News Release

Sept. 16 , 2008

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NEWS MEDIA CONTACT Don Brown Telephone: (505) 241-2882

Renewables, Energy Efficiency and Natural Gas-Fired Power to Meet Growing Electric Needs of PNM Customers

Albuquerque: The energy resources needed to meet the growing needs of PNM’s 495,000 electric customers will become cleaner and more efficient during the next several years under a comprehensive energy plan filed with state regulators today. In a separate filing, PNM also proposed new energy efficiency programs that would increase the company’s annual energy savings target by 110 percent.

Developed during a year-long public involvement effort that included 19 public meetings, PNM’s new integrated resource plan calls for the company to add more renewable energy resources, significantly increase its energy efficiency programs and add two existing, clean-burning, natural gas-fired plants to its energy portfolio in the next four years. Under the plan, filed with the N.M. Public Regulation Commission today, PNM will maintain but not expand its existing capacity from coal and nuclear resources.

“We worked actively with a public advisory group to analyze cost, reliability, environmental impact and other factors related to every resource available to us,” said Pat Vincent-Collawn, president and chief operating officer of PNM parent company PNM Resources. “The result is a comprehensive plan that maintains electric reliability and moves us into cleaner energy in the most cost-effective way possible.”

Electricity needs in PNM’s service territory are expected to grow by 2.1 percent per year between now and 2013 – 50 percent faster than the national forecast of 1.4 percent per year.

Four-Year Action Plan

While the planning document analyzes trends and risk factors for the long planning horizon of 2008 through 2027, its key recommendations cover the next four years. PNM already has moved forward on several of these items. The recommendations are to seek N.M. Public Regulation Commission approval for:

• ENERGY EFFICIENCY: Programs to achieve levels of energy efficiency in excess of the minimums required by the state’s Efficient Use of Energy Act (PNM has proposed to expand its energy efficiency offerings;see attached “PNM’s Proposed Energy Efficiency Programs” fact sheet);

See “PNM’s Proposed Energy Efficiency Programs” fact sheet

• NEW SOLAR PHOTOVOLTAIC PROGRAM: New incentives for customer-owned solar photovoltaic installations of greater than 10 kilowatts in size (PNM filed for approval of this program in July);
• ADDITIONAL RENEWABLES: The addition of new renewable energy resources resulting from two pending requests for proposals PNM issued this summer (PNM hopes to sign contracts for 100 to 350 megawatts of new renewable capacity by early 2009. A megawatt is enough electricity to power 700 average New Mexico homes); and
• GAS-FIRED PLANTS: Devote two existing gas-fired power plants in southern New Mexico to meeting the needs of PNM residential and business customers and begin planning for the addition of another gas-fired peaking plant (PNM and several parties last week filed an agreement asking PRC permission to add the two plants to PNM’s portfolio, saying they would save customers an estimated $144 million over 20 years versus building two, new gas-fired plants).

“The four-year action plan will increase the size and diversity of PNM’s energy portfolio in the most cost-effective way possible,” Vincent-Collawn said, adding that the gas-fired facilities would provide important peaking power and increase system stability while minimizing cost, even under a variety of different scenarios for future gas prices.

PNM will launch the next integrated resource planning process in 2010 and file a new plan, which will be based on an updated electric demand forecasts and other factors, in 2011.

PNM’s integrated resource plan is available online at www.PNM.com/irp.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 495,000 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.