EXHIBIT 10.05

ORDINANCE NO.16090    

AN ORDINANCE GRANTING A FRANCHISE
TO EL PASO ELECTRIC COMPANY
AND WAIVING APPLICATION PROCEDURES

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EL PASO:
Section 1. Grant. There is hereby granted by the City of El Paso, Texas (the
“City”) to El Paso Electric Company, a Texas corporation (the “Company”), its
successors and assigns, for the term commencing August 2, 2005 and extending
through July 31, 2030 (the “Franchise Term”), a franchise to construct,
reconstruct, repair, maintain, use and operate in, over, or under the present
and future streets, alleys, public ways, parks, and public places of the City of
El Paso, facilities for the transmission and distribution of electrical energy
and broadband over power line communications services (“BPL”) for the use of the
City and the inhabitants thereof and properties therein, with all usual and
customary appurtenances for such transmission and distribution (this
“Franchise”). Provided, this Franchise does not include places where the City’s
authority to permit such installations is or hereafter may be withdrawn by the
State, or where the Texas Department of Transportation or other State agency
constructs or maintains such public facility or place and lawfully excludes the
authority of the City to permit such public utility and BPL installations
therein.
Section 2. Required Construction. Prior to July 31, 2012, the Company will
initiate physical construction of its next generation plant, a base load or
intermediate load generation plant within the city limits of the City of El Paso
and shall complete said construction by July 31, 2017. If the Company does not
initiate or complete the required construction by the dates set

                            1

--------------------------------------------------------------------------------

forth above, this Franchise shall terminate two (2) years after the unmet
deadline. The generation plant shall not be powered from uranium fuel.
Section 3. Police Power. Work done in connection with the construction, repair,
maintenance and operation of such facilities is subject to the continuing police
power of the City; and the Company shall comply with all present and future
laws, ordinances and regulations, including the Texas Accessibility Standards as
adopted by the Texas Department of Licensing and Regulation, except such as
conflict with any provision hereof lawfully surrendering the City’s authority.
The City shall have power at any time to require the Company to remove and
abate, at the Company’s expense, any installation or structure that is dangerous
to life or property, and in case the Company, after notice, fails or refuses to
act, the City shall have the power to remove or abate the same at the expense of
the Company, all without compensation or liability for damages to the Company.
The City shall have the power at any time to require the Company to change the
route and position of its poles, lines, conduits or other construction at the
Company’s expense when the El Paso City Council (the “City Council”) shall find,
by resolution, that such change is necessary in the closing, opening or
relocating of streets or alleys, or water or sewer lines, the changing of grade
of streets or alleys, the construction and maintenance of parks and public
improvements, the construction of private buildings, the construction or use of
driveways, and under other conditions which the City Council shall find
necessary under the lawful exercise of its police power. Provided, however, the
Company shall be entitled to be paid for its costs and expense of any
relocation, raising or lowering of its wires or cables required by the City if
such expenses or costs are reimbursable or payable to the Company or to the City
by the State of Texas, the United States, or any agency or subdivision of either
whether directly or indirectly. The City shall not

                            2

--------------------------------------------------------------------------------

be liable to the Company for any damages to poles, lines, conduits or other
construction occurring in the change of the grade of streets, alleys or public
places after notice to the Company has been provided. The City shall use its
best reasonable efforts to consult and confer with the Company before requiring
any such relocation or raising or lowering of its lines or cables, with a view
to accomplishing the result reasonably and economically.
The Company shall promptly restore to as good condition as before working
thereon, and to the reasonable satisfaction of the City, all streets excavated
by it. The Company shall never tear up, bore nor excavate any pavement or street
at any time without first obtaining permission of the City, but such permission
shall be given if such action is necessary, reasonable and in accordance with
this Franchise.
Section 4. Underground Conduits. The Company may be required by the City Council
to place its wires and cables in underground conduits within the fire limits
herein described and such fire limits as may hereafter be established. No poles,
except distribution poles for drop or distribution wires, shall be set for
carrying wires or cables within the present fire limits, except by express
consent of the City Council or by consent of the City Manager which he may give
to facilitate rendition of service immediately upon unforeseen damage to the
system, or upon other emergency. The present fire limits for the purposes of
this Franchise are bounded by the south side of Main Drive, the west side of
Campbell Street, the north side of Overland Avenue, and the east side of Santa
Fe Street.
Section 5. Interference with Public or Private Property. All poles placed within
the City and all excavations or other construction in the streets, alleys or
public places shall be so done as to interfere as little as possible with the
use of streets, alleys and public places and with the use of private property,
in accordance with any direction given by or under the authority of the City
Council under the police and regulatory power of the City. Future installations
by the

                            3

--------------------------------------------------------------------------------

Company shall not conflict with then existing gas pipes, water pipes, telephone
lines or conduits, or sewers. Nothing herein shall be construed in any way to
restrict or limit the Company’s right of eminent domain as to private property.
Section 6. Trimming Trees. The Company may trim trees upon and overhanging the
streets, alleys, sidewalks and public places of the City so as to prevent the
branches of such trees from coming in contact with the wires or cables of the
Company. When so ordered by the City, such trimming shall be done under the
supervision and direction of any City official to whom such duty may be
delegated. The City Council may require pole lines that border on public parks
to be relocated or removed to adjacent alleys. The City agrees to use its best
efforts, while both designing and planting public areas, to coordinate with the
Company to minimize the need for subsequent tree trimming and relocation and
removal of lines.
Section 7. Wire Changes to Permit Moving of Structures. The Company on request
of any person shall remove or raise or lower its wires temporarily to permit the
moving of houses or other bulky structures. The expense of such temporary
removal, raising or lowering of wires, shall be paid by the benefited party or
parties, and the Company may require such payment in advance. The Company shall
be given not less than ninety-six (96) hours advance notice to arrange for such
temporary wire changes.
Section 8. Furnishing Service. The Company shall furnish service under fair
rules and regulations (which rules and regulations shall be subject to
supervision and control of the City Council) to any person, firm or corporation
which shall demand service within the City, upon such terms and conditions as
may be required by the City, and shall make connections therefor on demand
without unreasonable delay; provided that the extension of service demanded is
not prohibited by State or Federal law.

                            4

--------------------------------------------------------------------------------

The Company shall have the right to operate and control all meters, wires,
appliances and appurtenances owned by the Company. In case of refusal or failure
on the part of any customer to pay the Company proper charges for electricity
consumed, or to observe reasonable rules and regulations established by the
Company, the Company shall have the right to disconnect its service and wires to
the premises of such customer and to remove all facilities furnished and owned
by the Company.
Section 9. Other Utility Installations. The City reserves the right to install
and permit to be installed, gas, water and other utility lines, and do and
permit to be done, any work that may be deemed necessary or proper by the City
Council in, across, over or under any street, alley, or public place occupied by
the Company, and to change any curb or sidewalk or the grade of any street. In
doing or permitting such work, the City shall not be liable to the Company for
any damage so occasioned. Provided, however, the City shall not require the
Company (except as provided in Section 3 herein) to move its lines entirely from
any street, alley, or public place. If the City shall require the Company to
adapt or conform its lines or in any way or manner to alter, relocate or change
its property to enable any other corporation or person except the City to use
with greater convenience such street, alley, or public place, the Company shall
not be bound to make any such changes until such other corporation or person
shall have undertaken with solvent bond to reimburse the Company for any loss
and expense which will be caused by or arise out of such alteration, relocation
or change of the Company property; provided, however, that the City shall never
be liable for such reimbursement.
Section 10. Indemnification. The Company shall indemnify and save the City
harmless from all claims, demands or causes of action against the City for
injury to persons or property occasioned by or arising out of the construction,
reconstruction, maintenance, repair or operation of its system or by the conduct
of its business in the City.

                            5

--------------------------------------------------------------------------------

Section 11. Quality of System and Service. The Company shall construct, install
and maintain its system with economical and up-to-date apparatus and equipment,
in reasonable operating condition at all normal times. The service shall be
sufficient to meet all reasonable demands without undue interruption or
fluctuation, except when interrupted, prevented, or impaired by fires, strikes,
riots, war, storms, floods, State or Federal restrictions, or other occurrences
beyond the control of the Company, in any of which events the Company shall do
all things reasonably within its power to restore normal, efficient and
economical service.
Section 12. Reports; Rate Regulation. The City shall have the right to keep
informed as to the construction, reconstruction, maintenance, repair and
operation of the properties of the Company, and its accounting in connection
therewith, as affect the rates charged and service rendered within the City, and
to keep informed of the reasonableness of the Company’s rates. The Company will
furnish such pertinent information as may from time to time be reasonably
required by the City; and the original records of the Company shall be open to
inspection by the City at any reasonable time.
Annually and no later than March 31 the Company will file with the City Clerk a
detailed operating statement for the previous calendar year, showing income,
expenditures, profit or loss, and rate of return, and the basis therefor.
The City shall have power to fix and regulate the electric rates and charges of
the Company so far as not prohibited by law or the City Charter. The City shall
have the power to enter into settlement agreements with the Company which may
expand or limit the City’s rights under this Franchise.
If the Company applies to the City for an increase in its rates or charges, it
shall furnish the City Council with all proof necessary for the Council to act
advisedly and shall provide all facts, data and information demanded by the
Council. When said application to increase rates or

                            6

--------------------------------------------------------------------------------

charges is made, the City Council may employ such engineers, accountants,
attorneys and other special representatives (the “Consultants”) as the Council
may deem necessary and appropriate to determine the reasonableness of the
proposed rates and charges. The reasonable compensation paid to and expenses
incurred by the Consultants related to the review of the proposed rates and
charges shall be paid by the Company.
The Company will not resort to any court action with reference to the
establishment or regulation of its rates, charges or service without first
making application to the City Council and allowing reasonable time for full
investigation and hearing.
If the City shall order a reduction in rates, and the courts shall sustain such
rates as set by the City or shall approve any rate lower than the rate contended
for by the Company, the rate sustained by the courts shall be retroactive to the
date when the rate contended for by the City was first ordered by the City to go
into effect, and any excess collected by the Company shall be refunded to the
persons paying the same; and the Company shall pay all costs and expenses
incurred by the City in preparing for and conducting any litigation relating to
a reduction in rates, provided that such costs and expenses are determined to be
reasonable by the courts in which said litigation is tried.
Section 13. Compensation. As full compensation to the City for the rights herein
granted to the Company, the Company shall pay the following consideration:
(a)     At or before the acceptance of this Franchise, the Company will pay the
City Fifty Thousand Dollars ($50,000) and the cost of advertising this Ordinance
(the “Acceptance Fee”).
(b)     The Company will pay to the City on a quarterly basis during the life of
this Franchise a street rental charge of three and one-quarter percent (3.25 %)
of the gross revenues the Company receives for the generation, transmission and
distribution of electrical energy and other services within the City and four
percent (4%) of BPL-related gross revenues within the

                            7

--------------------------------------------------------------------------------

City of El Paso (the “Street Rental Charge”). The Company shall pay the Street
Rental Charge to the City by electronic funds transfer or by other means of
immediately available funds within forty-five (45) days of the end of each
calendar quarter (the “Payment Date”) with the first payment due November 14,
2005 for the sixty (60) days ending September 30, 2005. If the Street Rental
Charge or any portion thereof is not paid on or before the Payment Date, the
unpaid balance shall bear interest at a daily rate equivalent to the prime rate
of interest as published by the Wall Street Journal for that date, plus one
percent (1%) per annum from the Payment Date until the date such payment is
made. If any payment shall be more than thirty (30) days late, the interest
shall be paid at such prime rate plus three percent (3%) per annum.
(c)     The Company will pay to the City, as a Supplemental Franchise Fee, those
amounts calculated under Paragraph 1(d)(iii) of that certain Rate Agreement
entered into by and between the Company and the City which was passed and
approved by the City Council on July 12, 2005 and amounts to which the Company
and the City agree from time to time.
The consideration set forth in paragraphs (a), (b) and (c) of this Section shall
be in lieu of any other tax or charge, by whatever name called, for the
privileges granted in this Franchise. The City will not assess against the
Company any additional street rental charge, pole tax, inspection tax, charge
for the occupancy of the places to which this Franchise relates under Section 1,
or tax on this Franchise as property. This does not bar the City from assessing
against the Company or its property ad valorem taxes levied on property, fees
charged for the services of the Departments of Public Inspection or Engineering,
excise taxes levied, or other taxes, fees and charges which are general and not
compensation for the privileges herein granted. This does not relieve the
Company of its obligation to pay any amount legally charged under state law or
under Section 12 or other provisions of this Franchise or City ordinances now
codified as Sections 15.04.070 through 15.04.110 of the El Paso Municipal Code.

                            8

--------------------------------------------------------------------------------

Should the City not have the legal power to agree that payment of the foregoing
consideration shall be in lieu of any of the additional taxes or charges as
above set forth, the City will apply so much of such payment as may be necessary
to the satisfaction of the Company’s obligation to pay the additional tax or
charge herein agreed to be waived.
The payment or rendition of the consideration provided in this Franchise shall
not, except as otherwise provided herein, in any way limit any of the privileges
or rights of the City which it may now or hereafter have under the Constitution
and laws of Texas and the Charter of the City.
Section 14. Assignment.
(a)     If the Company shall assign this Franchise to any other person or
corporation (the “Assignee”) acquiring and duly authorized to acquire, own and
operate the Company’s property and to carry on the Company’s business as then
conducted, the Assignee shall execute and deliver to the City an agreement in
writing to be bound by all of the Company’s obligations, liabilities and
undertakings under this Franchise, the Assignee shall thereupon be deemed to be
substituted for the Company, and the Company shall stand released from all
obligations under this Franchise except such as have already accrued. If the
Assignee fails to file such agreement within thirty (30) days after said
assignment, this Franchise shall terminate.
(b)     This grant shall not be assignable without the express consent of the
governing body of the City. Said consent shall be evidenced by an ordinance that
fully recites the terms and conditions, if any, upon which such consent is
given. If the governing body does not grant said consent then this Agreement
shall terminate. In the context of this Agreement, consent is required in the
event of any merger or acquisition of the Company, sale of substantially all of
the assets of the Company or change in control of the Company. A formal
assignment of the Franchise is required subsequent to merger or acquisition.
“Change in Control” is defined to mean the occurrence of any of the following :
(i) the sale, lease, transfer, conveyance or other

                            9

--------------------------------------------------------------------------------

disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” or “group” (as such
terms are defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes
the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or indirectly, or more than 50% of the voting
stock of the Company, or (iv) the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors. For
purposes of this definition, any transfer of an equity interest of an entity
that was formed for the purpose of acquiring voting stock of the Company shall
be deemed to be a transfer of such portion of such voting stock as corresponds
to the portion of the equity of such entity that has been so transferred.
Section 15. Forfeiture. After reasonable notice and opportunity to be heard, and
a reasonable time for correcting any violation of this Franchise, the City
Council may forfeit this Franchise if the Company fails to perform its
obligations under this Franchise, maintain its property in good order or to
furnish efficient public utility service at reasonable rates. If court
proceedings are instituted to determine the legality of such forfeiture and the
Company does not prevail, the Company will pay the reasonable expenses incurred
by the City in connection with such litigation. If the Company does prevail, the
City will pay the reasonable expenses incurred by the Company in connection with
such litigation. In the absence of agreement between the City and the Company,
the reasonableness of any litigation expenses pursuant to this Section will be
determined by an appropriate court of law.

                            10

--------------------------------------------------------------------------------

The right to forfeit this Franchise shall be in addition to the penalties
provided in Section 3.18 of the City Charter, and other penalties provided by
law.
Section 16. Acceptance. This Franchise shall take effect if and only if: (a) It
is passed and approved by the City Council; and (b) within thirty (30) days
after this Franchise has been passed and approved by the City Council, the
Company files with the City Clerk the receipt received from the City Cashier for
its payment of the Acceptance Fee and the Company’s written acceptance of this
Franchise. This Franchise shall then become effective August 2, 2005 whereupon
the prior franchise granted September 12, 1995 and all rights and obligations
created thereby shall terminate.
Section 17. Waiver of Application Process. The City Council finds that all
relevant facts about the Company are known to the City Council and waives the
application process required by Section 15.08.012 H. of the El Paso Municipal
Code.

PASSED AND APPROVED this 12th day of July, 2005.

CITY OF EL PASO:
                        
/s/ John F. Cook         
ATTEST:                    John F. Cook, Mayor

/s/ Richarda Duffy Momsen    
Richarda Duffy Momsen, City Clerk

APPROVED AS TO FORM:                  APPROVED AS TO CONTENT:

/s/ Jorge Villegas                 /s/ William F. Studer, Jr.
Jorge Villegas                        William F. Studer, Jr.
Assistant City Attorney                    Deputy City Manager
Financial Services

                            11

--------------------------------------------------------------------------------

ACCEPTANCE

The Franchise granted by the City of El Paso on July 12, 2005 is hereby accepted
this 21 day of July, 2005.

EL PASO ELECTRIC COMPANY, GRANTEE

BY /s/Gary R. Hedrick    

ITS CEO and President    

STATE OF TEXAS
COUNTY OF EL PASO

This instrument was acknowledged before me on this 21st day of July, 2005 by
J.J. Jimenez.

[Notary Seal]
/s/ J.J. Jimenez                                         Notary Public, State of
Texas
    
My commission expires:
July 3, 2006

Received for filing this 26th day of July, 2005.
/s/ Richarda Duffy Momsen
Richarda Duffy Momsen, City Clerk

                            12