| UNITED STATES                                                     |
|-------------------------------------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION                                |
| Washington, D.C.  20549                                 |
|                                                              |
| 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, 2010                     |
|                                                              |
|                                                              |
|                                                              |   |   |   |   |
| 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) |   |   |
|                                                              |   | 577 N. Garden Ridge Blvd. |   |   |
|                                                              |   | Lewisville, Texas  75067 |   |   |
|                                                              |   | (972) 420-4189 |   |   |

----

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

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

----

|                                                                                                                                               | Page No. |
|----------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| GLOSSARY                                                                                                                                           | 4        |
| PART I.  FINANCIAL INFORMATION                                                                                                           |     |
|   ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                                                                                    |     |
|     PNM RESOURCES, INC. AND SUBSIDIARIES                                                                                       |     |
|           Condensed Consolidated Statements of Earnings (Loss)                                   | 6        |
|           Condensed Consolidated Balance Sheets                                                  | 7        |
|           Condensed Consolidated Statements of Cash Flows                                        | 9        |
|           Condensed Consolidated Statements of Changes in PNMR Common Stockholders’ Equity | 11       |
|           Condensed Consolidated Statements of Comprehensive Income (Loss)                       | 12       |
|      PUBLIC SERVICE COMPANY OF NEW MEXICO AND SUBSIDIARIES                                                                |     |
|           Condensed Consolidated Statements of Earnings                                          | 13       |
|           Condensed Consolidated Balance Sheets                                                  | 14       |
|           Condensed Consolidated Statements of Cash Flows                                        | 16       |
|           Condensed Consolidated Statements of Changes in PNM Common Stockholder’s Equity  | 18       |
|           Condensed Consolidated Statements of Comprehensive Income                              | 19       |
|      TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES                                                                      |     |
|           Condensed Consolidated Statements of Earnings                                          | 20       |
|           Condensed Consolidated Balance Sheets                                                  | 21       |
|           Condensed Consolidated Statements of Cash Flows                                        | 23       |
|           Condensed Consolidated Statements of Changes in Common Stockholder’s Equity      | 25       |
|           Condensed Consolidated Statements of Comprehensive Income                              | 26       |
|      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                                                 | 27       |
|   ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION                                                   | 69       |
|                   AND RESULTS OF OPERATIONS              |     |
|   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                          | 91       |
|   ITEM 4.  CONTROLS AND PROCEDURES                                                                                             | 96       |
| PART II.  OTHER INFORMATION                                                                                                              |     |
|   ITEM 1.  LEGAL PROCEEDINGS                                                                                                   | 97       |
|   ITEM 1A.  RISK FACTORS                                                                                                       | 97       |
|   ITEM 6.  EXHIBITS                                                                                                            | 98       |
| SIGNATURE                                                                                                                                          | 100      |
|                                                                                                                                               |     |
|                                                                                                                                               |     |

----

| Definitions:  |                                                                                                                                   |   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------|--------|
| Afton         | Afton Generating Station                                                                                                               |   |
| AG            | New Mexico Attorney General                                                                                                            |   |
| ALJ           | Administrative Law Judge                                                                                                               |   |
| Altura        | Optim Energy Twin Oaks, LP                                                                                                             |   |
| Altura Cogen  | Optim Energy Altura Cogen, LLC (the CoGen Lyondell Power Generation Facility)                                                          |   |
| AOCI          | Accumulated Other Comprehensive Income                                                                                                 |   |
| APS           | Arizona Public Service Company, which is the operator and a co-owner of PVNGS and  Four Corners                              |   |
| BART     | Best Available Retrofit Technology                                                                                                     |   |
| BHP           | BHP Billiton, Ltd, the parent of SJCC                                                                                                  |   |
| Board         | Board of Directors of PNMR                                                                                                             |   |
| BTU           | British Thermal Unit                                                                                                                   |   |
| Cal PX        | California Power Exchange                                                                                                              |   |
| Cal ISO       | California Independent System Operator                                                                                                 |   |
| Cascade       | Cascade Investment, L.L.C.                                                                                                             |   |
| CCB           | Coal Combustion Byproducts                                                                                                             |   |
| Continental   | Continental Energy Systems, L.L.C.                                                                                                     |   |
| CRHC          | Cap Rock Holding Corporation, a subsidiary of Continental                                                                              |   |
| CTC           | Competition Transition Charge                                                                                                          |   |
| Decatherm     | Million BTUs                                                                                                                           |   |
| Delta         | Delta-Person Limited Partnership                                                                                                       |   |
| DOE           | Department of Energy                                                                                                                   |   |
| ECJV          | ECJV Holdings, LLC                                                                                                                     |   |
| EIP           | Eastern Interconnection Project                                                                                                        |   |
| EPA           | United States Environmental Protection Agency                                                                                          |   |
| EPE           | El Paso Electric                                                                                                                       |   |
| ERCOT         | Electric Reliability Council of Texas                                                                                                  |   |
| FASB          | Financial Accounting Standards Board                                                                                                   |   |
| FERC          | Federal Energy Regulatory Commission                                                                                                   |   |
| First Choice  | First Choice Power, L. P. and Subsidiaries                                                                                             |   |
| Four Corners  | Four Corners Power Plant                                                                                                               |   |
| FPPAC         | Fuel and Purchased Power Adjustment Clause                                                                                             |   |
| GAAP          | Generally Accepted Accounting Principles in the United States of America                                                               |   |
| GEaR          | Gross Earnings at Risk                                                                                                                 |   |
| GHG           | Greenhouse Gas Emissions                                                                                                               |   |
| GWh           | Gigawatt hours                                                                                                                         |   |
| IBEW          | International Brotherhood of Electrical Workers, Local 611                                                                             |   |
| ISO           | Independent System Operator                                                                                                            |   |
| KWh           | Kilowatt Hour                                                                                                                          |   |
| LBB           | Lehman Brothers Bank, FSB, a subsidiary of LBH                                                                                         |   |
| LBH           | Lehman Brothers Holdings Inc.                                                                                                          |   |
| LCC           | Lyondell Chemical Company                                                                                                              |   |
| LIBOR         | London Interbank Offered Rate                                                                                                          |   |
| Lordsburg     | Lordsburg Generating Station                                                                                                           |   |
| Luna          | Luna Energy Facility                                                                                                                   |   |
| MD&A      | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                            |   |
| Moody’s | Moody’s Investor Services, Inc.                                                                                                  |   |
| MW            | Megawatt                                                                                                                               |   |
| MWh           | Megawatt Hour                                                                                                                          |   |
| Navajo Acts   | Navajo Nation Air Pollution Prevention and Control Act, the Navajo Nation Safe Drinking Water Act, and the Navajo Nation Pesticide Act |   |
| NDT           | Nuclear Decommissioning Trusts for PVNGS                                                                                               |   |
| Ninth Circuit | United States Court of Appeals for the Ninth Circuit                                                                                   |   |
| NMGC          | New Mexico Gas Company, a subsidiary of Continental                                                                                    |   |
| NMED          | New Mexico Environment Department                                                                                                      |   |
| NMPRC         | New Mexico Public Regulation Commission                                                                                                |   |

----

| NOX                       | Nitrogen Oxide                                                                     |   |
|--------------------------------|------------------------------------------------------------------------------------|--------|
| NOI                            | Notice of Inquiry                                                                  |   |
| NRC                            | United States Nuclear Regulatory Commission                                        |   |
| NSR                            | New Source Review                                                                  |   |
| O&M                        | Operations and Maintenance                                                         |   |
| OCI                            | Other Comprehensive Income                                                         |   |
| Optim Energy                   | Optim Energy, LLC, a limited liability company, owned 50% by each of PNMR and ECJV |   |
| PBO                            | Projected Benefit Obligation                                                       |   |
| PCRBs                          | Pollution Control Revenue Bonds                                                    |   |
| PGAC                           | Purchased Gas Adjustment Clause                                                    |   |
| PG&E                       | Pacific Gas and Electric Co.                                                       |   |
| PNM                            | Public Service Company of New Mexico and Subsidiaries                              |   |
| PNM Facility                   | PNM’s $400 Million Unsecured Revolving Credit Facility                       |   |
| PNMR                           | PNM Resources, Inc. and Subsidiaries                                               |   |
| PNMR Facility                  | PNMR’s $600 Million Unsecured Revolving Credit Facility                      |   |
| PPA                            | Power Purchase Agreement                                                           |   |
| PRP                            | Potential Responsible Party                                                        |   |
| PSD                            | Prevention of Significant Deterioration                                            |   |
| PUCT                           | Public Utility Commission of Texas                                                 |   |
| PV                             | Photovoltaic                                                                       |   |
| PVNGS                          | Palo Verde Nuclear Generating Station                                              |   |
| RCRA                           | Resource Conservation and Recovery Act                                             |   |
| RCT                            | Reasonable Cost Threshold                                                          |   |
| REC                            | Renewable Energy Certificates                                                      |   |
| REP                            | Retail Electricity Provider                                                        |   |
| RMC                            | Risk Management Committee                                                          |   |
| SCE                            | Southern Cal Edison Company                                                        |   |
| SEC                            | United States Securities and Exchange Commission                                   |   |
| SJCC                           | San Juan Coal Company, a subsidiary of BHP                                         |   |
| SJGS                           | San Juan Generating Station                                                        |   |
| SO2                       | Sulfur Dioxide                                                                     |   |
| SPS                            | Southwestern Public Service Company                                                |   |
| SRP                            | Salt River Project                                                                 |   |
| S&P                        | Standard and Poor’s Ratings Services                                         |   |
| TECA                           | Texas Electric Choice Act                                                          |   |
| Term Loan Agreement            | PNM’s $300 Million Unsecured Delayed Draw Term Loan Facility                 |   |
| TNMP                           | Texas-New Mexico Power Company and Subsidiaries                                    |   |
| TNMP Revolving Credit Facility | TNMP’s $75 Million Unsecured Revolving Credit Facility                       |   |
| Twin Oaks                      | Assets of Twin Oaks Power, L.P. and Twin Oaks Power III, L.P.                      |   |
| Valencia                       | Valencia Energy Facility                                                           |   |
| VaR                            | Value at Risk                                                                      |   |
|                           |                                                                               |   |
|                           |                                                                               |   |

----

|                                                                              |   | Three Months Ended March 31,             |    |
|-----------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                              |   | 2010                                     |    |   | 2009 |   |
|                                                                              |   | (In thousands, except per share amounts) |    |
| Operating Revenues:                                                               |   |                                     |    |   |   |   |
| Electric                                                                          |   | $                                        | 383,396 |   |   | $ | 385,803 |   |
| Other                                                                             |   |                                     | 61      |   |   |   | 62 |   |
| Total operating revenues                                                          |   |                                     | 383,457 |   |   |   | 385,865 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Operating Expenses:                                                               |   |                                     |    |   |   |   |   |   |
| Cost of energy                                                                    |   |                                     | 190,888 |   |   |   | 181,248 |   |
| Administrative and general                                                        |   |                                     | 62,785  |   |   |   | 62,138 |   |
| Energy production costs                                                           |   |                                     | 53,885  |   |   |   | 48,557 |   |
| Depreciation and amortization                                                     |   |                                     | 37,279  |   |   |   | 36,071 |   |
| Transmission and distribution costs                                               |   |                                     | 13,890  |   |   |   | 14,017 |   |
| Taxes other than income taxes                                                     |   |                                     | 14,187  |   |   |   | 13,931 |   |
| Total operating expenses                                                          |   |                                     | 372,914 |   |   |   | 355,962 |   |
| Operating income                                                                  |   |                                     | 10,543  |   |   |   | 29,903 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Other Income and Deductions:                                                      |   |                                     |    |   |   |   |   |   |
| Interest income                                                                   |   |                                     | 5,027   |   |   |   | 5,223 |   |
| Gains (losses) on investments held by NDT                                         |   |                                     | 1,743   |   |   |   | (4,382 | ) |
| Other income                                                                      |   |                                     | 10,137  |   |   |   | 23,164 |   |
| Equity in net earnings (loss) of Optim Energy                                     |   |                                     | (4,352  | ) |   |   | 1,395 |   |
| Other deductions                                                                  |   |                                     | (1,841  | ) |   |   | (2,360 | ) |
| Net other income (deductions)                                                     |   |                                     | 10,714  |   |   |   | 23,040 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Interest Charges                                                                  |   |                                     | 31,410  |   |   |   | 28,949 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Earnings (Loss) before Income Taxes                                               |   |                                     | (10,153 | ) |   |   | 23,994 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Income Taxes (Benefit)                                                            |   |                                     | (4,939  | ) |   |   | 7,587 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Earnings (Loss) from Continuing Operations                                        |   |                                     | (5,214  | ) |   |   | 16,407 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Earnings from Discontinued Operations, net of Income                              |   |                                     |    |   |   |   |   |   |
| Taxes of $0 and $40,027                                                           |   |                                     | -       |   |   |   | 75,853 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Net Earnings (Loss)                                                               |   |                                     | (5,214  | ) |   |   | 92,260 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Earnings Attributable to Valencia Non-controlling Interest                        |   |                                     | (3,103  | ) |   |   | (2,579 | ) |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Preferred Stock Dividend Requirements of Subsidiary                               |   |                                     | (132    | ) |   |   | (132 | ) |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Net Earnings (Loss) Attributable to PNMR                                          |   | $                                        | (8,449  | ) |   | $ | 89,549 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Earnings (Loss) from Continuing Operations Attributable to PNMR per Common Share: |   |                                     |    |   |   |   |   |   |
| Basic                                                                             |   | $                                        | (0.09   | ) |   | $ | 0.15 |   |
| Diluted                                                                           |   | $                                        | (0.09   | ) |   | $ | 0.15 |   |
| Net Earnings (Loss) Attributable to PNMR per Common Share:                        |   |                                     |    |   |   |   |   |   |
| Basic                                                                             |   | $                                        | (0.09   | ) |   | $ | 0.98 |   |
| Diluted                                                                           |   | $                                        | (0.09   | ) |   | $ | 0.98 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| Dividends Declared per Common Share                                               |   | $                                        | 0.125   |   |   | $ | 0.125 |   |

----

|                                                                                    |   | March 31,      |      |   | December 31, |   |
|-----------------------------------------------------------------------------------------|--------|----------------|-----------|--------|--------------|--------|
|                                                                                    |   | 2010           |      |   | 2009         |   |
|                                                                                    |   | (In thousands) |      |
| ASSETS                                                                                  |   |           |      |   |         |   |
| Current Assets:                                                                         |   |           |      |   |         |   |
| Cash and cash equivalents                                                               |   | $              | 28,986    |   |         | $      | 14,641 |   |
| Special deposits                                                                        |   |           | 31,962    |   |         |   | 52 |   |
| Accounts receivable, net of allowance for uncollectible accounts of $11,415 and $12,783 |   |           | 100,956   |   |         |   | 106,593 |   |
| Unbilled revenues                                                                       |   |           | 61,399    |   |         |   | 78,274 |   |
| Other receivables                                                                       |   |           | 79,847    |   |         |   | 77,672 |   |
| Materials, supplies, and fuel stock                                                     |   |           | 50,532    |   |         |   | 50,631 |   |
| Regulatory assets                                                                       |   |           | 18,976    |   |         |   | 7,476 |   |
| Commodity derivative instruments                                                        |   |           | 61,783    |   |         |   | 50,619 |   |
| Income taxes receivable                                                                 |   |           | 127,597   |   |         |   | 129,171 |   |
| Other current assets                                                                    |   |           | 90,758    |   |         |   | 63,076 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Total current assets                                                                    |   |           | 652,796   |   |         |   | 578,205 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Other Property and Investments:                                                         |   |           |      |   |         |   |   |   |
| Investment in PVNGS lessor notes                                                        |   |           | 121,796   |   |         |   | 137,511 |   |
| Equity investment in Optim Energy                                                       |   |           | 193,589   |   |         |   | 195,666 |   |
| Investments held by NDT                                                                 |   |           | 141,237   |   |         |   | 137,032 |   |
| Other investments                                                                       |   |           | 24,645    |   |         |   | 25,528 |   |
| Non-utility property, net of accumulated depreciation of $3,999 and  $3,779   |   |           | 7,704     |   |         |   | 7,923 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Total other property and investments                                                    |   |           | 488,971   |   |         |   | 503,660 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Utility Plant:                                                                          |   |           |      |   |         |   |   |   |
| Plant in service and plant held for future use                                          |   |           | 4,735,674 |   |         |   | 4,693,530 |   |
| Less accumulated depreciation and amortization                                          |   |           | 1,628,167 |   |         |   | 1,611,496 |   |
|                                                                                    |   |           | 3,107,507 |   |         |   | 3,082,034 |   |
| Construction work in progress                                                           |   |           | 166,198   |   |         |   | 181,078 |   |
| Nuclear fuel, net of accumulated amortization of $23,830 and $19,456                    |   |           | 75,473    |   |         |   | 69,337 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Net utility plant                                                                       |   |           | 3,349,178 |   |         |   | 3,332,449 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Deferred Charges and Other Assets:                                                      |   |           |      |   |         |   |   |   |
| Regulatory assets                                                                       |   |           | 525,056   |   |         |   | 524,136 |   |
| Goodwill                                                                                |   |           | 321,310   |   |         |   | 321,310 |   |
| Other intangible assets, net of accumulated amortization of $5,314 and $5,272           |   |           | 26,525    |   |         |   | 26,567 |   |
| Commodity derivative instruments                                                        |   |           | 3,779     |   |         |   | 2,413 |   |
| Other deferred charges                                                                  |   |           | 92,775    |   |         |   | 71,181 |   |
|                                                                                    |   |           |      |   |         |   |   |   |
| Total deferred charges and other assets                                                 |   |           | 969,445   |   |         |   | 945,607 |   |
|                                                                                    |   | $              | 5,460,390 |   |         | $      | 5,359,921 |   |

----

|                                                                                        |   | March 31,                                |      |   | December 31, |   |
|---------------------------------------------------------------------------------------------|--------|------------------------------------------|-----------|--------|--------------|--------|
|                                                                                        |   | 2010                                     |      |   | 2009         |   |
|                                                                                        |   | (In thousands, except share information) |      |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                  |   |                                     |      |   |         |   |
| Current Liabilities:                                                                        |   |                                     |      |   |         |   |
| Short-term debt                                                                             |   | $                                        | 287,973   |   |         | $      | 198,000 |   |
| Current installments of long-term debt                                                      |   |                                     | 2,125     |   |         |   | 2,125 |   |
| Accounts payable                                                                            |   |                                     | 103,354   |   |         |   | 111,432 |   |
| Accrued interest and taxes                                                                  |   |                                     | 66,717    |   |         |   | 45,341 |   |
| Regulatory liabilities                                                                      |   |                                     | 1,701     |   |         |   | 908 |   |
| Commodity derivative instruments                                                            |   |                                     | 59,944    |   |         |   | 24,025 |   |
| Other current liabilities                                                                   |   |                                     | 152,114   |   |         |   | 181,442 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Total current liabilities                                                                   |   |                                     | 673,928   |   |         |   | 563,273 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Long-term Debt                                                                              |   |                                     | 1,565,366 |   |         |   | 1,565,206 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Deferred Credits and Other Liabilities:                                                     |   |                                     |      |   |         |   |   |   |
| Accumulated deferred income taxes                                                           |   |                                     | 528,773   |   |         |   | 531,166 |   |
| Accumulated deferred investment tax credits                                                 |   |                                     | 19,911    |   |         |   | 20,518 |   |
| Regulatory liabilities                                                                      |   |                                     | 354,503   |   |         |   | 350,324 |   |
| Asset retirement obligations                                                                |   |                                     | 72,418    |   |         |   | 70,963 |   |
| Accrued pension liability and postretirement benefit cost                                   |   |                                     | 275,681   |   |         |   | 281,923 |   |
| Commodity derivative instruments                                                            |   |                                     | 12,133    |   |         |   | 4,549 |   |
| Other deferred credits                                                                      |   |                                     | 124,611   |   |         |   | 121,394 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Total deferred credits and other liabilities                                                |   |                                     | 1,388,030 |   |         |   | 1,380,837 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Total liabilities                                                                           |   |                                     | 3,627,324 |   |         |   | 3,509,316 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Commitments and Contingencies (See Note 9)                                                  |   |                                     |      |   |         |   |   |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Cumulative Preferred Stock of Subsidiary                                                    |   |                                     |      |   |         |   |   |   |
| without mandatory redemption requirements ($100 stated value, 10,000,000 shares authorized: |   |                                     |      |   |         |   |   |   |
| issued and outstanding 115,293 shares)                                                      |   |                                     | 11,529    |   |         |   | 11,529 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
| Equity:                                                                                     |   |                                     |      |   |         |   |   |   |
| PNMR Convertible Preferred Stock, Series A without mandatory redemption requirements        |   |                                     |      |   |         |   |   |   |
| (no stated value, 10,000,000 shares authorized: issued and outstanding 477,800 shares)      |   |                                     | 100,000   |   |         |   | 100,000 |   |
| PNMR common stockholders’ equity:                                                     |   |                                     |      |   |         |   |   |   |
| Common stock outstanding (no par value, 120,000,000 shares authorized: issued               |   |                                     |      |   |         |   |   |   |
| and outstanding 86,673,174 shares)                                                          |   |                                     | 1,290,248 |   |         |   | 1,289,890 |   |
| Accumulated other comprehensive income (loss), net of income taxes                          |   |                                     | (44,044   | )      |         |   | (46,057 | ) |
| Retained earnings                                                                           |   |                                     | 386,003   |   |         |   | 405,884 |   |
| Total PNMR common stockholders’ equity                                                |   |                                     | 1,632,207 |   |         |   | 1,649,717 |   |
| Non-controlling interest in Valencia                                                        |   |                                     | 89,330    |   |         |   | 89,359 |   |
| Total equity                                                                                |   |                                     | 1,821,537 |   |         |   | 1,839,076 |   |
|                                                                                        |   |                                     |      |   |         |   |   |   |
|                                                                                        |   | $                                        | 5,460,390 |   |         | $      | 5,359,921 |   |

----

|                                                                                      |   | Three Months Ended March 31, |    |
|-------------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                      |   | 2010                         |    |   | 2009 |   |
|                                                                                      |   | (In thousands)               |    |
| Cash Flows From Operating Activities:                                                     |   |                         |    |   |   |   |
| Net earnings (loss)                                                                       |   | $                            | (5,214  | ) |   | $ | 92,260 |   |
| Adjustments to reconcile net earnings (loss) to net cash flows from operating activities: |   |                         |    |   |   |   |   |   |
| Depreciation and amortization                                                             |   |                         | 44,318  |   |   |   | 42,305 |   |
| PVNGS firm sales contract revenue                                                         |   |                         | (14,329 | ) |   |   | (13,964 | ) |
| Bad debt expense                                                                          |   |                         | 6,397   |   |   |   | 14,908 |   |
| Deferred income taxes (benefit)                                                           |   |                         | (4,334  | ) |   |   | (89,714 | ) |
| Equity in net (earnings) loss of Optim Energy                                             |   |                         | 4,352   |   |   |   | (1,395 | ) |
| Net unrealized losses on derivatives                                                      |   |                         | 33,355  |   |   |   | 6,955 |   |
| Realized (gains) losses on investments held by NDT                                        |   |                         | (1,743  | ) |   |   | 4,382 |   |
| Gain on sale of PNM Gas                                                                   |   |                         | -       |   |   |   | (101,369 | ) |
| Gain on reacquired debt                                                                   |   |                         | -       |   |   |   | (7,467 | ) |
| Stock based compensation expense                                                          |   |                         | 1,427   |   |   |   | 1,070 |   |
| Other, net                                                                                |   |                         | (807    | ) |   |   | 333 |   |
| Changes in certain assets and liabilities:                                                |   |                         |    |   |   |   |   |   |
| Accounts receivable and unbilled revenues                                                 |   |                         | 16,113  |   |   |   | 4,423 |   |
| Materials, supplies, and fuel stock                                                       |   |                         | 98      |   |   |   | 2,098 |   |
| Other current assets                                                                      |   |                         | (70,817 | ) |   |   | (1,521 | ) |
| Other assets                                                                              |   |                         | (4,594  | ) |   |   | 1,386 |   |
| Accounts payable                                                                          |   |                         | (8,078  | ) |   |   | (79,020 | ) |
| Accrued interest and taxes                                                                |   |                         | 22,950  |   |   |   | 139,815 |   |
| Other current liabilities                                                                 |   |                         | (21,680 | ) |   |   | (26,823 | ) |
| Other liabilities                                                                         |   |                         | (10,670 | ) |   |   | (3,950 | ) |
| Net cash flows from operating activities                                                  |   |                         | (13,256 | ) |   |   | (15,288 | ) |
|                                                                                      |   |                         |    |   |   |   |   |   |
| Cash Flows From Investing Activities:                                                     |   |                         |    |   |   |   |   |   |
| Utility plant additions                                                                   |   |                         | (67,542 | ) |   |   | (80,850 | ) |
| Proceeds from sales of investments held by NDT                                            |   |                         | 20,699  |   |   |   | 44,391 |   |
| Purchases of investments held by NDT                                                      |   |                         | (21,614 | ) |   |   | (44,724 | ) |
| Proceeds from sale of PNM Gas                                                             |   |                         | -       |   |   |   | 640,620 |   |
| Transaction costs for sale of PNM Gas                                                     |   |                         | -       |   |   |   | (10,604 | ) |
| Return of principal on PVNGS lessor notes                                                 |   |                         | 14,216  |   |   |   | 11,458 |   |
| Other, net                                                                                |   |                         | 165     |   |   |   | 416 |   |
| Net cash flows from investing activities                                                  |   |                         | (54,076 | ) |   |   | 560,707 |   |

----

|                                                         |   | Three Months Ended March 31, |    |
|--------------------------------------------------------------|--------|------------------------------|---------|
|                                                         |   | 2010                         |    |   | 2009 |   |
|                                                         |   | (In thousands)               |    |
| Cash Flows From Financing Activities:                        |   |                         |    |   |   |   |
| Short-term borrowings (repayments), net                      |   |                         | 89,973  |   |   |   | (599,067 | ) |
| Long-term borrowings                                         |   |                         | -       |   |   |   | 309,242 |   |
| Repayment of long-term debt                                  |   |                         | -       |   |   |   | (314,079 | ) |
| Issuance of common stock                                     |   |                         | -       |   |   |   | 620 |   |
| Proceeds from stock option exercise                          |   |                         | 483     |   |   |   | - |   |
| Purchase of common stock to satisfy stock awards             |   |                         | (1,446  | ) |   |   | (803 | ) |
| Excess tax (shortfall) from stock-based payment arrangements |   |                         | (106    | ) |   |   | (519 | ) |
| Dividends paid                                               |   |                         | (11,564 | ) |   |   | (11,546 | ) |
| Equity transactions with Valencia’s owner              |   |                         | (3,132  | ) |   |   | - |   |
| Payments received on PVNGS firm-sales contracts              |   |                         | 7,593   |   |   |   | 7,634 |   |
| Debt issuance costs and other                                |   |                         | (124    | ) |   |   | (7,075 | ) |
| Net cash flows from financing activities                     |   |                         | 81,677  |   |   |   | (615,593 | ) |
|                                                         |   |                         |    |   |   |   |   |   |
| Change in Cash and Cash Equivalents                          |   |                         | 14,345  |   |   |   | (70,174 | ) |
| Cash and Cash Equivalents at Beginning of Period             |   |                         | 14,641  |   |   |   | 140,644 |   |
| Cash and Cash Equivalents at End of Period                   |   | $                            | 28,986  |   |   | $ | 70,470 |   |
|                                                         |   |                         |    |   |   |   |   |   |
| Supplemental Cash Flow Disclosures:                          |   |                         |    |   |   |   |   |   |
| Interest paid, net of capitalized interest                   |   | $                            | 5,349   |   |   | $ | 19,533 |   |
| Income taxes paid (refunded), net                            |   | $                            | (2,020  | ) |   | $ | (1,777 | ) |

----

|                                                     |   |         |       |   | Accumulated            |   |      |          |   |   | Total PNMR |   |
|----------------------------------------------------------|--------|--------------|------------|--------|------------------------|--------|-----------|---------------|--------|--------|------------|--------|
|                                                     |   | Common Stock |       |   | Other                  |   |      |          |   |   | Common     |   |
|                                                     |   | Number of    |       |   | Aggregate              |   |      | Comprehensive |   |   | Retained   |   |   | Stockholders’ |   |
|                                                     |   | Shares       |       |   | Value                  |   |      | Income (Loss) |   |   | Earnings   |   |   | Equity |   |
|                                                     |   |         |       |   | (Dollars in thousands) |   |
|                                                     |   |         |       |   |                   |   |      |          |   |   |       |   |   |   |   |
| Balance at December 31, 2009                             |   |         | 86,673,174 |   |                   | $      | 1,289,890 |          |   | $      | (46,057    | )      |   | $ | 405,884 |   |   | $ | 1,649,717 |   |
| Purchase of common stock to satisfy stock awards    |   |         | -          |   |                   |   | (963      | )             |   |   | -          |   |   |   | - |   |   |   | (963 | ) |
| Tax shortfall from stock-based compensation arrangements |   |         | -          |   |                   |   | (106      | )             |   |   | -          |   |   |   | - |   |   |   | (106 | ) |
| Stock based compensation expense                         |   |         | -          |   |                   |   | 1,427     |          |   |   | -          |   |   |   | - |   |   |   | 1,427 |   |
| Net earnings (loss) attributable to PNMR                 |   |         | -          |   |                   |   | -         |          |   |   | -          |   |   |   | (8,449 | ) |   |   | (8,449 | ) |
| Total other comprehensive income                         |   |         | -          |   |                   |   | -         |          |   |   | 2,013      |   |   |   | - |   |   |   | 2,013 |   |
| Dividends declared on common stock                       |   |         | -          |   |                   |   | -         |          |   |   | -          |   |   |   | (11,432 | ) |   |   | (11,432 | ) |
| Balance at March 31, 2010                                |   |         | 86,673,174 |   |                   | $      | 1,290,248 |          |   | $      | (44,044    | )      |   | $ | 386,003 |   |   | $ | 1,632,207 |   |

----

|                                                                   |   | Three Months Ended March 31, |   |
|------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                   |   | 2010                         |   |   | 2009 |   |
|                                                                   |   | (In thousands)               |   |
|                                                                   |   |                         |   |   |   |   |
| Net Earnings (Loss)                                                    |   | $                            | (5,214 | ) |   | $ | 92,260 |   |
|                                                                   |   |                         |   |   |   |   |   |   |
| Other Comprehensive Income (Loss):                                     |   |                         |   |   |   |   |   |   |
|                                                                   |   |                         |   |   |   |   |   |   |
| Unrealized Gain on Investment Securities:                              |   |                         |   |   |   |   |   |   |
| Unrealized holding gains arising during                                |   |                         |   |   |   |   |   |   |
| the period, net of income tax (expense)                                |   |                         |   |   |   |   |   |   |
| of $(1,222) and $(353)                                                 |   |                         | 1,865  |   |   |   | 538 |   |
| Reclassification adjustment for (gains) included in                    |   |                         |   |   |   |   |   |   |
| net earnings (loss), net of income tax expense                         |   |                         |   |   |   |   |   |   |
| of $610 and $292                                                       |   |                         | (931   | ) |   |   | (446 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Pension liability adjustment, net of income tax benefit                |   |                         |   |   |   |   |   |   |
|      of $147 and $38,671                      |   |                         | (223   | ) |   |   | (59,008 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Fair Value Adjustment for Designated Cash Flow Hedges:                 |   |                         |   |   |   |   |   |   |
| Change in fair market value, net of income tax (expense)               |   |                         |   |   |   |   |   |   |
| of $(5,056) and $(10,794)                                              |   |                         | 7,617  |   |   |   | 15,137 |   |
| Reclassification adjustment for (gains) losses included in             |   |                         |   |   |   |   |   |   |
| net earnings (loss), net of income tax expense                         |   |                         |   |   |   |   |   |   |
| of $4,192 and $6,101                                                   |   |                         | (6,315 | ) |   |   | (9,090 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Total Other Comprehensive Income (Loss)                                |   |                         | 2,013  |   |   |   | (52,869 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Comprehensive Income (Loss)                                            |   |                         | (3,201 | ) |   |   | 39,391 |   |
|                                                                   |   |                         |   |   |   |   |   |   |
| Comprehensive Income Attributable to Valencia Non-controlling Interest |   |                         | (3,103 | ) |   |   | (2,579 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Preferred Stock Dividend Requirements of Subsidiary                    |   |                         | (132   | ) |   |   | (132 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Comprehensive Income (Loss) Attributable to PNMR                       |   | $                            | (6,436 | ) |   | $ | 36,680 |   |

----

|                                                       |   | Three Months Ended March 31, |    |
|------------------------------------------------------------|--------|------------------------------|---------|
|                                                       |   | 2010                         |    |   | 2009 |   |
|                                                       |   | (In thousands)               |    |
|                                                       |   |                         |    |   |   |   |
| Electric Operating Revenues                                |   | $                            | 230,536 |   |   | $ | 231,955 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Operating Expenses:                                        |   |                         |    |   |   |   |   |   |
| Cost of energy                                             |   |                         | 86,434  |   |   |   | 101,533 |   |
| Administrative and general                                 |   |                         | 37,686  |   |   |   | 29,690 |   |
| Energy production costs                                    |   |                         | 53,885  |   |   |   | 50,944 |   |
| Depreciation and amortization                              |   |                         | 22,852  |   |   |   | 22,428 |   |
| Transmission and distribution costs                        |   |                         | 9,308   |   |   |   | 9,073 |   |
| Taxes other than income taxes                              |   |                         | 7,914   |   |   |   | 7,801 |   |
| Total operating expenses                                   |   |                         | 218,079 |   |   |   | 221,469 |   |
| Operating income                                           |   |                         | 12,457  |   |   |   | 10,486 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Other Income and Deductions:                               |   |                         |    |   |   |   |   |   |
| Interest income                                            |   |                         | 4,935   |   |   |   | 5,961 |   |
| Gains (losses) on investments held by NDT                  |   |                         | 1,743   |   |   |   | (4,382 | ) |
| Other income                                               |   |                         | 10,037  |   |   |   | 316 |   |
| Other deductions                                           |   |                         | (623    | ) |   |   | (866 | ) |
| Net other income (deductions)                              |   |                         | 16,092  |   |   |   | 1,029 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Interest Charges                                           |   |                         | 18,077  |   |   |   | 17,207 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Earnings (Loss) before Income Taxes                        |   |                         | 10,472  |   |   |   | (5,692 | ) |
|                                                       |   |                         |    |   |   |   |   |   |
| Income Taxes (Benefit)                                     |   |                         | 2,921   |   |   |   | (3,348 | ) |
|                                                       |   |                         |    |   |   |   |   |   |
| Earnings (Loss) from Continuing Operations                 |   |                         | 7,551   |   |   |   | (2,344 | ) |
|                                                       |   |                         |    |   |   |   |   |   |
| Earnings from Discontinued Operations, net of Income       |   |                         |    |   |   |   |   |   |
| Taxes of $0 and $40,027                                    |   |                         | -       |   |   |   | 75,853 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Net Earnings                                               |   |                         | 7,551   |   |   |   | 73,509 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Earnings Attributable to Valencia Non-controlling Interest |   |                         | (3,103  | ) |   |   | (2,579 | ) |
|                                                       |   |                         |    |   |   |   |   |   |
| Net Earnings Attributable to PNM                           |   |                         | 4,448   |   |   |   | 70,930 |   |
|                                                       |   |                         |    |   |   |   |   |   |
| Preferred Stock Dividends Requirements                     |   |                         | (132    | ) |   |   | (132 | ) |
|                                                       |   |                         |    |   |   |   |   |   |
| Net Earnings Available for PNM Common Stock                |   | $                            | 4,316   |   |   | $ | 70,798 |   |

----

|                                                                                  |   | March 31,      |      |   | December 31, |   |
|---------------------------------------------------------------------------------------|--------|----------------|-----------|--------|--------------|--------|
|                                                                                  |   | 2010           |      |   | 2009         |   |
|                                                                                  |   | (In thousands) |      |
| ASSETS                                                                                |   |           |      |   |         |   |
| Current Assets:                                                                       |   |           |      |   |         |   |
| Cash and cash equivalents                                                             |   | $              | 10,546    |   |         | $      | 1,373 |   |
| Special deposits                                                                      |   |           | 31,912    |   |         |   | 2 |   |
| Accounts receivable, net of allowance for uncollectible accounts of $1,483 and $1,483 |   |           | 61,236    |   |         |   | 70,515 |   |
| Unbilled revenues                                                                     |   |           | 32,562    |   |         |   | 38,067 |   |
| Other receivables                                                                     |   |           | 76,060    |   |         |   | 74,120 |   |
| Affiliate accounts receivable                                                         |   |           | 24        |   |         |   | 33 |   |
| Materials, supplies, and fuel stock                                                   |   |           | 47,497    |   |         |   | 47,789 |   |
| Regulatory assets                                                                     |   |           | 18,976    |   |         |   | 7,476 |   |
| Commodity derivative instruments                                                      |   |           | 24,968    |   |         |   | 24,498 |   |
| Income taxes receivable                                                               |   |           | 56,926    |   |         |   | 59,299 |   |
| Other current assets                                                                  |   |           | 47,787    |   |         |   | 40,197 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Total current assets                                                                  |   |           | 408,494   |   |         |   | 363,369 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Other Property and Investments:                                                       |   |           |      |   |         |   |   |   |
| Investment in PVNGS lessor notes                                                      |   |           | 121,796   |   |         |   | 137,511 |   |
| Investments held by NDT                                                               |   |           | 141,237   |   |         |   | 137,032 |   |
| Other investments                                                                     |   |           | 7,515     |   |         |   | 7,473 |   |
| Non-utility property                                                                  |   |           | 976       |   |         |   | 976 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Total other property and investments                                                  |   |           | 271,524   |   |         |   | 282,992 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Utility Plant:                                                                        |   |           |      |   |         |   |   |   |
| Plant in service and plant held for future use                                        |   |           | 3,711,182 |   |         |   | 3,677,974 |   |
| Less accumulated depreciation and amortization                                        |   |           | 1,270,202 |   |         |   | 1,260,903 |   |
|                                                                                  |   |           | 2,440,980 |   |         |   | 2,417,071 |   |
| Construction work in progress                                                         |   |           | 152,144   |   |         |   | 159,793 |   |
| Nuclear fuel, net of accumulated amortization of $23,830 and $19,456                  |   |           | 75,473    |   |         |   | 69,337 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Net utility plant                                                                     |   |           | 2,668,597 |   |         |   | 2,646,201 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Deferred Charges and Other Assets:                                                    |   |           |      |   |         |   |   |   |
| Regulatory assets                                                                     |   |           | 372,112   |   |         |   | 375,131 |   |
| Goodwill                                                                              |   |           | 51,632    |   |         |   | 51,632 |   |
| Other deferred charges                                                                |   |           | 71,199    |   |         |   | 55,841 |   |
|                                                                                  |   |           |      |   |         |   |   |   |
| Total deferred charges and other assets                                               |   |           | 494,943   |   |         |   | 482,604 |   |
|                                                                                  |   | $              | 3,843,558 |   |         | $      | 3,775,166 |   |

----

|                                                                                 |   | March 31,                                |      |   | December 31, |   |
|--------------------------------------------------------------------------------------|--------|------------------------------------------|-----------|--------|--------------|--------|
|                                                                                 |   | 2010                                     |      |   | 2009         |   |
|                                                                                 |   | (In thousands, except share information) |      |
| LIABILITIES AND STOCKHOLDER’S EQUITY                                           |   |                                     |      |   |         |   |
| Current Liabilities:                                                                 |   |                                     |      |   |         |   |
| Short-term debt                                                                      |   | $                                        | 178,000   |   |         | $      | 118,000 |   |
| Accounts payable                                                                     |   |                                     | 66,491    |   |         |   | 57,473 |   |
| Affiliate accounts payable                                                           |   |                                     | 14,183    |   |         |   | 13,481 |   |
| Accrued interest and taxes                                                           |   |                                     | 39,265    |   |         |   | 24,124 |   |
| Regulatory liabilities                                                               |   |                                     | 1,701     |   |         |   | 908 |   |
| Commodity derivative instruments                                                     |   |                                     | 6,393     |   |         |   | 1,509 |   |
| Other current liabilities                                                            |   |                                     | 102,125   |   |         |   | 126,273 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Total current liabilities                                                            |   |                                     | 408,158   |   |         |   | 341,768 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Long-term Debt                                                                       |   |                                     | 1,055,736 |   |         |   | 1,055,733 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Deferred Credits and Other Liabilities:                                              |   |                                     |      |   |         |   |   |   |
| Accumulated deferred income taxes                                                    |   |                                     | 366,218   |   |         |   | 364,498 |   |
| Accumulated deferred investment tax credits                                          |   |                                     | 19,911    |   |         |   | 20,518 |   |
| Regulatory liabilities                                                               |   |                                     | 313,079   |   |         |   | 316,215 |   |
| Asset retirement obligations                                                         |   |                                     | 71,536    |   |         |   | 70,099 |   |
| Accrued pension liability and postretirement benefit cost                            |   |                                     | 259,933   |   |         |   | 265,791 |   |
| Commodity derivative instruments                                                     |   |                                     | 1,199     |   |         |   | 556 |   |
| Other deferred credits                                                               |   |                                     | 93,187    |   |         |   | 90,425 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Total deferred credits and liabilities                                               |   |                                     | 1,125,063 |   |         |   | 1,128,102 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Total liabilities                                                                    |   |                                     | 2,588,957 |   |         |   | 2,525,603 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Commitments and Contingencies (See Note 9)                                           |   |                                     |      |   |         |   |   |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Cumulative Preferred Stock                                                           |   |                                     |      |   |         |   |   |   |
| without mandatory redemption requirements ($100 stated value, 10,000,000 authorized: |   |                                     |      |   |         |   |   |   |
| issued and outstanding 115,293 shares)                                               |   |                                     | 11,529    |   |         |   | 11,529 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
| Equity:                                                                              |   |                                     |      |   |         |   |   |   |
| PNM common stockholder’s equity                                                |   |                                     |      |   |         |   |   |   |
| Common stock outstanding (no par value, 40,000,000 shares authorized: issued         |   |                                     |      |   |         |   |   |   |
| and outstanding 39,117,799 shares)                                                   |   |                                     | 1,018,776 |   |         |   | 1,018,776 |   |
| Accumulated other comprehensive income (loss), net of income taxes                   |   |                                     | (51,056   | )      |         |   | (51,807 | ) |
| Retained earnings                                                                    |   |                                     | 186,022   |   |         |   | 181,706 |   |
| Total PNM common stockholder’s equity                                          |   |                                     | 1,153,742 |   |         |   | 1,148,675 |   |
| Non-controlling interest in Valencia                                                 |   |                                     | 89,330    |   |         |   | 89,359 |   |
| Total equity                                                                         |   |                                     | 1,243,072 |   |         |   | 1,238,034 |   |
|                                                                                 |   |                                     |      |   |         |   |   |   |
|                                                                                 |   | $                                        | 3,843,558 |   |         | $      | 3,775,166 |   |

----

|                                                                               |   | Three Months Ended March 31, |    |
|------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                               |   | 2010                         |    |   | 2009 |   |
|                                                                               |   | (In thousands)               |    |
| Cash Flows From Operating Activities:                                              |   |                         |    |   |   |   |
| Net earnings                                                                       |   | $                            | 7,551   |   |   | $ | 73,509 |   |
| Adjustments to reconcile net earnings to net cash flows from operating activities: |   |                         |    |   |   |   |   |   |
| Depreciation and amortization                                                      |   |                         | 28,010  |   |   |   | 25,934 |   |
| PVNGS firm sales contract revenue                                                  |   |                         | (14,329 | ) |   |   | (13,964 | ) |
| Deferred income taxes (benefit)                                                    |   |                         | 620     |   |   |   | (91,481 | ) |
| Net unrealized losses on derivatives                                               |   |                         | 5,289   |   |   |   | 5,887 |   |
| Realized (gains) losses on investments held by NDT                                 |   |                         | (1,743  | ) |   |   | 4,382 |   |
| Gain on sale of PNM Gas                                                            |   |                         | -       |   |   |   | (101,369 | ) |
| Other, net                                                                         |   |                         | (203    | ) |   |   | 262 |   |
| Changes in certain assets and liabilities:                                         |   |                         |    |   |   |   |   |   |
| Accounts receivable and unbilled revenues                                          |   |                         | 14,181  |   |   |   | 5,463 |   |
| Materials, supplies, and fuel stock                                                |   |                         | 292     |   |   |   | 1,698 |   |
| Other current assets                                                               |   |                         | (48,578 | ) |   |   | 9,009 |   |
| Other assets                                                                       |   |                         | 2,219   |   |   |   | 4,504 |   |
| Accounts payable                                                                   |   |                         | 9,018   |   |   |   | (32,116 | ) |
| Accrued interest and taxes                                                         |   |                         | 17,514  |   |   |   | 136,943 |   |
| Other current liabilities                                                          |   |                         | (16,083 | ) |   |   | (28,205 | ) |
| Other liabilities                                                                  |   |                         | (10,142 | ) |   |   | (2,890 | ) |
| Net cash flows from operating activities                                           |   |                         | (6,384  | ) |   |   | (2,434 | ) |
|                                                                               |   |                         |    |   |   |   |   |   |
| Cash Flows From Investing Activities:                                              |   |                         |    |   |   |   |   |   |
| Utility plant additions                                                            |   |                         | (62,025 | ) |   |   | (71,123 | ) |
| Proceeds from sales of NDT investments                                             |   |                         | 20,699  |   |   |   | 44,391 |   |
| Purchases of NDT investments                                                       |   |                         | (21,614 | ) |   |   | (44,724 | ) |
| Proceeds from sale of PNM Gas                                                      |   |                         | -       |   |   |   | 640,620 |   |
| Transaction cost for sale of PNM Gas                                               |   |                         | -       |   |   |   | (10,604 | ) |
| Return of principal on PVNGS lessor notes                                          |   |                         | 14,216  |   |   |   | 13,339 |   |
| Other, net                                                                         |   |                         | (48     | ) |   |   | 101 |   |
| Net cash flows from investing activities                                           |   |                         | (48,772 | ) |   |   | 572,000 |   |

----

|                                             |   | Three Months Ended March 31, |   |
|--------------------------------------------------|--------|------------------------------|--------|
|                                             |   | 2010                         |   |   | 2009 |   |
|                                             |   | (In thousands)               |   |
| Cash Flows From Financing Activities:            |   |                         |   |   |   |   |
| Short-term borrowings (repayments), net          |   |                         | 60,000 |   |   |   | (340,000 | ) |
| Payments received on PVNGS firm-sales contracts  |   |                         | 7,593  |   |   |   | 7,634 |   |
| Equity transactions with Valencia’s owner  |   |                         | (3,132 | ) |   |   | - |   |
| Dividends paid                                   |   |                         | (132   | ) |   |   | (220,132 | ) |
| Net cash flows from financing activities         |   |                         | 64,329 |   |   |   | (552,498 | ) |
|                                             |   |                         |   |   |   |   |   |   |
| Change in Cash and Cash Equivalents              |   |                         | 9,173  |   |   |   | 17,068 |   |
| Cash and Cash Equivalents at Beginning of Period |   |                         | 1,373  |   |   |   | 46,622 |   |
| Cash and Cash Equivalents at End of Period       |   | $                            | 10,546 |   |   | $ | 63,690 |   |
|                                             |   |                         |   |   |   |   |   |   |
| Supplemental Cash Flow Disclosures:              |   |                         |   |   |   |   |   |   |
| Interest paid, net of capitalized interest       |   | $                            | 3,773  |   |   | $ | 4,755 |   |
| Income taxes paid (refunded), net                |   | $                            | -      |   |   | $ | - |   |
|                                             |   |                         |   |   |   |   |   |   |

----

|                             |   |         |       |   | Accumulated            |   |      |          |   |   | Total PNM |   |
|----------------------------------|--------|--------------|------------|--------|------------------------|--------|-----------|---------------|--------|--------|-----------|--------|
|                             |   | Common Stock |       |   | Other                  |   |      |          |   |   | Common    |   |
|                             |   | Number of    |       |   | Aggregate              |   |      | Comprehensive |   |   | Retained  |   |   | Stockholder’s |   |
|                             |   | Shares       |       |   | Value                  |   |      | Income (Loss) |   |   | Earnings  |   |   | Equity |   |
|                             |   |         |       |   | (Dollars in thousands) |   |
|                             |   |         |       |   |                   |   |      |          |   |   |      |   |   |   |   |
| Balance at December 31, 2009     |   |         | 39,117,799 |   |                   | $      | 1,018,776 |          |   | $      | (51,807   | )      |   | $ | 181,706 |   |   | $ | 1,148,675 |   |
| Net earnings attributable to PNM |   |         | -          |   |                   |   | -         |          |   |   | -         |   |   |   | 4,448 |   |   |   | 4,448 |   |
| Total other comprehensive income |   |         | -          |   |                   |   | -         |          |   |   | 751       |   |   |   | - |   |   |   | 751 |   |
| Dividends on preferred stock     |   |         | -          |   |                   |   | -         |          |   |   | -         |   |   |   | (132) |   |   |   | (132) |   |
| Balance at March 31, 2010        |   |         | 39,117,799 |   |                   | $      | 1,018,776 |          |   | $      | (51,056   | )      |   | $ | 186,022 |   |   | $ | 1,153,742 |   |

----

|                                                                   |   | Three Months Ended March 31, |   |
|------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                   |   | 2010                         |   |   | 2009 |   |
|                                                                   |   | (In thousands)               |   |
|                                                                   |   |                         |   |   |   |   |
| Net Earnings                                                           |   | $                            | 7,551  |   |   | $ | 73,509 |   |
|                                                                   |   |                         |   |   |   |   |   |   |
| Other Comprehensive Income (Loss):                                     |   |                         |   |   |   |   |   |   |
|                                                                   |   |                         |   |   |   |   |   |   |
| Unrealized Gain on Investment Securities:                              |   |                         |   |   |   |   |   |   |
| Unrealized holding gains arising during                                |   |                         |   |   |   |   |   |   |
| the period, net of income tax (expense)                                |   |                         |   |   |   |   |   |   |
| of $(1,222) and $(353)                                                 |   |                         | 1,865  |   |   |   | 538 |   |
| Reclassification adjustment for (gains) included in                    |   |                         |   |   |   |   |   |   |
| net earnings, net of income tax expense                                |   |                         |   |   |   |   |   |   |
| of $610 and $292                                                       |   |                         | (931   | ) |   |   | (446 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Pension liability adjustment, net of income tax benefit                |   |                         |   |   |   |   |   |   |
|     of $147 and $38,671                            |   |                         | (223   | ) |   |   | (59,008 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Fair Value Adjustment for Designated Cash Flow Hedges:                 |   |                         |   |   |   |   |   |   |
| Change in fair market value, net of income tax (expense)               |   |                         |   |   |   |   |   |   |
| of $(2,696) and $(7,459)                                               |   |                         | 4,114  |   |   |   | 11,381 |   |
| Reclassification adjustment for (gains) included in                    |   |                         |   |   |   |   |   |   |
| net earnings, net of income tax expense                                |   |                         |   |   |   |   |   |   |
| of $2,670 and $3,849                                                   |   |                         | (4,074 | ) |   |   | (5,872 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Total Other Comprehensive Income (Loss)                                |   |                         | 751    |   |   |   | (53,407 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Comprehensive Income                                                   |   |                         | 8,302  |   |   |   | 20,102 |   |
|                                                                   |   |                         |   |   |   |   |   |   |
| Comprehensive Income Attributable to Valencia Non-controlling Interest |   |                         | (3,103 | ) |   |   | (2,579 | ) |
|                                                                   |   |                         |   |   |   |   |   |   |
| Comprehensive Income Attributable to PNM                               |   | $                            | 5,199  |   |   | $ | 17,523 |   |

----

|                                                                              |   | Three Months Ended March 31, |   |
|-----------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                              |   | 2010                         |   |   | 2009 |   |
|                                                                              |   | (In thousands)               |   |
| Electric Operating Revenues:                                                      |   |                         |   |   |   |   |
|    Non-affiliates                                                  |   | $                            | 38,591 |   |   | $ | 31,922 |   |
|    Affiliate                                                       |   |                         | 9,586  |   |   |   | 9,303 |   |
|         Total electric operating revenues |   |                         | 48,177 |   |   |   | 41,225 |   |
|                                                                              |   |                         |   |   |   |   |   |   |
| Operating Expenses:                                                               |   |                         |   |   |   |   |   |   |
| Cost of energy                                                                    |   |                         | 9,051  |   |   |   | 8,595 |   |
| Administrative and general                                                        |   |                         | 9,494  |   |   |   | 8,329 |   |
| Depreciation and amortization                                                     |   |                         | 10,095 |   |   |   | 8,598 |   |
| Transmission and distribution costs                                               |   |                         | 4,581  |   |   |   | 4,941 |   |
| Taxes other than income taxes                                                     |   |                         | 4,714  |   |   |   | 4,677 |   |
| Total operating expenses                                                          |   |                         | 37,935 |   |   |   | 35,140 |   |
| Operating income                                                                  |   |                         | 10,242 |   |   |   | 6,085 |   |
|                                                                              |   |                         |   |   |   |   |   |   |
| Other Income and Deductions:                                                      |   |                         |   |   |   |   |   |   |
| Other income                                                                      |   |                         | 364    |   |   |   | 417 |   |
| Other deductions                                                                  |   |                         | (18    | ) |   |   | (25 | ) |
| Net other income (deductions)                                                     |   |                         | 346    |   |   |   | 392 |   |
|                                                                              |   |                         |   |   |   |   |   |   |
| Interest Charges                                                                  |   |                         | 7,869  |   |   |   | 4,095 |   |
|                                                                              |   |                         |   |   |   |   |   |   |
| Earnings Before Income Taxes                                                      |   |                         | 2,719  |   |   |   | 2,382 |   |
|                                                                              |   |                         |   |   |   |   |   |   |
| Income Taxes                                                                      |   |                         | 1,075  |   |   |   | 961 |   |
|                                                                              |   |                         |   |   |   |   |   |   |
| Net Earnings                                                                      |   | $                            | 1,644  |   |   | $ | 1,421 |   |

----

|                                           |   | March 31,      |      |   | December 31, |   |
|------------------------------------------------|--------|----------------|-----------|--------|--------------|--------|
|                                           |   | 2010           |      |   | 2009         |   |
|                                           |   | (In thousands) |      |
| ASSETS                                         |   |           |      |   |         |   |
| Current Assets:                                |   |           |      |   |         |   |
| Cash and cash equivalents                      |   | $              | 71        |   |         | $      | 138 |   |
| Special deposits                               |   |           | 50        |   |         |   | 50 |   |
| Accounts receivable                            |   |           | 13,264    |   |         |   | 11,773 |   |
| Unbilled revenues                              |   |           | 5,199     |   |         |   | 7,239 |   |
| Other receivables                              |   |           | 848       |   |         |   | 579 |   |
| Affiliate accounts receivable                  |   |           | 4,730     |   |         |   | 5,151 |   |
| Materials and supplies                         |   |           | 2,818     |   |         |   | 2,591 |   |
| Income taxes receivable                        |   |           | 7,088     |   |         |   | 10,762 |   |
| Other current assets                           |   |           | 448       |   |         |   | 1,012 |   |
|                                           |   |           |      |   |         |   |   |   |
| Total current assets                           |   |           | 34,516    |   |         |   | 39,295 |   |
|                                           |   |           |      |   |         |   |   |   |
| Other Property and Investments:                |   |           |      |   |         |   |   |   |
| Other investments                              |   |           | 270       |   |         |   | 270 |   |
| Non-utility property                           |   |           | 2,111     |   |         |   | 2,111 |   |
|                                           |   |           |      |   |         |   |   |   |
| Total other property and investments           |   |           | 2,381     |   |         |   | 2,381 |   |
|                                           |   |           |      |   |         |   |   |   |
| Utility Plant:                                 |   |           |      |   |         |   |   |   |
| Plant in service and plant held for future use |   |           | 871,605   |   |         |   | 864,260 |   |
| Less accumulated depreciation and amortization |   |           | 296,304   |   |         |   | 292,608 |   |
|                                           |   |           | 575,301   |   |         |   | 571,652 |   |
| Construction work in progress                  |   |           | 4,455     |   |         |   | 9,832 |   |
|                                           |   |           |      |   |         |   |   |   |
| Net utility plant                              |   |           | 579,756   |   |         |   | 581,484 |   |
|                                           |   |           |      |   |         |   |   |   |
| Deferred Charges and Other Assets:             |   |           |      |   |         |   |   |   |
| Regulatory assets                              |   |           | 152,944   |   |         |   | 149,005 |   |
| Goodwill                                       |   |           | 226,665   |   |         |   | 226,665 |   |
| Other deferred charges                         |   |           | 10,485    |   |         |   | 10,225 |   |
|                                           |   |           |      |   |         |   |   |   |
| Total deferred charges and other assets        |   |           | 390,094   |   |         |   | 385,895 |   |
|                                           |   |           |      |   |         |   |   |   |
|                                           |   | $              | 1,006,747 |   |         | $      | 1,009,055 |   |

----

|                                                                   |   | March 31,                                |      |   | December 31, |   |
|------------------------------------------------------------------------|--------|------------------------------------------|-----------|--------|--------------|--------|
|                                                                   |   | 2010                                     |      |   | 2009         |   |
|                                                                   |   | (In thousands, except share information) |      |
| LIABILITIES AND STOCKHOLDER’S EQUITY                             |   |                                     |      |   |         |   |
| Current Liabilities:                                                   |   |                                     |      |   |         |   |
| Short-term debt – affiliate                                      |   | $                                        | 17,500    |   |         | $      | 23,500 |   |
| Accounts payable                                                       |   |                                     | 2,623     |   |         |   | 6,243 |   |
| Affiliate accounts payable                                             |   |                                     | 1,109     |   |         |   | 2,281 |   |
| Accrued interest and taxes                                             |   |                                     | 17,878    |   |         |   | 16,505 |   |
| Other current liabilities                                              |   |                                     | 2,515     |   |         |   | 2,194 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Total current liabilities                                              |   |                                     | 41,625    |   |         |   | 50,723 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Long-term Debt                                                         |   |                                     | 309,868   |   |         |   | 309,712 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Deferred Credits and Other Liabilities:                                |   |                                     |      |   |         |   |   |   |
| Accumulated deferred income taxes                                      |   |                                     | 135,032   |   |         |   | 136,944 |   |
| Regulatory liabilities                                                 |   |                                     | 41,425    |   |         |   | 34,109 |   |
| Asset retirement obligations                                           |   |                                     | 788       |   |         |   | 772 |   |
| Accrued pension liability and postretirement benefit cost              |   |                                     | 15,748    |   |         |   | 16,132 |   |
| Other deferred credits                                                 |   |                                     | 9,272     |   |         |   | 8,872 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Total deferred credits and other liabilities                           |   |                                     | 202,265   |   |         |   | 196,829 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Total liabilities                                                      |   |                                     | 553,758   |   |         |   | 557,264 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Commitments and Contingencies (See Note 9)                             |   |                                     |      |   |         |   |   |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Common Stockholder’s Equity:                                     |   |                                     |      |   |         |   |   |   |
| Common stock outstanding ($10 par value, 12,000,000 shares authorized: |   |                                     |      |   |         |   |   |   |
| issued and outstanding 6,358 shares)                                   |   |                                     | 64        |   |         |   | 64 |   |
| Paid-in-capital                                                        |   |                                     | 443,187   |   |         |   | 443,187 |   |
| Accumulated other comprehensive income (loss), net of income taxes     |   |                                     | (520      | )      |         |   | (74 | ) |
| Retained earnings                                                      |   |                                     | 10,258    |   |         |   | 8,614 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
| Total common stockholder’s equity                                |   |                                     | 452,989   |   |         |   | 451,791 |   |
|                                                                   |   |                                     |      |   |         |   |   |   |
|                                                                   |   | $                                        | 1,006,747 |   |         | $      | 1,009,055 |   |

----

|                                       |   | Three Months Ended March 31, |   |
|--------------------------------------------|--------|------------------------------|--------|
|                                       |   | 2010                         |   |   | 2009 |   |
|                                       |   | (In thousands)               |   |
| Cash Flows From Operating Activities:      |   |                         |   |   |   |   |
| Net earnings                               |   | $                            | 1,644  |   |   | $ | 1,421 |   |
| Adjustments to reconcile net earnings to   |   |                         |   |   |   |   |   |   |
| net cash flows from operating activities:  |   |                         |   |   |   |   |   |   |
| Depreciation and amortization              |   |                         | 11,101 |   |   |   | 10,317 |   |
| Deferred income taxes (benefit)            |   |                         | (1,665 | ) |   |   | (789 | ) |
| Other, net                                 |   |                         | 10     |   |   |   | 13 |   |
| Changes in certain assets and liabilities: |   |                         |   |   |   |   |   |   |
| Accounts receivable and unbilled revenues  |   |                         | 549    |   |   |   | 2,065 |   |
| Materials and supplies                     |   |                         | (227   | ) |   |   | (93 | ) |
| Other current assets                       |   |                         | 296    |   |   |   | (144 | ) |
| Other assets                               |   |                         | (856   | ) |   |   | (11 | ) |
| Accounts payable                           |   |                         | (3,620 | ) |   |   | (7,996 | ) |
| Accrued interest and taxes                 |   |                         | 5,047  |   |   |   | (8,230 | ) |
| Other current liabilities                  |   |                         | (429   | ) |   |   | 2,209 |   |
| Other liabilities                          |   |                         | (585   | ) |   |   | (796 | ) |
| Net cash flows from operating activities   |   |                         | 11,265 |   |   |   | (2,034 | ) |
|                                       |   |                         |   |   |   |   |   |   |
| Cash Flows From Investing Activities:      |   |                         |   |   |   |   |   |   |
| Utility plant additions                    |   |                         | (5,207 | ) |   |   | (8,052 | ) |
| Net cash flows from investing activities   |   |                         | (5,207 | ) |   |   | (8,052 | ) |

----

|                                                           |   | Three Months Ended March 31, |   |
|----------------------------------------------------------------|--------|------------------------------|--------|
|                                                           |   | 2010                         |   |   | 2009 |   |
|                                                           |   | (In thousands)               |   |
| Cash Flow From Financing Activities:                           |   |                         |   |   |   |   |
| Short-term borrowings (repayments), net                        |   |                         | -      |   |   |   | (150,000 | ) |
| Short-term borrowings (repayments), net – affiliate |   |                         | (6,000 | ) |   |   | 24,700 |   |
| Long-term borrowings                                           |   |                         | -      |   |   |   | 309,242 |   |
| Repayment of long-term debt                                    |   |                         | -      |   |   |   | (167,690 | ) |
| Debt issuance costs and other                                  |   |                         | (125   | ) |   |   | (6,231 | ) |
| Net cash flows from financing activities                       |   |                         | (6,125 | ) |   |   | 10,021 |   |
|                                                           |   |                         |   |   |   |   |   |   |
| Change in Cash and Cash Equivalents                            |   |                         | (67    | ) |   |   | (65 | ) |
| Cash and Cash Equivalents at Beginning of Period               |   |                         | 138    |   |   |   | 124 |   |
| Cash and Cash Equivalents at End of Period                     |   | $                            | 71     |   |   | $ | 59 |   |
|                                                           |   |                         |   |   |   |   |   |   |
| Supplemental Cash Flow Disclosures:                            |   |                         |   |   |   |   |   |   |
| Interest paid, net of capitalized interest                     |   | $                            | 865    |   |   | $ | 8,650 |   |
| Income taxes paid (refunded), net                              |   | $                            | (860   | ) |   | $ | (935 | ) |
|                                                           |   |                         |   |   |   |   |   |   |

----

|                                    |   |         |   |   |                   |   |   | Accumulated |   |   |          |   |   | Total    |   |
|-----------------------------------------|--------|--------------|--------|--------|------------------------|--------|--------|-------------|--------|--------|---------------|--------|--------|----------|--------|
|                                    |   | Common Stock |   |   |                   |   |   | Other       |   |   |          |   |   | Common   |   |
|                                    |   | Number of    |   |   | Aggregate              |   |   | Paid-in     |   |   | Comprehensive |   |   | Retained |   |   | Stockholder’s |   |
|                                    |   | Shares       |   |   | Value                  |   |   | Capital     |   |   | Income (Loss) |   |   | Earnings |   |   | Equity |   |
|                                    |   |         |   |   | (Dollars in thousands) |   |
|                                    |   |         |   |   |                   |   |   |        |   |   |          |   |   |     |   |   |   |   |
| Balance at December 31, 2009            |   |         | 6,358  |   |                   | $      | 64     |        |   | $      | 443,187       |   |   | $        | (74    | ) |   | $ | 8,614 |   |   | $ | 451,791 |   |
| Net earnings                            |   |         | -      |   |                   |   | -      |        |   |   | -             |   |   |     | -      |   |   |   | 1,644 |   |   |   | 1,644 |   |
| Total other comprehensive income (loss) |   |         | -      |   |                   |   | -      |        |   |   | -             |   |   |     | (446   | ) |   |   | - |   |   |   | (446 | ) |
| Balance at March 31, 2010               |   |         | 6,358  |   |                   | $      | 64     |        |   | $      | 443,187       |   |   | $        | (520   | ) |   | $ | 10,258 |   |   | $ | 452,989 |   |

----

|                                                                    |   | Three Months Ended March 31, |   |
|-------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                    |   | 2010                         |   |   | 2009 |   |
|                                                                    |   | (In thousands)               |   |
|                                                                    |   |                         |   |   |   |   |
| Net Earnings                                                            |   | $                            | 1,644  |   |   | $ | 1,421 |   |
|                                                                    |   |                         |   |   |   |   |   |   |
| Other Comprehensive Income (Loss):                                      |   |                         |   |   |   |   |   |   |
|                                                                    |   |                         |   |   |   |   |   |   |
| Fair Value Adjustment for Designated Cash Flow Hedges:                  |   |                         |   |   |   |   |   |   |
|   Change in fair market value, net of income tax              |   |                         |   |   |   |   |   |   |
|      benefit of $350 and $300                  |   |                         | (631   | ) |   |   | (541 | ) |
|    Reclassification adjustment for losses included in    |   |                         |   |   |   |   |   |   |
|      net earnings, net of income tax (benefit) |   |                         |   |   |   |   |   |   |
|      of $(102) and $0                          |   |                         | 185    |   |   |   | - |   |
|                                                                    |   |                         |   |   |   |   |   |   |
| Total Other Comprehensive Income (Loss)                                 |   |                         | (446   | ) |   |   | (541 | ) |
|                                                                    |   |                         |   |   |   |   |   |   |
| Comprehensive Income                                                    |   | $                            | 1,198  |   |   | $ | 880 |   |

----

| (1)   | Significant Accounting Policies and Responsibility for Financial Statements |
|-----------------|-----------------------------------------------------------------------------|

----

|                                                       |   | Quarter Ended March 31, 2009             |   |
|------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                       |   | As Originally                            |   |   |   |   |
|                                                       |   | Reported                                 |   |   | As Restated |   |
|                                                       |   | (In thousands, except per share amounts) |   |
|                                                       |   |                                     |   |   |   |   |
| PNMR                                                       |   |                                     |   |   |   |   |
| Net earnings (loss)                                        |   | $                                        | 98,082 |   |   | $ | 92,260 |   |
| Net earnings (loss) attributable to PNMR                   |   |                                     | 95,371 |   |   |   | 89,549 |   |
| Net earnings (loss) attributable to PNMR per common share: |   |                                     |   |   |   |   |   |   |
| Basic                                                      |   |                                     | 1.04   |   |   |   | 0.98 |   |
| Diluted                                                    |   |                                     | 1.04   |   |   |   | 0.98 |   |
|                                                       |   |                                     |   |   |   |   |   |   |
| PNM                                                        |   |                                     |   |   |   |   |   |   |
| Net earnings                                               |   |                                     | 79,331 |   |   |   | 73,509 |   |
| Net earnings attributable to PNM                           |   |                                     | 76,752 |   |   |   | 70,930 |   |

| (2)   | Disposition |
|-----------------|-------------|

----

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

----

|                                                                    |   | PNM      |      |   | TNMP     |   |      | First          |   |   | Corporate |   |   |         |    |
|-------------------------------------------------------------------------|--------|----------|-----------|--------|----------|--------|-----------|----------------|--------|--------|-----------|--------|--------|--------------|---------|
| Three Months Ended March 31, 2010                                       |   | Electric |      |   | Electric |   |      | Choice         |   |   | and Other |   |   | Consolidated |    |
|                                                                    |   |     |      |   |     |   |      | (In thousands) |   |   |      |   |   |         |    |
| Operating revenues                                                      |   | $        | 230,536   |   |     | $      | 38,591    |           |   | $      | 114,390   |   |   | $            | (60     | ) |   | $ | 383,457 |   |
| Intersegment revenues                                                   |   |     | -         |   |     |   | 9,586     |           |   |   | -         |   |   |         | (9,586  | ) |   |   | - |   |
| Total revenues                                                          |   |     | 230,536   |   |     |   | 48,177    |           |   |   | 114,390   |   |   |         | (9,646  | ) |   |   | 383,457 |   |
| Cost of energy                                                          |   |     | 86,434    |   |     |   | 9,051     |           |   |   | 104,990   |   |   |         | (9,587  | ) |   |   | 190,888 |   |
| Gross margin                                                            |   |     | 144,102   |   |     |   | 39,126    |           |   |   | 9,400     |   |   |         | (59     | ) |   |   | 192,569 |   |
| Other operating expenses                                                |   |     | 108,793   |   |     |   | 18,789    |           |   |   | 20,448    |   |   |         | (3,283  | ) |   |   | 144,747 |   |
| Depreciation and amortization                                           |   |     | 22,852    |   |     |   | 10,095    |           |   |   | 263       |   |   |         | 4,069   |   |   |   | 37,279 |   |
| Operating income (loss)                                                 |   |     | 12,457    |   |     |   | 10,242    |           |   |   | (11,311   | )      |   |         | (845    | ) |   |   | 10,543 |   |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Interest income                                                         |   |     | 4,935     |   |     |   | -         |           |   |   | 2         |   |   |         | 90      |   |   |   | 5,027 |   |
| Equity in net earnings (loss) of Optim Energy                           |   |     | -         |   |     |   | -         |           |   |   | -         |   |   |         | (4,352  | ) |   |   | (4,352 | ) |
| Other income (deductions)                                               |   |     | 11,157    |   |     |   | 346       |           |   |   | (8        | )      |   |         | (1,456  | ) |   |   | 10,039 |   |
| Interest charges                                                        |   |     | (18,077   | )      |     |   | (7,869    | )              |   |   | (311      | )      |   |         | (5,153  | ) |   |   | (31,410 | ) |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Segment earnings (loss) before income taxes                             |   |     | 10,472    |   |     |   | 2,719     |           |   |   | (11,628   | )      |   |         | (11,716 | ) |   |   | (10,153 | ) |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Income taxes (benefit)                                                  |   |     | 2,921     |   |     |   | 1,075     |           |   |   | (4,175    | )      |   |         | (4,760  | ) |   |   | (4,939 | ) |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Segment earnings (loss) from continuing operations                      |   |     | 7,551     |   |     |   | 1,644     |           |   |   | (7,453    | )      |   |         | (6,956  | ) |   |   | (5,214 | ) |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Valencia non-controlling interest                                       |   |     | (3,103    | )      |     |   | -         |           |   |   | -         |   |   |         | -       |   |   |   | (3,103 | ) |
| Subsidiary preferred stock dividends                                    |   |     | (132      | )      |     |   | -         |           |   |   | -         |   |   |         | -       |   |   |   | (132 | ) |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Segment earnings (loss) from continuing operations attributable to PNMR |   | $        | 4,316     |   |     | $      | 1,644     |           |   | $      | (7,453    | )      |   | $            | (6,956  | ) |   | $ | (8,449 | ) |
|                                                                    |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| At March 31, 2010:                                                      |   |     |      |   |     |   |      |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Total Assets                                                            |   | $        | 3,843,558 |   |     | $      | 1,006,747 |           |   | $      | 232,864   |   |   | $            | 377,221 |   |   | $ | 5,460,390 |   |
| Goodwill                                                                |   | $        | 51,632    |   |     | $      | 226,665   |           |   | $      | 43,013    |   |   | $            | -       |   |   | $ | 321,310 |   |

----

|                                                                    |   | PNM      |      |   | TNMP     |   |    | First          |   |   | Corporate |   |   |         |    |
|-------------------------------------------------------------------------|--------|----------|-----------|--------|----------|--------|---------|----------------|--------|--------|-----------|--------|--------|--------------|---------|
| Three Months Ended March 31, 2009                                       |   | Electric |      |   | Electric |   |    | Choice         |   |   | and Other |   |   | Consolidated |    |
|                                                                    |   |     |      |   |     |   |    | (In thousands) |   |   |      |   |   |         |    |
| Operating revenues                                                      |   | $        | 231,944   |   |     | $      | 31,922  |           |   | $      | 122,174   |   |   | $            | (175    | ) |   | $ | 385,865 |   |
| Intersegment revenues                                                   |   |     | 11        |   |     |   | 9,303   |           |   |   | -         |   |   |         | (9,314  | ) |   |   | - |   |
| Total revenues                                                          |   |     | 231,955   |   |     |   | 41,225  |           |   |   | 122,174   |   |   |         | (9,489  | ) |   |   | 385,865 |   |
| Cost of energy                                                          |   |     | 101,533   |   |     |   | 8,595   |           |   |   | 80,423    |   |   |         | (9,303  | ) |   |   | 181,248 |   |
| Gross margin                                                            |   |     | 130,422   |   |     |   | 32,630  |           |   |   | 41,751    |   |   |         | (186    | ) |   |   | 204,617 |   |
| Other operating expenses                                                |   |     | 97,508    |   |     |   | 17,947  |           |   |   | 29,332    |   |   |         | (6,144  | ) |   |   | 138,643 |   |
| Depreciation and amortization                                           |   |     | 22,428    |   |     |   | 8,598   |           |   |   | 518       |   |   |         | 4,527   |   |   |   | 36,071 |   |
| Operating income                                                        |   |     | 10,486    |   |     |   | 6,085   |           |   |   | 11,901    |   |   |         | 1,431   |   |   |   | 29,903 |   |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Interest income                                                         |   |     | 5,961     |   |     |   | -       |           |   |   | 35        |   |   |         | (773    | ) |   |   | 5,223 |   |
| Equity in net earnings of Optim Energy                                  |   |     | -         |   |     |   | -       |           |   |   | -         |   |   |         | 1,395   |   |   |   | 1,395 |   |
| Other income (deductions)                                               |   |     | (4,932    | )      |     |   | 392     |           |   |   | -         |   |   |         | 20,962  |   |   |   | 16,422 |   |
| Interest charges                                                        |   |     | (17,207   | )      |     |   | (4,095  | )              |   |   | (999      | )      |   |         | (6,648  | ) |   |   | (28,949 | ) |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Segment earnings (loss) before income taxes                             |   |     | (5,692    | )      |     |   | 2,382   |           |   |   | 10,937    |   |   |         | 16,367  |   |   |   | 23,994 |   |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Income taxes (benefit)                                                  |   |     | (3,348    | )      |     |   | 961     |           |   |   | 3,899     |   |   |         | 6,075   |   |   |   | 7,587 |   |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Segment earnings (loss) from continuing operations                      |   |     | (2,344    | )      |     |   | 1,421   |           |   |   | 7,038     |   |   |         | 10,292  |   |   |   | 16,407 |   |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Valencia non-controlling interest                                       |   |     | (2,579    | )      |     |   | -       |           |   |   | -         |   |   |         | -       |   |   |   | (2,579 | ) |
| Subsidiary preferred stock dividends                                    |   |     | (132      | )      |     |   | -       |           |   |   | -         |   |   |         | -       |   |   |   | (132 | ) |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Segment earnings (loss) from continuing operations attributable to PNMR |   | $        | (5,055    | )      |     | $      | 1,421   |           |   | $      | 7,038     |   |   | $            | 10,292  |   |   | $ | 13,696 |   |
|                                                                    |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| At March 31, 2009:                                                      |   |     |      |   |     |   |    |           |   |   |      |   |   |         |    |   |   |   |   |   |
| Total Assets                                                            |   | $        | 3,676,562 |   |     | $      | 971,998 |           |   | $      | 245,885   |   |   | $            | 383,117 |   |   | $ | 5,277,562 |   |
| Goodwill                                                                |   | $        | 51,632    |   |     | $      | 226,665 |           |   | $      | 43,013    |   |   | $            | -       |   |   | $ | 321,310 |   |

----

| (4)   | Energy Related Derivative Contracts and Fair Value Disclosures |
|-----------------|----------------------------------------------------------------|

----

----

|                              |   |            |    |   |                 |   |    | Qualified Cash |   |
|-----------------------------------|--------|-----------------|---------|--------|----------------------|--------|---------|----------------|--------|
|                              |   | Economic Hedges |    |   | Trading Transactions |   |    | Flow Hedges    |   |
|                              |   | March 31, 2010  |    |   | December 31, 2009    |   |    | March 31, 2010 |   |   | December 31, 2009 |   |   | March 31, 2010 |   |   | December 31, 2009 |   |
|                              |   |            |    |   | (In thousands)       |   |    |           |   |
| PNMR                              |   |            |    |   |                 |   |    |           |   |   |   |   |   |   |   |   |   |   |
| Current assets                    |   | $               | 24,219  |   |                 | $      | 15,728  |           |   | $ | 16,274 |   |   | $ | 13,889 |   |   | $ | 21,290 |   |   | $ | 21,002 |   |
| Deferred charges                  |   |            | 3,779   |   |                 |   | 2,413   |           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                              |   |            | 27,998  |   |                 |   | 18,141  |           |   |   | 16,274 |   |   |   | 13,889 |   |   |   | 21,290 |   |   |   | 21,002 |   |
|                              |   |            |    |   |                 |   |    |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities               |   |            | (44,618 | )      |                 |   | (11,375 | )              |   |   | (15,326 | ) |   |   | (12,650 | ) |   |   | - |   |   |   | - |   |
| Long-term liabilities             |   |            | (12,133 | )      |                 |   | (4,549  | )              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                              |   |            | (56,751 | )      |                 |   | (15,924 | )              |   |   | (15,326 | ) |   |   | (12,650 | ) |   |   | - |   |   |   | - |   |
|                              |   |            |    |   |                 |   |    |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                               |   | $               | (28,753 | )      |                 | $      | 2,217   |           |   | $ | 948 |   |   | $ | 1,239 |   |   | $ | 21,290 |   |   | $ | 21,002 |   |
|                              |   |            |    |   |                 |   |    |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PNM                               |   |            |    |   |                 |   |    |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets                    |   | $               | 3,678   |   |                 | $      | 3,496   |           |   | $ | - |   |   | $ | - |   |   | $ | 21,290 |   |   | $ | 21,002 |   |
| Deferred charges                  |   |            | -       |   |                 |   | -       |           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                              |   |            | 3,678   |   |                 |   | 3,496   |           |   |   | - |   |   |   | - |   |   |   | 21,290 |   |   |   | 21,002 |   |
|                              |   |            |    |   |                 |   |    |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities               |   |            | (6,393  | )      |                 |   | (1,509  | )              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Long-term liabilities             |   |            | (1,199  | )      |                 |   | (556    | )              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                              |   |            | (7,592  | )      |                 |   | (2,065  | )              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|      Net |   | $               | (3,914  | )      |                 | $      | 1,431   |           |   | $ | - |   |   | $ | - |   |   | $ | 21,290 |   |   | $ | 21,002 |   |

----

|                                |   | EconomicHedges              |    |   | TradingTransactions         |   |    | Qualified CashFlow Hedges   |   |
|-------------------------------------|--------|-----------------------------|---------|--------|-----------------------------|--------|---------|-----------------------------|--------|
|                                |   | Three Months EndedMarch 31, |    |   | Three Months EndedMarch 31, |   |    | Three Months EndedMarch 31, |   |
|                                |   | 2010                        |    |   | 2009                        |   |    | 2010                        |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                |   |                        |    |   |                        |   |    | (In thousands)              |   |   |   |   |   |   |   |
| PNMR                                |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   |   |
| Electric operating revenues         |   | $                           | (1,886  | )      |                        | $      | 3,804   |                        |   | $ | 3 |   |   | $ | (5 | ) |   | $ | 6,749 |   |   | $ | 9,676 |   |
| Cost of energy                      |   |                        | (31,949 | )      |                        |   | (14,065 | )                           |   |   | - |   |   |   | - |   |   |   | (477 | ) |   |   | (2,161 | ) |
|    Total gain (loss) |   | $                           | (33,835 | )      |                        | $      | (10,261 | )                           |   | $ | 3 |   |   | $ | (5 | ) |   | $ | 6,272 |   |   | $ | 7,515 |   |
|                                |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recognized in OCI                   |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   | $ | 765 |   |   | $ | (1,232 | ) |
|                                |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PNM                                 |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Electric operating revenues         |   | $                           | (1,886  | )      |                        | $      | 3,804   |                        |   | $ | - |   |   | $ | 61 |   |   | $ | 6,749 |   |   | $ | 9,676 |   |
| Cost of energy                      |   |                        | (3,625  | )      |                        |   | (11,783 | )                           |   |   | - |   |   |   | - |   |   |   | 55 |   |   |   | 46 |   |
|    Total gain (loss) |   | $                           | (5,511  | )      |                        | $      | (7,979  | )                           |   | $ | - |   |   | $ | 61 |   |   | $ | 6,804 |   |   | $ | 9,722 |   |
|                                |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recognized in OCI                   |   |                        |    |   |                        |   |    |                        |   |   |   |   |   |   |   |   |   | $ | 233 |   |   | $ | 9,119 |   |

|              |   | Decatherms     |       |   | MWh                 |   |
|-------------------|--------|----------------|------------|--------|---------------------|--------|
|              |   | EconomicHedges |       |   | TradingTransactions |   |   | Qualified Cash Flow Hedges |   |   | EconomicHedges |   |   | TradingTransactions |   |   | Qualified Cash Flow Hedges |   |
|              |   |           |       |   |                |   |   |   |   |
| March 31, 2010    |   |           |       |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PNMR              |   |           | 20,192,500 |   |                |   | (1,480,137 | ) |   |   | - |   |   |   | 2,056,226 |   |   |   | - |   |   |   | (594,090 | ) |
| PNM               |   |           | 4,580,000  |   |                |   | - |   |   |   | - |   |   |   | 321,275 |   |   |   | - |   |   |   | (594,090 | ) |
|              |   |           |       |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009 |   |           |       |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PNMR              |   |           | 17,852,500 |   |                |   | (1,963,293 | ) |   |   | - |   |   |   | 1,658,101 |   |   |   | - |   |   |   | (788,400 | ) |
| PNM               |   |           | 6,087,500  |   |                |   | - |   |   |   | - |   |   |   | 468,525 |   |   |   | - |   |   |   | (788,400 | ) |

----

| Contingent Feature –Credit Rating Downgrade |   | Contractual Liability |   |   | Existing Cash Collateral |   |   | Net Exposure |
|---------------------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|--------------|
|                                              |   | (In thousands)        |
| March 31, 2010                                    |   |                  |   |   |                     |   |   |         |
| PNMR                                              |   | $                     | 26,059 |   |                     | $      | -      |         |   | $ | 18,856 |   |
| PNM                                               |   | $                     | 303    |   |                     | $      | -      |         |   | $ | 276 |   |
|                                              |   |                  |   |   |                     |   |   |         |   |   |   |   |
| December 31, 2009                                 |   |                  |   |   |                     |   |   |         |   |   |   |   |
| PNMR                                              |   | $                     | 17,124 |   |                     | $      | 1,000  |         |   | $ | 14,104 |   |
| PNM                                               |   | $                     | 1,211  |   |                     | $      | 1,000  |         |   | $ | 37 |   |

----

|                                      |   | March 31, 2010 |   |   | December 31, 2009 |   |
|-------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                      |   | Unrealized Gains    |   |   | Fair Value        |   |   | Unrealized Gains |   |   | Fair Value |   |
|                                      |   |                |   |   | (In thousands)    |   |   |   |   |
| Equity securities:                        |   |                |   |   |              |   |   |   |   |   |   |   |
|    Domestic value          |   | $                   | 3,891  |   |              | $      | 22,939 |   |   | $ | 1,684 |   |   | $ | 21,458 |   |
|    Domestic growth         |   |                | 10,957 |   |              |   | 40,541 |   |   |   | 8,901 |   |   |   | 38,132 |   |
|    International and other |   |                | 2,164  |   |              |   | 9,845 |   |   |   | 1,558 |   |   |   | 9,985 |   |
| Fixed income securities:                  |   |                |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    Municipals              |   |                | 1,713  |   |              |   | 37,224 |   |   |   | 1,715 |   |   |   | 36,901 |   |
|    U.S. Government         |   |                | 120    |   |              |   | 20,448 |   |   |   | 25 |   |   |   | 20,451 |   |
|    Corporate and other     |   |                | 511    |   |              |   | 8,333 |   |   |   | 309 |   |   |   | 8,006 |   |
| Cash investments                          |   |                | -      |   |              |   | 1,907 |   |   |   | - |   |   |   | 2,099 |   |
|                                      |   | $                   | 19,356 |   |              | $      | 141,237 |   |   | $ | 14,192 |   |   | $ | 137,032 |   |

|                    |   | Three Months Ended March 31, 2010 |   |
|-------------------------|--------|-----------------------------------|--------|
|                    |   | (In thousands)                    |   |
|                    |   |                              |   |
|                    |   |                              |   |
| Proceeds from sales     |   | $                                 | 20,699 |   |
| Gross realized gains    |   | $                                 | 1,905  |   |
| Gross realized (losses) |   | $                                 | (1,362 | ) |

|                           |   | Fair Value         |   |
|--------------------------------|--------|--------------------|--------|
|                           |   | Available-for-Sale |   |   | Held-to-Maturity |   |
|                           |   | PNMR and PNM       |   |   | PNMR |   |   | PNM |   |
|                           |   | (In thousands)     |   |
| Within 1 year                  |   | $                  | 548    |   |   | $ | 35 |   |   | $ | 35 |   |
| After 1 year through 5 years   |   |               | 19,338 |   |   |   | 179,457 |   |   |   | 164,891 |   |
| After 5 years through 10 years |   |               | 8,109  |   |   |   | 4,473 |   |   |   | - |   |
| Over 10 years                  |   |               | 38,010 |   |   |   | - |   |   |   | - |   |
|                           |   | $                  | 66,005 |   |   | $ | 183,965 |   |   | $ | 164,926 |   |

----

|                             |   | March 31, 2010 |      |   | December 31, 2009 |   |
|----------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                             |   | CarryingAmount |      |   | Fair Value        |   |   | CarryingAmount |   |   | Fair Value |   |
|                             |   | (In thousands) |      |
| PNMR                             |   |           |      |   |              |   |   |   |   |   |   |   |
| Long-term debt                   |   | $              | 1,567,491 |   |              | $      | 1,643,491 |   |   | $ | 1,567,331 |   |   | $ | 1,627,986 |   |
| Investment in PVNGS lessor notes |   | $              | 152,805   |   |              | $      | 157,137 |   |   | $ | 159,936 |   |   | $ | 169,863 |   |
| Other investments                |   | $              | 24,645    |   |              | $      | 29,645 |   |   | $ | 25,528 |   |   | $ | 34,078 |   |
|                             |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| PNM                              |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt                   |   | $              | 1,055,736 |   |              | $      | 1,057,525 |   |   | $ | 1,055,733 |   |   | $ | 1,044,516 |   |
| Investment in PVNGS lessor notes |   | $              | 152,805   |   |              | $      | 157,137 |   |   | $ | 159,936 |   |   | $ | 169,863 |   |
| Other investments                |   | $              | 7,515     |   |              | $      | 8,597 |   |   | $ | 7,473 |   |   | $ | 8,457 |   |
|                             |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| TNMP                             |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt                   |   | $              | 309,868   |   |              | $      | 375,345 |   |   | $ | 309,712 |   |   | $ | 368,350 |   |
| Other investments                |   | $              | 270       |   |              | $      | 270 |   |   | $ | 270 |   |   | $ | 270 |   |

|   | Other Fair Value Disclosures |
|--------|------------------------------|

----

|                                                                              |   |     |    |   | Quoted Prices    |   |    | Significant |   |   |         |   |
|-----------------------------------------------------------------------------------|--------|----------|---------|--------|------------------|--------|---------|-------------|--------|--------|--------------|--------|
|                                                                              |   |     |    |   | in Active        |   |    | Other       |   |   | Significant  |   |
|                                                                              |   |     |    |   | Market for       |   |    | Observable  |   |   | Unobservable |   |
|                                                                              |   |     |    |   | Identical Assets |   |    | Inputs      |   |   | Inputs       |   |
|                                                                              |   | Total(1) |    |   | (Level 1)        |   |    | (Level 2)   |   |   | (Level 3)    |   |
| March 31, 2010                                                                    |   |     |    |   | (In thousands)   |   |    |        |   |
| PNMR and PNM                                                                      |   |     |    |   |             |   |    |        |   |   |         |   |
| NDT investments                                                                   |   |     |    |   |             |   |    |        |   |   |         |   |
|    Cash and equivalents                                            |   | $        | 1,907   |   |             | $      | 1,907   |        |   | $      | -            |   |   | $ | - |   |
|    Equity securities:                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
|      Domestic value                                      |   |     | 22,939  |   |             |   | 22,939  |        |   |   | -            |   |   |   | - |   |
|      Domestic growth                                     |   |     | 40,541  |   |             |   | 40,541  |        |   |   | -            |   |   |   | - |   |
|      International and other                             |   |     | 9,845   |   |             |   | 9,845   |        |   |   | -            |   |   |   | - |   |
|    Fixed income securities:                                        |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
|      U.S. government                                     |   |     | 20,448  |   |             |   | 15,244  |        |   |   | 5,204        |   |   |   | - |   |
|      Municipals                                          |   |     | 37,224  |   |             |   | -       |        |   |   | 37,224       |   |   |   | - |   |
|      Corporate and other                                 |   |     | 8,333   |   |             |   | 13      |        |   |   | 8,320        |   |   |   | - |   |
|           Total NDT investments |   | $        | 141,237 |   |             | $      | 90,489  |        |   | $      | 50,748       |   |   | $ | - |   |
|                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| PNMR                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| Commodity derivative assets                                                       |   | $        | 65,562  |   |             | $      | 19,144  |        |   | $      | 46,261       |   |   | $ | 469 |   |
| Commodity derivative liabilities                                                  |   |     | (72,077 | )      |             |   | (35,917 | )           |   |   | (36,088      | )      |   |   | (384 | ) |
|           Net                   |   | $        | (6,515  | )      |             | $      | (16,773 | )           |   | $      | 10,173       |   |   | $ | 85 |   |
|                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| PNM                                                                               |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| Commodity derivative assets                                                       |   | $        | 24,968  |   |             | $      | 840     |        |   | $      | 24,128       |   |   | $ | - |   |
| Commodity derivative liabilities                                                  |   |     | (7,592  | )      |             |   | (2,966  | )           |   |   | (4,626       | )      |   |   | - |   |
|           Net                   |   | $        | 17,376  |   |             | $      | (2,126  | )           |   | $      | 19,502       |   |   | $ | - |   |
|                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| December 31, 2009                                                                 |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| PNMR and PNM                                                                      |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| NDT investments                                                                   |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
|    Cash and equivalents                                            |   | $        | 2,099   |   |             | $      | 2,099   |        |   | $      | -            |   |   | $ | - |   |
|    Equity securities:                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
|      Domestic value                                      |   |     | 21,458  |   |             |   | 21,458  |        |   |   | -            |   |   |   | - |   |
|      Domestic growth                                     |   |     | 38,132  |   |             |   | 38,132  |        |   |   | -            |   |   |   | - |   |
|      International and other                             |   |     | 9,985   |   |             |   | 9,985   |        |   |   | -            |   |   |   | - |   |
|    Fixed income securities:                                        |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
|      U.S. government                                     |   |     | 20,451  |   |             |   | 15,135  |        |   |   | 5,316        |   |   |   | - |   |
|      Municipals                                          |   |     | 36,901  |   |             |   | -       |        |   |   | 36,901       |   |   |   | - |   |
|      Corporate and other                                 |   |     | 8,006   |   |             |   | -       |        |   |   | 8,006        |   |   |   | - |   |
|           Total NDT investments |   | $        | 137,032 |   |             | $      | 86,809  |        |   | $      | 50,223       |   |   | $ | - |   |
|                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| PNMR                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| Commodity derivative assets                                                       |   | $        | 53,032  |   |             | $      | 9,097   |        |   | $      | 43,510       |   |   | $ | 320 |   |
| Commodity derivative liabilities                                                  |   |     | (28,574 | )      |             |   | (10,534 | )           |   |   | (17,863      | )      |   |   | (72 | ) |
|           Net                   |   | $        | 24,458  |   |             | $      | (1,437  | )           |   | $      | 25,647       |   |   | $ | 248 |   |
|                                                                              |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| PNM                                                                               |   |     |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| Commodity derivative assets                                                       |   | $        | 24,498  |   |             | $      | -       |        |   | $      | 24,498       |   |   | $ | - |   |
| Commodity derivative liabilities                                                  |   |     | (2,065  | )      |             |   | (958    | )           |   |   | (1,090       | )      |   |   | (17 | ) |
|           Net                   |   | $        | 22,433  |   |             | $      | (958    | )           |   | $      | 23,408       |   |   | $ | (17 | ) |

----

|   |    (1)  The Level 1, 2 and 3 columns in the above table are presented based on the nature of each instrument.  The total column is presented based on the balance sheet classification of the instruments and reflect unit of account reclassifications between commodity derivative assets and commodity derivative liabilities of $0.3 million for PNMR and zero for PNM at March 31, 2010 and $0.1 million for PNMR and zero for PNM at December 31, 2009.  There were no transfers between levels during the three months ended March 31, 2010. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                      |   | PNMR                        |   |   | PNM                         |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                                                                                                                                                      |   | Three Months EndedMarch 31, |   |   | Three Months EndedMarch 31, |   |
|                                                                                                                                                      |   | 2010                        |   |   | 2009                        |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                                      |   |                        |   |   | (In thousands)              |   |   |   |   |
| Balance at beginning of period                                                                                                                            |   | $                           | 248    |   |                        | $      | (409 | ) |   | $ | (17 | ) |   | $ | (409 | ) |
| Total gains (losses) included in earnings                                                                                                                 |   |                        | (377   | )      |                        |   | (2,088 | ) |   |   | (128 | ) |   |   | (2,088 | ) |
| Total gains (losses) included in other comprehensive income                                                                                               |   |                        | -      |   |                        |   | (413 | ) |   |   | - |   |   |   | - |   |
| Purchases, issuances, and settlements(1)                                                                                                                  |   |                        | 214    |   |                        |   | 699 |   |   |   | 145 |   |   |   | 632 |   |
| Balance at end of period                                                                                                                                  |   | $                           | 85     |   |                        | $      | (2,211 | ) |   | $ | - |   |   | $ | (1,865 | ) |
|                                                                                                                                                      |   |                        |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Total gains (losses) included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the end of the period |   | $                           | (180   | )      |                        | $      | (1,522 | ) |   | $ | - |   |   | $ | (1,522 | ) |

| (1)   | Includes fair value reversal of contracts settled, unearned and prepaid option premiums received and paid during the period for contracts still held at end of period. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                     |   | PNMR                        |   |   | PNM                         |   |
|------------------------------------------------------------------------------------------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                                                                                     |   | Three Months EndedMarch 31, |   |   | Three Months EndedMarch 31, |   |
|                                                                                     |   | 2010                        |   |   | 2009                        |   |   | 2010 |   |   | 2009 |   |
|                                                                                     |   |                        |   |   | (In thousands)              |   |   |   |   |
| Gains (losses) included in earnings:                                                     |   |                        |   |   |                        |   |   |   |   |   |   |   |
|    Electric operating revenues                                            |   | $                           | -      |   |                        | $      | 159 |   |   | $ | - |   |   | $ | 159 |   |
|    Cost of energy                                                         |   |                        | (377   | )      |                        |   | (2,247 | ) |   |   | (128 | ) |   |   | (2,247 | ) |
|       Total                                                |   | $                           | (377   | )      |                        | $      | (2,088 | ) |   | $ | (128 | ) |   | $ | (2,088 | ) |
|                                                                                     |   |                        |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Change in unrealized gains or losses related to assets still held at the reporting date: |   |                        |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|    Electric operating revenues                                            |   | $                           | -      |   |                        | $      | 123 |   |   | $ | - |   |   | $ | 123 |   |
|    Cost of energy                                                         |   |                        | (180   | )      |                        |   | (1,645 | ) |   |   | - |   |   |   | (1,645 | ) |
|       Total                                                |   | $                           | (180   | )      |                        | $      | (1,522 | ) |   | $ | - |   |   | $ | (1,522 | ) |

----

| (5)   | Earnings Per Share |
|-----------------|--------------------|

|                                                                                  |   | Three Months EndedMarch 31,             |   |
|---------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                                  |   | 2010                                    |   |   | 2009 |   |
|                                                                                  |   | (In thousands, exceptper share amounts) |   |
| Earnings (Loss) Attributable to PNMR:                                                 |   |                                    |   |   |   |   |
| Earnings (loss) from continuing operations                                            |   | $                                       | (5,214 | ) |   | $ | 16,407 |   |
| Earnings from continuing operations attributable to Valencia Non-controlling Interest |   |                                    | (3,103 | ) |   |   | (2,579 | ) |
| Preferred stock dividend requirements of subsidiary                                   |   |                                    | (132   | ) |   |   | (132 | ) |
| Earnings from continuing operations attributable toPNMR                               |   |                                    | (8,449 | ) |   |   | 13,696 |   |
| Earnings from discontinued operations                                                 |   |                                    | -      |   |   |   | 75,853 |   |
| Net Earnings (Loss) Attributable to PNMR                                              |   | $                                       | (8,449 | ) |   | $ | 89,549 |   |
|                                                                                  |   |                                    |   |   |   |   |   |   |
| Average Number of Common Shares:                                                      |   |                                    |   |   |   |   |   |   |
| Outstanding during period                                                             |   |                                    | 86,673 |   |   |   | 86,554 |   |
| Equivalents from convertible preferred stock (Note 7)                                 |   |                                    | 4,778  |   |   |   | 4,778 |   |
|     Vested awards of restricted stock                             |   |                                    | 95     |   |   |   | - |   |
| Average Shares - Basic                                                                |   |                                    | 91,546 |   |   |   | 91,332 |   |
| Dilutive Effect of Common Stock Equivalents (a):                                      |   |                                    |   |   |   |   |   |   |
| Stock options and restricted stock                                                    |   |                                    | -      |   |   |   | 108 |   |
| Average Shares - Diluted                                                              |   |                                    | 91,546 |   |   |   | 91,440 |   |
|                                                                                  |   |                                    |   |   |   |   |   |   |
| Per Share of Common Stock – Basic:                                              |   |                                    |   |   |   |   |   |   |
| Earnings (loss) from continuing operations                                            |   | $                                       | (0.09  | ) |   | $ | 0.15 |   |
| Earnings from discontinued operations                                                 |   |                                    | -      |   |   |   | 0.83 |   |
| Net Earnings (Loss)                                                                   |   | $                                       | (0.09  | ) |   | $ | 0.98 |   |
|                                                                                  |   |                                    |   |   |   |   |   |   |
| Per Share of Common Stock – Diluted:                                            |   |                                    |   |   |   |   |   |   |
| Earnings (loss) from continuing operations                                            |   | $                                       | (0.09  | ) |   | $ | 0.15 |   |
| Earnings from discontinued operations                                                 |   |                                    | -      |   |   |   | 0.83 |   |
| Net Earnings (Loss)                                                                   |   | $                                       | (0.09  | ) |   | $ | 0.98 |   |

| (a)   | Due to losses in the three months ended March 31, 2010, no potentially dilutive securities are reflected in the average number of common shares used to compute earnings (loss) per share since any impact would be anti-dilutive.  At March 31, 2010, PNMR’s potentially dilutive securities consist of all options and non-vested restricted stock awards (see Note 6). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (6)   | Stock-Based Compensation |
|-----------------|--------------------------|

|                               |   |   |      |   |      |   |   |      |   |   |          |   |
|------------------------------------|--------|--------|-----------|--------|-----------|--------|--------|-----------|--------|--------|---------------|--------|
|                               |   |   |      |   | Weighted- |   |   |      |   |   | Weighted-     |   |
|                               |   |   |      |   | Average   |   |   | Aggregate |   |   | Average       |   |
|                               |   |   |      |   | Exercise  |   |   | Intrinsic |   |   | Remaining     |   |
|                               |   | Shares |      |   | Price     |   |   | Value     |   |   | Contract Life |   |
|                               |   |   |      |   |      |   |   |      |   |   |          |   |
| Outstanding at beginning of period |   |   | 4,274,019 |   |      | $      | 19.19  |      |   |   |          |   |   |   |
| Granted                            |   |   | 609,708   |   |      | $      | 12.23  |      |   |   |          |   |   |   |
| Exercised                          |   |   | (44,590   | )      |      | $      | 9.22   |      |   |   |          |   |   |   |
| Forfeited                          |   |   | (4,005    | )      |      | $      | 10.12  |      |   |   |          |   |   |   |
|     Expired    |   |   | (47,745   | )      |      | $      | 21.84  |      |   |   |          |   |   |   |
|                               |   |   |      |   |      |   |   |      |   |   |          |   |   |   |
| Outstanding at end of period       |   |   | 4,787,387 |   |      | $      | 18.38  |      |   | $      | 3,862,672     |   |   |   | 6.24 years |   |
|                               |   |   |      |   |      |   |   |      |   |   |          |   |   |   |   |   |
| Exercisable at end of period       |   |   | 3,638,740 |   |      | $      | 24.18  |      |   | $      | 1,765,637     |   |   |   | 5.29 years |   |
|                               |   |   |      |   |      |   |   |      |   |   |          |   |   |   |   |   |
| Available for future grant*        |   |   | 4,626,416 |   |      |   |   |      |   |   |          |   |   |   |   |   |

|                                                         |   | Three Months EndedMarch 31,             |   |
|--------------------------------------------------------------|--------|-----------------------------------------|--------|
| Options for PNMR Common Stock                                |   | 2010                                    |   |   | 2009 |   |
|                                                         |   | (In thousands,except per share amounts) |   |
|                                                         |   |                                    |   |   |   |   |
| Weighted-average grant date fair value of options granted    |   | $                                       | 3.05   |   |   | $ | 1.62 |   |
| Total intrinsic value of options exercised during the period |   | $                                       | 159    |   |   | $ | - |   |

| Dividend yield           |   |   | 4.09  | %      |
|--------------------------|--------|--------|-------|--------|
| Expected volatility      |   |   | 41.55 | %      |
| Risk-free interest rates |   |   | 1.36  | %      |
| Expected life (years)    |   |   | 4.62  |   |

----

|                             |   |   |    |   | Weighted-  |   |
|----------------------------------|--------|--------|---------|--------|------------|--------|
|                             |   |   |    |   | Average    |   |
| Nonvested Restricted             |   |   |    |   | Grant-Date |   |
| PNMR Common Stock                |   | Shares |    |   | Fair Value |   |
|                             |   |   |    |   |       |   |
| Nonvested at beginning of period |   |   | 193,941 |   |       | $      | 11.62 |   |
| Granted                          |   |   | 122,375 |   |       | $      | 8.68 |   |
| Vested                           |   |   | (59,282 | )      |       | $      | 15.12 |   |
| Forfeited                        |   |   | -       |   |       | $      | - |   |
|                             |   |   |    |   |       |   |   |   |
| Nonvested at end of period       |   |   | 257,034 |   |       | $      | 9.41 |   |

| (7)   | Capitalization |
|-----------------|----------------|

----

|                                   |   | March 31,      |    |   | December 31, |   |
|----------------------------------------|--------|----------------|---------|--------|--------------|--------|
| Short-term Debt                        |   | 2010           |    |   | 2009         |   |
|                                   |   | (In thousands) |    |
|                                   |   |           |    |   |         |   |
| PNM                                    |   |           |    |   |         |   |
| Revolving credit facility              |   | $              | 178,000 |   |         | $      | 118,000 |   |
| Local lines of credit                  |   |           | -       |   |         |   | - |   |
|                                   |   |           | 178,000 |   |         |   | 118,000 |   |
| TNMP – Revolving credit facility |   |           | -       |   |         |   | - |   |
| PNMR                                   |   |           |    |   |         |   |   |   |
| Revolving credit facility              |   |           | 109,973 |   |         |   | 80,000 |   |
| Local lines of credit                  |   |           | -       |   |         |   | - |   |
|                                   |   |           |    |   |         |   |   |   |
|                                   |   | $              | 287,973 |   |         | $      | 198,000 |   |

----

| (8)   | Pension and Other Postretirement Benefit Plans |
|-----------------|------------------------------------------------|

----

|                               |   | Three Months Ended March 31, |   |
|------------------------------------|--------|------------------------------|--------|
|                               |   | Pension Plan                 |   |   | Other Postretirement Benefits |   |   | Executive Retirement Program |   |
|                               |   | 2010                         |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                               |   |                         |   |   |   |   |   | (In thousands) |   |   |   |   |   |   |   |
| Components of Net Periodic         |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Benefit Cost (Income)              |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                       |   | $                            | -      |   |   | $ | - |   |   | $ | 105 |   |   | $ | 104 |   |   | $ | - |   |   | $ | 15 |   |
| Interest cost                      |   |                         | 8,518  |   |   |   | 8,610 |   |   |   | 1,913 |   |   |   | 1,847 |   |   |   | 263 |   |   |   | 284 |   |
| Long-term return on plan assets    |   |                         | (9,339 | ) |   |   | (9,691 | ) |   |   | (1,393 | ) |   |   | (1,458 | ) |   |   | - |   |   |   | - |   |
| Amortization of net loss           |   |                         | 1,613  |   |   |   | 955 |   |   |   | 1,372 |   |   |   | 822 |   |   |   | 18 |   |   |   | 7 |   |
| Amortization of prior service cost |   |                         | 79     |   |   |   | 79 |   |   |   | (1,036 | ) |   |   | (1,065 | ) |   |   | - |   |   |   | 3 |   |
| Net periodic benefit cost (income) |   | $                            | 871    |   |   | $ | (47 | ) |   | $ | 961 |   |   | $ | 250 |   |   | $ | 281 |   |   | $ | 309 |   |

----

|                               |   | Three Months Ended March 31, |   |
|------------------------------------|--------|------------------------------|--------|
|                               |   | Pension Plan                 |   |   | Other Postretirement Benefits |   |   | Executive Retirement Program |   |
|                               |   | 2010                         |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                               |   |                         |   |   |   |   |   | (In thousands) |   |   |   |   |   |   |   |
| Components of Net Periodic         |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Benefit Cost (Income)              |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                       |   | $                            | -      |   |   | $ | - |   |   | $ | 72 |   |   | $ | 65 |   |   | $ | - |   |   | $ | - |   |
| Interest cost                      |   |                         | 1,032  |   |   |   | 1,099 |   |   |   | 178 |   |   |   | 183 |   |   |   | 13 |   |   |   | 19 |   |
| Long-term return on plan assets    |   |                         | (1,449 | ) |   |   | (1,523 | ) |   |   | (129 | ) |   |   | (124 | ) |   |   | - |   |   |   | - |   |
| Amortization of net gain           |   |                         | -      |   |   |   | - |   |   |   | (49 | ) |   |   | (66 | ) |   |   | (1 | ) |   |   | - |   |
| Amortization of prior service cost |   |                         | -      |   |   |   | - |   |   |   | 15 |   |   |   | 15 |   |   |   | - |   |   |   | - |   |
| Net Periodic Benefit Cost (Income) |   | $                            | (417   | ) |   | $ | (424 | ) |   | $ | 87 |   |   | $ | 73 |   |   | $ | 12 |   |   | $ | 19 |   |

| (9)   | Commitments and Contingencies |
|-----------------|-------------------------------|

----

----

----

----

----

----

----

----

----

----

| (10)   | Regulatory and Rate Matters |
|------------------|-----------------------------|

----

----

----

----

----

|                                                  |   | Three Months Ended March 31, |    |
|-------------------------------------------------------|--------|------------------------------|---------|
|                                                  |   | 2010                         |    |   | 2009 |   |
|                                                  |   | (In thousands)               |    |
|                                                  |   |                         |    |   |   |   |
| Operating revenues                                    |   | $                            | 105,593 |   |   | $ | 78,397 |   |
| Cost of sales                                         |   |                         | 77,297  |   |   |   | 45,185 |   |
|  Gross margin                                    |   |                         | 28,296  |   |   |   | 33,212 |   |
| Non-fuel operations and maintenance expenses          |   |                         | 10,520  |   |   |   | 8,598 |   |
| Administrative and general expenses                   |   |                         | 5,612   |   |   |   | 7,925 |   |
| Depreciation and amortization expense                 |   |                         | 12,057  |   |   |   | 7,659 |   |
| Taxes other than income tax                           |   |                         | 3,433   |   |   |   | 3,329 |   |
|      Operating income (loss) |   |                         | (3,326  | ) |   |   | 5,701 |   |
| Interest charges                                      |   |                         | (4,671  | ) |   |   | (2,480 | ) |
| Other income (deductions)                             |   |                         | 65      |   |   |   | 57 |   |
| Earnings (loss) before income taxes                   |   |                         | (7,932  | ) |   |   | 3,278 |   |
| Income taxes (benefit)(1)                             |   |                         | 32      |   |   |   | 162 |   |
| Net earnings (loss)                                   |   | $                            | (7,964  | ) |   | $ | 3,116 |   |
|                                                  |   |                         |    |   |   |   |   |   |
| 50 percent of net earnings (loss)                     |   | $                            | (3,982  | ) |   | $ | 1,558 |   |
| Amortization of basis difference in Optim Energy      |   |                         | (370    | ) |   |   | (163 | ) |
| PNMR equity in net earnings (loss) of Optim Energy    |   | $                            | (4,352  | ) |   | $ | 1,395 |   |

----

|                                              |   | March 31,      |      |   | December 31, |   |
|---------------------------------------------------|--------|----------------|-----------|--------|--------------|--------|
|                                              |   | 2010           |      |   | 2009         |   |
|                                              |   | (In thousands) |      |
|                                              |   |           |      |   |         |   |
| Current assets                                    |   | $              | 136,702   |   |         | $      | 128,619 |   |
| Net property plant and equipment                  |   |           | 946,423   |   |         |   | 951,757 |   |
| Other long-term assets                            |   |           | 132,723   |   |         |   | 137,384 |   |
| Total assets                                      |   |           | 1,215,848 |   |         |   | 1,217,760 |   |
|                                              |   |           |      |   |         |   |   |   |
| Current liabilities                               |   |           | 58,293    |   |         |   | 66,190 |   |
| Long-term debt                                    |   |           | 765,000   |   |         |   | 755,000 |   |
| Other long-term liabilities                       |   |           | 5,807     |   |         |   | 5,710 |   |
| Total liabilities                                 |   |           | 829,100   |   |         |   | 826,900 |   |
|                                              |   |           |      |   |         |   |   |   |
| Owners’ equity                              |   | $              | 386,748   |   |         | $      | 390,860 |   |
|                                              |   |           |      |   |         |   |   |   |
| 50 percent of owners’ equity                |   | $              | 193,374   |   |         | $      | 195,430 |   |
| Unamortized PNMR basis difference in Optim Energy |   |           | 215       |   |         |   | 236 |   |
| PNMR equity investment in Optim Energy            |   | $              | 193,589   |   |         | $      | 195,666 |   |

----

|                                                                  |   | Three Months Ended |   |
|-----------------------------------------------------------------------|--------|--------------------|--------|
|                                                                  |   | March 31,          |   |
|                                                                  |   | 2010               |   |   | 2009 |   |
|                                                                  |   | (In thousands)     |   |
|                                                                  |   |               |   |   |   |   |
| Electricity, transmission and distribution related services billings: |   |               |   |   |   |   |
| TNMP to PNMR                                                          |   | $                  | 9,586  |   |   | $ | 9,303 |   |
|                                                                  |   |               |   |   |   |   |   |   |
| Services billings:                                                    |   |               |   |   |   |   |   |   |
| PNMR to PNM*                                                          |   |               | 21,662 |   |   |   | 17,028 |   |
| PNMR to TNMP                                                          |   |               | 6,488  |   |   |   | 5,284 |   |
| PNM to TNMP                                                           |   |               | 100    |   |   |   | 133 |   |
| TNMP to PNMR                                                          |   |               | 121    |   |   |   | 248 |   |
| PNMR to Optim Energy                                                  |   |               | 1,438  |   |   |   | 1,489 |   |
| Optim Energy to PNMR                                                  |   |               | 18     |   |   |   | 128 |   |
|                                                                  |   |               |   |   |   |   |   |   |
| Income tax sharing payments:                                          |   |               |   |   |   |   |   |   |
| PNMR to PNM                                                           |   |               | -      |   |   |   | - |   |
| PNMR to TNMP                                                          |   |               | -      |   |   |   | - |   |
|                                                                  |   |               |   |   |   |   |   |   |
| Interest payments:                                                    |   |               |   |   |   |   |   |   |
| TNMP to PNMR                                                          |   |               | 83     |   |   |   | 430 |   |

----

| (13)   | New Accounting Pronouncements |
|------------------|-------------------------------|

|                                 |   | Three Months Ended |    |
|--------------------------------------|--------|--------------------|---------|
|                                 |   | March 31, 2009     |    |
|                                 |   | (In thousands)     |    |
| Operating revenues                   |   | $                  | 65,696  |   |
| Cost of energy                       |   |               | 44,698  |   |
| Gross margin                         |   |               | 20,998  |   |
| Operating expenses                   |   |               | 5,817   |   |
| Depreciation and amortization        |   |               | -       |   |
| Operating income                     |   |               | 15,181  |   |
| Other income (deductions)            |   |               | 292     |   |
| Interest charges                     |   |               | (962    | ) |
| Gain on disposal                     |   |               | 101,369 |   |
| Segment earnings before income taxes |   |               | 115,880 |   |
| Income taxes                         |   |               | 40,027  |   |
| Segment earnings                     |   | $                  | 75,853  |   |

----

----

|                                                                |   | Three Months Ended |   |
|---------------------------------------------------------------------|--------|--------------------|--------|
|                                                                |   | March 31,          |   |
|                                                                |   | 2010               |   |   | 2009 |   |
|                                                                |   | (In thousands)     |   |
|                                                                |   |               |   |   |   |   |
| Operating revenues                                                  |   | $                  | 4,502  |   |   | $ | 4,058 |   |
| Operating expenses                                                  |   |               | (1,399 | ) |   |   | (1,479 | ) |
|    Earnings attributable to non-controlling interest |   | $                  | 3,103  |   |   | $ | 2,579 |   |

|                                                  |   | March 31,      |   |   | December 31, |   |
|-------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|
|                                                  |   | 2010           |   |   | 2009         |   |
|                                                  |   | (In thousands) |   |
|                                                  |   |           |   |   |         |   |
| Current assets                                        |   | $              | 4,257  |   |         | $      | 3,981 |   |
| Net property, plant and equipment                     |   |           | 85,736 |   |         |   | 86,349 |   |
|    Total assets                        |   |           | 89,993 |   |         |   | 90,330 |   |
| Current liabilities                                   |   |           | 663    |   |         |   | 971 |   |
| Owners’ equity – non-controlling interest |   | $              | 89,330 |   |         | $      | 89,359 |   |

|                                                |   | Three Months Ended |   |
|-----------------------------------------------------|--------|--------------------|--------|
|                                                |   | March 31, 2010     |   |
|                                                |   | (In thousands)     |   |
|                                                |   |               |   |
| Balance at beginning of period                      |   | $                  | 89,359 |   |
| Earnings attributable to non-controlling interest   |   |               | 3,103  |   |
| Net equity transactions with Valencia’s owner |   |               | (3,132 | ) |
| Balance at end of period                            |   | $                  | 89,330 |   |

----

----

----

----

----

|                                                         |   | Three Months Ended March 31,            |   |
|--------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                         |   | 2010                                    |   |   | 2009 |   |   | Change |   |
|                                                         |   | (In millions, except per share amounts) |   |
| Earnings (loss) from continuing operations                   |   | $                                       | (8.4   | ) |   | $ | 13.7 |   |   | $ | (22.1 | ) |
| Earnings from discontinued operations, net of income taxes   |   |                                    | -      |   |   |   | 75.9 |   |   |   | (75.9 | ) |
| Net earnings (loss)                                          |   | $                                       | (8.4   | ) |   | $ | 89.5 |   |   | $ | (97.9 | ) |
| Average common and common equivalent shares outstanding      |   |                                    | 91.5   |   |   |   | 91.4 |   |   |   | 0.1 |   |
| Earnings (loss) from continuing operations per diluted share |   | $                                       | (0.09  | ) |   | $ | 0.15 |   |   | $ | (0.24 | ) |
| Net earnings (loss) per diluted share                        |   | $                                       | (0.09  | ) |   | $ | 0.98 |   |   | $ | (1.07 | ) |

| PNM Electric        |   | $      | 9.4   |   |
|---------------------|--------|--------|-------|--------|
| TNMP Electric       |   |   | 0.2   |   |
| First Choice        |   |   | (14.5 | )      |
| Corporate and Other |   |   | (13.7 | )      |
| Optim Energy        |   |   | (3.5  | )      |
| Net change          |   | $      | (22.1 | )      |

----

|                                                              |   | Three Months Ended March 31, |   |
|-------------------------------------------------------------------|--------|------------------------------|--------|
|                                                              |   | 2010                         |   |   | 2009 |   |   | Change |   |
|                                                              |   | (In millions)                |   |
| Total revenues                                                    |   | $                            | 230.5  |   |   | $ | 232.0 |   |   | $ | (1.5 | ) |
| Cost of energy                                                    |   |                         | 86.4   |   |   |   | 101.5 |   |   |   | (15.1 | ) |
|      Gross margin                        |   |                         | 144.1  |   |   |   | 130.4 |   |   |   | 13.6 |   |
| Operating expenses                                                |   |                         | 108.8  |   |   |   | 97.5 |   |   |   | 11.3 |   |
| Depreciation and amortization                                     |   |                         | 22.9   |   |   |   | 22.4 |   |   |   | 0.4 |   |
|      Operating income                    |   |                         | 12.5   |   |   |   | 10.5 |   |   |   | 2.0 |   |
| Other income (deductions)                                         |   |                         | 16.1   |   |   |   | 1.0 |   |   |   | 15.1 |   |
| Interest charges                                                  |   |                         | (18.1  | ) |   |   | (17.2 | ) |   |   | (0.9 | ) |
|      Earnings (loss) before income taxes |   |                         | 10.5   |   |   |   | (5.7 | ) |   |   | 16.2 |   |
| Income (taxes) benefit                                            |   |                         | (2.9   | ) |   |   | 3.3 |   |   |   | (6.3 | ) |
| Valencia non-controlling interest                                 |   |                         | (3.1   | ) |   |   | (2.6 | ) |   |   | (0.5 | ) |
| Preferred stock dividend requirements                             |   |                         | (0.1   | ) |   |   | (0.1 | ) |   |   | - |   |
| Segment earnings (loss)                                           |   | $                            | 4.3    |   |   | $ | (5.1 | ) |   | $ | 9.4 |   |

|                               |   | 2010/2009 Change |   |
|------------------------------------|--------|------------------|--------|
|                               |   | Total            |   |   | Cost of |   |   | Gross |   |
|                               |   | Revenues         |   |   | Energy |   |   | Margin |   |
|                               |   |             |   | (In millions) |   |   |   |
| Retail rate increases              |   | $                | 10.6   |   |   | $ | 6.6 |   |   | $ | 4.0 |   |
| Retail load, fuel and transmission |   |             | (4.0   | ) |   |   | (9.1 | ) |   |   | 5.1 |   |
| Unregulated margins                |   |             | (3.2   | ) |   |   | (6.7 | ) |   |   | 3.5 |   |
| Net unrealized economic hedges     |   |             | (4.9   | ) |   |   | (5.5 | ) |   |   | 0.6 |   |
| Consolidation of Valencia PPA      |   |             | -      |   |   |   | (0.4 | ) |   |   | 0.4 |   |
| Total increase (decrease)          |   | $                | (1.5   | ) |   | $ | (15.1 | ) |   | $ | 13.6 |   |

|                                 |   | Three Months Ended March 31,    |   |
|--------------------------------------|--------|---------------------------------|--------|
|                                 |   | 2010                            |   |   | 2009 |   |   | Change |   |
|                                 |   | (In millions, except customers) |   |
| Residential                          |   | $                               | 84.4   |   |   | $ | 73.7 |   |   | $ | 10.7 |   |
| Commercial                           |   |                            | 72.9   |   |   |   | 70.0 |   |   |   | 2.9 |   |
| Industrial                           |   |                            | 20.3   |   |   |   | 19.0 |   |   |   | 1.3 |   |
| Public authority                     |   |                            | 4.4    |   |   |   | 4.4 |   |   |   | - |   |
| Other retail                         |   |                            | 2.1    |   |   |   | 2.9 |   |   |   | (0.8 | ) |
| Transmission                         |   |                            | 9.7    |   |   |   | 7.7 |   |   |   | 2.0 |   |
| Firm requirements wholesale          |   |                            | 8.2    |   |   |   | 7.6 |   |   |   | 0.6 |   |
| Other sales for resale               |   |                            | 30.6   |   |   |   | 43.5 |   |   |   | (12.9 | ) |
| Mark-to-market activity              |   |                            | (2.1   | ) |   |   | 3.2 |   |   |   | (5.3 | ) |
|                                 |   | $                               | 230.5  |   |   | $ | 232.0 |   |   | $ | (1.5 | ) |
| Average retail customers (thousands) |   |                            | 501.0  |   |   |   | 497.9 |   |   |   | 3.1 |   |

----

|                        |   | Three Months Ended March 31, |    |
|-----------------------------|--------|------------------------------|---------|
|                        |   | 2010                         |    |   | 2009 |   |   | Change |   |
|                        |   | (Gigawatt hours)             |    |
| Residential                 |   |                         | 858.4   |   |   |   | 795.7 |   |   |   | 62.7 |   |
| Commercial                  |   |                         | 881.2   |   |   |   | 855.6 |   |   |   | 25.6 |   |
| Industrial                  |   |                         | 349.8   |   |   |   | 355.2 |   |   |   | (5.4 | ) |
| Public authority            |   |                         | 54.2    |   |   |   | 51.7 |   |   |   | 2.5 |   |
| Firm requirements wholesale |   |                         | 177.2   |   |   |   | 183.6 |   |   |   | (6.4 | ) |
| Other sales for resale      |   |                         | 541.2   |   |   |   | 1,060.1 |   |   |   | (518.9 | ) |
|                        |   |                         | 2,862.0 |   |   |   | 3,301.9 |   |   |   | (439.9 | ) |

----

|                          |   |
|-------------------------------|--------|
|                          |   | Three Months Ended March 31, |   |
|                          |   | 2010 |   |   | 2009 |   |   | Change |   |
|                          |   | (In millions) |   |
| Total revenues                |   | $ | 48.2 |   |   | $ | 41.2 |   |   | $ | 7.0 |   |
| Cost of energy                |   |   | 9.1 |   |   |   | 8.6 |   |   |   | 0.5 |   |
| Gross margin                  |   |   | 39.1 |   |   |   | 32.6 |   |   |   | 6.5 |   |
| Operating expenses            |   |   | 18.8 |   |   |   | 17.9 |   |   |   | 0.8 |   |
| Depreciation and amortization |   |   | 10.1 |   |   |   | 8.6 |   |   |   | 1.5 |   |
| Operating income              |   |   | 10.2 |   |   |   | 6.1 |   |   |   | 4.2 |   |
| Other income (deductions)     |   |   | 0.3 |   |   |   | 0.4 |   |   |   | (0.0 | ) |
| Interest charges              |   |   | (7.9 | ) |   |   | (4.1 | ) |   |   | (3.8 | ) |
| Earnings before income taxes  |   |   | 2.7 |   |   |   | 2.4 |   |   |   | 0.3 |   |
| Income (taxes)                |   |   | (1.1 | ) |   |   | (1.0 | ) |   |   | (0.1 | ) |
| Segment earnings              |   | $ | 1.6 |   |   | $ | 1.4 |   |   | $ | 0.2 |   |

|                      |   | 2010/2009 Change |   |
|---------------------------|--------|------------------|--------|
|                      |   | Total            |   |   | Cost of |   |   | Gross |   |
|                      |   | Revenues         |   |   | Energy |   |   | Margin |   |
|                      |   | (In millions)    |   |
| Rate increases            |   | $                | 1.3    |   |   | $ | - |   |   | $ | 1.3 |   |
| Customer usage/load       |   |             | 3.2    |   |   |   | - |   |   |   | 3.2 |   |
| Other                     |   |             | 2.5    |   |   |   | 0.5 |   |   |   | 2.0 |   |
| Total increase (decrease) |   | $                | 7.0    |   |   | $ | 0.5 |   |   | $ | 6.5 |   |

|                              |   | Three Months Ended March 31,    |   |
|-----------------------------------|--------|---------------------------------|--------|
|                              |   | 2010                            |   |   | 2009 |   |   | Change |   |
|                              |   | (In millions, except customers) |   |
| Residential                       |   | $                               | 18.9   |   |   | $ | 14.4 |   |   | $ | 4.5 |   |
| Commercial                        |   |                            | 17.5   |   |   |   | 16.0 |   |   |   | 1.5 |   |
| Industrial                        |   |                            | 3.0    |   |   |   | 3.0 |   |   |   | - |   |
| Other                             |   |                            | 8.8    |   |   |   | 7.8 |   |   |   | 1.0 |   |
|                              |   | $                               | 48.2   |   |   | $ | 41.2 |   |   | $ | 7.0 |   |
| Average customers (thousands) (1) |   |                            | 228.5  |   |   |   | 228.1 |   |   |   | 0.4 |   |

| (1)   | Under TECA, customers of TNMP Electric in Texas have the ability to choose First Choice or any other REP to provide energy.  The average customers reported above include 79,193 and 89,895 customers of TNMP Electric for the three months ended March 31, 2010 and 2009, who have chosen First Choice as their REP.  These customers are also included in the First Choice segment. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        |   | Three Months Ended March 31, |    |
|-------------|--------|------------------------------|---------|
|        |   | 2010                         |    |   | 2009 |   |   | Change |   |
|        |   | (Gigawatt hours(1))          |    |
| Residential |   |                         | 611.5   |   |   |   | 509.8 |   |   |   | 101.7 |   |
| Commercial  |   |                         | 476.4   |   |   |   | 460.3 |   |   |   | 16.1 |   |
| Industrial  |   |                         | 516.8   |   |   |   | 424.1 |   |   |   | 92.7 |   |
| Other       |   |                         | 24.8    |   |   |   | 25.8 |   |   |   | (1.0 | ) |
|        |   |                         | 1,629.5 |   |   |   | 1,420.0 |   |   |   | 209.5 |   |

|           (1)   | The GWh sales reported above include 249.5 and 248.3 GWhs for the three months ended March 31, 2010 and 2009 used by customers of TNMP Electric, who have chosen First Choice as their REP.  These GWhs are also included below in the First Choice segment. |
|------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                          |   | Three Months Ended |   |
|-------------------------------|--------|--------------------|--------|
|                          |   | March 31, 2009     |   |
|                          |   | (In millions)      |   |
| Total revenues                |   | $                  | 65.7   |   |
| Cost of energy                |   |               | 44.7   |   |
| Gross margin                  |   |               | 21.0   |   |
| Operating expenses            |   |               | 5.8    |   |
| Depreciation and amortization |   |               | -      |   |
| Operating income              |   |               | 15.2   |   |
| Other income (deductions)     |   |               | 0.3    |   |
| Interest charges              |   |               | (1.0   | ) |
| Gain on disposal              |   |               | 101.4  |   |
| Earnings before income taxes  |   |               | 115.9  |   |
| Income (taxes)                |   |               | (40.0  | ) |
| Segment earnings              |   | $                  | 75.9   |   |

----

|                                |   | Three Months Ended March 31, |   |
|-------------------------------------|--------|------------------------------|--------|
|                                |   | 2010                         |   |   | 2009 |   |   | Change |   |
|                                |   | (In millions)                |   |
| Total revenues                      |   | $                            | 114.4  |   |   | $ | 122.2 |   |   | $ | (7.8 | ) |
| Cost of energy                      |   |                         | 105.0  |   |   |   | 80.4 |   |   |   | 24.6 |   |
| Gross margin                        |   |                         | 9.4    |   |   |   | 41.8 |   |   |   | (32.4 | ) |
| Operating expenses                  |   |                         | 20.4   |   |   |   | 29.3 |   |   |   | (8.9 | ) |
| Depreciation and amortization       |   |                         | 0.3    |   |   |   | 0.5 |   |   |   | (0.3 | ) |
| Operating income (loss)             |   |                         | (11.3  | ) |   |   | 11.9 |   |   |   | (23.2 | ) |
| Other income (deductions)           |   |                         | -      |   |   |   | - |   |   |   | - |   |
| Interest charges                    |   |                         | (0.3   | ) |   |   | (1.0 | ) |   |   | 0.7 |   |
| Earnings (loss) before income taxes |   |                         | (11.6  | ) |   |   | 10.9 |   |   |   | (22.6 | ) |
| Income (taxes) benefit              |   |                         | 4.2    |   |   |   | (3.9 | ) |   |   | 8.1 |   |
| Segment earnings (loss)             |   | $                            | (7.5   | ) |   | $ | 7.0 |   |   | $ | (14.5 | ) |

|                       |   | 2010/2009 Change |   |
|----------------------------|--------|------------------|--------|
|                       |   | Total            |   |   | Cost of |   |   | Gross |   |
|                       |   | Revenues         |   |   | Energy |   |   | Margin |   |
|                       |   | (In millions)    |   |
| Weather                    |   | $                | 11.3   |   |   | $ | 7.5 |   |   | $ | 3.8 |   |
| Customer growth/usage      |   |             | (6.2   | ) |   |   | (4.9 | ) |   |   | (1.3 | ) |
| Retail margins             |   |             | (13.0  | ) |   |   | (6.3 | ) |   |   | (6.7 | ) |
| Trading margins            |   |             | 0.1    |   |   |   | - |   |   |   | 0.1 |   |
| Unrealized economic hedges |   |             | -      |   |   |   | 28.3 |   |   |   | (28.3 | ) |
| Total increase (decrease)  |   | $                | (7.8   | ) |   | $ | 24.6 |   |   | $ | (32.4 | ) |

|                               |   | Three Months Ended March 31,    |   |
|------------------------------------|--------|---------------------------------|--------|
|                               |   | 2010                            |   |   | 2009 |   |   | Change |   |
|                               |   | (In millions, except customers) |   |
| Residential                        |   | $                               | 74.7   |   |   | $ | 76.0 |   |   | $ | (1.3 | ) |
| Mass-market                        |   |                            | 4.2    |   |   |   | 8.3 |   |   |   | (4.1 | ) |
| Mid-market                         |   |                            | 30.9   |   |   |   | 32.1 |   |   |   | (1.2 | ) |
| Trading gains (losses)             |   |                            | -      |   |   |   | (0.1 | ) |   |   | 0.1 |   |
| Other                              |   |                            | 4.6    |   |   |   | 5.9 |   |   |   | (1.3 | ) |
|                               |   | $                               | 114.4  |   |   | $ | 122.2 |   |   | $ | (7.8 | ) |
| Actual customers (thousands) (1,2) |   |                            | 221.4  |   |   |   | 246.7 |   |   |   | (25.3 | ) |

|                (1)   | See note above in the TNMP Electric segment discussion about the impact of TECA. |
|-------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|

|                (2)   | Due to the competitive nature of First Choice’s business, actual customer count at March 31 is presented in the table above as a more representative business indicator than the average customers that are shown in the table for TNMP customers. |
|------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        |   | Three Months Ended March 31, |   |
|-------------|--------|------------------------------|--------|
|        |   | 2010                         |   |   | 2009 |   |   | Change |   |
|        |   | (Gigawatt hours) (1)         |   |
| Residential |   |                         | 550.1  |   |   |   | 501.8 |   |   |   | 48.3 |   |
| Mass-market |   |                         | 26.6   |   |   |   | 42.0 |   |   |   | (15.4 | ) |
| Mid-market  |   |                         | 251.2  |   |   |   | 248.7 |   |   |   | 2.5 |   |
| Other       |   |                         | 2.0    |   |   |   | 2.3 |   |   |   | (0.3 | ) |
|        |   |                         | 829.9  |   |   |   | 794.8 |   |   |   | 35.1 |   |

| (1)   |   See note above in the TNMP Electric segment discussion about the impact of TECA. |
|-----------------|-----------------------------------------------------------------------------------------|

----

|                                                  |   | Three Months Ended March 31, |   |
|-------------------------------------------------------|--------|------------------------------|--------|
|                                                  |   | 2010                         |   |   | 2009 |   |   | Change |   |
|                                                  |   | (In millions)                |   |
| Total revenues                                        |   | $                            | (9.6   | ) |   | $ | (9.5 | ) |   | $ | (0.1 | ) |
| Cost of energy                                        |   |                         | (9.5   | ) |   |   | (9.3 | ) |   |   | (0.2 | ) |
|    Gross margin                        |   |                         | (0.1   | ) |   |   | (0.2 | ) |   |   | 0.1 |   |
| Operating expenses                                    |   |                         | (3.3   | ) |   |   | (6.1 | ) |   |   | 2.9 |   |
| Depreciation and amortization                         |   |                         | 4.1    |   |   |   | 4.5 |   |   |   | (0.5 | ) |
|    Operating income (loss)             |   |                         | (0.8   | ) |   |   | 1.4 |   |   |   | (2.3 | ) |
| Equity in net earnings (loss) of Optim Energy         |   |                         | (4.4   | ) |   |   | 1.4 |   |   |   | (5.7 | ) |
| Other income (deductions)                             |   |                         | (1.4   | ) |   |   | 20.2 |   |   |   | (21.6 | ) |
| Interest charges                                      |   |                         | (5.2   | ) |   |   | (6.6 | ) |   |   | 1.5 |   |
|    Earnings (loss) before income taxes |   |                         | (11.7  | ) |   |   | 16.4 |   |   |   | (28.1 | ) |
| Income (taxes) benefit                                |   |                         | 4.8    |   |   |   | (6.1 | ) |   |   | 10.8 |   |
| Segment earnings (loss)                               |   | $                            | (7.0   | ) |   | $ | 10.3 |   |   | $ | (17.3 | ) |

----

|                                                       |   | Three Months Ended March 31, |   |
|------------------------------------------------------------|--------|------------------------------|--------|
|                                                       |   | 2010                         |   |   | 2009 |   |   | Change |   |
|                                                       |   |                         |   |   | (In millions) |   |   |   |   |
|                                                       |   |                         |   |   |   |   |   |   |   |
| Total operating revenues                                   |   | $                            | 105.6  |   |   | $ | 78.4 |   |   | $ | 27.2 |   |
| Cost of energy                                             |   |                         | 77.3   |   |   |   | 45.2 |   |   |   | 32.1 |   |
| Gross margin                                               |   |                         | 28.3   |   |   |   | 33.2 |   |   |   | (4.9 | ) |
| Operating expenses                                         |   |                         | 19.5   |   |   |   | 19.9 |   |   |   | (0.4 | ) |
| Depreciation and amortization                              |   |                         | 12.1   |   |   |   | 7.7 |   |   |   | 4.4 |   |
| Operating income (loss)                                    |   |                         | (3.3   | ) |   |   | 5.7 |   |   |   | (9.0 | ) |
| Other income (deductions)                                  |   |                         | 0.1    |   |   |   | 0.1 |   |   |   | 0.0 |   |
| Interest charges                                           |   |                         | (4.7   | ) |   |   | (2.5 | ) |   |   | (2.2 | ) |
| Earnings (loss) before income taxes                        |   |                         | (7.9   | ) |   |   | 3.3 |   |   |   | (11.2 | ) |
| Income (tax) benefit on margin                             |   |                         | -      |   |   |   | (0.2 | ) |   |   | (0.2 | ) |
| Net earnings (loss)                                        |   | $                            | (8.0   | ) |   | $ | 3.1 |   |   | $ | (11.1 | ) |
|                                                       |   |                         |   |   |   |   |   |   |   |   |   |   |
| 50 percent of net earnings (loss)                          |   | $                            | (4.0   | ) |   | $ | 1.6 |   |   | $ | ( 5.6 | ) |
| Plus amortization of basis difference in Optim Energy |   |                         | (0.4   | ) |   |   | (0.2 | ) |   |   | (0.2 | ) |
| PNMR equity in net earnings (loss) of Optim Energy         |   | $                            | (4.4   | ) |   | $ | 1.4 |   |   | $ | (5.8 | ) |

----

|                                    |   | Three Months Ended March 31, |   |
|-----------------------------------------|--------|------------------------------|--------|
|                                    |   | 2010                         |   |   | 2009 |   |   | Change |   |
|                                    |   |                         |   | (In millions) |   |   |   |
| Net cash flows from:                    |   |                         |   |   |   |   |   |   |   |
|  Operating activities              |   | $                            | (13.3  | ) |   | $ | (15.3 | ) |   | $ | 2.0 |   |
|  Investing activities              |   |                         | (54.1  | ) |   |   | 560.7 |   |   |   | (614.8 | ) |
|  Financing activities              |   |                         | 81.7   |   |   |   | (615.6 | ) |   |   | 697.3 |   |
| Net change in cash and cash equivalents |   | $                            | 14.3   |   |   | $ | (70.2 | ) |   | $ | 84.5 |   |

----

----

|                                              |   | PNMR     |   |   | PNM           |   |   | TNMP     |   |   | PNMR         |   |
|---------------------------------------------------|--------|----------|--------|--------|---------------|--------|--------|----------|--------|--------|--------------|--------|
|                                              |   | Separate |   |   | Separate      |   |   | Separate |   |   | Consolidated |   |
|                                              |   |     |   |   | (In millions) |   |   |     |   |
| Financing Capacity:                               |   |     |   |   |          |   |   |     |   |   |         |   |
| Revolving credit facility                         |   | $        | 568.0  |   |          | $      | 400.0  |     |   | $      | 75.0         |   |   | $ | 1,043.0 |   |
| Local lines of credit                             |   |     | 5.0    |   |          |   | 5.0    |     |   |   | -            |   |   |   | 10.0 |   |
| Total financing capacity                          |   | $        | 573.0  |   |          | $      | 405.0  |     |   | $      | 75.0         |   |   | $ | 1,053.0 |   |
|                                              |   |     |   |   |          |   |   |     |   |   |         |   |   |   |   |   |
| Amounts outstanding as of April 30, 2010:         |   |     |   |   |          |   |   |     |   |   |         |   |   |   |   |   |
| Revolving credit facility                         |   | $        | 101.0  |   |          | $      | 208.0  |     |   | $      | -            |   |   | $ | 309.0 |   |
| Local lines of credit                             |   |     | -      |   |          |   | -      |     |   |   | -            |   |   |   | - |   |
| Total short-term debt outstanding                 |   |     | 101.0  |   |          |   | 208.0  |     |   |   | -            |   |   |   | 309.0 |   |
|                                              |   |     |   |   |          |   |   |     |   |   |         |   |   |   |   |   |
| Letters of credit                                 |   |     | 73.1   |   |          |   | 13.3   |     |   |   | 0.3          |   |   |   | 86.7 |   |
|                                              |   |     |   |   |          |   |   |     |   |   |         |   |   |   |   |   |
| Total short–term debt and letters of credit |   | $        | 174.1  |   |          | $      | 221.3  |     |   | $      | 0.3          |   |   | $ | 395.7 |   |
|                                              |   |     |   |   |          |   |   |     |   |   |         |   |   |   |   |   |
| Remaining availability as of April 30, 2010       |   | $        | 398.9  |   |          | $      | 183.7  |     |   | $      | 74.7         |   |   | $ | 657.3 |   |
| Invested cash as of April 30, 2010                |   | $        | 15.4   |   |          | $      | 9.3    |     |   | $      | -            |   |   | $ | 24.7 |   |

----

|                                   |   | March 31, |   |   | December 31, |   |
|----------------------------------------|--------|-----------|--------|--------|--------------|--------|
|                                   |   | 2010      |   |   | 2009         |   |
| PNMR                                   |   |      |   |   |         |   |
| PNMR common stockholders’ equity |   |      | 49.3   | %      |         |   | 49.6 | % |
| Convertible preferred stock            |   |      | 3.0    | %      |         |   | 3.0 | % |
| Preferred stock of subsidiary          |   |      | 0.3    | %      |         |   | 0.3 | % |
| Long-term debt                         |   |      | 47.4   | %      |         |   | 47.1 | % |
| Total capitalization                   |   |      | 100.0  | %      |         |   | 100.0 | % |

| PNM                                   |   |   |   |   |   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|
| PNM common stockholder’s equity |   |   | 52.0   | %      |   |   | 51.9 | % |
| Preferred stock                       |   |   | 0.5    | %      |   |   | 0.5 | % |
| Long-term debt                        |   |   | 47.5   | %      |   |   | 47.6 | % |
| Total capitalization                  |   |   | 100.0  | %      |   |   | 100.0 | % |

| TNMP                        |   |   |   |   |   |   |
|-----------------------------|--------|--------|--------|--------|--------|--------|
| Common stockholder's equity |   |   | 59.4   | %      |   |   | 59.3 | % |
| Long-term debt              |   |   | 40.6   | %      |   |   | 40.7 | % |
| Total capitalization        |   |   | 100.0  | %      |   |   | 100.0 | % |

----

----

----

----

----

| ●   | Conditions affecting the Company’s ability to access the financial markets and negotiate new credit facilities for those expiring in 2011 and 2012, or Optim Energy’s access to additional debt financing following the utilization of its existing credit facility, including actions by ratings agencies affecting the Company’s credit ratings, |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The recession, its consequent extreme disruption in the credit markets, and its impacts on the electricity usage of the Company’s customers, |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | State and federal regulatory and legislative decisions and actions, including appeals of prior regulatory proceedings, and including provisions relating to climate change, reduction of GHG, CCBs, and other power plant emissions, |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The ability of PNM to meet the renewable energy requirements established by the NMPRC, including the resource diversity requirement, within the specified cost parameters, and the Company’s ability to obtain federal and/or state funding and incentives for the development of alternative or renewable energy, |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The ability of PNM to successfully utilize a future test year in a rate filing with the NMPRC, including PNM’s ability to accurately forecast operating and capital expenditures and withstand challenges by regulators and intervenors, |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The performance of generating units, including PVNGS, SJGS, Four Corners, and Optim Energy generating units, and transmission systems, |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The risk that Optim Energy desires to expand its generation capacity but is unable to identify and implement profitable acquisitions or that PNMR and ECJV will not agree to make additional capital contributions to Optim Energy, |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The potential unavailability of cash from PNMR’s subsidiaries or Optim Energy due to regulatory, statutory or contractual restrictions, |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The impacts of the decline in the values of marketable equity securities on the trust funds maintained to provide nuclear decommissioning funding and pension and other postretirement benefits, including the levels of funding and expense, |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The ability of First Choice to attract and retain customers and collect amounts billed, |
|---------------------|-----------------------------------------------------------------------------------------|

| ●   | 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, |
|---------------------|---------------------------------|

| ●   | Weather, |
|---------------------|----------|

| ●   | Water supply, |
|---------------------|---------------|

| ●   | Changes in fuel costs, |
|---------------------|------------------------|

| ●   | Availability of fuel supplies, |
|---------------------|--------------------------------|

| ●   | Uncertainty regarding the requirements and related costs of decommissioning power plants owned or partially owned by PNM and Optim Energy and coal mines supplying certain PNM power plants, as well as the ability to recover decommissioning costs through charges to customers, |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The risk that replacement power costs incurred by PNM related to not meeting the specified capacity factor for its generating units under its Emergency FPPAC will not be approved by the NMPRC, |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The risk that PNM may not be able to renew rights-of-way on Native American lands or that the costs of rights-of-way are not allowed to be recovered through rates charged to customers, |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The effectiveness of risk management and commodity risk transactions, |
|---------------------|-----------------------------------------------------------------------|

| ●   | Seasonality and other changes in supply and demand in the market for electric power, |
|---------------------|--------------------------------------------------------------------------------------|

| ●   | The impact of mandatory energy efficiency measures on customer energy usage, |
|---------------------|------------------------------------------------------------------------------|

| ●   | Variability of wholesale power prices and natural gas prices, |
|---------------------|---------------------------------------------------------------|

| ●   | Volatility and liquidity in the wholesale power markets and the natural gas markets, |
|---------------------|--------------------------------------------------------------------------------------|

| ●   | Uncertainty regarding the ongoing validity of government programs for emission allowances, |
|---------------------|--------------------------------------------------------------------------------------------|

| ●   | The risk that the resolution of the bankruptcy of LCC results in significant adverse impacts on the operations of the Altura Cogen facility and Optim Energy, |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Changes in the competitive environment in the electric industry, |
|---------------------|------------------------------------------------------------------|

| ●   | The risk that the Company and Optim Energy may have to commit to substantial capital investments and additional operating costs to comply with new environmental requirements including possible future requirements to address concerns about global climate change, and the resultant impacts on the operations and economic viability of generating plants in which PNM and Optim Energy have interests, |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The risks associated with completion of generation, transmission, distribution, and other projects, including construction delays and unanticipated cost overruns, |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Uncertainty surrounding the status of PNM’s participation in jointly-owned projects resulting from the scheduled expiration of the operational documents for the projects beginning in 2015 and potential changes in the objectives of the participants in the projects, |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The outcome of legal proceedings, |
|---------------------|-----------------------------------|

| ●   | Changes in applicable accounting principles, and |
|---------------------|--------------------------------------------------|

| ●   | The performance of state, regional, and national economies. |
|---------------------|-------------------------------------------------------------|

----

----

|                                                                                               |   | Trading        |   |   | EconomicHedges |   |    | Total  |   |
|----------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|---------|--------|--------|
| Three Months Ended March 31, 2010                                                                  |   | (In thousands) |   |
|  Sources of fair value gain (loss):                                                           |   |           |   |   |           |   |    |   |   |
| Net fair value at beginning of period                                                              |   | $              | 1,239  |   |           | $      | 2,217   |   |   | $ | 3,456 |   |
| Amount realized on contracts delivered during period                                               |   |           | (294   | )      |           |   | 771     |   |   |   | 477 |   |
| Changes in fair value                                                                              |   |           | 3      |   |           |   | (33,835 | )      |   |   | (33,832 | ) |
| Net change recorded as mark-to-market                                                              |   |           | (291   | )      |           |   | (33,064 | )      |   |   | (33,355 | ) |
| Unearned/prepaid option premiums                                                                   |   |           | -      |   |           |   | 1,618   |   |   |   | 1,618 |   |
| Settlement of de-designated cash flow hedges                                                       |   |           | -      |   |           |   | 476     |   |   |   | 476 |   |
|             Net fair value at end of period |   | $              | 948    |   |           | $      | (28,753 | )      |   | $ | (27,805 | ) |

| Three Months Ended March 31, 2009                                                             |   |   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|--------|
|  Sources of fair value gain (loss):                                                      |   |   |   |   |   |   |   |   |   |
| Net fair value at beginning of period                                                         |   | $      | 2,556  |   |   | $ | (5,422 | ) |   | $ | (2,866 | ) |
| Amount realized on contracts delivered during period                                          |   |   | (1,565 | ) |   |   | 4,876 |   |   |   | 3,311 |   |
| Changes in fair value                                                                         |   |   | (5     | ) |   |   | (10,261 | ) |   |   | (10,266 | ) |
| Net change recorded as mark-to-market                                                         |   |   | (1,570 | ) |   |   | (5,385 | ) |   |   | (6,955 | ) |
| Unearned/prepaid option premiums                                                              |   |   | -      |   |   |   | (480 | ) |   |   | (480 | ) |
|             Net fair value at end of period |   | $      | 986    |   |   | $ | (11,287 | ) |   | $ | (10,301 | ) |
|                                                                                          |   |   |   |

|                                                          |   | Less than |    |   |           |   |   |     |   |   |   |   |
|---------------------------------------------------------------|--------|-----------|---------|--------|----------------|--------|--------|----------|--------|--------|--------|--------|
|                                                          |   | 1 year    |    |   | 1-3 Years      |   |   | 4+ Years |   |   | Total  |   |
|                                                          |   |      |    |   | (In thousands) |   |   |     |   |
| Trading                                                       |   |      |    |   |           |   |   |     |   |   |   |   |
|    Prices actively quoted                      |   | $         | 4,800   |   |           | $      | -      |     |   | $      | -      |   |   | $ | 4,800 |   |
|    Prices provided by other external sources   |   |      | (3,852  | )      |           |   | -      |     |   |   | -      |   |   |   | (3,852 | ) |
|    Prices based on models and other valuations |   |      | -       |   |           |   | -      |     |   |   | -      |   |   |   | - |   |
|                                                          |   |      | 948     |   |           |   | -      |     |   |   | -      |   |   |   | 948 |   |
| Economic hedges                                               |   |      |    |   |           |   |   |     |   |   |   |   |   |   |   |   |
|    Prices actively quoted                      |   |      | (15,938 | )      |           |   | (5,636 | )        |   |   | -      |   |   |   | (21,574 | ) |
|    Prices provided by other external sources   |   |      | (4,446  | )      |           |   | (2,540 | )        |   |   | (278   | )      |   |   | (7,264 | ) |
|    Prices based on models and other valuations |   |      | (15     | )      |           |   | 100    |     |   |   | -      |   |   |   | 85 |   |
|                                                          |   |      | (20,399 | )      |           |   | (8,076 | )        |   |   | (278   | )      |   |   | (28,753 | ) |
| Total                                                         |   | $         | (19,451 | )      |           | $      | (8,076 | )        |   | $      | (278   | )      |   | $ | (27,805 | ) |

----

----

|                 |   |                   |   |   |     |   |   | Net      |   |
|----------------------|--------|------------------------|--------|--------|----------|--------|--------|----------|--------|
|                 |   |                   |   |   | Number   |   |   | Exposure |   |
|                 |   | (b)                    |   |   | of       |   |   | of       |   |
|                 |   | Credit                 |   |   | Counter  |   |   | Counter- |   |
|                 |   | Risk                   |   |   | -parties |   |   | parties  |   |
| Rating (a)           |   | Exposure               |   |   | >10%  |   |   | >10%  |   |
|                 |   | (Dollars in thousands) |   |
| External ratings:    |   |                   |   |   |     |   |   |     |   |
| Investment grade     |   | $                      | 45,395 |   |     |   | 3      |     |   | $ | 21,423 |   |
| Non-investment grade |   |                   | 4,797  |   |     |   | -      |     |   |   | - |   |
| Internal ratings:    |   |                   |   |   |     |   |   |     |   |   |   |   |
| Investment grade     |   |                   | -      |   |     |   | -      |     |   |   | - |   |
| Non-investment grade |   |                   | 104    |   |     |   | -      |     |   |   | - |   |
| Total                |   | $                      | 50,296 |   |     |   |   |     |   | $ | 21,423 |   |

|                       (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 Credit Risk Exposure is the gross credit exposure, including long-term contracts (other than full requirements customers), forward sales and short-term sales. The exposure captures the amounts 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 but are not reduced by available credit collateral.  Credit collateral includes advance payments, cash deposits, letters of credit, and parental guarantees received from counterparties.  Amounts are presented before the application of such credit collateral instruments.  At March 31, 2010, PNMR held advance payments of $21.1 million and credit collateral of $4.9 million to offset its credit exposure. |
|---------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                 |   |      |   |   |           |   |   | Greater |   |   |     |   |
|----------------------|--------|-----------|--------|--------|----------------|--------|--------|---------|--------|--------|----------|--------|
|                 |   | Less than |   |   |           |   |   | than    |   |   | Total    |   |
| Rating               |   | 2 Years   |   |   | 2-5 Years      |   |   | 5 Years |   |   | Exposure |   |
|                 |   |      |   |   | (In thousands) |   |   |    |   |
| External ratings:    |   |      |   |   |           |   |   |    |   |   |     |   |
| Investment grade     |   | $         | 45,244 |   |           | $      | 116    |    |   | $      | 35       |   |   | $ | 45,395 |   |
| Non-investment grade |   |      | 4,573  |   |           |   | 224    |    |   |   | -        |   |   |   | 4,797 |   |
| Internal ratings:    |   |      |   |   |           |   |   |    |   |   |     |   |   |   |   |   |
| Investment grade     |   |      | -      |   |           |   | -      |    |   |   | -        |   |   |   | - |   |
| Non-investment grade |   |      | 104    |   |           |   | -      |    |   |   | -        |   |   |   | 104 |   |
| Total                |   | $         | 49,921 |   |           | $      | 340    |    |   | $      | 35       |   |   | $ | 50,296 |   |

----

----

| ●   | Navajo Nation Environmental Issues |
|---------------------|------------------------------------|

| ●   | Santa Fe Generating Station |
|---------------------|-----------------------------|

| ●   | Coal Combustion By-Products – Sierra Club Actions |
|---------------------|---------------------------------------------------------|

| ●   | Gila River Indian Reservation Superfund Site |
|---------------------|----------------------------------------------|

| ●   | PVNGS Water Supply Litigation |
|---------------------|-------------------------------|

| ●   | San Juan River Adjudication |
|---------------------|-----------------------------|

| ●   | Western United States Wholesale Power Market |
|---------------------|----------------------------------------------|

| ●   | Begay v. PNM et al |
|---------------------|--------------------|

| ●   | PNM – Emergency FPPAC |
|---------------------|-----------------------------|

| ●   | TNMP – Competitive Transition Charge True-Up Proceeding |
|---------------------|---------------------------------------------------------------|

| ●   | TNMP – Interest Rate Compliance Tariff |
|---------------------|----------------------------------------------|

----

| 3.1    | PNMR   | Articles of Incorporation of PNM Resources, as amended to date (incorporated by reference to Exhibit 3.1 to PNMR’s Current Report on Form 8-K filed November 21, 2008)                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2    | PNM    | Restated Articles of Incorporation of PNM, as amended through May 31, 2002 (incorporated by reference to Exhibit 3.1.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002)                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.3    | TNMP   | Articles of Incorporation of TNMP, as amended through July 7, 2005 (incorporated by reference to Exhibit 3.1.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005)                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.4    | PNMR   | Bylaws of PNM Resources, Inc. with all amendments to and including February 17, 2009 (incorporated by reference to Exhibit 3.1 to PNMR’s Current Report on Form 8-K filed February 20, 2009)                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.5    | PNM    | Bylaws of PNM with all amendments to and including May 31, 2002 (incorporated by reference to Exhibit 3.1.2 to the Company’s Report on Form 10-Q for the fiscal quarter ended June 30, 2002)                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.6    | TNMP   | Bylaws of TNMP as adopted on August 4, 2005 (incorporated by reference to Exhibit 3.2.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005)                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.1   | PNMR   | Changes in Director Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.2   | PNMR   | Fourth Amendment to Credit Agreement, dated as of March 22, 2010 among PNMR, First Choice Power, L. P., the lenders party thereto and Bank of America, N.A., as administrative agent                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3   | PNMR   | 2010 Officer Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.4   | PNMR   | Form of Performance Restricted Stock Rights Award Agreement for performance-based, time-vested restricted stock rights awards based on adjusted cash earnings granted under the PEP in 2010                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.5   | PNMR   | Form of Performance Cash Award Agreement for performance cash awards based on adjusted cash earnings granted under the PEP in 2010                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.6   | PNM    | Municipal Effluent Purchase and Sale Agreement dated April 23, 2010 between City of Phoenix, City of Mesa, City of Tempe, City of Scottsdale, and City of Glendale, Arizona municipal corporations; and Arizona Public Service Company and Salt River Project Agricultural Improvement and Power District, , acting on behalf of themselves and El Paso Electric Company, Southern California Edison Company, Public Service Company of New Mexico, Southern California Public Power Authority, and the Los Angeles Department of Water & Power |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 12.1   | PNMR   | Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 12.2   | PNM    | Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 12.3   | TNMP   | Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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 |

----

|                               | PNM RESOURCES, INC.PUBLIC SERVICE COMPANY OF NEW MEXICOTEXAS-NEW MEXICO POWER COMPANY |
|------------------------------------|---------------------------------------------------------------------------------------|
|                               | (Registrants)                                                                         |
|                               |                                                                                  |
|                               |                                                                                  |
| Date:   May 7, 2010 | /s/ Thomas G. Sategna                                                                 |
|                               | Thomas G. Sategna                                                                     |
|                               | Vice President and Corporate Controller                                               |
|                               | (Officer duly authorized to sign this report)                                         |

----