News Release

Jan. 28, 2003

Regulators Approve PNM Electric Rate Cuts

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NEWS MEDIA CONTACT Frederick Bermudez Telephone: (505) 241-4831 Pager: (505) 235-9706

Albuquerque: The New Mexico Public Regulation Commission (PRC) today unanimously approved a comprehensive agreement that will reduce electric rates for PNM customers 6.5 percent over the next 2½ years.

The rate reductions — totaling about $35 million — will be the third and fourth in a string of electric rate cuts by PNM over the last eight years. PNM has not had an electric rate increase in more than 17 years, while lowering residential rates by more than 17 percent since 1994.

The rate reductions were part of an unopposed stipulated agreement between PNM and several parties that traditionally participate in rate-making procedures, including the Attorney General's Office, the PRC staff, City of Albuquerque officials, large business customers and UNM.

The agreement was filed in October and addresses numerous issues, including support for a repeal of New Mexico's competitive electricity law.

"The Commission's quick action on this agreement will allow PNM customers to reap the reward of even lower electric rates," said PNM Chairman, President and CEO Jeff Sterba. "These reductions will put PNM rates at 1982 levels."

Beginning Sept. 1, PNM's electric customers will see rates cut by 4 percent. Consumers will see another 2.5 percent decrease beginning Sept. 1, 2005. The new rates would be reflected in October bills.

The rates — which would be among the lowest in the Southwest — would remain in effect until Jan. 1, 2008. Combined, the proposed rate reductions would reduce the average residential monthly bill by $2.78 per month, based on 500 kilowatt-hours.