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

                                    FORM 10-Q

(Mark One)
(X)  COMBINED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
          For the quarterly period ended March 31, 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 13,061,689 shares of common stock outstanding as of
April 28, 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 period ended March 31, 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.
        (Unaudited for Periods Ended March 31, 1997, and 1996)

        TNP Enterprises, Inc. (TNP) and Subsidiaries:

              Consolidated Statements of Income
              Three Month Periods Ended March 31, 1997, and 1996             3

              Consolidated Statements of Cash Flows
              Three Month Periods Ended March 31, 1997, and 1996             4 

              Consolidated Balance Sheets
              March 31, 1997, and December 31, 1996                          5

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

              Consolidated Statements of Income
              Three Month Periods Ended March 31, 1997, and 1996             6

              Consolidated Statements of Cash Flows
              Three Month Periods Ended March 31, 1997, and 1996             7

              Consolidated Balance Sheets
              March 31, 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.                                                 12

Item 5.  Other Information.                                                 13

Item 6.  Exhibits and Reports on Form 8-K.                                  13
           (a)   Exhibit Index                                              13
           (b)   Reports on Form 8-K                                        13
           Signature page                                                   14






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

                                                            Three Months Ended
                                                                 March 31,
                                                --------------------------------------------
                                                        1997                   1996
                                                ---------------------   --------------------
                                                   (In thousands except per share amounts)

<S>                                              <C>                     <C>               
OPERATING REVENUES                               $           128,397     $           99,827
                                                ---------------------   --------------------

OPERATING EXPENSES:
  Purchased power                                             58,347                 32,635
  Fuel                                                         9,969                 11,055
  Other operating and general expenses                        19,609                 17,950
  Maintenance                                                  3,012                  2,737
  Depreciation                                                 9,665                  9,695
  Taxes other than income taxes                                7,994                  7,351
  Income taxes                                                 1,378                    618
                                                ---------------------   --------------------
       Total operating expenses                              109,974                 82,041
                                                ---------------------   --------------------

NET OPERATING INCOME                                          18,423                 17,786
                                                ---------------------   --------------------

OTHER INCOME:
  Other income and deductions, net                               199                    208
  Income taxes                                                    (1)                   (85)
                                                ---------------------   --------------------
       Other income, net of taxes                                198                    123
                                                ---------------------   --------------------

INCOME BEFORE INTEREST CHARGES                                18,621                 17,909
                                                ---------------------   --------------------
INTEREST CHARGES:
  Interest on long-term debt                                  13,506                 16,569
  Other interest and amortization of 
   debt-related costs                                          1,005                    778
                                                ---------------------   --------------------
            Total interest charges                            14,511                 17,347
                                                ---------------------   --------------------

NET INCOME                                                     4,110                    562
Dividends on preferred stock                                      40                     42
                                                ---------------------   --------------------

INCOME APPLICABLE TO COMMON STOCK                $             4,070     $              520
                                                =====================   ====================


EARNINGS PER SHARE OF COMMON STOCK               $              0.31     $             0.05
                                                =====================   ====================

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

WEIGHTED AVERAGE NUMBER OF COMMON AND
 COMMON EQUIVALENT  SHARES OUTSTANDING                        13,141                 10,986
                                                =====================   ====================


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

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                     TNP ENTERPRISES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                          Three Months Ended
                                                                March 31,
                                                ------------------------------------------
                                                         1997                   1996
                                                ------------------    --------------------
                                                              (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                              <C>                    <C>               
  Cash received from customers                   $        130,089       $          100,052
  Purchased power                                         (55,719)                (39,758)
  Fuel costs paid                                          (9,503)                (10,998)
  Cash paid for payroll and to other suppliers            (33,494)                (25,302)
  Interest paid, net of amounts capitalized               (20,828)                (25,407)
  Income taxes paid                                           874                  (8,386)
  Other taxes paid, net of amounts capitalized            (16,110)                (16,845)
  Other operating cash receipts and payments, net             882                   1,636
                                                 ------------------    --------------------
NET CASH USED IN OPERATING ACTIVITIES                      (3,809)                (25,008)
                                                 ------------------    --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to utility plant, net of capitalized 
   depreciation and interest                               (5,818)                 (6,460)
  Additions to other property and nonregulated 
   investments                                             (2,806)                      -
                                                 ------------------    --------------------
NET CASH USED IN INVESTING ACTIVITIES                      (8,624)                 (6,460)
                                                 ------------------    --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid on preferred and common stocks            (3,238)                 (2,453)
  Borrowings (repayments) under revolving credit 
   facilities                                             120,000                  30,000
  Common stock issuances                                    1,678                     934
  Redemptions:
     Other long-term debt                                     (19)                      -
     First mortgage bonds                                (100,800)                   (120)
                                                 -----------------     -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                  17,621                  28,361
                                                 -----------------     -------------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                     5,188                  (3,107)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD            8,387                  21,105
                                                 -----------------     -------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD        $        13,575       $          17,998
                                                 =================     ===================
RECONCILIATION OF NET INCOME TO NET
     CASH USED IN OPERATING ACTIVITIES:
  Net income                                      $         4,110       $             562
  Adjustments to reconcile net income to net 
   cash provided by operating activities:
     Depreciation                                           9,665                   9,695
     Amortization of debt-related costs and 
      other deferred charges                                  967                   1,122
     Allowance for borrowed funds used during 
      construction                                            (13)                    (39)
     Deferred income taxes (excluding effect 
      of change in accounting)                                290                     901
     Investment tax credits                                   241                    (267)

Cash flows impacted by changes in current assets
  and liabilities:
     Deferred purchased power and fuel costs                2,072                  (5,688)
     Accrued interest                                      (7,271)                 (7,252)
     Accrued taxes                                         (6,394)                (17,780)
     Accounts payable                                      (4,101)                 (4,854)
     Changes in other current assets and 
      liabilities                                          (5,621)                 (1,045)
Other, net                                                  2,246                    (363)
                                                 -----------------     -------------------
NET CASH USED IN OPERATING ACTIVITIES             $        (3,809)      $         (25,008)
                                                 =================     ===================


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

</TABLE>


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

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

UTILITY PLANT:
<S>                                               <C>                <C>           
  Electric plant                                  $   1,219,419      $    1,215,355
  Construction work in progress                             819                 906
                                                 ---------------    ----------------
            Total                                     1,220,238           1,216,261
  Less accumulated depreciation                         290,078             282,322
                                                 ---------------    ----------------
            Net utility plant                           930,160             933,939
                                                 ---------------    ----------------

OTHER PROPERTY AND INVESTMENTS, at cost                   6,678               3,927
                                                 ---------------    ----------------

CURRENT ASSETS:
  Cash and cash equivalents                              13,575               8,387
  Customer receivables                                   14,846              16,362
  Inventories, at lower of average cost or market:
       Fuel                                                 534                 367
       Materials and supplies                             6,079               6,384
  Deferred purchased power and fuel costs                 3,766               3,565
  Accumulated deferred income taxes                       4,730               1,937
  Other current assets                                    1,432               1,121
                                                 ---------------    ----------------
            Total current assets                         44,962              38,123
                                                 ---------------    ----------------

DEFERRED CHARGES                                         31,050              30,795
                                                 ---------------    ----------------
                                                  $   1,012,850      $    1,006,784
                                                 ===============    ================
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
  Common shareholders' equity:
       Common stock - no par value per share.
       Authorized 50,000,000
            shares; issued 13,053,102 shares
            in 1997 and 13,006,492 in 1996        $     185,449      $      183,771
       Retained earnings                                 95,575              94,703
                                                 ---------------    ----------------
            Total common shareholders' equity           281,024             278,474
 
  Preferred stock                                         3,420               3,420
  Long-term debt, less current maturities               553,145             533,964
                                                 ---------------    ----------------
            Total capitalization                        837,589             815,858
                                                 ---------------    ----------------

CURRENT LIABILITIES:
  Current maturities of long-term debt                      138                 138
  Accounts payable                                       24,345              28,446
  Accrued interest                                        3,608              10,879
  Accrued taxes                                          12,439              18,833
  Customers' deposits                                     2,838               2,662
  Deferred purchased power costs                          2,273                   -
  Other current liabilities                               7,450              11,797
                                                 ---------------    ----------------
            Total current liabilities                    53,091              72,755
                                                 ---------------    ----------------

REGULATORY TAX LIABILITIES                               10,462              10,963
ACCUMULATED DEFERRED INCOME TAXES                        78,428              74,844
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS              19,974              19,734
DEFERRED CREDITS                                         13,306              12,630
COMMITMENTS AND CONTINGENCIES (Notes 2 and 4)
                                                 ---------------    ----------------
                                                  $   1,012,850      $    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
                                                           March 31,
                                              ------------------------------------
                                                    1997               1996
                                              -----------------  -----------------
                                                        (In thousands)

<S>                                            <C>                <C>            
OPERATING REVENUES                             $       126,223    $        99,827
                                              -----------------  -----------------

OPERATING EXPENSES:
  Purchased power                                       58,347             32,635
  Fuel                                                   9,969             11,055
  Other operating and general expenses                  15,758             17,950
  Maintenance                                            3,012              2,737
  Depreciation of utility plant                          9,610              9,695
  Taxes other than income taxes                          7,795              7,351
  Income taxes                                           2,065                618
                                              -----------------  -----------------
       Total operating expenses                        106,556             82,041
                                              -----------------  -----------------

NET OPERATING INCOME                                    19,667             17,786
                                              -----------------  -----------------

OTHER INCOME:
  Other income and deductions, net                         159                296
  Income taxes                                              (1)              (116)
                                              -----------------  -----------------
       Other income, net of taxes                          158                180
                                              -----------------  -----------------

INCOME BEFORE INTEREST CHARGES                          19,825             17,966
                                              -----------------  -----------------

INTEREST CHARGES:
  Interest on long-term debt                            13,506             16,569
  Other interest and amortization of 
   debt-related costs                                    1,005                778
                                              -----------------  -----------------
            Total interest charges                      14,511             17,347
                                              -----------------  -----------------

NET INCOME                                               5,314                619
Dividends on preferred stock                                40                 42
                                              -----------------  -----------------

INCOME APPLICABLE TO COMMON STOCK              $         5,274    $           577
                                              =================  =================


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

</TABLE>


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

                                                                  Three Months Ended
                                                                      March 31,
                                                         ------------------------------------
                                                               1997                1996
                                                         ------------------   ---------------
                                                                    (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>                  <C>          
  Cash received from customers                            $        129,737     $     100,052
  Purchased power                                                  (55,719)          (39,758)
  Fuel costs paid                                                   (9,503)          (10,998)
  Cash paid for payroll and to other suppliers                     (27,548)          (25,138)
  Interest paid, net of amounts capitalized                        (20,828)          (25,407)
  Income taxes paid                                                      3            (8,499)
  Other taxes paid, net of amounts capitalized                     (16,852)          (16,845)
  Other operating cash receipts and payments, net                      846             1,723
                                                         ------------------   ---------------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                    136           (24,870)
                                                         ------------------   ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to utility plant, net of capitalized 
   depreciation and interest                                        (5,818)           (6,460)
  Additions to other property and investments                            -                 -
                                                         ------------------   ---------------

CASH FLOWS USED IN INVESTING ACTIVITIES                             (5,818)           (6,460)
                                                         ------------------   ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Dividends paid on preferred and common stocks                     (9,040)           (2,442)
  Borrowings (repayments) under revolving credit facilities        120,000            30,000
  First mortgage bond redemption                                  (100,800)             (120)
                                                         ------------------   ---------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                           10,160            27,438
                                                         ------------------   ---------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                              4,478            (3,892)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     5,115            14,450
                                                         ------------------   ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $          9,593     $      10,558
                                                         ==================   ===============

RECONCILIATION OF NET INCOME TO NET
     CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
  Net income                                              $          5,314     $         619
  Adjustments to reconcile net income to net cash 
   provided by operating activities:
     Depreciation of utility plant                                   9,610             9,695
     Amortization of debt-related costs and other 
      deferred charges                                                 967             1,122
     Allowance for borrowed funds used during construction             (13)              (39)
     Deferred income taxes                                            (467)              884
     Investment tax credits                                            334              (262)

Cash flows impacted by changes in current assets and 
 liabilities:
     Deferred purchased power and fuel costs                         2,072            (5,688)
     Accounts payable                                               (4,819)           (4,854)
     Accrued interest                                               (7,271)           (7,252)
     Accrued taxes                                                  (6,855)          (17,878)
     Changes in other current assets and liabilities                (1,500)             (882)
Other, net                                                           2,764              (335)
                                                         ------------------   ---------------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES       $            136     $     (24,870)
                                                         ==================   ===============


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

</TABLE>


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

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

UTILITY PLANT:
<S>                                                  <C>                 <C>            
  Electric plant                                     $  1,219,419        $   1,215,355
  Construction work in progress                               819                  906
                                                    --------------      ---------------
            Total                                       1,220,238            1,216,261
  Less accumulated depreciation                           290,078              282,322
                                                    --------------      ---------------
            Net utility plant                             930,160              933,939
                                                    --------------      ---------------

OTHER PROPERTY AND INVESTMENTS, at cost                     1,884                1,884
                                                    --------------      ---------------
CURRENT ASSETS:
  Cash and cash equivalents                                 9,593                5,115
  Customer receivables                                     12,183               15,521
  Inventories, at lower of average cost or market:
       Fuel                                                   534                  367
       Materials and supplies                               6,079                6,384
  Deferred purchased power and fuel costs                   3,766                3,565
  Accumulated deferred income taxes                         4,730                1,937
  Other current assets                                        921                1,324
                                                    --------------      ---------------
            Total current assets                           37,806               34,213
                                                    --------------      ---------------

DEFERRED CHARGES                                           30,935               32,121
                                                    --------------      ---------------
                                                     $  1,000,785        $   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                                   61,582               65,308
                                                    --------------      ---------------
            Total common shareholder's equity             283,822              287,548
 
  Redeemable cumulative preferred stock                     3,420                3,420
  Long-term debt, less current maturities                 553,000              533,800
                                                    --------------      ---------------
            Total capitalization                          840,242              824,768
                                                    --------------      ---------------
CURRENT LIABILITIES:
  Current maturities of long-term debt                        100                  100
  Accounts payable                                         22,435               27,254
  Accrued interest                                          3,608               10,879
  Accrued taxes                                            10,046               16,901
  Customers' deposits                                       2,838                2,662
  Deferred purchased power costs                            2,273                    -
  Other current liabilities                                 7,287               10,993
                                                    --------------      ---------------
            Total current liabilities                      48,587               68,789
                                                    --------------      ---------------

REGULATORY TAX LIABILITIES                                 10,462               10,963
ACCUMULATED DEFERRED INCOME TAXES                          68,689               65,860
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS                19,499               19,164
DEFERRED CREDITS                                           13,306               12,613
COMMITMENTS AND CONTINGENCIES (Notes 2 and 4)
                                                    --------------      ---------------
                                                     $  1,000,785        $   1,002,157
                                                    ==============      ===============

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

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


Note 1.  Interim Financial Statements

         The interim consolidated  financial statements of TNP and subsidiaries,
and TNMP and subsidiaries are unaudited, and contain all adjustments (consisting
primarily of normal  recurring  accruals)  necessary for a fair statement of the
results for the interim periods  presented.  Results for interim periods are not
necessarily  indicative  of  results  to be  expected  for a  full  year  or for
previously reported periods due in part to seasonal revenue fluctuations.  It is
suggested that these  consolidated  financial  statements be read in conjunction
with the audited consolidated financial statements and notes thereto included in
TNP's and TNMP's 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 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.  Management believes that
TNMP's claim for ITC is valid and is contesting the agent's  recommendation.  Of
the $22.5 million of ITC at issue, TNP and its  subsidiaries  have utilized $8.2
million in the  consolidated  returns  through  1995 and expect to utilize  $1.6
million in the 1996 consolidated tax returns. TNMP's portion is $7.0 million and
$1.8  million  respectively.  However,  since  1990,  TNP  and  TNMP  have  only
recognized $2.3 million of the amortization of ITC in results of operations.

Note 3.  Regulatory Matters

Cities Rate Review

         Beginning in late December 1996, certain cities in the Texas gulf coast
area served by TNMP passed  resolutions  requiring  TNMP to file  complete  rate
information  with those  cities.  During the first  quarter of 1997 those cities
agreed to reopen  negotiations  on a new transition to competition  proposal and
have deferred the required rate filing until July 1, 1997.  If  negotiations  on
the new  transition  to  competition  proposal are not  successful  and the rate
filings are made, TNMP does not anticipate a final resolution of the rate review
with the  cities  before  late 1997.  Based on its  preliminary  analysis,  TNMP
believes the filing will support the reasonableness of TNMP's current rates.

Texas Transmission Access

         During 1996,  the Public  Utility  Commission  of Texas (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.  TNMP believes it will benefit from the new rules as competition  should
increase in the wholesale power market and result in reduced purchased power and
wheeling  costs.  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.  Until the new  transmission
rules are  recognized as being final,  TNMP has not recorded the benefits of the
new transmission rules.

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 April 18, 1997, the New Mexico Public Utility Commission (NMPUC)
issued an order  approving  TNMP's plan for  transition  to  competition  in New
Mexico.  During  the  first  quarter  of  1997,  TNMP  proposed  a new  plan for
transition to competition to the communities  within TNMP's service territory in
Texas.  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 March 31,  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.

Results Of Operations

   Overall Results

         TNP's  earnings  applicable  to common  stock were $4.1 million for the
quarter ended March 31, 1997.  Earnings  increased $3.6 million when compared to
the  corresponding  1996  quarter,  primarily  due to a  reduction  in  interest
expense,  control area savings,  and additional base revenue from industrial and
commercial sales at TNMP.

         Facility Works Inc. (Facility Works), a wholly owned subsidiary of TNP,
began  operations  in early  1996,  and  provides  energy-related  services  and
products to commercial and institutional  customers. For the quarter ended March
31,  1997,  Facility  Works had a net loss of $1.0  million on  revenues of $2.2
million. Facility Works had no net income or loss in the first quarter of 1996.

         Since the  operations  of TNMP  (the  principal  subsidiary)  currently
represent most of TNP's operations,  the following  discussion focuses on TNMP's
operations unless noted otherwise.

   Operating Revenues

         TNMP's  operating  revenues  increased $26.4 million as compared to the
corresponding  1996  quarter.  Current  quarter  base  revenues  increased  $3.3
million,  or 5.9%,  compared to the  corresponding  1996 period.  Base  revenues
increased due to the additional  economy rate sales and higher  commercial sales
discussed below.  The components of TNMP's operating  revenues are summarized in
the following table (in thousands):

                          Three Months Ended March 31,
                                                                  Increase
                                          1997         1996      (Decrease)
                                       ---------    ----------   ----------

  Operating revenues                   $ 126,223    $   99,827   $  26,396

  Less pass-through items                 67,542        44,406      23,136
                                       ---------    ----------   ---------

  Base revenues                        $  58,681    $   55,421   $   3,260
                                       =========    ==========   =========


                 Base revenues
                 Weather related                              $    (572)
                 Price - sales mix and other                        397
                 Customer growth                                    851
                 Industrial - economy rate sales                  1,961
                 Industrial - firm rate sales                      (278)
                 Standby revenues - nonindustrial                   818
                 Other electric revenue                              83
                                                              ---------
                                                              $   3,260
                                                              =========

         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 first  quarter  variance  are  discussed  under  "Results of  Operations  --
Operating Expenses."

         Current quarter GWH sales increased by 663 GWH, or 41.6%.  The increase
was  attributed  primarily  to economy  rate sales  which are low  margin,  high
volume, and generally  short-term.  The majority of the increase in economy rate
sales  was  due  to  contractual  agreements  entered  into  with  two  existing
cogeneration customers in mid-1996.

         The  components  of  gigawatt-hours  (GWH) sales are  summarized in the
following table:

                          Three Months Ended March 31,
                          ---------------------------
                                                                     Increase
                                             1997         1996      (Decrease)
                                             ----         ----      ----------
   GWH sales:
   Residential                                494           498          (4)
   Commercial                                 380           370          10
   Industrial:
     Firm                                     267           326         (59)
     Economy                                1,061           374         687
   Other                                       55            26          29
                                          --------     ---------    --------

         Total GWH sales                    2,257         1,594         663
                                          ========     =========    ========

         Current quarter sales of 2,257 GWH's,  increased over the corresponding
1996 quarter  sales of 1,594 GWH's due to increased  industrial  economy  sales.
Contributing to the 89.8% industrial sales increase were contractual  agreements
entered into with two existing cogeneration customers in mid-1996.

   Operating Expenses

         Total  operating  expenses for the current  quarter  increased by $24.5
million as compared to the same quarter last year  primarily  due to an increase
in  pass-through  expenses.  The  components  of TNMP's  operating  expenses are
summarized in the following table (in thousands):

                          Three Months Ended March 31,
                          ---------------------------
                                                                    Increase
                                            1997         1996      (Decrease)
                                            ----         ----      ----------
   Pass-through expenses:
     Purchased power                     $ 58,347      $ 32,635    $ 25,712
     Standby power                              -         1,555      (1,555)
     Fuel                                   9,195        10,216      (1,021)
                                         --------      --------    ---------
   Total pass-through items                67,542        44,406      23,136

   Other operating expenses                29,154        29,666        (512)

   Income and other tax expenses            9,860         7,969       1,891
                                         --------      --------    ---------

   Operating expenses                    $106,556      $ 82,041    $ 24,515
                                         ========      ========    =========

   Pass-through Expenses

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

         Purchased Power. Purchased power costs, including standby, increased by
$24.2  million  in  the  current   quarter  due  primarily  to  increased  power
requirements to meet higher GWH sales.  The first quarter of 1996 was reduced by
supplier refunds of $6.7 million which were passed through to Texas customers.

         Fuel. The decrease in the current quarter of $1.0 million is attributed
to a reduction in firm rate  industrial  sales.  Fuel cost  recovery is excluded
from 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.

   Other Operating Expenses, Income and Other Tax Expenses

         Other operating expenses for the current quarter were approximately the
same as the prior year quarter.

         Current  quarter  income  and  other  tax  expenses  increased  by $1.9
million.  The increases are due to higher pre-tax  income and  additional  gross
receipts taxes.

   Interest Expense

         Interest charges decreased by $2.8 million.  The decrease is attributed
to reduced  long-term debt levels and refinancing of debt.  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

   Liquidity

         Currently,  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 three  months ended March 31, 1997  compared to the
three months ended March 31, 1996, due to higher receipts from customers,  lower
interest  expense,  and the timing of income tax payments.  As discussed  above,
during the first quarter of 1996, TNMP refunded $6.7 million to customers. TNP's
consolidated  cash flow from operations also improved for the three months ended
March 31, 1997  compared to the three months ended March 31, 1996,  for the same
reasons as discussed above;  however,  they were offset slightly by $3.1 million
of cash used by Facility Works in its operations. Currently TNP's primary source
of cash are 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
March 31, 1997, available unused credit under the 1995 Facility was $75 million,
subject to interest coverage and capitalization  tests. Under the 1995 Facility,
TNMP can borrow up to $25 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
11.25% Series T FMBs.

         TNMP has sufficient  liquidity to satisfy the  possibility of any 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 Choice SM

         New Mexico.  On March 27,  1997,  the NMPUC  issued an order  approving
Community  Choice,  TNMP's plan for transition to competition for its New Mexico
service  territory as modified by  stipulation on February 3. On April 18, 1997,
the  NMPUC   reaffirmed  the  approval  of  Community   Choice  with  two  minor
modifications. A motion had been filed on April 11, 1997, requesting a rehearing
on the March 27, 1997  order.  The plan went into effect on May 1 and gives TNMP
customers  the  right  to  choose  their  energy  provider  after  a  three-year
transition  period.  The plan freezes rates (including the recovery of purchased
power) for a three-year  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
any stranded costs will depend on the future market and price for energy through
May 1, 2000.

     Texas.  In late February  1997,  TNMP proposed a new plan for transition to
competition to 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  under  "Cities Rate  Review",  certain  cities served by TNMP in the
Texas gulf coast area and TNMP agreed to delay a rate review  filing  until July
1, 1997, in order to reopen  negotiations  on the new  transition to competition
plan.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

Wholesale Purchase Power Agreement.

         As set forth in TNP's and TNMP's  Combined  Annual  Report on Form 10-K
for  1996  filed  with  the  Securities  and  Exchange  Commission,  TNMP  filed
proceedings  with the PUCT and in a Texas state district court to declare TNMP's
wholesale  purchase power  agreement (the "TU  Agreement")  with Texas Utilities
Electric  Company (TU) null and void.  On August 29,  1996,  the PUCT entered an
order  declaring  two of the terms of the TU  Agreement  void,  but  upheld  the
validity of the remainder of the contract.  In November  1996,  TNMP and TU each
filed an appeal of the PUCT's ruling with Texas state  district  courts and such
appeals are pending.

Early Redemption of Series T FMBs

     As reported on TNP's and TNMP's 1996  Combined  Annual Report on Form 10-K,
on January 30, 1997,  TNMP,  Jackson  National Life  Insurance  Company and John
Hancock Life Insurance  Company agreed to a tentative  settlement of the lawsuit
styled  Texas-New  Mexico Power  Company v. John Hancock Life  Insurance Co. et.
al., then pending in the United States District Court for the Northern  District
of Texas, Fort Worth Division. The lawsuit arose from TNMP's early retirement of
$29.2  million of 11.25% Series T FMBs in late 1995. In an order dated March 31,
1997, the court approved that  settlement.  In accordance  with the  settlement,
TNMP has paid  $2,000,000  to the parties of the  lawsuit.  The full  settlement
amount was charged against 1996 income.

Cities Rate Review

         See Note 3 for information regarding the Cities Rate Review.


Item 5.  Other Information.

     Dwight R. Spurlock,  a director  since 1993,  retired from TNP's and TNMP's
boards of directors as of May 1, 1997. Both companies expect to name a successor
later in 1997.


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

         TNP and  TNMP  filed a report  on Form 8-K  dated  February  25,  1997,
         reporting  information  under Item 4 regarding a change in  Independent
         Accountants  and  the  satisfactory  resolution  of a  disagreement  on
         accounting.

Statement Regarding Forward Looking Information

         The  discussions  in  this  document  that  are not  historical  facts,
including,  but not  limited to, the  outcome of future  rate  proceedings,  the
effect of new  transmission  rules,  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.


                               By \s\ MANJIT S. CHEEMA
                               Manjit S. Cheema
Date: May 6, 1997              Vice President and as Chief Financial Officer



(Registrant)                       TEXAS-NEW MEXICO POWER COMPANY


                               By \s\ SCOTT FORBES
                               Scott Forbes
Date: May 6, 1997              Controller and as Chief Accounting Officer