EXHIBIT 10.39


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                      PUBLIC SERVICE COMPANY OF NEW MEXICO
                         MANAGEMENT LIFE INSURANCE PLAN
                                 (July 17, 1985)
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                                    ARTICLE 1
                                TITLE AND PURPOSE

      1.01 The Company hereby establishes a plan as set forth herein, which
shall be known as the  Public  Service  Company of New  Mexico  Management  Life
Insurance Plan (the "Plan").

         1.02 The purpose of the Plan is to provide  additional  life  insurance
for selected management employees.

         1.03  Participation  in the Plan by an  Employee  does not and shall be
deemed to  constitute  a contract  of  employment  between  the  Company and the
Employee, nor shall any provision hereunder restrict the right of the Company to
discharge  the  Employee or  restrict  the right of the  Employee  to  terminate
employment.

                                   ARTICLE II
                                   DEFINITIONS

       The following terms as used herein shall have the meaning specified below
unless the context otherwise requires.  The masculine pronoun, where used, shall
include the feminine, and the singular shall, where appropriate, include plural.


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         2.01  "Accelerated  Management  Performance Plan" shall mean the Public
Service  Company of New  Mexico  Accelerated  Management  Performance  Plan,  as
amended from time to time.

         2.02 "Annual  Earnings"  shall mean the annual rate of base earnings of
an  Employee  as of the date of  death,  exclusive  of  overtime  pay,  bonuses,
commissions, or other special payments, before deductions, including any and all
federal, state and other taxes.

         2.03 "Authorized Leave of Absence" means a leave of absence approved by
the Company.

         2.04 "Beneficiary" shall mean that person or persons or fiduciary which
the Employee has  designated in writing,  and which  designation  has been filed
with the Plan Administrator, to receive the benefits payable upon the Employee's
death. Until a written designation to the contrary is filed, if the Employee has
an  Eligible  Spouse,  the  Employee  shall be  deemed to have  designated  such
Eligible Spouse as Beneficiary,  or if the Employee has no Eligible Spouse,  the
Employee  shall  be  deemed  to  have   designated  the  Employee's   estate  as
Beneficiary.

         2.05 "Board of Directors" means the Board of Directors of the Company.

         2.06  "Company"  means  Public  Service  Company  of New  Mexico or any
successor thereto and any company  affiliated with Public Service Company of New
Mexico which adopts the Plan.


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         2.07 "Effective Date" of the Plan shall be July 17, 1985.

         2.08  "Eligible  Spouse"  means the wife or husband to whom an Employee
has been  legally  married  continuously  for at least one (1) year prior to the
date of such Employee's death.

         2.09 "Employee" shall mean any person who is receiving compensation for
personal   services   rendered  to  the  Company  or  would  be  receiving  such
compensation except for an Authorized Leave of Absence.

         2.10  "Management  Pay Group"  means a  management  group of  employees
designated by the President of the Company.

         2.11 "Maximum  Performance  Credits"  shall mean a total of thirty (30)
Performance Credits as defined in and earned in accordance with the terms of the
Company's Accelerated Management Performance Plan.

         2.12 "Plan" means the Public Service  Company of New Mexico  Management
Life Insurance Plan.

         2.13  "Plan  Administrator"  shall mean the  person  designated  by the
President of the Company as a Plan Administrator of the Plan.


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         2.14 "Service Group Life Insurance  Plan" shall mean the Public Service
Company of New Mexico  Service Group Term Life  Insurance  Plan, as amended from
time to time.

         2.15  "Year"  means  the  period of twelve  (12)  consecutive  calendar
months.

                                   ARTICLE III
                                  PARTICIPATION
         3.01  Eligibility  for  Participation.  Each  Employee  shall  become a
Participant under the Plan of the Employee.

                  3.01.1 Is a member of the Management Pay Group, and 3.01.2 Has
completed six (6) months of service.

         3.02 Date of Participation.

                  3.02.1  Each  Employee  who on July  17,  1985,  fulfills  the
requirements  of Section 3.01 shall become a  Participant  under the Plan or the
Effective Date of the Plan.

                  3.02.2 Each other  Employee  shall become a Participant on the
date he fulfills the requirements of Section 3.01.

         3.03 Duration of  Participation.  An Employee  shall be continued to be
covered under the Plan until the date on which an Employee is no longer a member
of the Management Pay Group.

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                                   ARTICLE IV
                               INSURANCE BENEFITS

         4.01 Amount of Life  Insurance.  The amount of life insurance that each
Employee will have shall be determined as follows:

                  4.01.1 Employees  Accumulating  Less Than Maximum  Performance
Credits and Thirty Years of Service.  An Employee who dies prior to accumulating
a total of thirty (30)  Performance  Credits under the terms of the  Accelerated
Management  Performance  Plan or thirty (30) Years of  Service,  shall have life
insurance  benefits in an amount  equal to three (3) times his Annual  Earnings,
reduced by the amount of life insurance payable to Employee's  Beneficiary under
the Service Group Term Life Insurance Plan, if any.

                  4.01.2  Employee  With Maximum  Performance  Credits or Thirty
Years of Service. An Employee who dies after accumulating a total of thirty (30)
Performance  Credits under the terms of the Accelerated  Management  Performance
Plan, or thirty (30) Years of Service,  shall have life insurance benefits in an
amount equal to one (1) times his Annual Earnings, reduced by the amount of life
insurance  payable  to  Employee's  Beneficiary  under the  Service  Group  Life
Insurance Plan, if any.


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         4.02 Maximum  Benefits.  The maximum amount of life insurance  benefits
that may be  provided  under the Plan,  including  the amount of life  insurance
payable under the Service Group Life  Insurance  Plan, is Four Hundred  Thousand
Dollars ($400,000.00).

                                    ARTICLE V
                               PAYMENT OF PREMIUMS

         5.01 Payment of Premiums.  The cost of each  Employee's  life insurance
coverage shall be paid by the Company.

                                   ARTICLE VI
                               PLAN ADMINISTRATION

         6.01 Administration of the Plan. The Board of Directors hereby vest the
Plan  Administrator  with all powers and authority  necessary to administer  the
Plan as  herein  provided,  and  with  the  authority  to make  such  rules  and
regulations of uniform  application as the Plan Administrator may deem necessary
to carry out the provisions of the Plan. The Plan  Administrator  shall have the
exclusive  right to interpret  the  provisions  of the Plan and to determine any
questions arising thereunder or in connection with the  administration  thereof.
Any decision or action of the Plan Administrator shall be conclusive and binding
upon the Employees and Beneficiaries.


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         6.02 Reliance on Reports and Certificates.  The Plan  Administrator may
rely conclusively upon all tables, certificates,  opinions and reports furnished
by the  insurance  company,  accountant,  counsel or person who may from time to
time be employed or engaged for such purposes.

                                   ARTICLE VII
                            AMENDMENT AND TERMINATION

         7.01  General.  The Board of Directors of the Company may, at any time,
amend or terminate the Plan except as set forth in Section 7.01 hereof.

         7.02  Restrictions on Amendment or Termination.  The Board of Directors
in  terminating  or amending the Plan shall  require that  payments be made to a
Beneficiary of a deceased  Employee entitled to benefits as if such Plan had not
been amended or terminated.

                                  ARTICLE VIII
                                  MISCELLANEOUS

         8.01 No  Alienation.  The  benefits  provided  hereunder  shall  not be
subject   to   alienation,   assignment,   pledge,   anticipation,   attachment,
garnishment, receivership, execution or levy of any kind, including liability or
alimony or support  payments,  and any  attempt  to cause  such  benefits  to be
subject shall not be recognized, except to the extent as may be required by law.


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         8.02  Construction and Governing Law. In any question or interpretation
or other matter of doubt, the Plan  Administrator  and the Company may rely upon
the counsel for the Company.  The  Provisions  of this Plan shall be  construed,
administered  and  enforced  in  accordance  with the  laws of the  State of New
Mexico.
         IN WITNESS WHEREOF, the Company has caused this Plan to be adopted this
23rd day of July, 1985.

                                        PUBLIC SERVICE COMPANY OF
                                          NEW MEXICO

                                        By:      /S/ Jerry D. Geist
                                                   JERRY D. GEIST,
                                               Chairman and President

ATTEST:



/S/ J. B. Mulcock Jr.
Secretary


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