News Release

Sept. 29, 2003

Winter Heating Season Begins

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

Albuquerque: PNM customers who use natural gas in October will pay 50.96 cents per therm, a price substantially higher than last October but consistent with prices seen throughout 2003.

The average PNM residential customer, using 26 therms, will pay $28.07 for natural gas service in October. This compares with last October's average bill of $21.85, when the price was 30.63 cents per therm.

"This price is consistent with trends we're seeing nationwide," said PNM Vice President Melvin Christopher, the PNM official in charge of purchasing natural gas for the company's 441,000 natural gas customers. "Market analysts and buyers believe prices will remain high until we see more production, lower use or both."

Wholesale market prices have eased somewhat in recent weeks. But PNM is warning customers to expect high prices throughout the winter. Christopher said PNM has purchased hedging contracts - in essence, insurance policies - to protect against extraordinarily high prices. PNM can exercise those contracts if market prices rise to 70 cents per therm or higher.

PNM purchases natural gas on the wholesale market and, by state law, passes the cost along to customers without a markup.

Christopher urged PNM customers to consider making a donation to the PNM Good Neighbor Fund, which matches customer contributions with shareholder dollars to help New Mexicans who have difficulty paying their winter heating bills.

"The smallest donation doubles in size immediately, helping provide a cushion to some of our most vulnerable customers," Christopher said.

Customers may contribute by designating an amount on the monthly bill stub they return to PNM. Last year, the fund helped more than 6,000 New Mexico families.