News Release

May 13, 2004

Competitive Electric Rates a Strong Sell for New Mexico

PNM NEWS News releases Financial news Contact PNM

NEWS MEDIA CONTACT Rorie Hanrahan N.M. Economic Development Dept. Telephone: (505) 476-3747

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

Santa Fe: New Mexico Secretary of Economic Development Rick Homans and Jeff Sterba, leader of the state's largest electric and gas utility, have a message for out-of-state businesses thinking of relocating to New Mexico: our electricity is not only reliable, but it's also substantially cheaper.

New data from the Department of Energy's Energy Information Administration shows the electric rates of Public Service Co. of New Mexico (PNM), which serves 400,000 electric customers in New Mexico, are now nearly 5 percent below the national average and more than 19 percent below the regional average. The region includes New Mexico, Texas, Colorado, Arizona, Nevada, Utah and California.

The data shows average PNM rates for commercial customers are nearly 25 percent below the regional average, while those for industrial customers are more than 21 percent below the regional average.

"Energy that's well priced and reliable is a key to a profitable business, and we've got it here in abundance, as this new data shows," Homans said. "Our energy advantages, the quality of our work force, and the lower overall cost of doing business help us to drive New Mexico forward by creating new high-wage jobs."

"PNM's intense focus on quality improvement has produced a paradox that's rarely seen in the utility industry: better reliability, improved customer service and lower rates for customers both large and small," said Sterba, PNM's chairman, president and CEO. "We are proud to play a strong role in keeping New Mexico businesses competitive and attracting new businesses to the state."

Sterba said PNM electric rates have dropped nearly 18 percent since 1992, without adjusting for inflation. Under the terms of an electric rate agreement approved in 2002, PNM rates are set to go down by an additional 2.4 percent in September 2005 — and will remain at that level through 2007.

Homans said the state will be promoting the competitiveness of PNM's electric rates at this week's CoreNet real estate conference in Chicago and through the department's "Make It In New Mexico" marketing campaign.

For more information on doing business in New Mexico, visit www.nmsitesearch.com or www.goNM.biz.