changes (pre-tax)	0	0
Income tax impact of other OCI changes	0	0
Total Other Comprehensive Income (Loss)	907	891
Ending balance	$ (76,250)	$ (80,866)

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Net Earnings Attributable to PNMR	$ 47,190	$ 55,014
Average Number of Common Shares:
Outstanding during period (in shares)	90,200	85,835
Vested awards of restricted stock (in shares)	283	266
Average Shares – Basic (in shares)	90,483	86,101
Dilutive Effect of Common Stock Equivalents:
Restricted stock (in shares)	31	37
PNMR 2020 Forward Equity Sale Agreements (in shares)	0	3
Average Shares – Diluted (in shares)	90,514	86,141
Net Earnings Per Share of Common Stock:
Basic (in dollars per share)	$ 0.52	$ 0.64
Diluted (in dollars per share)	$ 0.52	$ 0.64

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Electric Operating Revenues - Narrative (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) utility	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Disaggregation of Revenue [Line Items]
Number of regulated utilities | utility	2
Other receivables, allowance for credit loss, period increase	$ 0	$ 0
Contract assets	24,600,000		$ 22,100,000
PNM
Disaggregation of Revenue [Line Items]
Accounts receivable	$ 75,400,000		$ 93,600,000

XML

Electric Operating Revenues - Disaggregation of revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 431,089	$ 531,032
Alternative revenue programs	5,293	4,759
Other electric operating revenue	495	8,286
Electric Operating Revenues	436,877	544,077
PNM
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	305,714	414,554
Alternative revenue programs	1,906	7,325
Other electric operating revenue	495	8,286
Electric Operating Revenues	308,115	430,165
TNMP
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	125,375	116,478
Alternative revenue programs	3,387	(2,566)
Other electric operating revenue	0	0
Electric Operating Revenues	128,762	113,912
Energy
Disaggregation of Revenue [Line Items]
Electric Operating Revenues	436,877	544,077
Energy | Residential
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	161,880	156,251
Energy | Commercial
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	134,882	132,792
Energy | Industrial
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	34,625	32,243
Energy | Public authority
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	6,115	6,036
Energy | Economy energy service
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	7,563	9,309
Energy | PNM | Residential
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	120,385	119,885
Energy | PNM | Commercial
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	99,338	98,062
Energy | PNM | Industrial
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	24,769	19,478
Energy | PNM | Public authority
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	4,398	4,417
Energy | PNM | Economy energy service
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	7,563	9,309
Energy | TNMP | Residential
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	41,495	36,366
Energy | TNMP | Commercial
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	35,544	34,730
Energy | TNMP | Industrial
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	9,856	12,765
Energy | TNMP | Public authority
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	1,717	1,619
Energy | TNMP | Economy energy service
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Transmission
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	71,958	79,065
Transmission | PNM
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	36,149	49,007
Transmission | TNMP
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	35,809	30,058
Wholesale energy sales (1)
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	11,690	112,986
Wholesale energy sales (1) | PNM
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	11,690	112,986
Wholesale energy sales (1) | TNMP
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	0	0
Miscellaneous
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	2,376	2,350
Miscellaneous | PNM
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	1,422	1,410
Miscellaneous | TNMP
Disaggregation of Revenue [Line Items]
Total revenues from contracts with customers	$ 954	$ 940

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Variable Interest Entities (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($) MW	Mar. 31, 2023 USD ($)	Dec. 05, 2022 MW	Jan. 31, 2016 USD ($)
San Juan Generating Station | Coal supply
Variable Interest Entity [Line Items]
Cash used to support bank letter or credit arrangement				$ 30.3
PNM
Variable Interest Entity [Line Items]
Number of megawatts purchased (in megawatts) | MW			64.1
PNM | Valencia
Variable Interest Entity [Line Items]
Payment for fixed costs	$ 5.1	$ 5.0
Payment for variable costs	$ 0.1	$ 1.6
Long-term contract option to purchase, ownership percentage (up to)	50.00%
Long-term contract option to purchase, purchase price - percentage of adjusted NBV	50.00%
Long-term contract option to purchase, purchase price - percentage of FMV	50.00%
PNM | Purchased through May 2028 | Valencia
Variable Interest Entity [Line Items]
Number of megawatts purchased (in megawatts) | MW	155

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Variable Interest Entities - Schedule of Operations for Valencia (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Results of Operations
Electric Operating Revenues	$ 436,877	$ 544,077
Operating expenses	356,287	444,986
Earnings attributable to non-controlling interest	3,044	5,127
Financial Position
Current assets	407,843		$ 475,543
Assets	10,257,653	9,353,136	10,252,605
Total current liabilities	1,107,128		1,230,760
Non-controlling interest in Valencia	48,999		49,958
Public Service Company of New Mexico
Results of Operations
Electric Operating Revenues	308,115	430,165
Operating expenses	257,165	352,261
Earnings attributable to non-controlling interest	3,044	5,127
Financial Position
Current assets	335,426		377,837
Assets	6,878,575		6,813,065
Total current liabilities	855,327		839,194
Non-controlling interest in Valencia	48,999		49,958
Valencia | Public Service Company of New Mexico
Results of Operations
Electric Operating Revenues	5,189	6,604
Operating expenses	2,145	1,477
Earnings attributable to non-controlling interest	3,044	$ 5,127
Financial Position
Current assets	3,265		3,422
Net property, plant, and equipment	46,543		47,253
Assets	49,808		50,675
Total current liabilities	809		717
Non-controlling interest in Valencia	$ 48,999		$ 49,958

XML

Variable Interest Entities - Schedule of Impact on Results of Operation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Variable Interest Entity [Line Items]
Depreciation and amortization	$ 103,004	$ 87,128
Interest Charges	53,762	40,923
Public Service Company of New Mexico
Variable Interest Entity [Line Items]
Depreciation and amortization	60,356	51,438
Interest Charges	25,116	$ 18,122
Valencia | Public Service Company of New Mexico
Variable Interest Entity [Line Items]
Operating Revenues	5,946
Depreciation and amortization	821
Interest Charges	5,025
Other	100
Net Earnings	$ 0

XML

Variable Interest Entities - Schedule of Impact on Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Variable Interest Entity [Line Items]
Regulatory assets	$ 61,453	$ 73,046
Current Installments of Long-Term Debt	283,776	280,169
Long-Term Debt	4,355,049	4,241,642
Public Service Company of New Mexico
Variable Interest Entity [Line Items]
Regulatory assets	61,453	72,996
Current Installments of Long-Term Debt	203,802	200,222
Long-Term Debt	2,058,523	2,061,558
Valencia | Public Service Company of New Mexico
Variable Interest Entity [Line Items]
Regulatory assets	559	2,724
Securitized Cost (included in Deferred Regulatory Assets)	339,808	340,629
Current Installments of Long-Term Debt	5,935	2,529
Accrued Interest	7,505	2,502
Long-Term Debt	335,137	338,521
Valencia | Public Service Company of New Mexico | Other Current Assets
Variable Interest Entity [Line Items]
Restricted Cash	7,175	0
Valencia | Public Service Company of New Mexico | Other Deferred Charges
Variable Interest Entity [Line Items]
Restricted Cash	$ 1,747	$ 1,728

XML

Fair Value of Derivative and Other Financial Instruments - Narrative (Details)		3 Months Ended		4 Months Ended
	Apr. 23, 2024 MW	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2023 MW	Dec. 31, 2023 USD ($)
Debt Securities, Available-for-sale [Line Items]
Obligations to return cash					$ 200,000
PNM
Debt Securities, Available-for-sale [Line Items]
Amounts recognized for right to reclaim cash		$ 0			0
Cash collateral under margin arrangements		300,000			200,000
(Increase)/decrease in other than temporary losses of available-for-sale securities, net portion recognized in earnings		13,400,000	$ 2,000,000
PNM | Commodity derivatives | Designated as Hedging Instrument
Debt Securities, Available-for-sale [Line Items]
Other current assets		835,000			826,000
Current derivative liability		0			0
PNM | Portfolio One
Debt Securities, Available-for-sale [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW				85
PNM | Portfolio One | Subsequent event
Debt Securities, Available-for-sale [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	150
PNM | Portfolio Two
Debt Securities, Available-for-sale [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW				50
PNM | Portfolio Two | Subsequent event
Debt Securities, Available-for-sale [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	100
PNM | Portfolio Three
Debt Securities, Available-for-sale [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW				50
PNM | Fuel and purchased power costs | Commodity derivatives | Designated as Hedging Instrument
Debt Securities, Available-for-sale [Line Items]
Other current assets					800,000
Current derivative liability					0
PNM | Recurring
Debt Securities, Available-for-sale [Line Items]
Available-for-sale debt securities		448,164,000			444,408,000
Nuclear Decommissioning Trust | PNM | Recurring
Debt Securities, Available-for-sale [Line Items]
Available-for-sale debt securities		371,000,000			361,000,000
SJGS Decommissioning Trust | PNM | Recurring
Debt Securities, Available-for-sale [Line Items]
Available-for-sale debt securities		11,700,000			12,300,000
Mine Reclamation Trust | PNM | Recurring
Debt Securities, Available-for-sale [Line Items]
Available-for-sale debt securities		$ 65,500,000			$ 71,100,000

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Fair Value of Derivative and Other Financial Instruments - Overview and Commodity Derivatives (Details) - PNM - Designated as Hedging Instrument - Commodity derivatives - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Derivatives, Fair Value [Line Items]
Other current assets	$ 835	$ 826
Other current liabilities	0	0
Net	$ 835	$ 826

XML

Fair Value of Derivative and Other Financial Instruments - Schedule of Commodity Contract Volume Positions (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024 MMBTU	Mar. 31, 2024 MWh	Dec. 31, 2023 MMBTU	Dec. 31, 2023 MWh
Commodity derivatives | Designated as Hedging Instrument | Public Service Company of New Mexico
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Economic Hedges (in mmtbu and mwh)	0	(15,360)	0	(15,360)

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Fair Value of Derivative and Other Financial Instruments - Investments in NDT and Gross Realized Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity securities:
Net gains (losses) from equity securities sold	$ 9,871	$ (844)
Net gains (losses) from equity securities still held	(1,205)	7,477
Total net gains on equity securities	8,666	6,633
Available-for-sale debt securities:
Net gains (losses) on debt securities	9,332	(191)
Net gains on investment securities	$ 17,998	$ 6,442

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Fair Value Measures and Disclosures - Gross Realized (Losses) (Details) - PNM - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Debt Securities, Available-for-sale [Line Items]
Proceeds from sales	$ 302,510	$ 91,211
Gross realized gains	13,679	3,428
Gross realized (losses)	$ (7,912)	$ (6,471)

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Fair Value of Derivative and Other Financial Instruments - Maturities of Debt Securities (Details) - PNMR and PNM $ in Thousands	Mar. 31, 2024 USD ($)
Available-for-Sale
Within 1 year	$ 34,176
After 1 year through 5 years	11,915
After 5 years through 10 years	8,634
After 10 years through 15 years	9,998
After 15 years through 20 years	5,626
After 20 years	3,953
Available-for-sale debt securities	$ 74,302

XML

Fair Value of Derivative and Other Financial Instruments - Items Recorded and Presented by Level of Hierarchy (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2024	Jun. 30, 2023	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term debt	$ 4,335,572		$ 4,260,509
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term debt	4,638,825		4,521,811
PNM
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term debt	2,086,662		2,107,588
PNM | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term debt	2,262,325		2,261,780
TNMP
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term debt	1,248,910		1,152,922
TNMP | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of long-term debt	1,377,255		1,260,880
Recurring | PNM
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	448,164		444,408
Investments, unrealized gain	3,896	$ 14,316
Recurring | PNM | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	361,724		264,287
Recurring | PNM | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	47,261		180,121
Recurring | PNM | Cash and cash equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	122,332		93,873
Recurring | PNM | Cash and cash equivalents | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	122,332		93,873
Recurring | PNM | Cash and cash equivalents | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0		0
Recurring | PNM | Corporate stocks, common
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	81,045		77,422
Recurring | PNM | Corporate stocks, common | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	81,045		77,422
Recurring | PNM | Corporate stocks, common | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0		0
Recurring | PNM | Corporate stocks, preferred
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0		4,323
Recurring | PNM | Corporate stocks, preferred | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0		504
Recurring | PNM | Corporate stocks, preferred | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0		3,819
Recurring | PNM | Mutual funds and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	131,306		57,966
Recurring | PNM | Mutual funds and other | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	131,306		57,966
Recurring | PNM | Mutual funds and other | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0		0
Recurring | PNM | Uncategorized Collective Investment Trusts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	39,179
Recurring | PNM | Uncategorized Collective Investment Trusts | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities
Recurring | PNM | Uncategorized Collective Investment Trusts | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities
Recurring | PNM | U.S. government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	27,041		35,113
Investments, unrealized gain	1,874	2,055
Recurring | PNM | U.S. government | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	27,041		34,522
Recurring | PNM | U.S. government | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0		591
Recurring | PNM | International government
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0		8,735
Investments, unrealized gain	0	104
Recurring | PNM | International government | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0		0
Recurring | PNM | International government | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities			8,735
Recurring | PNM | Municipals
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	35,260		53,436
Investments, unrealized gain	1,227	2,872
Recurring | PNM | Municipals | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0		0
Recurring | PNM | Municipals | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	35,260		53,436
Recurring | PNM | Corporate and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	12,001		113,540
Investments, unrealized gain	795	$ 9,285
Recurring | PNM | Corporate and other | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities			0
Recurring | PNM | Corporate and other | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	$ 12,001		$ 113,540

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands			3 Months Ended
	Apr. 08, 2024	Dec. 04, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Restricted Shares and Performance Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized expense related to stock awards			$ 8,400
Period of time stock expense is expected to be recognized			2 years 2 months 12 days
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested (in shares)			255,079		212,080
Fair value of restricted stock rights			$ 5,395	$ 8,394
Executive | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares awarded in year two (in shares)			138,978
Maximum number of shares awarded in year three (in shares)			133,960
Maximum number of shares awarded in year four (in shares)			186,951
Performance period			3 years
Executive | Performance Shares | Achieved Performance Target For 2021 Through 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares awarded in year one (in shares)			80,492
President And Chief Operating Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Retention agreement, bonus		$ 1,000
President And Chief Operating Officer | Restricted Stock | Subsequent event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock rights	$ 800
Performance Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Vesting rate			100.00%
Performance Equity Plan | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Performance Equity Plan | Non-employee Members of the Board of Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
Retention Agreement | Restricted Stock | Share-Based Payment Arrangement, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		24 months
Retention Agreement | Restricted Stock | Share-Based Payment Arrangement, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		6 months
Retention Agreement | Chairman And Chief Executive Officer | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested (in shares)		26,766
Retention Agreement | Senior Vice President And General Counsel | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested (in shares)		8,922

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Stock-Based Compensation (Details) - Restricted Stock - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Restricted Stock, Shares
Outstanding at beginning of period (in shares)	212,080
Granted (in shares)	188,019
Exercised (in shares)	(145,020)
Forfeited (in shares)	0
Outstanding at end of period (in shares)	255,079
Restricted Stock, Weighted- Average Grant Date Fair Value
Outstanding at beginning of period (in dollars per share)	$ 40.33
Granted (in dollars per share)	32.43	$ 44.78
Exercised (in dollars per share)	37.18
Forfeited (in dollars per share)	0
Outstanding at end of period (in dollars per share)	$ 36.30

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Stock-Based Compensation - Weighted Average Assumptions (Details) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Restricted Shares and Performance Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected quarterly dividends per share (in dollars per share)	$ 0.3875	$ 0.3675
Risk-free interest rate	4.27%	4.46%
Market-Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	4.31%
Dividend yield	4.21%
Expected volatility	13.09%

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Stock-Based Compensation - Restricted Stock Awards (Details) - Restricted Stock - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Weighted-average grant date fair value (in dollars per share)	$ 32.43	$ 44.78
Total fair value of restricted shares that vested	$ 5,395	$ 8,394

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Financing - Financing Activities (Details)		1 Months Ended	3 Months Ended
	Nov. 10, 2022 USD ($)	Jul. 31, 2024 USD ($)	Mar. 31, 2024 shares	Jul. 01, 2024 USD ($)	Mar. 28, 2024 USD ($) debtInstrument	May 16, 2023 USD ($)	Apr. 28, 2023 USD ($) bond debtInstrument
Debt Instrument [Line Items]
Forward sale agreement (in shares) | shares			4,365,510
At-The-Market
Debt Instrument [Line Items]
Distribution agreement	$ 200,000,000
PNM
Debt Instrument [Line Items]
Maturity term over which financings require regulator approval (more than)			18 months
Texas-New Mexico Power Company | FMB Notes Due July 2024 | Forecast | Senior Unsecured Noted, Pollution Control Revenue Bonds
Debt Instrument [Line Items]
Repayments of unsecured debt		$ 80,000,000
Line of credit
Debt Instrument [Line Items]
Ratio of debt to capital (less than or equal to)			70.00%
Line of credit | PNM and TNMP
Debt Instrument [Line Items]
Ratio of debt to capital (less than or equal to)			65.00%
Unsecured Debt | PNM, Due May 2026
Debt Instrument [Line Items]
Aggregate principal amount						$ 650,000,000
Unsecured Debt | PNM | PNM 2023 Note Purchase Agreement
Debt Instrument [Line Items]
Aggregate principal amount							$ 200,000,000
Number of debt issuances | debtInstrument							2
Unsecured Debt | PNM | PNM 2023 SUNs At 5.1%, Due April 28, 2035
Debt Instrument [Line Items]
Aggregate principal amount							$ 150,000,000
Stated interest rate							5.51%
Unsecured Debt | PNM | PNM 2023 SUNs At 5.92%, Due April 28, 2053
Debt Instrument [Line Items]
Aggregate principal amount							$ 50,000,000
Stated interest rate							5.92%
Unsecured Debt | Texas-New Mexico Power Company | TNMP 2024 Bond Purchase Agreement
Debt Instrument [Line Items]
Aggregate principal amount					$ 285,000,000
Number of debt issuances | debtInstrument					4
Unsecured Debt | Texas-New Mexico Power Company | TNMP 2024 Bond, 5.26%, Due March 28, 2029
Debt Instrument [Line Items]
Aggregate principal amount					$ 32,000,000
Stated interest rate					5.26%
Unsecured Debt | Texas-New Mexico Power Company | TNMP 2024 Bond, 5.55%, Due March 28, 2036
Debt Instrument [Line Items]
Aggregate principal amount					$ 85,000,000
Stated interest rate					5.55%
Unsecured Debt | Texas-New Mexico Power Company | TNMP 2024 Bond, 5.65% | Forecast
Debt Instrument [Line Items]
Aggregate principal amount				$ 40,000,000
Stated interest rate				5.65%
Unsecured Debt | Texas-New Mexico Power Company | TNMP 2024 Bond, 5.79% | Forecast
Debt Instrument [Line Items]
Aggregate principal amount				$ 128,000,000
Stated interest rate				5.79%
Secured Debt | PNM | TNMP 2023 Bond Purchase Agreement
Debt Instrument [Line Items]
Debt instrument, series of bond issuance | bond							2
Secured Debt | Texas-New Mexico Power Company | TNMP 2023 Bond Purchase Agreement
Debt Instrument [Line Items]
Aggregate principal amount							$ 185,000,000
Secured Debt | Texas-New Mexico Power Company | TNMP 2023 Bond Purchase Agreement At 5.01%, Due April 28, 2033
Debt Instrument [Line Items]
Aggregate principal amount							$ 130,000,000.0
Stated interest rate							5.01%
Secured Debt | Texas-New Mexico Power Company | TNMP 2023 Bond Purchase Agreement At 5.47%, Due July 28, 2053
Debt Instrument [Line Items]
Aggregate principal amount							$ 55,000,000.0
Stated interest rate							5.47%
Bonds | PNMR 2021 Delayed-Draw Term Loan
Debt Instrument [Line Items]
Variable interest rate			6.38%
Bonds | PNMR 2023 Delayed-Draw Term Loan
Debt Instrument [Line Items]
Variable interest rate			6.78%

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Financing - Schedule of Forward Contracts (Details) - USD ($) $ / shares in Units, $ in Thousands						3 Months Ended	12 Months Ended
	Sep. 26, 2023	Jun. 30, 2023	May 30, 2023	Mar. 20, 2023	Mar. 15, 2023	Mar. 31, 2024	Dec. 31, 2023
Forward Contract Indexed to Issuer's Equity [Line Items]
Forward contracts, net cash proceeds							$ 198,200
Forward contracts, issuance costs							$ 1,000
Forward sale agreement (in shares)						4,365,510
Settlement amount						$ 199,210
Bank Of America, N.A.
Forward Contract Indexed to Issuer's Equity [Line Items]
Forward sale agreement (in dollars per share)					$ 48.49
Forward sale agreement (in shares)					504,452
Settlement price (in dollars per share)					$ 49.00
Settlement amount					$ 24,720
Wells Fargo Bank, N.A.
Forward Contract Indexed to Issuer's Equity [Line Items]
Forward sale agreement (in dollars per share)	$ 44.03			$ 48.30
Forward sale agreement (in shares)	2,283,860			528,082
Settlement price (in dollars per share)	$ 44.11			$ 48.78
Settlement amount	$ 100,734			$ 25,758
MUFG Securities EMEA plc
Forward Contract Indexed to Issuer's Equity [Line Items]
Forward sale agreement (in dollars per share)		$ 44.87	$ 47.56
Forward sale agreement (in shares)		804,477	244,639
Settlement price (in dollars per share)		$ 45.07	$ 47.99
Settlement amount		$ 36,257	$ 11,741

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Financing - Short-term Debt and Liquidity (Details)			1 Months Ended
	Jul. 01, 2024 USD ($)	Apr. 01, 2024 USD ($) extension_option	Feb. 28, 2025 USD ($)	Aug. 30, 2024 USD ($)	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	May 20, 2022 USD ($)	May 13, 2022 USD ($)	Mar. 11, 2022 USD ($)
Short-term Debt [Line Items]
Letters of credit outstanding					$ 3,100,000
Short-term debt					244,500,000	$ 261,900,000
PNMR Development
Short-term Debt [Line Items]
Notes payable					0	0
ETBC 1 | Forecast
Short-term Debt [Line Items]
Scheduled payments			$ 3,400,000	$ 2,500,000
PNMR Revolving Credit Facility | WEB LOC Facility
Short-term Debt [Line Items]
Letters of credit outstanding					30,300,000
PNM
Short-term Debt [Line Items]
Letters of credit outstanding					0
Short-term debt					186,200,000	137,500,000
PNM | PNMR
Short-term Debt [Line Items]
Notes payable					2,300,000
PNM | Lines of credit
Short-term Debt [Line Items]
NMPRC approved credit facility							$ 40,000,000
TNMP
Short-term Debt [Line Items]
Letters of credit outstanding					0
Short-term debt					18,300,000	55,100,000
TNMP | PNMR
Short-term Debt [Line Items]
Notes payable					0
TNMP | TNMP 2024 Bond Purchase Agreement | Subsequent event | Unsecured Debt
Short-term Debt [Line Items]
Proceeds from issuance of unsecured debt	$ 128,000,000
PNMR Development | PNMR
Short-term Debt [Line Items]
Short-term debt					100,000	2,300,000
PNMR Development | PNMR Revolving Credit Facility
Short-term Debt [Line Items]
Short-term debt					40,000,000	$ 69,300,000
Revolving credit facility
Short-term Debt [Line Items]
Financing capacity					300,000,000
Revolving credit facility | PNM
Short-term Debt [Line Items]
Financing capacity					400,000,000
Revolving credit facility | TNMP
Short-term Debt [Line Items]
Financing capacity									$ 100,000,000
Revolving credit facility | TNMP | Subsequent event
Short-term Debt [Line Items]
Financing capacity		$ 200,000,000
Number of extensions | extension_option		2
Extension period		1 year
Revolving credit facility | TNMP | First mortgage bonds
Short-term Debt [Line Items]
Collateral amount								$ 100,000,000
Revolving credit facility | TNMP | First Mortgage Bonds Due 2029 | Subsequent event
Short-term Debt [Line Items]
Collateral amount		$ 200,000,000
Revolving credit facility | PNMR and PNM | Subsequent event
Short-term Debt [Line Items]
Number of extensions | extension_option		2
Extension period		1 year
Senior Unsecured Noted, Pollution Control Revenue Bonds | PNM | Pollution Control Revenue Bonds, Due June 2024
Short-term Debt [Line Items]
Financing capacity					198,000,000
Senior Unsecured Noted, Pollution Control Revenue Bonds | TNMP | FMB Notes Due July 2024
Short-term Debt [Line Items]
Financing capacity					$ 80,000,000

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Financing - Hedging Arrangement (Details) $ in Millions	Mar. 31, 2024 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair value of hedge agreements, assets	$ 7.8
Fair value of hedge agreements, liabilities	0.1
Other Current Assets
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair value of hedge agreements, assets	7.6
Other Deferred Charges
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair value of hedge agreements, assets	0.2
Other deferred credits
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair value of hedge agreements, liabilities	$ 0.1

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Financing - Schedule of Hedging Arrangements (Details) - Designated as Hedging Instrument - Interest rate contract $ in Thousands	Mar. 31, 2024 USD ($)
Variable Rate Debt, 3.32%, Due December 2024 (1)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 100,000
Fixed interest rate	3.32%
Variable Rate Debt, 3.32%, Due December 2024 (2)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 100,000
Fixed interest rate	3.32%
Variable Rate Debt, 3.38%, Due December 2024
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 100,000
Fixed interest rate	3.38%
Variable Rate Debt, 3.62%, Due December 2024
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 150,000
Fixed interest rate	3.62%
Variable Rate Debt, 3.57%, Due December 2024
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 150,000
Fixed interest rate	3.57%
Variable Rate Debt, 4.18% Due December 2025
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 100,000
Fixed interest rate	4.18%
Variable Rate Debt, 4.18% Due December 2025 (2)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 100,000
Fixed interest rate	4.18%
Variable Rate Debt, 3.99% Due December 2025
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset, notional amount	$ 100,000
Fixed interest rate	3.99%

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Financing - Schedule of Short-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Short-term Debt [Line Items]
Short-term debt	$ 244,500	$ 261,900
PNM
Short-term Debt [Line Items]
Short-term debt	186,200	137,500
Texas-New Mexico Power Company
Short-term Debt [Line Items]
Short-term debt	18,300	55,100
PNM Revolving Credit Facility | PNM
Short-term Debt [Line Items]
Short-term debt	$ 146,200	$ 107,500
Line of credit facility, interest rate at period end	6.67%	6.69%
PNM New Mexico Credit Facility | PNM
Short-term Debt [Line Items]
Short-term debt	$ 40,000	$ 30,000
Line of credit facility, interest rate at period end	6.68%	6.71%
TNMP Revolving Credit Facility | Texas-New Mexico Power Company
Short-term Debt [Line Items]
Short-term debt	$ 18,300	$ 55,100
Line of credit facility, interest rate at period end	6.29%	6.32%
PNMR Revolving Credit Facility | PNMR Development
Short-term Debt [Line Items]
Short-term debt	$ 40,000	$ 69,300
Line of credit facility, interest rate at period end	6.92%	6.96%

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Pension and Other Postretirement Benefit Plans - Schedule of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
PNM | Pension Plan
Components of Net Periodic Benefit Cost
Service cost	$ 0	$ 0
Interest cost	5,427	5,913
Expected return on plan assets	(7,757)	(7,299)
Amortization of net loss	2,661	2,646
Amortization of prior service cost	0	0
Net Periodic Benefit Cost (Income)	331	1,260
PNM | OPEB Plan
Components of Net Periodic Benefit Cost
Service cost	0	0
Interest cost	597	676
Expected return on plan assets	(1,391)	(1,243)
Amortization of net loss	0	0
Amortization of prior service cost	0	0
Net Periodic Benefit Cost (Income)	(794)	(567)
PNM | Executive Retirement Program
Components of Net Periodic Benefit Cost
Service cost	0	0
Interest cost	124	135
Expected return on plan assets	0	0
Amortization of net loss	50	38
Amortization of prior service cost	0	0
Net Periodic Benefit Cost (Income)	174	173
Texas-New Mexico Power Company | Pension Plan
Components of Net Periodic Benefit Cost
Service cost	0	0
Interest cost	553	601
Expected return on plan assets	(687)	(674)
Amortization of net loss	139	110
Amortization of prior service cost	0	0
Net Periodic Benefit Cost (Income)	5	37
Texas-New Mexico Power Company | OPEB Plan
Components of Net Periodic Benefit Cost
Service cost	5	5
Interest cost	96	106
Expected return on plan assets	(129)	(120)
Amortization of net loss	(161)	(190)
Amortization of prior service cost	0	0
Net Periodic Benefit Cost (Income)	(189)	(199)
Texas-New Mexico Power Company | Executive Retirement Program
Components of Net Periodic Benefit Cost
Service cost	0	0
Interest cost	4	3
Expected return on plan assets	0	0
Amortization of net loss	0	0
Amortization of prior service cost	0	0
Net Periodic Benefit Cost (Income)	$ 4	$ 3

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Pension and Other Postretirement Benefit Plans - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pension Plan | PNM
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 0	$ 0
Estimated employer contributions for remainder of fiscal year through year four	$ 0
Pension Plan | PNM | Maximum
Defined Benefit Plan Disclosure [Line Items]
Assumptions used calculating net periodic benefit cost, discount rate	5.50%
Pension Plan | Texas-New Mexico Power Company
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 0	0
Estimated employer contributions for remainder of fiscal year through year four	0
Estimated future contributions, year five	$ 200,000
Pension Plan | Texas-New Mexico Power Company | Maximum
Defined Benefit Plan Disclosure [Line Items]
Assumptions used calculating net periodic benefit cost, discount rate	5.50%
OPEB Plan | PNM
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 0	0
Disbursements by employer	100,000	800,000
Disbursements by employer, year one through four	10,100,000
Estimated disbursement by employer, current year	200,000
OPEB Plan | Texas-New Mexico Power Company
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	0	0
Disbursements by employer, year one through four	0
Executive Retirement Program | PNM
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	300,000	100,000
Disbursements by employer, year one through four	4,400,000
Estimated disbursement by employer, current year	1,200,000
Executive Retirement Program | Texas-New Mexico Power Company
Defined Benefit Plan Disclosure [Line Items]
Disbursements by employer, year one through four	200,000
Estimated disbursement by employer, current year	100,000
Executive Retirement Program | Texas-New Mexico Power Company | Maximum
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 100,000	$ 100,000

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Commitments and Contingencies - Nuclear Spent Fuel and Waste Disposal (Details) - PNM - Nuclear spent fuel and waste disposal - Palo Verde Nuclear Generating Station - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Public Utilities, Commitments And Contingencies [Line Items]
Estimate of possible loss	$ 55.6
Other deferred credits
Public Utilities, Commitments And Contingencies [Line Items]
Loss contingency accrual	$ 11.7	$ 11.0

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Commitments and Contingencies - Santa Fe Generating Station (Details)		1 Months Ended	24 Months Ended
	Jan. 01, 2020 fieldReport	Jul. 31, 2020 fieldReport	Dec. 31, 2014 monitoringWell
Commitments and Contingencies Disclosure [Abstract]
Number of field work reports | fieldReport	2	2
Number of monitoring wells containing free-phase hydrocarbon products | monitoringWell			1

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Commitments and Contingencies - Coal Supply (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Dec. 31, 2022	Jan. 31, 2016
PNM | Loss on long-term purchase commitment | Surface
Public Utilities, Commitments And Contingencies [Line Items]
Loss contingency accrual	$ 44.5	$ 50.0
PNM | Loss on long-term purchase commitment | Underground
Public Utilities, Commitments And Contingencies [Line Items]
Loss contingency accrual	47.9	26.2
PNM | Loss on long-term purchase commitment | San Juan Generating Station | Surface
Public Utilities, Commitments And Contingencies [Line Items]
Estimate of possible loss	51.4
PNM | Loss on long-term purchase commitment | San Juan Generating Station | Underground
Public Utilities, Commitments And Contingencies [Line Items]
Estimate of possible loss	59.7
Coal supply | San Juan Generating Station
Public Utilities, Commitments And Contingencies [Line Items]
Cash used to support bank letter or credit arrangement				$ 30.3
Coal supply | NM Capital | San Juan Generating Station
Public Utilities, Commitments And Contingencies [Line Items]
Requirement to post reclamation bonds	118.7
Cash used to support bank letter or credit arrangement	30.3
Four Corners CSA | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Funds contributed, mine reclamation trust		0.2	$ 2.4
Reclamation trust funding, remainder of year	3.1
Reclamation trust funding, 2025	1.3
Reclamation trust funding, year 2026	1.5
San Juan Generating Station
Public Utilities, Commitments And Contingencies [Line Items]
Reclamation costs	20.9
Regulatory disallowance	4.5
San Juan Generating Station | Surface
Public Utilities, Commitments And Contingencies [Line Items]
Increase in regulatory liabilities	4.0
Decrease in deferred regulatory assets	0.5
Reclamation, maximum collection from customers	100.0
San Juan Generating Station | Underground
Public Utilities, Commitments And Contingencies [Line Items]
Increase in regulatory liabilities	17.0
San Juan Generating Station | Loss on long-term purchase commitment | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Annual funding post-term reclamation trust		$ 2.7
Annual funding post-term reclamation trust, remainder of year	20.7
Annual funding post-term reclamation trust, year one	3.9
Annual funding post-term reclamation trust, year two	4.0
San Juan Generating Station and Four Corners | Mine Reclamation Trust | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Customer reclamation funding cost	$ 100.0

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Commitments and Contingencies - San Juan County Decommissioning Ordinance (Details) - San Juan Generating Station - Coal-Fired Electricity Generating Facility Demolition And Remediation Ordinance - Public Service Company of New Mexico - USD ($) $ in Millions	1 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Nov. 09, 2021
Public Utilities, Commitments And Contingencies [Line Items]
Initial funding requirement	$ 14.7
Surety bond			$ 46.0
Decrease in decommissioning obligation		$ 21.1

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Commitments and Contingencies - PVNGS Liability and Insurance Matters (Details) - PNM - Palo Verde Nuclear Generating Station - Nuclear plant $ in Millions	Mar. 31, 2024 USD ($)
Public Utilities, Commitments And Contingencies [Line Items]
Maximum potential assessment per incident	$ 36.3
Annual payment limitation related to incident	5.4
Aggregate amount of all risk insurance	2,800.0
Maximum amount under nuclear electric insurance limited	4.9
Maximum
Public Utilities, Commitments And Contingencies [Line Items]
Liability insurance coverage	16,300.0
Liability insurance coverage sublimit	2,250.0
Commercial providers
Public Utilities, Commitments And Contingencies [Line Items]
Liability insurance coverage	500.0
Industry Wide Retrospective Assessment Program
Public Utilities, Commitments And Contingencies [Line Items]
Liability insurance coverage	$ 15,800.0

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Regulatory and Rate Matters - PNM (Details) $ in Thousands					3 Months Ended		12 Months Ended
	Jan. 03, 2024 USD ($)	Jan. 01, 2024 USD ($)	Apr. 17, 2023 USD ($) program	Dec. 05, 2022 USD ($) lease MW	Mar. 31, 2024 USD ($) $ / MWh MW	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Public Utilities, Commitments And Contingencies [Line Items]
Increase in non-fuel based rate	$ 15,300
Regulatory liabilities return period	2 years						2 years
Operating revenues					$ (436,877)	$ (544,077)
Excess return on jurisdictional equity that would require refund					0.50%
PVNGS Leased Interest
Public Utilities, Commitments And Contingencies [Line Items]
Regulatory liability	$ 38,400
Four Corners
Public Utilities, Commitments And Contingencies [Line Items]
Regulatory disallowances	$ 81,000
PNM
Public Utilities, Commitments And Contingencies [Line Items]
Operating revenues					$ (308,115)	(430,165)
Number of leases renewed | lease				5
Number of megawatts purchased (in megawatts) | MW				64.1
Renewable Portfolio Standard | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Number of megawatts of Solar PV facilities | MW					158
Current output in the geothermal facility (in megawatts) | MW					11
Solar generation capacity (in megawatts) | MW					289.3
2024 Plan | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Program costs related to energy efficiency, number of programs | program			10
Program costs related to energy efficiency, in year one			$ 34,500
Program costs related to energy efficiency, in year two			35,400
Program costs related to energy efficiency, in year three			$ 36,500
Integrated Resource Plan, 2011 | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Frequency of IRP filings					3 years
Planning period covered of IRP					20 years
NM 2022 Rate Case
Public Utilities, Commitments And Contingencies [Line Items]
Requested return on equity	9.26%
Requested debt capital structure	50.10%
Requested equity capital structure, percentage	0.29%
Requested equity capital structure	49.61%
NM 2022 Rate Case | Palo Verde Nuclear Generating Station
Public Utilities, Commitments And Contingencies [Line Items]
Approved regulatory asset	$ 51,300
Request regulatory asset	96,300
Disallowance of return	$ 45,000
NM 2022 Rate Case | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Recovery of base rate				$ 2,700,000
NM 2022 Rate Case | PNM | Non-Fuel Energy
Public Utilities, Commitments And Contingencies [Line Items]
Requested rate increase (decrease)				$ 63,800
2024 Rate Change
Public Utilities, Commitments And Contingencies [Line Items]
Regulatory liability							$ 19,200
Deferred Regulatory Liability							19,200
2024 Rate Change | PVNGS Leased Interest
Public Utilities, Commitments And Contingencies [Line Items]
Operating revenues							38,400
2024 Rate Change | Palo Verde Nuclear Generating Station
Public Utilities, Commitments And Contingencies [Line Items]
Regulatory disallowances							8,200
2024 Rate Change | Four Corners
Public Utilities, Commitments And Contingencies [Line Items]
Regulatory disallowances							$ 55,500
NMPRC
Public Utilities, Commitments And Contingencies [Line Items]
Requested return on equity				10.25%
Action plan, covered period					3 years
NMPRC | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Proposed revision to rider that will allow for recovery		$ 59,000
NMPRC | Renewable Energy Rider | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Recorded revenues from renewable rider					$ 15,300	$ 18,600
Minimum | Energy Efficiency and Load Management Program | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Profit incentive sliding scale multiplier			0.071
Maximum | Renewable Portfolio Standard | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Reasonable cost threshold in megawatts per hour | $ / MWh					60
Maximum | Energy Efficiency and Load Management Program | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Profit incentive sliding scale multiplier			0.0882
New Mexico Wind | Renewable Portfolio Standard 2014 | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Number of megawatts for wind energy | MW					200
Red Mesa Wind | Renewable Portfolio Standard 2014 | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Number of megawatts for wind energy | MW					102
La Joya Wind | Renewable Portfolio Standard | PNM
Public Utilities, Commitments And Contingencies [Line Items]
Number of megawatts for wind energy | MW					140

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Regulatory and Rate Matters - Fours Corners, Summer Peak Resource Adequacy, 2026 Resource Application, Grid Modernization Application (Details) $ in Thousands				1 Months Ended	3 Months Ended		12 Months Ended
	Oct. 25, 2023 MW batteryStorageAgreement	Oct. 03, 2022 USD ($)	Jan. 08, 2021 USD ($)	Nov. 30, 2020 USD ($)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2020 USD ($)
Public Utilities, General Disclosures [Line Items]
Electric operating revenues					$ 436,877	$ 544,077
Number of battery storage agreements | batteryStorageAgreement	3
PNM
Public Utilities, General Disclosures [Line Items]
Electric operating revenues					$ 308,115	$ 430,165
Grid modernization investment		$ 344,000
Grid modernization, initial term		6 years
Grid modernization term		11 years
PNM | Four Corners
Public Utilities, General Disclosures [Line Items]
Request issuance of energy transition bonds			$ 300,000
Payments for relief from obligations				$ 15,000			$ 75,000
Final payment for relief from obligations							$ 60,000
PNM | Four Corners | PNM
Public Utilities, General Disclosures [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners							13.00%
PNM | Solar Agreement One
Public Utilities, General Disclosures [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	100
PNM | Solar Agreement Two
Public Utilities, General Disclosures [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	60
PNM | Battery Storage Agreement One
Public Utilities, General Disclosures [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	100
PNM | Battery Storage Agreement Two
Public Utilities, General Disclosures [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	100
PNM | Battery Storage Agreement Three
Public Utilities, General Disclosures [Line Items]
Number of megawatts available in purchase power agreement (in megawatts) | MW	50

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Regulatory and Rate Matters - Transportation and Electrification Program (TEP) (Details) - Public Service Company of New Mexico - USD ($) $ in Millions	Feb. 23, 2024	Feb. 02, 2024	Jun. 01, 2023
Public Utilities, General Disclosures [Line Items]
Expected budgeted expenditures			$ 37.1
Budget period			3 years
Budge dedication to low-income customers			22.00%
Budget dedication to low-income customers			$ 8.0
Reduction in approved budget		$ 4.0
Total budget	$ 32.9

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Regulatory and Rate Matters - Schedule of Transmission Cost of Service Rates (Details) - PUCT - TNMP - USD ($) $ in Millions	Mar. 15, 2024	Sep. 06, 2023	May 12, 2023
Public Utilities, General Disclosures [Line Items]
Approved Increase in Rate Base	$ 97.4	$ 21.4	$ 150.5
Annual Increase in Revenue	$ 13.1	$ 4.2	$ 19.4

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Regulatory and Rate Matters - TNMP Narrative (Details) - TNMP - USD ($) $ in Millions	Apr. 01, 2024	Sep. 28, 2023	Mar. 01, 2022
Public Utilities, Commitments And Contingencies [Line Items]
Energy efficiency cost recovery, requested change amount			$ 7.3
Energy efficiency cost recovery, requested bonus			$ 1.9
Energy efficiency cost recovery factor, recovery		$ 6.6
Energy efficiency cost recovery factor, approved performance bonus		$ 1.2
Subsequent event
Public Utilities, Commitments And Contingencies [Line Items]
Requested rate increase (decrease)	$ 15.9
Recovery of base rate	$ 207.4

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Regulatory and Rate Matters - Schedule of Interim Distribution Rate Increases (Details) - Texas-New Mexico Power Company - Periodic Distribution Rate Adjustment - USD ($) $ in Millions	Sep. 01, 2023	Sep. 01, 2022
Public Utilities, General Disclosures [Line Items]
Approved Increase in Rate Base	$ 157.0	$ 95.7
Annual Increase in Revenue	$ 14.5	$ 6.8

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Lease Commitments - Narrative (Details) $ in Thousands	1 Months Ended			3 Months Ended
	Jan. 31, 2024 USD ($)	Apr. 30, 2023 USD ($)	Jan. 31, 2023 USD ($)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Jan. 15, 2016 lease	Jan. 15, 2015 lease
Operating Leased Assets [Line Items]
Proceeds from sale of productive assets				$ 2,840	$ 28,372
Reduction to inventories				6,457	(2,443)
Unamortized cost, right-of-way lease payments				71,300		$ 56,200
Operating lease, right-of-use asset, amortization expense				$ 1,100	900
Non-lease component, percent of lease liability				25.50%
Operating lease, right-of-use asset				$ 179,480		182,201
Lessee, operating lease, unguaranteed residual value				23,800
Lease to be executed, fixed consideration				$ 1,100,000
Lease to be executed, term of contract				20 years
Materials, Supplies, and Fuel Stock
Operating Leased Assets [Line Items]
Reduction to inventories	$ (600)			$ (5,300)
PNM
Operating Leased Assets [Line Items]
Proceeds from sale of productive assets				2,840	28,372
Reduction to inventories				3,612	(2,916)
Operating lease, right-of-use asset				177,865		180,370
Lessee, operating lease, unguaranteed residual value				11,900
PNM | Palo Verde Nuclear Generating Station, Unit 1 and 4 Leases
Operating Leased Assets [Line Items]
Number of leases, expiring | lease								4
Number of leases under which lease term was extended | lease								4
PNM | Palo Verde Nuclear Generating Station, Unit 2 Leases
Operating Leased Assets [Line Items]
Number of leases, expiring | lease							4
Number of leases under which lease term was extended | lease							1
PNM | Navajo Nation
Operating Leased Assets [Line Items]
Annual lease payments				6,000
Right-of-way lease payments		$ 8,300
TNMP
Operating Leased Assets [Line Items]
Reduction to inventories				2,845	$ 473
Operating lease, right-of-use asset				1,615		$ 1,814
Lessee, operating lease, unguaranteed residual value				12,000
Equipment
Operating Leased Assets [Line Items]
Operating lease, residual value of leased asset				1,800
Equipment | PNM
Operating Leased Assets [Line Items]
Operating lease, residual value of leased asset				800
Equipment | TNMP
Operating Leased Assets [Line Items]
Operating lease, residual value of leased asset				1,000
PNM Owned Assets
Operating Leased Assets [Line Items]
Proceeds from sale of productive assets	3,400		$ 33,700
Net Utility Plant
Operating Leased Assets [Line Items]
Proceeds from sale of productive assets	$ 2,800			$ 28,400
Other
Operating Leased Assets [Line Items]
Operating lease, term of contract				20 years

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Lease Commitments - Operating Lease Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Operating leases:
Operating lease assets, net of amortization	$ 179,480	$ 182,201
Current portion of operating lease liabilities	11,811	12,267
Long-term portion of operating lease liabilities	165,842	167,000
PNM
Operating leases:
Operating lease assets, net of amortization	177,865	180,370
Current portion of operating lease liabilities	10,925	11,371
Long-term portion of operating lease liabilities	165,199	166,191
TNMP
Operating leases:
Operating lease assets, net of amortization	1,615	1,814
Current portion of operating lease liabilities	887	895
Long-term portion of operating lease liabilities	$ 643	$ 809

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Lease Commitments - Finance Lease Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financing leases:
Non-utility property	$ 48,826	$ 49,981
Accumulated depreciation	(24,095)	(23,905)
Non-utility property, net	24,731	26,076
Other current liabilities	8,473	8,776
Other deferred credits	16,299	17,326
PNM
Financing leases:
Non-utility property	23,262	25,425
Accumulated depreciation	(10,975)	(11,984)
Non-utility property, net	12,287	13,441
Other current liabilities	3,836	4,146
Other deferred credits	8,469	9,300
TNMP
Financing leases:
Non-utility property	25,400	24,487
Accumulated depreciation	(13,058)	(11,869)
Non-utility property, net	12,342	12,618
Other current liabilities	4,604	4,616
Other deferred credits	$ 7,760	$ 8,023

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Lease Commitments - Schedule of Weighted Average Remaining Lease Terms and Discount Rates (Details)	Mar. 31, 2024
Weighted average remaining lease term (years):
Operating leases	16 years 5 months 15 days
Financing leases	3 years 4 months 6 days
Weighted average discount rate:
Operating leases	5.60%
Financing leases	4.72%
PNM
Weighted average remaining lease term (years):
Operating leases	16 years 7 months 2 days
Financing leases	3 years 8 months 1 day
Weighted average discount rate:
Operating leases	5.61%
Financing leases	4.65%
TNMP
Weighted average remaining lease term (years):
Operating leases	1 year 6 months 25 days
Financing leases	3 years 7 days
Weighted average discount rate:
Operating leases	4.22%
Financing leases	4.80%

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Lease Commitments - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Lease, Cost [Line Items]
Operating lease cost:		$ 4,337
Amounts capitalized	$ (267)	(513)
Operating lease cost:	5,009	3,824
Financing lease cost:
Amortization of right-of-use assets	2,542	2,093
Interest on lease liabilities	297	234
Amounts capitalized	(2,023)	(1,690)
Total financing lease expense	816	637
Variable lease expense	360	262
Short-term lease expense	216	151
Total lease expense for the period	6,401	4,874
Battery Storage Leases
Lease, Cost [Line Items]
Operating lease cost:	2,947
Other Operating Leases
Lease, Cost [Line Items]
Operating lease cost:	2,329
PNM
Lease, Cost [Line Items]
Operating lease cost:		3,908
Amounts capitalized	(35)	(160)
Operating lease cost:	4,971	3,748
Financing lease cost:
Amortization of right-of-use assets	1,218	1,008
Interest on lease liabilities	144	122
Amounts capitalized	(841)	(690)
Total financing lease expense	521	440
Variable lease expense	360	262
Short-term lease expense	204	147
Total lease expense for the period	6,056	4,597
PNM | Battery Storage Leases
Lease, Cost [Line Items]
Operating lease cost:	2,947
PNM | Other Operating Leases
Lease, Cost [Line Items]
Operating lease cost:	2,059
TNMP
Lease, Cost [Line Items]
Operating lease cost:		429
Amounts capitalized	(232)	(353)
Operating lease cost:	38	76
Financing lease cost:
Amortization of right-of-use assets	1,316	1,064
Interest on lease liabilities	152	111
Amounts capitalized	(1,182)	(1,000)
Total financing lease expense	286	175
Variable lease expense	0	0
Short-term lease expense	6	0
Total lease expense for the period	330	$ 251
TNMP | Battery Storage Leases
Lease, Cost [Line Items]
Operating lease cost:	0
TNMP | Other Operating Leases
Lease, Cost [Line Items]
Operating lease cost:	$ 270

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Lease Commitments - Schedule of Supplemental Cash Flows Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 3,840	$ 9,319
Operating cash flows from financing leases	74	55
Finance cash flows from financing leases	728	560
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	90	0
Financing leases	1,398	4,077
PNM
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	3,826	9,193
Operating cash flows from financing leases	44	42
Finance cash flows from financing leases	464	377
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	27	0
Financing leases	263	2,730
TNMP
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	14	126
Operating cash flows from financing leases	29	14
Finance cash flows from financing leases	256	161
Non-cash information related to right-of-use assets obtained in exchange for lease obligations:
Operating leases	63	0
Financing leases	$ 1,040	$ 1,347

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Lease Commitments - Schedule of Future Expected Lease Payments (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Financing
Remainder of 2024	$ 7,271
2025	7,926
2026	6,181
2027	3,526
2028	1,241
Later years	707
Total minimum lease payments	26,852
Less: Imputed interest	2,080
Lease liabilities	24,772
Battery Storage
Battery Storage
Remainder of 2024	7,825
2025	7,867
2026	7,121
2027	7,049
2028	7,049
Later years	10,587
Total minimum lease payments	47,498
Less: Imputed interest	5,536
Lease liabilities	41,962
Other
Battery Storage
Remainder of 2024	8,840
2025	11,786
2026	11,786
2027	11,786
2028	11,786
Later years	172,254
Total minimum lease payments	228,238
Less: Imputed interest	92,547
Lease liabilities	135,691
PNM
Financing
Remainder of 2024	3,333
2025	3,636
2026	3,117
2027	1,885
2028	856
Later years	614
Total minimum lease payments	13,441
Less: Imputed interest	1,136
Lease liabilities	12,305
PNM | Battery Storage
Battery Storage
Remainder of 2024	7,117
2025	7,082
2026	7,031
2027	7,035
2028	7,038
Later years	10,587
Total minimum lease payments	45,890
Less: Imputed interest	5,457
Lease liabilities	40,433
PNM | Other
Battery Storage
Remainder of 2024	8,840
2025	11,786
2026	11,786
2027	11,786
2028	11,786
Later years	172,254
Total minimum lease payments	228,238
Less: Imputed interest	92,547
Lease liabilities	135,691
TNMP
Financing
Remainder of 2024	3,909
2025	4,262
2026	3,038
2027	1,615
2028	383
Later years	93
Total minimum lease payments	13,300
Less: Imputed interest	936
Lease liabilities	12,364
Battery Storage
Remainder of 2024	708
2025	785
2026	90
2027	14
2028	11
Later years	0
Total minimum lease payments	1,608
Less: Imputed interest	78
Lease liabilities	$ 1,530

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2017
Income Tax Contingency [Line Items]
Effective tax rate	14.64%
Income tax assessment	$ 0.2
Deferred federal, state and local, income taxes	$ 23.3
PNM
Income Tax Contingency [Line Items]
Effective tax rate	13.09%
Income tax assessment	$ 0.1
Deferred federal, state and local, income taxes	$ 20.7
TNMP
Income Tax Contingency [Line Items]
Effective tax rate	20.72%
Income tax assessment	$ 0.1
Deferred federal, state and local, income taxes	$ 2.6
NMPRC
Income Tax Contingency [Line Items]
Period of time for proposed return to customers the benefit of the reduction in federal corporate income tax rate	5 years	23 years
Unprotected excess deferred income taxes	$ 62.7

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Services billings: | PNMR to PNM
Related Party Transaction [Line Items]
Amount of related party transaction	$ 35,407	$ 31,539
Services billings: | PNMR to TNMP
Related Party Transaction [Line Items]
Amount of related party transaction	14,237	12,413
Services billings: | PNM to TNMP
Related Party Transaction [Line Items]
Amount of related party transaction	81	65
Services billings: | TNMP to PNMR
Related Party Transaction [Line Items]
Amount of related party transaction	10	35
Services billings: | PNMR to NMRD
Related Party Transaction [Line Items]
Amount of related party transaction	66	82
Renewable energy purchases: | PNM from NMRD
Related Party Transaction [Line Items]
Amount of related party transaction	1,523	2,361
Interest billings: | PNMR to PNM
Related Party Transaction [Line Items]
Amount of related party transaction	14	3
Interest billings: | PNMR to TNMP
Related Party Transaction [Line Items]
Amount of related party transaction	14	11
Interest billings: | PNM to PNMR
Related Party Transaction [Line Items]
Amount of related party transaction	155	130
Income tax sharing payments: | PNMR to PNM
Related Party Transaction [Line Items]
Amount of related party transaction	0	0
Income tax sharing payments: | TNMP to PNMR
Related Party Transaction [Line Items]
Amount of related party transaction	$ 0	$ 0

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Equity Method Investment - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Feb. 27, 2024	Mar. 31, 2024	Mar. 31, 2023
Business Acquisition [Line Items]
Investment tax credit	$ 15,700
Gain on sale of NMRD	4,400	$ 4,449	$ 0
Disposal Group, Disposed of by Sale, Not Discontinued Operations | NMRD
Business Acquisition [Line Items]
Proceeds from interests	$ 117,000
PNMR Development | NMRD
Business Acquisition [Line Items]
Contribution to construction activities		$ 12,600	$ 11,500

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Equity Method Investment - Summarized Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Results of Operations
Operating revenues	$ 436,877	$ 544,077
Financial Position
Net property, plant, and equipment	693,502		$ 589,834
Assets	10,257,653	9,353,136	10,252,605
Total PNM common stockholder’s equity	2,355,731		2,349,093
NMRD
Results of Operations
Operating revenues	3,204	2,531
Operating expenses	3,378	2,434
Net Earnings Attributable to PNM	(174)	$ 97
Financial Position
Current assets	0		2,589
Net property, plant, and equipment	0		235,791
Non-current assets	0		1,849
Assets	0		240,229
Current liabilities	0		730
Non-current liabilities	0		358
Total PNM common stockholder’s equity	$ 0		$ 239,141