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PNM Resources Files Acquisition Plan

Albuquerque, New Mexico
September 9 , 2004

PNM Resources' (NYSE: PNM) acquisition of TNP Enterprises will strengthen the financial positions of both companies and provide savings resulting in modest rate decreases, according to filings made today with regulators in New Mexico and Texas.

Fort Worth-based TNP Enterprises is the parent company of Texas-New Mexico Power Co. (TNMP), which serves 48,000 customers in southern New Mexico and is the transmission and distribution company for 205,000 customers in Texas' competitive electric market. In July, PNM Resources agreed to acquire the company.

"This transaction will provide a very real opportunity to return TNP Enterprises to a healthier financial condition with no adverse effect on PNM Resources or PNM the utility," said Bill Real, PNM Resources senior vice president of Public Policy. "The acquisition will result in savings in administrative and overhead costs."

According to the filing, cost of service rate reductions of less than $1 per year for PNM gas customers would go into effect immediately following the acquisition. PNM electric customers, whose rates were cut 4 percent in 2003 and will see rates decrease another 2.4 percent in 2005, will receive a rate credit from the acquisition savings in January 2008, when the existing moratorium on rate changes expires.

The filings ask for approval of the acquisition from the New Mexico Public Regulation Commission and a finding from the Public Utility Commission of Texas that the acquisition is in the public interest. Additional federal approvals also are needed. PNM Resources believes that all regulatory approvals can be obtained in about six months due to the simple nature of the acquisition.

Real said the administrative savings would come from consolidating administrative and overhead costs, such as computer systems, licensing, software, insurance costs, bill printing, benefits administrative fees, purchasing efficiencies and duplicative positions.

According to the filing, PNM Resources will identify any possible benefits of combining the utility operations of PNM and TNMP-New Mexico and might propose to combine the operations when it files for its next general electric rate proceeding.

About PNM Resources
PNM Resources is an energy holding company based in Albuquerque, New Mexico. PNM, the principal subsidiary of PNM Resources, serves about 459,000 natural gas customers and 405,000 electric customers in New Mexico. The company also sells power on the wholesale market in the Western U.S. PNM Resources stock is traded primarily on the NYSE under the symbol PNM.

About TNP Enterprises
TNP Enterprises' primary subsidiary, Texas-New Mexico Power Company, was created in 1935. It provides community based electric service to 85 cities and more than 252,000 customers in Texas and New Mexico. First Choice Power, TNP Enterprises' other primary subsidiary, is a retail electric provider with more than 225,000 customers in Texas. First Choice began providing retail electric service to Texas customers in 2002 in response to the Texas Electric Choice Act. Headquartered in Fort Worth, Texas, the company has 37 offices throughout its service areas and approximately 750 employees in two states. More information about the company can be found at www.tnpe.com.

Analysts' contacts
Gina Jacobi: (505) 241-2211
Caroline Souders: (505) 241-0679

 

Press & analysts' contact
Frederick Bermudez: (505) 241-4831

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