News Release

Dec. 30, 2002

Market Factors Drive January Natural Gas Prices Slightly Higher

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

Albuquerque: PNM customers will pay 46.8 cents per therm for natural gas in January, an increase of about 10 percent from the December price of 42.6 cents per therm. The increase is a result of rising wholesale market prices.

PNM officials said the price of natural gas, which PNM passes along to customers without markup, remains volatile and is expected to stay that way for the foreseeable future.

"We have sufficient supplies of natural gas to meet customer demand," said PNM Vice President Melvin Christopher. "Unfortunately, the cost of buying that gas is substantially higher than it was this time last year."

Christopher added that natural gas prices are still well below their record-setting levels of two years ago, when market conditions drove the price for PNM customers to 66.75 cents per therm for January 2001.

Christopher said that despite continuing high prices, PNM customer bills will start to drop in the next few months as warmer weather reduces heating needs and average customer consumption.

PNM customers typically use more natural gas in January than in any other month. The average residential customer uses 145 therms in January, followed in descending order by February (132 therms), December (113 therms) and March (108 therms). Customers typically use the least amount of gas in August, with an average residential use of 18 therms.

To help customers manage their energy consumption, the January edition of PNM's Energy Works bill supplement includes a coupon good for $5 off any purchase of energy-saving products that totals $15 or more. The coupon is good at participating True Value Hardware stores throughout New Mexico.

PNM is the principal subsidiary of PNM Resources, an energy holding company based in Albuquerque. PNM provides natural gas service to 441,000 gas customers and electric utility service to 378,000 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