As the provider of steam for the on-site Lyondell Chemical Company outside of Houston, Altura Cogen operates more like a base load plant and can produce up to 614 megawatts of power.

In early 2007, PNM Resources and a subsidiary of Cascade Investment, L.L.C formed EnergyCo, an unregulated generation and power trading company operating in the competitive Texas market. EnergyCo is PNM Resources’ vehicle for expansion in competitive markets like the Electric Reliability Council of Texas. For Cascade, a Seattle-based, private-equity firm whose sole member is Microsoft founder Bill Gates, EnergyCo provides the opportunity to widen its investment in the energy industry. Already one of our largest shareholders, Cascade is familiar with PNM Resources' management and has supported the company's efforts to grow. Cascade invested $100 million to help fund PNM Resources' 2005 acquisition of TNP Enterprises.

EnergyCo's current generation portfolio consists of the 305-megawatt, coal-fired Twin Oaks Power facility located about 150 miles south of Dallas, and the 614-megawatt, natural gas Altura Cogen power plant near Houston.

In August 2007, EnergyCo announced a joint development project with NRG Energy, Inc., to expand NRG's existing Cedar Bayou Generating Station to a fourth unit. Once Cedar Bayou 4 goes online in mid-2009, approximately 275 megawatts will be available to EnergyCo's Marketing and Trading division and EnergyCo's generation portfolio will increase to nearly 1,200
megawatts.