News Release

Jan. 13, 2004

PRC Approves Plan for New Natural Gas Delivery Rates

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

Santa Fe: On a unanimous 5-0 vote, the state Public Regulation Commission (PRC) today approved new natural gas delivery rates for PNM residential and business customers.

New residential rates will go into effect in April; new business rates go into effect immediately.

"Approval of this agreement culminates months of hard work by PNM, PRC commissioners and their staff and other parties," said PNM Senior Vice President Bill Real. "In the end, we have a rate plan that avoids an impact on residential customers this winter while also giving PNM revenues for continued investment in the system and the opportunity to earn a fair return."

Real said PNM customers today pay less for delivery charges than they did in 1991, despite $300 million in gas infrastructure investments since that time. For the third quarter of 2003, PNM reported its gas utility operations lost 12 cents per share.

For residential customers, the plan approved today will keep the set monthly access charge at $9, but increase per-therm distribution and transmission charges beginning in April. This will add 7.5 percent, or $3.56, to the average monthly bill of $47.48. For business customers, an increase to the monthly access fee as well as per-therm distribution and transmission services charges will add about 3 percent, or $7.32, to the average small business bill of $245 beginning immediately.

PNM originally requested a $37 million rate increase, plus an increase of $1.6 million to miscellaneous charges. The plan approved today represents an increase of $20 million in base rates, plus $1.6 million in miscellaneous charges.

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.