Profile: PNM Resources, Inc. (PNM)

PNM Resources, Inc. (PNMR), incorporated in 2000, is a holding company of energy and energy-related businesses. The subsidiaries of the Company are Public Service Company of New Mexico and subsidiaries (PNM), Texas-New Mexico Power Company and subsidiaries (TNMP), First Choice Power, L. P. and subsidiaries (First Choice) and Optim Energy Twin Oaks, LP; formerly known as Altura Power L.P. (Altura). PNM is a public utility with regulated operations engaged in the generation, transmission and distribution of electricity, the transmission and distribution and sale of natural gas. TNMP is a regulated utility operating in Texas and New Mexico. First Choice is a REP operating in Texas. PNM Resources, Inc. and subsidiaries (PNMR) owns 50% of Optim Energy (formerly, EnergyCo), which is focused on unregulated electric operations, within the areas of Texas covered by Electric Reliability Council of Texas (ERCOT), including the development, operation and ownership of generation assets and wholesale marketing.

PNM Electric

PNM Electric is an electric utility focused on providing service to its rate-regulated customers. PNM Electric’s operations consist of generation, transmission and distribution of electricity for retail electric customers in New Mexico subject to the jurisdiction of the New Mexico Public Regulation Commission (NMPRC) and for wholesale customers in New Mexico and Arizona subject to the jurisdiction of Federal Energy Regulatory Commission (FERC). PNM Electric also provides transmission services to third parties and TNMP.

PNM Electric also includes the generation and sale of electricity into the wholesale market. This includes the sale of excess energy from PNM’s jurisdictional assets San Juan Generating Station (SJGS), Palo Verde Nuclear Generating Station (PVNGS) Units 1 and 2, and Four Corners, as well as the energy of its generating plants excluded from retail rates. PNM Electric provides retail electric service to north central New Mexico, including the cities of Albuquerque and Santa Fe, and certain other areas of New Mexico, which are located in Southern New Mexico. PNM Electric owns or leases transmission lines, interconnected with other utilities in New Mexico, Texas, Arizona, Colorado and Utah.

PNM Electric owns or leases 3,165 circuit miles of electric transmission lines, interconnected with other utilities in New Mexico, Arizona, Colorado, Texas and Utah. PNM Electric includes wholesale activities that consist of the generation and sale of electricity into the wholesale market from Luna, Lordsburg, and PNM’s share of Unit 3 at PVNGS, which are excluded from retail rates.

TNMP Electric

TNMP Electric consists of all the operations of TNMP. TNMP is a regulated utility operating in Texas and New Mexico. In New Mexico, TNMP provided integrated electricity services that included the transmission, distribution, purchase and sale of electricity to its customers in southwest and south central New Mexico as well as transmission to third parties and to PNM.

In Texas, TNMP Electric provides regulated transmission and distribution services under the provisions of Texas Electric Choice Act (TECA) and the Texas Public Utility Regulatory Act. TNMP Electric serves a market of small-to-medium-sized communities.

TNMP Electric’s Texas territory consists of three non-contiguous areas. One portion of this territory extends from Lewisville, which is approximately 10 miles north of the Dallas-Fort Worth International Airport, eastward to municipalities near the Red River, and to communities north, west and south of Fort Worth. The second portion of its territory includes the area along the Texas Gulf Coast between Houston and Galveston, and the third portion includes areas of far west Texas between Midland and El Paso. TNMP Electric’s Texas operations lie entirely within the ERCOT region. ERCOT is the independent system operator that is responsible for maintaining operations for the electric power supply system in the ERCOT region, which is located within Texas. TNMP Electric provides transmission and distribution services at regulated rates to various REPs that, in turn, provide retail electric service within TNMP Electric’s Texas service area. As of December 31, 2008, 65 active REPs served customers that receive transmission and distribution services from TNMP Electric.

PNM Gas

PNM Gas distributed natural gas to the communities in New Mexico, including Albuquerque and Santa Fe. In 2008, PNM Gas had 39 transportation-service customers, which procured gas for their end users independently of PNM Gas end users. Transportation-service customers were gas marketers and producers contracting with PNM Gas for transportation services to their end users and for other related services. Transportation services were provided to transportation-service customers at locations throughout the PNM Gas distribution system, as well as points on and off PNM Gas transmission pipelines. Through its transportation-service customers, PNM Gas provided gas transportation deliveries to 2,624 end users that were not PNM Gas customers in 2008.

Altura

On April 18, 2006, PNMR’s wholly owned subsidiary, Altura, purchased Twin Oaks, which included a 305 megawatt coal-fired power plant located 150 miles south of Dallas, Texas. PNMR acquired Twin Oaks to expand its merchant generation capacity in order to serve the wholesale market in the Southwest.

Optim Energy

Optim Energy is focused on the unregulated operations in the nation’s market. Optim Energy’s business consists of development, operation and ownership of generation assets, and wholesale marketing and trading to optimize its assets. PNMR accounts for its 50% ownership interest in Optim Energy.

First Choice

First Choice is a REP operating in ERCOT, which provides electricity to residential, small commercial and governmental customers. First Choice’s services include acquiring retail customers, setting up retail accounts, handling customer inquiries and complaints, and acting as a liaison between the transmission and distribution companies and retail customers. First Choice focuses its customer acquisition efforts in the Texas metropolitan areas that are open to electric choice within ERCOT, including Dallas-Fort Worth, Houston, Corpus Christi, and McAllen-Harlingen.

Corporate and Other

PNMR Services Company provides corporate services through shared services agreements to PNMR, to all of PNMR's business units, including First Choice, PNM and TNMP, and to Optim Energy. These services are charged and billed on a monthly basis to the business units. PNMR Services Company is included in the corporate and other segment.