PNM Proposes New Structure On Gas Rates; Revised Agreement Accepts Equal Commercial and Residential Rate Increases, Delays Residential Increase to April 2004.

Energy Editors/Business Editors

ALBUQUERQUE, N.M.--(BUSINESS WIRE)--Nov. 7, 2003

PNM Resources (NYSE: PNM) utility subsidiary PNM today submitted a revised plan to the state Public Regulation Commission for increasing delivery rates for the company's 441,000 natural gas customers. The compromise proposal amends a negotiated settlement of the company's gas rate case that the commissioners rejected Nov. 3.

The proposal leaves intact the $22 million revenue increase and the 10.25 percent return on equity (ROE) in the original agreement. In the new settlement, PNM agrees to forego revenues it would have collected from residential customers in the final two months of 2003 and the first quarter of 2004 under the terms of the original agreement. New rates for other customer classes will take effect in November. In addition, residential and small business customers would see the same percentage increase in delivery charges.

"We believe this new proposal fully addresses concerns expressed by the commissioners about previous rate increase proposals," said PNM Senior Vice President Bill Real. "With a delayed implementation date and equalization between customer classes, we believe the proposal is fair, just and reasonable in every respect."

The revised settlement agreement has the support of commission staff and an industrial users group.

PNM Resources is an energy holding company based in Albuquerque, N.M. PNM, the principal subsidiary of PNM Resources, serves about 450,000 natural gas customers and 390,000 electric customers in New Mexico. The company also sells power on the wholesale market in the western United States. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. For more information about our company, see our Web site at www.pnm.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements made in this news release and documents we file with the SEC that relate to future events or our expectations, projections, estimates, intentions, goals, targets and strategies 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 we assume 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 our future financial condition, cash flow and operating results. These factors include interest rates, weather, fuel costs, 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, state and federal regulatory and legislative decisions and actions, the outcome of legal proceedings 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 our forward-looking statements, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our current and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and our current and future Current Reports on Form 8-K, filed with the SEC.