Exhibit 99.2 PNM Files For NMPRC Approval of a Global Settlement that: |X| Sets Electric Retail Rate Path |X| Facilitates Wholesale Market Strategy |X| Supports Repeal of Retail Open Access SETTLEMENT BENEFITS: o Avoids expensive litigation and uncertain outcome o Coal savings offset rate reduction o Provides long-term rate certainty o Increases earnings clarity o Extends current rates to September, 2003 o Continues joint dispatch of PNM's electric resources, including merchant plants o Retains upside of wholesale power market RATE PATH - A two-step rate reduction from today's levels for customers, providing a five-year rate path. o 4.0% across the board reduction $21 million beginning 9/03 o 2.5% across the board reduction $14 million beginning 9/05 o Average residential rates go from $.0858/kWh currently, to $.0821/kWh in 2003 and $.0800/kWh in 2005 o Allows recovery of $100 million of coal mine decommissioning costs Estimated per share earnings effects of rate agreement (not including load growth or other cost changes): 2003 2004 2005 2006 2007 ----------- ----------- ------------ ----------- ---------- Rate Reduction ($0.08) ($0.32) ($0.39) ($0.54) ($0.54) Coal Savings $0.08 $0.35 $0.37 $0.46 $0.46 Impact on Earnings at Commission Approval After-tax Earnings (millions) After-tax $/Share - ---------------------------- ------------------------------ ------------------- Write-off of open access transition costs ($10.0) ($0.26) Regulatory return on resources expanded to include 45 MW of San Juan Unit 4 and all power purchase contracts. Resources serve NM retail and FERC firm requirements wholesale customers. Total resources of 1,828 MW are projected to serve a peak load of 1,623 in the summer of 2003. Generation Assets in Rates: NM Retail FERC Power Purchases in Rates: NM Retail FERC San Juan Generating Station 659 MW 106 MW SPS Interruptible 129 MW 21 MW Four Corners 165 MW 27 MW EPE Contingent 34 MW 5 MW Reeves 133 MW 21 MW SPS Firm 62 MW 10 MW Las Vegas 17 MW 3 MW Tri-State 43 MW 7 MW PVNGS 219 MW 35 MW Delta-Person 114 MW 18 MW TOTAL 1,193 MW 192 MW TOTAL 382 MW 61 MW Exhibit 99-2 (Continued) (In Millions) Earnings Power GAAP Rate Base Rate Equity Assets* Adjustment Base Credit Return EPS --------- ----------- ------- -------- -------- -------- Electric Assets Employed $1,058 $ 97 $ 961 50% 11.20% $ 1.38 Coal Mine Decommissioning 100 100 - N/A N/A (0.09) --------- ----------- ------- -------- -------- -------- NM Retail Electric $1,158 $ 197 $ 961 50% 10.50% $ 1.29 Firm Customers (FERC) 175 24 $ 151 50% 9.00% $ 0.17 Excluded Plant/Marketing 282 9 273 100% 2.50% 0.17 NM Retail Gas 377 39 338 50% 3.80% 0.16 Cash/Equivalents 155 100% 1.80% 0.07 Accounts Receivable 154 N/A N/A 0.02 PVNGS Lessor Notes & Trusts 437 N/A N/A 0.12 Regulatory & Other Assets 201 N/A N/A - ---------- ------------ ------- ------- Total Assets $2,939 $ 269 $1,723 $ 2.00 ---------- ------------ ------- ------- * 12 months ended 6/30/02 as reflected in 2nd Quarter 10-Q. |X| WHOLESALE MARKET STRATEGY: The settlement provides for the ground rules for wholesale strategy. o Investment up to $1.25 billion (including Lordsburg and Afton) o PNM must remain investment grade o Maximum allowable leverage of 62% o No commission approval required to transfer wholesale plant to any other entity o Expedited approval process for wholesale plant financing o PNM will transfer all wholesale plant to an affiliate no later than 2010 o Joint dispatch of jurisdictional assets and merchant plant resources until 2015 |X| ELECTRIC INDUSTRY RESTRUCTURING: Current legislation in New Mexico provides for open access in January, 2007. As part of the overall stipulation, all signatories agree to support repeal of the Restructuring Act. The agreement creates a tariff that allows PNM to acquire a separate supply of power for large customers (82 customers 1 MW +). Availability limited to 100 MW in 7/05, load growth (30-40 MW) beyond '05.