News Release

May 17 , 2006

PNM Seeks Proposals to Meet Growing Demand for Electricity

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Albuquerque: PNM is seeking a combination approach to meeting growing electricity demand by requesting proposals that help reduce demand for electricity as well as increase the company's electricity generating capacity.

PNM projects it will need an additional 132 megawatts of electric capacity in 2008 to maintain an adequate reserve of power for days of peak electric demand, which typically occur during the summer. That need is expected to grow to 183 MW in 2009 and 229 MW in 2010.

For the first time, PNM will accept and evaluate proposals from vendors who can reduce demand on the PNM electric system in addition to proposals from those who can supply the utility with more power.

"Traditionally, we have met growing electricity demand by expanding our generating capacity either through building new power plants or purchasing more power," said Evelin Wheeler, director of resource planning and analytics for PNM. "Now we're taking a new approach by looking for ways to meet at least some of this demand by saving energy, which may be more cost-effective and environmentally friendly."

PNM has issued two separate but related requests for proposals, asking third-party energy companies to propose projects that would provide all or part of the additional electricity need PNM projects:

Capacity Supply RFP: Issued May 10, this RFP seeks proposals to bring additional electricity into the PNM system either through the construction of new generating facilities or through new contracts with existing power generators. Proposals may address all or part of the projected power need.

Demand-Side RFP: Issued today, this RFP seeks proposals that allow PNM to reduce the need for electricity during peak demand periods, so that the company can maintain adequate power reserves without the need for additional electricity generation. One possible approach could be to enter voluntary agreements with customers that would allow PNM to turn off their cooling systems for periods of time during peak demand to reduce demand on the system.

Wheeler said PNM would prefer to have both capacity supply and demand-side measures to maintain reliability for customers in the coming years.

Companies interested in bidding for capacity supply must notify PNM of their intent to bid by June 2, with proposals due June 23. Those interested in submitting demand-side proposals must notify PNM of their intent to bid by June 9, with proposals due June 30.

PNM will analyze the proposals along with the company's own self-build options and hopes to select one or more projects by this fall.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 424,000 customers and natural gas service to 478,000 customers in New Mexico. The company also sells power on the wholesale market in the West. 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.