AMENDMENT No. 1
                                     To The
                      AMENDED AND RESTATED SAN JUAN UNIT 4
                      PURCHASE AND PARTICIPATION AGREEMENT
                                     Between
                      Public Service Company of New Mexico
                                       and
                The Incorporated County of Los Alamos, New Mexico

1.0      PARTIES

         This  Amendment  No. 1 to the  Amended  and  Restated  San Juan  Unit 4
Purchase and  Participation  Agreement  ("Amendment  No. 1") is made and entered
into this 27th day of October 1999, by and between PUBLIC SERVICE COMPANY OF NEW
MEXICO,  a New Mexico  corporation  ("PNM") and THE  INCORPORATED  COUNTY OF LOS
ALAMOS,  NEW  MEXICO,  a body  politic  and  corporate,  existing as a political
subdivision  under the  constitution  and laws of the State of New  Mexico  (the
"County"),  hereinafter  sometimes  referred  to  individually  as a "Party"  or
collectively as the "Parties."

2.0      RECITALS

         This  Amendment No. 1 is made with  reference to the  following  facts,
among others:

         2.1 The Restated and Amended San Juan Unit 4 Purchase and Participation
Agreement  (the  "Restated  PPA") was entered into by the Parties as of December
28, 1984.  The Restated PPA governs the purchase by the County of a 7.20 percent
undivided   ownership  interest  in  San  Juan  Unit  4  and  associated  common
facilities,  supplies  and  inventories  and  the  operation  thereof  by PNM as
Operating Agent of the San Juan Project.

         2.2 PNM and Tucson  Electric Power Company  ("TEP") only are parties to
the San Juan Project Co-Tenancy  Agreement (the "Co-Tenancy  Agreement") and the
San Juan Project Operating Agreement (the "Operating Agreement").


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         2.3 The  Co-Tenancy  Agreement  and the Operating  Agreement  have been
previously  amended by action of PNM and TEP,  through and including  Amendments
Number 10 to the Co-Tenancy Agreement and the Operating Agreement.

         2.4 The San Juan Project Construction  Agreement was terminated in 1995
by action of PNM and TEP.

         2.5 PNM, TEP, Century Power Company,  Southern  California Public Power
Authority ("SCPPA"),  the City of Farmington,  New Mexico ("Farmington"),  M-S-R
Public Power Agency  ("M-S-R"),  the County and the City of Anaheim,  California
("Anaheim")  entered  into  the  San  Juan  Project  Designated   Representative
Agreement  ("DR  Agreement")  as of April 29, 1994, for the purpose of complying
with the  federal  Clean  Air Act  Amendments  of  1990;  the DR  Agreement  was
thereafter  accepted by Utah Associated  Municipal  Power Systems  ("UAMPS") and
Tri-State  Generation and Transmission  Association,  Inc.  ("Tri-State") at the
time of  their  respective  purchases  of  ownership  interests  in the San Juan
Project.

         2.6 The owners of the San Juan  Project,  including PNM and the County,
have  negotiated  a San Juan Project  Participation  Agreement  among PNM,  TEP,
Farmington,  M-S-R,  the  County,  SCPPA,  Anaheim,  UAMPS  and  Tri-State  (the
"Participation  Agreement") to amend,  restate and replace in their entirety the
Co-Tenancy  Agreement  and  the  Operating  Agreement  and  to  set  out  in one
instrument all of the matters  previously  included in the Co-Tenancy  Agreement
and the Operating Agreement.

         2.7 The Participation  Agreement will, upon its effective date, provide
the County with all the rights,  privileges and obligations of a  "Participant,"
as that term is defined  in the  Participation  Agreement,  and is  intended  to
supersede  the  rights,  privileges  and  obligations  of the  County as a "Unit
Participant," as that term is defined in the Operating Agreement.


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         2.8 The  Parties  desire to amend the  Restated  PPA to  harmonize  the
Restated PPA with the Participation Agreement.

         NOW, THEREFORE, based on the foregoing recitals and in consideration of
the mutual  promises,  terms and covenants of this  Amendment No. 1, the Parties
hereby agree as follows:

3.0      TERM AND TERMINATION

         3.1 This Amendment No. 1 shall become effective as of the date on which
the Participation Agreement becomes effective.

         3.2 Section 1.2 of the  Restated PPA is amended to read in its entirety
as follows:

            This  Agreement  shall continue in full force and effect
            from its Effective  Date until the  termination  date of
            the San Juan Project Participation  Agreement,  dated as
            of _____________, 1999 (the "Participation Agreement").

4.0      CHANGES IN REFERENCES TO CO-TENANCY AGREEMENT
         AND OPERATING AGREEMENT

         4.1  Section 5 of the  Restated  PPA is hereby  amended  to read in its
entirety as follows:

                  5.1 Participation  Agreement.  Except as otherwise provided in
               this  Agreement,  the rights and  obligations of the Parties with
               respect  to  the  San  Juan  Project  are  as  set  forth  in the
               Participation  Agreement.  Any reference in this Agreement to any
               provision of the San Juan Project  Agreements  shall be deemed to
               be a reference to the corresponding or successor provision of the
               Participation Agreement.

                  5.2 PNM-County Relationship.  The relationship between PNM and
               the  County  with  respect  to Unit 4 shall be  governed  by this
               Agreement.  As  between  PNM and  the  County,  where a  specific
               provision of this  Agreement  is in conflict  with a provision in
               one or more of the San Juan Project Agreements, the provisions of
               this Agreement shall govern.

         4.2 Except as otherwise  provided herein,  the Participation  Agreement
shall be  applicable  to all aspects of the County's  ownership  interest in San
Juan Unit 4.


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5.0      PNM AS PROJECT MANAGER

         5.1  Section 6 of the Restated PPA is hereby deleted in its entirety.

6.0      PNM AS OPERATING AGENT

         6.1  Section 7 of the  Restated  PPA is hereby  amended  to read in its
entirety as follows:

                  7.1 The County  recognizes that PNM is the Operating Agent, as
               that  term  is  defined  in  Section  5.31  of the  Participation
               Agreement.

                  7.2 PNM's  responsibilities  as Operating  Agent to the County
               are described in Section 28 of the Participation Agreement.

7.0      APPLICABILITY OF CERTAIN PROVISIONS OF CO-TENANCY AGREEMENT

         7.1 Section 8 of the Restated PPA is hereby deleted in its entirety.

8.0      ENTITLEMENT TO AND SCHEDULING OF POWER AND ENERGY

         8.1 Section 9 of the Restated PPA is hereby deleted in its entirety.

9.0      START-UP AND AUXILIARY POWER

         9.1  Section  10.2 of the  Restated  PPA is hereby  amended  to read as
follows:

                  10.2 Each Party  shall be  obligated  to provide  its share of
               start-up  and  auxiliary  power and energy in  proportion  to its
               Participation  Share in San Juan Unit 4 as provided in Section 17
               of the Participation  Agreement.  Any supplementary  arrangements
               which  may be  required  to  facilitate  the  County's  supply of
               start-up  and  auxiliary  power  and  energy  shall  be  made  in
               accordance  with  procedures  established by the  Engineering and
               Operating Committee.

10.0     CAPITAL BETTERMENTS, ADDITIONS AND REPLACEMENTS

         10.1 Section 11 of the Restated PPA is hereby deleted in its entirety.


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11.0     PNM'S RIGHT OF FIRST REFUSAL

         11.1 Section 12 of the  Restated  PPA is hereby  amended to read in its
entirety as follows:

                  12.1 PNM shall have a right of first  refusal  with respect to
               the sale or  disposition  of the  Transfer  Interest  or  portion
               thereof.  Such right of first  refusal  shall exist as of Closing
               and shall  continue  for the term of this  Agreement.  Such right
               shall be exercised in  accordance  with the terms and  conditions
               and the  procedures  set out in Section  11 of the  Participation
               Agreement.

12.0     DEFAULTS

         12.1 All  references  to "the prime lending rate  established  and last
published  or quoted by Irving Trust  Company" in Sections  15.3 and 15.4 of the
Restated PPA are replaced by "ten percent (10%) per annum."

         12.2 Sections  15.5 and 15.6 of the Restated PPA are hereby  deleted in
their entirety.

13.0     DISPUTES; ARBITRATION

         13.1 Section 16 of the  Restated  PPA is hereby  amended to read in its
entirety as follows:

                  16.1 In the event that a dispute  between the  Parties  should
               arise under this Agreement, such dispute shall be first submitted
               to the PNM and County  members on the  Engineering  and Operating
               Committee for  resolution.  In the event these members are unable
               to resolve such dispute within ninety (90) days after submission,
               the dispute  shall be referred in writing to the  President  or a
               Vice  President  designated  by PNM and the  Chairman,  Board  of
               Public Utilities,  of the County, or his or her designee. If such
               dispute has not been  resolved  within thirty (30) days after the
               referral made by either Party (unless such thirty (30) day period
               is extended by mutual agreement of the Parties), either Party may
               thereafter  call for submission of such dispute to arbitration in
               the  manner  set  forth  in  Section  37  of  the   Participation
               Agreement,  which call shall be binding upon the Parties,  except
               that the notices required under Section 37.1 of the Participation
               Agreement shall only be provided to the Parties to this Agreement
               unless the dispute between the Parties to this Agreement  affects
               the interests of other parties to the Participation Agreement.

14.0     RELATIONSHIP OF PARTIES

         14.1 Sections  19.2 and 19.4 of the Restated PPA are hereby  deleted in
their entirety.


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15.0     SUCCESSORS AND ASSIGNS

         15.1  Section  25.2  of the  Restated  PPA  is  hereby  deleted  in its
entirety.

16.0     NOTICES

         16.1  Section  26.1.2 of the  Restated  PPA is  amended  to read in its
entirety as follows:

                     26.1.2 Incorporated County of Los Alamos, New Mexico
                            c/o Utilities Manager
                            P.O. Drawer 1030
                            901 Trinity Drive
                            Los Alamos, NM 87544

17.0     DESTRUCTION, DAMAGE OR CONDEMNATION OF SAN JUAN UNIT 4

         17.1 Section 35 of the Restated PPA is hereby deleted in its entirety.

18.0     CONTINUATION IN EFFECT

         18.1 Except as herein modified,  all provisions of the Restated PPA are
unchanged and continue in full force and effect.

         IN WITNESS WHEREOF,  the Parties have caused this Amendment No. 1 to be
executed  by their  duly  authorized  representatives  as of the date set  forth
above.

                                   PUBLIC SERVICE COMPANY OF NEW MEXICO

                                   By: /s/ Patrick J. Goodman
                                       --------------------------------------
                                             Patrick J. Goodman
                                             Vice President, Power Production


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                                   THE INCORPORATED COUNTY OF
                                   LOS ALAMOS, NEW MEXICO

                                   By:
                                       --------------------------------------
                                            Chairman, County Council

Attest:


---------------------------
County Clerk

                                   By:
                                       --------------------------------------
                                       Chairman, Board of Public Utilities

73310


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