News Release

Aug. 30, 2005

PNM Customers To See 2.6 Percent Decrease
in Electric Rates Beginning in September

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

Albuquerque: While customers prepare for high natural gas bills this winter, PNM is passing on some savings to its electric customers. PNM electric customers will see a 2.6 decrease in rates starting Sept. 1. This is the second rate cut in two years.

With the rate cut, PNM rates are among the lowest in the Southwest. The chart below shows the declining PNM residential rates alongside regional and national rates that have increased since 2002. PNM residential rates are 13 percent lower than the regional average and 8.7 percent below the national average.

The rate cut is part of an agreement approved in 2002 that saves PNM customers $35 million per year. The first cut, a 4 percent decrease, was in 2003.

"In a time when energy costs are rising, we are happy to pass these savings on to our customers," said Doug Hobbs, senior vice president of customer and delivery services.

This is the fourth rate cut by PNM during the last 11 years. PNM has not had a rate increase in more than 17 years and has lowered residential rates by more than 15 percent since 1994. As part of the agreement, these reduced electric rates will remain in effect until 2008.

The 2.6 percent rate cut applies to residential and business customers.

Electric rates for businesses also are among the lowest in the region. PNM commercial rates are 18.5 percent lower than regional averages and 11.9 percent lower than the national average.

"Having some of the lowest electric rates in the region is important for New Mexico’s growth," said Carol Radosevich, director of economic development for PNM. "This is good news for existing New Mexico businesses as well as businesses in other states looking to see what we have to offer."

PNM is the principal subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 413,000 customers and natural gas service to 471,000 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. For more information, see the company's Web site at PNM.com.