1. A Utility’s Perspective on Climate Change Jeff Burks Director of Sustainability and Environmental Policy PNM Resources Presentation to WRAP Santa Fe, New Mexico August 25, 2005

2. 2 PNM Resources

3. 2 PNM’s Motivation to Address Climate Change? Environmental Science Public policy and national discourse Business reasons PNM’s environmental sustainability policy

4. 2 The Science Mounting scientific evidence cannot be ignored. Increasing evidence global warming is attributable to human activity. Atmospheric life of GHG emissions are long-lived.

5. 2 Public Policy and National Discourse Federal legislative agenda 2004 multi-pollutant legislation 2005 energy bill Topic in the national discourse Increasing State initiatives 171 cities with climate commitments Major issue of international economic dialogue G-8 summit at Gleneagle, Scotland

6. 2 Business Reasons Carbon policies alter economics of generation, fuel choices, and electricity prices. Directly impacts utility resource planning and operation decisions. Shareholder resolutions/environmental disclosure Interest of financial investment funds Environmental sustainability policy

7. 2 PNM Resources Perspective on Climate Change Climate change is emerging as the single most challenging environmental issue for utilities. Time for debate of science is over Utilities need to start preparing for a carbon constrained world now Early action on climate change aligned with PNM’s environmental policy PNM motivated to adopt a “no regrets” approach.

8. 2 Involvement with State, Regional and National Forums Participation on state, regional and national policy forums EEI CEO’s Climate Change Subcommittee NM Climate Change Advisory Committee WGA Clean Diversified Energy initiative 2004 NM Clean Energy Task Force WRAP?

9. 2 Our Conclusions Climate change has reached critical mass as an environmental, policy and business issue. Utility industry will operate in a carbon constrained world in the near future. Utilities have a key role to play in contributing to solving the challenge of climate change Regulatory policies must be aligned with public policy objectives State and local actions are helpful, but a meaningful, comprehensive federal policy is needed.