News Release

Oct. 2 , 2006

PNM Expects Sustained Higher Heating Bills This Winter
Despite Recent Decrease in Natural Gas Costs

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

Albuquerque: PNM has good news tempered with a word of caution for customers as October begins: This month’s cost of natural gas has dropped 27 percent from earlier projections.

PNM has filed a variance with the New Mexico Public Regulation Commission in order to change the per-therm cost of gas it will pass through to customers in October, setting the price at 61 cents. The average residential customer is expected to use 22 therms in October, and the average residential customer’s natural gas bill is expected to be $29.48.

“While it’s great news for our customers that the cost of natural gas has come down in recent weeks, we want to remind everyone that we could see cooler winter temperatures this year,” said Terry Horn, PNM vice president of customer service. “That would mean that while we’d be paying less for the natural gas we use, we would be using more of it and our bills may be about as high as they were last winter.”

The cost of natural gas very volatile, so today’s low prices may not reflect the long-term outlook for the cost. Factors like weather, geopolitical events, and even human emotion all can influence the natural gas market, making long-term price projections difficult and often unreliable.

However, PNM does look forward and make estimates based on best available information to offer general guidance to customers of what to expect in the coming months. As of Friday, PNM projected that higher expected consumption could mean the average residential customer bill this winter could be approximately $108 per month. That compares with last winter’s average bill of $115.

The actual cost customers will pay this winter will vary from this projection based on weather conditions and market influences on the cost of natural gas. PNM strongly recommends that customers prepare for winter by weatherizing their homes to help manage their heating costs. PNM rebates are available to customers to reduce the cost of certain energy efficiency measures, including:

• Retail rebates, with rebate forms available at participating retailers or at PNM.com, including:
  • $10 back for the purchase of a water heater insulation blanket
  • $25 back for the purchase of an ENERGY STAR® qualified programmable thermostat
• Contractor rebates, for products installed by a participating contractor listed at PNM.com, including:
  • 25 percent back (for as much as $500) on participating contractor-installed insulation and weatherization measures, including attic insulation, wall insulation, and ductwork leakage testing and sealing
  • Contractor-installed efficiency products, including ENERGY STAR® qualified programmable thermostats ($40), hot water heater insulation blankets ($15), hot water pipe insulation ($5 for as much as 10 feet), and low-flow showerheads ($8)

Visit PNM.com for more information on how to weatherize your home, or request a free how-to DVD on weatherization ideas.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 426,000 customers and natural gas service to 481,000 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.