Filed by:  Public Service Company of New Mexico
                                             deemed filed pursuant to Rule 14a-6
                                          of the Securities Exchange Act of 1934

               Public Service Company of New Mexico Commission File No.:  1-6986
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                                         Subject Company:  Annual Meeting Speech


The Challenge of Change: A Focus on Transformation

Good morning and welcome to the 2001 PNM Annual Shareholders Meeting.


     You know,  I'd bet that no utility CEO has given an annual  meeting  speech
this year without talking about change. For nearly a decade, change has been our
constant  theme  here at PNM - and this year may top the  charts.  Change in our
industry,  in our business structure,  in regulation,  change that has been more
rapid, more  far-reaching,  and less predictable than anyone would have believed
possible.

     I wish I could say we'd anticipated all these changes - But I can't.

     Look at how the  situation  has  developed in  California  over the past 12
months - while some market turbulence was anticipated, I don't believe anyone in
our industry could honestly say they saw that coming with all its ramifications.

     But I can tell you  that we are  continually  learning  how to  respond  to
change and make it work for us to benefit customers, shareholders and employees.
Adapting quickly and effectively to changing  circumstances has become the focus
for transformation of our company.

     When we met last  year,  we were  preparing  PNM for the  opening of retail
electric competition here in New Mexico and the fundamental restructuring of our
business,  which was  scheduled  to begin  this year.  But events in  California
overtook  those  carefully  laid  plans,  and New Mexico has now  postponed  its
schedule  for  retail  electric  competition,  delaying  the  separation  of our
delivery and commodity businesses.

     In authorizing  that delay,  legislators  recognized  that PNM cannot stand
still while others move ahead. PNM Resources, our proposed holding company, will
look somewhat different than originally planned but it will allow us to continue
on the path we embarked on nearly a decade ago.

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     Some things have not, and will not,  change for PNM.  Serving the people of
New Mexico  remains the vital core of our  business.  In this role,  our utility
mission  remains  unchanged:  to  deliver  safe,  reliable  energy  and  provide
customers with information that can help them better manage their energy use. In
short,  provide Energy  Confidence.  Our efforts to improve service and increase
efficiency have enabled New Mexico  consumers to benefit from some of the lowest
electric bills in the United States.  PNM retail  customers  today are paying 13
percent  less for  electricity  than  they did in 1985 -46  percent  less,  when
adjusted for inflation.

     In fact, PNM is the only investor-owned  utility in New Mexico that has not
increased its electric rates in the last 12 months. Being a low cost electricity
provider is a change for the better for PNM and our customers.

     Unfortunately,  over the past year we,  along with the rest of the  nation,
have faced  escalating  natural gas costs,  which have truly been  difficult for
customers. While we have consistently provided gas service to customers at costs
well  below the  national  average,  utility  bill  increases  are a change  not
everyone can handle,  even if they are lower than they are in Arizona,  Colorado
or Kansas.  We know these  kind of changes  are hard and that's why we've  taken
steps to change how we purchase gas for customers,  and how we charge  customers
for that energy.

     We've spread  those  higher costs out over more months so customers  aren't
hit so hard during the winter heating season. We have substantially  boosted the
contribution  PNM  shareholders  gave to our Good  Neighbor  fund,  contributing
nearly  $500,000 in this past winter heating season to help those  customers who
most  need  assistance.  And  we  have  stepped  up our  efforts  to  work  with
residential  and small  business  customers  to conserve  energy and lower their
energy bills.

     During just one month,  January of this year, more than 2,000 PNM customers
took advantage of our offer for a free energy  analysis.  So far this year, more
than 5,000 customers have requested these energy audits,  compared to 4,000 such
requests for all of last year. We will continue to emphasize these and other new
initiatives to help customers.

     While we will not lose  sight of our  utility  mission,  the other  half of
PNM's business has assumed growing importance in our strategic plan. PNM's power
generation and wholesale power trading  operations now contribute more than half
of the company's total revenues, and we see continued growth ahead.

     Successfully  managing all these changes  becomes more of a challenge every
day. We have learned to respond  quickly,  not just to day-to-day  shifts in the
market,  but also to the shifting currents of political and regulatory action at
the federal level.

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     The latest change was the Federal Energy  Regulatory  Commission's  June 18
decision expanding price controls throughout the Western wholesale power market.
While we are still watching the effect of that order on the current  market,  we
do not believe it will adversely affect the Company in the long term.

     However,  major market  interventions  like price caps have a ripple effect
with unintended consequences.

     Price caps, while well-intentioned, will discourage new investment in power
plants - the very thing that must be encouraged if the supply imbalance is to be
addressed.  Energy  policy  must be focused on  increasing  supply and  reducing
demand. Price caps accomplish neither of these.

     The new order also creates a 10 percent price premium for all power flowing
into  California - an  incentive,  if you will,  to sell power there despite the
increased  credit risk.  The unintended  consequence  may well be that available
power will flow to California increasing California's supply, but at the expense
of the rest of the West.

     PNM customers,  however, can be assured that we have adequate capacity
for now. We also have a rate freeze in place that keeps rates at current  levels
until 2003,  regardless of wholesale market prices.  PNM customers can also rely
on our commitment to ensuring continued, reliable service.

     We are also proud of helping bring price  stability and supply  security to
other New Mexicans  through an agreement we announced  yesterday  with Texas New
Mexico  Power.  Under  the  terms  of  that  contract,  PNM  will  meet  all the
electricity  needs of TNP's customers in  southwestern  New Mexico over the next
five years.  To help  provide  the 100  megawatts  of power  needed to meet that
commitment,  we are proceeding  with plans to build a new generating  plant near
Las Cruces. That new generating station should be in operation next fall.

     Whatever  actions federal  regulators  take to try and control prices,  one
fact remains  clear:  there is a significant  shortage of electric  power in the
Western United States today that will likely persist for a few years.

     While  PNM has an  adequate  power  supply  for now,  we can't  take it for
granted.  New  Mexico  and the  nation  need an  energy  policy  that  addresses
increasing  energy use and  future  requirements  for  growth,  while  fostering
improved energy efficiency technologies.

     PNM relies on coal, nuclear and natural gas to generate electricity, and we
have a keen  interest  in  adding  renewable  energy to this  portfolio.  We are
investigating  new opportunities in wind power and in new technologies that will
allow us to site smaller generating units closer to where the power is needed.

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     Our proposed  transaction  with Western  Resources  will also vastly expand
PNM's  generation  resources  - and our  market  reach -- by giving us access to
Midwestern  wholesale markets, as well as adding more than 600,000 new customers
to our retail customer base.

     Changing  energy  needs will also  require new energy  solutions.  While we
continue to concentrate  first on our core utility  operations and second on our
growing  wholesale power business,  through our Avistar  subsidiary we will seek
out  selective   strategic   investments   that  complement  and  enhance  PNM's
competencies in the areas of electricity production,  energy trading and utility
operations.

     Our vision is to be the best merchant  utility in America - a company whose
primary focus is on  efficiently  delivering  energy to customers in its service
territory and expanding our generation and power trading  business on a regional
basis.

     We are  committed to  increasing  our  financial  strength and providing an
attractive  total  return to  shareholders.  In the 12 1/2 months since our last
annual  meeting,  PNM total  shareholder  return - dividend plus the increase in
stock price -- has been 105 percent,  compared to 26 percent for other stocks in
our  peer  group  and a loss of 1/2  percent  in for the  Dow  Jones  Industrial
Average.

     While I am pleased  that PNM stock  today is trading at more than twice its
price at this  time  last  year,  we  continue  to  believe  that  PNM  stock is
undervalued.  I believe this is partly due to our small size in a  consolidating
industry and partly due to investor uncertainty, both in regards to our proposed
acquisition of Western Resources and our future in the Western power market.

     The Western Resources  transaction is a transforming event for our company.
We are awaiting a final  decision  from Kansas  regulators  regarding  Western's
pending electric rate case. That decision is expected later this month. After we
have  assessed  the  potential  impact of that rate order,  we will present this
proposed transaction to shareholders for your approval.

     As to our future in the wholesale  power market here in the West, I believe
our track  record over the past 10 years  speaks for itself.  Yes, the market is
changing; in fact it's evolving at a pace undreamed of just a few years ago. But
we have demonstrated the ability to thrive on that change, and I am confident we
can continue to do so.

     Our success over the last 12 months, and the ability to continue to succeed
in the  future,  is most  dependent  on one thing - our  people.  They have been
through  a lot  over the  last 10  years - and  have  the  scars to prove  it. I
couldn't be more pleased to have the opportunity to work with them in service to
our customers and owners.

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     Our path is full of bumps but our folks have  demonstrated  commitment and,
increasingly,  creativity  to enable our continued  progress.  It's also special
when the culture of our company receives  recognition,  as in this month's issue
of Fortune  magazine.  Fortune  recognized your company as one of America's best
companies for  minorities,  and THE BEST for  Hispanics.  While this is only one
aspect of our corporate culture, it is an exceptionally important one that helps
us do a better job in the markets we serve.

     Thank you for your  confidence in PNM. Now I'd like to answer any questions
you may have.



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