UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

(Mark One)
     (X)  COMBINED  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999

                                       or

     ( )  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934 For the transition period from to

--------------------------------------------------------------------------------
                         Commission File Number: 1-8847

                              TNP ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)

        Texas                                           75-1907501
(State of incorporation)                 (I.R.S. employer identification number)

        4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113
              (Address and zip code of principal executive offices)

         Registrant's telephone number, including area code 817-731-0099

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes \X\ No \ \

     TNP Enterprises,  Inc. had 13,398,418 shares of common stock outstanding as
of May 5, 1999.
--------------------------------------------------------------------------------
                         Commission File Number: 2-97230

                         TEXAS-NEW MEXICO POWER COMPANY
             (Exact name of registrant as specified in its charter)

        Texas                                            75-0204070
(State of incorporation)                 (I.R.S. employer identification number)

        4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113
              (Address and zip code of principal executive offices)

         Registrant's telephone number, including area code 817-731-0099

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes \X\ No \ \

     TNP  Enterprises,  Inc.  holds  all  10,705  outstanding  common  shares of
Texas-New Mexico Power Company.

<PAGE>


                     TNP Enterprises, Inc. And Subsidiaries
                 Texas New-Mexico Power Company And Subsidiaries
   Combined Quarterly Report on Form 10-Q for the period ended March 31, 1999

         This Combined  Quarterly Report on Form 10-Q is filed separately by TNP
Enterprises,  Inc., and Texas-New  Mexico Power Company.  Texas-New Mexico Power
Company makes no representation  as to information  relating to TNP Enterprises,
Inc., except as it may relate to Texas-New Mexico Power Company, or to any other
affiliate or subsidiary of TNP Enterprises, Inc.

                                TABLE OF CONTENTS

                          PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>

Item 1.    Financial Statements.
<S>                                                                                                           <C>

           TNP Enterprises, Inc. (TNP) and Subsidiaries:

                 Consolidated Statements of Income
                 Three Month Periods Ended March 31, 1999, and 1998                                            3

                 Consolidated Statements of Cash Flows
                 Three Month Periods Ended March 31, 1999, and 1998                                            4

                 Consolidated Balance Sheets
                 March 31, 1999, and December 31, 1998                                                         5

           Texas-New Mexico Power Company (TNMP) and Subsidiaries:

                 Consolidated Statements of Income
                 Three Month Periods Ended March 31, 1999, and 1998                                            6

                 Consolidated Statements of Cash Flows
                 Three Month Periods Ended March 31, 1999, and 1998                                            7

                 Consolidated Balance Sheets
                 March 31, 1999, and December 31, 1998                                                         8

           Notes to Consolidated Financial Statements                                                          9

  Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.             10


                           PART II. OTHER INFORMATION
  Item 1.  Legal Proceedings                                                                                  16

  Item 4.  Submission of Matters to a Vote of Securities Holders.                                             16

  Item 6.  Exhibits and Reports on Form 8-K.                                                                  16
           (a)   Exhibit Index                                                                                16
           (b)   Reports on Form 8-K                                                                          16
  Statement Regarding Forward Looking Information                                                             16
  Signature page                                                                                              17


</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                     TNP ENTERPRISES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
 

                                                                                    Three Months Ended
                                                                                         March 31,
                                                                    ----------------------------------------------------
                                                                            1999                         1998            
                                                                    ----------------------     -------------------------
                                                                          (In thousands except per share amounts)       
<S>                                                                 <C>                        <C>                                 

OPERATING REVENUES                                                    $           118,125           $           125,938 
                                                                    ----------------------     -------------------------

OPERATING EXPENSES:
  Purchased power and fuel                                                         57,372                        66,825 
  Other operating and maintenance                                                  23,825                        20,384 
  Depreciation                                                                     13,724                         9,872 
  Taxes other than income taxes                                                     8,000                         7,727 
  Income taxes                                                                        712                         2,638 
                                                                    ----------------------     -------------------------
       Total operating expenses                                                   103,633                       107,446 
                                                                    ----------------------     -------------------------

NET OPERATING INCOME                                                               14,492                        18,492 
                                                                    ---------------------      ------------------------
OTHER INCOME:
  Other income and deductions, net                                                    163                           364 
  Income taxes                                                                        118                          (166)
                                                                    ----------------------     -------------------------
       Other income, net of taxes                                                     281                           198 
                                                                    ----------------------     -------------------------

INCOME BEFORE INTEREST CHARGES                                                     14,773                        18,690 
                                                                    ----------------------     -------------------------
INTEREST CHARGES:
  Interest on long-term debt                                                       10,224                        12,498 
  Other interest and amortization of debt-related costs                             1,417                         1,062 
                                                                    ----------------------     -------------------------
       Total interest charges                                                      11,641                        13,560 
                                                                    ----------------------     -------------------------

INCOME FROM CONTINUING OPERATIONS                                                   3,132                         5,130 



Loss from discontinued nonregulated operations (Note 2)                               -                             505 
                                                                    ----------------------     -------------------------

NET INCOME                                                                          3,132                         4,625 
Dividends on preferred stock                                                           36                            38 
                                                                    ----------------------     -------------------------

INCOME APPLICABLE TO COMMON STOCK                                     $             3,096           $             4,587 
                                                                    ======================     =========================


EARNINGS PER SHARE OF COMMON STOCK
Earnings from continuing operations                                   $              0.23           $              0.39 
Loss from discontinued nonregulated operations                                        -                           (0.04)
                                                                    ----------------------     -------------------------
EARNINGS PER SHARE                                                    $              0.23           $              0.35 
                                                                    ======================     =========================

DIVIDENDS PER SHARE OF COMMON STOCK                                   $              0.29           $              0.27 
                                                                    ======================     =========================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                         13,346                        13,188 
                                                                    ======================     =========================



The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                     TNP ENTERPRISES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                                           Three Months Ended
                                                                                               March 31
                                                                             ----------------------------------------------
                                                                                    1999                     1998
                                                                             --------------------   -----------------------
                                                                                           (In thousands)
<S>                                                                          <C>                    <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:
  Cash received from customers                                                 $         105,835      $            130,245   
  Purchased power                                                                        (47,366)                  (61,749)
  Fuel costs paid                                                                        (15,157)                   (8,010)
  Cash paid for payroll and to other suppliers                                           (27,935)                  (38,062)
  Interest paid, net of amounts capitalized                                              (11,577)                  (15,592)
  Income taxes refunded (paid)                                                             4,000                    (1,739)
  Other taxes paid                                                                       (18,147)                  (16,431)
  Other operating cash receipts and payments, net                                            181                       375 
                                                                             --------------------   -----------------------

NET CASH USED IN OPERATING ACTIVITIES                                                    (10,166)                  (10,963)
                                                                             --------------------   -----------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to utility plant                                                             (11,592)                   (7,791)
  Additions to other property and nonregulated investments                                     -                       360 
  Withdrawals from (deposits to) escrow account                                            1,902                         - 
                                                                             --------------------   -----------------------

NET CASH USED IN INVESTING ACTIVITIES                                                     (9,690)                   (7,431)
                                                                             --------------------   -----------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid on preferred and common stocks                                           (3,906)                   (3,607)
  Common stock issuances                                                                   3,091                     3,104 
  Borrowings from (repayments to) revolving credit facilities - net                      (27,500)                   26,500 
  Issuances:
     Senior notes, net of discount                                                       174,164                         - 
  Deferred expenses associated with financings                                            (1,280)                        - 
  Redemptions:
     Secured debentures                                                                 (130,000)                        - 
     Other long-term debt                                                                      -                      (105)
                                                                             --------------------   -----------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                                 14,569                    25,892 
                                                                             --------------------   -----------------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                                   (5,287)                    7,498 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                          12,216                    15,877 
                                                                             --------------------   -----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                     $           6,929      $             23,375 
                                                                             ====================   =======================

RECONCILIATION OF NET INCOME TO NET
     CASH USED IN OPERATING ACTIVITIES:
  Net income                                                                   $           3,132      $              4,625 
  Adjustments to reconcile net income to net cash used in operating
activities:
     Depreciation                                                                         13,724                     9,872 
     Amortization of debt-related costs and other deferred charges                         1,211                       940 
     Allowance for borrowed funds used during construction                                   (78)                      (36)
     Deferred income taxes                                                                  (873)                    3,180 
     Investment tax credits                                                                  678                    (1,086)

Cash flows impacted by changes in current assets and liabilities:
     Deferred fuel costs                                                                    (587)                   (1,043)
     Accounts payable                                                                     (6,858)                   (4,355)
     Accrued interest                                                                     (1,071)                   (2,933)
     Accrued taxes                                                                        (5,369)                  (11,322)
     Reserve for customer refund                                                          (8,511)                        - 
     Changes in other current assets and liabilities                                      (6,071)                   (8,448)
Other, net                                                                                   507                      (357)
                                                                             --------------------   -----------------------

NET CASH USED IN OPERATING ACTIVITIES                                          $         (10,166)     $            (10,963)
                                                                             ====================   =======================





The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                     TNP ENTERPRISES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                              March 31, 1999             December 31,
                                                                                (Unaudited)                  1998
                                                                           ----------------------    ----------------------
                                                                                           (In thousands)
<S>                                                                        <C>                       <C>
ASSETS

UTILITY PLANT:
  Electric plant                                                             $         1,267,285       $         1,260,147 
  Construction work in progress                                                            7,641                     6,294 
                                                                           ----------------------    ----------------------
            Total                                                                      1,274,926                 1,266,441 
  Less accumulated depreciation                                                          353,784                   343,562 
                                                                           ----------------------    ----------------------
            Net utility plant                                                            921,142                   922,879 
                                                                           ----------------------    ----------------------

OTHER PROPERTY AND INVESTMENTS, at cost                                                    8,537                    10,384 
                                                                           ----------------------    ----------------------

CURRENT ASSETS:
  Cash and cash equivalents                                                                6,929                    12,216 
  Accounts receivable                                                                      4,813                     5,955 
  Inventories, at lower of average cost or market:
       Fuel                                                                                  594                       677 
       Materials and supplies                                                              4,535                     4,567 
  Deferred fuel costs                                                                      2,263                     1,676 
  Accumulated deferred income taxes                                                        3,425                     2,235 
  Other current assets                                                                     3,657                     4,403 
                                                                           ----------------------    ----------------------
            Total current assets                                                          26,216                    31,729 
                                                                           ----------------------    ----------------------

REGULATORY TAX ASSETS                                                                        686                         - 
DEFERRED CHARGES                                                                          27,629                    28,773 
                                                                           ----------------------    ----------------------
                                                                             $           984,210       $           993,765 
                                                                           ======================    ======================
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
  Common shareholders' equity:
       Common stock - no par value per share.  Authorized 50,000,000
            shares; issued 13,384,016 shares in 1999 and 13,293,996 in       
            1998                                                             $           195,608       $           192,518 
       Retained earnings                                                                 115,003                   115,776 
                                                                           ----------------------    ----------------------
            Total common shareholders' equity                                            310,611                   308,294 
 
  Preferred stock                                                                          3,060                     3,060 
  Long-term debt, less current maturities                                                475,681                   459,000 
                                                                           ----------------------    ----------------------
            Total capitalization                                                         789,352                   770,354 
                                                                           ----------------------    ----------------------

CURRENT LIABILITIES:
  Accounts payable                                                                        21,153                    28,011 
  Accrued interest                                                                         3,949                     5,020 
  Accrued taxes                                                                            8,921                    14,290 
  Customers' deposits                                                                      3,773                     3,609 
  Reserve for customer refunds                                                             2,460                    10,971 
  Other current liabilities                                                               16,964                    25,202 
                                                                           ----------------------    ----------------------
            Total current liabilities                                                     57,220                    87,103 
                                                                           ----------------------    ----------------------

REGULATORY TAX LIABILITIES                                                                     -                       957 
ACCUMULATED DEFERRED INCOME TAXES                                                         99,306                    97,346 
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS                                               21,594                    20,916 
DEFERRED CREDITS                                                                          16,738                    17,089 
COMMITMENTS AND CONTINGENCIES (Note 4)
                                                                           ----------------------    ----------------------
                                                                             $           984,210       $           993,765 
                                                                           ======================    ======================


The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                 TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
              (a wholly owned subsidiary of TNP Enterprises, Inc.)
                        Consolidated Statements of Income
                                  (Unaudited)

                                                                              Three Months Ended

                                                                                    March 31,
                                                                 ------------------------------------------
                                                                        1999                     1998
                                                                 -----------------        -----------------
                                                                                (In thousands)
<S>                                                              <C>                      <C>
OPERATING REVENUES                                                 $      118,111           $      125,931 
                                                                 -----------------        -----------------


OPERATING EXPENSES:
  Purchased power and fuel                                                 57,372                   66,825 
  Other operating and maintenance                                          23,023                   19,270 
  Depreciation                                                             13,724                    9,872 
  Taxes other than income taxes                                             7,879                    8,384 
  Income taxes                                                              1,044                    2,804 
                                                                 ------------------       -----------------
       Total operating expenses                                           103,042                  107,155 
                                                                 ------------------       -----------------

NET OPERATING INCOME                                                       15,069                   18,776 
                                                                 ------------------       -----------------
OTHER INCOME:
  Other income and deductions, net                                             73                      195 
  Income taxes                                                                142                      (93)
                                                                 ------------------       -----------------
       Other income, net of taxes                                             215                      102 
                                                                 ------------------       -----------------

INCOME BEFORE INTEREST CHARGES                                             15,284                   18,878 
                                                                 ------------------       -----------------
INTEREST CHARGES:

  Interest on long-term debt                                               10,054                   12,498 
  Other interest and amortization of debt-related costs                     1,417                    1,061 
                                                                 ------------------       -----------------
       Total interest charges                                              11,471                   13,559 
                                                                 ------------------       -----------------
NET INCOME                                                                  3,813                    5,319 
Dividends on preferred stock                                                   36                       38 
                                                                 ------------------       -----------------

INCOME APPLICABLE TO COMMON STOCK                                  $        3,777           $        5,281 
                                                                 ==================       =================




The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                 TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
              (a wholly owned subsidiary of TNP Enterprises, Inc.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                                  Three Months Ended
                                                                                       March 31
                                                                    -----------------------------------------------
                                                                            1999                     1998
                                                                    ---------------------    ----------------------
<S>                                                                 <C>                      <C>                                  
                                                                                    (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Cash received from customers                                        $         105,001        $          125,267 
  Purchased power                                                               (47,366)                  (61,749)
  Fuel costs paid                                                               (15,157)                   (8,010)
  Cash paid for payroll and to other suppliers                                  (22,504)                  (28,072)
  Interest paid, net of amounts capitalized                                     (11,447)                  (15,588)
  Income taxes refunded (paid)                                                    4,000                         - 
  Other taxes paid                                                              (18,089)                  (17,486)
  Other operating cash receipts and payments, net                                   158                       193 
                                                                    ---------------------    ----------------------

NET CASH USED IN OPERATING ACTIVITIES                                            (5,404)                   (5,445)
                                                                    ---------------------    ----------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to utility plant                                                    (11,692)                   (7,694)
  Withdrawal from (deposits to) escrow account                                    1,902                         - 
                                                                    ---------------------    ----------------------

CASH FLOWS USED IN INVESTING ACTIVITIES                                          (9,790)                   (7,694)
                                                                    ---------------------    ----------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid on preferred and common stocks                                     (36)                  (10,038)
  Borrowings from (repayments to) revolving credit facilities -                 (31,000)                   26,500 
  net
  Issuances:
     Senior notes, net of discount                                              174,164                         - 
  Deferred expenses associated with financings                                   (1,280)                        - 
  Redemptions:
     Secured debentures                                                        (130,000)                        - 
                                                                    ---------------------    ----------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                        11,848                    16,462 
                                                                    ---------------------    ----------------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                          (3,346)                    3,323 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                  7,977                     2,772 
                                                                    ---------------------    ----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                            $           4,631        $            6,095 
                                                                    =====================    ======================

RECONCILIATION OF NET INCOME TO NET
     CASH USED IN OPERATING ACTIVITIES:
  Net income                                                          $           3,813        $            5,319
  Adjustments to reconcile net income to net cash used in
  operating activities:
     Depreciation of utility plant                                               13,724                     9,872 
     Amortization of debt-related costs and other deferred charges                1,211                       940 
     Allowance for borrowed funds used during construction                          (78)                      (36)
     Deferred income taxes                                                       (2,125)                    3,846 
     Investment tax credits                                                         894                    (1,085)

Cash flows impacted by changes in current assets and liabilities:
     Deferred fuel costs                                                           (587)                   (1,043)
     Accounts payable                                                            (6,310)                   (4,355)
     Accrued interest                                                            (1,112)                   (2,933)
     Accrued taxes                                                               (4,075)                   (8,994)
     Reserve for customer refund                                                 (8,511)                        - 
     Changes in other current assets and liabilities                             (3,048)                   (5,099)
Other, net                                                                          800                    (1,877)
                                                                    ---------------------    ----------------------
NET CASH USED IN OPERATING ACTIVITIES                                 $          (5,404)       $           (5,445)
                                                                    =====================    ======================




The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>



 
<PAGE>
<TABLE>
<CAPTION>



 
                 TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
              (a wholly owned subsidiary of TNP Enterprises, Inc.)
                           CONSOLIDATED BALANCE SHEETS


                                                                            March 31, 1999           December 31,
                                                                              (Unaudited)                1998
                                                                          --------------------   ----------------------
<S>                                                                       <C>                    <C>                              
                                                                                         (In thousands)
ASSETS

UTILITY PLANT:
  Electric plant                                                            $       1,267,237        $       1,260,099  
  Construction work in progress                                                         7,641                    6,294  
                                                                          --------------------   ---------------------- 
            Total                                                                   1,274,878                1,266,393  
  Less accumulated depreciation                                                       353,784                  343,562  
                                                                          --------------------   ---------------------- 
            Net utility plant                                                         921,094                  922,831  
                                                                          --------------------   ---------------------- 

OTHER PROPERTY AND INVESTMENTS, at cost                                                   214                    2,116  
                                                                          --------------------   ---------------------- 

CURRENT ASSETS:
  Cash and cash equivalents                                                             4,631                    7,977 
  Accounts receivable                                                                     303                      923 
  Inventories, at lower of average cost or market:
       Fuel                                                                               594                      677 
       Materials and supplies                                                           4,535                    4,567 
  Deferred fuel costs                                                                   2,263                    1,676 
  Accumulated deferred income taxes                                                     1,102                        - 
  Other current assets                                                                  3,396                    4,093 
                                                                          --------------------   ----------------------
            Total current assets                                                       16,824                   19,913 
                                                                          --------------------   ----------------------

REGULATORY TAX ASSETS                                                                     686                        - 
DEFERRED CHARGES                                                                       27,437                   28,706 
                                                                          --------------------   ----------------------
                                                                            $         966,255        $         973,566 
                                                                          ====================   ======================
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
  Common shareholder's equity:
       Common stock, $10 par value per share.
            Authorized 12,000,000 shares; issued 10,705 shares              $             107        $             107 
       Capital in excess of par value                                                 222,149                  222,149 
       Retained earnings                                                               83,617                   79,840 
                                                                          --------------------   ----------------------
            Total common shareholder's equity                                         305,873                  302,096 
  Redeemable cumulative preferred stock                                                 3,060                    3,060 
  Long-term debt, less current maturities                                             463,181                  450,000 
                                                                          --------------------   ----------------------
            Total capitalization                                                      772,114                  755,156 
                                                                          --------------------   ----------------------

CURRENT LIABILITIES:
  Accounts payable                                                                     20,578                   26,888 
  Accrued interest                                                                      3,892                    5,004 
  Accrued taxes                                                                        16,374                   20,449 
  Customers' deposits                                                                   3,773                    3,609 
  Accumulated deferred income taxes                                                         -                      649 
  Reserve for customer refunds                                                          2,460                   10,971 
  Other current liabilities                                                            12,432                   17,076 
                                                                          --------------------   ----------------------
            Total current liabilities                                                  59,509                   84,646 
                                                                          --------------------   ----------------------

REGULATORY TAX LIABILITIES                                                                  -                      957 
ACCUMULATED DEFERRED INCOME TAXES                                                      94,647                   93,378 
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS                                            23,623                   22,729 
DEFERRED CREDITS                                                                       16,362                   16,700 
COMMITMENTS AND CONTINGENCIES (Note 4)
                                                                          --------------------   ----------------------
                                                                            $         966,255        $         973,566
                                                                          ====================   ======================

The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>
<PAGE>
                      TNP Enterprises Inc. and Subsidiaries
                 Texas-New Mexico Power Company and Subsidiaries
                   Notes to Consolidated Financial Statements


Note 1.  Interim Financial Statements

         The interim consolidated  financial statements of TNP and subsidiaries,
and TNMP and subsidiaries, are unaudited and contain all adjustments (consisting
primarily of normal  recurring  accruals)  necessary for a fair statement of the
results for the interim periods  presented.  Results for interim periods are not
necessarily  indicative  of  results  to be  expected  for a  full  year  or for
previously reported periods due in part to seasonal revenue fluctuations.  It is
suggested that these  consolidated  financial  statements be read in conjunction
with the audited consolidated financial statements and notes thereto included in
TNP's and TNMP's 1998 Combined Annual Report on Form 10-K.

         Prior  period   statements  have  been  reclassified  in  order  to  be
consistent with current period presentation.  The reclassification had no effect
on net income or common shareholders equity.

Note 2.  Discontinued Nonregulated Operations

         As discussed in TNP's and TNMP's 1998  Combined  Annual  Report on Form
10-K,  management  discontinued the remaining  operations of Facility Works Inc.
(FWI),  TNP's  wholly owned  unregulated  subsidiary,  in late 1998.  All losses
incurred by FWI during 1998 have been  reclassified as losses from  discontinued
operations.


Note 3.  Segment and Related Information

         In TNP's and TNMP's  1998  Combined  Annual  Report on Form  10-K,  TNP
reported two segments,  TNMP, which provides regulated electric service in Texas
and New Mexico,  and FWI, which before  operations were  discontinued,  provided
integrated  mechanical,  electrical,  plumbing and other  maintenance and repair
services to commercial customers in Texas metropolitan areas.

         The operations of TNMP have been separated into two segments, Texas and
New Mexico.  TNP manages the  segments  separately  to respond to the  differing
operational and regulatory climates in the two states.

         The following  tables present  information  about  profits,  losses and
assets of TNP's reportable segments (in thousands):
<TABLE>
<CAPTION>

   Three Months Ended March 31, 1999

                                             Texas          New Mexico        All Other      Eliminations     Consolidated
<S>                                      <C>                <C>             <C>              <C>              <C>       

   Operating revenues                    $     98,994       $  19,117       $       14         $      -        $  118,125
   Net income (loss)                            3,194             619             (681)               -             3,132
   Total assets at March 31, 1999             737,169          67,781          185,011            (5,751)         984,210


   Three Months Ended March 31, 1998

                                             Texas          New Mexico        All Other      Eliminations     Consolidated
   Operating revenues                    $    105,100       $  20,831       $        7         $      -        $  125,938
   Net income (loss)                            3,517           1,802             (694)               -             4,625
   Total assets at December 31, 1998          738,257          64,521          191,213              (226)         993,765
</TABLE>

Note 4.           Commitments and Contingencies

   Legal Proceedings

         Clear Lake.  TNMP and Clear Lake  Limited  Partnership  ("Clear  Lake")
agreed in March  1999 to settle  the  lawsuit  styled  Clear  Lake  Cogeneration
Limited  Partnership vs.  Texas-New  Mexico Power Company,  pending in the 234th
District  court of Harris County,  Texas,  and the parallel  proceeding  pending
before the PUCT. These proceedings  arose out of disagreements  between TNMP and
Clear Lake over the  interpretation of certain terms of an agreement under which
TNMP purchases cogenerated electricity from Clear Lake.


<PAGE>



         Under the  settlement,  TNMP,  Clear Lake and  Calpine  Power  Services
Company (an affiliate of Clear Lake) have entered into a revised purchased power
contract,  effective  as of  October  1, 1998,  governing  energy  and  capacity
transactions between the parties. The key elements of the revised contract are:

     -    The capacity rate under which TNMP will  purchase  capacity from Clear
          Lake is significantly reduced. The energy rate is virtually unchanged.

     -    Clear Lake guarantees the original  contract's capacity of 250 MW. The
          original contract provided for Clear Lake to supply 250 MW of capacity
          on an as  available  basis.  Clear  Lake  may  supply  the 250 MW from
          multiple  sources,  as  opposed to the  single  cogeneration  facility
          specified  in the  original  contract.  In return,  Clear Lake will no
          longer pay for or receive  standby power.  

     -    TNMP will pay for the cost of  transmitting  power  from the  existing
          Clear Lake power plant to TNMP's load centers in the Gulf Coast Region
          pursuant  to PUCT  rules.  Clear  Lake  will  reimburse  TNMP  for any
          incremental  transmission  costs that TNMP would  incur as a result of
          delivery from points other than the Clear Lake Plant.

     
         The settlement  also provides that TNMP will pay Clear Lake $8 million,
if the  PUCT  approves  the  overall  settlement  and  revised  purchased  power
contract.  The settlement calls for regulatory  recovery by TNMP of all payments
to be made by TNMP for power and  energy,  as well as the $8 million  settlement
payment.  If the PUCT approves the settlement as proposed,  TNMP does not expect
this settlement to have a material  adverse impact on its financial  position or
results of operations.

     Phillips  Petroleum.  TNMP  is  the  defendant  in a suit  styled  Phillips
Petroleum  Company vs. Texas-New Mexico Power Company,  filed on October 1, 1997
and pending in the 149th State District  Court of Brazoria  County,  Texas.  The
suit is  based  on  events  surrounding  an  interruption  of  electricity  to a
petroleum  refinery and related  facilities that occurred in May 1997.  Phillips
Petroleum   Company  is  seeking  the  recovery  of  damages  arising  from  the
interruption,  and in May 1999  demanded  payment in the amount of  $47,145,000.
TNMP claims that most, if not all of the damages  Phillips alleges are barred by
limitations  contained within our tariff approved by the PUCT. In May 1999, TNMP
filed a Third Party Petition naming Sweeny Cogeneration Limited Partnership as a
defendant.  The lawsuit is in the  discovery  stage.  TNMP  believes that it has
insurance  coverage on most of  Phillips'  claims up to a total of $31  million,
with a $500,000  self-retention.

     TNMP is involved  in various  claims and other legal proceedings arising in
the ordinary  course of  business.  In the opinion of  management,  the ultimate
dispositions of these matters will not have a material  adverse effect on TNMP's
and TNP's consolidated financial position or results of operations.


     Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations (MD&A).

         The following discussion should be read in conjunction with the related
interim consolidated financial statements and notes.

Results Of Operations

          As discussed in TNP's and TNMP's 1998 Combined  Annual Report on  Form
10-K,  the  Public  Utility   Commission  of  Texas  (PUCT),   approved   TNMP's
transition-to-competition plan (Transition Plan)on July 22, 1998. The Transition
Plan includes a number of provisions that impact TNMP's financial results, which
will be noted as necessary in the following discussion.

   Overall Results

         TNP's  earnings  applicable  to common  stock were $3.1 million for the
quarter  ended March 31, 1999 as compared to $4.6 million for the quarter  ended
March 31, 1998.  Excluding the loss on FWI's  discontinued  operations  incurred
during 1998, earnings for the first quarter of 1998 were $5.1 million. Since the
operations of TNMP (the principal  subsidiary) currently represent most of TNP's
operations,  the following  discussion focuses on TNMP's operations unless noted
otherwise.


         Under the Transition Plan,  TNMP's earnings on its Texas operations are
capped at an 11.25% return on equity less assumed discounts on industrial rates,
which are expected to be  approximately  $2.9  million in 1999.  TNMP will apply
Texas  earnings in excess of the cap to recover  stranded  costs  related to its
generation  investment (TNP One) or will refund them to customers,  according to
PUCT guidelines. During the first quarter of 1999, TNMP's Texas earnings did not
exceed the cap established by the PUCT in the Transition Plan.
<PAGE>
          TNMP's  earnings  applicable to common stock were $3.8 million for the
quarter  ended March 31, 1999 as compared to $5.3 million for the quarter  ended
March 31, 1998. The $1.5 million  decrease is attributable to the factors listed
below (in millions):

       Texas demand purchased power savings
          Texas demand revenue                                      $      (1.4)
          Less:  Texas demand purchased power expense                      (5.2)
                                                                    ------------
                                                                            3.8 
       Changes in base revenues (excluding Texas demand)                   (3.3)
       Transmission expenses                                               (2.0)
       Depreciation expenses                                               (3.8)
       Interest                                                             2.1 
       All other (including income tax effects on the items above)          1.7 
                                                                    ------------
                                                                    $      (1.5)
                                                                    ============
         

   Base Revenues

         The  following  table  summarizes  the  components of base revenues (in
thousands).
<TABLE>
<CAPTION>

                          Three Months Ended March 31,
                                                                       Increase
                                               1999         1998      (Decrease)
<S>                                        <C>           <C>          <C>

         Operating revenues                 $ 118,111     $ 125,931    $ (7,820)

         Pass-through expenses                 38,314        41,351      (3,037)
                                            ----------    ----------   ---------

         Base revenues                      $  79,797     $  84,580    $ (4,783)
                                            ==========    ==========   =========
</TABLE>

         Pass-through  expenses in Texas  include fuel   and the  energy-related
portion of purchased  power.  In New Mexico,  purchased  power costs incurred to
serve  certain  industrial  customers  are  passed-through  to those  customers.
Details of  pass-through  expenses are discussed under "Results of Operations --
Operating Expenses."

         The  following  table  summarizes  the  components  of the base revenue
decrease from 1998 to 1999 (in thousands).

         Base revenue
         ------------
         Weather related                                              $      66
         Customer growth                                                    947
         Rate changes (primarily base rate reductions)                   (1,188)
         Industrial - firm rate sales                                    (1,581)
         Clear Lake standby revenue (Note 4)                               (818)
         Other                                                             (782)
                                                                      ----------
           Base revenue excluding Texas demand                           (3,356)
         Texas demand revenue                                            (1,427)
                                                                      ----------
               Base revenue decrease                                  $  (4,783)
                                                                      ==========

         Current quarter base revenue decreased $4.8 million,  or 5.7%, compared
to the corresponding  1998 period. The decrease resulted from rate reductions in
Texas  pursuant  to  the  Transition  Plan,  loss  of a  significant  industrial
customer,  lower revenues from a second significant industrial customer, and the
absence of standby  revenue  payments   resulting from the Clear Lake settlement
discussed in Note 4.


<PAGE>



         The following table  summarizes the components of  gigawatt-hour  (GWH)
sales.
<TABLE>
<CAPTION>

                                                 Three Months Ended March 31,
                                                                       Increase
                                               1999         1998      (Decrease)
<S>                                          <C>          <C>        <C>   

         GWH sales:
         Residential                              492           478          14
         Commercial                               402           382          20
         Industrial:
           Firm                                   112           175         (63)
           Economy                              1,044         1,061         (17)
         Power marketing                           22           113         (91)
         Other                                     26            25           1
                                             --------     ---------    --------
               Total GWH sales                  2,098         2,234        (136)
                                             ========     =========    ========
</TABLE>

         Current  quarter sales of 2,098 GWHs decreased by 136 GWHs (or 6.1%) as
compared to the  corresponding  1998 quarter  sales of 2,234 GWHs.  The decrease
resulted  from the  loss of a  significant  industrial  customer  and  decreased
off-system  sales.  This was partially offset by the increase in residential and
commercial sales resulting from customer growth.

   Operating Expenses

         The following table summarizes the components of TNMP's total operating
expenses (in thousands).
<TABLE>
<CAPTION>

                                                   Three Months Ended March 31,
                                                                      Increase
                                                 1999        1998    (Decrease)
<S>                                           <C>         <C>         <C>
         Purchased power and fuel expenses:
           Pass through expenses:
              Purchased power                 $   31,352  $   33,579  $  (2,227)
              Fuel                                 6,962       7,772       (810)
                                              ----------  ----------  ---------
               Subtotal                           38,314      41,351     (3,037)
           Texas demand purchased power           14,092      19,310     (5,218)
           New Mexico non-pass through
               purchased power                     4,719       5,869     (1,150)
           Other fuel costs                          247         295        (48)
                                              ----------  ----------  ---------
               Total                              57,372      66,825     (9,453)

         Transmission expense                      4,605       2,595      2,010

         Depreciation expense                     13,724       9,872      3,852

         Other operating expenses                 18,418      16,675      1,743

         Income and other tax expenses             8,923      11,188     (2,265)
                                              ----------  ----------  ---------

         Operating expenses                   $  103,042  $  107,155  $  (4,113)
                                              ==========  ==========  =========
</TABLE>
   Purchased Power and Fuel Expenses

         Under the Transition  Plan, TNMP will pass through to customers via the
fuel adjustment clause the  energy-related  portion of purchased power only. The
demand-related  portion of purchased power will be recovered  through base rates
and is not  subject  to  adjustment  or future  reconciliation.  Therefore,  any
difference  between  the  amount of  demand-related  purchased  power  recovered
through TNMP's rates, and the actual cost of such, will affect operating income.

     In the first quarter of 1999,  purchased power and fuel expenses  decreased
$9.5  million  from  the  level  incurred  during  the  first  quarter  of 1998.
Pass-through  expenses  accounted  for $3.0 million of the  decrease,  while non
pass-through  expenses  accounted for the remaining  $6.5 million.  The decrease
reflects  lower overall GWH  requirements  due to lower sales,  and lower energy
costs due to  increased  purchases  of spot market  power in 1999 as compared to
1998.  In the first  quarter of 1999,  the cost of energy  purchased in the spot
market was significantly less than the cost of energy available from alternative
sources  of  supply.  In  addition,  demand  costs  have  decreased,  due to the
replacement  of purchases  from Texas  Utilities  with purchases from lower cost
providers.  Demand costs have also  decreased  because the rate under which TNMP
purchases  capacity  from Clear Lake has been  significantly  reduced  under the
Clear Lake settlement, as discussed in Note 4.
<PAGE>
   Transmission Expenses

         Transmission   expenses   increased   primarily  due  to   discontinued
reimbursements  in accordance  with the Clear Lake  settlement,  as discussed in
Note 4.

   Depreciation Expenses

         Under the Transition  Plan,  TNMP will record $15 million of additional
depreciation  annually during  1999-2002 to recover stranded costs. In the first
quarter of 1999, the additional  depreciation accounted for substantially all of
the $3.8 million  increase in  depreciation  expense  over the first  quarter of
1998.

   Other Operating Expenses, Income and Other Tax Expenses

         Other  operating  expenses  for the current  quarter  were $1.7 million
higher  than in the same  quarter of 1998.  This  increase is  primarily  due to
abnormally  low  payroll-related  costs in the  first  quarter  of 1998.  Higher
outside services costs and accelerated  amortization of regulatory assets in the
current quarter also contributed to the increase.

         Current quarter income and other tax expenses decreased by $2.3 million
due to lower pre-tax income.

   Interest Expense

         Interest  charges  decreased by $2.1 million due to TNMP's January 1999
issuance of $175 million of 6.25% senior notes,  which  replaced $130 million of
12.5% secured debentures, and reduced debt levels of the credit facilities.

Financial Condition

   Liquidity

         Currently,  the main  sources of  liquidity  for TNP are cash flow from
operations,  borrowings from credit  facilities,  and sale of additional  common
stock. TNP's cash flow from operations was lower for the current year quarter as
compared to prior year quarter due to lower  receipts from  customers  offset by
lower  payments for purchased  power and interest  costs.  The changes in TNMP's
cash flow from operations mirrored those of TNP.

         In January 1999,  TNMP issued $175 million of 6.25% Senior Notes due in
2009 and used the  proceeds to retire its 12.5%  secured  debentures  and reduce
outstanding  borrowings under the credit  facilities,  as discussed in TNP's and
TNMP's 1998 Combined Annual Report on Form 10-K.

         TNMP has sufficient  liquidity to satisfy the  possibility of any known
contingencies.  Management  believes  cash  flow from  operations,  the new debt
described above, and periodic  borrowings under its revolving credit  facilities
should be sufficient to meet working  capital  requirements  and planned capital
expenditures at least through 1999.

Regulatory Matters

    New Mexico

         During the recent  session of the New Mexico  Legislature,  both houses
passed, and the Governor signed, the Electric Utility Industry Restructuring Act
of 1999 (the Act).  The Act  contains  many  provisions  in common  with  TNMP's
Community  Choice(R)  plan,  and opens New  Mexico's  electric  power  market to
consumer choice in 2001. The Act's provisions include:

  -   Phased in competition.  Public schools, residential and small business
      customers  can choose  among  competing  electric  suppliers  beginning
      January  2001.  Choice  will begin for all other  customers  in January
      2002.  The New Mexico  Public  Regulation  Commission  (NMPRC)  has the
      authority to delay the onset of choice by one year.

  -   Metering  and  billing  services  will be  provided  by the  regulated
      distribution utility. 

  -   Utilities must unbundle the competitive parts of their business from the
      regulated activities through creation of at least two separate affiliates.
          
  -   Utilities are guaranteed  recovery of 50% of their stranded costs over
      a five-year period. If certain  conditions are met, the NMPRC can allow
      up to 100% recovery of stranded costs.

  -   Each utility  must submit a  transition  plan to the NMPRC by March 1,
      2000.  Since TNMP already  operates under Community  Choice,  the NMPRC
      must  decide  whether  to  leave  it in  place,  or  conform  it to the
      provisions of the Act.


<PAGE>



         In Texas, legislation  establishing  competition  has been  approved by
the Senate, and is under consideration in the House of  Representatives.  TNMP's
Transition  Plan  provides  that the Plan will be  modified  to  conform  to any
legislation  enacting  competition  in the  electric  utility  industry.  Absent
legislation  implementing  retail  competition,  at the  end  of  the  five-year
transition  period  TNMP  shall  file with the PUCT a  proposal  to  voluntarily
implement  retail  access,  contingent  upon  the  approval  of  an  appropriate
mechanism for recovery of any remaining  stranded costs.  The PUCT has committed
to full recovery of stranded costs if they are  quantified  using a market-based
methodology,  TNMP offers retail access, and stranded costs are allocated fairly
to all customers.

Year 2000

         TNMP is actively  addressing  the Year 2000 issue (Y2K)  throughout its
operating and office environments. Many existing computer programs were designed
and  developed  to use only two digits to identify a year in the date field.  If
not addressed, these computer systems could fail, with possible material adverse
effects on TNMP's operations.

     In mid-1997  TNMP's  information  technology  staff  began to identify  and
assess corporate  software  applications,  equipment and operating  systems.  In
early 1998, the project was expanded to include  professionals  from  throughout
the company and to  identify  and assess  embedded  systems.  TNMP's  project to
analyze Y2K has  included  the  following  phases:  identification,  assessment,
remediation/implementation and testing.

         In its  analysis  to  identify  and  assess  the Y2K  impact on company
systems,  TNMP has conducted  extensive  studies to analyze the impact of Y2K on
all operating  systems.  As a result of these studies,  TNMP has developed a Y2K
mitigation  plan. The plan requires TNMP to amend,  replace,  or upgrade most of
its primary  corporate  information  systems,  some of which were already  being
replaced  or  upgraded  pursuant  to a  previously  approved  plan to replace or
upgrade such systems.

         The following is a brief summary of the renovation and validation,  and
implementation  progress for the critical  business  areas of TNMP - generation,
transmission,   distribution,   energy  management,  and  corporate  information
systems.

         Generating  Units. TNMP owns one power plant, TNP One, which is located
in  Robertson  County,  Texas.  TNP One has two units  that burn  lignite as the
primary fuel source to generate power. The total lignite supply is provided from
a mine  adjacent to the power  plant.  TNP plans to increase  the coal supply to
provide for an additional six-week supply prior to January 1, 2000. The plant is
also  capable  of  burning  natural  gas,  as well as  various  waste  products.
Integrated testing of the Plant Control Computer, which provides for most of the
computerized  operations  of the boiler and turbine  controls,  was completed on
Unit 1 in February 1999, and on Unit 2 in April 1999. The integrated  testing of
the Plant Control Computer detected no Y2K problems.

         In late  1998,  tests of the  Continuous  Emissions  Monitoring  System
determined that only non-critical Y2K issues existed. In April 1999, upgrades to
the Continuous Emissions  Monitoring System software were completed.  Subsequent
testing of the Continuous Emissions Monitoring System detected no Y2K issues.

         As of May 1,  1999,  the TNP One  generation  plant has  completed  the
assessment of all mission-critical  facilities,  and is approximately 93 percent
complete  with the  testing and  remediation  of those  facilities.  Testing and
remediation  of all  remaining  mission-critical  facilities  is  expected to be
complete by June 1999.

         Distribution System. TNMP is primarily a distribution company. Over 600
suspect  distribution  system devices have been identified and are being tested.
TNMP is  currently  testing  the devices  that have  external  clock  functions.
Devices  that  have no  external  clock  function  are  being  checked  with the
manufacturer and TNMP is reviewing their testing of those devices. All of TNMP's
critical distribution  substations have designs which contain redundant relaying
or bypass  switching  schemes to remove failed  devices and equipment for normal
operations, allowing for quick restoration of power to customers.

         As of May 1, 1999,  TNMP is 98 percent  complete with the assessment of
all distribution  system  mission-critical  facilities,  and is approximately 94
percent complete with the testing and remediation of those  facilities.  Testing
and remediation of all remaining  mission-critical  facilities is expected to be
complete by June 1999.


<PAGE>



         Transmission  System.  TNMP has transmission  lines which are a part of
the transmission grid comprised within the Electric Reliability Council of Texas
(ERCOT).  The transmission  grid within ERCOT is operated by member utilities in
conjunction with an Independent System Operator.  TNMP has transmission lines in
New Mexico which are part of the Western  Systems  Coordinating  Council (WSCC).
TNMP is  participating on ERCOT's Year 2000 Technical Task Force and on the Year
2000   Operational   Preparedness   and  Planning  Task  Force.   TNMP  is  also
participating in all testing, drills and contingency planning done by ERCOT, the
Independent System Operator and the WSCC.

         Testing and  remediation of  transmission  line  electronic  protective
devices is  approximately  97 percent  complete.  Testing and remediation of all
remaining facilities is expected to be complete by June 1999.

         Supervisory  Control and Data  Acquisition  Systems  (SCADA) and Energy
Management  Systems.  TNMP has three  SCADA  systems  in Texas.  A SCADA  system
reports on the status of protective  devices,  allows for the remote  control of
these same devices,  and reports and tracks  critical power flow  information on
the  transmission  and  distribution  grids.  These systems are new, having been
upgraded in 1997 and 1998.  TNMP is in the process of replacing the SCADA system
in New Mexico, which is not Year 2000 compliant.

         As of May 1, 1999,  TNMP has completed the  assessment of all SCADA and
Energy Management Systems mission-critical  facilities,  and is approximately 94
percent  complete  with the testing and  remediation  of those  facilities.  All
testing and remediation is expected to be complete by June 1999,  except for the
New Mexico SCADA system that will be complete in August 1999.

         Information Technology Systems. As of May 1, 1999, approximately 90% of
TNMP's  infrastructure  supporting  its  business  systems  has been  tested and
verified as Y2K compliant. TNMP expects to have the remaining infrastructure Y2K
compliant by June 30, 1999.  TNMP has completed the upgrade of its financial and
accounting  system to a Y2K ready  version.  Integrated  testing of the upgraded
financial  system will be  completed  in May 1999.  A new  customer  information
system is expected to be implemented and tested during the third quarter of 1999
and other corporate  information  systems directly related to TNMP's  operations
are expected to be installed  and tested by September  1999.  TNMP  incorporates
unit testing,  system testing,  integration  testing and acceptance testing into
the verification methodology.

         Y2K Remediation  Cost. The costs associated with TNMP's Y2K efforts are
expected to be  approximately  $10.2  million.  Approximately  $9 million of the
total cost is to upgrade or replace various  information  technology systems, as
discussed above, as well as improve the infrastructure to support those systems.
TNMP does not  expect  these  costs to have a material  impact on its  financial
position or results of  operations.  TNMP  continues  to work with key  software
vendors and outside consultants to validate its Y2K compliance project. To date,
TNMP has spent  approximately  $7.1 million on Y2K remediation.  TNMP has in the
past used,  and expects to continue to use,  cash flow from  operations  to fund
costs associated with Y2K.

         Third-Party  Vendors.  In addition to its own mitigation  plan, TNMP is
actively  working  with its key vendors and other third  parties with which TNMP
has a material  relationship to assist such parties in achieving compliance with
respect  to Y2K in those  systems  affecting  TNMP's  operations.  Such  parties
include  electric  power  providers  in Texas  and New  Mexico;  the  fuel,  ash
disposal,  and limestone  contractors at TNP One;  transmission and distribution
material  suppliers;  and banking  partners.  Although  TNMP  believes that such
persons are working  diligently to properly  address Y2K, TNMP cannot  guarantee
that these third-party  systems will be timely  converted,  or that a failure to
convert by another  company or a  conversion  that is  incompatible  with TNMP's
systems, would not have a material adverse effect on TNMP.

         Contingency  Plans. The primary operating  processes of TNMP's business
(e.g.,  the production,  transmission,  and  distribution of electric power) are
subject  to  contingencies  related to  weather,  equipment  failure,  and other
factors.  TNMP has drafted Y2K contingency plans by adapting previously existing
contingency plans. TNMP will finalize the Y2K contingency plan by June 1999.

         The Risks of the  Company's  Year 2000  Issues.  Based upon its current
assessment  and testing of the Y2K issue,  TNMP believes the  reasonably  likely
worst-case  Y2K  scenarios  would  have the  following  impacts  upon it and its
operations. With respect to its ability to provide energy to its customers, TNMP
believes that the reasonably likely worst-case scenario is for small,  localized
interruptions  of  electrical  service that are restored in a time frame that is
within  normal  service  levels.  With respect to services that are essential to
TNMP's operations,  such as customer service, business operations,  supplies and
emergency response  capabilities,  the reasonably likely worst-case  scenario is
for  minor  disruptions  of  essential  services  with  rapid  recovery  and all
essential information and processes ultimately recovered.


<PAGE>



         While risks related to the third  parties' lack of Y2K readiness  could
materially  and adversely  affect  TNMP's  business,  results of operations  and
financial   condition,   TNMP  expects  its  Y2K  readiness  efforts  to  reduce
significantly  its  level of  uncertainty  about the  impact of third  party Y2K
issues on both its IT systems and non-IT systems.


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

         See Note 4 for information regarding material legal proceedings.

Item 4.  Submission of Matters to a Vote of Securities Holders.

         At the annual meeting of the Company's shareholders on May 3, 1999, the
shareholders  (i)  elected  John A.  Fanning,  Larry G.  Wheeler,  and Dennis H.
Withers as Class 2  directors,  all for  three-year  terms;  (ii)  ratified  the
appointment of Arthur Andersen LLP, Certified Independent Public Accountants, as
independent  auditors for 1999; and (iii) approved  amendments to the TNP Equity
Incentive Plan.

         The vote in the election of directors was as follows:

         John A. Fanning:           For:  10,788,274 Withheld:  359,367
         Larry G. Wheeler:          For:  10,783,004 Withheld:  364,637
         Dennis H. Withers:         For:  10,789,508 Withheld:  358,133

         The  vote  in  the  ratification  of  Arthur  Andersen  LLP,  Certified
Independent  Public  Accountants,  as independent  auditors was 11,068,103  for,
43,625 against, and 35,913 abstaining.

     The vote in the  amendments to the TNP Equity  Incentive Plan was 8,025,766
for, 3,007,828 against, and 114,047 abstaining.

Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits

         The following exhibits are filed with this report:

         27(a)    Financial Data Schedule for TNP.

         27(b)    Financial Data Schedule for TNMP.

(b)      Reports on Form 8-K - None

Statement Regarding Forward Looking Information

     The discussions in this document that are not historical facts,  including,
but  not  limited  to,  the  continued   application  of  regulatory  accounting
principles,  future cash flows and the potential recovery of stranded costs, are
based upon current expectations. Actual results may differ materially. Among the
facts that could cause the results to differ  materially from  expectations  are
the  following:  whether  legislation  is enacted in Texas,  and its  effects on
TNMP's business; the effects of recently passed legislation in New Mexico on the
regulation of TNMP's business; changes in regulations affecting TNP's and TNMP's
businesses;  PUCT or court disapproval of the Clear Lake litigation  settlement;
insurance coverage available for claims made in litigation;  future acquisitions
or strategic partnerships;  general business and economic conditions,  and price
fluctuations  in the electric  power  market;  the  effectiveness  of TNMP's Y2K
mitigation plan, and the timely Y2K compliance by TNP's and TNMP's vendors;  and
other factors described from time to time in TNP's and TNMP's reports filed with
the Securities and Exchange Commission. TNP and TNMP wish to caution readers not
to place undue reliance on any such forward looking  statements,  which are made
pursuant to the Private  Securities  Litigation Reform Act of 1995 and, as such,
speak only as of the date made.



<PAGE>


                     TNP ENTERPRISES, INC. AND SUBSIDIARIES
                 TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES





                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


(Registrant)                                 TNP ENTERPRISES, INC. AND
                                             TEXAS-NEW MEXICO POWER COMPANY


Date: May 13, 1999                           By \s\ MANJIT S. CHEEMA
                                                --------------------
                                                  Manjit S. Cheema
                                                  Senior Vice President and 
                                                  Chief Financial Officer


Date: May 13, 1999                           By \s\ MICHAEL J. RICKETTS
                                                -----------------------
                                                  Michael J. Ricketts
                                                  Controller and as 
                                                  Chief Accounting Officer