| **UNITED                STATES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **SECURITIES                AND EXCHANGE COMMISSION**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Washington,                D.C. 20549                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| **FORM                10-Q**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (Mark                One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| [X]                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| SECURITIES                EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **For                the quarterly period ended****March                31, 2006**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| -                OR                -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| [                ]                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF                THE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| SECURITIES                EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| For                the transition period from _______________ to                _________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |
| **Commission**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **Name                of Registrants, State of Incorporation,** |   | **I.R.S.                Employer** |
| **File                Number**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **Address                and Telephone Number** |   | **Identification                No.** |
| 001-32462                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | PNM                Resources, Inc. |   | 85-0468296 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (A                New Mexico Corporation) |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Alvarado                Square |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Albuquerque,                New Mexico 87158 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (505)                241-2700 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |
| 001-06986                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Public                Service Company of New Mexico |   | 85-0019030 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (A                New Mexico Corporation) |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Alvarado                Square |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Albuquerque,                New Mexico 87158 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (505)                241-2700 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |
| 002-97230                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Texas-New                Mexico Power Company |   | 75-0204070 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (A                Texas Corporation) |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 4100                International Plaza, |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | P.O.                Box 2943 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Fort                Worth, Texas 76113 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (817)                731-0099 |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Indicate                by check mark whether PNM Resources, Inc. (“PNMR”) and Public Service                Company of New Mexico (“PNM”) (1) have filed all reports required to                be filed by Section 13 or 15(d) of the Securities Exchange Act                of 1934 during the preceding 12 months (or for such shorter period                that the registrant was required to file such reports) and (2) have                been subject to such filing requirements for the past 90                days.YES                ü                      NO  __                  Indicate                by check mark whether Texas New Mexico Power Company (“TNMP”) (1) has                filed all reports required to be filed by Section 13 or 15(d) of                the Securities Exchange Act of 1934 during the preceding 12 months                (or for such shorter period that the registrant was required to file                such                reports) and (2) has been subject to such filing requirements for the                past 90 days. YES                __                    NO                ü  (NOTE:                As a voluntary filer, not subject to the filing requirements, TNMP                filed                all reports under Section 13 or 15(d) of the Securities Exchange                Act of                1934 during the preceding 12                months.) |

----

| Large                  accelerated filer ü | Accelerated                  filer                        | Non-accelerated                  filer        |
|-------------------------------------------------|-------------------------------------------------------------------------------|----------------------------------------------------------------------------------|

| Large                  accelerated filer        | Accelerated                  filer        | Non-accelerated                  filer ü |
|------------------------------------------------------------------------------------|------------------------------------------------------------------------------|-----------------------------------------------|

| As                of May 1, 2006, 68,818,632 shares of common stock, no par value per                share,                of PNMR were outstanding. |
|------------------------------------------------------------------------------------------------------------------------------------------------------|
| The                total number of shares of Common Stock of PNM outstanding as of May                1,                2006 was 39,117,799 all held |
| by                PNMR (and none held by non-affiliates).                                                                                            |
| The                total number of shares of Common Stock of TNMP outstanding as of                May 1,                2006 was 9,615 all held     |
| indirectly                by PNMR (and none held by                non-affiliates).                                                                  |

**PNM      AND TNMP MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H) (1) (a)      AND      (b) OF FORM 10-Q AND ARE THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE      FORMAT PURSUANT TO GENERAL INSTRUCTION (H) (2).**

| This                Form 10-Q represents separate filings by PNMR, PNM and TNMP. Information                herein relating to an individual registrant is filed by that registrant                on                its own behalf. PNM makes no representations as to the information                relating to PNMR and its subsidiaries other than PNM. TNMP makes                no                representations as to the information relating to PNMR and its                subsidiaries other than TNMP. When this Form 10-Q is incorporated                by                reference into any filing with the SEC made by PNM or TNMP, the portions                of this Form 10-Q that relate to PNMR and its subsidiaries other                than PNM                or TNMP, respectively are not incorporated by reference                therein.  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PNM      RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC      SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW      MEXICO POWER COMPANY AND SUBSIDIARIES**

**INDEX**

|                                                                                             | **Page                No.** |
|--------------------------------------------------------------------------------------------------|-----------------------------|
| GLOSSARY                                                                                         | 1                           |
|                                                                                             |                        |
| **PART                I. FINANCIAL INFORMATION:**                                                |                        |
|                                                                                             |                        |
| ITEM                1. FINANCIAL STATEMENTS (Unaudited)                                          |                        |
|                                                                                             |                        |
| PNM                Resources, Inc. and Subsidiaries                                              |                        |
| Condensed                Consolidated Statements of Earnings                                     |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 3                           |
| Condensed                Consolidated Balance Sheets                                             |                        |
| March                31, 2006 and December 31, 2005                                              | 4                           |
| Condensed                Consolidated Statements of Cash Flows                                   |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 6                           |
| Condensed                Consolidated Statements of Comprehensive Income                         |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 8                           |
| Public                Service Company of New Mexico and Subsidiary                               |                        |
| Condensed                Consolidated Statements of Earnings                                     |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 9                           |
| Condensed                Consolidated Balance Sheets                                             |                        |
| March                31, 2006 and December 31, 2005                                              | 10                          |
| Condensed                Consolidated Statements of Cash Flows                                   |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 12                          |
| Condensed                Consolidated Statements of Comprehensive Income                         |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 14                          |
| Texas-New                Mexico Power Company and Subsidiaries                                   |                        |
| Condensed                Consolidated Statements of Earnings                                     |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 15                          |
| Condensed                Consolidated Balance Sheets                                             |                        |
| March                31, 2006 and December 31, 2005                                              | 16                          |
| Condensed                Consolidated Statements of Cash Flows                                   |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 18                          |
| Condensed                Consolidated Statements of Comprehensive Income                         |                        |
| Three                Months Ended March 31, 2006 and 2005                                        | 20                          |
| Notes                to the Condensed Consolidated Financial Statements                          |                        |
|                                                                                             |                        |
| ITEM                2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL                   | 53                          |
| CONDITION                AND RESULTS OF OPERATIONS                                               |                        |
|                                                                                             |                        |
| ITEM                3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET                RISK | 76                          |
|                                                                                             |                        |
| ITEM                4. CONTROLS AND PROCEDURES                                                   | 84                          |
|                                                                                             |                        |
| **PART                II. OTHER INFORMATION:**                                                   |                        |
|                                                                                             |                        |
| ITEM                1. LEGAL PROCEEDINGS                                                         | 85                          |
|                                                                                             |                        |
| ITEM                1A. RISK FACTORS                                                             | 85                          |
|                                                                                             |                        |
| ITEM                5. OTHER INFORMATION                                                         | 85                          |
|                                                                                             |                        |
| ITEM                6. EXHIBITS                                                                  | 86                          |
|                                                                                             |                        |
| Signature                                                                                        | 87                          |

----

**GLOSSARY**

| Afton                             | Afton                Generating Station                                                                                                                         |
|-----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Altura                            | Altura                Power L.P.                                                                                                                                |
| APB                               | Accounting                Principles Board                                                                                                                      |
| APS                               | Arizona                Public Service Company                                                                                                                   |
| Avistar                           | Avistar,                Inc.                                                                                                                                    |
| Board                             | Board                of Directors                                                                                                                               |
| BTU                               | British                Thermal Unit                                                                                                                             |
| Cal                PX             | California                Power Exchange                                                                                                                        |
| Cal                ISO            | California                Independent System Operator                                                                                                           |
| Company                           | PNM                Resources, Inc. and Subsidiaries                                                                                                             |
| Constellation                     | Constellation                Energy Commodities Group, Inc.                                                                                                     |
| Decatherm                         | 1,000,000                BTUs                                                                                                                                   |
| Delta                             | Delta-Person                Limited Partnership                                                                                                                 |
| EaR                               | Earnings                at Risk                                                                                                                                 |
| EIP                               | Eastern                Interconnection Project                                                                                                                  |
| EITF                              | Emerging                Issues Task Force                                                                                                                       |
| EPA                               | United                States Environmental Protection Agency                                                                                                    |
| EPE                               | El                Paso Electric Company                                                                                                                         |
| ERCOT                             | Electric                Reliability Council of Texas                                                                                                            |
| ESPP                              | Employee                Stock Purchase Plan                                                                                                                     |
| FASB                              | Financial                Accounting Standards Board                                                                                                             |
| FCPSP                             | First                Choice Power Special Purpose, L.P.                                                                                                         |
| Federal                Funds Rate | Overnight                Rate on Federal funds transactions with members of the Federal Reserve                System, as published by the Federal Reserve Bank |
| FERC                              | Federal                Energy Regulatory Commission                                                                                                             |
| First                Choice       | First                Choice Power, L. P. and Subsidiaries                                                                                                       |
| GAAP                              | Generally                Accepted Accounting Principles in the United                                                                                           |
|                              | States                of America                                                                                                                                |
| LIBOR                             | London                Interbank Offered Rate                                                                                                                    |
| Lordsburg                         | Lordsburg                Generating Station                                                                                                                     |
| Luna                              | Luna                Energy Facility                                                                                                                             |
| MMBTUs                            | Million                British Thermal Units                                                                                                                    |
| Moody's                           | Moody’s                Investor Services, Inc.                                                                                                            |
| MW                                | Megawatt                                                                                                                                                        |
| MWh                               | Megawatt                Hour                                                                                                                                    |
| NMPRC                             | New                Mexico Public Regulation Commission                                                                                                          |
| NSPS                              | New                Source Performance Standards                                                                                                                 |
| NSR                               | New                Source Review                                                                                                                                |
| NYMEX                             | New                York Mercantile Exchange                                                                                                                     |
| O&M                           | Operations                and Maintenance                                                                                                                       |
| PEP                               | PNMR                Omnibus Performance Equity Plan                                                                                                             |
| PGAC                              | Purchased                Gas Adjustment Clause                                                                                                                  |
| PNM                               | Public                Service Company of New Mexico and Subsidiary                                                                                              |
| PNMR                              | PNM                Resources, Inc. and Subsidiaries                                                                                                             |
| PPA                               | Power                Purchase Agreement                                                                                                                         |
| PRG                               | Power                Resource Group, Inc.                                                                                                                       |
| PUCT                              | Public                Utility Commission of Texas                                                                                                               |

----

| PURPA                    | Public                Utility Regulatory Policy Act of 1978                  |
|--------------------------|------------------------------------------------------------------------------|
| PVNGS                    | Palo                Verde Nuclear Generating Station                         |
| Reeves                   | Reeves                Generating Station                                     |
| REP                      | Retail                Electricity Provider                                   |
| RMC                      | Risk                Management Committee                                     |
| RMRR                     | Routine                Maintenance, Repair or Replacement                    |
| SDG&E                | San                Diego Gas and Electric Company                            |
| SEC                      | United                States Securities and Exchange Commission              |
| Sempra                   | Sempra                Generation, a subsidiary of Sempra Energy              |
| SESCO                    | San                Angelo Electric Service Company                           |
| SFAS                     | Statement                of Financial Accounting Standards                   |
| SJCC                     | San                Juan Coal Company                                         |
| SJGS                     | San                Juan Generating Station                                   |
| S&P                  | Standard                and Poors Ratings Services                           |
| SPS                      | Southwestern                Public Service Company                           |
| TCEQ                     | Texas                Commission on Environmental Quality                     |
| TECA                     | Texas                Electric Choice Act                                     |
| TNMP                     | Texas-New                Mexico Power Company and Subsidiaries               |
| TNP                      | TNP                Enterprises, Inc. and Subsidiaries                        |
| Throughput               | Volumes                of gas delivered, whether or not owned by the Company |
| Twin                Oaks | Assets                of Twin Oaks Power, LP and Twin Oaks Power III, LP     |
| VaR                      | Value                at Risk                                                 |
| WSPP                     | Western                Systems Power Pool                                    |

----

| **ITEM                1. FINANCIAL STATEMENTS**                                                                                                  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                             |   |   |   |   |   |
| **PNM                RESOURCES, INC. AND SUBSIDIARIES**                                                                                          |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF EARNINGS**                                                                                 |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands, except                per share amounts) |   |
| **Operating                Revenues:**                                                                                                           |   |   |   |   |   |
| Electric                                                                                                                                         |   | $ | 448,216 |   | $ | 262,443 |   |
| Gas                                                                                                                                              |   |   | 207,476 |   |   | 165,233 |   |
| Other                                                                                                                                            |   |   | 109 |   |   | 237 |   |
| Total                operating revenues                                                                                                          |   |   | 655,801 |   |   | 427,913 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Operating                Expenses:**                                                                                                           |   |   |   |   |   |   |   |
| Cost                of energy sold                                                                                                               |   |   | 425,972 |   |   | 247,478 |   |
| Administrative                and general                                                                                                        |   |   | 65,305 |   |   | 41,309 |   |
| Energy                production costs                                                                                                           |   |   | 37,587 |   |   | 36,033 |   |
| Depreciation                and amortization                                                                                                     |   |   | 34,330 |   |   | 28,827 |   |
| Transmission                and distribution costs                                                                                               |   |   | 19,050 |   |   | 14,062 |   |
| Taxes,                other than income taxes                                                                                                    |   |   | 16,964 |   |   | 8,871 |   |
| Income                taxes                                                                                                                      |   |   | 10,247 |   |   | 13,391 |   |
| Total                operating expenses                                                                                                          |   |   | 609,455 |   |   | 389,971 |   |
| Operating                income                                                                                                                  |   |   | 46,346 |   |   | 37,942 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Other                Income and Deductions:**                                                                                                  |   |   |   |   |   |   |   |
| Interest                income                                                                                                                   |   |   | 10,151 |   |   | 9,770 |   |
| Other                income                                                                                                                      |   |   | 3,167 |   |   | 3,240 |   |
| Carrying                charges on regulatory assets                                                                                             |   |   | 1,973 |   |   | - |   |
| Other                deductions                                                                                                                  |   |   | (1,516 | ) |   | (2,136 | ) |
| Other                income taxes                                                                                                                |   |   | (5,101 | ) |   | (3,884 | ) |
| Net                other income and deductions                                                                                                   |   |   | 8,674 |   |   | 6,990 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Interest                Charges**                                                                                                              |   |   | 28,563 |   |   | 14,291 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Preferred                Stock Dividend Requirements of Subsidiary**                                                                           |   |   | 132 |   |   | 132 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Net                Earnings**                                                                                                                  |   | $ | 26,325 |   | $ | 30,509 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Net                Earnings per Common Share (see Note 5):**                                                                                   |   |   |   |   |   |   |   |
| **Basic**                                                                                                                                        |   | $ | 0.38 |   | $ | 0.50 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Diluted**                                                                                                                                      |   | $ | 0.38 |   | $ | 0.50 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Dividends                Declared per Common Share**                                                                                           |   | $ | 0.220 |   | $ | 0.185 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNMR, are an integral part                of these                financial statements. |

----

| **PNM                RESOURCES, INC. AND SUBSIDIARIES**                                                                                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                CONSOLIDATED BALANCE SHEETS**                                                                                         |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |
|                                                                                                                                             |   | **March                31,** |   | **December                31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **ASSETS**                                                                                                                                       |   |   |   |   |   |
| **Utility                Plant:**                                                                                                                |   |   |   |   |   |
| Electric                plant in service                                                                                                         |   | $ | 3,341,055 |   | $ | 3,315,642 |   |
| Gas                plant in service                                                                                                              |   |   | 725,869 |   |   | 711,823 |   |
| Common                plant in service and plant held for future use                                                                             |   |   | 137,155 |   |   | 135,849 |   |
|                                                                                                                                             |   |   | 4,204,079 |   |   | 4,163,314 |   |
| Less                accumulated depreciation and amortization                                                                                    |   |   | 1,399,032 |   |   | 1,374,599 |   |
|                                                                                                                                             |   |   | 2,805,047 |   |   | 2,788,715 |   |
| Construction                work in progress                                                                                                     |   |   | 168,601 |   |   | 168,195 |   |
| Nuclear                fuel, net of accumulated amortization of $17,539 and                $14,679                                               |   |   | 25,738 |   |   | 27,182 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Net                utility plant                                                                                                                 |   |   | 2,999,386 |   |   | 2,984,092 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Other                Property and Investments:**                                                                                               |   |   |   |   |   |   |   |
| Investment                in lessor notes                                                                                                        |   |   | 275,722 |   |   | 286,678 |   |
| Other                investments                                                                                                                 |   |   | 138,942 |   |   | 180,013 |   |
| Non-utility                property, net of accumulated depreciation of $2,189 and                $22                                            |   |   | 8,080 |   |   | 4,214 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                other property and investments                                                                                              |   |   | 422,744 |   |   | 470,905 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Current                Assets:**                                                                                                               |   |   |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                         |   |   | 45,770 |   |   | 68,199 |   |
| Special                deposits                                                                                                                  |   |   | 533 |   |   | 534 |   |
| Accounts                receivable, net of allowance for uncollectible accounts of $4,792                and                $3,653               |   |   | 138,801 |   |   | 128,834 |   |
| Unbilled                revenues                                                                                                                 |   |   | 112,118 |   |   | 151,773 |   |
| Other                receivables                                                                                                                 |   |   | 48,340 |   |   | 64,285 |   |
| Inventories                                                                                                                                      |   |   | 43,315 |   |   | 52,037 |   |
| Regulatory                assets                                                                                                                 |   |   | 3,377 |   |   | 28,058 |   |
| Other                current assets                                                                                                              |   |   | 102,830 |   |   | 102,577 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                current assets                                                                                                              |   |   | 495,084 |   |   | 596,297 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Deferred                Charges:**                                                                                                             |   |   |   |   |   |   |   |
| Regulatory                assets                                                                                                                 |   |   | 350,437 |   |   | 347,279 |   |
| Prepaid                pension cost                                                                                                              |   |   | 92,458 |   |   | 91,444 |   |
| Goodwill                                                                                                                                         |   |   | 499,155 |   |   | 499,155 |   |
| Other                intangible assets, net of accumulated amortization of $1,070 and                $742                                        |   |   | 78,184 |   |   | 78,512 |   |
| Other                deferred charges                                                                                                            |   |   | 65,515 |   |   | 57,025 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                deferred charges                                                                                                            |   |   | 1,085,749 |   |   | 1,073,415 |   |
|                                                                                                                                             |   | $ | 5,002,963 |   | $ | 5,124,709 |   |
|                                                                                                                                             |
| The                accompanying notes, as they relate to PNMR, are an integral part                of these                financial statements. |

----

| **PNM                RESOURCES, INC. AND SUBSIDIARIES**                                                                                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                CONSOLIDATED BALANCE SHEETS**                                                                                         |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |
|                                                                                                                                             |   | **March                31,** |   | **December                31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **CAPITALIZATION                AND LIABILITIES**                                                                                                |   |   |   |   |   |
| **Capitalization:**                                                                                                                              |   |   |   |   |   |
| Common                stockholders’ equity:                                                                                                |   |   |   |   |   |
| Common                stock outstanding (no par value, 120,000,000 shares authorized:                issued                                      |   |   |   |   |   |
| 68,818,632                and 68,786,286 at March 31, 2006 and December 31, 2005,                respectively)                                   |   | $ | 817,075 |   | $ | 813,425 |   |
| Accumulated                other comprehensive loss, net of tax                                                                                  |   |   | (96,601 | ) |   | (91,589 | ) |
| Retained                earnings                                                                                                                 |   |   | 575,807 |   |   | 564,623 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                common stockholders’ equity                                                                                           |   |   | 1,296,281 |   |   | 1,286,459 |   |
| Cumulative                preferred stock of subsidiary without mandatory redemption                                                             |   |   |   |   |   |   |   |
| ($100                stated value, 10,000,000 shares authorized: issued 115,293                at                                                |   |   |   |   |   |   |   |
| March                31, 2006 and December 31, 2005)                                                                                             |   |   | 11,529 |   |   | 11,529 |   |
| Long-term                debt                                                                                                                    |   |   | 1,744,929 |   |   | 1,746,395 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                capitalization                                                                                                              |   |   | 3,052,739 |   |   | 3,044,383 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Current                Liabilities:**                                                                                                          |   |   |   |   |   |   |   |
| Short-term                debt                                                                                                                   |   |   | 330,987 |   |   | 332,200 |   |
| Accounts                payable                                                                                                                  |   |   | 120,272 |   |   | 206,648 |   |
| Accrued                interest and taxes                                                                                                        |   |   | 51,549 |   |   | 27,815 |   |
| Other                current liabilities                                                                                                         |   |   | 147,883 |   |   | 156,833 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                current liabilities                                                                                                         |   |   | 650,691 |   |   | 723,496 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Long-Term                Liabilities:**                                                                                                        |   |   |   |   |   |   |   |
| Accumulated                deferred income taxes                                                                                                 |   |   | 433,457 |   |   | 451,263 |   |
| Accumulated                deferred investment tax credits                                                                                       |   |   | 32,897 |   |   | 33,806 |   |
| Regulatory                liabilities                                                                                                            |   |   | 391,459 |   |   | 402,253 |   |
| Asset                retirement obligations                                                                                                      |   |   | 56,968 |   |   | 55,646 |   |
| Accrued                pension liability and postretirement benefit cost                                                                         |   |   | 226,081 |   |   | 227,202 |   |
| Other                deferred credits                                                                                                            |   |   | 158,671 |   |   | 186,660 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                long-term liabilities                                                                                                       |   |   | 1,299,533 |   |   | 1,356,830 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Commitments                and Contingencies (see Note 9)                                                                                        |   |   | - |   |   | - |   |
|                                                                                                                                             |   | $ | 5,002,963 |   | $ | 5,124,709 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNMR, are an integral part                of these                financial statements. |

----

| **PNM                RESOURCES, INC. AND SUBSIDIARIES**                                                                                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                               |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **Cash                Flows From Operating Activities:**                                                                                         |   |   |   |   |   |
| Net                earnings                                                                                                                      |   | $ | 26,325 |   | $ | 30,509 |   |
| Adjustments                to reconcile net earnings to net cash flows from operating                activities:                                 |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                                                     |   |   | 40,011 |   |   | 36,275 |   |
| Allowance                for equity funds used during construction                                                                               |   |   | 47 |   |   | (470 | ) |
| Accumulated                deferred income tax                                                                                                   |   |   | (10,279 | ) |   | (639 | ) |
| Net                unrealized gains on trading and investment securities                                                                         |   |   | (3,933 | ) |   | (923 | ) |
| Realized                gains on investment securities                                                                                           |   |   | (1,407 | ) |   | (1,616 | ) |
| Carrying                charges on deferred stranded costs                                                                                       |   |   | (1,973 | ) |   | - |   |
| Carrying                charges on other regulatory assets and liabilities                                                                       |   |   | 1,298 |   |   | - |   |
| Stock                based compensation expense                                                                                                  |   |   | 4,373 |   |   | - |   |
| Excess                tax benefits from stock-based payment arrangements                                                                         |   |   | (313 | ) |   | - |   |
| Other,                net                                                                                                                        |   |   | 1,139 |   |   | - |   |
| Changes                in certain assets and liabilities, net of amounts                acquired:                                                |   |   |   |   |   |   |   |
| Accounts                receivable - customer                                                                                                    |   |   | 14,266 |   |   | 12,595 |   |
| Accounts                receivable - other                                                                                                       |   |   | 14,180 |   |   | 5,748 |   |
| Unbilled                revenues                                                                                                                 |   |   | 31,491 |   |   | 18,341 |   |
| Inventory                                                                                                                                        |   |   | 8,722 |   |   | 1,525 |   |
| Regulatory                assets                                                                                                                 |   |   | 19,285 |   |   | (3,776 | ) |
| Other                assets                                                                                                                      |   |   | 10,280 |   |   | (4,149 | ) |
| Accrued                postretirement benefit costs                                                                                              |   |   | (2,135 | ) |   | (2,007 | ) |
| Accounts                payable                                                                                                                  |   |   | (102,391 | ) |   | (22,060 | ) |
| Accrued                interest and taxes                                                                                                        |   |   | 24,046 |   |   | 44,129 |   |
| PVNGS                lease accrual                                                                                                               |   |   | (16,573 | ) |   | (16,573 | ) |
| Other                liabilities                                                                                                                 |   |   | (23,919 | ) |   | (17,548 | ) |
| Net                cash flows from operating activities                                                                                          |   |   | 32,540 |   |   | 79,361 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Cash                Flows From Investing Activities:**                                                                                         |   |   |   |   |   |   |   |
| Utility                plant additions                                                                                                           |   |   | (50,406 | ) |   | (28,390 | ) |
| Nuclear                fuel additions                                                                                                            |   |   | (1,415 | ) |   | (1,303 | ) |
| Proceeds                from sales of securities                                                                                                 |   |   | 30,449 |   |   | 28,222 |   |
| Purchases                of securities                                                                                                           |   |   | (30,301 | ) |   | (28,689 | ) |
| Return                of principal PVNGS lessor notes                                                                                            |   |   | 10,956 |   |   | 9,998 |   |
| Other,                net                                                                                                                        |   |   | 870 |   |   | 1,034 |   |
| Net                cash flows from investing activities                                                                                          |   |   | (39,847 | ) |   | (19,128 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNMR, are an integral part                of these                financial statements. |

----

| **PNM                RESOURCES, INC. AND SUBSIDIARIES**                                                                                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                               |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **Cash                Flows From Financing Activities:**                                                                                         |   |   |   |   |   |
| Short-term                borrowings (repayments), net                                                                                           |   |   | (1,213 | ) |   | (72,900 | ) |
| Long-term                debt borrowings                                                                                                         |   |   | - |   |   | 239,832 |   |
| Issuance                of common stock                                                                                                          |   |   | - |   |   | 101,231 |   |
| Net                activity related to stock-based payment arrangements                                                                          |   |   | (1,088 | ) |   | (5,639 | ) |
| Excess                tax benefits from stock-based payment arrangements                                                                         |   |   | 313 |   |   | - |   |
| Dividends                paid                                                                                                                    |   |   | (13,758 | ) |   | (11,318 | ) |
| Other,                net                                                                                                                        |   |   | 624 |   |   | 145 |   |
| Net                cash flows from financing activities                                                                                          |   |   | (15,122 | ) |   | 251,351 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Increase                (Decrease) in Cash and Cash Equivalents                                                                                  |   |   | (22,429 | ) |   | 311,584 |   |
| Beginning                of Period                                                                                                               |   |   | 68,199 |   |   | 17,195 |   |
| End                of Period                                                                                                                     |   | $ | 45,770 |   | $ | 328,779 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Supplemental                Cash Flow Disclosures:**                                                                                           |   |   |   |   |   |   |   |
| Interest                paid, net of capitalized interest                                                                                        |   | $ | 25,750 |   | $ | 12,370 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Income                taxes paid (refunded), net                                                                                                 |   | $ | - |   | $ | (20,369 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNMR, are an integral part                of these                financial statements. |

----

| **PNM                RESOURCES, INC. AND SUBSIDIARIES**                                                                                          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CONDENSED                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**                                                                     |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
|                                                                                                                                             |   |   |   |   |   |
| **Net                Earnings**                                                                                                                  |   | $ | 26,325 |   | $ | 30,509 |   |
| Other                Comprehensive Income (Loss):                                                                                                |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Unrealized                gain (loss) on securities**:                                                                                         |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) arising during the period,                                                                      |   |   |   |   |   |   |   |
| net                of tax (expense) benefit of $(7,605) and $66                                                                                  |   |   | 11,604 |   |   | (101 | ) |
| Reclassification                adjustment for gains included in net income,                                                                     |   |   |   |   |   |   |   |
| net                of tax expense of $319 and $498                                                                                               |   |   | (486 | ) |   | (760 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Mark-to-market                adjustment for certain derivative transactions:**                                                                |   |   |   |   |   |   |   |
| Change                in fair market value of designated cash flow hedges,                                                                       |   |   |   |   |   |   |   |
| net                of tax (expense) benefit of $9,064 and $(2,070)                                                                               |   |   | (14,646 | ) |   | 3,159 |   |
| Reclassification                adjustment for gains included in net income,                                                                     |   |   |   |   |   |   |   |
| net                of tax expense of $1,195 and $917                                                                                             |   |   | (1,484 | ) |   | (1,399 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Total                Other Comprehensive Income (Loss)**                                                                                       |   |   | (5,012 | ) |   | 899 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Total                Comprehensive Income**                                                                                                    |   | $ | 21,313 |   | $ | 31,408 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNMR, are an integral part                of these                financial statements. |

----

| **PUBLIC                SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                             |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF EARNINGS**                                                                                |   |
| (Unaudited)                                                                                                                                     |   |
|                                                                                                                                            |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                            |   | **2006** |   | **2005** |   |
|                                                                                                                                            |   | (In                thousands) |   |
| **Operating                Revenues:**                                                                                                          |   |   |   |   |   |
| Electric                                                                                                                                        |   | $ | 311,467 |   | $ | 262,443 |   |
| Gas                                                                                                                                             |   |   | 207,476 |   |   | 165,233 |   |
| Total                operating revenues                                                                                                         |   |   | 518,943 |   |   | 427,676 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Operating                Expenses:**                                                                                                          |   |   |   |   |   |   |   |
| Cost                of energy sold                                                                                                              |   |   | 339,262 |   |   | 247,412 |   |
| Administrative                and general                                                                                                       |   |   | 41,128 |   |   | 40,479 |   |
| Energy                production costs                                                                                                          |   |   | 37,587 |   |   | 36,033 |   |
| Depreciation                and amortization                                                                                                    |   |   | 24,855 |   |   | 27,945 |   |
| Transmission                and distribution costs                                                                                              |   |   | 14,307 |   |   | 14,063 |   |
| Taxes,                other than income taxes                                                                                                   |   |   | 9,313 |   |   | 8,292 |   |
| Income                taxes                                                                                                                     |   |   | 14,962 |   |   | 14,643 |   |
| Total                operating expenses                                                                                                         |   |   | 481,414 |   |   | 388,867 |   |
| Operating                income                                                                                                                 |   |   | 37,529 |   |   | 38,809 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Other                Income and Deductions:**                                                                                                 |   |   |   |   |   |   |   |
| Interest                income                                                                                                                  |   |   | 9,353 |   |   | 9,206 |   |
| Other                income                                                                                                                     |   |   | 1,828 |   |   | 3,276 |   |
| Other                deductions                                                                                                                 |   |   | (851 | ) |   | (1,164 | ) |
| Other                income taxes                                                                                                               |   |   | (4,011 | ) |   | (3,841 | ) |
| Net                other income and deductions                                                                                                  |   |   | 6,319 |   |   | 7,477 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Interest                Charges**                                                                                                             |   |   | 13,420 |   |   | 13,800 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Net                Earnings**                                                                                                                 |   |   | 30,428 |   |   | 32,486 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Preferred                Stock Dividend Requirements**                                                                                        |   |   | 132 |   |   | 132 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Net                Earnings Available for Common Stock**                                                                                      |   | $ | 30,296 |   | $ | 32,354 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNM, are an integral part of                these                financial statements. |

----

| **PUBLIC                SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                             |   |
| **CONDENSED                CONSOLIDATED BALANCE SHEETS**                                                                                        |   |
| (Unaudited)                                                                                                                                     |   |
|                                                                                                                                            |   |
|                                                                                                                                            |   | **March                31,** |   | **December                31,** |   |
|                                                                                                                                            |   | **2006** |   | **2005** |   |
|                                                                                                                                            |   | (In                thousands) |   |
| **ASSETS**                                                                                                                                      |   |   |   |   |   |
| **Utility                Plant:**                                                                                                               |   |   |   |   |   |
| Electric                plant in service                                                                                                        |   | $ | 2,596,062 |   | $ | 2,576,182 |   |
| Gas                plant in service                                                                                                             |   |   | 725,869 |   |   | 711,823 |   |
| Common                plant in service and plant held for future use                                                                            |   |   | 72,806 |   |   | 74,857 |   |
|                                                                                                                                            |   |   | 3,394,737 |   |   | 3,362,862 |   |
| Less                accumulated depreciation and amortization                                                                                   |   |   | 1,223,484 |   |   | 1,205,386 |   |
|                                                                                                                                            |   |   | 2,171,253 |   |   | 2,157,476 |   |
| Construction                work in progress                                                                                                    |   |   | 139,985 |   |   | 137,663 |   |
| Nuclear                fuel, net of accumulated amortization of $17,539 and                $14,679                                              |   |   | 25,738 |   |   | 27,182 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Net                utility plant                                                                                                                |   |   | 2,336,976 |   |   | 2,322,321 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Other                Property and Investments:**                                                                                              |   |   |   |   |   |   |   |
| Investment                in lessor notes                                                                                                       |   |   | 275,722 |   |   | 286,678 |   |
| Other                investments                                                                                                                |   |   | 128,892 |   |   | 170,422 |   |
| Non-utility                property                                                                                                             |   |   | 966 |   |   | 966 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                other property and investments                                                                                             |   |   | 405,580 |   |   | 458,066 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Current                Assets:**                                                                                                              |   |   |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                        |   |   | 6,636 |   |   | 12,690 |   |
| Special                deposits                                                                                                                 |   |   | 263 |   |   | 263 |   |
| Accounts                receivable, net of allowance for uncollectible accounts of $1,457                and                $1,435              |   |   | 97,494 |   |   | 108,569 |   |
| Unbilled                revenues                                                                                                                |   |   | 95,128 |   |   | 121,453 |   |
| Other                receivables                                                                                                                |   |   | 44,293 |   |   | 53,546 |   |
| Inventories                                                                                                                                     |   |   | 41,538 |   |   | 50,411 |   |
| Regulatory                assets                                                                                                                |   |   | 3,377 |   |   | 28,058 |   |
| Other                current assets                                                                                                             |   |   | 55,707 |   |   | 75,885 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                current assets                                                                                                             |   |   | 344,436 |   |   | 450,875 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Deferred                Charges:**                                                                                                            |   |   |   |   |   |   |   |
| Regulatory                assets                                                                                                                |   |   | 223,551 |   |   | 223,325 |   |
| Prepaid                pension cost                                                                                                             |   |   | 92,458 |   |   | 91,444 |   |
| Other                deferred charges                                                                                                           |   |   | 47,544 |   |   | 41,720 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                deferred charges                                                                                                           |   |   | 363,553 |   |   | 356,489 |   |
|                                                                                                                                            |   | $ | 3,450,545 |   | $ | 3,587,751 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNM, are an integral part of                these                financial statements. |

----

| **PUBLIC                SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                             |   |
| **CONDENSED                CONSOLIDATED BALANCE SHEETS**                                                                                        |   |
| (Unaudited)                                                                                                                                     |   |
|                                                                                                                                            |   |
|                                                                                                                                            |   | **March                31,** |   | **December                31,** |   |
|                                                                                                                                            |   | **2006** |   | **2005** |   |
|                                                                                                                                            |   | (In                thousands) |   |
| **CAPITALIZATION                AND LIABILITIES**                                                                                               |   |   |   |   |   |
| **Capitalization:**                                                                                                                             |   |   |   |   |   |
| Common                stockholder’s equity:                                                                                               |   |   |   |   |   |
| Common                stock outstanding (no par value, 40,000,000 shares authorized:                                                            |   |   |   |   |   |
| issued                39,117,799 at March 31, 2006 and December 31, 2005)                                                                       |   | $ | 765,500 |   | $ | 765,500 |   |
| Accumulated                other comprehensive loss, net of tax                                                                                 |   |   | (92,860 | ) |   | (90,515 | ) |
| Retained                earnings                                                                                                                |   |   | 362,837 |   |   | 332,542 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                common stockholder’s equity                                                                                          |   |   | 1,035,477 |   |   | 1,007,527 |   |
| Cumulative                preferred stock without mandatory redemption ($100 stated                value,                                       |   |   |   |   |   |   |   |
| 10,000,000                shares authorized: issued 115,293 at March 31, 2006 and                                                               |   |   |   |   |   |   |   |
| December                31, 2005)                                                                                                               |   |   | 11,529 |   |   | 11,529 |   |
| Long-term                debt                                                                                                                   |   |   | 986,764 |   |   | 987,068 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                capitalization                                                                                                             |   |   | 2,033,770 |   |   | 2,006,124 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Current                Liabilities:**                                                                                                         |   |   |   |   |   |   |   |
| Short-term                debt                                                                                                                  |   |   | 103,287 |   |   | 128,200 |   |
| Accounts                payable                                                                                                                 |   |   | 83,753 |   |   | 170,517 |   |
| Affiliate                accounts payable                                                                                                       |   |   | 51,524 |   |   | 50,070 |   |
| Accrued                interest and taxes                                                                                                       |   |   | 52,907 |   |   | 15,951 |   |
| Other                current liabilities                                                                                                        |   |   | 66,410 |   |   | 98,753 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                current liabilities                                                                                                        |   |   | 357,881 |   |   | 463,491 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Long-Term                Liabilities:**                                                                                                       |   |   |   |   |   |   |   |
| Accumulated                deferred income taxes                                                                                                |   |   | 282,574 |   |   | 300,752 |   |
| Accumulated                deferred investment tax credits                                                                                      |   |   | 31,554 |   |   | 32,266 |   |
| Regulatory                liabilities                                                                                                           |   |   | 333,959 |   |   | 346,007 |   |
| Asset                retirement obligations                                                                                                     |   |   | 56,247 |   |   | 54,940 |   |
| Accrued                pension liability and postretirement benefit cost                                                                        |   |   | 216,477 |   |   | 217,092 |   |
| Other                deferred credits                                                                                                           |   |   | 138,083 |   |   | 167,079 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Total                long-term liabilities                                                                                                      |   |   | 1,058,894 |   |   | 1,118,136 |   |
| Commitments                and Contingencies (see Note 9)                                                                                       |   |   | - |   |   | - |   |
|                                                                                                                                            |   | $ | 3,450,545 |   | $ | 3,587,751 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNM, are an integral part of                these                financial statements. |

----

| **PUBLIC                SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                             |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                              |   |
| (Unaudited)                                                                                                                                     |   |
|                                                                                                                                            |   |   |   |   |   |
|                                                                                                                                            |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                            |   | **2006** |   | **2005** |   |
|                                                                                                                                            |   | (In                thousands) |   |
| **Cash                Flows From Operating Activities:**                                                                                        |   |   |   |   |   |
| Net                earnings                                                                                                                     |   | $ | 30,428 |   | $ | 32,486 |   |
| Adjustments                to reconcile net earnings to net cash flows from operating                activities:                                |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                                                    |   |   | 29,780 |   |   | 35,393 |   |
| Allowance                for equity funds used during construction                                                                              |   |   | 1 |   |   | (470 | ) |
| Accumulated                deferred income tax                                                                                                  |   |   | (11,832 | ) |   | (639 | ) |
| Net                unrealized gains on trading securities                                                                                       |   |   | (504 | ) |   | (923 | ) |
| Realized                gains on investment securities                                                                                          |   |   | (1,407 | ) |   | (1,616 | ) |
| Carrying                charges on other regulatory assets and liabilities                                                                      |   |   | 1,298 |   |   | - |   |
| Changes                in certain assets and liabilities:                                                                                       |   |   |   |   |   |   |   |
| Accounts                receivable - customer                                                                                                   |   |   | 11,075 |   |   | 12,595 |   |
| Accounts                receivable - other                                                                                                      |   |   | 9,253 |   |   | 7,151 |   |
| Unbilled                revenues                                                                                                                |   |   | 26,326 |   |   | 18,341 |   |
| Inventory                                                                                                                                       |   |   | 8,873 |   |   | 1,719 |   |
| Regulatory                assets                                                                                                                |   |   | 20,899 |   |   | (3,776 | ) |
| Other                assets                                                                                                                     |   |   | 14,942 |   |   | (573 | ) |
| Accrued                postretirement benefit costs                                                                                             |   |   | (1,628 | ) |   | (2,007 | ) |
| Accounts                payable                                                                                                                 |   |   | (86,765 | ) |   | (27,888 | ) |
| Accrued                interest and taxes                                                                                                       |   |   | 36,800 |   |   | 20,062 |   |
| PVNGS                lease accrual                                                                                                              |   |   | (16,573 | ) |   | (16,573 | ) |
| Other                liabilities                                                                                                                |   |   | (24,948 | ) |   | (29,241 | ) |
| Net                cash flows from operating activities                                                                                         |   |   | 46,018 |   |   | 44,041 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Cash                Flows From Investing Activities:**                                                                                        |   |   |   |   |   |   |   |
| Utility                plant additions                                                                                                          |   |   | (37,391 | ) |   | (23,686 | ) |
| Nuclear                fuel additions                                                                                                           |   |   | (1,415 | ) |   | (1,303 | ) |
| Proceeds                from sales of securities                                                                                                |   |   | 30,449 |   |   | 28,222 |   |
| Purchases                of securities                                                                                                          |   |   | (30,301 | ) |   | (28,689 | ) |
| Return                of principal PVNGS lessor notes                                                                                           |   |   | 10,956 |   |   | 9,998 |   |
| Other,                net                                                                                                                       |   |   | 652 |   |   | 513 |   |
| Net                cash flows from investing activities                                                                                         |   |   | (27,050 | ) |   | (14,945 | ) |
|                                                                                                                                            |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNM, are an integral part of                these                financial statements. |

----

| **PUBLIC                SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                             |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                              |   |
| (Unaudited)                                                                                                                                     |   |
|                                                                                                                                            |   |   |   |   |   |
|                                                                                                                                            |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                            |   | **2006** |   | **2005** |   |
|                                                                                                                                            |   | (In                thousands) |   |
| **Cash                Flows From Financing Activities:**                                                                                        |   |   |   |   |   |
| Short-term                borrowings (repayments), net                                                                                          |   |   | (24,913 | ) |   | (38,600 | ) |
| Long-term                debt repayments                                                                                                        |   |   | (149 | ) |   | - |   |
| Dividends                paid                                                                                                                   |   |   | (132 | ) |   | (132 | ) |
| Change                in affiliate borrowings                                                                                                   |   |   | - |   |   | 843 |   |
| Other,                net                                                                                                                       |   |   | 172 |   |   | (93 | ) |
| Net                cash flows from financing activities                                                                                         |   |   | (25,022 | ) |   | (37,982 | ) |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Decrease                in Cash and Cash Equivalents                                                                                            |   |   | (6,054 | ) |   | (8,886 | ) |
| Beginning                of Period                                                                                                              |   |   | 12,690 |   |   | 16,448 |   |
| End                of Period                                                                                                                    |   | $ | 6,636 |   | $ | 7,562 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Supplemental                Cash Flow Disclosures:**                                                                                          |   |   |   |   |   |   |   |
| Interest                paid, net of capitalized interest                                                                                       |   | $ | 11,935 |   | $ | 11,415 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| Income                taxes paid, net                                                                                                           |   | $ | - |   | $ | - |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNM, are an integral part of                these                financial statements. |

----

| **PUBLIC                SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**                                                                          |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                             |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**                                                                    |   |
| (Unaudited)                                                                                                                                     |   |
|                                                                                                                                            |   |   |   |   |   |
|                                                                                                                                            |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                            |   | **2006** |   | **2005** |   |
|                                                                                                                                            |   | (In                thousands) |   |
|                                                                                                                                            |   |   |   |   |   |
| **Net                Earnings Available for Common Stock**                                                                                      |   | $ | 30,296 |   | $ | 32,354 |   |
| Other                Comprehensive Income (Loss):                                                                                               |   |   |   |   |   |   |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Unrealized                gain (loss) on securities**:                                                                                        |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) arising during the period,                                                                     |   |   |   |   |   |   |   |
| net                of tax (expense) benefit of $(7,605) and $66                                                                                 |   |   | 11,604 |   |   | (101 | ) |
| Reclassification                adjustment for gains included in net income,                                                                    |   |   |   |   |   |   |   |
| net                of tax expense of $319 and $498                                                                                              |   |   | (486 | ) |   | (760 | ) |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Mark-to-market                adjustment for certain derivative transactions:**                                                               |   |   |   |   |   |   |   |
| Change                in fair market value of designated cash flow hedges,                                                                      |   |   |   |   |   |   |   |
| net                of tax (expense) benefit of $6,607 and $(2,070)                                                                              |   |   | (10,081 | ) |   | 3,159 |   |
| Reclassification                adjustment for gains included in net income,                                                                    |   |   |   |   |   |   |   |
| net                of tax expense of $2,217 and $917                                                                                            |   |   | (3,382 | ) |   | (1,399 | ) |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Total                Other Comprehensive Income (Loss)**                                                                                      |   |   | (2,345 | ) |   | 899 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| **Total                Comprehensive Income**                                                                                                   |   | $ | 27,951 |   | $ | 33,253 |   |
|                                                                                                                                            |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to PNM, are an integral part of                these                financial statements. |

----

| **TEXAS-NEW                MEXICO POWER COMPANY AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                              |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF EARNINGS**                                                                                 |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |
|                                                                                                                                             |   | **Post-Acquisition** |   |   | **Pre-Acquisition** |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **Operating                Revenues:**                                                                                                           |   |   |   |   |   |   |
| Electric                                                                                                                                         |   | $ | 62,685 |   |   | $ | 65,882 |   |
| Total                operating revenues                                                                                                          |   |   | 62,685 |   |   |   | 65,882 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| **Operating                Expenses:**                                                                                                           |   |   |   |   |   |   |   |   |
| Cost                of energy sold                                                                                                               |   |   | 27,172 |   |   |   | 27,092 |   |
| Administrative                and general                                                                                                        |   |   | 11,231 |   |   |   | 6,497 |   |
| Depreciation                and amortization                                                                                                     |   |   | 7,731 |   |   |   | 7,518 |   |
| Transmission                and distribution costs                                                                                               |   |   | 4,713 |   |   |   | 5,167 |   |
| Taxes,                other than income taxes                                                                                                    |   |   | 5,607 |   |   |   | 6,033 |   |
| Income                taxes                                                                                                                      |   |   | (680 | ) |   |   | 2,247 |   |
| Total                operating expenses                                                                                                          |   |   | 55,774 |   |   |   | 54,554 |   |
| Operating                income                                                                                                                  |   |   | 6,911 |   |   |   | 11,328 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| **Other                Income and Deductions:**                                                                                                  |   |   |   |   |   |   |   |   |
| Interest                income                                                                                                                   |   |   | 255 |   |   |   | 290 |   |
| Other                income                                                                                                                      |   |   | 186 |   |   |   | 271 |   |
| Carrying                charges on regulatory assets                                                                                             |   |   | 1,973 |   |   |   | (2,801 | ) |
| Other                deductions                                                                                                                  |   |   | (30 | ) |   |   | (49 | ) |
| Other                income taxes                                                                                                                |   |   | (912 | ) |   |   | 869 |   |
| Net                other income and deductions                                                                                                   |   |   | 1,472 |   |   |   | (1,420 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| **Interest                Charges**                                                                                                              |   |   | 7,227 |   |   |   | 7,032 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| **Net                Earnings**                                                                                                                  |   | $ | 1,156 |   |   | $ | 2,876 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to TNMP, are an integral part                of these                financial statements. |

----

| **TEXAS-NEW                MEXICO POWER COMPANY AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                              |   |
| **CONDENSED                CONSOLIDATED BALANCE SHEETS**                                                                                         |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |
|                                                                                                                                             |   | **March                31,** |   | **December                31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **ASSETS**                                                                                                                                       |   |   |   |   |   |
| **Utility                Plant:**                                                                                                                |   |   |   |   |   |
| Electric                plant in service                                                                                                         |   | $ | 887,249 |   | $ | 877,893 |   |
| Construction                work in progress                                                                                                     |   |   | 3,515 |   |   | 7,138 |   |
| Common                plant in service and plant held for future use                                                                             |   |   | 589 |   |   | 589 |   |
|                                                                                                                                             |   |   | 891,353 |   |   | 885,620 |   |
| Less                accumulated depreciation and amortization                                                                                    |   |   | 302,199 |   |   | 296,611 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Net                utility plant                                                                                                                 |   |   | 589,154 |   |   | 589,009 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Other                Property and Investments:**                                                                                               |   |   |   |   |   |   |   |
| Other                investments                                                                                                                 |   |   | 548 |   |   | 548 |   |
| Non-utility                property, net of accumulated depreciation of $3 and $3                                                                |   |   | 2,120 |   |   | 2,120 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                other property and investments                                                                                              |   |   | 2,668 |   |   | 2,668 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Current                Assets:**                                                                                                               |   |   |   |   |   |   |   |
| Cash                and cash equivalents                                                                                                         |   |   | 17,117 |   |   | 16,228 |   |
| Accounts                receivable, net of allowance for uncollectible accounts of $79 and                $100                                   |   |   | 11,018 |   |   | 13,191 |   |
| Federal                income tax refund                                                                                                         |   |   | 36,437 |   |   | 36,392 |   |
| Unbilled                revenues                                                                                                                 |   |   | 6,995 |   |   | 6,679 |   |
| Other                receivables                                                                                                                 |   |   | 1,568 |   |   | 6,087 |   |
| Inventories                                                                                                                                      |   |   | 1,487 |   |   | 1,478 |   |
| Other                current assets                                                                                                              |   |   | 65 |   |   | 1,211 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                current assets                                                                                                              |   |   | 74,687 |   |   | 81,266 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Deferred                Charges:**                                                                                                             |   |   |   |   |   |   |   |
| Stranded                costs                                                                                                                    |   |   | 87,316 |   |   | 87,316 |   |
| Carrying                charges on stranded costs                                                                                                |   |   | 35,890 |   |   | 33,918 |   |
| Other                regulatory assets                                                                                                           |   |   | 3,679 |   |   | 2,720 |   |
| Goodwill                                                                                                                                         |   |   | 456,088 |   |   | 456,088 |   |
| Other                deferred charges                                                                                                            |   |   | 3,681 |   |   | 4,948 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                deferred charges                                                                                                            |   |   | 586,654 |   |   | 584,990 |   |
|                                                                                                                                             |   | $ | 1,253,163 |   | $ | 1,257,933 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to TNMP, are an integral part                of these                financial statements. |

----

| **TEXAS-NEW                MEXICO POWER COMPANY AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                              |   |
| **CONDENSED                CONSOLIDATED BALANCE SHEETS**                                                                                         |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |
|                                                                                                                                             |   | **March                31,** |   | **December                31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **CAPITALIZATION                AND LIABILITIES**                                                                                                |   |   |   |   |   |
| **Capitalization:**                                                                                                                              |   |   |   |   |   |
| Common                stockholder’s equity:                                                                                                |   |   |   |   |   |
| Common                stock outstanding ($10 par value, 12,000,000 shares authorized:                                                            |   |   |   |   |   |
| issued                9,615 at March 31, 2006 and December 31, 2005)                                                                             |   | $ | 96 |   | $ | 96 |   |
| Paid-in-capital                                                                                                                                  |   |   | 583,130 |   |   | 583,130 |   |
| Accumulated                other comprehensive loss, net of tax                                                                                  |   |   | (29 | ) |   | (29 | ) |
| Retained                earnings                                                                                                                 |   |   | 6,606 |   |   | 5,450 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                common stockholder’s equity                                                                                           |   |   | 589,803 |   |   | 588,647 |   |
| Long-term                debt                                                                                                                    |   |   | 415,938 |   |   | 415,864 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                capitalization                                                                                                              |   |   | 1,005,741 |   |   | 1,004,511 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Current                Liabilities:**                                                                                                          |   |   |   |   |   |   |   |
| Accounts                payable                                                                                                                  |   |   | 13,083 |   |   | 11,913 |   |
| Accrued                interest and taxes                                                                                                        |   |   | 17,807 |   |   | 24,250 |   |
| Accrued                payroll and benefits                                                                                                      |   |   | 2,385 |   |   | 3,268 |   |
| Other                current liabilities                                                                                                         |   |   | 5,017 |   |   | 5,516 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                current liabilities                                                                                                         |   |   | 38,292 |   |   | 44,947 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Long-Term                Liabilities:**                                                                                                        |   |   |   |   |   |   |   |
| Accumulated                deferred income taxes                                                                                                 |   |   | 140,032 |   |   | 139,405 |   |
| Accumulated                deferred investment tax credits                                                                                       |   |   | 1,343 |   |   | 1,540 |   |
| Regulatory                liabilities                                                                                                            |   |   | 57,500 |   |   | 56,246 |   |
| Accrued                pension liability                                                                                                         |   |   | 2,875 |   |   | 3,585 |   |
| Accrued                postretirement benefit cost                                                                                               |   |   | 6,728 |   |   | 6,525 |   |
| Other                deferred credits                                                                                                            |   |   | 652 |   |   | 1,174 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Total                long-term liabilities                                                                                                       |   |   | 209,130 |   |   | 208,475 |   |
| Commitments                and Contingencies (see Note 9)                                                                                        |   |   | - |   |   | - |   |
|                                                                                                                                             |   | $ | 1,253,163 |   | $ | 1,257,933 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to TNMP, are an integral part                of these                financial statements. |

----

| **TEXAS-NEW                MEXICO POWER COMPANY AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                              |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                               |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                             |   | **Post-Acquisition** |   |   | **Pre-Acquisition** |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **Cash                Flows From Operating Activities:**                                                                                         |   |   |   |   |   |   |
| Net                earnings                                                                                                                      |   | $ | 1,156 |   |   | $ | 2,876 |   |
| Adjustments                to reconcile net earnings to net cash flows from operating                activities:                                 |   |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                                                     |   |   | 7,805 |   |   |   | 7,592 |   |
| Allowance                for equity funds used during construction                                                                               |   |   | (47 | ) |   |   | (39 | ) |
| Accumulated                deferred income tax                                                                                                   |   |   | 430 |   |   |   | (1,486 | ) |
| Carrying                charges on deferred stranded costs                                                                                       |   |   | (1,973 | ) |   |   | 2,801 |   |
| Interest                on retail competition transition obligation                                                                              |   |   | 437 |   |   |   | - |   |
| Other,                net                                                                                                                        |   |   | (7 | ) |   |   | - |   |
| Changes                in certain assets and liabilities:                                                                                        |   |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                                               |   |   | 2,194 |   |   |   | 243 |   |
| Unbilled                revenues                                                                                                                 |   |   | (316 | ) |   |   | 2,469 |   |
| Other                assets                                                                                                                      |   |   | 1,838 |   |   |   | 2,739 |   |
| Accrued                postretirement benefit costs                                                                                              |   |   | (507 | ) |   |   | 329 |   |
| Accounts                payable                                                                                                                  |   |   | 725 |   |   |   | (4,999 | ) |
| Accrued                interest and taxes                                                                                                        |   |   | (6,477 | ) |   |   | (4,498 | ) |
| Change                in affiliate accounts                                                                                                      |   |   | 4,528 |   |   |   | 540 |   |
| Other                liabilities                                                                                                                 |   |   | (1,746 | ) |   |   | 2,745 |   |
| Net                cash flows from operating activities                                                                                          |   |   | 8,040 |   |   |   | 11,312 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| **Cash                Flows From Investing Activities:**                                                                                         |   |   |   |   |   |   |   |   |
| Utility                plant additions                                                                                                           |   |   | (7,216 | ) |   |   | (9,447 | ) |
| Other,                net                                                                                                                        |   |   | 31 |   |   |   | (160 | ) |
| Net                cash flows from investing activities                                                                                          |   |   | (7,185 | ) |   |   | (9,607 | ) |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to TNMP, are an integral part                of these                financial statements. |

----

| **TEXAS-NEW                MEXICO POWER COMPANY AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                              |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF CASH FLOWS**                                                                               |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                             |   | **Post-Acquisition** |   |   | **Pre-Acquisition** |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
| **Cash                Flows From Financing Activities:**                                                                                         |   |   |   |   |   |   |
| Other,                net                                                                                                                        |   |   | 34 |   |   |   | - |   |
| Net                cash flows from financing activities                                                                                          |   |   | 34 |   |   |   | - |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Increase                in Cash and Cash Equivalents                                                                                             |   |   | 889 |   |   |   | 1,705 |   |
| Beginning                of Period                                                                                                               |   |   | 16,228 |   |   |   | 65,759 |   |
| End                of Period                                                                                                                     |   | $ | 17,117 |   |   | $ | 67,464 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| **Supplemental                Cash Flow Disclosures:**                                                                                           |   |   |   |   |   |   |   |   |
| Interest                paid, net of capitalized interest                                                                                        |   | $ | 5,482 |   |   | $ | 5,242 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Income                taxes paid, net                                                                                                            |   | $ | - |   |   | $ | - |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| The                accompanying notes, as they relate to TNMP, are an integral part                of these                financial statements. |

----

| **TEXAS-NEW                MEXICO POWER COMPANY AND SUBSIDIARIES**                                                                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **A                WHOLLY OWNED SUBSIDIARY OF PNM RESOURCES, INC.**                                                                              |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**                                                                     |   |
| (Unaudited)                                                                                                                                      |   |
|                                                                                                                                             |   |   |   |   |   |
|                                                                                                                                             |   | **Post-Acquisition** |   | **Pre-Acquisition** |   |
|                                                                                                                                             |   | **Three                Months Ended March 31,** |   |
|                                                                                                                                             |   | **2006** |   | **2005** |   |
|                                                                                                                                             |   | (In                thousands) |   |
|                                                                                                                                             |   |   |   |   |   |
| **Net                Earnings**                                                                                                                  |   | $ | 1,156 |   | $ | 2,876 |   |
| Other                Comprehensive Income:                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| Interest                rate hedge net of reclassification adjustment, net of                income                                              |   |   |   |   |   |   |   |
| tax                benefit (expense) of $0 and $(79)                                                                                             |   |   | - |   |   | 129 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Total                Other Comprehensive Income**                                                                                              |   |   | - |   |   | 129 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
| **Total                Comprehensive Income**                                                                                                    |   | $ | 1,156 |   | $ | 3,005 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |
|                                                                                                                                             |
| The                accompanying notes, as they relate to TNMP, are an integral part                of these                financial statements. |

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(1)**
**Significant      Accounting Policies and Responsibility for Financial      Statements**

*TNP      Acquisition*

*Presentation*

*“Accounting      for the Effects of Certain Types of Regulation,”*

*Change      in Presentation*

*Principles      of Consolidation*

----

**PNM              RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC              SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW              MEXICO POWER COMPANY**
**AND              SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Financial      Statement Preparation*

*Goodwill      and Other Intangible Assets*

*“Goodwill      and Other Intangible Assets”*
*“Accounting      for the Impairment or Disposal of Long-Lived Assets”*

*Decommissioning      Costs*

*"Accounting      for Asset Retirement Obligations”*

*Stock-Based      Compensation *

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Carrying      Charges on Stranded Costs*

**(2)**
**Acquisitions**

*TNP*

*Twin      Oaks*

| **(3)                   ** | **Segment                Information** |
|-----------------------------------------------------|----------------------------------------|

**REGULATED      OPERATIONS**

**PNM      Electric **

**TNMP      Electric**

----

**PNM          RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC          SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW          MEXICO POWER COMPANY**
**AND          SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**PNM      Gas**

**UNREGULATED      OPERATIONS **

**PNM      Wholesale**

*Reporting      Realized Gains and Losses on Derivative Instruments that are Subject to FASB      Statement No. 133 and Not Held for Trading Purposes*

**First      Choice**

**CORPORATE      AND OTHER**

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                         |   | **Regulated** |      | **Unregulated** |   |      |   |          |    |       |
|----------------------------------------------|--------|---------------|-----------|-----------------|--------|-----------|--------|---------------|---------|------------|
| Segments                of Business          |   | **PNM**       |      | **TNMP**        |   | **PNM**   |   | **PNM**       |    | **First**  |   | **Corporate** |   |   |   |   |
|                                         |   | **Electric**  |      | **Electric**    |   | **Gas**   |   | **Wholesale** |    | **Choice** |   | **&                Other** |   |   | **Consolidated** |   |
| **2006:**                                    |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |
| Operating                revenues            |   | $             | 136,596   |            | $      | 46,969    |   | $             | 207,476 |       | $ | 164,311 |   | $ | 105,082 |   | $ | (4,633 | ) |  (a) | $ | 655,801 |   |
| Intersegment                revenues         |   |          | 2,182     |            |   | 15,716    |   |          | 49      |       |   | 15,177 |   |   | - |   |   | (33,124 | ) |   |   | - |   |
| **Total                revenues**            |   |          | 138,778   |            |   | 62,685    |   |          | 207,525 |       |   | 179,488 |   |   | 105,082 |   |   | (37,757 | ) |   |   | 655,801 |   |
| Less:                Cost of energy          |   |          | 45,474    |            |   | 27,172    |   |          | 157,691 |       |   | 142,877 |   |   | 90,335 |   |   | (37,577 | ) |  (a) |   | 425,972 |   |
| Intersegment                energy           |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transfer                                     |   |          | (5,178    | )               |   | -         |   |          | -       |       |   | 5,178 |   |   | - |   |   | - |   |   |   | - |   |
| **Gross                margin**              |   |          | 98,482    |            |   | 35,513    |   |          | 49,834  |       |   | 31,433 |   |   | 14,747 |   |   | (180 | ) |   |   | 229,829 |   |
| Operating                expenses            |   |          | 67,154    |            |   | 21,532    |   |          | 25,090  |       |   | 11,785 |   |   | 13,178 |   |   | 167 |   |  (b) |   | 138,906 |   |
| Depreciation                and              |   |          |           |            |   |      |   |          |    |       |   |  |   |   |   |   |   |   |   |   |   |   |   |
| amortization                                 |   |          | 14,972    |            |   | 7,731     |   |          | 5,920   |       |   | 3,161 |   |   | 498 |   |   | 2,048 |   |   |   | 34,330 |   |
| Income                taxes                  |   |          | 3,072     |            |   | (673      | )      |          | 6,266   |       |   | 5,014 |   |   | 300 |   |   | (3,732 | ) |  (b) |   | 10,247 |   |
| **Operating                income**          |   |          | 13,284    |            |   | 6,923     |   |          | 12,558  |       |   | 11,473 |   |   | 771 |   |   | 1,337 |   |   |   | 46,346 |   |
|                                         |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                income               |   |          | 6,511     |            |   | 255       |   |          | 1,265   |       |   | 1,279 |   |   | 392 |   |   | 449 |   |   |   | 10,151 |   |
| Other                income/(deductions)     |   |          | 198       |            |   | 2,129     |   |          | 101     |       |   | 706 |   |   | (10 | ) |   | 368 |   |   |   | 3,492 |   |
| Other                income taxes            |   |          | (2,656    | )               |   | (912      | )      |          | (541    | )          |   | (786 | ) |   | (139 | ) |   | (67 | ) |   |   | (5,101 | ) |
| Interest                charges              |   |          | (8,597    | )               |   | (7,227    | )      |          | (2,997  | )          |   | (3,821 | ) |   | (224 | ) |   | (5,697 | ) |   |   | (28,563 | ) |
| **Segment                net income (loss)** |   | $             | 8,740     |            | $      | 1,168     |   | $             | 10,386  |       | $ | 8,851 |   | $ | 790 |   | $ | (3,610 | ) |   | $ | 26,325 |   |
|                                         |   |          |      |            |   |      |   |          |         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Gross                property additions**  |   | $             | 30,316    |            | $      | 7,216     |   | $             | 4,365   |       | $ | 3,751 |   | $ | 297 |   | $ | 5,876 |   |   | $ | 51,821 |   |
|                                         |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **At                March 31, 2006:**        |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total                assets**              |   | $             | 1,913,142 |            | $      | 1,257,517 |   | $             | 650,588 |       | $ | 406,267 |   | $ | 238,588 |   | $ | 536,861 |   |   | $ | 5,002,963 |   |
| **Goodwill**                                 |   | $             | -         |            | $      | 456,088   |   | $             | -       |       | $ | - |   | $ | 43,067 |   | $ | - |   |   | $ | 499,155 |   |

| (a)   | Reflects                EITF 03-11 impact, under which wholesale revenues and the associated                cost                of energy of $4.7 million are reclassified to a net margin basis                in                accordance with GAAP. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Includes                TNP acquisition integration costs of $0.9 million and an income tax                benefit of $0.4 million in income                taxes. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                        |   | **Regulated** |      | **Unregulated** |   |      |   |          |    |       |
|---------------------------------------------|--------|---------------|-----------|-----------------|--------|-----------|--------|---------------|---------|------------|
| Segments                of Business         |   | **PNM**       |      | **TNMP**        |   | **PNM**   |   | **PNM**       |    | **First**  |   | **Corporate** |   |   |   |   |
|                                        |   | **Electric**  |      | **Electric**    |   | **Gas**   |   | **Wholesale** |    | **Choice** |   | **&                Other** |   |   | **Consolidated** |   |
| **2005:**                                   |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |
| Operating                revenues           |   | $             | 132,491   |            | $      | -         |   | $             | 165,233 |       | $ | 132,004 |   | $ | - |   | $ | (1,815 | ) |  (a) | $ | 427,913 |   |
| Intersegment                revenues        |   |          | 1,691     |            |   | -         |   |          | 53      |       |   | - |   |   | - |   |   | (1,744 | ) |   |   | - |   |
| **Total                revenues**           |   |          | 134,182   |            |   | -         |   |          | 165,286 |       |   | 132,004 |   |   | - |   |   | (3,559 | ) |   |   | 427,913 |   |
| Less:                Cost of energy         |   |          | 47,403    |            |   | -         |   |          | 114,435 |       |   | 89,312 |   |   | - |   |   | (3,672 | ) |  (a) |   | 247,478 |   |
| Intersegment                energy          |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |  |   |   |   |  |   |
| Transfer                                    |   |          | (14,123   | )               |   | -         |   |          | -       |       |   | 14,123 |   |   | - |   |   | - |   |   |   | - |   |
| **Gross                margin**             |   |          | 100,902   |            |   | -         |   |          | 50,851  |       |   | 28,569 |   |   | - |   |   | 113 |   |   |   | 180,435 |   |
| Operating                expenses           |   |          | 63,337    |            |   | -         |   |          | 24,091  |       |   | 10,888 |   |   | - |   |   | 1,959 |   |   |   | 100,275 |   |
| Depreciation                and             |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization                                |   |          | 17,558    |            |   | -         |   |          | 5,576   |       |   | 3,987 |   |   | - |   |   | 1,706 |   |   |   | 28,827 |   |
| Income                taxes                 |   |          | 4,499     |            |   | -         |   |          | 7,229   |       |   | 3,831 |   |   | - |   |   | (2,168 | ) |   |   | 13,391 |   |
| **Operating                income (loss)**  |   |          | 15,508    |            |   | -         |   |          | 13,955  |       |   | 9,863 |   |   | - |   |   | (1,384 | ) |   |   | 37,942 |   |
|                                        |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                income              |   |          | 7,216     |            |   | -         |   |          | 756     |       |   | 1,344 |   |   | - |   |   | 454 |   |   |   | 9,770 |   |
| Other                income/(deductions)    |   |          | 557       |            |   | -         |   |          | 77      |       |   | 933 |   |   | - |   |   | (595 | ) |   |   | 972 |   |
| Other                income taxes           |   |          | (3,077    | )               |   | -         |   |          | (330    | )          |   | (901 | ) |   | - |   |   | 424 |   |   |   | (3,884 | ) |
| Interest                charges             |   |          | (8,643    | )               |   | -         |   |          | (2,924  | )          |   | (4,016 | ) |   | - |   |   | 1,292 |   |   |   | (14,291 | ) |
| **Segment                net income**       |   | $             | 11,561    |            | $      | -         |   | $             | 11,534  |       | $ | 7,223 |   | $ | - |   | $ | 191 |   |   | $ | 30,509 |   |
|                                        |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Gross                property additions** |   | $             | 14,624    |            | $      | -         |   | $             | 8,946   |       | $ | 3,667 |   | $ | - |   | $ | 2,456 |   |   | $ | 29,693 |   |
|                                        |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **At                December 31, 2005:**    |   |          |      |            |   |      |   |          |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total                assets**             |   | $             | 1,937,811 |            | $      | 1,257,933 |   | $             | 721,021 |       | $ | 421,377 |   | $ | 229,977 |   | $ | 556,590 |   |   | $ | 5,124,709 |   |
| **Goodwill**                                |   | $             | -         |            | $      | 456,088   |   | $             | -       |       | $ | - |   | $ | 43,067 |   | $ | - |   |   | $ | 499,155 |   |

| (a)   | Reflects                EITF 03-11 impact, under which wholesale revenues and the associated                cost                of energy of $2.1 million are reclassified to a net margin basis                in                accordance with GAAP. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

| Segments                of Business          |   | **PNM**      |      | **PNM** |   | **PNM**       |   |      |    |   |             |    |
|----------------------------------------------|--------|--------------|-----------|---------|--------|---------------|--------|-----------|---------|--------|------------------|---------|
|                                         |   | **Electric** |      | **Gas** |   | **Wholesale** |   | **Other** |    |   | **Consolidated** |    |
| **2006:**                                    |   |         |      |    |   |          |   |      |    |   |             |    |
| Operating                revenues            |   | $            | 136,596   |    | $      | 207,476       |   | $         | 164,311 |   | $                | (4,741  | ) |  (a) | $ | 503,642 |   |
| Intersegment                revenues         |   |         | 2,182     |    |   | 49            |   |      | 15,177  |   |             | (2,107  | ) |   |   | 15,301 |   |
| **Total                revenues**            |   |         | 138,778   |    |   | 207,525       |   |      | 179,488 |   |             | (6,848  | ) |   |   | 518,943 |   |
| Less:                Cost of energy          |   |         | 45,474    |    |   | 157,691       |   |      | 142,877 |   |             | (6,780  | ) |  (a) |   | 339,262 |   |
| Intersegment                energy transfer  |   |         | (5,178    | )       |   | -             |   |      | 5,178   |   |             | -       |   |   |   | - |   |
| **Gross                margin**              |   |         | 98,482    |    |   | 49,834        |   |      | 31,433  |   |             | (68     | ) |   |   | 179,681 |   |
| Operating                expenses            |   |         | 67,154    |    |   | 25,090        |   |      | 11,785  |   |             | (1,694  | ) |   |   | 102,335 |   |
| Depreciation                and amortization |   |         | 14,972    |    |   | 5,920         |   |      | 3,161   |   |             | 802     |   |   |   | 24,855 |   |
| Income                taxes                  |   |         | 3,072     |    |   | 6,266         |   |      | 5,014   |   |             | 610     |   |   |   | 14,962 |   |
| **Operating                income**          |   |         | 13,284    |    |   | 12,558        |   |      | 11,473  |   |             | 214     |   |   |   | 37,529 |   |
|                                         |   |         |           |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| Interest                income               |   |         | 6,511     |    |   | 1,265         |   |      | 1,279   |   |             | 298     |   |   |   | 9,353 |   |
| Other                income/(deductions)     |   |         | 198       |    |   | 101           |   |      | 706     |   |             | (160    | ) |   |   | 845 |   |
| Other                income taxes            |   |         | (2,656    | )       |   | (541          | )      |      | (786    | )      |             | (28     | ) |   |   | (4,011 | ) |
| Interest                charges              |   |         | (8,597    | )       |   | (2,997        | )      |      | (3,821  | )      |             | 1,995   |   |   |   | (13,420 | ) |
| **Segment                net income**        |   | $            | 8,740     |    | $      | 10,386        |   | $         | 8,851   |   | $                | 2,319   |   |   | $ | 30,296 |   |
|                                         |   |         |      |    |   |          |   |      |         |   |             |    |   |   |   |   |   |
| **Gross                property additions**  |   | $            | 30,316    |    | $      | 4,365         |   | $         | 3,751   |   | $                | 374     |   |   | $ | 38,806 |   |
|                                         |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| **At                March 31, 2006:**        |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| **Total                assets**              |   | $            | 1,913,142 |    | $      | 650,588       |   | $         | 406,267 |   | $                | 480,548 |   |   | $ | 3,450,545 |   |

| (a)   | Reflects                EITF 03-11 impact, under which wholesale revenues and the associated                cost                of energy of $4.7 million are reclassified to a net margin basis                in                accordance with GAAP. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PNM          RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC          SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW          MEXICO POWER COMPANY**
**AND          SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

| Segments                of Business          |   | **PNM**      |      | **PNM** |   | **PNM**       |   |      |    |   |             |    |
|----------------------------------------------|--------|--------------|-----------|---------|--------|---------------|--------|-----------|---------|--------|------------------|---------|
|                                         |   | **Electric** |      | **Gas** |   | **Wholesale** |   | **Other** |    |   | **Consolidated** |    |
| **2005:**                                    |   |         |      |    |   |          |   |      |    |   |             |    |
| Operating                revenues            |   | $            | 132,491   |    | $      | 165,233       |   | $         | 132,004 |   | $                | (2,052  | ) |  (a) | $ | 427,676 |   |
| Intersegment                revenues         |   |         | 1,691     |    |   | 53            |   |      | -       |   |             | (1,744  | ) |   |   | - |   |
| **Total                revenues**            |   |         | 134,182   |    |   | 165,286       |   |      | 132,004 |   |             | (3,796  | ) |   |   | 427,676 |   |
| Less:                Cost of energy          |   |         | 47,403    |    |   | 114,435       |   |      | 89,312  |   |             | (3,738  | ) |  (a) |   | 247,412 |   |
| Intersegment                energy           |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| transfer                                     |   |         | (14,123   | )       |   | -             |   |      | 14,123  |   |             | -       |   |   |   | - |   |
| **Gross                margin**              |   |         | 100,902   |    |   | 50,851        |   |      | 28,569  |   |             | (58     | ) |   |   | 180,264 |   |
| Operating                expenses            |   |         | 63,337    |    |   | 24,091        |   |      | 10,888  |   |             | 551     |   |   |   | 98,867 |   |
| Depreciation                and amortization |   |         | 17,558    |    |   | 5,576         |   |      | 3,987   |   |             | 824     |   |   |   | 27,945 |   |
| Income                taxes                  |   |         | 4,499     |    |   | 7,229         |   |      | 3,831   |   |             | (916    | ) |   |   | 14,643 |   |
| **Operating                income (loss)**   |   |         | 15,508    |    |   | 13,955        |   |      | 9,863   |   |             | (517    | ) |   |   | 38,809 |   |
|                                         |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| Interest                income               |   |         | 7,216     |    |   | 756           |   |      | 1,344   |   |             | (110    | ) |   |   | 9,206 |   |
| Other                income/(deductions)     |   |         | 557       |    |   | 77            |   |      | 933     |   |             | 413     |   |   |   | 1,980 |   |
| Other                income taxes            |   |         | (3,077    | )       |   | (330          | )      |      | (901    | )      |             | 467     |   |   |   | (3,841 | ) |
| Interest                charges              |   |         | (8,643    | )       |   | (2,924        | )      |      | (4,016  | )      |             | 1,783   |   |   |   | (13,800 | ) |
| **Segment                net income**        |   | $            | 11,561    |    | $      | 11,534        |   | $         | 7,223   |   | $                | 2,036   |   |   | $ | 32,354 |   |
|                                         |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| **Gross                property additions**  |   | $            | 14,624    |    | $      | 8,946         |   | $         | 3,667   |   | $                | (2,248  | ) |   | $ | 24,989 |   |
|                                         |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| **At                December 31, 2005:**     |   |         |      |    |   |          |   |      |    |   |             |    |   |   |   |   |   |
| **Total                assets**              |   | $            | 1,937,811 |    | $      | 721,021       |   | $         | 421,377 |   | $                | 507,542 |   |   | $ | 3,587,751 |   |

| (a)   | Reflects                EITF 03-11 impact, under which wholesale revenues and the associated                cost                of energy of $2.1 million are reclassified to a net margin basis                in                accordance with GAAP. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(4)**
**Fair      Value of Financial Instruments**

*Normal      Sales and Purchases Transactions*

*“Accounting      for Derivative Instruments and Hedging Activities”*

*Hedge      Accounting Transactions*

*Mark-to-Market      Transactions*

*         Electricity Contracts*

----

**PNM          RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC          SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW          MEXICO POWER COMPANY**
**AND          SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Gas      Contracts*

*Normal      Sales and Purchases Transactions*

*Hedge      Accounting Transactions - PGAC *

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Hedge      Accounting Transactions - Gas Off-System Sales*

*Hedge      Accounting Transactions - Wholesale Electricity*

*Hedge      Accounting Transactions - Wholesale Gas*

----

**PNM          RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC          SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW          MEXICO POWER COMPANY**
**AND          SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Mark-to-Market      Transactions - Wholesale Electricity*

*Mark-to-Market      Transactions - Wholesale Gas*

*Normal      Sales and Purchases Transactions*

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(5)          **
**Earnings      Per Share**

*Earnings      per Share,”*

|                                                                   |   | **Three                Months Ended**                   |   |
|------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                   |   | **March                31,**                            |   |
|                                                                   |   | **2006**                                                |   | **2005** |   |
|                                                                   |   | (In                thousands, except per share amounts) |   |
| **Basic:**                                                             |   |                                                    |   |   |   |
| **Net                Earnings**                                        |   | $                                                       | 26,325 |   | $ | 30,509 |   |
| Average                Number of Common Shares Outstanding             |   |                                                    | 68,787 |   |   | 60,551 |   |
| **Net                Earnings per Share of Common Stock (Basic)**      |   | $                                                       | 0.38   |   | $ | 0.50 |   |
|                                                                   |   |                                                    |   |   |   |   |   |
| **Diluted:**                                                           |   |                                                    |   |   |   |   |   |
| **Net                Earnings**                                        |   | $                                                       | 26,325 |   | $ | 30,509 |   |
| Average                Number of Common Shares Outstanding             |   |                                                    | 68,787 |   |   | 60,551 |   |
| Diluted                Effect of Common Stock Equivalents (a)          |   |                                                    | 588    |   |   | 958 |   |
| Average                Common and Common Equivalent Shares Outstanding |   |                                                    | 69,375 |   |   | 61,509 |   |
| **Net                Earnings per Share of Common Stock (Diluted)**    |   | $                                                       | 0.38   |   | $ | 0.50 |   |

**(6)       **Stock-Based      Compensation****

*“Share-Based      Payment*
*"Accounting      for Stock Issued to Employees"*

----

**PNM          RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC          SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW          MEXICO POWER COMPANY**
**AND          SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

| **Three                Months Ended**                             |   |
|-------------------------------------------------------------------|--------|
| **March                31, 2006**                                 |   |
| (In                thousands, except per share amounts)           |   |
|                                                              |   |   |   |
| Reduction                - PNMR income from continuing operations |   | $ | 2,708 |   |
| Reduction                - PNMR income before income taxes        |   | $ | 2,708 |   |
| Reduction                - PNMR net earnings                      |   | $ | 1,650 |   |
|                                                              |   |   |   |   |
| Reduction                - PNMR earnings per share:               |   |   |   |   |
| Basic                                                             |   | $ | 0.02 |   |
|                                                              |   |   |   |   |
| Diluted                                                           |   | $ | 0.02 |   |

*“Share-Based      Payment*

| **Three                Months Ended**                             |   |
|-------------------------------------------------------------------|--------|
| **March                31, 2005**                                 |   |
| (In                thousands, except per share amounts)           |   |
|                                                              |   |   |   |
| PNMR                net earnings:                                 |   | $ | 30,509 |   |
| Add:                Stock compensation expense included           |   |   |   |   |
| in                reported net income, net of related tax effects |   |   | - |   |
| Deduct:                Total stock-based employee                 |   |   |   |   |
| compensation                expense determined under              |   |   |   |   |
| fair                value based method for all awards,            |   |   |   |   |
| net                of related tax effects                         |   |   | (347 | ) |
| PNMR                pro forma net earnings                        |   | $ | 30,162 |   |
|                                                              |   |   |   |   |
| PNMR                earnings per share:                           |   |   |   |   |
| Basic                - as reported                                |   | $ | 0.50 |   |
|                                                              |   |   |   |   |
| Basic                - pro forma                                  |   | $ | 0.50 |   |
|                                                              |   |   |   |   |
| Diluted                - as reported                              |   | $ | 0.50 |   |
|                                                              |   |   |   |   |
| Diluted                - pro forma                                |   | $ | 0.49 |   |

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Stock      Options*

|                                           | **Three                Months Ended**                                                          |
|------------------------------------------------|------------------------------------------------------------------------------------------------|
|                                           | **March                31,**                                                                   |
|                                           | **2006**                                                                                       |   | **2005** |
|                                           |                                                                                           |   |   |
| Dividend                yield                  | 3.33%                                                                                          |   | 2.55% |
| Expected                volatility             | 21.70%                                                                                         |   | 24.29% |
| Risk-free                interest rate         | 4.37%                                                                                          |   | 3.79% |
| Expected                life of option (years) |                4.14 |   |                              4.23 |

|                                                |   |                                                              |      | **Weighted-** |   |          |   | **Weighted-**                    |   |
|-----------------------------------------------------|--------|-------------------------------------------------------------------|-----------|---------------|--------|---------------|--------|----------------------------------|--------|
|                                                |   |                                                              |      | **Average**   |   | **Aggregate** |   | **Average**                      |   |
|                                                |   |                                                              |      | **Exercise**  |   | **Intrinsic** |   | **Remaining**                    |   |
| **Stock                Options**                    |   | **Shares**                                                        |      | **Price**     |   | **Value**     |   | **Contract                Life** |   |
|                                                |   | (In                thousands, except share and per share amounts) |      |
|                                                |   |                                                              |      |          |   |          |   |                             |   |
| Outstanding                at beginning of period   |   |                                                              | 3,016,549 |          | $      | 18.97         |   |                             |   |   |   |   |   |
|                                                |   |                                                              |      |          |   |          |   |                             |   |   |   |   |   |
| Granted                                             |   |                                                              | 808,800   |          | $      | 24.06         |   |                             |   |   |   |   |   |
|                                                |   |                                                              |      |          |   |          |   |                             |   |   |   |   |   |
| Exercised                                           |   |                                                              | (92,183   | )             | $      | 15.18         |   |                             |   |   |   |   |   |
|                                                |   |                                                              |      |          |   |          |   |                             |   |   |   |   |   |
| Forfeited                or expired                 |   |                                                              | (27,036   | )             | $      | 14.87         |   |                             |   |   |   |   |   |
|                                                |   |                                                              |      |          |   |          |   |                             |   |   |   |   |   |
| Outstanding                at end of period         |   |                                                              | 3,706,130 |          | $      | 20.21         |   | $                                | 15,529 |   |   | 7.65                Years |   |
|                                                |   |                                                              |      |          |   |          |   |                             |   |   |   |   |   |
| Options                exercisable at end of period |   |                                                              | 1,797,938 |          | $      | 16.01         |   | $                                | 15,085 |   |   | 6.23                Years |   |
|                                                |   |                                                              |      |          |   |          |   |                             |   |   |   |   |   |
| Options                available for future grant   |   |                                                              | 3,262,506 |          |   |          |   |                             |   |   |   |   |   |

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

| **Stock                Options**                                            |   | **2006**                                                               |   | **2005** |   |
|-----------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|----------|--------|
|                                                                        |   | (In                thousands, except                per share amounts) |   |
|                                                                        |   |                                                                   |   |     |   |
| Weighted-average                grant date fair value of options granted    |   | $                                                                      | 3.87   |     |   | N/A |   |
| Total                fair value of options that vested during the period    |   | $                                                                      | 3,327  |     | $      | 4,074 |   |
| Total                intrinsic value of options exercised during the period |   | $                                                                      | 851    |     | $      | 6,302 |   |

*Restricted      Stock*

|                                                  | **Three                Months Ended**         |
|-------------------------------------------------------|-----------------------------------------------|
|                                                  | **March                31,**                  |
|                                                  | **2006**                                      |   | **2005** |
|                                                  |                                          |   |   |
| Expected                quarterly dividends per share | $0.20                                         |   | N/A |
| Risk-free                interest rate                |                     4.64% |   | N/A |

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                            |   |       |    | **Weighted-**                 |   |
|-------------------------------------------------|--------|------------|---------|-------------------------------|--------|
|                                            |   |       |    | **Average**                   |   |
|                                            |   |       |    | **Grant-Date**                |   |
| **Nonvested                Restricted Stock**   |   | **Shares** |    | **Fair                Value** |   |
|                                            |   |       |    |                          |   |
| Nonvested                at beginning of period |   |       | 109,044 |                          | $      | 24.92 |   |
|                                            |   |       |    |                          |   |   |   |
| Granted                                         |   |       | 97,000  |                          | $      | 21.82 |   |
|                                            |   |       |    |                          |   |   |   |
| Vested                                          |   |       | (36,071 | )                             | $      | 24.42 |   |
|                                            |   |       |    |                          |   |   |   |
| Nonvested                at end of period       |   |       | 169,973 |                          | $      | 23.26 |   |

| **Restricted                Stock**                                     |   | **2006**                                                              |   | **2005** |   |
|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|----------|--------|
|                                                                    |   | (In                thousands,except                per share amounts) |   |
|                                                                    |   |                                                                  |   |     |   |
| Weighted-average                grant date fair value of shares granted |   | $                                                                     | 21.82  |     | $      | 26.34 |   |
| Total                fair value of shares that vested during the period |   | $                                                                     | 881    |     | $      | 276 |   |

*Performance      Shares*

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*ESPP*

**(7)            **
**Capitalization**

*Long-Term      Debt*

*Revolving      and Other Credit Facilities *

*Financing      Activities*

----

**PNM              RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC              SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW              MEXICO POWER COMPANY**
**AND              SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Long-Term      Debt*

*Revolving      and Other Credit Facilities *

----

**PNM              RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC              SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW              MEXICO POWER COMPANY**
**AND              SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

*Financing      Activities*

*Asset      Securitization*

*Revolving      and Other Credit Facilities *

**(8)            **
**Pension      and Other Postretirement Benefit Plans**

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                               |   | **Three                Months Ended March 31,** |    |
|----------------------------------------------------|--------|-------------------------------------------------|---------|
|                                               |   | **Pension                Plan**                 |    | **Other                Postretirement Benefits** |   | **Executive                Retirement Program** |   |
|                                               |   | **2006**                                        |    | **2005** |   | **2006** |   | **2005** |   | **2006** |   | **2005** |   |
|                                               |   |                                            |    |   |   | (In                thousands) |   |   |   |   |   |
| **Components                of Net Periodic**      |   |                                            |    |   |   |   |   |   |   |   |   |   |   |
| **Benefit                Cost/(Income)**           |   |                                            |    |   |   |   |   |   |   |   |   |   |   |
| Service                cost                        |   | $                                               | 126     |   | $ | 477 |   | $ | 678 |   | $ | 645 |   | $ | 14 |   | $ | 16 |   |
| Interest                cost                       |   |                                            | 7,710   |   |   | 7,567 |   |   | 1,842 |   |   | 1,648 |   |   | 264 |   |   | 295 |   |
| Expected                long-term return on assets |   |                                            | (10,138 | ) |   | (10,042 | ) |   | (1,354 | ) |   | (1,318 | ) |   | - |   |   | - |   |
| Amortization                of net (gain)/loss     |   |                                            | 1,210   |   |   | 892 |   |   | 1,670 |   |   | 1,490 |   |   | 25 |   |   | 43 |   |
| Amortization                of prior service cost  |   |                                            | 79      |   |   | 79 |   |   | (1,422 | ) |   | (1,702 | ) |   | 3 |   |   | 34 |   |
| Net                Periodic Benefit Cost/(Income)  |   | $                                               | (1,013  | ) | $ | (1,027 | ) | $ | 1,414 |   | $ | 763 |   | $ | 306 |   | $ | 388 |   |

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                                 |   | **Three                  Months Ended March 31,** |   |
|------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                 |   | **Pension                  Plan**                 |   | **Other                  Postretirement Benefits** |   | **Executive                  Retirement Program** |   |
|                                                 |   | **Post-Acquisition**                              |   |   | **Pre-Acquisition** |   | **Post-Acquisition** |   | **Pre-Acquisition** |   | **Post-Acquisition** |   | **Pre-Acquisition** |   |
|                                                 |   | **2006**                                          |   |   | **2005** |   | **2006** |   | **2005** |   | **2006** |   | **2005** |   |
|                                                 |   |                                              |   |   |   |   | (In                  thousands) |   |   |   |   |   |
| **Components                  of Net Periodic**      |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| **Benefit                  Cost/(Income)**           |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                        |   | $                                                 | -      |   |   | $ | 505 |   | $ | 106                    |   | $ | 116 |   | $ | - |   | $ | 24 |   |
| Interest                  cost                       |   |                                              | 1,085  |   |   |   | 1,116 |   |   | 178                    |   |   | 168 |   |   | 19 |   |   | 46 |   |
| Expected                  long-term return on assets |   |                                              | (1,754 | ) |   |   | (1,421 | ) |   | (114                  ) |   |   | (81 | ) |   | - |   |   | - |   |
| Amortization                  of net loss            |   |                                              | -      |   |   |   | 684 |   |   | -   |   |   | 78 |   |   | - |   |   | 3 |   |
| Amortization                  of prior service cost  |   |                                              | -      |   |   |   | 10 |   |   | 15   |   |   | - |   |   | - |   |   | (5 | ) |
| Net                  Periodic Benefit Cost/(Income)  |   | $                                                 | (669   | ) |   | $ | 894 |   | $ | 185   |   | $ | 281 |   | $ | 19 |   | $ | 68 |   |

**(9)            **
**Commitments      and Contingencies**

*Accounting      for Contingencies*

----

**PNM          RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC          SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW          MEXICO POWER COMPANY**
**AND          SUBSIDIARIES**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**PVNGS      Operations**

**Conflicts      at San Juan Mine Involving Oil and Gas Leaseholders**

**Asbestos      Cases**

**New      Source Review**

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**SESCO      Matter**

**California      Refund Proceeding**

**California      Antitrust Litigation**

**Generation      Market Power Filings**

----

**PNM              RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC              SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW              MEXICO POWER COMPANY**
**AND              SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**SESCO      Matter**

**Power      Resource Group Litigation**

**(10)    **
**Regulatory      and Rate Matters**

**Price-to-Beat      Base Rate Reset**

**Transmission      Rate Case**

----

**PNM              RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC              SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW              MEXICO POWER COMPANY**
**AND              SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Complaint      Against Southwestern Public Service Company**

**TNMP      True-Up Proceeding**

**60-Day      Rate Review**

----

**PNM              RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC              SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW              MEXICO POWER COMPANY**
**AND              SUBSIDIARIES**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(11)         **
**Variable      Interest Entities**

*“Consolidation      of Variable Interest Entities”*

**(12)    **
**Related      Party Transactions**

*Related      Party Disclosures*

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                   |   | **Three                Months**    |   |
|------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                   |   | **Ended                March 31,** |   |
|                                                                   |   | **2006**                           |   | **2005** |   |
|                                                                   |   | (In                thousands)      |   |
| **PNMR                Transactions with PNM**                          |   |                               |   |   |   |
| Shared                services billings from PNMR to PNM               |   | $                                  | 31,617 |   | $ | 25,535 |   |
| Shared                services receivable/payable at March 31, 2006    |   | $                                  | 10,711 |   | $ | - |   |
| Shared                services receivable/payable at December 31, 2005 |   | $                                  | -      |   | $ | 36,099 |   |
|                                                                   |   |                               |   |   |   |   |   |
| **PNM                Transactions with TNMP**                          |   |                               |   |   |   |   |   |
| Electricity                and energy scheduling service               |   |                               |   |   |   |   |   |
| billings                from PNM to TNMP                               |   | $                                  | 15,013 |   | $ | - |   |
| Electricity                and energy scheduling services              |   |                               |   |   |   |   |   |
| receivable                at March 31, 2006                            |   | $                                  | 8,242  |   | $ | - |   |
| Electricity                and energy scheduling services              |   |                               |   |   |   |   |   |
| receivable                at December 31, 2005                         |   | $                                  | -      |   | $ | 4,063 |   |
|                                                                   |   |                               |   |   |   |   |   |
| Transmission                billings from PNM to TNMP                  |   | $                                  | 289    |   | $ | - |   |
| Transmission                charges receivable at March 31, 2006       |   | $                                  | 32     |   | $ | - |   |
| Transmission                charges receivable at December 31, 2005    |   | $                                  | -      |   | $ | 174 |   |
|                                                                   |   |                               |   |   |   |   |   |
| Transmission                billings to PNM from TNMP                  |   | $                                  | 70     |   | $ | - |   |
| Transmission                charges payable at March 31, 2006          |   | $                                  | 17     |   | $ | - |   |
| Transmission                charges payable at December 31, 2005       |   | $                                  | -      |   | $ | 26 |   |

----

**PNM            RESOURCES, INC. AND SUBSIDIARIES**

**PUBLIC            SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARY**

**TEXAS-NEW            MEXICO POWER COMPANY**
**AND            SUBSIDIARIES**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                  |   | **Three                Months**    |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|
|                                                                                                  |   | **Ended                March 31,** |   |
|                                                                                                  |   | **2006**                           |   | **2005** |   |
|                                                                                                  |   | (In                thousands)      |   |
| **TNMP                Transactions with PNM**                                                         |   |                               |   |   |   |
| Electricity                and energy scheduling service billings to TNMP from PNM                    |   | $                                  | 15,013 |   | $ | - |   |
| Electricity                and energy scheduling services payable at March 31, 2006                   |   | $                                  | 8,242  |   | $ | - |   |
| Electricity                and energy scheduling services payable at December 31,                2005 |   | $                                  | -      |   | $ | 4,063 |   |
|                                                                                                  |   |                               |   |   |   |   |   |
| Transmission                billings to TNMP from PNM                                                 |   | $                                  | 289    |   | $ | - |   |
| Transmission                charges payable at March 31, 2006                                         |   | $                                  | 32     |   | $ | - |   |
| Transmission                charges payable at December 31, 2005                                      |   | $                                  | -      |   | $ | 174 |   |
|                                                                                                  |   |                               |   |   |   |   |   |
| Transmission                billings from TNMP to PNM                                                 |   | $                                  | 70     |   | $ | - |   |
| Transmission                charges receivable at March 31, 2006                                      |   | $                                  | 17     |   | $ | - |   |
| Transmission                charges receivable at December 31, 2005                                   |   | $                                  | -      |   | $ | 26 |   |
|                                                                                                  |   |                               |   |   |   |   |   |
| **TNMP                Transactions with PNMR**                                                        |   |                               |   |   |   |   |   |
| Shared                services billings to TNMP from PNMR                                             |   | $                                  | 7,811  |   | $ | - |   |
| Shared                services receivable/payable at March 31, 2006                                   |   | $                                  | 4,180  |   | $ | - |   |
| Shared                services receivable/payable at December 31, 2005                                |   | $                                  | -      |   | $ | 2,975 |   |

**(13)         **
**New      Accounting Pronouncements**

*** ***
*“Accounting      for Certain Hybrid Instruments," (an Amendment of FASB Statements No. 133 and      140)” *

----

**ITEM            2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF            FINANCIAL CONDITION AND RESULTS OF            OPERATIONS**

**RESULTS      OF OPERATIONS - EXECUTIVE SUMMARY**

*PVNGS      Operations*

*Business      and Strategy*

----

**ITEM              2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF              FINANCIAL CONDITION AND RESULTS OF              OPERATIONS**

*Segment      Information*

**RESULTS      OF OPERATIONS - PNMR**

**THREE      MONTHS ENDED MARCH 31, 2006 **

**COMPARED      TO THREE MONTHS ENDED MARCH 31, 2005**

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**Regulated      Operations**

**PNM      Electric **

|                                                 |   | **Three                Months Ended** |        |     |   |
|------------------------------------------------------|--------|---------------------------------------|-------------|----------|--------|
|                                                 |   | **March                31,**          |        |     |   |
|                                                 |   | **2006**                              |        | **2005** |   | **Variance** |   |
|                                                 |   | (In                thousands)         |        |
| **Operating                revenues**                |   | **$**                                 | **138,778** |     | **$**  | **134,182** |   | **$** | **4,596** |   |
| Less:                Cost of energy                  |   |                                  | 45,474      |     |   | 47,403 |   |   | (1,929 | ) |
| Intersegment                energy transfer          |   |                                  | (5,178      | )        |   | (14,123 | ) |   | 8,945 |   |
| **Gross                margin**                      |   |                                  | **98,482**  |     |   | **100,902** |   |   | **(2,420** | **)** |
| Energy                production costs               |   |                                  | 29,243      |     |   | 28,481 |   |   | 762 |   |
| Transmission                and distribution O&M |   |                                  | 7,645       |     |   | 7,385 |   |   | 260 |   |
| Customer                related expense              |   |                                  | 3,730       |     |   | 4,021 |   |   | (291 | ) |
| Administrative                and general            |   |                                  | 2,691       |     |   | 2,567 |   |   | 124 |   |
| **Total                non-fuel O&M**            |   |                                  | **43,309**  |     |   | **42,454** |   |   | **855** |   |
| Corporate                allocation                  |   |                                  | 17,648      |     |   | 15,456 |   |   | 2,192 |   |
| Depreciation                and amortization         |   |                                  | 14,972      |     |   | 17,558 |   |   | (2,586 | ) |
| Taxes                other than income taxes         |   |                                  | 6,197       |     |   | 5,427 |   |   | 770 |   |
| Income                taxes                          |   |                                  | 3,072       |     |   | 4,499 |   |   | (1,427 | ) |
| **Total                non-fuel operating expenses** |   |                                  | **85,198**  |     |   | **85,394** |   |   | **(196** | **)** |
| **Operating                income**                  |   | **$**                                 | **13,284**  |     | **$**  | **15,508** |   | **$** | **(2,224** | **)** |

**PNM      Electric Revenues**

|                             |   | **Three                Months Ended**           |    |     |   |
|----------------------------------|--------|-------------------------------------------------|---------|----------|--------|
|                             |   | **March                31,**                    |    |     |   |
|                             |   | **2006**                                        |    | **2005** |   | **Variance** |   |
|                             |   | (In                thousands, except customers) |    |
| Residential                      |   | $                                               | 55,328  |     | $      | 54,014 |   | $ | 1,314 |   |
| Commercial                       |   |                                            | 57,079  |     |   | 56,166 |   |   | 913 |   |
| Industrial                       |   |                                            | 14,741  |     |   | 15,203 |   |   | (462 | ) |
| Transmission                     |   |                                            | 7,045   |     |   | 4,464 |   |   | 2,581 |   |
| Other                            |   |                                            | 4,585   |     |   | 4,335 |   |   | 250 |   |
|                             |   | $                                               | 138,778 |     | $      | 134,182 |   | $ | 4,596 |   |
|                             |   |                                            |    |     |   |   |   |   |   |   |
| Average                customers |   |                                            | 425,919 |     |   | 413,825 |   |   | 12,094 |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**PNM      Electric Sales**

|        |   | **Three                Months Ended** |      |     |   |
|-------------|--------|---------------------------------------|-----------|----------|--------|
|        |   | **March                31,**          |      |     |   |
|        |   | **2006**                              |      | **2005** |   | **Variance** |   |
|        |   | (Megawatt                hours)       |      |
| Residential |   |                                  | 688,472   |     |   | 654,093 |   |   | 34,379 |   |
| Commercial  |   |                                  | 803,700   |     |   | 767,376 |   |   | 36,324 |   |
| Industrial  |   |                                  | 314,008   |     |   | 315,816 |   |   | (1,808 | ) |
| Other       |   |                                  | 54,863    |     |   | 51,869 |   |   | 2,994 |   |
|        |   |                                  | 1,861,043 |     |   | 1,789,154 |   |   | 71,889 |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**TNMP      Electric**

| **Three                Months Ended**                |   |
|------------------------------------------------------|--------|
| **March                31, 2006**                    |   |
| (In                thousands)                        |   |
| **Operating                revenues**                |   | **$** | **62,685** |   |
| Less:                Cost of energy                  |   |   | 27,172 |   |
| **Gross                margin**                      |   |   | **35,513** |   |
| Transmission                and distribution O&M |   |   | 4,713 |   |
| Customer                related expense              |   |   | 1,204 |   |
| Administrative                and general            |   |   | 398 |   |
| **Total                non-fuel O&M**            |   |   | **6,315** |   |
| Corporate                allocation                  |   |   | 9,610 |   |
| Depreciation                and amortization         |   |   | 7,731 |   |
| Taxes                other than income taxes         |   |   | 5,607 |   |
| Income                taxes                          |   |   | (673 | ) |
| **Total                non-fuel operating expenses** |   |   | **28,590** |   |
| **Operating                income**                  |   | **$** | **6,923** |   |

**TNMP      Electric Revenues**

| **Three                Months Ended**           |   |
|-------------------------------------------------|--------|
| **March                31, 2006**               |   |
| (In                thousands, except customers) |   |
| Residential                                     |   | $ | 19,280 |   |
| Commercial                                      |   |   | 20,846 |   |
| Industrial                                      |   |   | 13,064 |   |
| Other                                           |   |   | 9,495 |   |
|                                            |   | $ | 62,685 |   |
|                                            |   |   |   |   |
| Average                customers *              |   |   | 260,936 |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**TNMP      Electric Sales ***

| **Three                Months Ended** |   |
|---------------------------------------|--------|
| **March                31, 2006**     |   |
| (Megawatt                hours)       |   |
| Residential                           |   |   | 528,346 |   |
| Commercial                            |   |   | 495,057 |   |
| Industrial                            |   |   | 541,119 |   |
| Other                                 |   |   | 28,959 |   |
|                                  |   |   | 1,593,481 |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**PNM      Gas**

|                                                 |   | **Three                Months Ended** |        |     |   |
|------------------------------------------------------|--------|---------------------------------------|-------------|----------|--------|
|                                                 |   | **March                31,**          |        |     |   |
|                                                 |   | **2006**                              |        | **2005** |   | **Variance** |   |
|                                                 |   | (In                thousands)         |        |
| **Operating                revenues**                |   | **$**                                 | **207,525** |     | **$**  | **165,286** |   | **$** | **42,239** |   |
| Less:                Cost of energy                  |   |                                  | 157,691     |     |   | 114,435 |   |   | 43,256 |   |
| **Gross                margin**                      |   |                                  | **49,834**  |     |   | **50,851** |   |   | **(1,017** | **)** |
| Energy                production costs               |   |                                  | 488         |     |   | 628 |   |   | (140 | ) |
| Transmission                and distribution O&M |   |                                  | 6,668       |     |   | 6,695 |   |   | (27 | ) |
| Customer                related expense              |   |                                  | 3,538       |     |   | 4,275 |   |   | (737 | ) |
| Administrative                and general            |   |                                  | 1,501       |     |   | 1,177 |   |   | 324 |   |
| **Total                non-fuel O&M**            |   |                                  | **12,195**  |     |   | **12,775** |   |   | **(580** | **)** |
| Corporate                allocation                  |   |                                  | 10,755      |     |   | 9,367 |   |   | 1,388 |   |
| Depreciation                and amortization         |   |                                  | 5,920       |     |   | 5,576 |   |   | 344 |   |
| Taxes                other than income taxes         |   |                                  | 2,140       |     |   | 1,949 |   |   | 191 |   |
| Income                taxes                          |   |                                  | 6,266       |     |   | 7,229 |   |   | (963 | ) |
| **Total                non-fuel operating expenses** |   |                                  | **37,276**  |     |   | **36,896** |   |   | **380** |   |
| **Operating                income**                  |   | **$**                                 | **12,558**  |     | **$**  | **13,955** |   | **$** | **(1,397** | **)** |

**PNM      Gas Revenues**

|                             |   | **Three                Months Ended**           |    |     |   |
|----------------------------------|--------|-------------------------------------------------|---------|----------|--------|
|                             |   | **March                31,**                    |    |     |   |
|                             |   | **2006**                                        |    | **2005** |   | **Variance** |   |
|                             |   | (In                thousands, except customers) |    |
| Residential                      |   | $                                               | 141,637 |     | $      | 108,269 |   | $ | 33,368 |   |
| Commercial                       |   |                                            | 44,021  |     |   | 31,931 |   |   | 12,090 |   |
| Industrial                       |   |                                            | 737     |     |   | 643 |   |   | 94 |   |
| Transportation*                  |   |                                            | 4,659   |     |   | 3,988 |   |   | 671 |   |
| Other                            |   |                                            | 16,471  |     |   | 20,455 |   |   | (3,984 | ) |
|                             |   | $                                               | 207,525 |     | $      | 165,286 |   | $ | 42,239 |   |
|                             |   |                                            |    |     |   |   |   |   |   |   |
| Average                customers |   |                                            | 480,655 |     |   | 470,336 |   |   | 10,319 |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**PNM      Gas Throughput**

|            |   | **Three                Months Ended**    |   |     |   |
|-----------------|--------|------------------------------------------|--------|----------|--------|
|            |   | **March                31,**             |   |     |   |
|            |   | **2006**                                 |   | **2005** |   | **Variance** |   |
|            |   | (Thousands                of decatherms) |   |
| Residential     |   |                                     | 11,962 |     |   | 12,758 |   |   | (796 | ) |
| Commercial      |   |                                     | 4,166  |     |   | 4,309 |   |   | (143 | ) |
| Industrial      |   |                                     | 72     |     |   | 85 |   |   | (13 | ) |
| Transportation* |   |                                     | 11,031 |     |   | 8,150 |   |   | 2,881 |   |
| Other           |   |                                     | 1,566  |     |   | 2,791 |   |   | (1,225 | ) |
|            |   |                                     | 28,797 |     |   | 28,093 |   |   | 704 |   |

----

**ITEM            2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF            OPERATIONS**

**Unregulated      Operations**

**PNM      Wholesale**

|                                                 |   | **Three                Months Ended** |        |                          |   |
|------------------------------------------------------|--------|---------------------------------------|-------------|-------------------------------|--------|
|                                                 |   | **March                31,**          |        |                          |   |
|                                                 |   | **2006**                              |        | **2005**                      |   | **Variance** |   |
|                                                 |   |                                  |        | (In                thousands) |   |   |   |
| **Operating                revenues**                |   | **$**                                 | **179,488** |                          | **$**  | **132,004** |   | **$** | **47,484** |   |
| Less:                Cost of energy                  |   |                                  | 142,877     |                          |   | 89,312 |   |   | 53,565 |   |
| Intersegment                energy transfer          |   |                                  | 5,178       |                          |   | 14,123 |   |   | (8,945 | ) |
| **Gross                margin**                      |   |                                  | **31,433**  |                          |   | **28,569** |   |   | **2,864** |   |
| Energy                production costs               |   |                                  | 7,898       |                          |   | 6,955 |   |   | 943 |   |
| Transmission                and distribution O&M |   |                                  | 19          |                          |   | 8 |   |   | 11 |   |
| Customer                related expense              |   |                                  | 258         |                          |   | 278 |   |   | (20 | ) |
| Administrative                and general            |   |                                  | 1,441       |                          |   | 1,694 |   |   | (253 | ) |
| **Total                non-fuel O&M**            |   |                                  | **9,616**   |                          |   | **8,935** |   |   | **681** |   |
| Corporate                allocation                  |   |                                  | 1,193       |                          |   | 1,037 |   |   | 156 |   |
| Depreciation                and amortization         |   |                                  | 3,161       |                          |   | 3,987 |   |   | (826 | ) |
| Taxes                other than income taxes         |   |                                  | 976         |                          |   | 916 |   |   | 60 |   |
| Income                taxes                          |   |                                  | 5,014       |                          |   | 3,831 |   |   | 1,183 |   |
| **Total                non-fuel operating expenses** |   |                                  | **19,960**  |                          |   | **18,706** |   |   | **1,254** |   |
| **Operating                income**                  |   | **$**                                 | **11,473**  |                          | **$**  | **9,863** |   | **$** | **1,610** |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**PNM      Wholesale Revenues**

|                               |   | **Three                Months Ended** |    |     |   |
|------------------------------------|--------|---------------------------------------|---------|----------|--------|
|                               |   | **March                31,**          |    |     |   |
|                               |   | **2006**                              |    | **2005** |   | **Variance** |   |
|                               |   | (In                thousands)         |    |
| Long-term                contracts |   | $                                     | 31,234  |     | $      | 37,475 |   | $ | (6,241 | ) |
| Short-term                sales    |   |                                  | 148,254 |     |   | 94,529 |   |   | 53,725 |   |
|                               |   | $                                     | 179,488 |     | $      | 132,004 |   | $ | 47,484 |   |

**PNM      Wholesale Sales**

|                               |   | **Three                Months Ended** |      |     |   |
|------------------------------------|--------|---------------------------------------|-----------|----------|--------|
|                               |   | **March                31,**          |      |     |   |
|                               |   | **2006**                              |      | **2005** |   | **Variance** |   |
|                               |   | (Megawatt                hours)       |      |
| Long-term                contracts |   |                                  | 578,544   |     |   | 725,403 |   |   | (146,859 | ) |
| Short-term                sales    |   |                                  | 2,220,752 |     |   | 2,125,023 |   |   | 95,729 |   |
|                               |   |                                  | 2,799,296 |     |   | 2,850,426 |   |   | (51,130 | ) |

----

**ITEM              2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF              OPERATIONS**

----

**ITEM            2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF            OPERATIONS**

**First      Choice**

| **Three                Months Ended**                |   |
|------------------------------------------------------|--------|
| **March                31, 2006**                    |   |
| (In                thousands)                        |   |
| **Operating                revenues**                |   | **$** | **105,082** |   |
| Less:                Cost of energy                  |   |   | 90,335 |   |
| **Gross                margin**                      |   |   | **14,747** |   |
| Customer                related expense              |   |   | 3,577 |   |
| Administrative                and general            |   |   | 3,612 |   |
| **Total                non-fuel O&M**            |   |   | **7,189** |   |
| Corporate                allocation                  |   |   | 4,809 |   |
| Depreciation                and amortization         |   |   | 498 |   |
| Taxes                other than income taxes         |   |   | 1,180 |   |
| Income                taxes                          |   |   | 300 |   |
| **Total                non-fuel operating expenses** |   |   | **13,976** |   |
| **Operating                income**                  |   | **$** | **771** |   |

**First      Choice Electric Revenues**

| **Three                Months Ended**           |   |
|-------------------------------------------------|--------|
| **March                31, 2006**               |   |
| (In                thousands, except customers) |   |
| Residential                                     |   | $ | 59,601 |   |
| Mass-market                                     |   |   | 18,941 |   |
| Mid-market                                      |   |   | 19,447 |   |
| Other                                           |   |   | 7,093 |   |
|                                            |   | $ | 105,082 |   |
|                                            |   |   |   |   |
| Average                customers *              |   |   | 209,338 |   |

**First      Choice Electric Sales ***

| **Three                Months Ended** |   |
|---------------------------------------|--------|
| **March                31, 2006**     |   |
| (Megawatt                hours)       |   |
| Residential                           |   |   | 427,544 |   |
| Mass-market                           |   |   | 121,770 |   |
| Mid-market                            |   |   | 177,643 |   |
| Other                                 |   |   | 12,262 |   |
|                                  |   |   | 739,219 |   |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**Corporate      and Other**

*Corporate      Administrative and General Expenses*

**PNMR      Consolidated**

*Other      Income and Deductions*

*Interest      Charges*

*Income      Taxes*

----

**ITEM            2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF            OPERATIONS**

**RESULTS      OF OPERATIONS - PNM**

**THREE      MONTHS ENDED MARCH 31, 2006 **

**COMPARED      TO THREE MONTHS ENDED MARCH 31, 2005**

**RESULTS      OF OPERATIONS - TNMP**

**THREE      MONTHS ENDED MARCH 31, 2006 **

**COMPARED      TO THREE MONTHS ENDED MARCH 31, 2005**

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

**LIQUIDITY      AND CAPITAL RESOURCES**

*Statements      of Cash Flow*

----

**ITEM              2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF              OPERATIONS**

*Capital      Requirements*

----

**ITEM              2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF              OPERATIONS**

*Liquidity*

----

**ITEM              2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF              OPERATIONS**

----

**ITEM                2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATIONS**

*Off-Balance      Sheet Arrangements*

*Commitments      and Contractual Obligations*

*Contingent      Provisions of Certain Obligations*

----

**ITEM                2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATIONS**

*Financing      Activities*

----

**ITEM                2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATIONS**

----

**ITEM            2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF            OPERATIONS**

*Capital      Structure*

|                                |   | **March                31,** |   | **December                31,** |   |
|-------------------------------------|--------|------------------------------|--------|---------------------------------|--------|
|                                |   | **2006**                     |   | **2005**                        |   |
|                                |   |                         |   |                            |   |
| Common                Equity        |   |                         | 42.4   | %                               |   | 42.3 | % |
| Preferred                Stock      |   |                         | 0.4    | %                               |   | 0.4 | % |
| Long-term                Debt       |   |                         | 57.2   | %                               |   | 57.3 | % |
| Total                Capitalization |   |                         | 100.0  | %                               |   | 100.0 | % |

|                                |   | **March                31,** |   | **December                31,** |   |
|-------------------------------------|--------|------------------------------|--------|---------------------------------|--------|
|                                |   | **2006**                     |   | **2005**                        |   |
|                                |   |                         |   |                            |   |
| Common                Equity        |   |                         | 50.9   | %                               |   | 50.2 | % |
| Preferred                Stock      |   |                         | 0.6    | %                               |   | 0.6 | % |
| Long-term                Debt       |   |                         | 48.5   | %                               |   | 49.2 | % |
| Total                Capitalization |   |                         | 100.0  | %                               |   | 100.0 | % |

|                                | **March                31,** |   | **December                31,** |
|-------------------------------------|------------------------------|--------|---------------------------------|
|                                | **2006**                     |   | **2005**                        |
|                                |                         |   |                            |
| Common                Equity        | 58.6%                        |   | 58.6%                           |
| Long-term                Debt       | 41.4%                        |   | 41.4%                           |
| Total                Capitalization | 100.0%                       |   | 100.0%                          |

----

**ITEM          2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF          OPERATIONS**

**OTHER      ISSUES FACING THE COMPANY**

**NEW      ACCOUNTING STANDARDS**

*.*

**DISCLOSURE      REGARDING FORWARD LOOKING STATEMENTS**

| ·   | The                potential unavailability of cash from TNP and its                subsidiaries, |
|--------------------|---------------------------------------------------------------------------------------------------|
| ·   | The                risk that TNP and its subsidiaries will not be integrated successfully                into PNMR, |
|--------------------|---------------------------------------------------------------------------------------------------------------------|
| ·   | The                risk that the benefits of the TNP acquisition will not be fully realized                or will take longer to realize than                expected, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Disruption                from the TNP acquisition making it more difficult to maintain                relationships with customers, employees, suppliers or other third                parties, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                outcome of any appeals of the PUCT order in the stranded cost true-up                proceeding, |
|--------------------|---------------------------------------------------------------------------------------------------------------------|
| ·   | The                ability of First Choice to attract and retain                customers, |
|--------------------|--------------------------------------------------------------------------------------------|
| ·   | Changes                in ERCOT protocols, |
|--------------------|--------------------------------------------|
| ·   | Changes                in the cost of power acquired by First                Choice, |
|--------------------|--------------------------------------------------------------------------------------|
| ·   | Collections                experience, |
|--------------------|----------------------------------------|
| ·   | Insurance                coverage available for claims made in                litigation, |
|--------------------|-------------------------------------------------------------------------------------------|
| ·   | Fluctuations                in interest rates, |
|--------------------|------------------------------------------------|
| ·   | Conditions                in the financial markets affecting PNMR’s permanent financing for the Twin                Oaks power plant acquisition, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Weather,                including impacts on PNMR and its subsidiaries of the hurricanes                in the                Gulf Coast region, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Water                supply, |
|--------------------|------------------------------|
| ·   | Changes                in fuel costs, |
|--------------------|---------------------------------------|
| ·   | Availability                of fuel supplies, |
|--------------------|-----------------------------------------------|
| ·   | The                effectiveness of risk management and commodity risk                transactions, |
|--------------------|-----------------------------------------------------------------------------------------------------|
| ·   | Seasonality                and other changes in supply and demand in the market for electric                power, |
|--------------------|--------------------------------------------------------------------------------------------------------------------|
| ·   | Variability                of wholesale power prices and natural gas                prices, |
|--------------------|---------------------------------------------------------------------------------------------|
| ·   | Volatility                and liquidity in the wholesale power markets and the natural gas                markets, |
|--------------------|--------------------------------------------------------------------------------------------------------------------|
| ·   | Changes                in the competitive environment in the electric and natural gas                industries, |
|--------------------|------------------------------------------------------------------------------------------------------------------|
| ·   | The                performance of generating units, including PVNGS, and transmission                systems, |
|--------------------|---------------------------------------------------------------------------------------------------------------|
| ·   | The                market for electrical generating                equipment, |
|--------------------|-------------------------------------------------------------------------------|
| ·   | The                ability to secure long-term power sales, |
|--------------------|-------------------------------------------------------------|
| ·   | The                risks associated with completion of generation, transmission, distribution                and other projects, including construction delays and unanticipated                cost                overruns, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | State                and federal regulatory and legislative decisions and                actions, |
|--------------------|---------------------------------------------------------------------------------------------------|
| ·   | The                outcome of legal proceedings, |
|--------------------|--------------------------------------------------|
| ·   | Changes                in applicable accounting principles, and |
|--------------------|-----------------------------------------------------------------|
| ·   | The                performance of state, regional and national                economies. |
|--------------------|------------------------------------------------------------------------------------------|

----

**ITEM              2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF              OPERATIONS**

**SECURITIES      ACT DISCLAIMER**

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

*Accounting      for Derivatives*

*Commodity      Risk *

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

|                                                             |   | **March                31,**  |    | **December                31,** |   |
|------------------------------------------------------------------|--------|-------------------------------|---------|---------------------------------|--------|
|                                                             |   | **2006**                      |    | **2005**                        |   |
|                                                             |   | (In                thousands) |    |
| Mark-to-Market                Energy Contracts:                  |   |                          |    |                            |   |
| Current                asset                                     |   | $                             | 41,731  |                            | $      | 14,458 |   |
| Long-term                asset                                   |   |                          | 3,233   |                            |   | 21,265 |   |
| Total                mark-to-market assets                       |   |                          | 44,964  |                            |   | 35,723 |   |
| Current                liability                                 |   |                          | (36,098 | )                               |   | (11,260 | ) |
| Long-term                liability                               |   |                          | (2,544  | )                               |   | (20,844 | ) |
| Total                mark-to-market liabilities                  |   |                          | (38,642 | )                               |   | (32,104 | ) |
|                                                             |   |                          |    |                            |   |   |   |
| Net                fair value of mark-to-market energy contracts |   | $                             | 6,322   |                            | $      | 3,619 |   |

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

|                                                                |   | **Three                Months Ended** |   |
|---------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                |   | **March                31,**          |   |
|                                                                |   | **2006**                              |   | **2005** |   |
|                                                                |   | (In                thousands)         |   |
| Sources                of Fair Value Gain/(Loss):                   |   |                                  |   |   |   |
| Fair                value at beginning of year                      |   | $                                     | 3,619  |   | $ | 2,073 |   |
|                                                                |   |                                  |   |   |   |   |   |
| Amount                realized on contracts delivered during period |   |                                  | 1,202  |   |   | 67 |   |
|                                                                |   |                                  |   |   |   |   |   |
| Changes                in fair value                                |   |                                  | 1,501  |   |   | 856 |   |
|                                                                |   |                                  |   |   |   |   |   |
| Net                fair value at end of period                      |   | $                                     | 6,322  |   | $ | 2,996 |   |
|                                                                |   |                                  |   |   |   |   |   |
| Net                change recorded as mark-to-market                |   | $                                     | 2,703  |   | $ | 923 |   |

**Fair      Value at March 31**
**,      2006**

| **Maturities**               |
|------------------------------|
| **Less                than** |   |   |   |   |   |   |
| **1                year**    |   | **1-3                Years** |   | **4+                Years** |   | **Total** |
|                         |   | (In                thousands) |   |   |
| $5,633                       |   | $462 |   | $227 |   | $6,322 |

*Risk      Management Activities*

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

*“Amendment      of Statement 133 on Derivative Instruments and Hedging*
*Activities.”*

----

**ITEM          3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET          RISK**

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

*Credit      Risk*

**PNM      Wholesale**

**Schedule      of Credit Risk Exposure**

**March      31, 2006**

|                                |   |                                  |   |         |   | **Net**                 |
|-------------------------------------|--------|---------------------------------------|--------|--------------|--------|-------------------------|
|                                |   | **(b)**                               |   | **Number**   |   | **Exposure**            |
|                                |   | **Net**                               |   | **of**       |   | **of**                  |
|                                |   | **Credit**                            |   | **Counter**  |   | **Counter-**            |
|                                |   | **Risk**                              |   | **-parties** |   | **parties**             |
| **Rating                (a)**       |   | **Exposure**                          |   | **>10%**  |   | **>10%**             |
|                                |   | (Dollars                in thousands) |
|                                |   |                                  |   |         |   |                    |
| Investment                grade     |   | $                123,266              |   | 3            |   | $                67,446 |
| Non-investment                grade |   | 56                                    |   | -            |   | -                       |
| Internal                ratings     |   |                                  |   |         |   |                    |
| Investment                grade     |   | 2,267                                 |   | -            |   | -                       |
| Non-investment                grade |   | 12,825                                |   | -            |   | -                       |
| Total                               |   | $                138,414              |   |         |   | $                67,446 |

| (a)   | The***Rating***** **included                in “Investment Grade” is for counterparties with a minimum S&P rating                of BBB- or Moody's rating of Baa3. If the counterparty has provided                a                guarantee by a higher rated entity (e.g., its parent), determination                is                based on the rating of its guarantor. The category “Internal Ratings -                Investment Grade” includes those counterparties that are internally rated                as investment grade in accordance with the guidelines established                in the                Company’s credit policy. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)                  | The                ***Net                Credit Risk*** ***Exposure***is                the net credit exposure to PNM from PNM Wholesale operations. This                includes long-term contracts, forward sales and short-term sales.                The                exposure captures the net amounts due to PNM from receivables/payables                for                realized transactions, delivered and unbilled revenues, and mark-to-market                gains/losses (pursuant to contract terms). Exposures are offset according                to legally enforceable netting arrangements and reduced by credit                collateral. Credit collateral includes cash deposits, letters of                credit                and performance bonds received from counterparties. Amounts are presented                before those reserves that are determined on a portfolio                basis. |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

**PNM      Wholesale**

**Maturity      of Credit Risk Exposure**

**March      31, 2006**

|                                |   |                         |   |                          |   |                                                          |   | **Total**                |
|-------------------------------------|--------|------------------------------|--------|-------------------------------|--------|---------------------------------------------------------------|--------|--------------------------|
|                                |   | **Less                than** |   |                          |   |                                                          |   | **Net**                  |
| **Rating**                          |   | **2                Years**   |   | **2-5                Years**  |   | **>5                Years**                                |   | **Exposure**             |
|                                |   |                         |   | (In                thousands) |   |                                                          |
|                                |   |                         |   |                          |   |                                                          |   |                     |
| Investment                grade     |   | $                117,815     |   | $                5,451        |   | $                        -      |   | $                123,266 |
| Non-investment                grade |   | 56                           |   | -                             |   | -                                                             |   | 56                       |
| Internal                ratings     |   |                         |   |                          |   |                                                          |   |                     |
| Investment                grade     |   | 2,267                        |   | -                             |   | -                                                             |   | 2,267                    |
| Non-investment                grade |   | 12,825                       |   | -                             |   | -                                                             |   | 12,825                   |
| Total                               |   | $                132,963     |   | $                5,451        |   | $                        - |   | $                138,414 |

*First      Choice*

*Interest      Rate Risk*

----

**ITEM            3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET            RISK**

*Equity      Market Risk*

----

**ITEM      4. CONTROLS AND PROCEDURES**

*Disclosure      Controls and Procedures*

*Changes      in Internal Controls*

*TNP      Acquisition*

----

**PART      II - OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

| ·   | Asbestos                Cases |
|--------------------|-------------------------------|

| ·   | SESCO                Matter (for both PNM and TNMP) |
|--------------------|-----------------------------------------------------|

| ·   | California                Refund Proceeding |
|--------------------|---------------------------------------------|

| ·   | California                Antitrust Litigation |
|--------------------|------------------------------------------------|

| ·   | Power                Resource Group Litigation |
|--------------------|------------------------------------------------|

| ·   | TNMP                True-Up Proceeding |
|--------------------|----------------------------------------|

**ITEM      1A. RISK FACTORS**

**ITEM      5. OTHER EVENTS**

----

**ITEM      6. EXHIBITS**

| 10.119 | PNM    | Amended                and Restated San Juan Project Participation Agreement, dated as of                March                23, 2006 among PNM, Tucson Electric Power Company, The City of Farmington,                New Mexico, M-S-R Public Power Agency, The Incorporated County of                Los                Alamos, New Mexico, Southern California Public Power Authority, City                of                Anaheim, Utah Associated Municipal Power System and Tri-State Generation                and Transmission Association, Inc. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 12.1   | PNMR   | Ratio                of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 12.2   | PNMR   | Ratio                of Earnings to Combined Fixed Charges and Preferred Stock                Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.1   | PNMR   | Chief                Executive Officer Certification Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2   | PNMR   | Chief                Financial Officer Certification Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.3   | PNM    | Chief                Executive Officer Certification Pursuant to Section 302 of the                Sarbanes-Oxley                Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.4   | PNM    | Chief                Financial Officer Certification Pursuant to Section 302 of the                Sarbanes-Oxley                Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.5   | TNMP   | Chief                Executive Officer Certification Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.6   | TNMP   | Chief                Financial Officer Certification Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.1   | PNMR   | Chief                Executive Officer Certification Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.2   | PNMR   | Chief                Financial Officer Certification Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.3   | PNM    | Chief                Executive Officer Certification Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.4   | PNM    | Chief                Financial Officer Certification Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.5   | TNMP   | Chief                Executive Officer Certification Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.6   | TNMP   | Chief                Financial Officer Certification Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

----

**Signature**

|                             | **PNM                RESOURCES, INC.****PUBLIC                SERVICE COMPANY OF NEW MEXICO****TEXAS-NEW                MEXICO POWER COMPANY** |
|----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
|                             | (Registrants)                                                                                                                                  |
|                             |                                                                                                                                           |
|                             |                                                                                                                                           |
| Date:                May 9, 2006 | /s/                Thomas G. Sategna                                                                                                           |
|                             | Thomas                G. Sategna                                                                                                               |
|                             | Vice                President and Corporate Controller                                                                                         |
|                             | (Officer                duly authorized to sign this                report)                                                                    |