EXHIBIT
      10.6





**AGREEMENT**






**THIS
      AGREEMENT**is entered into this _16th__ day of August, 2007,
      between PNM Resources, Inc., a New Mexico corporation, on its behalf and on
      behalf of its affiliates (“PNMR”) and Public Policy Strategy Group LLC, a New
      Mexico limited liability company (“Contractor”).




**WHEREAS**,
      PNMR desires to secure various consulting services on a temporary basis from
      Contractor; and




**WHEREAS**,
      Contractor is willing to provide such services to PNMR on the terms and
      conditions described below.




**NOW,
      THEREFORE**, in consideration of the mutual covenants herein contained,
      the receipt and sufficiency of which are hereby acknowledged, the parties agree
      as follows:




1.           **Confidentiality.**Contractor
      agrees to keep confidential all “Confidential Information” as defined in this
      Agreement, which he presently has or which he may obtain during the term of
      this
      Agreement.  Contractor shall not reveal any Confidential Information
      to any other person, corporation or entity, without the prior written consent
      from an authorized PNMR representative unless ordered to do so by a court or
      administrative agency.  If Contractor is ordered to divulge PNMR’s
      Confidential Information, Contractor shall promptly notify PNMR so that it
      may
      take steps to protect its Confidential Information.  If PNMR declines
      to take steps to protect the Confidential Information, or is unsuccessful in
      doing so, Contractor shall divulge only so much of the Confidential Information
      in its possession as is necessary to comply the order.  Contractor
      shall return or destroy Confidential Information in its possession at the
      request of PNMR.  The term “Confidential Information” means
      information Contractor has received from PNMR or any of its employees, agents
      or
      representatives and includes all reports, forecasts, contracts, customer or
      third party information, confidential commercial information, trade secrets,
      business secrets, business, sales or marketing plans, long range plans, sales
      or
      earnings projections or any information that is not available to the general
      public.  Contractor understands and agrees that its obligations under
      this paragraph will apply as long as the information is not publicly available
      and will extend as long as the information is not publicly available even after
      expiration of this Agreement.




2.           **Consulting
      Services.**Contractor agrees to provide consulting services
      to PNMR as requested by senior management regarding strategy and tactics in
      the
      areas of regulatory, communications, legislative and other public policy related
      matters.  For purposes of this Agreement, “senior management” is
      defined as PNMR’s Chief Executive Officer; Chief Financial Officer; Senior Vice
      President, Public Policy and Strategy; and Vice President, Corporate Strategy
      and Development.  Consulting services provided under this Agreement
      shall be performed by William J. Real (“Real”) unless otherwise agreed to by
      PNMR.




In
      performing the consulting services under this Agreement, Contractor agrees
      that
      it will follow all PNMR policies and procedures and that it will not purport
      to
      bind PNMR in any manner unless expressly authorized to do so by senior
      management.











3.           **Conflicts
      of Interest.**Contractor shall avoid conflicts of interest
      with PNMR.  Contractor shall refrain from taking positions contrary to
      positions held by PNMR.




4.           **Compensation.**In
      consideration of the services to be provided to PNMR, PNMR shall pay to
      Contractor the sum of $6,000.00 per month plus gross receipts
      tax.  Payment shall be made in advance on the 6th day of each month
      commencing September 6, 2007.  It is anticipated that consulting
      services will be required for an average of forty hours per month, which is
      less
      than 20% of the average level of services performed by Real as an employee
      of
      PNMR Services Company during the immediately preceding 36 months prior to Real’s
      termination of full-time employment.  Every three months while this
      Agreement is in effect, a determination will be made as to the total number
      of
      hours of consulting services performed during the three-month
      period.  If the total hours Contractor has provided consulting
      services to PNMR exceeds 120 hours during the three-month period, PNMR shall
      further compensate Contractor at the rate of $150.00 per hour for the time
      spent
      in excess of 120 hours.  If the total number of hours of consulting
      services performed during the three-month period is less than the sum of 120
      hours plus any shortfall carried over from a prior three-month period, and
      the
      shortfall was due to the unavailability of Realm the shortfall shall be carried
      over to the next three-month period so that the further compensation of $150.00
      per hour shall not be payable unless the number of hours exceeds 120 hours
      plus
      the prior period shortfalls resulting from the unavailability of
      Real.  Contractor shall provide a monthly invoice for the monthly
      amount to be paid.  Each invoice after the first invoice, shall
      identify the number of hours spent on consulting services for PNMR with a
      general description of each matter for which services were
      rendered.




5.           **Reimbursement
      of Expenses.**  Reasonable and necessary expenses incurred by
      Contactor in performing the consulting services under this Agreement shall
      be
      paid, in addition to the compensation paid pursuant to Section 3. All
      requests for reimbursement of expenses incurred must include supporting
      documentation as required by PNMR.




6.           **Term.**This
      Agreement shall become effective as of September 6, 2007, at 12:01 a.m. and
      will terminate on September 5, 2008, at 11:59 p.m. unless earlier
      terminated by either party upon ninety days written notice.  This
      Agreement shall continue in effect on a month to month basis after its
      expiration unless either party provides thirty days written notice of
      termination of the month to month extensions.  Notwithstanding
      termination of this Agreement, the obligations of Section 1 shall continue
      as long as Confidential Information does not become public.




7.           **Independent
      Contractor**.  Prior to the effective date set forth in
      Section 6, Real shall terminate his full-time employment with PNMR Services
      Company.  From and after the effective date, the relationship between
      Contractor and PNMR shall be that of an independent contractor and nothing
      in
      this Agreement will be construed or deemed to create any other
      relationship.  Without limiting the foregoing, the relationship
      between the parties following the effective date will not be considered to
      be
      that of an employer-employee, joint venture, or partnership.  As an
      independent contractor, Contractor has the sole responsibility for paying
      workers’ compensation insurance premiums, if applicable, employee benefits (if
      any), and all similar obligations.  Contractor shall perform the
      services called for by this Agreement in the way that Contractor deems the
      most
      feasible or desirable in order to perform and complete the services in the
      most
      efficient manner possible.  Contractor shall be entirely and solely
      responsible for his acts while engaged in the performance of the services and
      Contractor’s representatives shall not hold themselves out to be employees of
      PNMR.  During the term of this Agreement, Real is not entitled to
      continue to accrue any employee benefits from PNMR since he is not an employee
      of PNMR.  Contractor shall be liable for and shall pay, and shall
      indemnify, defend and hold harmless, PNMR from all taxes (including but not
      limited to employment/self-employment and withholding taxes) assessed or payable
      on all compensation or other monies paid to Contractor pursuant to this
      Agreement.






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8.           **Amendment.**No
      amendment, modification or waiver of the terms or conditions of this Agreement
      shall be binding unless it is in writing and signed by the parties.




9.           **Choice
      of Law.**This Agreement shall be governed by and construed in
      accordance with the laws of the State of New Mexico without respect to conflicts
      of laws provisions.




10.           **Counterparts.**This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      regarded as an original and all of which shall constitute but one and the same
      instrument.










**Public
      Policy Strategy Group LLC**











By:__/s/
      Bill Real_____________________





Its:________________________________





**PNM
      Resources, Inc.**








By:  /s/
      Jeff
      Sterba





Its:  Chairman,
      President &
CEO




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