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SOUTHWESTERN PUBLIC SERVICE COMPANY RESPONDS TO INQUIRIES

 AMARILLO, Texas, May 4 /PRNewswire/ -- The following is a statement by Southwestern Public Service Company (NYSE: SPS) Chairman Bill D. Helton:
 "It is important to understand that this phase of the bankruptcy process is far from over. SPS remains confident that it can ultimately prevail. In order for a plan of reorganization to be confirmed by the bankruptcy court, the majority of creditors and other constituents recognized by the court must support the proposed plan. Not one single group of creditors or shareholders has yet supported this plan. SPS remains in serious negotiations with creditors and other constituents on its proposed reorganization plan.
 "SPS intends to file a motion in bankruptcy court tomorrow, May 5, to allow it to file an SPS plan of reorganization.
 "The EPE - C&SW agreement is subject to many contingencies, such as obtaining the rate approvals from Texas, New Mexico and federal regulators -- as well as approval from other state and federal regulators for the C&SW holding company to acquire EPE. Most of these agencies will conduct public hearings and will look very hard at whether it is in the `public interest' to proceed with a C&SW - EPE combination.
 "In accordance with the court and the mediator's instructions, over the past several months, SPS and C&SW have each been working with the staff of the Public Utility Commission of Texas in an effort to reach a stipulation on a rate path that could be recommended to the Commission. SPS, the PUCT staff and the Office of Public Utility Counsel (which represents the interest of residential and small commercial customers in Texas) have entered into a stipulation on rate principles for an SPS plan of reorganization for EPE. Under this confidential stipulation, these recommendations regarding rate issues would be presented to the Public Utility Commission of Texas. The PUCT staff has indicated that it believes SPS's rate proposal is in the public interest and would recommend it to the Commission.
 "C&SW has not reached an agreement with the staff on a rate proposal that could be recommended to the Commission, and the staff has indicated that there may be serious `public interest' problems with a C&SW acquisition of EPE. Despite this, in an effort to gain the El Paso Electric board's support, C&SW recently raised its offer to equity holders of EPE, which adds significantly to the already high cost of this proposed acquisition.
 "We remain convinced that an SPS-EPE combination would be in the best interests of all of EPE's constituents. Our company is continuing serious negotiations with creditors and other constituents on its plan of reorganization for EPE. We continue to feel that, because of the natural fit of the two companies and the strong synergies that could be developed by a combination, our plan offers the best value to the creditors and other constituents, as well as being in the best interest of the public, including the electric customers of EPE."
 -0- 5/4/93
 /CONTACT: Phil Roth, public information supervisor, 806-378-2120, (media), or Jim Steinhilper, group manager of finance, (securities analysts), 806-378-2843, both of Southwestern Public Services Company/
 (SPS)


CO: Southwestern Public Service Company ST: Texas IN: UTI SU:

TM -- NY089 -- 4589 05/04/93 17:53 EDT
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Publication:PR Newswire
Date:May 4, 1993
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