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

                                    FORM 10-Q

(Mark One)
(X)      COMBINED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
         SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended June 30, 1997

                                       or

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


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

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

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

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

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

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

TNP Enterprises,  Inc. had 13,107,874 shares of common stock  outstanding as of
July 31, 1997.

--------------------------------------------------------------------------------
                         Commission File Number: 2-97230

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

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

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

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

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

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

                     TNP Enterprises, Inc. And Subsidiaries
                 Texas New-Mexico Power Company And Subsidiaries
   Combined Quarterly Report on Form 10-Q for the periods ended June 30, 1997

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

                                TABLE OF CONTENTS

                          PART I. FINANCIAL INFORMATION
Item 1.  Financial Statements.
 
         TNP Enterprises, Inc. (TNP) and Subsidiaries:

           Consolidated Statements of Income
           Three and Six Month Periods Ended June 30, 1997, and 1996          3

           Consolidated Statements of Cash Flows
           Six Month Periods Ended June 30, 1997, and 1996                    4

           Consolidated Balance Sheets
           June 30, 1997, and December 31, 1996                               5

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

           Consolidated Statements of Income
           Three and Six Month Periods Ended June 30, 1997, and 1996          6

           Consolidated Statements of Cash Flows
           Six Month Periods Ended June 30, 1997, and 1996                    7

           Consolidated Balance Sheets
           June 30, 1997, and December 31, 1996                               8

         Notes to Consolidated Financial Statements                           9

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


                           PART II. OTHER INFORMATION

  Item 1.  Legal Proceedings.                                                14

  Item 4.  Submission of Matters to a Vote of Security Holders.              14

  Item 6.  Exhibits and Reports on Form 8-K.                                 14
           (a)   Exhibit Index                                               14
           (b)   Reports on Form 8-K                                         14
           Signature page                                                    15


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

                                                       Three Months Ended                  Six Months Ended
                                                             June 30,                           June 30,
                                                  ----------------------------------------------------------------------
                                                       1997              1996              1997               1996
                                                  ----------------  ----------------  ----------------   ---------------
                                                                 (In thousands except per share amounts)

<S>                                               <C>               <C>               <C>                <C>          
OPERATING REVENUES                                $     136,026     $     122,020     $     264,423      $     221,847
                                                  --------------    --------------    --------------     --------------

OPERATING EXPENSES:
  Purchased power                                        54,872            41,326           113,219             73,961
  Fuel                                                    9,884            12,182            19,853             23,237
  Other operating and general expenses                   24,576            19,419            44,185             37,369
  Maintenance                                             3,429             2,412             6,441              5,149
  Depreciation                                            9,782             9,309            19,447             19,004
  Taxes other than income taxes                           7,972             8,124            15,966             15,475
  Income taxes                                            3,893             3,921             5,271              4,539
                                                  --------------    --------------    --------------     --------------

       Total operating expenses                         114,408            96,693           224,382            178,734
                                                  --------------    --------------    --------------     --------------

NET OPERATING INCOME                                     21,618            25,327            40,041             43,113
                                                  --------------    --------------    --------------     --------------

OTHER INCOME (LOSS):
  Other income and deductions, net                          246              (261)              445                (53)
  Income taxes                                               24               131                23                 46
                                                  --------------    --------------    --------------     --------------

       Other income (loss), net of taxes                    270              (130)              468                 (7)
                                                  --------------    --------------    --------------     --------------

INCOME BEFORE INTEREST CHARGES                           21,888            25,197            40,509             43,106
                                                  --------------    --------------    --------------     --------------
INTEREST CHARGES:
  Interest on long-term debt                             13,408            16,555            26,914             33,124
  Other interest and amortization of 
   debt-related costs                                     1,049               811             2,054              1,589
                                                  --------------    --------------    --------------     --------------

       Total interest charges                            14,457            17,366            28,968             34,713
                                                  --------------    --------------    --------------     --------------

NET INCOME                                                7,431             7,831            11,541              8,393
Dividends on preferred stock                                 40                42                80                 84
                                                  --------------    --------------    --------------     --------------

INCOME APPLICABLE TO COMMON STOCK                 $       7,391     $       7,789     $      11,461      $       8,309
                                                  ==============    ==============    ==============     ==============


EARNINGS PER SHARE OF COMMON STOCK                $        0.56     $        0.71     $        0.87      $        0.76
                                                  ==============    ==============    ==============     ==============

DIVIDENDS PER SHARE OF COMMON STOCK               $       0.245     $        0.22     $        0.49      $        0.44
                                                  ==============    ==============    ==============     ==============

WEIGHTED AVERAGE NUMBER OF COMMON AND
 COMMON EQUIVALENT  SHARES OUTSTANDING                   13,161            11,028            13,139             10,989
                                                  ==============    ==============    ==============     ==============


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


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

                                                                                     Six Months Ended
                                                                                         June 30,
                                                                           -------------------------------------
                                                                                1997                  1996
                                                                           ----------------      ---------------
                                                                                     (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                        <C>                   <C>           
  Cash received from customers                                             $       263,391       $      216,143
  Purchased power                                                                 (110,338)             (79,212)
  Fuel costs paid                                                                  (18,513)             (23,856)
  Cash paid for payroll and to other suppliers                                     (61,068)             (45,799)
  Interest paid, net of amounts capitalized                                        (31,875)             (32,913)
  Income taxes paid                                                                   (705)              (8,631)
  Other taxes paid                                                                 (21,237)             (19,872)
  Other operating cash receipts and payments, net                                    1,126                 (479)
                                                                           ----------------      ---------------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                           20,781                5,381
                                                                           ----------------      ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to utility plant                                                       (13,068)             (13,531)
  Additions to other property and nonregulated investments                          (2,015)                   -
                                                                           ----------------      ---------------

NET CASH USED IN INVESTING ACTIVITIES                                              (15,083)             (13,531)
                                                                           ----------------      ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid on preferred and common stocks                                     (6,482)              (4,910)
  Borrowings under revolving credit facilities                                     108,000                7,000
  Common stock issuances                                                             2,633                1,287
  Redemptions:
     Other long-term debt                                                              (61)                   -
     Obligation - FWI investment aquisition                                           (300)                   -
     First mortgage bonds                                                         (100,800)                (712)
                                                                           ----------------      ---------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                            2,990                2,665
                                                                           ----------------      ---------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                              8,688               (5,485)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                     8,387               21,105
                                                                           ----------------      ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $        17,075       $       15,620
                                                                           ================      ===============

RECONCILIATION OF NET INCOME TO NET
     CASH PROVIDED BY OPERATING ACTIVITIES:
  Net income                                                               $        11,541       $        8,393
  Adjustments to reconcile net income to net cash provided by 
   operating activities:
     Depreciation                                                                   19,447               19,004
     Amortization of debt-related costs and other deferred charges                   1,926                2,260
     Allowance for borrowed funds used during construction                             (23)                 (62)
     Deferred income taxes                                                           2,727                3,486
     Investment tax credits                                                             19                 (195)

Cash flows impacted by changes in current assets and liabilities:
     Deferred purchased power and fuel costs                                         1,540               (8,214)
     Accrued interest                                                               (4,810)                 309
     Accrued taxes                                                                  (3,472)             (11,676)
     Accounts payable                                                                3,570                2,178
     Changes in other current assets and liabilities                               (10,996)              (5,539)
Other, net                                                                            (688)              (4,563)
                                                                           ----------------      ---------------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                  $        20,781       $        5,381
                                                                           ================      ===============


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


<PAGE>
<TABLE>
<CAPTION>
                     TNP ENTERPRISES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                           June 30, 1997       December 31,
                                                                            (Unaudited)            1996
                                                                          ---------------    ----------------
                                                                                    (In thousands)
ASSETS

UTILITY PLANT:
<S>                                                                       <C>                <C>            
  Electric plant                                                          $   1,225,396      $     1,215,355
  Construction work in progress                                                     421                  906
                                                                          --------------     ----------------
            Total                                                             1,225,817            1,216,261
  Less accumulated depreciation                                                 298,122              282,322
                                                                          --------------     ----------------
            Net utility plant                                                   927,695              933,939
                                                                          --------------     ----------------

OTHER PROPERTY AND INVESTMENTS, at cost                                           5,830                3,927
                                                                          --------------     ----------------

CURRENT ASSETS:
  Cash and cash equivalents                                                      17,075                8,387
  Customer receivables                                                           17,864               16,362
  Inventories, at lower of average cost or market:
       Fuel                                                                         430                  367
       Materials and supplies                                                     5,006                6,384
  Deferred purchased power and fuel costs                                         2,996                3,565
  Accumulated deferred income taxes                                               2,147                1,937
  Other current assets                                                           10,320                1,121
                                                                          --------------     ----------------
            Total current assets                                                 55,838               38,123
                                                                          --------------     ----------------

DEFERRED CHARGES                                                                 28,487               30,795
                                                                          --------------     ----------------
                                                                          $   1,017,850      $     1,006,784
                                                                          ==============     ================
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
  Common shareholders' equity:
       Common stock - no par value per share.  Authorized 50,000,000
            shares; issued 13,102,478 shares in 1997 and 13,006,492 
            in 1996                                                       $    186,404       $      183,771
       Retained earnings                                                        99,762               94,703
                                                                          -------------      ---------------
            Total common shareholders' equity                                  286,166              278,474
 
  Preferred stock                                                                3,420                3,420
  Long-term debt, less current maturities                                      541,119              533,964
                                                                          -------------      ---------------
            Total capitalization                                               830,705              815,858
                                                                          -------------      ---------------

CURRENT LIABILITIES:
  Current maturities of long-term debt                                             122                 138
  Accounts payable                                                              32,016              28,446
  Accrued interest                                                               6,069              10,879
  Accrued taxes                                                                 15,361              18,833
  Customers' deposits                                                            3,132               2,662
  Deferred purchased power costs                                                   971                   -
  Other current liabilities                                                      7,641              11,797
                                                                          -------------      --------------
            Total current liabilities                                           65,312              72,755
                                                                          -------------      --------------

REGULATORY TAX LIABILITIES                                                       8,431              10,963
ACCUMULATED DEFERRED INCOME TAXES                                               80,313              74,844
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS                                     19,752              19,734
DEFERRED CREDITS                                                                13,337              12,630
COMMITMENTS AND CONTINGENCIES (Notes 2 and 4)
                                                                          -------------      --------------
                                                                          $  1,017,850       $   1,006,784
                                                                          =============      ==============


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


<PAGE>
<TABLE>
<CAPTION>
                 TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
              (a wholly owned subsidiary of TNP Enterprises, Inc.)
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

                                                                 Three Months Ended                 Six Months Ended
                                                                      June 30,                          June 30,
                                                         ------------------------------------------------------------------
                                                              1997             1996             1997             1996
                                                         ---------------  --------------    --------------  ---------------
                                                                                   (In thousands)

<S>                                                      <C>              <C>               <C>             <C>           
OPERATING REVENUES                                       $      132,361   $     122,020     $     258,584   $      221,847
                                                         ---------------  --------------    --------------  ---------------

OPERATING EXPENSES:
  Purchased power                                                54,872          41,326           113,219           73,961
  Fuel                                                            9,884          12,182            19,853           23,237
  Other operating and general expenses                           18,019          19,419            33,777           37,369
  Maintenance                                                     3,429           2,412             6,441            5,149
  Depreciation of utility plant                                   9,725           9,309            19,335           19,004
  Taxes other than income taxes                                   7,813           8,124            15,608           15,475
  Income taxes                                                    4,972           3,921             7,037            4,539
                                                         ---------------  --------------    --------------  ---------------
       Total operating expenses                                 108,714          96,693           215,270          178,734
                                                         ---------------  --------------    --------------  ---------------

NET OPERATING INCOME                                             23,647          25,327            43,314           43,113
                                                         ---------------  --------------    --------------  ---------------

OTHER INCOME:
  Other income and deductions, net                                  193              62               352              358
  Income taxes                                                       24              19                23              (97)
                                                         ---------------  --------------    --------------  ---------------
       Other income, net of taxes                                   217              81               375              261
                                                         ---------------  --------------    --------------  ---------------

INCOME BEFORE INTEREST CHARGES                                   23,864          25,408            43,689           43,374
                                                         ---------------  --------------    --------------  ---------------

INTEREST CHARGES:
  Interest on long-term debt                                     13,408          16,555            26,914           33,124
  Other interest and amortization of debt-related costs           1,049             811             2,054            1,589
                                                         ---------------  --------------    --------------  ---------------
       Total interest charges                                    14,457          17,366            28,968           34,713
                                                         ---------------  --------------    --------------  ---------------

NET INCOME                                                        9,407           8,042            14,721            8,661
Dividends on preferred stock                                         40              42                80               84
                                                         ---------------  --------------    --------------  ---------------

INCOME APPLICABLE TO COMMON STOCK                        $        9,367   $       8,000     $      14,641   $        8,577
                                                         ===============  ==============    ==============  ===============


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


<PAGE>
<TABLE>
<CAPTION>
                TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDAIRIES
              (a wholly owned subsidiary of TNP Enterprises, Inc.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                                     Six Months Ended
                                                                                         June 30,
                                                                            -----------------------------------
                                                                                  1997               1996
                                                                            -----------------   ---------------
                                                                                       (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                         <C>                 <C>           
  Cash received from customers                                              $        259,545    $      216,195
  Purchased power                                                                   (110,338)          (79,212)
  Fuel costs paid                                                                    (18,513)          (23,856)
  Cash paid for payroll and to other suppliers                                       (49,221)          (45,558)
  Interest paid, net of amounts capitalized                                          (31,875)          (32,913)
  Income taxes paid                                                                      (79)           (8,626)
  Other taxes paid                                                                   (21,360)          (19,868)
  Other operating cash receipts and payments, net                                      1,036               246
                                                                            -----------------   ---------------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                             29,195             6,408
                                                                            -----------------   ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to utility plant                                                         (13,068)          (13,531)
  Withdrawal from escrow account                                                       1,670                 -
                                                                            -----------------   ---------------

CASH FLOWS USED IN INVESTING ACTIVITIES                                              (11,398)          (13,531)
                                                                            -----------------   ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid on preferred and common stocks                                      (20,880)           (4,884)
  Borrowings under revolving credit facilities                                       108,000             7,000
  First mortgage bond redemption                                                    (100,800)             (712)
                                                                            -----------------   ---------------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                  (13,680)            1,404
                                                                            -----------------   ---------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                                4,117            (5,719)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                       5,115            14,450
                                                                            -----------------   ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                  $          9,232    $        8,731
                                                                            =================   ===============

RECONCILIATION OF NET INCOME TO NET
     CASH PROVIDED BY OPERATING ACTIVITIES:
  Net income                                                                $         14,721    $        8,661
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation of utility plant                                                    19,335            19,004
     Amortization of debt-related costs and other deferred charges                     1,926             2,260
     Allowance for borrowed funds used during construction                               (23)              (62)
     Deferred income taxes                                                             3,697             3,405
     Investment tax credits                                                              216              (175)

Cash flows impacted by changes in current assets and liabilities:
     Deferred purchased power and fuel costs                                           1,540            (8,214)
     Accounts payable                                                                  2,927             2,178
     Accrued interest                                                                 (4,810)              309
     Accrued taxes                                                                    (2,730)          (11,611)
     Changes in other current assets and liabilities                                  (6,860)           (4,921)
Other, net                                                                              (744)           (4,426)
                                                                            -----------------   ---------------

NET CASH PROVIDED BY OPERATING ACTIVITIES                                   $         29,195    $        6,408
                                                                            =================   ===============


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

</TABLE>


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


                                                                          June 30, 1997        December 31,
                                                                           (Unaudited)             1996
                                                                          ---------------     ----------------
                                                                                    (In thousands)
ASSETS

UTILITY PLANT:
<S>                                                                       <C>                 <C>            
  Electric plant                                                          $   1,225,396       $     1,215,355
  Construction work in progress                                                     421                   906
                                                                          --------------      ----------------
            Total                                                             1,225,817             1,216,261
  Less accumulated depreciation                                                 298,122               282,322
                                                                          --------------      ----------------
            Net utility plant                                                   927,695               933,939
                                                                          --------------      ----------------

OTHER PROPERTY AND INVESTMENTS, at cost                                             214                 1,884
                                                                          --------------      ----------------

CURRENT ASSETS:
  Cash and cash equivalents                                                       9,232                 5,115
  Customer receivables                                                           15,040                15,521
  Inventories, at lower of average cost or market:
       Fuel                                                                         430                   367
       Materials and supplies                                                     5,006                 6,384
  Deferred purchased power and fuel costs                                         2,996                 3,565
  Accumulated deferred income taxes                                               2,147                 1,937
  Other current assets                                                            9,095                 1,324
                                                                          --------------      ----------------
            Total current assets                                                 43,946                34,213
                                                                          --------------      ----------------

DEFERRED CHARGES                                                                 29,590                32,121
                                                                          --------------      ----------------
                                                                          $   1,001,445       $     1,002,157
                                                                          ==============      ================
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
  Common shareholder's equity:
       Common stock, $10 par value per share.
            Authorized 12,000,000 shares; issued 10,705 shares            $         107       $           107
       Capital in excess of par value                                           222,133               222,133
       Retained earnings                                                         59,149                65,308
                                                                          --------------      ----------------
            Total common shareholder's equity                                   281,389               287,548
 
  Redeemable cumulative preferred stock                                           3,420                 3,420
  Long-term debt, less current maturities                                       541,000               533,800
                                                                          --------------      ----------------
            Total capitalization                                                825,809               824,768
                                                                          --------------      ----------------

CURRENT LIABILITIES:
  Current maturities of long-term debt                                              100                   100
  Accounts payable                                                               30,181                27,254
  Accrued interest                                                                6,069                10,879
  Accrued taxes                                                                  14,171                16,901
  Customers' deposits                                                             3,142                 2,662
  Deferred purchased power costs                                                    971                     -
  Other current liabilities                                                       7,552                10,993
                                                                          --------------      ----------------
            Total current liabilities                                            62,186                68,789
                                                                          --------------      ----------------

REGULATORY TAX LIABILITIES                                                        8,431                10,963
ACCUMULATED DEFERRED INCOME TAXES                                                72,302                65,860
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS                                      19,381                19,164
DEFERRED CREDITS                                                                 13,336                12,613
COMMITMENTS AND CONTINGENCIES (Notes 2 and 4)
                                                                          --------------      ----------------
                                                                          $   1,001,445       $     1,002,157
                                                                          ==============      ================


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


<PAGE>
Note 1.  Interim Financial Statements

     The interim consolidated financial statements of TNP and subsidiaries,  and
TNMP and  subsidiaries  are unaudited,  and contain all adjustments  (consisting
primarily of normal  recurring  accruals)  necessary for a fair statement of the
results for the interim periods  presented.  Results for interim periods are not
necessarily  indicative  of  results  to be  expected  for a  full  year  or for
previously reported periods due in part to seasonal revenue fluctuations.  It is
suggested that these  consolidated  financial  statements be read in conjunction
with the audited consolidated financial statements and notes thereto included in
TNP's and TNMP's 1996 Combined Annual Report on Form 10-K.

Note 2.  Income Taxes

     As indicated in the 1996  Combined  Annual Report on Form 10-K, an Internal
Revenue  Service (IRS) revenue  agent  involved in auditing  TNP's 1990 and 1991
consolidated  federal  income tax returns  recommended,  in March  1995,  that a
private letter ruling concerning eligibility of the TNP One generating plant for
investment  tax credit (ITC) be revoked  retroactively.  On July 29,  1997,  TNP
received  notification  from the IRS that  revoked  the private  letter  ruling.
However, the IRS has granted full relief from the effects of this revocation and
has  allowed  TNP to rely on the private  letter  ruling as issued.  The current
ruling will have no material effect on the amount of ITC previously recognized.

Note 3.  Regulatory Matters

Rate Filing with the PUCT and Texas Gulf Coast Cities
 
     Beginning in late  December  1996,  certain  cities in the Texas gulf coast
area (Gulf Coast Cities)  served by TNMP passed  resolutions  requiring  TNMP to
file complete rate information with those cities.  On July 1, 1997, TNMP made an
informational filing with the Gulf Coast Cities, which included preliminary rate
filing  information.  On  July  31,  1997,  TNMP  filed  the  required  complete
traditional  rate  information,  based on the test year ended December 31, 1996,
with the Gulf Coast Cities and the Public Utility Commission of Texas (PUCT). In
addition to the  required  traditional  rate  filing,  the Company  also filed a
transition  to  competition  plan  with  the  PUCT  and all of its  cities.  The
transition to competition  plan proposes a five year transition  period,  with a
series of rate reductions for  residential,  commercial and municipal  customers
beginning in 1998. At the end of the  transition  period TNMP's Texas  customers
would be  allowed  to  choose  their  energy  supplier.  The plan  provides  the
opportunity  for TNMP to recover an estimate of its  stranded  costs  during the
transition  period,  and  establishes a Competitive  Transition  Charge (CTC) to
recover any stranded cost that remains at the end of the transition period. TNMP
does not expect a final resolution of the rate filings before late 1997.

     Agreements  with the Gulf  Coast  Cities  provide  that any rate  reduction
resulting from the city ordinances requiring the traditional rate filing will be
placed into effect  retroactive  to May 15, 1997.  Based on its  analysis,  TNMP
believes the filing supports the reasonableness of TNMP's current rates.

Texas Transmission Access

     During  1996,  the PUCT passed a wholesale  transmission  access rule which
established a regional method of transmission  pricing,  terms,  and conditions.
The purpose is to increase  competition  in wholesale  energy sales within Texas
and  establish an  Independent  System  Operator  for the  Electric  Reliability
Council of Texas  transmission  system.  The new  transmission fee structure was
scheduled  to start in early  1997.  However,  during the first  quarter of 1997
several Texas  utilities  unsuccessfully  petitioned  the PUCT to revise the new
transmission  rules,  and an appeal  has been filed in a state  district  court.
During  the  second  quarter  of 1997,  the PUCT  approved  TNMP's  tariffs  for
transmission  service.  Consequently,  TNMP  recognized  the  effects of the new
transmission  rules  retroactive to January 1, 1997,  during the second quarter,
which increased pre-tax net income by $3.2 million.


<PAGE>
Fuel Reconciliation Filing

     On June 30,  1997,  TNMP filed a  reconciliation  of fuel  expenses for the
period  September 30, 1993 to December 31, 1996, with the PUCT. At the beginning
of the  reconciliation  period  TNMP  had a  cumulative  under  recovery  of $11
million,  and  had  a  $4.4  million  under-recovery  as  of  the  end  of  the
reconciliation  period.  TNMP believes that the total fuel costs incurred during
the  reconciliation  period were  reasonable  and necessary to provide  reliable
electric  service.  In the  filing,  TNMP  proposed  no change to the fixed fuel
factor,  and plans to collect the under-recovery  that existed as of the end of
the reconciliation period through the existing fixed fuel factor.

Note 4.  Accounting for the Effects of Regulation
 
     TNP's and TNMP's consolidated  financial statements reflect the application
of certain accounting  standards,  including  Statement of Financial  Accounting
Standard (SFAS) 71, "Accounting for the Effects of Certain Types of Regulation,"
which provide for recognition of the economic effects of rate regulation. On May
1, 1997,  TNMP placed  into effect its  transition  to  competition  plan in New
Mexico.  On July 31, 1997,  TNMP filed a new plan for  transition to competition
with the PUCT.  Additional  information  regarding these two transition plans is
provided under "MD&A--Regulatory Matters." Continued applicability of SFAS 71 to
TNP's and TNMP's financial  statements requires that rates set by an independent
regulator on a  cost-of-service  basis can actually be charged to and  collected
from  customers.  Management  believes  that as of June  30,  1997,  and for the
foreseeable  future,  TNP and  TNMP  satisfy  the  criteria  for  accounting  in
accordance with SFAS 71.

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

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

     TNP is a holding company, in which TNMP currently  represents most of TNP's
operations.  Additionally,  Facility  Works Inc.,  (Facility  Works) is a wholly
owned  subsidiary of TNP, that began  operations in early 1996.  Facility  Works
provides  facility-related services and products to commercial and institutional
customers.  The following  discussion  focuses on TNMP's operations except where
otherwise noted.

Results Of Operations

   Overall Results

     TNP's income  applicable to common stock was $7.4 million and $11.5 million
for the three and six months  ended June 30,  1997,  respectively.  TNP's income
applicable  to common  stock  decreased  $0.4 million for the three months ended
June 30,  1997,  and  increased  $3.2  million for the six months ended June 30,
1997, when compared to the same periods of last year.

     TNMP's  income  applicable  to common stock  increased for the three months
ended June 30, 1997, as a result of reduced interest expense, increased revenues
from  new  transmission   rates  in  Texas,  the  continued  benefits  from  the
implementation  in  August  1996 of a  control  area,  and  increased  sales  to
industrial customers.  Partially offsetting those increases was reduced sales to
residential and commercial customers due to milder than normal weather. Facility
Works,  Inc.  (Facility  Works),  incurred net operating  losses of $1.4 million
during the three  months ended June 30, 1997.  In addition,  TNP's  earnings per
share were  reduced  due to a 19  percent  increase  in the  number of  weighted
average common shares outstanding,  due to the issuance of two million shares of
common stock in October 1996.

     TNMP's income applicable to common stock increased $6.1 million for the six
months ended June 30, 1997, due to the same reasons as discussed above. Facility
Works incurred $2.4 million of net operating  losses during the six months ended
June 30, 1997.  Weighted  average common shares increased 20 percent for the six
months ended June 30, 1997, which reduced TNP's earnings per share.

   Operating Revenues

     TNMP's operating revenues increased $10.3 million for the second quarter of
1997, and $36.7 million for the six months ended June 30, 1997, when compared to
the corresponding  periods of 1996. Second quarter base revenues  decreased $0.4
million, while year-to-date base revenues increased $2.8 million.


<PAGE>
     The components of TNMP's  operating and base revenues are summarized in the
following tables (in thousands):

<TABLE>
<CAPTION>
                                                   Three Months Ended June 30,           Six Months Ended June 30,
                                                   ---------------------------           -------------------------
                                                                         Increase                              Increase
                                                 1997         1996      (Decrease)        1997       1996     (Decrease)
                                              _________    __________   __________    __________  _________   __________
<S>                                           <C>          <C>          <C>           <C>                     <C>      
         Operating revenues                   $ 132,361    $  122,020   $  10,341     $  258,584  $ 221,847   $  36,737

         Less pass-through items                 64,585        53,798      10,787        132,127     98,204      33,923
                                              _________    __________   __________    __________  _________   __________
         Base revenues                        $  67,776    $   68,222   $    (446)    $  126,457  $ 123,643   $   2,814
                                              =========    ==========   ==========    ==========  =========   ==========
</TABLE>

<TABLE>
<CAPTION>
                           Base revenues 
                           -------------
<S>                                                                     <C>                          <C>        
                           Weather related                              $  (4,931)                   $   (5,517)
                           Price - sales mix and other                        (51)                          273
                           Customer growth                                    937                         1,792
                           Industrial - economy rate sales                  2,155                         4,116
                           Industrial - firm rate sales                    (1,112)                       (1,390)
                           Non industrial standby revenues                    817                         1,635
                           Transmission revenue                             4,173                         4,129
                           Unbilled revenue                                (2,246)                       (2,252)
                           Other electric revenue                            (188)                           28
                                                                        __________                   ___________
                                                                        $    (446)                   $    2,814
                                                                        ==========                   ===========
</TABLE>
     Pass-through  items are the portion of operating  revenues that recover the
costs of purchased  power,  fuel, and standby power from customers.  These items
affect customer rates but do not affect operating  income.  Explanations for the
second  quarter and  year-to-date  variances  are  discussed  under  "Results of
Operations -- Operating Expenses."

     As detailed  below,  gigawatt-hour  (GWH) sales  increased due to increased
economy rate sales which are low margin, high volume, and generally short-term.

     The components of GWH sales are summarized in the following table:

<TABLE>
<CAPTION>
                                                   Three Months Ended June 30,               Six Months Ended June 30,
                                                   ---------------------------               -------------------------
                                                                         Increase                               Increase
                                                 1997         1996      (Decrease)         1997       1996     (Decrease)
                                                ______       ______     __________        ______     ______    __________ 
         GWH sales:
         ----------
<S>                                                 <C>           <C>         <C>            <C>      <C>          <C> 
         Residential                                450           517         (67)           944      1,015        (71)
         Commercial                                 421           429          (8)           801        799          2
         Industrial:
           Firm                                     287           369         (82)           554        695       (141)
           Economy                                1,084           415         669          2,145        789      1,356
         Other                                       38            29           9             93         55         38
                                                _______      ________    _________        _______     ______     _______
               Total GWH sales                    2,280         1,759         521          4,537      3,353      1,184
                                                =======      ========    =========        =======     ======     ======
</TABLE>

     The increases in the three and six month ended periods ended June 30, 1997,
resulted from increased  industrial economy sales,  offset in part by reductions
in firm industrial sales and weather-related sales reductions to residential and
commercial  customers.  Economy  industrial  sales  increased due to contractual
agreements  entered into with two existing  cogeneration  customers in mid-1996,
whereby TNMP purchases the output from those cogeneration facilities and resells
the power to those  customers.  Weather  during the three  months ended June 30,
1997, was much milder than normal, while weather for the three months ended June
30, 1996 was much  hotter  than  normal.  The  combination  of those two weather
effects  was a  significant  decrease  in sales to  residential  and  commercial
customers  for the three  months  ended June 30, 1997 when  compared to the same
period of last year.

     Firm  industrial  sales  decreased  for both the three and six months ended
June 30, 1997. Over the last several years,  cogeneration  projects developed or
considered by certain industrial customers resulted in TNMP offering economy
rates to qualifying customers.  Previously,  those industrial customers had
paid firm rates. The economy rates are designed to retain such customers, and to
compete for and develop new loads.

<PAGE>
   Operating Expenses

     Total  operating  expenses  increased $12 million and $36.5 million for the
three and six months  ended June 30,  1997,  as compared to the same  periods of
last year due primarily to an increase in pass-through  expenses. The components
of  TNMP's  operating  expenses  are  summarized  in  the  following  table  (in
thousands):

<TABLE>
<CAPTION>
                                                   Three Months Ended June 30,               Six Months Ended June 30,
                                              ------------------------------------     -----------------------------------
                                                                         Increase                                Increase
                                                 1997         1996      (Decrease)          1997      1996      (Decrease)
                                              __________    __________  __________     ___________   _________   _________
         Pass-through expenses:
<S>                                           <C>           <C>         <C>            <C>           <C>         <C>     
           Purchased power                    $  54,872     $  41,326   $  13,546      $  113,219    $ 73,961    $ 39,258
           Standby power                              -         1,216      (1,216)              -       2,771      (2,771)
           Fuel                                   9,713        11,256      (1,543)         18,908      21,472      (2,564)
                                              __________    __________  __________     ___________   _________   _________
         Total pass-through items                64,585        53,798      10,787         132,127      98,204      33,923
 
         Other operating expenses                31,344        30,850         494          60,498      60,516         (18)

         Income and other tax expenses           12,785        12,045         740          22,645      20,014       2,631
                                              __________    __________  __________     ___________   _________   _________

         Operating expenses                   $ 108,714     $  96,693   $  12,021      $  215,270    $178,734    $ 36,536
                                              ==========    ==========  ==========     ===========   =========   =========
</TABLE>

   Pass-through Expenses

     Pass-through  expenses  consist of  purchased  power,  standby  power,  and
certain  fuel costs.  Current  quarter and  year-to-date  pass-through  expenses
increased due to higher purchased power costs.

     Purchased Power.  Purchased power costs,  including  standby,  increased by
$12.3  million  and $36.5  million  for the three and six months  ended June 30,
1997, when compared to the same periods of 1996 due primarily to increased power
requirements  to meet higher economy sales to industrial  customers.  During the
first quarter of 1996,  purchased  power  supplier  refunds of $6.7 million were
passed through to Texas customers, which reduced purchased power expense for the
six months ended June 30, 1996.

     Fuel.  Fuel expense  decreased  for the three and six months ended June 30,
1997, due primarily to a reduction in GWH sales, exclusive of industrial economy
sales. No fuel cost recovery is included in industrial  economy rate sales.  The
majority of TNMP's monthly fuel costs are recovered in revenues  through a fixed
fuel  factor per KWH  approved  by the PUCT.  TNMP  records as fuel  expense the
amount  collected  through this fixed fuel factor.  Any  difference  between the
amount  collected  and actual cost is deferred for  collection/refund  in future
periods.  See  Note 3,  for  information  regarding  the  June  30,  1997,  fuel
reconciliation filing with the PUCT.

   Other Operating Expenses, Income and Other Tax Expenses

     TNMP's other operating expenses for the three and six months ended June 30,
1997, were  approximately  the same when compared to the same periods last year.
TNP's other operating  expenses  increased  significantly  for the three and six
months ended June 30, 1997,  when compared to the same periods last year, due to
the  inclusion of Facility  Works  operations  during 1997.  Facility  Works had
virtually no activity during the first half of 1996.

     TNMP's income and other tax expenses increased for the three and six months
ended June 30, 1997, due to higher pre-tax income and additional  gross receipts
taxes.  TNP's income tax expenses  decreased for the three months ended June 30,
1997,  due to lower  pre-tax  income and increased for the six months ended June
30, 1997, due to higher pre-tax income.

   Interest Expense

     Interest charges  decreased $2.9 million and $5.7 million for the three and
six months ended June 30, 1997. The decrease is attributed to reduced  long-term
debt  levels  and  refinancing  of debt at lower  levels.  Borrowings  under the
revolving credit  facilities and an equity  contribution  from TNP in late 1996,
resulting from a common stock sale,  were used to redeem TNMP's higher  interest
rate bonds.

Financial Condition


<PAGE>
   Liquidity

     The main sources of liquidity  for TNMP are cash flow from  operations  and
borrowings from credit facilities. TNMP's cash flow from operations improved for
the six months  ended June 30,  1997,  compared to the six months ended June 30,
1996, due to higher  receipts from  customers,  net of fuel and purchased  power
payments, and the timing of income tax payments. As previously discussed, during
the first  quarter of 1996,  TNMP  refunded  $6.7  million to  customers.  TNP's
consolidated  cash flow from  operations  also improved for the six months ended
June 30,  1997,  for the same  reasons as discussed  above;  however,  they were
offset  somewhat  by  $6.5  million  of  cash  used  by  Facility  Works  in its
operations. Currently, TNP's primary source of cash is dividends from TNMP.

     TNMP has two credit  facilities  with a total  commitment of $250 million -
the 1995 Facility  ($150 million) and the 1996 Facility  ($100  million).  As of
June 30, 1997,  available unused credit under the 1995 Facility was $87 million,
subject to interest coverage and capitalization  tests. Under the 1995 Facility,
TNMP can borrow up to $37 million of the unused  commitment  with no  additional
collateral  and borrow the remainder of the unused  commitment  ($50 million) by
pledging  first  mortgage  bonds  (FMBs) equal to the  principal  amount of such
borrowings.

     There  is  currently  no  available  credit  under  the $100  million  1996
Facility.  The  interest  rates  under both  facilities  are based on the London
Interbank  Offered Rate (LIBOR).  The interest  rate margins on both  facilities
will decrease as the ratings on TNMP's FMBs improve.

     In January,  TNMP used the credit  facilities to retire  $100.8  million of
11.25% Series T FMBs.

     TNMP has sufficient  liquidity to satisfy the possibility of existing known
contingencies.  Management  believes  cash flow  from  operations  and  periodic
borrowings  under its two revolving  credit  facilities  should be sufficient to
meet working  capital  requirements  and planned  capital  expenditures at least
through 1998.

Regulatory Matters

   Community ChoiceSM

     New Mexico. On May 1, 1997, TNMP implemented  Community Choice, its plan
for transition to competition  for its New Mexico  service  territory.  The plan
provides  TNMP's  customers  the right to choose their energy  provider  after a
three-year  transition period. The plan freezes rates (including the recovery of
purchased  power)  during  the  transition   period,  and  allows  for  customer
aggregation  based on market  forces.  TNMP  believes  the plan will allow it to
recover  most,  if not all,  of its  potential  stranded  costs  in New  Mexico;
however,  the actual recovery of stranded costs will depend on the future market
and price for energy through May 1, 2000.

   Transition to Competition

     Texas.  On  July  31,  1997,  TNMP  filed  a new  plan  for  transition  to
competition with the PUCT and the communities within TNMP's service territory in
Texas. Due to the numerous issues involved,  TNMP can provide no assurance as to
the timing or outcome of the new  transition to  competition  plan in Texas.  As
discussed  previously in Note 3 - Rate Filing with the PUCT and Texas Gulf Coast
Cities,  TNMP has filed  traditional rate information with certain cities served
by TNMP in the  Texas  gulf  coast  area,  due to  their  request,  in  order to
determine the reasonableness of TNMP's current rates.

   New Accounting Standards

     The Financial  Accounting Standards Board has issued SFAS 128, Earnings per
Share, which will become effective for financial  statements ending December 31,
1997. SFAS 128 requires the calculation of basic and diluted earnings per share.
Basic  earnings per share is computed by dividing  income  applicable  to common
stock by the weighted  average  number of common shares  outstanding  during the
period.  Diluted earnings per share is computed by dividing income applicable to
common stock by the weighted  average  number of common shares  outstanding  and
common stock  equivalents.  SFAS 128 will not  materially  change TNP's reported
earnings per share.


<PAGE>
                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

Rate Filing with the PUCT and Texas Gulf Coast Cities, and Fuel Reconciliation
 
     See Note 3 for  information  regarding  the rate  filing  with the PUCT and
Texas Gulf Coast Cities, and the fuel reconciliation with the PUCT.

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

     At the annual  meeting of the Company's  shareholders  on May 6, 1997,  the
shareholders  (i) elected  J.R.  Holland,  Jr.,  Harris L.  Kempner and Carol D.
Surles as Class 3 directors for three-year  terms; (ii) approved an amendment to
the TNP Enterprises  Equity  Incentive Plan that adds an additional  performance
measure  to be  achieved  for a  participant  to earn  and  receive  payment  of
performance-based  stock awards;  and (iii)  ratified the  appointment of Arthur
Andersen LLP, Certified Independent Public Accountants,  as independent auditors
for 1997.

         The vote in the election of directors was as follows:

         J.R. Holland, Jr.:         For:  11,287,536 Withheld:  99,822
         Harris L. Kempner:         For:  11,297,188 Withheld:  90,170
         Carol D. Surles:           For:  11,287,466 Withheld:  99,892

     The vote in the amendment to the TNP Equity  Incentive  Plan was 10,848,916
for, 413,160 against, and 125,282 abstaining.

     The vote in the ratification of Arthur Andersen LLP, Certified  Independent
Public Accountants, as independent auditors was 11,136,871 for, 147,909 against,
and 102,578 abstaining.
 
Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits

         The following exhibits are filed with this report;

         27(a)    Financial Data Schedule for TNP.

         27(b)    Financial Data Schedule for TNMP.

(b)      Reports on Form 8-K - None


Statement Regarding Forward Looking Information

     The discussions in this document that are not historical facts,  including,
but  not  limited  to,  the  outcome  of  current  and  future   rate/regulatory
proceedings,  the continued  application  of regulatory  accounting  principles,
future cash flows and the potential  recovery of stranded costs,  are based upon
current expectations. Actual results may differ materially. Among the facts that
could  cause  the  results  to  differ  materially  from  expectations  are  the
following:  legislation  in the states TNMP serves  affecting the  regulation of
TNMP's  business;  changes in regulations  affecting TNP and TNMP's  businesses;
results of regulatory  proceedings  affecting TNP and TNMP's operations;  future
acquisitions   or  strategic   partnerships;   general   business  and  economic
conditions;  negotiations  regarding  TNMP's  proposal  regarding  transition to
competition;  and other  factors  described  from time to time in TNP and TNMP's
reports filed with the Securities and Exchange Commission.  TNP and TNMP wish to
caution  readers  not to  place  undue  reliance  on any  such  forward  looking
statements,  which are made pursuant to the Private Securities Litigation Reform
Act of 1995 and, as such, speak only as of the date made.




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


                                   SIGNATURES

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


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


                            By \s\ MANJIT S. CHEEMA                             
                            Manjit S. Cheema
Date: August 1, 1997        Senior Vice President and as Chief Financial Officer


                            By \s\ SCOTT FORBES                                 
                            Scott Forbes
Date: August 1, 1997        Controller and as Chief Accounting Officer