News Release

Dec. 28, 2005

PNM Gets Approval To Launch Customer Solar Energy Program

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

Albuquerque: PNM has received final approval from the New Mexico Public Regulation Commission (PRC) to launch a customer solar energy program and significantly increase the amount of solar generation in New Mexico.

PNM estimates a customer with a typical 1kilowatt AC (kW) photovoltaic (PV) system could receive about $3,650 during 12 years by participating in the program. A typical 1kW system costs between $9,000 and $12,000. Any customer with a 10 kW PV system or smaller will be eligible to participate.

Through the performance-based program, PNM expects to purchase the environmental attributes from about 18.7 million kilowatt hours (kWh) of customer-generated solar energy during a 12-year period, at a cost of about $2.8 million. PNM estimates generating the same amount of solar energy would require construction of a 1.2 megawatt solar facility that would occupy about five acres of land, at a cost of about $7.8 million.

The program is expected to begin in March.

"We are very excited that the PRC has approved this unique program, and we are eager to begin offering it to our customers," said Hugh Smith, PNM senior vice president of energy resources. "We believe this program is a good way to make more environmentally friendly renewable energy available to all of our customers."

"This program is an historic step forward for New Mexico that will make solar power much more affordable for residents," said Ben Luce, chair and policy director for the Coalition for Clean Affordable Energy.

How it works

The performance-based program would increase the value of the customer's PV system by paying the customer for the environmental attributes of the solar energy generated – known as a renewable energy certificate (REC). For PNM's program, one REC equals one kWh. PNM will pay participants 13 cents per kWh for the environmental attributes of the total energy produced. Customers will also be able to benefit by participating in PNM's net metering program.

The program is among the first in the country to be based on the actual performance of PV systems – most customer-owned programs offer incentives based only on the installation of generating systems.

Customers interested in learning more about this program can visit PNM.com.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 419,000 customers and natural gas service to 470,000 customers in New Mexico. The company also sells power on the wholesale market in the Western United States. 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.