News Release

May 21, 2002

San Juan Generating Station Recycles Fly Ash for Concrete

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NEWS MEDIA CONTACT Susan Sponar Telephone: (505) 241-2768

Waterflow: San Juan Generating Station (SJGS) recently signed a contract with Phoenix Cement Company of Scottsdale to provide fly ash for use in concrete products and roadwork. The ash classifier plant will help SJGS decrease one of its solid wastes while selling a valuable concrete additive to the American Indian-owned Arizona company.

Phoenix Cement Company will purchase fly ash, a byproduct of burning coal, from SJGS. Phoenix Cement Company will classify the ash to ensure a consistent, high quality product. It will be transported by truck directly to customers and to Phoenix Cement’s rail loadout facility in Gallup. Fly ash can be used as an additive and substitute for Portland cement in concrete to make it stronger and less costly.

“This project provides benefits to PNM and the plant owners on a number of fronts, by providing environmental dividends while lowering costs,” said Russell Huffman, San Juan Generating Station’s manager.

In a 15-year contract, Phoenix Cement will take between 150,000 and 300,000 tons of fly ash annually from units three and four of SJGS. More importantly, the deal will reduce the amount of fly ash being sent to the San Juan Mine for burial in the mine pit.

As road building and other concrete technologies have evolved, fly ash has become an important component in the process as an additive to concrete. Some 50,000 tons of fly ash from SJGS were used in the construction of Highway 550 between Bloomfield and Bernalillo.

The $3.5 million ash classifier plant at SJGS, constructed by Phoenix Cement, will sort the fly ash, taking the finer particles for its product and sorting the larger particles to be disposed of in the nearby mine. The new plant began production May 15, 2002.

Phoenix Cement is an operating division of the Salt River Pima-Maricopa Indian Community, an American Indian tribe in Arizona.

PNM is a combined electric and gas utility serving approximately 1.3 million people in New Mexico. The company, a wholly owned subsidiary of PNM Resources, 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.