News Release

June 27, 2007

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PNM Takes First Step Toward Possible Solar Plant

Albuquerque: PNM has initiated a concentrating solar study group that will carefully investigate the feasibility of building a large solar generating facility in New Mexico.

The study is the first step in a three-step project, and is expected to be completed by the end of this year. The study will consider:

• The optimal size of a facility, within a range of 50 to 500 megawatts (MW)
• The optimal site for a facility based on solar potential, land availability and access to electric transmission infrastructure
• Optimal generating technology including thermal and photovoltaic systems
• Financial incentives available
• Regulatory issues to be addressed.

“The breadth and level of participation we have recruited for this study is a direct reflection of PNM’s earnest desire to develop and build a major solar project in New Mexico by 2010” said Jim Ferland, Senior Vice President of Energy Resources for PNM Resources. “But we must be methodical and thorough in our analysis to ensure that the interests of all stakeholders, including our customers and our investors, are protected.”

The study is being coordinated by EPRI, a non-profit electric research organization funded by the investor-owned utility industry. Other participants in the project include:

• Xcel Energy
• San Diego Gas & Electric Co.
• Southern California Edison
• Tri-State Generation and Transmission Association
• Black and Veatch
• Nexant
• New Mexico Energy, Minerals and Natural Resources Department
• National Renewable Energy Laboratory
• Sandia National Laboratory
• Western Resource Advocates
• Coalition for Clean Affordable Energy

After the study is completed, the participants will consider the findings and decide whether they wish to proceed the second step of developing an actual facility, which would include performing detailed design and engineering of a plant and securing the necessary permits.

At the conclusion of the second step individual participants would then decide whether they wish commit to the construction of a solar plant, which could occur in the 2010 timeframe.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to more than 487,000 customers and natural gas service to 492,000 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.