8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest events reported)		February 7, 2005
		(February 2, 2005)
Commission	Name of Registrants, State of Incorporation,		I.R.S. Employer
File Number	Address and Telephone Number		Identification No.
333-32170	PNM Resources, Inc.		85-0468296
	(A New Mexico Corporation)
	Alvarado Square
	Albuquerque, New Mexico  87158
	(505) 241-2700
______________________________
(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

[   ]   Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)

Item 1.01               Entry into a Material Definitive Agreement.

On February 3, 2005, PNM Resources, Inc. (the "Company") issued a press release announcing it has reached an agreement in Texas ("Settlement Agreement") that represents a significant next step in the process of completing its acquisition of Fort Worth-based TNP Enterprises ("TNP").

The Settlement Agreement is between the Company and Texas-New Mexico Power Company ("TNMP"), the cities of Dickenson, Lewisville, La Marque, Ft. Stockton and Friendswood, Texas, the Legal and Enforcement Division of the Public Utility Commission of Texas ("PUCT"), the Office of Public Utility Counsel, the Texas Industrial Energy Consumers and the Alliance for Retail Markets.  The Settlement Agreement outlines terms and conditions necessary for the PUCT to find the acquisition of TNP and its subsidiaries, TNMP and First Choice Power, to be in the public interest.

Among other issues, the agreement calls for:

• A two-year electric rate freeze that includes a $13 million annual rate reduction in TNMP's retail delivery rates effective May 1, 2005,
• An authorized return on equity of 10.25% on an implied capital structure of 60% debt and 40% equity for certain reporting purposes,
• The use of a 60/40% debt/equity capital structure in TNMP's next base rate case if filed before January 1, 2009, and
• A $6 million synergy savings credit amortized over 24 months effective after the close of the transaction.

The Settlement Agreement is furnished herewith as Exhibit 10.1 and incorporated by reference herein.  The press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein. 

Item 8.01               Other Events.

On February 2, 2005, PNM Resources, Inc. (the "Company") was notified that the proposed acquisition of TNP Enterprises has received anti-trust clearance under the Hart-Scott-Rodino Antitrust Improvements Act from the Federal Trade Commission.  The Company still needs approval of the acquisition from the PUCT (see Item 1.01 above), New Mexico Public Regulation Commission, the Securities and Exchange Commission and the Federal Energy Regulatory Commission.

(Intentionally left blank)

EXHIBIT INDEX

Exhibit Number Description

10.1	Settlement Agreement dated February 3, 2005, between PNM Resources, Inc. and Texas-New Mexico Power Company, the cities of Dickenson, Lewisville, La Marque, Ft. Stockton and Friendswood, Texas, the Legal and Enforcement Division of the Public Utility Commission of Texas, the Office of Public Utility Counsel, the Texas Industrial Energy Consumers and the Alliance for Retail Markets.
10.1.1	Texas-New Mexico Power Company Tariff for Retail Delivery Service
10.1.2	Texas-New Mexico Power Company Twelve Months Ended September 30, 2004 Weighted Average Cost of Capital
10.1.3	Texas-New Mexico Power Company Tariff for Retail Delivery Service
10.1.4	Service Quality Standards and Reliability Commitments
10.1.5	Service Quality Penalty Calculation
10.1.6	Industrial Officers Quarterly Meetings Contact List
10.1.7	Industrial Customer Planned Maintenance Schedule Contact List
99.1	Press Release dated February 3, 2005.

(Intentionally left blank)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PNM RESOURCES, INC.
	(Registrant)
Date: February 7, 2005	/s/ Thomas G. Sategna
	Thomas G. Sategna
	Vice President and Corporate Controller
	(Officer duly authorized to sign this report)

 

EX-10

EXHIBIT 10.1

SOAH DOCKET NO. 473-05-0174
PUC DOCKET NO. 30172
 

APPLICATION OF	§	BEFORE THE STATE OFFICE
PNM RESOURCES, INC., AND	§
TEXAS-NEW MEXICO POWER	§	OF
COMPANY REGARDING	§
PROPOSED ACQUISITION	§	ADMINISTRATIVE HEARINGS
OF STOCK	§

STIPULATION

WHEREAS, on September 9, 2004, PNM Resources, Inc. ("PNM Resources") and Texas-New Mexico Power Company ("TNMP") (jointly referred to as "Applicants") filed an application seeking:  (i) a finding by the Public Utility Commission of Texas ("Commission" or "PUC") that the proposed acquisition by PNM Resources of 100% of the common stock of TNMP's parent, TNP Enterprises, Inc. ("TNP Enterprises"), which acquisition is hereinafter referred to as the "Transaction" is consistent with the public interest pursuant to PURA § 14.101; and (ii) Commission approval of a regulatory plan under which a total of $4.1 million in net synergy savings would be credited to TNMP's Texas retail delivery base rates over the five-year period following the closing of the Transaction;

WHEREAS, the cities of Dickinson, Lewisville, La Marque, Fort Stockton, and Friendswood served by TNMP ("Cities"); the office of Public Utility Counsel ("OPC"); Texas Industrial Energy Consumers ("TIEC"); Alliance for Retail Markets ("ARM"); El Paso Electric Company ("EPE"); Rio Grande Electric Cooperative, Inc. ("RGEC"); Cap Rock Energy Corporation ("Cap Rock"); Sharyland Utilities, LP ("Sharyland Utilities"); and Power Resources Group, Inc. ("PRG") filed motions to intervene in this proceeding, all of which interventions, except PRG's, have been granted;

WHEREAS, Applicants invited all of the entities that had filed motions to intervene and the Legal and Enforcement Division of the Commission ("Staff") to participate in settlement discussions;

WHEREAS, Applicants, Staff, Cities, OPC, TIEC, and ARM agree that a negotiated resolution of this proceeding on the basis set forth in this Stipulation is in the public interest because the result is reasonable and will conserve the public's and the parties' resources and eliminate controversy; and

WHEREAS, EPE, Cap Rock, and Sharyland Utilities, while not entering into the Stipulation, have indicated that they do not oppose the entry of an order in Docket No. 30172 consistent with this Stipulation.

NOW THEREFORE, Applicants, Staff, Cities, OPC, TIEC, and ARM (the "Signatories") stipulate and agree as follows:

ARTICLE I
The Stipulation:  Resolution of All Issues

A.                The Signatories agree that the terms of this Stipulation are in the public interest and that the Commission should enter an order materially consistent with this Stipulation and providing for its implementation.

B.                 The Signatories agree to support fully this Stipulation in all respects and to use all reasonable efforts to obtain prompt adoption of a final order in Docket No. 30172 based on this Stipulation.  The Signatories further agree to defend the terms of this Stipulation. 

C.                The Signatories agree that this Stipulation resolves all issues in Docket No. 30172.

D.                The terms of this Stipulation apply only to TNMP's Texas rates, operations, services, and tariffs.

ARTICLE II
Support for the Transaction

The Signatories agree that the acquisition by PNM Resources of 100% of the common stock of TNP Enterprises under the terms as described in Applicants' direct testimony and in conjunction with other provisions of this Stipulation is consistent with the public interest and support the entry by the Commission of an order finding the Transaction to be consistent with the public interest pursuant to PURA § 14.101.

ARTICLE III
Conditions Precedent

The Signatories acknowledge and agree that all of the provisions of this Stipulation, except for Articles IV, V, VI., and X below, are contingent upon the closing of the Transaction and the acquisition by PNM Resources of 100% of the common stock of TNP Enterprises under terms consistent with those described in Applicants' direct testimony.  In the event the Transaction does not close, all Signatories are released from the provisions of this Stipulation and all obligations arising hereunder, with the exception of Articles IV, V, VI., and X below.

ARTICLE IV
Rate Reduction

A.                TNMP agrees that it will reduce its Texas retail delivery base rates by $13 million annually (the "Rate Reduction").  The Rate Reduction shall be based on the historical test year ending September 30, 2004.  Exhibit 1 attached to this Stipulation contains the rider that implements the Rate Reduction for each class of customer.  The Signatories agree to support the issuance by the Commission of an order approving the Rate Reduction and the rider attached as Exhibit 1 hereto.

B.                 The signatories agree that the Rate Reduction is contingent upon the Commission entering an order materially consistent with this Stipulation and providing for its implementation.

C.                Provided that the conditions precedent set forth in Article IV.B. are satisfied, the Rate Reduction will be made effective for billing cycles beginning May 1, 2005,  provided that if the order by the PUC is executed on or after April 21 then the approved Rate Reduction shall go into effect for billing cycles beginning 10 days after the date of the order.  The date of the initial effectiveness of the Rate Reduction is referred to as the "Implementation Date." 

D.                The Rate Reduction shall be applied as an equal across-the-board percentage reduction in the Texas retail delivery base rates to all customer classes.  As reflected in the Rate Reduction rider attached hereto as Exhibit 1, the Signatories also agree to support the proposal that exempts municipal pumping customers from the 80% demand ratchet imposed by the Commission in Docket No. 22349 for secondary service customers with billing demand greater than 5 kilowatts ("kW").  TNMP agrees that the rider implementing the Rate Reduction does not seek to recover any revenues that will be lost as a result of exempting municipal pumping customers from the 80% demand ratchet.  The Signatories acknowledge and agree that the design of the rates proposed in this Stipulation has been entered into as a matter of compromise and is not intended to create a precedent for resolving such issues in any future proceeding involving TNMP.

E.                 The Signatories agree that the Rate Reduction has been entered into by all parties solely as a matter of compromise and settlement. For purposes of financial and regulatory reporting during and following the Rate Freeze as defined in Article V.A. below, the Signatories agree that TNMP's weighted average cost of capital (utilizing a hypothetical 60% debt - 40% common equity capital structure) is 8.34% as calculated on Exhibit 2.  Additionally, for regulatory purposes, TNMP is deemed to be recovering the System Benefit Fund regulatory asset as part of the settlement rates. No amortization of the System Benefit Fund regulatory asset or any unamortized balance of the System Benefit Fund  regulatory asset will be included in the cost of service or rate base in a retail delivery rate case subsequent to the Rate Freeze, as defined hereinafter. While the Signatories support the Rate Reduction as being reasonable under the circumstances and support its approval by the Commission, they do not necessarily agree that the amount of the Rate Reduction, the weighted average cost of capital, or any other component is what would result if a contested rate proceeding on the same facts were to be conducted by the Commission.

F.                 The Signatories further agree that the Rate Reduction is not related to and does not reflect any savings related to synergies arising from the closing of the Transaction.  Rather, the Rate Reduction is solely related to the existing circumstances and facts of TNMP without regard to the Transaction and is addressed herein solely for the convenience of the Signatories.

ARTICLE V
Base Rate Freeze

A.                TNMP agrees not to file an application with any regulatory authority to increase its retail delivery base rates prior to two years following the Implementation Date.  The two-year period following the Implementation Date is referred to as the "Rate Freeze." 

B.                 The Rate Freeze does not apply to:  (i) Transmission Cost Recovery Factors ("TCRF"); (ii) Competition Transition Charges ("CTC") or Transition Charges ("TC") related to stranded cost recovery; (iii) other adjustments to T&D rates associated with the true-up proceeding required by PURA §39.262; or (iv) revenue neutral tariff changes that do not shift revenue between classes

C.                Staff, Cities, OPC, TIEC, and ARM  agree that they will not initiate or request the Commission or another entity to initiate a rate case to reduce TNMP's retail delivery base rates during the Rate Freeze.  TNMP agrees that the existing authority of regulatory authorities to request and obtain rate and service information pertaining to TNMP's transmission and distribution services is not affected by this Stipulation.

D.                The Rate Freeze does not preclude the implementation of any rate mechanism or revision found appropriate as a result of a remand by a court to the Commission from a judicial appeal. 

ARTICLE VI
Filings Under P.U.C. Subst. R. 25.41(g)(3) and 25.263(n)

A.                Pursuant to P.U.C. Subst. R. 25.263(n)(1), TNMP shall make its application to adjust rates within 60 days ("60-Day Filing") following the issuance of a final, appealable order in its true-up proceeding, Docket No. 29206. 

B.                 Pursuant to P.U.C. Subst. R. 25.41(g)(3), TNMP's affiliated retail electric provider, First Choice Power Special Purpose, L.P. ("FCP"), shall request the Commission to consider its Post-True-Up Price to Beat ("PTB") Adjustment proceeding on a schedule consistent with the processing of TNMP's 60-Day Filing.  FCP shall file its Post-True-Up PTB Adjustment filing to adjust its PTB Base Rates no later than 30 days after the date upon which TNMP files its 60-Day Filing application.  FCP shall file its Post-True-Up PTB Adjustment filing to adjust its PTB Fuel Factors within ten days of the earlier of: (1) the issuance of a proposal for decision in the 60-Day Filing docket, or (2) the filing of a unanimous settlement in the 60-Day Filing docket.  FCP's Post-True-Up PTB Adjustment filings to adjust its PTB Base Rates and its filings to adjust its PTB Fuel Factors shall be made in the same proceeding.  FCP's Post-True-Up PTB Adjustment shall take into account and include the impact of this Stipulation's Article IV Rate Reduction and Article VII Synergy Savings Credit.

C.                If the Transaction closes prior to the expiration of 30 days from the date of the 60-Day Filing final order, FCP will request a simultaneous effective date for the non-bypassable rates established in the 60-Day Filing final order and the PTB rates set in the Post-True-Up PTB Adjustment final order.  The simultaneous effective date will be no later than 30 days following the issuance of the final order in the 60-Day Filing docket.

D.                If the Transaction does not close prior to the expiration of 30 days from the date of the 60-Day Filing final order, FCP shall request that the Commission issue an interim order reflecting a calculation of the Post-True-Up PTB pursuant to P.U.C. SUBST. R. 25.41(g)(3), with the exception of the impact of the Article VII Synergy Savings Credit on the calculation of the Post-True-Up PTB.  In such a case, FCP will request a simultaneous effective date for the non-bypassable rates established in the 60-Day Filing final order and the PTB rates set in the Post-True-Up PTB Adjustment interim order.  The simultaneous effective date will be no later than 30 days following the issuance of the final order in the 60-Day Filing docket.  If the Commission issues a Post-True-Up PTB Adjustment interim order, FCP shall request the issuance of a final order incorporating the Article VII Synergy Savings Credit within thirty (30) days of closing the Transaction.

ARTICLE VII
Synergy Savings Credit

A.                Over the twenty-four month period following the closing of the Transaction, and beginning with billing cycles as of the 1^st day of the month following the closing of the Transaction, TNMP agrees to provide a total of $6 million in net synergy savings credits to its Texas retail delivery base rates. 

B.                 The net synergy savings credits of $3 million per year will be allocated to customer classes in the same manner as specified in Article IV.  The amount allocated to each customer class shall be applied to reduce the customer charge component of the base rates as set forth in the proposed Synergy Savings Credit rider attached hereto as Exhibit 3.  This resolves all issues concerning synergy savings and the costs to achieve synergy savings.

ARTICLE VIII
Transaction Costs

Applicants agree to not include transaction costs associated with the acquisition in TNMP's cost of service in any future Texas retail delivery base rate case.  Transaction costs are those costs necessary to consummate the Transaction and include the following:  (1) TNP Enterprises recapitalization costs, i.e., PIK preferred call premium, call premium on 10.25% debt refinancing and underwriting fees (legal, banking and others) incurred in connection with the recapitalization activities; (2) change of control/severance cost related to TNP Enterprises costs that have never been included in cost of service in either TNMP-Texas or TNMP-NM rates; (3) bank advisory fees incurred in connection with the acquisition; and (4) legal, external accounting and rating agency fees related to the negotiation and execution of the Stock Purchase Agreement.   Transaction costs do not include costs to achieve synergy savings.

ARTICLE IX
Accounting for the Transaction

TNMP agrees that it will not seek to recover through Texas retail delivery base rates any amounts for goodwill or intangible assets resulting from the application of "push-down" accounting for the effects of the Transaction. 

ARTICLE X
Capital Structure and Credit Rating

A.                The Signatories agree that a capital structure of 60% debt - 40% common equity will be used to establish the return component in TNMP's next Texas retail delivery base rate case so long as TNMP's next base rate case is filed on or before January 1, 2009. 

B.                 TNMP agrees that its requested cost of equity will be based on the higher of its actual credit rating by Standard & Poor's at the time of the filing or the lowest investment grade credit rating (Standard & Poor's BBB-) in its next retail delivery base rate case so long as its next base rate case is filed on or before January 1, 2009. 

ARTICLE XI
Service Quality Standards and Reliability Commitments

A.                TNMP agrees to extend through the earlier of its next Texas retail delivery base rate case or December 31, 2009, the service quality and reliability commitments set forth in Exhibit 4 hereto.  Compliance with such commitments is subject to force majeure as set forth in such Exhibit 4 ("Service Reliability Force Majeure"). 

B.                 The Signatories agree that TNMP has complied with the consultant's report on Sanderson reliability as contemplated by the stipulation in Docket No. 21112. 

C.                The Signatories further agree that TNMP has paid all penalties related to merger commitments arising from Docket No. 21112 and has no remaining liability for calendar years 2000 through 2003.  Beginning for the calendar year 2004 reporting period, penalties, if any, will be calculated as set forth in Exhibit 5 hereto.

ARTICLE XII
Employee Safety

A.                Through the earlier of its next Texas retail delivery base rate case or December 31, 2009, TNMP agrees to maintain employee safety (as defined by the number of OSHA Reportable Accidents) starting in calendar year 2005 equal to, or better than, TNMP's actual historical average for the period 1999-2003, excluding generation-related incidents.

B.                 No penalties or rewards will be imposed as a result of the foregoing employee safety provision.

C.                Compliance with this commitment is subject to Service Reliability Force Majeure events.

ARTICLE XIII
T&D Construction Centers and Field Services Employees

During the Rate Freeze, TNMP agrees it will not decrease its 14 existing transmission and distribution ("T&D") construction centers or the 363 TNMP employees in Texas performing T&D field services.

ARTICLE XIV
REP-Related Commitments

A.                TNMP shall  host an annual meeting with the retail electric providers ("REPs") to which it provides T&D service.  The purpose of such meeting will be to allow discussion of TNMP's practices and policies and to permit REPs to provide comments to TNMP on such practices and policies. TNMP shall respond to all market related comments raised by REPs during this meeting within 90 days of the meeting, including an explanation of what changes were made in response to REP comments.  TNMP shall explain why other comments or suggestions were not acted on, if any.

B.                 TNMP is committed to the "ERCOT and Non-ERCOT FasTrak Day-to-Day Policies and Procedures."  In the event an issue raised by a REP is not capable of being resolved within seven (7) business days, TNMP shall provide the affected REP with a time schedule for resolution of the issue no later than the seventh business day.  TNMP shall use due diligence in resolving all ERCOT and Non-ERCOT FasTrak issues raised by REPs.

C.                TNMP is committed to working with REPs to resolve cancellation/rebill issues in a timely manner. In the event an issue is not capable of being resolved within seven (7) business days, TNMP shall provide the affected REP with a time schedule for resolution of the issue no later than the seventh business day.  TNMP shall use due diligence in resolving all cancellation/rebill issues. 

D.                TNMP shall acknowledge the receipt of an inquiry from a REP, transmitted through the centralized communication mechanism published in the marketplace, by the close of two (2) business days following receipt of the inquiry.  The Signatories agree that an inquiry from a REP concerning a FasTrak issue will be first handled in accordance with the FasTrak procedure.  In the event an issue is not capable of being resolved within seven (7) business days, TNMP shall provide the affected REP with an expected time schedule for resolution of the issue no later than the seventh business day.  TNMP shall use due diligence in resolving such REP inquiries.

E.                 TNMP agrees to use due diligence to respond to letters of authorization within five (5) business days as contemplated by the ERCOT Retail Market Guide.

F.                 TNMP shall investigate the feasibility of providing REPs with direct access to specific customer, non-IDR historical metering data via the Internet.  By March 1, 2005, TNMP, in consultation with ARM,  shall determine  whether such access is reasonably feasible.  If  such access is deemed reasonably feasible, TNMP shall make commercially reasonable efforts to provide such Internet access by October 1, 2005 .  If REP Internet access is not deemed reasonably feasible, TNMP shall explain in detail the reasons underlying that conclusion and propose potential alternatives.

ARTICLE XV
Industrial Service -Related Commitments

A.                TNMP is committed to the adequate maintenance of its metering equipment in accordance with accepted good utility practice as defined in P.U.C. Subst. R. 25.5(56).

B.                 TNMP shall provide customer usage information in accordance with the terms set forth in 4.8.1 of the TNMP tariff for retail delivery service. In this regard, TNMP is installing MV-Web, which will allow customers with IDR billing to access their historical account information by the later of June 30, 2005, or the closing of the Transaction.  TNMP agrees to read IDR customers' metersmore frequently and will allow customers or their designated representatives to install, at the customer's cost, telemetry necessary to poll the meter data on a real time basis.  TNMP agrees to provide this data to the customers as soon as practicable after customer IDR meters have been polled.

C.                TNMP shall investigate changing its billing system to accommodate a more complex billing statement.  By May 1, 2005, TNMP will determine, in accordance with the implementation of the Texas SET V2.1, whether such billing system changes are reasonably feasible.  If the implementation of a complex billing statement is reasonably feasible, TNMP will make commercially reasonable efforts to implement that system within 180 days after completion of the completion of the feasibility analysis.  If the implementation of a complex billing statement is not deemed reasonably feasible, TNMP will explain the reasons underlying that conclusion and propose potential alternatives. 

D.                TNMP shall establish a process under which an employee will be dedicated to reviewing each IDR meter reading for accuracy and TNMP shall provide backup information supporting the derivation of all charges on a customer's bill.  TNMP further agrees to timely resolve any customer billing disputes in accordance with Article XIV.B. above. This Stipulation does not resolve billing disputes existing on the date of execution of this Stipulation.

E.                 TNMP shall hold quarterly meetings between TNMP officer-level employees and appropriate officer-level employees designated by the industrial customers to discuss reliability issues, planned maintenance and system planning.  The initial officers designated by the industrial customers are identified on Exhibit 6 hereto.  TNMP and TIEC may revise the list of officers as appropriate.  TNMP is entitled to rely on the list of industrial officers provided by TIEC on Exhibit 6 unless notified of any changes in writing. 

F.                 TNMP agrees to provide TNMP's planned maintenance schedule for its transmission and substation system within a reasonable time after internal approval to the customer contact list attached as Exhibit 7 hereto.  TNMP and TIEC may revise the contact list as appropriate.  TNMP is entitled to rely on the contact list provided by TIEC on Exhibit 7 unless notified in writing. In no event shall TNMP commence planned maintenance or make planned system modifications or improvements that would temporarily lessen system reliability without first providing at least 90 days written notice to the affected customers. Written notice provided at any of the meetings provided for herein or the minutes of those meetings shall be sufficient written notice for the purposes hereof.

G.                TNMP is committed to service reliability and will seek continuous improvement in the area of service reliability within reasonable cost parameters.  In light of that commitment, TNMP shall prepare an annual transmission reliability report for its industrial customers that discusses past reliability efforts, TNMP's projected system load growth for the next three years, TNMP's plans to accommodate load growth, and all proposed reliability initiatives, improvements or modifications.  TNMP shall host an annual meeting, which will take place at one of the quarterly meetings called for by Article XV.E, with all industrial customers, as set forth in Exhibit 6.  The purpose of such meeting will be to allow discussion of TNMP's annual reliability report and to permit industrial customers the opportunity to provide loading information and comments to TNMP on reliability issues.  TNMP shall provide a substantive response  to all comments or suggestions raised by industrial customers during this meeting within 90 days of the meeting.

ARTICLE XVI
Sharyland Utilities

This Stipulation has no impact on the prices charged or the services provided by First Choice Power, LP and First Choice Power Special Purpose, LP to customers in the service area certificated to Sharyland Utilities.

ARTICLE XVII
Miscellaneous Provisions

A.                This Stipulation is binding on each Signatory only for the purpose of settling the issues herein and for no other purpose.  The Signatories acknowledge and agree that a Signatory's support of the matters contained in this Stipulation may differ from its position or testimony in other dockets and cases not referenced in this Stipulation.  To the extent that there is a difference, a Signatory does not waive its position in such other dockets.  Because this is a settlement agreement, a Signatory is under no obligation to take the same position as set out in this Stipulation in other dockets not referenced in this Stipulation whether those dockets present the same or a different set of circumstances.  The Signatories reserve their rights in this docket to litigate all issues in this docket against parties who do not sign this Stipulation.  Provided, however, that in the event a person or entity other than a Signatory attempts to initiate a TNMP rate case during the Rate Freeze, the Signatories are bound by the provisions of this Stipulation not to support any change in retail delivery base rates.

B.                 This Stipulation represents a compromise, settlement and accommodation among the Signatories, and all Signatories agree that the terms and conditions herein are interdependent and no Signatory shall be bound by any portion of this Stipulation outside the context of the Stipulation as a whole.  If the Commission does not accept this Stipulation as presented, or an interim or final order inconsistent with this Stipulation in any material respect is issued, the Signatories agree that any signatory adversely affected by that material modification or inconsistency has the right to withdraw its consent from this Stipulation, thereby becoming released from all commitments and obligations, and to proceed to hearing on all issues, present evidence, and advance any positions it desires as if it had not been a Signatory.  The Signatories agree that neither oral nor written statements made during the course of the settlement negotiations may be used as an admission or concession of any sort nor as evidence in any proceeding.  If the Commission does not adopt orders consistent with the material terms of this Stipulation, the Signatories agree that the terms of this Stipulation were made during the course of settlement negotiations and may not be used as an admission or concession of any sort nor as evidence in any proceeding.  This obligation shall continue and be enforceable, even if this Stipulation is terminated. 

C.                This written Stipulation contains the entire understanding and agreement of the Signatories with regard to Docket No. 30172, supersedes all other written and oral exchanges, or arrangements or negotiations among them or their representatives with respect to the subjects contained herein; and neither this Stipulation, nor any of the terms of this Stipulation, may be altered, amended, waived, terminated, discharged or modified, except by a writing properly executed by the Signatories. 

D.                The Signatories mutually agree that they enter into this Stipulation for their exclusive benefit and the benefit of their respective lawful successors.  The Signatories agree that nothing in this Stipulation shall be construed to confer any right, privilege or benefit on any person or entity other than the Signatories and their respective lawful successors. 

E.                 This Stipulation assumes the legality of the treatments and methodologies set out herein.  Should any treatment or methodology used be declared illegal by either the Commission or a court, the Signatories agree to negotiate in good faith to substitute a treatment or methodology with the same economic effect of that declared illegal. 

F.                 The titles assigned to each Article are for convenience only, are not part of this Stipulation and shall not be considered in the resolution of any dispute or question arising with respect to this Stipulation.

G.                Each signing representative warrants that he or she is duly authorized to sign this Stipulation on behalf of the Signatory he or she represents, subject to approval by local regulatory authorities.  Facsimile copies of signatures are valid for purposes of evidencing execution.  The Signatories may sign individual signature pages to facilitate the circulation and filing of the original of this Stipulation.

H.                The Signatories agree that their request that the Commission enter an order consistent with the Stipulation is not intended to have precedential value with respect to any particular principle, treatment, or methodology that may underlie the Stipulation.

IN WITNESS WHEREOF, this Stipulation has been executed, approved and agreed to by the Signatories hereto in multiple counterparts each of which shall be deemed an original, on the date indicated below by the Signatories hereto, by and through their undersigned duly authorized representatives.  This Stipulation shall be effective and binding, as to each Signatory, as of the date of execution of each Signatory.

PNM RESOURCES, INC	TEXAS-NEW MEXICO POWER COMPANY
By: /s/ Patrick Ortiz	By:  /s/ Jack V. Chambers
Title: SVP, General Counsel and Secretary	Title: Chairman, President, and CEO
Date: February 1, 2005	Date:  January 1, 2005
LEGAL AND ENFORCEMENT DIVISION OF THE PUBLIC UTILITY COMMISSION OF TEXAS	OFFICE OF PUBLIC UTILITY COUNSEL
By:  /s/ William Huie	By:  /s/ Roger Stewart
Title: Staff Attorney	Title: Assistant Public Counsel
Date:  January 31, 2005	Date:  January 31, 2005
TEXAS INDUSTRIAL ENERGY CONSUMERS	CITIES OF DICKENSON, LEWISVILLE, LA MARQUE, FT. STOCKTON AND FRIENDSWOOD
By:  /s/ Joseph P. Younger	By:  /s/ Steven A. Porter
Title: Attorney for TIEC	Title: Attorney for Cities
Date:  February 1, 2005	Date:  February 3, 2005
ALLIANCE FOR RETAIL MARKETS
By:   /s/ Stephen J. Davis
Title:  Attorney for ARM
Date:  February 2, 2005

FIRST CHOICE POWER SPECIAL PURPOSE, L.P. signs this Stipulation agreeing to and being bound only by Articles VI.B., VI.C., and VI.D.

By: /s/ Manjit S. Cheema

Title: President

Date: January 31, 2005

EX-10

EXHIBIT 10.1.1

TEXAS-NEW MEXICO POWER COMPANY
TARIFF FOR RETAIL DELIVERY SERVICE

6.1 Rate Schedules

Applicable:  Entire Certified Service Area	Page No.: 1
Effective Date:  TBD	Original

6.1.1.16           RIDER BRR -BASE RATE REDUCTION

AVAILABILITY

This rider is applicable to delivery service provided under Section 6.1.1.1 Residential Service, Section 6.1.1.2 Secondary Service (Less Than or Equal to 5 kW), Section 6.1.1.3 Secondary Service (Greater Than 5 kW), Section 6.1.1.4 Primary Service, Section 6.1.1.5 Transmission Service and Section 6.1.1.6 Lighting Service in the Company's Tariff for Retail Delivery Service.  

MONTHLY CREDIT

A Retail Customer's credit for the billing month shall be:

Rate Schedule	Credit
Residential Service
Customer Charge	$0.03	Per Customer
Metering Charge	$0.33	Per Customer
Distribution System Charge	$0.001607	Per kWh
Transmission System Charge	$0.000386	Per kWh
Secondary Service (Less Than or Equal to 5KW)
Customer Charge	$0.03	Per Customer
Metering Charge	$0.33	Per Customer
Distribution System Charge	$0.002862	Per kWh
Transmission System Charge	$0.000528	Per kWh
Secondary Service (Greater Than 5 KW)
Customer Charge	$0.10	Per Customer
Metering Charge	$1.73	Per Customer
Distribution System Charge	$0.56	Per NCP kW

EXHIBIT 10.1.1

TEXAS-NEW MEXICO POWER COMPANY
TARIFF FOR RETAIL DELIVERY SERVICE

6.1 Rate Schedules
 

Applicable:  Entire Certified Service Area	Page No.: 2
Effective Date:  TBD	Original

Rate Schedule	Credit
Secondary Service (Greater Than 5 KW)
Transmission System Charge
Non IDR Metered	$0.10	Per NCP kW
IDR Metered	$0.11	Per 4CP kW
Determination of Billing Demand for distribution System Charges Determination of Billing kW  The Billing kW applicable to the Distribution System Charge shall be the higher of the NCP kW for the current billing month or 80% of the highest monthly NCP kW established in the 11 months preceding the current billing month (80% ratchet).  The 80% ratchet shall not apply to Retail Seasonal Agricultural Customers and Municipal Pumping Customers.
Primary Service
Customer Charge	$0.26	Per Customer
Metering Charge	$2.83	Per Customer
Distribution System Charge	$0.58	Per NCP kW
Transmission System Charge
Non IDR Metered	$0.12	Per NCP kW
IDR Metered	$0.12	Per 4CP kW
Transmission Service
Customer Charge	$16.35	Per Customer
Metering Charge	$510.31	Per Meter
Distribution System Charge	$0.01	Per 4CP kVa
Transmission System Charge	$0.12	Per 4CP kVa

EXHIBIT 10.1.1

TEXAS-NEW MEXICO POWER COMPANY
TARIFF FOR RETAIL DELIVERY SERVICE

6.1 Rate Schedules
 

Applicable:  Entire Certified Service Area	Page No.: 3
Effective Date:  TBD	Original

Rate Schedule	Credit
Schedule I - Wood Pole
8150 lumen - 175 watt MV	$0.51	Per Lamp
21500 lumen - 400 watt MV	$0.95	Per Lamp
9500 lumen - 100 watt HPS	$0.65	Per Lamp
16000 lumen - 150 wattt HPS	$0.75	Per Lamp
22000 lumen - 200 watt HPS	$0.80	Per Lamp
27500 lumen - 250 watt HPS	$0.88	Per Lamp
50000 lumen - 400 watt HPS	$0.97	Per Lamp
Schedule II - Ornamental Pole
1 lamp per pole
8150 lumen - 175 watt MV	$0.98	Per Lamp
21500 lumen - 400 watt MV	$1.25	Per Lamp
9500 lumen - 100 watt HPS	$0.95	Per Lamp
16000 lumen - 150 wattt HPS	$1.21	Per Lamp
22000 lumen - 200 watt HPS	$1.29	Per Lamp
27500 lumen - 250 watt HPS	$1.46	Per Lamp
50000 lumen - 400 watt HPS	$0.95	Per Lamp
9500 lumen - 100 watt HPS U	$1.04	Per Lamp
2 lamps per pole
21500 lumen - 400 watt MV	$1.05	Per Lamp
9500 lumen - 100 watt HPS	$0.76	Per Lamp
16000 lumen - 150 wattt HPS	$0.84	Per Lamp
22000 lumen - 200 watt HPS	$0.92	Per Lamp
27500 lumen - 250 watt HPS	$1.06	Per Lamp
50000 lumen - 400 watt HPS	$1.16	Per Lamp

EXHIBIT 10.1.1

TEXAS-NEW MEXICO POWER COMPANY
TARIFF FOR RETAIL DELIVERY SERVICE

6.1 Rate Schedules
 

Applicable:  Entire Certified Service Area	Page No.: 4
Effective Date:  TBD	Original

Rate Schedule	Credit
Underground Service
Schedule III Wood Pole
3500 lumen - 100 watt MV	$0.52	Per Lamp
8150 lumen - 175 MV	$0.57	Per Lamp
21500 lumen - 400 watt MV	$1.04	Per Lamp
9500 lumen - 100 HPS	$0.72	Per Lamp
22000 lumen - 200 watt HPS	$0.88	Per Lamp
Schedule IV - Ornamental Pole
1 lamp per pole
8150 lumen - 175 MV	$1.04	Per Lamp
21500 lumen - 400 watt MV	-	Per Lamp
9500 lumen - 100 HPS	$1.04	Per Lamp
22000 lumen - 200 watt HPS	$1.40	Per Lamp
2 lamps per pole
8150 lumen - 175 MV	-	Per Lamp
21500 lumen - 400 watt MV	$1.05	Per Lamp
9500 lumen - 100 HPS	$0.81	Per Lamp
22000 lumen - 200 watt HPS	$1.04	Per Lamp
Public Highway Lighting
Schedule V - Normal Lamp replacement Only
27500 lumen HPS or HA	$0.70	Per Lamp
50000 lumen HPS or HA	$0.96	Per Lamp
Non Roadway Lighting
Nite Liters
175 W MV Lamp - Nite Light	$0.53	Per Lamp
400 W MV Lamp - Nite Light	$0.87	Per Lamp
100 W HPS Lamp - Nite Light	$0.51	Per Lamp
200 W HPS Lamp - Nite Light	$0.79	Per Lamp

EXHIBIT 10.1.1

TEXAS-NEW MEXICO POWER COMPANY
TARIFF FOR RETAIL DELIVERY SERVICE

6.1 Rate Schedules
 

Applicable:  Entire Certified Service Area	Page No.: 5
Effective Date:  TBD	Original

Rate Schedule Flood Lights	Credit
400 W MV Lamp - Flood Light	$0.88	Per Lamp
1,000 W MV Lamp - Flood Light	$1.61	Per Lamp
400 W HA Lamp - Flood Light	$0.92	Per Lamp
1,000 W HA Lamp - Flood Light	$1.62	Per Lamp
250 W HPS Lamp - Flood Light	$0.86	Per Lamp
400 W HPS Lamp - Flood Light	$1.01	Per Lamp
Competitive Energy Services
175 w MV Lamp-Nite Lite	$0.30	Per Lamp
400 w MV Lamp-Nite Lite	$0.47	Per Lamp
100 w HPS Lamp-Nite Lite	$0.30	Per Lamp
200 w HPS Lamp-Nite Lite	$0.46	Per Lamp
400 w MV Lamp-Flood Light	$0.47	Per Lamp
1000 w MV Lamp-Flood Light	$0.75	Per Lamp
400 w HA Lamp-Flood Light	$0.49	Per Lamp
1000 w HA Lamp-Flood Light	$0.81	Per Lamp
250 w HPS Lamp-Flood Light	$0.49	Per Lamp
400 w HPS Lamp-Flood Light	$0.55	Per Lamp
Metered Lighting Service
Schedule VI - Restricted Use
Metered Series Service	$0.003961	Per kWh
Other Metered Service	$0.003961	Per kWh
Public Facilities	$0.003961	Per kWh
Pole Rental	$0.23	Per Pole

NOTICE

This rate schedule is subject to the Company's Tariff and Applicable Legal Authorities.

EX-10

Exhibit 10.1.2

TEXAS-NEW MEXICO POWER COMPANY
TWELVE MONTHS ENDED SEPTEMBER 30, 2004
WEIGHTED AVERAGE COST OF CAPITAL
 

Line	(a) Balance	(b) Percent of Total	(c) Cost	(d) Weighted Cost
1 Common Equity* 2 Preferred Stock 3 Preferred Trust Securities 4 Long-Term Debt 5 Short-Term Debt 6 7 Total	$270,884,617                        0                        0 406,326,926                       0 ______________ $677,211,543	40.00%             0.00%             0.00%           60.00%             0.00% _________          100.00%	10.25%          0.00%          0.00%          7.07%          0.00%	4.10%        0.00%        0.00%        4.24%        0.00% _______        8.34%

* Assumed common equity in order to achieve 40% equity ratio

EX-10

EXHIBIT 10.1.3 TEXAS-NEW MEXICO POWER COMPANY TARIFF FOR RETAIL DELIVERY SERVICE
6.1 Rate Schedules Applicable: Entire Certified Service Area Effective Date: TBD	Page No.: 1 Original

6.1.1.17           RIDER SSC - SYNERGY SAVINGS CREDIT

AVAILABILITY

This rider is applicable to delivery service provided under Section 6.1.1.1 Residential Service, Section 6.1.1.2 Secondary Service (Less Than or Equal to 5 kW), Section 6.1.1.3 Secondary Service (Greater Than 5 kW), Section 6.1.1.4 Primary Service, Section 6.1.1.5 Transmission Service and Section 6.1.1.6 Lighting Service in the Company's Tariff for Retail Delivery Service.  The rider will expire two years after the effective date of the rider.   

MONTHLY CREDIT

A Retail Customer's credit for the billing month shall be:

Rate Schedule	Credit
Residential Service
Customer Charge	$0.64	Per Customer
Secondary Service (Less Than or Equal to 5KW)
Customer Charge	$0.48	Per Customer
Secondary Service (Greater Than 5 KW)
Customer Charge	$5.47	Per Customer
Primary Service
Customer Charge	$59.13	Per Customer
Transmission Service
Customer Charge	$692.01	Per Customer
Lighting Service
Metered	$0.000914	Per kWh
Non Metered	$0.22	Per Lamp

NOTICE

This rate schedule is subject to the Company's Tariff and Applicable Legal Authorities.

EX-10

Docket No. 30172 Stipulation

EXHIBIT 10.1.4

SERVICE QUALITY STANDARDS AND RELIABILITY COMMITMENTS

I.  SERVICE RELIABILITY FORCE MAJEURE

Compliance with the standards and commitments set forth in this Exhibit 4 are subject to events of force majeure which are defined as a major event in P.U.C. Subst. R. 25.52.

II.  CUSTOMER SERVICE STANDARDS

TNMP will comply with the following customer service performance standards beginning with the closing of the Transaction.

A.  Customer Service Standard # 1:   Service Turn on and Upgrades

On a quarterly basis (data collected monthly), TNMP shall complete the installation of new service as follows:

1)      Ninety-five percent of new service installations requiring no construction of electric facilities shall:

(a)      be completed within 24 hours after the customer's service location is ready for service and all necessary tariff and local regulation requirements have been met.

(b)      be completed by the requested installation date, when an applicant requests an installation date more than three business days after the customer's service location is ready for service and all necessary tariff and local regulation requirements have been met.

2)      Ninety percent of new service installations requiring construction of electric facilities, including the setting of the meter, and ninety percent of service upgrades, shall:

(a)     be completed within 10 business days after the customer's service location is ready for service and all necessary tariff and local regulation requirements have been met.

(b)  be completed by the requested installation date, when an applicant or      customer requests an installation date more than ten business days after the customer's service location is ready for service and all necessary tariff and local regulation requirements have been met.

3)      If an applicant/customer complies with all pertinent tariff requirements and the electric distribution company cannot complete the requested service installation or service upgrade as set forth above, the company shall promptly notify the applicant/customer of the delay, the reasons for the delay, the steps being taken to complete the work, and the probable completion date.  If such probable completion date cannot be met, repeat notification shall be made.

4)      Penalty for failure to meet this standard:  TNMP will rebate, on a quarterly basis, via bill credit, $40 for each customer not connected within the timeframes stated above.           

B.  Customer Service Standard # 2:   Light Replacements

In any Texas business unit area, 90 percent of all customer reports of security and streetlight outages shall be corrected within two business days.  Light replacement compliance will be measured on a calendar monthly basis.  This standard will not apply to customer reports received during "major events" as defined in P.U.C. Subst. R. 25.52.  No penalties or rewards will be imposed as a result of this commitment.

III.  ELECTRIC RELIABILITY STANDARDS

A.  General Provisions

a)      The standards are to be consistent with P.U.C. Subst. R. 25.52 - Reliability and Continuity of Service.

b)      Reporting periods are to be consistent with P.U.C. Subst. R. 25.81 - - Service Quality Reports, and are to coincide with TNMP's Electric System Service Quality Report to the PUCT.  Annual evaluations will be for the 12-month period ending December 31 of each year.

c)      The initial evaluation will be for the reporting period ending December 31, 2001.

d)      Reliability indices are calculated for "forced interruptions" as defined by P.U.C. Subst. R. 25.52.

e)      The standards will be calculated and evaluated for the seven (7) Texas Business Units of TNMP individually.

B.  SAIDI and SAIFI Indices

The following reliability standards for System Average Interruption Frequency Index ("SAIFI") and System Average Interruption Duration Index ("SAIDI") shall be calculated for each of the Texas Business Units.  The distribution feeder standards shall be established for distribution feeders with 10 or more customers.

a)      No distribution feeder within a Business Unit shall sustain a "SAIFI" or "SAIDI" value for a reporting period that is among the highest (worst) 10% of the feeders within that same Business Unit for any two consecutive reporting periods.

b)      No distribution feeder within a Business Unit shall sustain a "SAIFI" or "SAIDI" value for a reporting year that is more than 300% greater than the system average of all feeders within that same Business Unit for any two consecutive reporting periods.

c)      No Texas Business Unit of TNMP shall exceed the system-wide SAIFI or SAIDI standard by more than 5.0% beginning in the 2001-reporting year.  The system-wide standard is the average of the three reporting years 1998, 1999, and 2000.

C.  Guarantee to Meet Reliability Standards

a)      The annual service reliability guarantee for all of the Texas Business Units of TNMP combined will be a total not to exceed $500,000.  The individual reliability guarantee for each Business Unit will be calculated based upon the percentage of total Texas customers that are served within each of the Business Units.

b)      The guarantee will be credited to customers based upon the following priorities:

i)        10% Worst Distribution Feeder Performance

ii)       300% Greater than System Average Distribution Feeder Performance

iii)     System Standards

c)      Terms of Guarantee

i)        10% Worst Distribution Feeder Performance Standard

(1)   A service reliability credit of $20 shall be made to each customer on all feeders within a Business Unit violating the 10% Worst Distribution Feeder Performance standard.  A distribution feeder will not have violated this standard if the feeder performance is equal to or better than two times the system average for the Business Unit.  A separate credit will be made for each standard violated (SAIFI and/or SAIDI) such that a customer on a feeder violating both standards would be credited $40.  These credits will be prorated if the guarantee for this standard exceeds the total guarantee expressed above.  The sum of these credits will not exceed the maximum amount of the service reliability guarantee for each of the Business Units.

(2)   If TNMP has no distribution feeder within a Business Unit that violates the 10% Worst Distribution Feeder Performance standard for a reporting period, the total amount of guarantee will be reduced 10% for each standard achieved.  The amount of reduction will be 20% if both standards are achieved.  The reduction of guarantee will decrease the exposure that a particular Business Unit may have with respect to the 10% Worst Distribution Feeder Performance standard, the 300% Greater than Average Distribution Feeder Performance standard, or the System Standards for that reporting period.

ii)       300% Greater than Average Distribution Feeder Performance Standard

(1)   A service reliability credit of $50 shall be made to each customer on all feeders within a Business Unit violating SAIFI or SAIDI standards.  A separate credit will be made for each standard violated (SAIFI and/or SAIDI) such that a customer on a feeder violating both standards would be credited $100.  These credits will be prorated if the guarantee for this provision plus the guarantee for the 10% Worst Performing Distribution Feeder Performance standard exceeds the total guarantee expressed above.  The sum of these credits will not exceed the maximum amount of the service reliability guarantee for each of the Business Units.

(2)   If TNMP has no distribution feeder within a Business Unit that violates the 300% Greater than Average Distribution Feeder Performance provision of the rule for a reporting period, the total amount of guarantee will be reduced 10% for each standard (SAIFI or SAIDI) achieved.  The amount of reduction will be 20% if both standards are achieved.  The reduction of guarantee will decrease the exposure that a Business Unit may have with respect to the 300% Greater than Average Distribution Feeder Performance standard or the System Standards for that reporting period.

iii)     System Standards

(1)   In the event that a Business Unit's System SAIFI or SAIDI exceeds the allowable limit of 105% of the 36-month standard described above; TNMP will credit the remaining guarantee (i.e., business unit guarantee less any feeder standard reductions) proportionately among all customers in the Business Unit.

(2)   SAIFI:  The guarantee will be the numerical difference between the actual and the allowable SAIFI values, in interruptions per year, multiplied by 1 million, up to a maximum of one-half of the total remaining guarantee for the Business Unit.

(3)   SAIDI:  The guarantee will be the numerical difference between the actual and the allowable SAIDI values, in minutes per year, multiplied by 10,000, up to a maximum of one-half of the total remaining guarantee for the Business Unit.

EX-10

EXHIBIT 10.1.5

STIPULATION DOCKET NO. 30172

Service Quality Penalty Calculation
Business Unit	Customer Minutes of Outage	Customer Interruptions	Number of Customers	Avg. SAIDI	Avg. SAIFI	Percentage of TX Customers	Maximum Business Unit Customer Credit Amount
Bay Area	1,438,252	21,845	41,749	34.4500	0.5232	21.46%	$107,295.77
Brazos	740,491	11,697	22,247	33.2850	0.5258	11.44%	$57,175.24
Central TX	1,327,576	12,953	24,365	54.4870	0.5316	12.52%	$62,618.54
Lewisville	1,657,974	19,025	35,210	47.0882	0.5403	18.10%	$90,490.41
Mainland	2,462,526	29,213	32,337	76.1520	0.9034	16.62%	$83,106.74
North TX	1,175,089	15,877	24,128	48.7023	0.6580	12.40%	$62,009.45
West TX	370,219	7,262	14,515	25.5060	0.5003	7.46%	$37,303.84
TX Operations	9,172,127	117,872	194,551	47.1451	0.6059	100.00%	$500,000.00
Stage I - 10% Worst Repeating Circuits
	(1) Penalties = $20 / customer             Reductions  = 10% of Maximum Business Unit Customer Credit Amount above
SAIDI
Business Unit	Circuit 1	Twice Business Unit Avg.	Customer Count				Business Unit Total (1)	No. of Repeaters
Bay Area	Alvin-1259	Yes	638				$12,760	1
Brazos							($5,718)	0
Central TX	Th-1447	Yes	606				$12,120	1
Lewisville	2508	Yes	278				$5,560	1
Mainland							($8,311)	0
North TX	Gr-1245	Yes	164				$3,280	1
West TX	G-25F05	Yes	18				$360	1
						Penalty	$34,080
						Reduction	($14,028)

SAIFI
Business Unit	Circuit 1	Twice Business Unit Avg.	Customer Count	Circuit 2	Twice Business Unit Avg.	Customer Count	Business Unit Total (1)	No. of Repeaters
Bay Area	Alvin-1259	Yes	638				$12,760	1
Brazos	Sw-1128	Yes	914				$18,280	1
Central TX	Th-1447	Yes	606				$12,120	1
Lewisville	2508	Yes	278				$5,560	1
Mainland							($8,311)	0
North TX	Gr-1245	Yes	164				$3,280	1
West TX	Ca-12K86	Yes	37	Py-25P217	Yes	48	$1,700	2
						Penalty	$53,700
						Reduction	($8,311)

Stage II- 300% Worst Repeating Circuits
	(1) Penalties = $50 / customer    Reductions  = 10% of Maximum Business Unit Customer Credit Amount above
SAIDI
Business Unit	Circuit 1	Customer Count	Circuit 2	Customer Count	Circuit 3	Customer Count	BU Customer Credit Total	BU Total
Bay Area							($10,730)	0
Brazos							($5,718)	0
Central TX	Th-1447	606					$30,300	1
Lewisville							($9,049)	0
Mainland							($8,311)	0
North TX							($6,201)	0
West TX	G-25F05	18	G-25F61	18	Co-25P47	23	$2,950	3
						Penalty	$33,250
						Reduction	($40,008)
SAIFI
Business Unit	Circuit 1	Customer Count					BU Customer Credit Total	BU Total
Bay Area							($10,730)	0
Brazos							($5,718)	0
Central TX							($6,262)	0
Lewisville							($9,049)	0
Mainland							($8,311)	0
North TX							($6,201)	0
West TX	Py-25P217	48					$2,400	1
						Penalty	$2,400
						Reduction	($46,270)

Stage III - System Standard
	SAIFI Penalties = difference between the actual and the allowable SAIFI values multiplied by 1 million,
		up to a maximum of one-half of the total remaining guarantee for the Business Unit.
	SAIDI Penalties = difference between the actual and the allowable SAIDI values multiplied by $10,000
		up to a maximum of one-half of the total remaining guarantees for the Business Unit.
Business Unit	SAIDI	105% 36 Month TX Average	Difference	Customer Credit	SAIFI	105% 36 Month TX Average	Difference	Customer Credit
Bay Area	34.4500	54.8007	0.0000	$0	0.5232	0.7893	0.0000	$0
Brazos	33.2850	54.8007	0.0000	$0	0.5258	0.7893	0.0000	$0
Central TX	54.4870	54.8007	0.0000	$0	0.5316	0.7893	0.0000	$0
Lewisville	47.0882	54.8007	0.0000	$0	0.5403	0.7893	0.0000	$0
Mainland	76.1520	54.8007	21.3513	$24,932	0.9034	0.7893	0.1141	$24,932
North TX	48.7023	54.8007	0.0000	$0	0.6580	0.7893	0.0000	$0
West TX	25.5060	54.8007	0.0000	$0	0.5003	0.7893	0.0000	$0
							Penalty	$49,864
Year	SAIFI	SAIDI
1998	0.8843	64.3837				BUSINESS UNIT SUMMARY
1999	0.6337	41.3792				Business Unit	Penalty
2000	0.7364	50.7428				Bay Area	$25,520
36 month	0.7517	52.1911				Brazos	$18,280
105%	0.7893	54.8007				Central TX	$54,540
						Lewisville	$11,120
						Mainland	$49,864
						North TX	$6,560
						West TX	$7,410
							$173,294	TOTAL PENALTY

EX-10

Docket No. 30172 Stipulation

EXHIBIT 10.1.6

INDUSTRIAL OFFICERS QUARTERLY MEETINGS
CONTACT LIST

	Name	Company Affiliation	Title	Mailing Address	E-Mail Address	Telephone No.	Fax No.
1.	Mr. Steve Talecki	BP		501 Westlake Park Blvd., Room 4.442C Houston, Texas  77079	talecksa@bp.com	(281) 366-4942	(281) 366-2200
2.	Mr. Jaime Viancos	BP		501 Westlake Park Blvd., Room 4.442C Houston, Texas  77079
3.	Mr. Wade Worthy	Marathon Ashland Petroleum, LLC		P. O. Box 3128 Houston, TX  77253-3128	LWWorthy@MAPLLC.com	(713) 296-3790	(713) 513-1300
4.	Ms. Joan Walker-Ratliff	ConocoPhillips		P.O. Box 1267, M170-4 ST Ponca City, OK  74602-1267	joan.walker-ratliff@conocophillips.com	(580) 767-4070	(580) 767-4070
5.	Mr. Charlie Miller	Valero Refining - Texas L.P.		9701 Manchester Houston, Texas 77012	charlie.miller@valero.com	(713) 923-3493	(713) 923-3331
6.
7.
8.
9.
10.

EX-10

Docket No. 30172 Stipulation

EXHIBIT 10.1.7

INDUSTRIAL CUSTOMER PLANNED MAINTENANCE SCHEDULE
CONTACT LIST

	Name	Company Affiliation	Title	Mailing Address	E-Mail Address	Telephone No.	Fax No.
1.	Mr. Steve Talecki	BP		501 Westlake Park Blvd., Room 4.442C Houston, Texas  77079	talecksa@bp.com	(281) 366-4942	(281) 366-2200
2.	Mr. Jaime Viancos	BP		501 Westlake Park Blvd., Room 4.442C Houston, Texas  77079
3.	Mr. Wade Worthy	Marathon Ashland Petroleum, LLC		P. O. Box 3128 Houston, TX  77253-3128	LWWorthy@MAPLLC.com	(713) 296-3790	(713) 513-1300
4.	Ms. Joan Walker-Ratliff	ConocoPhillips		P.O. Box 1267, M170-4 ST Ponca City, OK  74602-1267	joan.walker-ratliff@conocophillips.com	(580) 767-4070	(580) 767-4070
5.	Mr. Charlie Miller	Valero Refining - Texas L.P.		9701 Manchester Houston, Texas 77012	charlie.miller@valero.com	(713) 923-3493	(713) 923-3331
6.
7.
8.
9.
10.

EX-99

Exhibit 99.1

Feb. 3, 2005

PNM Resources, Texas Parties Agree on Acquisition Terms

Albuquerque: PNM Resources (NYSE: PNM) announced today it has reached an agreement in Texas and has obtained federal anti-trust clearance - two significant steps in the process of completing its acquisition of Fort Worth-based TNP Enterprises (TNP).

The agreement, reached with several cities, the staff of the Public Utility Commission of Texas (PUC), the Office of Public Utility Counsel, the Texas Industrial Energy Consumers and the Alliance for Retail Markets, is unopposed and was filed today with the PUC. The agreement outlines terms and conditions necessary for the PUC to find the acquisition of TNP and its subsidiaries, Texas-New Mexico Power Co. (TNMP) and First Choice Power, to be consistent with the public interest.

Among other issues, the agreement calls for:

A two-year electric rate freeze that includes a $13 million annual rate reduction in TNMP's retail delivery rates effective May 1, 2005,

An authorized return on equity of 10.25 percent on an implied capital structure of 60 percent debt and 40 percent equity for certain reporting purposes.

The use of a 60/40-percent debt/equity capital structure in TNMP's next base rate case if filed before January 1, 2009, and

A $6 million synergy savings credit amortized over 24 months effective after the close of the transaction.

"This settlement is a result of everyone involved recognizing that our proposed acquisition of TNP makes sense for both companies and Texas consumers," said Jeff Sterba, PNM Resources chairman, president and chief executive officer. "It moves us closer to realizing our projected financial benefits and brings financial stability to TNP, while bringing rate relief to customers and rate stability to TNMP for the next two years."

In addition, PNM Resources was notified late Wednesday the proposed acquisition has received anti-trust clearance under the Hart-Scott-Rodino Act from the Federal Trade Commission.

PNM Resources still needs approval of the acquisition from the New Mexico Public Regulation Commission, the Securities and Exchange Commission and the Federal Energy Regulatory Commission.

In July 2004, PNM Resources announced its proposed $1.024 billion purchase of TNP Enterprises and its subsidiaries. The acquisition and subsequent refinancing of TNP debt and securities are estimated to produce net savings of at least $40 million in annual pre-tax interest expense and $10 million annually of pre-tax synergy savings. These savings are expected to generate at least 10 percent annual accretion to PNM Resources' earnings per share in the first full year after closing and 20 percent accretion to free cash flow.

"We remain on target to achieve our stated goal of $10 million of annual corporate and operational synergy savings," said John R. Loyack, PNM Resources senior vice president and chief financial officer.

In addition, Loyack said the first two completed steps of PNM Resources' financing plan have turned out better than the assumptions in the original estimate of $40 million annually. The company had originally disclosed its intent to issue $100 million of debt at 8 percent interest. PNM Resources since has entered into a floating-to-fixed interest rate swap that locks the interest on $100 million at 4.97 percent through November 2009. In addition, the company achieved a 6.625 percent interest rate on equity-linked securities to be issued to Cascade Investment LLC.

PNM Resources has entered into negotiations with New Mexico parties in an effort to develop an agreement that would be presented to state regulators. The transaction is expected to close soon after all regulatory approvals are obtained.

PNM Resources is an energy holding company based in Albuquerque, New Mexico. PNM, the principal subsidiary of PNM Resources, serves about 471,000 natural gas customers and 413,000 electric customers in New Mexico. The company also sells power on the wholesale market in the Western U.S. PNM Resources stock is traded primarily on the NYSE under the symbol PNM.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made in this release and documents the Company files with the SEC that relate to future events or the Company's expectations, projections, estimates, intentions, goals, targets and strategies, both with respect to the Company and with respect to the proposed acquisition of TNP Enterprises, Inc., are made pursuant to the Private Securities Litigation Reform Act of 1995. You are cautioned that all forward-looking statements are based upon current expectations and estimates and the Company assumes no obligation to update this information. Because actual results may differ materially from those expressed or implied by the forward-looking statements, PNM Resources cautions you not to place undue reliance on these statements. Many factors could cause actual results to differ, and will affect the Company's future financial condition, cash flow and operating results. These factors include risks and uncertainties relating to the receipt of regulatory approvals of the proposed acquisition of TNP Enterprises, Inc., the risks that the businesses will not be integrated successfully, the risk that the benefits of the acquisition will not be fully realized or will take longer to realize than expected, disruption from the proposed acquisition making it more difficult to maintain relationships with customers, employees, suppliers or other third parties, conditions in the financial markets relevant to the proposed acquisition, interest rates, weather, water supply, fuel costs, availability of fuel supplies, risk management and commodity risk transactions, seasonality and other changes in supply and demand in the market for electric power, wholesale power prices, market liquidity, the competitive environment in the electric and natural gas industries, the performance of generating units and transmission system, the ability of the Company to secure long-term power sales, the risks associated with completion of the construction of Luna Energy Facility, including construction delays and unanticipated cost overruns, state and federal regulatory and legislative decisions and actions, the outcome of legal proceedings, changes in applicable accounting principles and the performance of state, regional and national economies. For a detailed discussion of the important factors that affect PNM Resources and that could cause actual results to differ from those expressed or implied by the Company's forward-looking statements, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's current and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and the Company's current and future Current Reports on Form 8-K, filed with the SEC.