News Release

Jan. 31, 2007

PNM Seeks Approval for Comprehensive
Energy Efficiency Plan

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

Albuquerque: PNM today filed an energy efficiency plan with the New Mexico Public Regulation Commission that would provide customers with a variety of electricity-saving tools to help manage their bills and protect the environment.

The plan proposes a number of measures for both residential and commercial customers that PNM predicts could result in energy savings of more than 26 million kilowatt-hours (kWh) per year. By comparison, the average PNM residential customer uses approximately 7,200 kWh per year.

The proposed plan also calls for innovative, voluntary programs that would allow PNM to free up electricity during peak demand periods.

“PNM and its customers are entering a new energy era in which the demand for electricity is growing quickly,” said Doug Hobbs, PNM Senior Vice President of Customer and Delivery Services. “By encouraging energy efficiency among our customers and employing load management programs during peak demand periods, the energy and demand savings we achieve are resource additions to our system that over time can delay the need to build more expensive new generation and transmission. That ultimately results in cost-savings for all of our customers and provides a clear benefit to the environment.”

In all, the plan proposes nine different measures that either:

• promote electric energy efficiency to reduce the amount of electricity consumed
• manage demand for energy to free up electricity as needed during times of peak demand

Energy Efficiency Fact Sheet

Promoting Energy Efficiency

The proposed energy efficiency measures provide customers with a wide variety of customer choices, from discounts on energy efficient compact fluorescent light bulbs, to a program that encourages customers to recycle their inefficient old refrigerators and freezers, to financial incentives for homebuilders to build energy efficient homes.

Managing Demand

In addition, the plan proposes load management programs for both residential and commercial customers that would allow PNM to reduce energy consumption during peak demand periods – particularly hot summer afternoons when customers use larger amounts of electricity to cool their homes and businesses. These voluntary programs would allow PNM to cycle air conditioners and other equipment on and off for brief periods of time when demand on the system is at its highest. PNM estimates that beginning in 2008 the load management programs could provide 30 MW of additional peak capacity available upon demand. That number is expected to grow to 63 MW by 2011.

PNM estimates the cost of running all of the programs will be about $7.5 million per year and has proposed a bill surcharge of 1.27 percent to cover the cost. The average monthly PNM residential bill of $47 would increase by 60 cents as a result of the proposed surcharge. The program and surcharge would also be applied to retail customers of Texas-New Mexico Power, the electric utility whose New Mexico operations are now part of PNM.

Every customer paying the surcharge would be eligible to participate in one or more of the energy efficiency measures or load management programs.

PNM hopes to receive PRC approval of the plan in time to offer the program to customers beginning this fall.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 435,000 customers and natural gas service to 487,000 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.