Public Policy

The Company believes that public policy decisions shape the direction of our government and impact the environment in which we do business and the quality of life for all. Engaging in an open and transparent political process is an important principle of the Company. Accordingly, the Company encourages our employees and stakeholders to participate in the political and public policy making processes. We support and strictly comply with all applicable federal, state, and local laws governing our political activities.

Employee Political Participation

Employees at all levels are encouraged to participate in the political process and fully exercise their rights. Consequently, the Company generally will not promulgate policies that restrict any appropriate, lawful participation. However, campaign contributions to candidates seeking election to the NMPRC must be given special consideration given the NMPRC's role as a regulator of the rates and services of PNM. Therefore, Company officers should refrain from contributing to NMPRC candidates or their campaign committees. Laws and regulations governing political activities and contributions are complex, and employees are prohibited from acting on behalf of TXNM Energy or in any way giving the impression that their own opinions represent those of the Company unless they are expressly authorized to do so. TXNM Energy supports and encourages eligible employees to participate in the TXNM Energy Responsible Citizens Group (RCG), an employee-funded political action committee (PAC) governed by its own board of trustees.

Corporate Political Participation

Federal laws govern how a corporation may participate in the political process. On a limited basis and with approval of senior management, TXNM Energy may use corporate funds to make contributions to 527 organizations (tax‐exempt organizations that engage in political activities), trade associations and for independent expenditures. TXNM Energy also makes contributions to 501(c)(4) organizations whose primary purpose is to promote social welfare. TXNM Energy generally supports public policies that further the Company's business objectives; promote a diverse mix of resources for providing electricity to our customers; and support investments in the infrastructure needed to ensure safe, environmentally responsible, reliable, and cost‐effective service for our customers.

The Company's decisions on spending corporate funds are based on what is in the best interests of the Company and what we believe is sound public policy, and not on the personal preferences of Company officers, directors or employees. We also engage in important state and federal issues through trade associations that represent a broad array of professional and industry interests. Depending on their roles, these organizations may be subject to lobbyist registration and disclosure reporting obligations, with their reports made available to the public by the federal and state agencies overseeing lobbying activities. If a trade association to which the Company has contributed informs the Company that a portion of annual dues was used for lobbying, the Company discloses the name of the trade association and the dollar amount used for lobbying in our Annual Report of Contributions (below), provided that the amount is $1,000 or more. Additionally, we are active in local chambers of commerce because the Company actively supports the economic vitality of the areas we serve. TXNM Energy's policies require that representatives of the Company file all political compliance reports required by the Federal Elections Commission and state election compliance offices in a complete and timely manner.

Responsible Citizens Group (RCG)

TXNM Energy supports the RCG. As permitted by law, the Company may match employee contributions with donations to qualifying charities to encourage employee membership and participation in the RCG. While the Company is not permitted to make contributions to the RCG, the law does permit the Company to fund certain RCG administrative expenses such as the cost of sending periodic newsletters and conducting the annual meeting.

Independent Expenditures

TXNM Energy may make independent expenditures from our own funds or contribute to a separate registered PAC that engages in independent expenditures concerning specific candidates, initiatives or referenda to the extent permitted by law.

Lobbying

TXNM Energy actively participates in the political process to help shape policies that support our efforts to effectively and responsibly serve our customers, advance our business strategies and goals, promote effective public and government relations, and serve the interests of key stakeholder groups. By engaging with elected officials, community and business leaders, and state agencies, among others, we strive to conduct our business as transparently as possible to build trust and develop lasting partnerships that promote growth and innovation within our communities. TXNM Energy engages registered lobbyists, both federal and state, to support its legislative and regulatory activities. These lobbyists are carefully selected and are engaged only with the approval of senior management responsible for government affairs oversight. Further, eligible employees are provided the opportunity to participate in the political process through RCG, where the board of trustees oversees the distribution of campaign contributions.

Trade Association

TXNM Energy works with trade associations in our government relations activities. Depending on their capacity and function, some trade associations may be subject to lobbyist disclosure reporting obligations, with their reports made available to the public by the federal and state agencies overseeing lobbying activities. For the trade associations where TXNM Energy has contributed $1,000 or more, and the organization informs the Company a portion of annual dues was used for lobbying, TXNM Energy discloses the name of the trade association and the dollar amount used for lobbying in our Annual Report of Contributions.

TXNM Energy's Corporate Political Contributions

As part of our continued commitment to an open and transparent political process, we are pleased to provide a voluntary report of corporate contributions made to 527 organizations. Below, we report the lobbying portion of payments and dues to trade associations that, if made directly by TXNM Energy, would not be deductible under section 162(e) of the Internal Revenue Code. The report on the lobbying portion of payments and dues is based upon information provided by the trade associations.

TXNM Energy's Annual Reports of Contributions and Expenditures

⁽¹⁾Depending on their capacity and function, some trade associations may be subject to lobbyist disclosure reporting obligations, with their reports made available to the public by the federal and state agencies overseeing lobbying activities. This report includes trade associations to which TXNM Energy made payments greater than $1,000 for dues and which notified TXNM Energy of the portion used by that organization for expenditures or contributions that if made directly by TXNM Energy would not be deductible under section 162(e) of the Internal Revenue Code.

⁽²⁾Reported amount represents the estimated portion of TXNM Energy dues that if made directly by TXNM Energy would not be deductible under section 162(e) of the Internal Revenue Code and is based upon information requested and received by TXNM Energy. All PAC contributions are publicly disclosed on the Federal Election Commission website. You can also view RCG contributions to state and local political campaigns on the New Mexico Secretary of State's website (http://sos.state.nm.us) as well as the Company's contributions to independent expenditure PACs.

Public Disclosure

TXNM Energy and their lobbyists are required to file lobbying reports with Congress and with state agencies on a regular basis. The reports include information on the issues lobbied, the agencies contacted and the expenditures made, and are available for public review on the websites of the U.S. House of Representatives (http://www.house.gov) and the U.S. Senate (http://www.senate.gov). State reports for PNM lobbyists are available for review through the New Mexico Secretary of State (http://sos.state.nm.us), and state reports for TNMP lobbyists are available for review through the Texas Ethics Commission (https://www.ethics.state.tx.us).