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Citing Customer Impact, PNM Requests More Time to Consider Proposed New Emissions Controls in New Mexico

^{Published on 2010-08-11 15:55:45 - Market Wire}
 

ALBUQUERQUE, N.M.--([ BUSINESS WIRE ])--PNM yesterday filed a motion with the N.M. Environmental Improvement Board asking for more time to consider and respond to a plan recently proposed by the N.M. Environment Department related to regional haze in national parks and federal wilderness areas. PNM is the largest utility subsidiary of PNM Resources (NYSE: PNM).

"Our national parks and wilderness areas are important public assets that must be cared for and respected, and PNM believes strongly that its recent environmental investments to reduce NOx will achieve the EPA intent of reducing haze in those public areas"

The proposed plan, which would affect only the coal-fired PNM San Juan Generating Station, would have significant negative cost impacts to PNMa™s 500,000 electric customers, the company said in its filing. PNM estimates the controls would cost the average residential PNM customer about $90 per year for an estimated 20 years; costs for businesses would be higher.

PNM is requesting that the public hearing on the proposal now set for Oct. 4 be delayed until January 2011. The current schedule does not give the company adequate time to address the complicated issues raised in the proposal and fully evaluate the impacts on San Juan and customers it serves in several states. NMED filed the plan on June 21.

At issue is which technology best meets the U.S. Environmental Protection Agency regulations to address haze and improve visibility in federal wilderness areas and national parks. Mesa Verde National Monument in Colorado is the closest affected site to the San Juan plant, located near Farmington, N.M.

NMEDa™s proposed plan to meet the EPA regulations calls for installation of selective catalytic reduction, which PNM estimates would have a price tag of $750 million to $1 billion. Based on PNMa™s partial ownership of San Juan, PNMa™s share of that potential price tag is 46.3 percent.

PNMa™s analysis, conducted by a well respected engineering firm that specializes in air emissions, concluded that the planta™s recently completed $320 million environmental upgrade meets the EPAa™s Best Available Retrofit Technology a" or aBARTa a" standards. Technologies installed as part of that environmental upgrade have reduced plant emissions of nitrogen oxide, or NOx a" the primary emission targeted by the NMED proposal a" by about 33 percent. Other emissions also have been reduced.

PNM strongly believes the selective catalytic reduction technology would increase customer rates, yet would not have a significant impact on improving visibility in the targeted national parks and wilderness areas.

aAny proposal with this type of cost impact deserves ample time for review and consideration. Our proposed extension would provide that additional time,a said Pat Vincent-Collawn, president and CEO of PNM.

Nearby states, including Utah and Nevada, have reached different, less expensive conclusions in preparing their recommended state plan to meet the EPA rules.

Regional haze is produced by various emissions, including NOx. Coal plants like San Juan are significant sources of NOx, which is why PNM installed state-of-the-art low-NOx burners with over-fired air systems at San Juan during the recent environmental upgrade.

aOur national parks and wilderness areas are important public assets that must be cared for and respected, and PNM believes strongly that its recent environmental investments to reduce NOx will achieve the EPA intent of reducing haze in those public areas,a Vincent-Collawn said.

San Juan produces about half of the power PNM uses to serve its New Mexico customers.

The outcome of the October hearing on the statea™s proposal will be submitted to EPA Region 6 for approval. The EPA process will include a 60-day public comment period. PNM will have five years to achieve compliance with the requirements that come out of that process.

Background:

PNM Resources (NYSE: PNM) is an energy holding company based in Albuquerque, N.M., with 2009 consolidated operating revenues from continuing operations of $1.6 billion. Through its utility and energy subsidiaries, PNM Resources has more than 2,710 megawatts of generation resources and serves electricity to more than 875,300 homes and businesses in New Mexico and Texas. The company also has a 50-percent ownership of Optim Energy, which owns nearly 1,200 megawatts of generation resources. For more information, visit the company's Web site at [ www.PNMResources.com ].

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 500,000 retail customers in New Mexico. The company also sells power on the wholesale market in the West. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. For more information, see the company's Web site at [ PNM.com ].

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements made in this news release that relate to future events or PNM Resources' or PNM's (collectively, the "Companies") expectations, projections or estimates are made pursuant to the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements are based upon current expectations and estimates and the Companies assume no obligation to update this information. Because actual results may differ materially from those expressed or implied by these forward-looking statements, the Companies caution readers not to place undue reliance on these statements. The Companies' projections and estimates are influenced by many factors, which are often beyond their control that can cause actual results to differ from those expressed or implied by the forward-looking statements. These factors include: conditions affecting the Companiesa™ ability to access the financial markets and negotiate new credit facilities for those expiring in 2012, including actions by ratings agencies affecting the Companya™s credit ratings; state and federal regulatory and legislative decisions and actions, including provisions relating to climate change, reduction of greenhouse gas emissions, coal combustion by-products, and other power plant emissions; the performance of generating units; fluctuations in interest rates; weather; seasonality and other changes in supply and demand in the market for electric power; the impact of mandatory energy efficiency measures on customer energy usage; variability of wholesale power prices and natural gas prices; volatility and liquidity in the wholesale power markets and the natural gas markets; uncertainty regarding the ongoing validity of government programs for emission allowances; changes in the competitive environment in the electric industry; the risk that the Companies may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements including possible future requirements to address concerns about global climate change, and the resultant impacts on the operations and economic viability of generating plants in which PNM has interests; the risks associated with completion of generation projects, includingchanges in technology, construction delays, fluctuations in the costs of construction materials and labor, and other unanticipated cost overruns; and uncertainty surrounding the status of PNMa™s participation in jointly-owned projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2015 and potential changes in the objectives of the participants in the projects.