This Instrument Contains After-Acquired Property Provisions



             This Instrument Grants a Security Interest by a Utility

                         Texas-New Mexico Power Company
                   (Formerly Community Public Service Company)

                                       To

             First Trust of Illinois, National Association Trustee.


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


                       Twenty-Fifth Supplemental Indenture

                         Dated as of September 10, 1996


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


                          Supplemental to and Modifying

                              Indenture of Mortgage
                                       and
                                  Deed of Trust
                          Dated as of November 1, 1944
                         (as supplemented and modified)








<PAGE>
          This Instrument Contains After-Acquired Property Provisions.

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

            This Instrument Grants a Security Interest by a Utility.

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

      This      is a Security Agreement granting a Security Interest in Chattels
                including Chattels affixed to Realty as well as a
         Mortgage and Deed of Trust upon Real Estate and Other Property

     THIS TWENTY-FIFTH  SUPPLEMENTAL INDENTURE,  dated as of September 10, 1996,
between  Texas-New  Mexico Power  Company  (formerly  Community  Public  Service
Company),  as debtor,  a Texas  corporation  (hereinafter  sometimes  called the
"Company"), whose mailing address and address of its principal place of business
is 4100  International  Plaza, P.O. Box 2943, Fort Worth,  Texas 76113, party of
the first part, and First Trust of Illinois,  National Association  (hereinafter
sometimes called the "Trustee"),  (which is successor trustee to Bank of America
Illinois, a banking corporation organized under the laws of Illinois,  which was
formerly  known, at various times,  as Continental  Bank, a banking  corporation
organized under the laws of Illinois,  Continental Bank,  National  Association,
and Continental  Illinois National Bank and Trust Company of Chicago  (sometimes
referred to as "Predecessor Trustee")), as Trustee and secured party, and having
its  principal  place of  business  and  mailing  address at 400 North  Michigan
Avenue, Chicago, Illinois 60611, party of the second part:

         WHEREAS,  Community  Public  Service  Company,  a Delaware  corporation
(hereinafter  sometimes  called  the  "Predecessor  Company"),   has  heretofore
executed and  delivered to the City  National  Bank and Trust Company of Chicago
(hereinafter  sometimes called the "Old Trustee"),  an Indenture of Mortgage and
Deed of Trust  dated as of November 1, 1944  (hereinafter  sometimes  called the
"Original  Indenture,"  capitalized  terms used herein and not otherwise defined
herein shall have the same meaning as set forth in the Original  Indenture),  to
secure as provided  therein,  its bonds (in the  Original  Indenture  and herein
called the "Bonds") to be designated generally as its "First Mortgage Bonds" and
to be issued in one or more series as provided in the Original Indenture; and

         WHEREAS,  the Predecessor Company has heretofore executed and delivered
to the Old Trustee six indentures supplemental to the Original Indenture,  which
supplemental indentures were dated as of March 1, 1947, January 1, 1949, January
1, 1952, March 1, 1954, June 1, 1957 and June 1, 1961, respectively; and



<PAGE>
     WHEREAS, simultaneously with the merger of the Predecessor Company into the
Company,   the  Company  has   heretofore   executed  and  delivered  a  Seventh
Supplemental  Indenture,  dated  as of  May 1,  1963,  to  Continental  Illinois
National Bank and Trust Company of Chicago (into which on September 1, 1961, the
Old Trustee was merged) as Predecessor Trustee; and

         WHEREAS,  the Company has  heretofore  executed  and  delivered  to the
Predecessor Trustee an Eighth Supplemental Indenture dated as of July 1, 1963; a
Ninth  Supplemental  Indenture dated as of August 1, 1965; a Tenth  Supplemental
Indenture dated as of May 1, 1966; an Eleventh  Supplemental  Indenture dated as
of October 1, 1969; a Twelfth Supplemental  Indenture dated as of May 1, 1971; a
Thirteenth  Supplemental  Indenture  dated  as of July  1,  1974;  a  Fourteenth
Supplemental  Indenture  dated as of March 1,  1975;  a  Fifteenth  Supplemental
Indenture  dated as of  September 1, 1976;  a Sixteenth  Supplemental  Indenture
dated as of November 1, 1981; a Seventeenth  Supplemental  Indenture dated as of
December 1, 1982; an Eighteenth  Supplemental Indenture dated as of September 1,
1983; a Nineteenth  Supplemental  Indenture dated as of May 1, 1985; a Twentieth
Supplemental  Indenture  dated as of July 1, 1987; a  Twenty-First  Supplemental
Indenture dated as of July 1, 1989; a Twenty-Second Supplemental Indenture dated
as of January  15,  1992;  a  Twenty-Third  Supplemental  Indenture  dated as of
September  15, 1993;  and a  Twenty-Fourth  Supplemental  Indenture  dated as of
November 3, 1995; and

         WHEREAS, pursuant to the Original Indenture, as heretofore supplemented
and modified, there have been executed, authenticated,  delivered and issued and
there  are now  outstanding  First  Mortgage  Bonds of series  and in  principal
amounts as follows:


                          Title         Issued      Outstanding

 Series L, 10 1/2due 2000           $ 12,000,000   $  8,888,000

 Series M, 8.70 percent due 2006    $ 10,000,000   $  8,100,000

 Series R, 10 percent due 2017      $ 65,000,000   $ 61,750,000

 Series S, 9N percent due 2019      $ 20,000,000   $ 19,400,000

 Series T, 11 1/4percent due 1997   $130,000,000   $100,800,000

 Series U, 9 1/4percent due 2000    $100,000,000   $100,000,000

 Series V, due 2000                 $ 30,000,000   $ 30,000,000



and

         WHEREAS,  Continental  Illinois  National  Bank and  Trust  Company  of
Chicago changed its name to Continental Bank,  National  Association,  effective
December 12, 1988;  Continental Bank,  National  Association changed its name to
Continental Bank, effective June 29, 1994; and Continental Bank changed its name
to Bank of America Illinois effective September 1, 1994; and

         WHEREAS, on August 21, 1995 Bank of America Illinois and certain of its
affiliates  and First Bank  National  Association  (the parent of First Trust of
Illinois,  National  Association) and certain of its affiliates,  entered into a
Purchase and  Assumption  Agreement,  as  supplemented,  which  provided for the
purchase by the Trustee (or an affiliate) of  substantially  all of the Illinois
trust  and  agency  appointments  of  the  Predecessor  Trustee,  including  the
appointment under the Original Indenture, as supplemented and modified; and

         WHEREAS,  pursuant to Section 3-3 of the Illinois  Corporate  Fiduciary
Act (the "Act") and the No-Objection letter No. 95-1021 dated July 21, 1995 from
the  Illinois  Commissioner  of  Banks  and  Trust  Companies,  the  sale of the
Predecessor  Trustee's  corporate trust business to another corporate  fiduciary
will result in automatic  succession of the transferred accounts pursuant to the
provisions of the Act,  provided such  succession is not prohibited by the trust
instrument's provisions; and

         WHEREAS,  the  Trustee  is  qualified  and  eligible  to act as trustee
pursuant to the  Original  Indenture,  as  supplemented  and  modified,  and the
automatic succession is not prohibited by the Original Indenture; and

         WHEREAS,  to complete the  transfer  under the Act, the Trustee and the
Predecessor  Trustee  entered into an Instrument  of Transfer and  Assignment of
Certain Illinois  Appointments dated December 8, 1995 whereby the Trustee became
the trustee under the Original Indenture, as supplemented and modified; and

         WHEREAS, it is provided in the Original Indenture,  among other things,
that the  Company  and the Trustee  may,  and when so  required by the  Original
Indenture shall, enter into such indentures supplemental thereto as may or shall
by them be deemed  necessary or desirable and which shall thereafter form a part
thereof for the  purposes,  among others,  of (a)  subjecting to the lien of the
Original Indenture  additional  property acquired by the Company,  (b) providing
for the  creation  of any new  series of  Bonds,  designating  the  series to be
created and specifying the form and provisions of the Bonds of such series,  (c)
providing for a sinking, amortization,  improvement or other analogous funds for
the  benefit  of all or any of the  Bonds  of any  one or more  series,  of such
character  and of such  amount  and upon such terms and  conditions  as shall be
contained in such supplemental indenture; and (d) providing for modifications in
the Original Indenture, subject to certain conditions; and

         WHEREAS,  the Company is entering  into that certain  Credit  Agreement
dated as of  September  10, 1996 (as the same may be amended  from time to time,
the "Credit Agreement"), among the Company, certain lenders (the "Lenders"), The
First National Bank of Chicago ("First  Chicago"),  as administrative  agent (in
such capacity,  together with its  successors and assigns in such capacity,  the
"Administrative  Agent"), and collateral agent (in such capacity,  together with
its  successors  and  assigns in such  capacity,  the  "Collateral  Agent,"  and
together with the Administrative Agent, the "Agents") for the Lenders, and First
Chicago and Union Bank of California, N.A., as co-agents for the Lenders; and

         WHEREAS, the Credit Agreement requires, as a condition precedent to the
effectiveness  of the  Commitments  (as defined in the Credit  Agreement) of the
Lenders,  that the Company issue a new series of First  Mortgage  Bonds to First
Chicago,  as Collateral  Agent (the  "Collateral  Agent") for the Agents and the
Lenders under a Bond Agreement,  dated as of September 10, 1996 (as the same may
be amended from time to time, the "Bond Agreement"),  in an aggregate  principal
amount of up to  $100,000,000  to secure the payment when due of the Obligations
(as defined in the Bond Agreement); and

         WHEREAS,  the  agreements  of  the  parties  to  the  Credit  Agreement
constitute  consideration  for the issuance of such First  Mortgage Bonds to the
Collateral Agent; and

         WHEREAS, the Company, as required by the Credit Agreement,  proposes to
create under the Original  Indenture a new issue of First Mortgage  Bonds, to be
designated as First Mortgage Bonds, Series W (the "Bonds of Series W") to be due
on September 10, 2001, in an aggregate  principal  amount of up to  $100,000,000
and proposes to issue the same from time to time as provided for herein; and

         WHEREAS,  it is the  intent of the  Company  and the  Lenders  that any
payment made in respect to the Company's  obligations under the Credit Agreement
shall be deemed a payment in respect of the Bonds of Series W, but such  payment
shall not reduce the principal amount of the Bonds of Series W unless,  and then
only to the extent,  the aggregate  amount of the Total Commitment (as such term
is defined in the Credit  Agreement) is irrevocably  reduced  concurrently  with
such payment; and

         WHEREAS,  it is the intent of the Company and the Lenders that there be
no duplication in the obligations paid by the Company under the Credit Agreement
and the Bonds of Series W, but the payments, if any, of principal of or interest
on the Bonds of Series W be applied to payment of the  Obligations  and that the
benefits and security of the lien of the Original Indenture, as supplemented and
amended, be extended to the Obligations by means of the issuance and delivery of
the Bonds of Series W to the Collateral  Agent for the benefit of the Agents and
the Lenders; and

         WHEREAS,   the  Company  is  required  to  execute  this   Twenty-Fifth
Supplemental  Indenture  and  hereby  requests  the  Trustee  to  join  in  this
Twenty-Fifth  Supplemental  Indenture for the purpose, among others, of creating
and  describing  the terms of the Bonds of Series W (the  Original  Indenture as
heretofore  supplemented  and modified and as supplemented  and modified by this
Twenty-Fifth   Supplemental   Indenture  being  herein   sometimes   called  the
"Indenture"); and

         WHEREAS,  all acts and proceedings  required by law and by the Restated
Articles of Incorporation and By-Laws of the Company necessary to make the Bonds
of Series W, when  executed by the Company,  authenticated  and delivered by the
Trustee  and duly  issued,  the  valid,  binding  and legal  obligations  of the
Company,  and to constitute the Indenture a valid and binding  mortgage and deed
of trust for the security of all of the Bonds in  accordance  with its and their
terms,  have  been  done and  taken;  and the  execution  and  delivery  of this
Twenty-Fifth Supplemental Indenture have been in all respects duly authorized.

         NOW, THEREFORE, THIS TWENTY-FIFTH  SUPPLEMENTAL INDENTURE,  WITNESSETH,
that, in order to secure the payment of the principal of,  premium,  if any, and
interest on all Bonds at any time issued and  outstanding  under the  Indenture,
according to their tenor,  purport and effect, and to secure the performance and
observance of all the covenants  and  conditions  contained in said Bonds and in
the Indenture, and to declare the terms and conditions upon and subject to which
the Bonds of Series W are to be  issued  and  secured,  and for the  purpose  of
confirming the lien of the Original  Indenture,  as heretofore  supplemented and
modified,  and  for  and in  consideration  of the  premises  and of the  mutual
covenants  contained  in the  Indenture  and of the  acceptance  of the Bonds of
Series W by the holders thereof, and of the sum of $1 to the Company paid by the
Trustee at or before the execution and delivery  hereof,  and for other valuable
considerations,  the  receipt  whereof is hereby  acknowledged,  the Company has
executed and delivered this Twenty-Fifth  Supplemental  Indenture,  and by these
presents does grant, bargain, sell, convey, assign, transfer,  mortgage, pledge,
hypothecate,  set over and confirm unto the  Trustee,  the  following  property,
rights, privileges and franchises, to wit:

                                    CLAUSE I.

         All the  property,  real,  personal or mixed,  tangible  or  intangible
(other than that  Excepted  Property as defined in the  Granting  Clauses of the
Original Indenture) of every kind,  character and description which is described
in Article Five hereof.

                                   CLAUSE II.

         Without  in any  way  limiting  anything  in  Article  Five  hereof  or
hereinafter described,  all and singular the lands, real estate,  chattels real,
interests in lands,  leaseholds,  ways,  rights-of-way,  easements,  servitudes,
permits  and  licenses,   lands  under  water,   riparian  rights,   franchises,
privileges,  gas or electric generating plants,  natural gas plants, gas storage
plants and facilities,  gas or electric  transmission and distribution  systems,
gas  gathering   systems  and  tap  lines,   and  all  apparatus  and  equipment
appertaining  thereto,  offices,  buildings,  warehouses  and other  structures,
machine  shops,  tools,  materials  and  supplies and all property of any nature
appertaining  to any of the  plants,  systems,  business  or  operations  of the
Company,  whether or not affixed to the realty,  used in the operation of any of
the premises or plants or systems or otherwise, which are now owned or which may
hereafter be owned or acquired by the Company,  other than Excepted  Property as
defined in the Granting Clauses of the Original Indenture.

                                   CLAUSE III.

         All corporate,  Federal, state, municipal and other permits,  consents,
licenses,  bridge licenses,  bridge rights, river permits,  franchises,  grants,
privileges  and  immunities of every kind and  description,  now belonging to or
which may hereafter be owned,  held,  possessed or enjoyed by the Company (other
than  Excepted  Property  as defined  in the  Granting  Clauses of the  Original
Indenture) and all renewals,  extensions,  enlargements and modifications of any
of them.

                                   CLAUSE IV.

         Also  all  other  property,   real,  personal  or  mixed,  tangible  or
intangible  (other than Excepted  Property as defined in the Granting Clauses of
the Original Indenture) of every kind, character and description and wheresoever
situated,  whether or not  useful in the  generation,  manufacture,  production,
transportation,  distribution or sale of gas or electricity,  now owned or which
may hereafter be acquired by the Company, it being the intention hereof that all
property,  rights and  franchises  acquired by the Company after the date hereof
(other than Excepted Property as defined in the Granting Clauses of the Original
Indenture) shall be as fully embraced within and subjected to the lien hereof as
if such property were now owned by the Company and were  specifically  described
herein and conveyed hereby.

                                    CLAUSE V.

         Together  with all and  singular the plants,  buildings,  improvements,
additions, tenements, hereditaments, easements, rights, privileges, licenses and
franchises  and all  other  appurtenances  whatsoever  belonging  or in  anywise
appertaining to any of the property hereby mortgaged or pledged,  or intended so
to be, or any part  thereof,  and the reversion  and  reversions,  remainder and
remainders,  and the rents, revenues,  issues,  earnings,  income,  products and
profits  thereof,  and of every part and  parcel  thereof,  and all the  estate,
right, title, interest, property, claim and demand of every nature whatsoever of
the  Company  at law,  in  equity  or  otherwise  howsoever,  in, of and to such
property and every part and parcel thereof.

                                   CLAUSE VI.

         Also any and all property, real, personal, or mixed (including Excepted
Property as defined in the  Granting  Clauses of the Original  Indenture),  that
may, from time to time hereafter, by delivery or by writing of any kind, for the
purpose  hereof be in  anywise  subjected  to the lien  hereof  or be  expressly
conveyed,  mortgaged,  assigned,  transferred,  deposited  and/or pledged by the
Company or by anyone in its behalf or with its consent, to and with the Trustee,
which is hereby  authorized  to receive the same at any and all times as and for
additional  security  and  also,  when  and as in  the  Indenture  provided,  as
substituted security hereunder, to the extent permitted by law. Such conveyance,
mortgage, assignment,  transfer, deposit and/or pledge or other creation of lien
by the  Company  or by anyone in its  behalf or with its  consent of or upon any
property as and for additional security may be made subject to any reservations,
limitations, conditions and provisions which shall be set forth in an instrument
or  agreement  in writing  executed by the Company or the person or  corporation
conveying, assigning, mortgaging,  transferring,  depositing and/or pledging the
same and/or by the Trustee,  respecting the use,  management and  disposition of
the property so conveyed,  assigned,  mortgaged,  transferred,  deposited and/or
pledged, or the proceeds thereof.

                                EXCEPTED PROPERTY

         There is,  however,  expressly  excepted and excluded from the lien and
operation of the Indenture all property  specifically excepted under the heading
"Excepted  Property" of the Granting  Clauses of the Original  Indenture and all
property released or otherwise disposed of pursuant to the provisions of Article
Seven of the Original Indenture.

         The Company may, however, pursuant to the provisions of Granting Clause
VI above, subject to the lien and operation of the Indenture, all or any part of
the  Excepted  Property  as defined  in the  Granting  Clauses  of the  Original
Indenture.

         TO HAVE AND TO HOLD the Trust  Estate  (as  defined in  Paragraph  A of
Section  1.06  of the  Original  Indenture)  and  all and  singular  the  lands,
properties,  estates,  rights,  franchises,  privileges and appurtenances hereby
mortgaged,  conveyed,  pledged or assigned,  or intended so to be, together with
all the appurtenances thereto appertaining,  unto the Trustee and its successors
and assigns, forever:

         SUBJECT,  HOWEVER, to Permitted  Encumbrances as defined in Paragraph G
of Section 1.07 of the  Original  Indenture;  and,  with respect to any property
which the Company may hereafter acquire, to all terms,  conditions,  agreements,
covenants,  exceptions  and  reservations  expressed or provided in the deeds or
other instruments,  respectively, under and by virtue of which the Company shall
hereafter acquire the same and to any liens thereon  existing,  and to any liens
for unpaid  portions of the purchase money placed  thereon,  at the time of such
acquisitions;

         BUT IN  TRUST,  NEVERTHELESS,  for the  equal  and  proportionate  use,
benefit,  security and  protection of those who from time to time shall hold the
Bonds and coupons  authenticated  and  delivered  under the  Indenture  and duly
issued by the Company, without any discrimination, preference or priority of any
one Bond or coupon  over any other by reason of  priority  in the time of issue,
sale or negotiation thereof or otherwise, except as provided in Section 10.02 of
the Original  Indenture,  so that, subject to said Section 10.02 of the Original
Indenture,  each and all of said Bonds and  coupons  shall have the same  right,
lien and privilege under the Original Indenture,  as heretofore supplemented and
as  supplemented  by this  Twenty-Fifth  Supplemental  Indenture,  and  shall be
equally  secured  thereby  and  hereby  and  shall  have the same  proportionate
interest  and share in the Trust  Estate,  with the same effect as if all of the
Bonds and coupons had been issued,  sold and negotiated  simultaneously;  and in
trust for enforcing payment of the principal of the Bonds and of the premium, if
any, and  interest  thereon,  according to the tenor,  purport and effect of the
Bonds and coupons and of the Indenture, and for enforcing the terms, provisions,
covenants and stipulations in the Indenture and in the Bonds set forth;

         UPON  CONDITION  that,  until the  happening of an Event of Default (as
defined  in Section  14.01 of the  Original  Indenture),  the  Company  shall be
suffered and permitted to possess, use and enjoy the Trust Estate, except money,
securities and other personal  property pledged or deposited with or required to
be pledged or deposited with the Trustee under the Indenture, and to receive and
use  the  rents,  revenues,  issues,  earnings,  income,  products  and  profits
therefrom:

                                   ARTICLE ONE

           BONDS OF SERIES W AND CERTAIN PROVISIONS RELATING THERETO.

         SECTION  1.01.  Terms of Bonds of Series W. There  shall be, and hereby
is, created a new series of Bonds,  known as and entitled "First Mortgage Bonds,
Series W, due 2001"  (herein  referred to as the "Bonds of Series  W"),  and the
form thereof shall be  substantially  as  hereinafter  set forth in Section 1.02
hereof.  The  principal  amount of the  Bonds of  Series W shall not be  limited
except as  provided in Section  2.01 of the  Original  Indenture  (as amended by
Section 1.01 of the Thirteenth  Supplemental Indenture dated as of July 1, 1974)
and  except  as may be  provided  in any  indenture  supplemental  thereto.  The
definitive  Bonds of Series W shall be issued only as  registered  Bonds without
coupons  of the  denomination  of $1,000 or any  multiple  thereof,  and of such
respective  amounts  of each of said  denominations  as may be  executed  by the
Company and delivered to the Trustee for authentication and delivery.

         The Bonds of Series W shall be registered in the name of the Collateral
Agent for the Agents and the Lenders who are parties to the Credit Agreement.

         The  Bonds of  Series W are to be  issued  to the  Collateral  Agent to
secure  the  payment  when  due of  the  Obligations  (as  defined  in the  Bond
Agreement),  including,  without limitation, the Loans (as defined in the Credit
Agreement).

         The Bonds of Series W are to be issued in various  amounts on  multiple
dates to coincide  with the  Borrowings as defined in and pursuant to the Credit
Agreement and shall be limited to an aggregate principal amount of $100,000,000,
but the aggregate principal amount thereof outstanding at any one time shall not
exceed the amount as is equal to the Total  Commitment (as defined in the Credit
Agreement) or, if the Total Commitment shall have been terminated, the aggregate
outstanding  principal amount of the Loans, as defined in the Credit  Agreement.
The  principal  of the  Bonds  of  Series  W shall  be  payable  in  whole or in
installments on such date or dates as the Company has any obligation to make any
payment  under the Credit  Agreement,  but not later than the Maturity  Date (as
defined in the Credit  Agreement).  Bonds of Series W may be issued hereunder by
the Company's  submitting a Written Order of the Company to the Trustee at least
three (3)  business  days  prior to the date  Bonds of Series W are to be issued
("Issue Date").

         The Bonds of Series W will  bear  interest  at a rate per annum on each
date (an "interest  payment  date") as interest or fees are payable from time to
time  pursuant  to the Credit  Agreement  as shall  cause the amount of interest
payable  on such date on the Bonds of Series W to equal the  amount of  interest
and fees payable on such date under the Credit Agreement. The amount of interest
and fees  payable  from time to time  under the Credit  Agreement,  the basis on
which  such  interest  and fees are  computed  and the  dates on which  they are
payable are set forth in the Credit Agreement.

         Any  payment  made in respect to the  Company's  obligations  under the
Credit  Agreement shall be deemed a payment in respect of the Bonds of Series W,
but such payment shall not reduce the principal  amount of the Bonds of Series W
unless,  and  then  only  to the  extent,  the  aggregate  amount  of the  Total
Commitment is irrevocably reduced concurrently with such payment. The obligation
of the Company to make payments with respect to the principal of and interest on
the Bonds of Series W shall be fully  satisfied  and  discharged  to the  extent
that,  at any time that any such payment  shall be due,  the Company  shall have
paid fully the then due  principal of and interest on, and fees with respect to,
the Loans.  Until such time as the Trustee shall have  received  notice from the
Collateral  Agent  that an "Event of  Default"  under the Credit  Agreement  has
occurred  and is  continuing,  the Trustee  shall be entitled to assume that all
such  payments  have been made.  Any such notice shall  provide the Trustee with
information  on the principal and interest  payments due thereafter on the Bonds
of Series W.

         Upon the satisfaction of the conditions  precedent contained in Section
9.17 of the Credit Agreement,  the Bonds of Series W shall be surrendered to the
Company and the Company's obligations  thereunder shall be discharged and deemed
satisfied.

         The  definitive  Bonds of  Series W may be  issued in the form of Bonds
engraved,  printed,  lithographed  on steel engraved  borders or typed on safety
paper.

         The  person  in whose  name any Bond of Series W is  registered  at the
close of business on any record date (as  hereinbelow  defined)  with respect to
any interest  payment date shall be entitled to receive the interest  payable on
such interest  payment date  notwithstanding  the  cancellation  of such Bond of
Series W upon any transfer or exchange thereof  (including any exchange effected
as an incident to a partial  redemption  thereof)  subsequent to the record date
and prior to such interest payment date,  except that, if and to the extent that
the Company  shall  default in the payment of the interest due on such  interest
payment date,  then the  registered  holders of Bonds of Series W on such record
date  shall  have no  further  right to or claim in  respect  of such  defaulted
interest  as such  registered  holders  on such  record  date,  and the  persons
entitled to receive payment of any defaulted interest thereafter payable or paid
on any Bonds of Series W shall be the registered holders of such Bonds of Series
W on the record date for payment of such  defaulted  interest.  The term "record
date" as used in this  Section  1.01,  and in the form of the Bonds of Series W,
with respect to any interest  payment date  applicable to the Bonds of Series W,
shall  mean the date  five  days  prior to such  interest  payment  date (or the
preceding  business  day if a holiday  or other  day on which the  office of the
Trustee is closed).

         Subject to the  provisions  of Section 2.11 of the Original  Indenture,
all definitive  Bonds of Series W, upon surrender at the principal office of the
Trustee,  shall be  exchangeable  for  other  Bonds of  Series W of a  different
denomination or denominations, as requested by the holder surrendering the same.
The Company shall execute, and the Trustee shall authenticate and deliver, Bonds
of Series W whenever the same shall be required for any such exchange.

         Notwithstanding   the  provisions  of  Section  2.11  of  the  Original
Indenture,  no charge  shall be made for any  exchange  of Bonds of Series W for
other  Bonds  of  Series  W of  different  authorized  denominations  or for any
transfer of Bonds of Series W, except that the Company at its option may require
the  payment  of a sum  sufficient  to  reimburse  it for any stamp tax or other
governmental charge incident thereto.

         The Bonds of Series W shall be  redeemed by the Company in whole at any
time prior to maturity  at a  redemption  price of 100 percent of the  principal
amount to be redeemed,  plus any accrued and unpaid  interest to the  redemption
date, but only if the Trustee shall receive a written demand from the Collateral
Agent  for  redemption  of all Bonds of  Series W held by the  Collateral  Agent
stating that an "Event of Default"  under the Credit  Agreement has occurred and
is continuing  and that payment of the principal  amount  outstanding  under the
Credit Agreement,  all interest thereon and all other amounts payable thereunder
are  immediately  due and  payable  and  demanding  payment  thereof;  provided,
however,  that the  Bonds of Series W shall not be  redeemed  in the event  that
prior  to the  date of  such  redemption  the  Trustee  shall  have  received  a
certificate of the Collateral  Agent (a) stating that there has been a waiver of
such Event of Default, or (b) withdrawing said written demand. The redemption of
the Bonds of Series W shall be made forthwith upon receipt of such demand by the
Company  from the  Required  Lenders (as defined in the Credit  Agreement),  the
Administrative  Agent or the Collateral Agent on behalf of the Required Lenders,
or the Trustee.

         The Trustee  hereunder  shall, by virtue of its office as such Trustee,
be a paying agent of the Company for the purpose of the payment of the principal
of and premium,  if any, and interest on the Bonds of Series W and the registrar
and  transfer  agent  of  the  Company  for  the  purpose  of  registering   and
transferring  Bonds of Series W.  Neither the  Company nor the Trustee  shall be
required to make transfers or exchanges of Bonds of Series W for a period of ten
days next  preceding the mailing of notice of redemption of Bonds of Series W to
be redeemed  and  neither the Company nor the Trustee  shall be required to make
transfers  or  exchanges  of any  Bonds of  Series  W  designated  in whole  for
redemption  or that  part  of any  Bond  of  Series  W  designated  in part  for
redemption.

     SECTION 1.02.  Form of Bonds of Series W. The Bonds of Series W shall be in
substantially the following form:

                           [FORM OF BOND OF SERIES W]

No. W                                                   $

                         TEXAS-NEW MEXICO POWER COMPANY
                     First Mortgage Bond, Series W, Due 2001
                             Due September 10, 2001

         Texas-New Mexico Power Company, a Texas corporation (hereinafter called
the "Company"),  for value  received,  hereby promises to pay to , as Collateral
Agent (as hereinafter defined) under the Credit Agreement hereinafter described,
or registered assigns,  ___________ Million Dollars  ($_________) or such lesser
amount as is equal to the aggregate  principal  amount of the outstanding  Loans
(as  defined  in  the  Credit  Agreement   hereinafter  defined),  in  whole  or
installments  on such date or dates as the  Company has any  obligation  to make
payments  under the Credit  Agreement,  but not later than the Maturity Date (as
defined in the Credit  Agreement),  and to pay interest on the unpaid  principal
amount  hereof  to the  registered  owner  hereof at such rate per annum on each
interest  payment  date (as  hereinafter  defined)  as shall cause the amount of
interest payable on such interest payment date (as hereinafter  defined) on this
Bond to equal the amount of interest and fees payable on such  interest  payment
date (as hereinafter defined) under the Credit Agreement as provided below.

         The principal of and interest on this Bond are payable at the principal
corporate  trust office of First Trust of Illinois,  National  Association  (the
"Trustee"),  or its  successor  in trust  under the  Indenture  (as  hereinafter
defined),  in the City of  Chicago,  Illinois,  in any coin or  currency  of the
United  States of America which at the time of payment shall be legal tender for
payment of public and private debts.

         The Bonds of Series W have been issued to the Collateral  Agent for the
lenders (the  "Lenders")  and the Agents (as  hereinafter  defined) party to the
Credit Agreement  (hereinafter  defined),  to secure the payment when due of the
Obligations  (as defined in that certain Bond  Agreement,  dated as of September
10, 1996, by the Company in favor of the  Collateral  Agent,  as the same may be
amended,  supplemented  or  otherwise  modified  from time to time),  including,
without limitation, the Loans (as defined in the Credit Agreement),  made by the
Lenders, which Loans were made pursuant to that certain Credit Agreement,  dated
as of September ___, 1996 (as amended,  supplemented and otherwise  modified and
in effect from time to time,  the "Credit  Agreement"),  among the Company,  the
Lenders, the First National Bank of Chicago ("First Chicago"), as administrative
agent (in such  capacity,  together  with its  successors  and  assigns  in such
capacity, the "Administrative Agent") and as collateral agent (in such capacity,
together  with its  successors  and assigns in such  capacity,  the  "Collateral
Agent," and  together  with the  Administrative  Agent,  the  "Agents")  for the
Lenders,  and First Chicago and Union Bank of California,  N.A. as co-agents for
the  Lenders,  which  provides  for a revolving  credit  facility  (the  "Credit
Facility").

         The interest on this Bond shall be payable on the same dates (each,  an
"interest  payment  date") as  interest  or fees are  payable  from time to time
pursuant  to the Credit  Agreement  until  maturity  of this  Bond,  or upon the
satisfaction of the conditions in Section 9.17 of the Credit  Agreement,  or, in
the case the Collateral  Agent shall demand  redemption of this Bond,  until the
redemption  date,  or, if the Company  shall default in the payment of principal
due on this Bond, until such principal and interest shall have been paid in full
and the Company's obligations with respect thereto discharged as provided in the
Indenture (as hereinafter defined). The amount of interest and fees payable from
time to time under the Credit  Agreement,  the basis on which such  interest and
fees are computed and the dates on which such  interest and fees are payable are
set forth in the Credit Agreement.

         Any  payment  made in respect of the  Company's  obligations  under the
Credit  Agreement shall be deemed a payment in respect of the Bonds of Series W,
but such payment shall not reduce the principal  amount of the Bonds of Series W
unless,  and  then  only  to the  extent,  the  aggregate  amount  of the  Total
Commitment  (as  defined  in  the  Credit  Agreement)  is  irrevocably   reduced
concurrently  with such payment.  The obligation of the Company to make payments
with respect to the  principal of and interest on the Bonds of Series W shall be
fully  satisfied  and  discharged  to the extent that, at any time that any such
payment  shall be due, the Company  shall have paid fully the then due principal
of and interest on, and fees with respect to, the Loans.

         Upon the satisfaction of the conditions  precedent contained in Section
9.17 of the Credit Agreement,  this Bond shall be surrendered to the Company and
the Company's obligations hereunder shall be discharged and deemed satisfied.

         The principal hereof and interest hereon shall be payable, in such coin
or currency of the United  States of America as at the time of payment  shall be
legal  tender for the  payment of public and  private  debts,  at the  principal
office of the Trustee under the Indenture mentioned on the reverse hereof.

         This Bond shall not become or be valid or  obligatory  for any  purpose
until the  certificate  of  authentication  hereon shall have been signed by the
Trustee.

         The  provisions  of this Bond are  continued on the reverse  hereof and
such continued  provisions shall for all purposes have the same effect as though
fully set forth at this place.

         IN WITNESS WHEREOF, TEXAS-NEW MEXICO POWER COMPANY has caused this Bond
to be executed in its corporate name by the manual or facsimile signature of its
President or one of its Vice  Presidents  and its corporate seal to be impressed
or  imprinted  hereon,  attested  by the manual or  facsimile  signature  of its
Secretary or one of its Assistant Secretaries, and this Bond to be dated.

                                         TEXAS-NEW MEXICO POWER COMPANY,



                                                     By:
                                                              President

Attest:



         Secretary

(Seal)



Date of Authentication: _______________

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION


         This  Bond  is one  of  the  Bonds  described  in the  within-mentioned
Indenture.




                         FIRST  TRUST  OF  ILLINOIS,  NATIONAL  ASSOCIATION,  as
                    Trustee





                                                              Authorized Officer




<PAGE>


                      [FORM OF REVERSE OF BOND OF SERIES W]

         This Bond is one of an  authorized  issue of Bonds of the Company known
as its "First Mortgage Bonds," limited as provided in the Indenture  hereinafter
mentioned,  issued and to be issued in one or more series under, and all equally
and ratably secured (except as any sinking, amortization,  improvement, renewal,
replacement or other analogous fund established under the Indenture  hereinafter
mentioned,  may  afford  additional  security  for the  Bonds of any  particular
series) by an  Indenture  of Mortgage  and Deed of Trust dated as of November 1,
1944,  executed to City National Bank and Trust Company of Chicago,  as to which
Continental  Illinois  National Bank and Trust  Company of Chicago  (which later
changed its name to Continental Bank, National Association,  then to Continental
Bank, a banking  corporation  organized under the laws of Illinois,  and then to
Bank of America  Illinois,  a banking  corporation  organized  under the laws of
Illinois,  who was succeeded by First Trust of Illinois,  National Association),
as successor trustee,  as Trustee,  as supplemented by twenty-four  supplemental
indentures thereto, including the Thirteenth,  Fourteenth, Fifteenth, Sixteenth,
Seventeenth,  Eighteenth,  Nineteenth, Twentieth,  Twenty-First,  Twenty-Second,
Twenty-Third,  and Twenty-Fourth Supplemental Indentures which also modified the
Original   Indenture   and  the   Twenty-Fifth   Supplemental   Indenture   (the
"Twenty-Fifth  Supplemental  Indenture")  dated as of September  ___, 1996 (said
Indenture of Mortgage and Deed of Trust, as so supplemented and modified,  being
herein  called  the   "Indenture"),   to  which  Indenture  and  all  indentures
supplemental  thereto  reference  is  hereby  made  for  a  description  of  the
properties  mortgaged and pledged,  the nature and extent of the  security,  the
rights  of the  holders  of the  Bonds and the  appurtenant  coupons  and of the
Trustee  and of the  Company  in  respect  of such  security,  and the terms and
conditions upon which the Bonds are and are to be secured.

         The  Indenture  contains  provisions  permitting  the  Company  and the
Trustee,  with the consent of the holders of not less than seventy-five per cent
in principal amount of the Bonds  (exclusive of Bonds  disqualified by reason of
the Company's interest therein) at the time outstanding, including, if more than
one series of Bonds  shall be at the time  outstanding,  not less than sixty per
cent in  principal  amount of each  series  affected,  to  execute  supplemental
indentures amending the Indenture;  provided, however, that no such supplemental
indenture  shall  extend the fixed  maturity  of this Bond or reduce the rate or
extend  the time of  payment  of  interest  hereon or reduce  the  amount of the
principal hereof or reduce any premium payable on the redemption hereof, without
the consent of the holder hereof.

         As provided in the  Indenture,  the Bonds are  issuable in series which
may vary as in the Indenture provided or permitted. This Bond is one of a series
entitled  "First  Mortgage Bonds,  Series W, due 2001"  (hereinafter  called the
"Bonds of Series W").

         Bonds of this  series  may,  upon  surrender  thereof at the  principal
office of the Trustee,  be exchanged  for several Bonds of the same series for a
like aggregate principal amount in authorized  denominations;  and several Bonds
of this series, registered in the same name, may, upon surrender thereof at said
principal  office of the Trustee,  be exchanged  for one Bond of the same series
for a like aggregate  principal  amount in authorized  denominations.  No charge
shall  be made for any  exchange  of Bonds of this  series  for  other  Bonds of
different authorized denominations or for any transfer of this Bond, except that
the  Company at its option  may  require  the  payment  of a sum  sufficient  to
reimburse it for any stamp tax or other governmental charge incidental thereto.

         The Company and the Trustee may deem and treat the person in whose name
this Bond shall be  registered  as the absolute  owner hereof for the purpose of
receiving payment as herein provided and for all other purposes,  whether or not
this Bond shall be overdue;  and all such payments  shall be valid and effectual
to satisfy and discharge  the liability  upon this Bond to the extent of the sum
or sums so paid.

         If an event of default as defined in the  Indenture  shall  occur,  the
principal of all the Bonds of Series W may become or be declared due and payable
upon the  conditions  and in the  manner  and with the  effect  provided  in the
Indenture and the Credit Agreement.

         The Bonds of Series W are  subject to  redemption  prior to maturity as
provided in the Twenty-Fifth Supplemental Indenture at a redemption price of 100
percent of the  principal  amount to be  redeemed  plus any  accrued  and unpaid
interest to the redemption date.

         No  recourse  shall be had for the payment of the  principal  of or the
interest  on this Bond or for any claim  based  hereon or  otherwise  in respect
hereof or based on or in respect of the  Indenture,  against  any  incorporator,
stockholder,  officer or  director,  as such,  past,  present or future,  of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution,  statute or rule of law or by the enforcement of any assessment or
penalty, or otherwise,  all such liability being by the acceptance hereof and as
part of the consideration for the issue hereof expressly waived and released, as
provided in the  Indenture;  provided,  however,  that nothing  herein or in the
Indenture contained shall be taken to prevent recourse to and the enforcement of
the liability,  if any, of any  shareholder or any  stockholder or subscriber to
capital stock upon or in respect of shares of capital stock not fully paid.

         This Bond is nontransferable except to effect transfer to any successor
to the Collateral Agent under the Credit  Agreement,  but is exchangeable by the
registered  holder  hereof,  in person or by attorney  duly  authorized,  at the
corporate trust office of the Trustee,  any such permitted  transfer or exchange
to be made in the manner and upon the  conditions  prescribed in the  Indenture,
upon  the  surrender  and  cancellation  of this  Bond  and the  payment  of any
applicable  taxes  and fees  required  by law,  and upon  any such  transfer  or
exchange a new  registered  bond or bonds or the same series and tenor,  will be
issued to the authorized  transferee,  or the registered holder, as the case may
be.


                                   ARTICLE TWO

                           AMOUNT OF BONDS OUTSTANDING

         The aggregate  principal amount of Bonds of the Company outstanding and
presently to be issued and  outstanding  under the provisions of, and secured by
the Indenture, will be $___________ consisting of $8,888,000 principal amount of
First Mortgage Bonds,  Series L, 10 1/2 percent due 2000, due March 1, 2000, now
outstanding; $8,100,000 principal amount of First Mortgage Bonds, Series M, 8.70
percent due 2006, due September 1, 2006, now outstanding;  $61,750,000 principal
amount of First Mortgage Bonds, Series R, 10 percent due 2017, due July 1, 2017,
now outstanding; $19,400,000 principal amount of First Mortgage Bonds, Series S,
9 5/8  percent  due  2019,  due  July 1,  2019,  now  outstanding;  $100,800,000
principal amount of First Mortgage Bonds, Series T, 11 1/4 percent due 1997, due
January  15,  1997,  now  outstanding;  $100,000,000  principal  amount of First
Mortgage  Bonds,  Series U, 9 1/4  percent due 2000,  due  September  15,  2000;
$30,000,000  principal  amount of First Mortgage Bonds,  Series V, due 2000, due
November 3, 2000, now  outstanding and up to  $100,000,000  principal  amount of
First Mortgage  Bonds,  Series W, due 2001, due September 10, 2001, to be issued
pursuant to Article  Four of the  Original  Indenture  as  provided  for in this
Twenty-Fifth Supplemental Indenture.

         Additional  Bonds of  Series  M, R, S, T, U, V and W and of  subsequent
series   created  after  the   execution  and  delivery  of  this   Twenty-Fifth
Supplemental Indenture, may, from time to time, be authenticated,  delivered and
issued pursuant to the terms of the Indenture.

                                  ARTICLE THREE

                         ADDITIONAL COVENANTS OF COMPANY

         The Company  covenants and agrees with the Trustee,  for the benefit of
the  Trustee  and all the  present  and  future  holders of the Bonds and of the
coupons,  that the Company  will pay the  principal  of,  premium,  if any,  and
interest on all Bonds  issued or to be issued and secured by the  Indenture,  as
well as all Bonds which may be  hereafter  issued in  exchange  or  substitution
therefor,  and  will  perform  and  fulfill  all of  the  terms,  covenants  and
conditions of the Original Indenture, with respect to the additional Bonds to be
issued under the Indenture.

                                  ARTICLE FOUR

                                  MISCELLANEOUS

         This  instrument  is executed  and shall be  construed  as an indenture
supplemental to the Original Indenture as heretofore supplemented and shall form
a part thereof, and the Original Indenture as heretofore  supplemented is hereby
confirmed.

         The recitals in this  Twenty-Fifth  Supplemental  Indenture are made by
the Company only and not by the Trustee;  and all of the provisions contained in
the Original Indenture in respect of the rights, privileges,  immunities, powers
and duties of the Trustee  shall be  applicable  in respect  hereof as fully and
with like effect as if set forth herein in full.

         Although  this  Twenty-Fifth   Supplemental   Indenture  is  dated  for
convenience  and for the purpose of  reference as of  September  10,  1996,  the
actual date or dates of execution  thereof by the Company and the Trustee are as
indicated by their respective acknowledgments hereto annexed.

         In order to  facilitate  the  recording or filing of this  Twenty-Fifth
Supplemental  Indenture,  the same may be  simultaneously  executed  in  several
counterparts,  each of  which  shall  be  deemed  to be an  original,  and  such
counterparts shall together constitute but one and the same instrument.

                                  ARTICLE FIVE

                                      FIRST

                                      Land

         The following  described lots,  pieces, or parcels of land owned by the
Company and located in the States and in the Counties designated and hereinafter
set forth:


<PAGE>


State Of Texas

County Of Denton

         All that certain property situated in Denton County,  Texas,  described
as follows, to wit:

         Lot 3, in Block A, of VISTA RIDGE  SQUARE  ADDITION,  PHASE  THREE,  an
         Addition to the CITY OF LEWISVILLE, Texas, according to the Map thereof
         recorded in Cabinet L, Page 327, of the PLAT Records of DENTON  County,
         Texas.

                                     SECOND

                          Electric Transmission Systems

         All of the following electric  transmission lines owned by the Company,
including  towers,  poles,  pole  lines,  wires,  switch  racks,   switchboards,
insulators and other  appliances and equipment and all other property  forming a
part thereof or pertaining thereto,  and all service lines extending  therefrom;
together with all real property, rights of way, easements,  permits, privileges,
franchises  and rights  over or  relating to the  construction,  maintenance  or
operation thereof,  through, over, under, or upon any private property or in the
public streets or highways within as well as without the corporate limits of any
municipal corporation including without limitation, those situate as follows:

         A.       State of New Mexico

          1.   Otero County.  Install  115KV H-Frame in the Amrad line,  west of
               Alamogordo.

          2.   Eddy  County.  Replace 1-2 pole tangent  structure  with 1-3 pole
               tubular steel structure on the Amrad to Eddy County 115KV line.

          3.   Chavez County.

                           (a)      Replace 1-3 pole wood angle  structure  with
                                    1-3 pole  tubular  steel angle  structure on
                                    the Amrad to Eddy County 115KV line.

                           (b)      Replace an existing wood  structure with 1-3
                                    pole  tubular  steel angle  structure on the
                                    Amrad to Eddy County 115KV line.

          4.   Grant County.

                           (a)      Install  a 69 KV,  gang  operated  air break
                                    switch on the Bullfrog Substation tap off of
                                    the MD#1 to Cobre Mine 69 KV line.
                           (b)      Install a 69 KV metering  position for Cobre
                                    Mine.  This includes  CT's,  PT's,  metering
                                    equipment,   cabinet,   and  wood   platform
                                    structure.
                           (c)      Purchase and install transfer trip scheme
                                    equipment  in  the  Turquoise
                                    Substation.

          5.   Hidalgo County.

                           (a)      Purchase  and  install a second  345-115  KV
                                    auto-transformer  at the Hidalgo Substation.
                                    This  includes  the  transformer  pad  and a
                                    short  section  of  115 KV  bus  inside  the
                                    substation.
                           (b)      Purchase and install transfer trip scheme
                                    equipment in the Hidalgo Substation.


         B.       State of Texas

                  1.       Angleton.  Replace 138KV tangent structure #50,
                           Line #138-15.

                  2.       Alvin.

                           (a)      Replace 138KV tangent structure #2,
                                    Line #138-12.

                           (b)      Replace 138KV tangent structure #91,
                                    Line #138-11B.

                  3.       Bosque County.

                           (a)      Install  concrete  overhead guy pole for new
                                    69 KV single pole  transmission  line out of
                                    Clifton #2 69/22 KV Substation.
                           (b)      Change out a 75' pole on 69 KV line from
                                    Clifton to Meridian.
                           (c)      Replace 10 poles in the 69 KV line from
                                    Walnut Springs to Clifton.

                  4.       Brazoria County.

                           (a)      Replace 138KV tangent structures #8, 50, 59,
                                    69, 94, 95, 12, & 113, Line #138-15.

                           (b)      Replace  138KV tangent  structures  #52, 53,
                                    85,  89,  90,  111,   113,  120,  124,  Line
                                    #138-17.

                  5.       Clay County.

                                    Install air flow  spoilers on 16 spans of 69
                                    KV line.

                  6.       Clifton.

                                    Construct    2822'   69   KV   single   pole
                                    transmission  line -  Clifton  #2  69/22  KV
                                    Substation.

                  7.       Dickinson.

                                      Replace 138KV tangent structures #50 & 51,
                                       Line #138-14.

                  8.       Fannin County.

                                    Install  69  KV  air  switch  and  pole  for
                                    Trenton transmission line.

                  9.       Friendswood.

                           (a)      Replace 138KV tangent structure #31, Line
                                    #138-11A.

                           (b)      Replace 138KV tangent structures #87, 97,
                                    99, Line #138-10B.

                  10.      Galveston County.

                                    Replace 138KV  tangent  structure  #67, Line
                                     #138-12.

                  11.      La Marque.

                                    Replace static wire on 3 lines.

                  12.      Lewisville.

                           (a)      Purchase and install three concrete poles
                                     between Highlands and West Stations.
                           (b)      Purchase 138 KV easement from E Systems
                                     from Lakepointe to FM 3040.
                           (c)      Purchase transmission easement from E
                                     Systems for 138 KV line.
                           (d)      Design, survey, and plan 138 KV transmission
                                     line, Lakepointe and TI.
                           (e)      Purchase  material and construct 138 KV
                                    transmission  line,  Lakepointe and TI
                                    Substation.

                  13.      Pecos County.

                                    Purchase   and  install   arresters  on  the
                                    Sanderson  69KV line.  Replace  69KV tangent
                                    structures;  replace crossarm  assemblies on
                                    existing    single    pole   69KV    tangent
                                    structures;  replace  bolted type jumpers at
                                    six-two    pole   69KV    double    dead-end
                                    structures;  replace  69KV switch  structure
                                    with a single pole 69KV tangent structure.

                  14.      Reeves County.

     Purchase and install a 138 KV airbreak switch at the Worsham Field Station.

                    15.  Terrell  County.   Replace  69KV  tangent   structures.
                         Replace crossarm assemblies on 69KV tangent structures;
                         purchase and install arresters at selected locations.

                  16.      Texas City.

                      (a)      Purchase right-of-way 138-4A, 4B, 138-19 line.

                           (b)      Build  fiber optic  circuit on Line  #138-4B
                                    between Caddo and Apache Switching  Stations
                                    for  relaying,   SCADA  and   communications
                                    required to  interconnect  UCC  Cogeneration
                                    facility with 138KV transmission system.

                           (c)      Replace 138KV tangent structure #32, Line
                                     #138-7.

                           (d)      Replace 138KV tangent structures #100, 119,
                                     126, & 173, Line #138-12.

                           (e)      Replace 69KV tangent structure #6/5, Line
                                      #69-D.

                           (f)      Replace 69KV tangent structure #5/5,
                                      Line #69-E.

                           (g)      Replace 69KV tangent structure #5/1,
                                     Line #69-F.

                           (h)      Replace 69KV tangent structures #3/5, 3/12,
                                     Line #69-G.

                           (i)      Replace static wire on 4 lines.

                           (j)      Replace static wire -- line 69G.

                    17.  West  Columbia.  Purchase  and  install  Digital  Fault
                         Record.   Replace  138KV  tangent  structure  #7,  Line
                         #138-18.

                                      THIRD

                                   Substations

         All the substations and the switching stations owned by the Company for
transforming,  distributing or otherwise  regulating  electric current at any of
its  plants,  together  with all  buildings,  transformers,  wires,  insulators,
appliances,  equipment and all other property, real or personal,  forming a part
of or pertaining to or used,  occupied or enjoyed in connection with any of such
substations and switching stations, including without limitation, those situated
as follows:

         A.       State of New Mexico

               1.   Alamogordo.

                    (a)  Upgrade the 12.5KV bus in the Alamogordo  Substation on
                         the north transformer.

                    (b)  Replace  6-Station  Class  Arresters  and 3-bus support
                         insulators  in the  Alamogordo  Substation on the South
                         and Middle Bays.

                    (c)  Replace the wall  mounted  heating and cooling  unit in
                         the Alamogordo Substation control house.

               2.   Hidalgo  County.  Purchase  and  install  2-SEL  221G  Fault
                    Locating  Relays and Goes  clock (1 on the  Hidalgo-Greenlee
                    terminal and 1 on the Greenlee-Luna terminal).

               3.   Otero County.  Purchase and install 2-Siemens Accu/Stat MJ-X
                    Voltage Regulator Controls in the Hollywood Substation.

               4.   Silver City.  Purchase and install bus  differential  relays
                    (Westinghouse type KAB) for a differential protection scheme
                    on the Silver City 69-12 KV Substation bus.

         B.       State of Texas

               1.   Angleton.   Angleton   Substation-Replace   1-138KV  Outdoor
                    Potential  Transformer.  Replace  150' 3  phase  336 MCM AAC
                    primary and neutral with 795 MCM AAC.

               2.   Bosque County.

                    (a)  Install  conduit  and  wiring  from TU fence to control
                         house in Walnut Springs 66 KV Station.

                    (b)  Build  circuit  getaway  from OCR 22-820 out of Handley
                         Substation.

                    (c)  Purchase necessary equipment and convert RV recloser to
                         remote control at Walnut Springs Substation.

               3.   Brazoria County.

                    (a)  West  Columbia  Main  Substation-Purchase  and  install
                         Mehta Tech  Transcan  Digital Fault  Recorder.  Replace
                         station batteries.

                    (b)  Old Ocean  Substation-Install  3-Voltage Regulators and
                         5-12KV post insulators.

                    (c)  Phillips #5 Switching Station-Install 2-Outdoor Current
                         Transformers and 2-Outdoor Potential Transformers.

                    (d)  Amoco-Pan   Am   Substation-Replace   2-Magnetic   tape
                         recorders with Data Star pulse recorders.

                    (e)  Phillips #2 Switching  Station-Replace  1-Magnetic tape
                         recorder with Data Star pulse recorder.

                    (f)  Phillips #3 Switching  Station-Replace  1-Magnetic tape
                         recorder with Data Star pulse recorder.

               4.   Brazoria.   Brazoria  Substation-Replace  3-69KV  disconnect
                    switches and 36-Bus support insulators.

               5.   Clifton.  Purchase new keyboard  for SCADA  system.  Replace
                    3750  KVA  66/22  KVA  transformer  in  Clifton  #2 66/22 KV
                    Substation.

               6.   Collin County.

                     Purchase and install SCADA RTU for Climax Substation.

               7.   Coryell County.

                           (a)      Build 69/22KV Sycamore Substation.

                           (b)      Build 1000 MCM URD circuit getaway out of
                                    Sycamore Substation.

                           (c)      Install 1108' of pasture fence around
                                     Coryell County Switching Station Site.

               8.   Denton County.

                         Purchase and install 3750 KVA  transformer and fuses at
                    Pilot Point Substation.

               9.   Erath County.

                         Purchase and install new recording voltmeter in Thurber
                    66/22/12.5 KV Substation.

               10.  Fort Stockton.  16th Street  Substation-Replace  oil circuit
                    breaker.

               11.  Franklin County.

                         Purchase   and   install   SCADA  RTU  for  Talco  West
                    Substation.

               12.  Galveston  County.  Purchase and install  1-Remote  Terminal
                    Unit  (R.T.U.) at the P.H.  Robinson  Switchyard  to provide
                    operational information to the League City Dispatch Center.

               13.  Gatesville.

                                    (a)     Purchase   and   install replacement
                                            transformer   cooling  fan  in
                                            Gatesville #1 66/4 KV Substation.
                                    (b)     Purchase and install 69 KV 600A gas
                                            circuit  breaker in Coryell  County
                                            66 KV Station.
                                    (c)     Install  three - 300  KVAR Capacitor
                         banks in TDC - Hilltop 22/4 KV
                                   Substation.
                                    (d)     Purchase   necessary   equipment  to
                                            install  new  conduit   system  from
                                            control  house to 69 KV  breaker  in
                                            Coryell County Substation.

               14.  Glen Rose.

                                    Purchase and install replacement transformer
                                    cooling fan in Glen Rose 66/4 KV Substation.
                                    Change  out RV100 OCR to WVE in Glen Rose #2
                                    Substation.

               15.  Hamilton.

                                    Purchase  and  install   three   transformer
                                    cooling  fans  for  Hamilton  City  66/22 KV
                                    Station.

               16.  Hamilton County.

                                    (a)     Install  two down guys on 69 KV line
                                            between  the  Hamilton  Co  66/22 KV
                                            Station to Hamilton City #1 66/22 KV
                                            Station.
                                    (b)     Purchase  and install WVE  recloser,
                                            recloser   bypass   switches,    and
                                            necessary  equipment to construct an
                                            additional  circuit  out of Hamilton
                                            County Substation.
                                    (c)     Purchase  and  install   equipment
                         to convert two OCR's to remote
                       controlled in Hamilton County Subst
                                     ation.
                                    (d)     Construct   circuit   getaway  for
                                            OCR  24-015  for   Hamilton   County
                                            Substation.

               17.  Hill County.

                    (a)  Purchase  and install two type WVE OCR's in Hill County
                         Substation.

                    (b)  Install mini-RTU, wiring and phone line for supervisory
                         control in Hill County Substation.

                    (c)  Purchase and install steel fuse and  arresters  support
                         structure,  three SMD-2B  fuses and three  arresters in
                         Hill County Substation.

               18.  Jack County. Replace CT's at Bryson Substation.

               19.  LaMarque. LaMarque Substation-Install SCADA equipment.

               20.  Lamar County.

                    (a)  Purchase and install SCADA RTU for Deport Substation.

                    (b)  Install CCW/CCVAR meter at Minter Substation.

               21.  League City.

                    (a)  Build South Shore 138/12.5KV Substation.

                    (b)  South Shore  Substation-Purchase  and install necessary
                         equipment  to place 2nd  12/16/20  MVA  transformer  in
                         service.

                    (c)  League City Dispatch  Center-Upgrade  SCADA/EMS  master
                         computer  system  to  implement  AGC for  control  area
                         operations.

                    (d)  League City Dispatch Center-Purchase and install 1-Data
                         link processor  workstation  with  networking  terminal
                         equipment,  operating software,  communication circuits
                         and  1-Remote  Terminal  Unit  (R.T.U.) to  communicate
                         control  area   information   to  ERCOT's  South  Texas
                         Security Center.

                    (e)  League  City  Dispatch   Center-Purchase  Power  System
                         Operation  video  training   series  w/20   videotapes,
                         student workbooks,  and instructors guides required for
                         continuing  training of power system operators in order
                         to gain and maintain ERCOT certification necessary as a
                         part of control area implementation plan.

                    (f)  League City Dispatch  Center-Purchase 2-Remote Terminal
                         Units  (R.T.U.)  necesssary for the  implementation  of
                         control area operations.

                    (g)  League City Dispatch Center-Relocate the General Office
                         EMC telemetry receiving/conversion equipment, recording
                         equipment, SCADA master station equipment and furniture
                         to the League City Dispatch Center.

                    (h)  League City Dispatch Center-Purchase and install Da-Tel
                         telemetry  equipment and data acquisition  hardware and
                         software  to  provide   CP&L  with   dynamic   schedule
                         signaling.

                    (i)  League City  Substation-Replace  200KVAR  capacitor and
                         roof on control house.

               22.  Leonard.

                         Install  metering  on  existing   portable   substation
                    transformer.

               23.  Lewisville.

                    (a)  Install buswork,  switch, and URD getaway at Lakepointe
                         Substation.

                    (b)  Change out switch in TI Substation.

                    (c)  Install new batteries for SCADA ups system.

                    (d)  Reconductor work at West Substation.

                    (e)  Purchase and install event recorder in TI Substation.

                    (f)  Purchase  and  install   25/33/42/47   MVA  138-7.5  KV
                         transformer with arresters for Lewisville West Station.

                    (g)  Install  25/37/42 MVA 138-7.5 KV  transformer  in north
                         position at TI Station.  (h)  Purchase  four 138 KV SF6
                         circuit breakers for TI Substation.

                    (i)  Purchase  new  remote   interrogation  unit  for  SCADA
                         operations.

                    (j)  Purchase  and install 2 SCADA RTU's for TU Flower Mound
                         POD's.

                    (k)  Purchase  and  install  25/33/42  MVA  transformer  and
                         arresters at West Station.

                    (l)  Purchase and install 12.5 KV 200A, 41 switches, and bus
                         in West Station.

                    (m)  Purchase  and install two reverse  power  relays for TI
                         Substation.

                    (n)  Replace failed PT at Lakepointe Substation.

                    (o)  Construct transformer  foundation for spare transformer
                         at West Substation.

                    (p)  Purchase   25/37/42  MVA  power   transformer   for  TI
                         Substation backup.

                    (q)  Purchase and install relay panels and gas breaker at TI
                         Substation.

                    (r)  Purchase   and  install   relay  panel  at   Lakepointe
                         Substation.

                  24.      Montague County.

                                    Repair transmission line hit by tornado.

                  25.      Pecos County.

                    (a)  Belding Substation-Install RV recloser.

                    (b)  Airport    Substation-Install   7500   KVA,   3   phase
                         transformer.

                    (c)  Puckett Field Substation-Install 2-69KV gang switches.

                    (d)  Install RV Recloser in the Belding Substation.

                    (e)  Install  7500  KVA  3  phase   transformer  at  Airport
                         Substation

                  26.      Pecos.

                    (a)  Pecos Main  Substation-Purchase  and  install  SPS 69KV
                         1200  AMP SF6  circuit  breaker;  install  3 each  69KV
                         arresters.

                    (b)  Pecos Main  Substation-Purchase  oil  circuit  recloser
                         type  KWE-7,  14.4KV  560a,  10KA type ME4C  electronic
                         control,  a substation  mounting  frame and  additional
                         miscellaneous accessories.

                    (c)  Airport Substation-Rewind,  transportation and handling
                         costs of Allis-Chalmers  7500 KVA 66/12.5KV  substation
                         transformer.

                  27.      Red River County.

                         Purchase   and   install   SCADA   RTU  for  Red  River
                    Substation.

                  28.      Reeves County.

                    (a)  Worsham Field  Substation-Purchase  and install a 138KV
                         airbreak  switch  on the  Pecos  side  of the  IH20  to
                         Wickett 69KV line.

                    (b)  Worsham Field Substation-Purchase oil circuit recloser,
                         type  KWE  7,  14.4KV,   465A  10KA,   with  type  ME4C
                         electronic  control.   Purchase  oil  circuit  recloser
                         substation mounting frame and additional  miscellaneous
                         accessories.

                    (c)  Worsham  Field   Station-Purchase  &  install  a  138KV
                         airbreak switch.

                    (d)  Reeves   County  #4   Substation-Replace   oil  circuit
                         recloser.

                    (e)  Flat Top Substation-Replace 3-oil circuit reclosers.

                  29.      Texas City.

                    (a)  G.A.F.  138KV  Switching  Station-Purchase  and install
                         1-145KV, 2,000 amp Gas Circuit Breaker,  2-138KV, 2,000
                         amp gang switches,  9-88KV MCOV line  arresters,  138KV
                         steel switch  stand,  relaying,  buswork,  foundations,
                         fill & level, grounding, control cable & conduit.

                    (b)  Caddo  138KV  Switching  Station-Purchase  and  install
                         relaying and  communications  equipment to interconnect
                         the UCC Cogeneration with 138KV transmission system.

                    (c)  Grant Avenue Switching Station-Replace 2-HCB relays and
                         1-SC fault interruption relay due to flood damage.

                    (d)  Union Carbide Substation-Replace station batteries.

                    (e)  Amoco Substation-Replace 6-69KV disconnect switches and
                         2-200 KVAR, 69KV capacitor units.

                    (f)  Build Apache 138KV  Switching  Station to  interconnect
                         the UCC Cogeneration  facility with 138KV  transmission
                         system.

                    (g)  Purchase and install  telemetry  equipment and 1-Remote
                         Terminal   Units  (R.T.U.)  at  the  Enron  Clear  Lake
                         Cogeneration    facility    to   provide    operational
                         information to the League City Dispatch Center.

                    (h)  Texas  City  Spare-Purchase   4-Remote  Terminal  Units
                         (R.T.U.) for future  installation into new and existing
                         Cogeneration facilities.

                  30.      Trenton.

                    Replace bank  at  Trenton  Substation  with  3750  KVA 69 KV
                         transformer  and  4  KV  regulators  from  Farmersville
                         Station.


                  31.      Ward County.

                    (a)  Cochise  Substation-Purchase  and  install  oil circuit
                         recloser,  substation  mounting  frame  and  additional
                         miscellaneous  accessories.  Purchase  and  install oil
                         circuit recloser at Cochise Substation.

                    (b)  Lone Star Tap Substation-Install 3 way switch.

                  32.      Whitney.

                    (a)  Install three 100 amp voltage regulators in the Whitney
                         66/22 KV Substation.

                    (b)  Purchase and install WVE recloser for Whitney  66/22 KV
                         Substation.

                  33.      Winkler County.

                    (a)  California Substation-Install 2 way switch.

                    (b)  Wink Substation-Replace 2-oil circuit breakers.

                  34.      Young County.

                    (a)  Purchase and install  transformer  cooling fan in Olney
                         69/12.5 KV Substation.

                    (b)  Purchase and install ABB  reclosing  relay on OCR #1431
                         at Olney Station.


                                     FOURTH

                                   Franchises

         All and singular,  the corporate,  federal,  state, municipal and other
franchises,  permits, consents,  licenses,  grants, immunities,  privileges, and
rights  owned by the Company  and now held by the Company for the  construction,
maintenance,  and  operation  of  electric  light,  heat,  and power  plants and
systems; for the construction,  maintenance; as well as all franchises,  grants,
immunities,  privileges,  and  rights  of the  Company  used  or  useful  in the
operation  of the Trust  Estate,  including  all and  singular  the  franchises,
grants,  immunities,  privileges,  and  rights  of the  Company  granted  by the
governing  authorities of the cities and towns enumerated in the schedule below,
and by all other  municipalities  or political  subdivisions,  and all renewals,
extensions,  and  modifications  of said  franchises,  grants,  privileges,  and
rights, or any of them, including:

         A.       State of New Mexico

                  Municipality                       Expiration Date
                  Dona Ana County                    November 1, 2019

         B.       State of Texas

                  Municipality                       Expiration Date

                  Alvin                         Extended to October 21, 1996
                  Cross Roads                        May 28, 2026
                  Nocona                        Extended to April 8, 2015
                  Texas City                    Extended to March 31, 1999

         IN WITNESS  WHEREOF,  TEXAS-NEW  MEXICO  POWER  COMPANY has caused this
Twenty-Fifth  Supplemental  Indenture to be signed in its corporate  name by its
President or a Vice President and its corporate seal to be hereunto  affixed and
attested  by its  Secretary  or an  Assistant  Secretary,  and,  in token of its
acceptance  of the trust  created  hereby,  First  Trust of  Illinois,  National
Association has caused this Twenty-Fifth  Supplemental Indenture to be signed in
its corporate  name by one of its Vice  Presidents  and its corporate seal to be
hereunto affixed and attested by one of its Assistant Secretaries, all as of the
day and year first above written.



<PAGE>


                         TEXAS-NEW MEXICO POWER COMPANY,



(Corporate Seal)                    By:
                                  M. S. Cheema
                              Senior Vice President


Attest:

B. Jan Adkins
Assistant Secretary

                                            FIRST TRUST OF ILLINOIS,
                                            NATIONAL ASSOCIATION,
                                            as Trustee
(CORPORATE SEAL)

                                            By:
                                 Vice President

Attest:


Assistant Secretary



<PAGE>


STATE OF TEXAS                      SS.
                                            SS. ss.:
COUNTY OF TARRANT          SS.


         On    this    ____    day    of    September,    1996,    before    me,
____________________________,  Notary  Public  in and for the  County  and State
aforesaid,  personally  appeared M. S. Cheema, to me personally known, and known
to me to be the person whose name is subscribed to the foregoing  instrument and
known to me to be Senior Vice  President of TEXAS-NEW  MEXICO POWER  COMPANY,  a
Texas  corporation,  who  being by me duly  sworn,  did say that he  resides  in
Weatherford,  Texas,  that he is Senior Vice President of said TEXAS-NEW  MEXICO
POWER COMPANY and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said  corporation by authority of its Board of Directors;  and said M. S. Cheema
acknowledged  said  instrument to be the free act and deed of said  corporation,
and  acknowledged  to me that he executed said  instrument  for the purposes and
consideration therein expressed and as the act of said corporation.

         IN WITNESS WHEREOF, I have hereunto set my hand and seal of office this
____ day of September ___, 1996.





(NOTARIAL SEAL)






<PAGE>


STATE OF ILLINOIS                   SS.
                                            SS. ss.:
COUNTY OF COOK                      SS.


         On    this    ____    day    of    September,    1996,    before    me,
____________________________,  Notary  Public  in and for the  County  and State
aforesaid,   personally   appeared   _________________________________,   to  me
personally  known,  and known to me to be the person whose name is subscribed to
the foregoing  instrument  and known to me to be a Vice President of First Trust
of Illinois, National Association,  who, being by me duly sworn, did say that he
resides in Chicago, Illinois; that he is a Vice President of said First Trust of
Illinois, National Association,  and that the seal affixed to said instrument is
the corporate  seal of said banking  corporation,  and that said  instrument was
signed and sealed in behalf of said  association  by  authority  of its Board of
Directors; and said ___________________________, acknowledged said instrument to
be the free act and deed of said  association,  and  acknowledged  to me that he
executed said instrument for the purposes and  consideration  therein  expressed
and as the act of said association.

         IN WITNESS WHEREOF, I have hereunto set my hand and seal of office this
____ day of September, 1996.





(NOTARIAL SEAL)





<PAGE>


STATE OF TEXAS                      SS.
                                    SS. ss.:
COUNTY OF TARRANT                   SS.


         M. S. Cheema, being duly sworn, deposes and says:

         1. That he is Senior Vice President of TEXAS-NEW  MEXICO POWER COMPANY,
a Texas  corporation,  one of the corporations  described in, and which executed
the foregoing instrument,  and is one of the officers who executed the foregoing
instrument in behalf of TEXAS-NEW MEXICO POWER COMPANY.

         2. That TEXAS-NEW MEXICO POWER COMPANY,  one of the corporations  which
executed the aforementioned  instrument,  is a corporation engaged in the States
of Texas and New Mexico in the generation, purchase, transmission,  distribution
and sale of  electricity  to the  public  and,  consequently,  is a  utility  as
described in Section  35.01,  Texas  Business and Commerce  Code,  Revised Civil
Statutes of Texas.


Subscribed and sworn to before me this ____ day of September, 1996.





(NOTARIAL SEAL)







D-337151.06