EXHIBIT
      10.2





FIRST
      AMENDMENT TO CREDIT AGREEMENT








THIS
      FIRST AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”)
      is
      entered into as of November 3, 2006 among PNM RESOURCES, INC., a New Mexico
      corporation (the “ Company ”),
      FIRST
      CHOICE POWER, L.P., a Texas limited partnership (“ FCP ”), TEXAS-NEW
      MEXICO POWER COMPANY, a Texas
      corporation (“ TNMP ”,
      collectively with the Company and FCP, the “ Borrowers ”),
      the
      Lenders party hereto, and BANK OF AMERICA, N.A., as Administrative Agent for
      the
      Lenders (in such capacity, the “ Administrative
      Agent ”).
      Capitalized terms used herein and not otherwise defined shall have the meanings
      ascribed thereto in the Credit Agreement (as defined below).








R
      E C
      I T A L S





WHEREAS,
      the Borrowers, the Lenders party thereto and the Administrative Agent are
      parties to that certain Amended and Restated Credit Agreement, dated as of
      August  15, 2005 (as amended or modified from time to time, the
“ Credit
      Agreement ”);





WHEREAS,
      the Borrowers have requested that the Lenders agree to certain changes to the
      Credit Agreement; and





WHEREAS,
      the Lenders are willing to agree to certain changes to the Credit Agreement
      as
      more fully set forth below.





NOW,
      THEREFORE, in consideration of the premises and the mutual covenants contained
      herein, and for other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the parties hereto agree as
      follows:





A
      G R
      E E M E N T





1 .  Amendments . Section
      7.1 .
      Sections 7.1(a) and 7.1(b) of the Credit Agreement are hereby amended and
      restated in their entireties to read as follows:





(a)  Annual
      Financial Statements .
      As soon
      as available, and in any event within 120 days after the close of each Fiscal
      Year of such Borrower, a consolidated balance sheet and income statement of
      such
      Borrower and its Subsidiaries, as of the end of such Fiscal Year, together
      with
      the related consolidated statements of income and of cash flows for such Fiscal
      Year, setting forth in comparative form figures for the preceding Fiscal Year,
      all such financial information described above to be in reasonable form and
      detail and (i) in the case of each of FCP and First Choice (to the extent such
      Person is a Borrower), accompanied by a certificate of a Financial Officer
      of
      such Borrower to the effect that such annual financial statements fairly present
      in all material respects the financial condition of such Borrower and have
      been
      prepared in accordance with GAAP and (ii) in all other cases, audited by
      independent certified public accountants of recognized national standing
      reasonably acceptable to the Required Lenders and whose opinion shall be
      furnished to the Lenders, and shall be to the effect that such financial
      statements have been prepared in accordance with GAAP (except for changes with
      which such accountants concur) and shall not be limited as to the scope of
      the
      audit or qualified in any respect. Notwithstanding the forgoing, such financial
      statements of each Borrower (other than the Company) shall not be required
      to
      contain comparative form figures for any portion of the preceding Fiscal Year,
      if any, that the applicable Borrower has not been owned by the
      Company.








(b)  Quarterly
      Financial Statements .
      As soon
      as available, and in any event within 60 days after the close of each Fiscal
      Quarter of such Borrower (other than the fourth Fiscal Quarter), a consolidated
      balance sheet and income statement of such Borrower and its Subsidiaries as
      of
      the end of such Fiscal Quarter, together with the related consolidated statement
      of income for such Fiscal Quarter and a year to date statement of cash flows,
      in
      each case setting forth in comparative form figures for the corresponding period
      of the preceding Fiscal Year, all such financial information described above
      to
      be in reasonable form and detail and reasonably acceptable to the Required
      Lenders, and, in each case, accompanied by a certificate of a Financial Officer
      of such Borrower to the effect that such quarterly financial statements fairly
      present in all material respects the financial condition of such Person and
      have
      been prepared in accordance with GAAP, subject to changes resulting from audit
      and normal year-end audit adjustments and except that the quarterly financial
      statements have fewer footnotes than annual statements. Notwithstanding the
      forgoing, such financial statements of each Borrower (other than the Company)
      shall not be required to contain comparative form figures for any portion of
      the
      preceding Fiscal Year, if any, that the applicable Borrower has not been owned
      by the Company.





2 .  Conditions
      Precedent .
      This
      Amendment shall be effective upon receipt by the Administrative Agent of copies
      of this Amendment duly executed by each Borrower and the Required
      Lenders.





3 .  Ratification
      of Credit Agreement .
      The
      term “Credit Agreement” as used in each of the Credit Documents shall hereafter
      mean the Credit Agreement as amended by this Amendment. Except as herein
      specifically agreed, the Credit Agreement is hereby ratified and confirmed
      and
      shall remain in full force and effect according to its terms.





4 .  Authority/Enforceability .
      Each
      Borrower represents and warrants as follows:





( a )  It
      has
      taken all necessary action to authorize the execution, delivery and performance
      of this Amendment.





( b )  This
      Amendment has been duly executed and delivered by such Person and constitutes
      such Person’s legal, valid and binding obligations, enforceable in accordance
      with its terms, except as such enforceability may be subject to (i) bankruptcy,
      insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
      similar laws affecting creditors’ rights generally and (ii) general principles
      of equity (regardless of whether such enforceability is considered in a
      proceeding at law or in equity).





( c )  No
      consent, approval, authorization or order of, or filing, registration or
      qualification with, any court or governmental authority or third party is
      required in connection with the execution, delivery or performance by such
      Person of this Amendment.





5 .  Representations
      and Warranties .
      Each
      Borrower represents and warrants to the Lenders that ( a ) the
      representations and warranties of such Borrower set forth in Section 6 of
      the Credit Agreement are true and correct as of the date hereof, unless they
      specifically refer to an earlier date, ( b ) no
      event has occurred and is continuing which constitutes a Default or an Event
      of
      Default, and ( c ) it
      has no claims, counterclaims, offsets, credits or defenses to its obligations
      under the Credit Documents or to the extent it has any they are hereby released
      in consideration of the Lenders entering into this Amendment.





2


6 .  No
      Conflicts .
      Neither
      the execution and delivery of this Amendment, nor the consummation of the
      transactions contemplated herein, nor performance of and compliance with the
      terms and provisions hereof by any Borrower will ( a ) violate,
      contravene or conflict with any provision of its respective articles or
      certificate of incorporation, bylaws or other organizational or governing
      document, ( b ) violate,
      contravene or conflict with any law, rule, regulation, order, writ, judgment,
      injunction, decree or permit applicable to a Borrower, ( c ) violate,
      contravene or conflict with contractual provisions of, or cause an event of
      default under, any indenture, loan agreement, mortgage, deed of trust, contract
      or other agreement or instrument to which a Borrower is a party or by which
      it
      or its properties may be bound or ( d ) result
      in or require the creation of any Lien upon or with respect to a Borrower’s
      properties.





7 .  Counterparts/Telecopy .
      This
      Amendment may be executed in any number of counterparts, each of which when
      so
      executed and delivered shall be an original, but all of which shall constitute
      one and the same instrument. Delivery of executed counterparts by telecopy
      shall
      be effective as an original and shall constitute a representation that an
      original will be delivered if requested.





8 .  **GOVERNING
      LAW** . **THIS
      AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
      GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
      STATE OF NEW YORK.**











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      of page intentionally left blank]














3


Each
      of
      the parties hereto has caused a counterpart of this Amendment to be duly
      executed and delivered as of the date first above written.








**BORROWERS** **:**





**PNM
      RESOURCES, INC.,**


a
      New
      Mexico corporation








By:  /s/
      Wendy A. Carlson


Name:  Wendy
      A. Carlson


Title:  Vice
      President and Treasurer








**FIRST
      CHOICE POWER, L.P.** ,


a
      Texas
      limited partnership








By:  /s/
      Wendy A. Carlson


Name:  Wendy  A.
      Carlson


Title:  Vice
      President and Treasurer





**TEXAS-NEW
      MEXICO POWER COMPANY** **,**


a
      Texas
      corporation








By:  /s/
      Tom Sategna


Name:  Thomas
      G. Sategna


Title:  Vice
      President, Controller and Treasurer





4


**LENDERS:**
              **BANK
                  OF AMERICA, N.A.**,
                as
                  a Lender and L/C
                  Issuer





By:  /s/
      Kevin Bertelsen


Name:  Kevin
      Bertelsen


Title:  Senior
      Vice President








**WACHOVIA
      BANK, NATIONAL ASSOCIATION** ,


as
      a
      Lender and L/C Issuer








By:  /s/
      Frederick W. Price


Name:  Frederick
      W. Price


Title:  Managing
      Director











**UNION
      BANK OF CALIFORNIA, N.A.**








By:  /s/
      Efrain Soto


Name:  Efrain
      Soto


Title:  Vice
      President








**JPMORGAN
      CHASE BANK, N.A.**








By:  /s/
      Michael DeForge


Name:  Michael
      DeForge


Title:  Vice
      President








**CITIBANK,
      N.A.**








By:  /s/
      J.
      Nicholas McKee


Name:  Nicholas
      McKee


Title:  Managing
      Director








**WELLS
      FARGO BANK, N.A.**








By:  /s/
      Daniel A. Conklin


Name:  Daniel
      Conklin


Title:  Vice
      President







5


**MERRILL
      LYNCH BANK USA**








By:  /s/
      Louis
      Alder


Name:  Louis
      Alder


Title:  Director








**MORGAN
      STANLEY BANK**








By:


Name:


Title:








**UBS
      LOAN FINANCE LLC**








By:  /s/
      Irja R. Otsa -- /s/Richard L. Tavros


Name:  Irja
      R. Otsa -- Richard L. Tavros


Title:  Associate
      Director Director


Banking
      Products Services, US








**LEHMAN
      BROTHERS BANK, FSB**








By:  /s/
      Janine M Shugan


Name:  Janine
      M. Shugan


Title:  Authorized
      Signatory








**WILLIAM
      STREET COMMITMENT CORPORATION**


(Recourse
      only to assets of William Street Commitment


Corporation)





By:  /s/
      Mark Walton


Name:  Mark
      Walton


Title:  Assistant
      Vice President








**CREDIT
      SUISSE, CAYMAN ISLANDS BRANCH**








By:  /s/
      Sarah Wu


Name:  Sarah
      Wu


Title:  Director





6


By:  /s/Laurence
      Lapeyre


Name:  Laurence
      Lapeyre


Title:  Associate





**U
      S BANK NATIONAL ASSOCIATION**








By:  /s/
      James W. Henken


Name:  James
      W. Henken


Title:  Vice
      President








**HSBC
      BANK USA, NATIONAL ASSOCIATION**








By:  /s/
      Jennifer Diedzic #75329


Name:  Jennifer
      Diedzic


Title:  Assistant
      Vice President








**MELLON
      BANK, N.A.**








By:  /s/
      Mark W. Rogers


Name:  Mark
      W. Rogers


Title:  Vice
      President








**ROYAL
      BANK OF CANADA**








By:  /s/
      David A. McCluskey


Name:  David
      A. McCluskey


Title:  Authorized
      Signatory








**COMPASS
      BANK**








By:


Name:


Title:








**SOUTHWEST
      SECURITIES BANK**








By:  /s/
      Lonnie Warren


Name:  Lonnie
      Warren


Title:  President,
      North Arlington Banking Center





7


**BANK
      OF ALBUQUERQUE, N.A.**








By:  /s/
      Myka C. Gentry


Name:  Myka
      C. Gentry


Title:  Vice
      President





**BANK
      HAPOALIM BM**





By:  /s/
      Helen H. Gateson /s/ Charles McLaughlin


Name:  Helen
      H. Gateson Charles McLaughlin


Title:  Vice
      President Senior Vice President





ADMINSTRATIVE
      AGENT:  **BANK
      OF AMERICA, N.A.**





By:  /s/
      Maria A. McClain


Title:  Vice
      President




8