BYLAWS

                                       OF

                      PUBLIC SERVICE COMPANY OF NEW MEXICO










With All Amendments to and Including February 8, 2000
-----------------------------------------------------


<PAGE>


                                     BYLAWS

                                       OF

                      PUBLIC SERVICE COMPANY OF NEW MEXICO

                                   ARTICLE I.

                            Meetings of Stockholders
                            ------------------------

  Section 1. Meetings.  The Annual Meeting of Stockholders shall be held on such
date and at such time and  place as may be fixed  from time to time by the Board
of  Directors of the Company  pursuant to a resolution  adopted by a majority of
the members of the Board then in office,  for the election of directors  and the
transaction  of such other  business as may  properly  come before the  meeting.
Special  meetings  may be called by a majority  of the Board of  Directors,  the
Executive Committee, the Chairman of the Board or the President.

  Section  2.  Place  of  Meetings.   The  annual  or  any  special  meeting  of
stockholders shall be held at the principal office of the Company in the City of
Albuquerque,  Bernalillo  County,  State of New Mexico,  or at such other places
within or without the State of New Mexico as shall be specified in the notice of
such meeting.

  Section 3. Notice.  Written notice of any meeting  stating the time and place,
and if a special  meeting,  the purpose or purposes  of such  meeting,  shall be
mailed to each  stockholder  of record  entitled to vote at such  meeting at the
address of such  stockholders as the same appears on the stock transfer books of
the Company,  except as otherwise  provided by law. In the event of the transfer
of a  stockholder's  stock after mailing of such notice and prior to the holding
of the  meeting,  it shall not be necessary to mail notice of the meeting to any
transferee.  All notices of any special  stockholder meeting shall be mailed not
less than forty (40) days before the date of the meeting; however, notice of any
such  special  meeting  called  by a  majority  of the Board of  Directors,  the
Executive Committee,  the Chairman of the Board or the President,  and notice of
any  annual  meeting,  shall be mailed not less than ten (10) days  before  such
meeting of stockholders.


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<PAGE>


  Section 4.  Quorum.  At any meeting of the  stockholders,  except as otherwise
provided  by law,  it shall be  necessary  that the holders of a majority of the
issued and  outstanding  shares of the  capital  stock  entitled to vote at such
meeting  shall be  represented  in person or by proxy to constitute a quorum for
the transaction of business.

  Section 5. Adjournment. Whenever at any meeting of the stockholders, notice of
which shall have been duly given, a quorum shall not be present, or whenever for
any  reason  it  may  be  deemed  desirable,  a  majority  in  interest  of  the
stockholders  present in person or by proxy may adjourn the meeting from time to
time to any future day, without notice other than by announcement at the meeting
or adjournment  thereof.  At any such adjourned meeting at which quorum shall be
present,  any business may be transacted which might have been transacted at the
meeting on the date originally fixed.

  Section 6. Organization.  The Chairman, or in the absence of the Chairman, the
President,  or in the absence of both, a Vice  President  shall call meetings of
the  stockholders  to order and  shall act as  Chairman  of such  meetings.  The
stockholders  may appoint any stockholder or the proxy of any stockholder to act
as Chairman of any meeting of the  stockholders  in the absence of the Chairman,
President  and  Vice  Presidents.  The  Secretary,  or in  the  absence  of  the
Secretary, an Assistant Secretary, shall act as Secretary at all meetings of the
stockholders,  but in the absence of the Secretary and Assistant  Secretaries at
any meeting of the stockholders the presiding  officer may appoint any person to
act as Secretary of such meeting.

  Section 7. Inspectors.  At each meeting of the stockholders at which a vote by
ballot is taken,  the polls shall be opened and closed,  the proxies and ballots
shall be received  and be taken in charge,  and the  validity of proxies and the
acceptance or rejection of votes shall be decided by two  inspectors.  No person
who is a candidate  for the office of  director  shall act as  Inspector  of any
election  for  directors.  Such  inspectors  shall be  appointed by the Board of
Directors before the meeting,  or, if no such appointment  shall have been made,
then by the  presiding  officer  of the  meeting.  If for any  reason any of the
inspectors  previously  appointed shall fail to attend or refuse or be unable to
serve,  inspectors in place of any so failing to attend or refusing or unable to
serve shall be appointed in like manner.




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  Section 8. Voting. At each meeting of stockholders every stockholder,  whether
resident or  nonresident,  shall be entitled to one vote for each share of stock
standing in the name of the  stockholder on the books of the Company on the date
on which stockholders  entitled to vote are determined.  Such stockholder may be
represented  and  vote by a proxy  or  proxies  appointed  by an  instrument  in
writing;  in the event that such  instrument in writing  shall  designate two or
more  persons to act as  proxies,  a  majority  of such  persons  present at the
meeting,  or if only one shall be  present,  then  that one  shall  have and may
exercise all of the powers conferred by such written  instrument upon all of the
persons so designated,  unless the instrument shall otherwise provide.  No proxy
shall be voted at any meeting or  adjournment  thereof other than that for which
the proxy is given.

  In all elections for directors, voting shall be by written ballot.

  The Board of Directors may fix a date in advance not exceeding fifty (50) days
preceding  the date of any  meeting  of  stockholders  as a record  date for the
determination  of  stockholders  entitled  to  notice of and to vote at any such
meeting, and in such case only stockholders of record on the date so fixed shall
be entitled to notice of and to vote at such meeting.







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<PAGE>



                                   ARTICLE II.

                                    Directors
                                    ---------

  Section 1.  Number,  Election  and Terms.  The  business  and  property of the
corporation  shall be managed and controlled by a Board of Directors who, if and
while so required by law, shall be stockholders in the Company, and none of whom
need be a resident of the State of New Mexico.  The  directors  shall be nine in
number and shall be elected in classes in the manner  provided in Article  Fifth
of the Articles of Incorporation as amended.

  Section 2.  Vacancies.  Any  vacancies  occurring on the Board of Directors by
death, resignation, or otherwise shall be filled by a majority of Directors then
remaining in office.

  Section 3. Meetings.  The meetings of the Board of Directors  shall be held at
the times and places  designated  by the Board of  Directors.  There shall be no
fewer than four regular meetings of the Board during any calendar year.

  The Annual  Meeting of the Board of Directors for the election of officers and
of the Executive Committee,  and such other business as may properly come before
the  meeting,  shall  be  held  immediately  following  the  annual  meeting  of
stockholders.

  Special  meetings of the Board of Directors  shall be held whenever  called at
the direction of the Chairman of the Board of Directors,  the President, any two
directors, or the Executive Committee.

  Section  4.  Notice.  No notice  shall be  required  of any  annual or regular
meeting of the Board of Directors  unless the place  thereof shall be other than
that last designated by the Board. Notice of any annual or regular meeting, when
required,  or of any special meeting of the Board of Directors shall be given to
each director by mailing or delivering the same at least  forty-eight  hours, or
by telephoning the same at least twenty-four hours before the time fixed for the
meeting.  Such notice may be waived by any director.  Unless otherwise indicated
in the  notice  thereof  any and all  business  may be  transacted  at a special
meeting.  At any meeting at which every director shall be present,  even without
notice, any business may be transacted.


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  Section 5.  Quorum.  A majority of the Board of Directors  shall  constitute a
quorum for the transaction of business, and any action receiving the affirmative
vote of a majority of the directors present at any meeting shall be effective.

  Section 6. Adjournments.  Any annual,  regular or special meeting of the Board
of Directors may be adjourned from time to time by the members  present  whether
or not a quorum  shall be  present,  and no  notice  shall  be  required  of any
adjourned meeting beyond the announcement of such adjournment at the meeting.

  Section 7. Indemnification. Each person who shall have served as a director or
an officer of the Company,  or, at the request of the Company,  as a director or
an officer  of any other  corporation,  partnership  or joint  venture,  whether
profit or nonprofit,  in which the Company (a) owns shares of capital stock, (b)
has an ownership interest, (c) is a member, or (d) is a creditor, and regardless
of whether  or not such  person is then in  office,  and the  heirs,  executors,
administrators  and  personal  representatives  of  any  such  person  shall  be
indemnified by the Company to the full extent of the authority of the Company to
so indemnify as authorized by the law of New Mexico.

  Section 8.  Committees.  The Board of Directors,  by  resolution  adopted by a
majority of the full Board of Directors,  may  designate  from among its members
one or more committees,  in addition to the Executive  Committee provided for in
Article  III hereof,  each of which,  to the extent  provided in the  resolution
establishing such committee and designating the member or members thereof, shall
have and may exercise all the authority of the Board of Directors, except as may
be limited by law.


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                                  ARTICLE III.

                               Executive Committee
                               -------------------

  Section 1. The Board of Directors  may from time to time appoint by resolution
adopted by a majority of the full Board of  Directors  from among its members an
Executive  Committee  which may exercise the powers of the Board of Directors in
the  management  of the  business,  affairs and  property of the Company  during
intervals  between the meetings of the Board of  Directors  unless and until the
Board of Directors shall otherwise direct.  The Board shall appoint the Chair of
the Executive  Committee,  who will be a Director other than the Chairman of the
Board.

  Section 2. A majority of the Executive Committee shall constitute a quorum for
the transaction of business and any action  receiving the affirmative  vote of a
majority of the members of the Executive  Committee present at any meeting shall
be effective;  provided,  however,  that the  affirmative  vote of not less than
three members of the Executive Committee shall be required for any such action.

  Section 3. Meetings of the Executive  Committee  shall be held whenever called
by the direction of the Chairman of the Executive Committee, the Chairman of the
Board of Directors, or any two members of the Executive Committee. Notice of any
meeting of the Executive  Committee  shall be given each member of the Executive
Committee in writing or by telephone at least 24 hours before the time fixed for
the meeting. Such notice may be waived by any member of the Executive Committee.

                                   ARTICLE IV.

                                    Officers
                                    --------

  Section 1. Number,  Election and Term.  The officers of the Company shall be a
Chairman of the Board, a President,  one or more Vice Presidents, a Secretary, a
Treasurer,  and a  Controller  who  shall be  elected  annually  by the Board of
Directors  at the annual  meeting  thereof  and who shall hold their  respective
offices until the next annual meeting or until their  successor shall be elected
and shall  qualify.  The Board of Directors  may  designate  the Chairman of the
Board or the President as Chief  Executive  Officer.  The Board of Directors may
elect one person to serve as both Chairman of the Board and President. The Board


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of Directors  may  designate one or more Vice  Presidents  as  "Executive"  Vice
Presidents  and one or more Vice  Presidents  as "Senior" Vice  Presidents.  The
title  of any  Vice  President  may  include  words  indicative  of the  area of
responsibility  of such Vice  President.  The Board of Directors shall designate
one of the Vice  Presidents as the chief financial  officer of the Company.  The
Board of Directors may from time to time appoint such additional officers as the
interest of the Company may require and fix their terms and duties of office.  A
vacancy  occurring  in any office may be filled by the Board of  Directors.  All
officers  shall  hold  office  subject  to the Board of  Directors  and shall be
subject  to  removal at any time by the  affirmative  vote of a majority  of the
whole  Board of  Directors.  Election of any person as an officer of the Company
shall not of itself create contract rights.

  Section 2. Chairman of the Board.  The Chairman  shall be elected  annually by
the Board of Directors at the annual meeting  thereof and shall hold that office
until the next annual  meeting or until a  successor  shall be elected and shall
qualify.  In the event of the incapacity of the Chairman of the Board, the Board
of Directors  shall, by a majority vote of the Board of Directors,  designate an
Acting  Chairman who shall,  during the  incapacity of the Chairman,  assume and
perform all functions and duties which the Chairman is authorized or required by
law to do.  The  Chairman  of the Board  shall  have the  power to call  special
meetings of the  stockholders  and of the Directors for any purpose or purposes.
The Chairman shall preside at all meetings of the  stockholders and of the Board
of Directors unless the Chairman shall be absent or incapacitated.  The Chairman
of the Board,  subject to the  authority  of the Board,  shall  generally do and
perform all acts  incident to the office of the  Chairman of the Board and which
are authorized or required by law.



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  Section 3. President.  The President shall provide active  management over all
operations  of the  Company;  subject,  however,  to  control  of the  Board  of
Directors. The President shall have the power to appoint and discharge,  subject
to the  general  approval  or review by the Board of  Directors,  employees  and
agents of the Company and to fix their  compensation  to make and sign contracts
and  agreements  in the name of and on  behalf of the  Company  and  direct  the
general  management and control of the business and affairs of the Company.  The
President  may  delegate  from  among the  powers  enumerated  in the  preceding
sentence to officers of the Company,  such responsibilities and authority as the
President may  determine.  The  President  shall have the power to segregate the
operations of the Company into areas of responsibility.  The President shall see
that the books,  reports,  statements and  certificates  required by the statute
under which the Company is  organized or any other laws  applicable  thereto are
properly  kept,  made,  and filed  according  to law;  and the  President  shall
generally do and perform all acts which are  authorized  or required by law. The
President  shall  designate a Vice  President  who shall,  during the absence or
incapacity of the  President,  assume and perform all functions and duties which
the  President  might  lawfully  do if  present  in  person  and not  under  any
incapacity.

  Section 4. Vice Presidents.

  Section  5(a).  Executive  and Senior  Vice  Presidents.  Each Vice  President
designated as "Executive" or "Senior Vice  President"  shall be responsible  for
such areas and activities as assigned by the President,  shall be subject to the
authority  of the  President  and  shall  assist  in  the  general  control  and
management of the business and affairs of the Company.

  Section 5(b). Other Vice Presidents.  The Vice Presidents shall be responsible
for such areas and activities as are assigned by the President and shall perform
such duties as may be required.

  Section 5(c).  Assumption  of Duties by a Vice  President.  A Vice  President,
consistent  with the  title or duty of such Vice  President,  shall  assume  and
perform all functions  and duties  assigned to a superior  executive  during the
absence or incapacity of such superior.


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  Section 6. Secretary.  The Secretary shall be sworn to the faithful  discharge
of the duties of the Secretary.  The Secretary shall keep a record in the proper
books  provided  for that purpose of meetings  and  proceedings  of the Board of
Directors,  Executive Committee and other Committees as may be designated by the
Board  and  stockholders,  and  shall  record  all  votes of the  directors  and
stockholders  in a book to be kept for that purpose.  The Secretary shall notify
the directors and stockholders of the respective  meetings as required by law or
by the bylaws of the  Company  and shall  perform  such  other  duties as may be
required by law or the bylaws of the Company, or which may be assigned from time
to time by the Board of  Directors  or  Executive  Committee.  The  Secretary is
authorized to appoint one or more  assistants from time to time as the Secretary
deems  advisable,  the  assistant or  assistants to serve at the pleasure of the
Secretary,  and to perform the duties that are delegated by the  Secretary.  The
assistant or assistants so appointed shall not be officers of the Company.

  Section 7.  Treasurer.  The Treasurer  shall have the custody of all the funds
and securities of the Company, and shall have the power on behalf of the Company
to sign checks,  notes,  drafts and other evidences of  indebtedness,  to borrow
money  for  the  current  needs  of the  business  of the  Company  and to  make
short-term  investments  of surplus funds of the Company.  The  Treasurer  shall
render to the President or directors,  whenever  required by them, an account of
all transactions  performed as Treasurer and of the financial  conditions of the
Company.  The Treasurer  shall perform such other duties as may be assigned from
time to time by the Board of  Directors,  by the  Executive  Committee or by the
President.  The Treasurer is authorized to appoint one or more  assistants  from
time to time as the Treasurer  deems  advisable,  the assistant or assistants to
serve at the  pleasure  of the  Treasurer,  and to perform  the duties  that are
delegated by the Treasurer.  The assistant or assistants so appointed  shall not
be officers of the Company.

  Section 8. Controller. The Controller shall be the chief accounting officer of
the  Company  and  have  full  responsibility  and  control  of  the  accounting
department,  which department shall include all accounting  functions carried on
throughout the Company and its  subsidiaries.  As such,  the  Controller  shall,
subject to the approval of the Board of Directors,  the  Executive  Committee or
the President,  establish accounting policies.  The Controller shall standardize


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and coordinate  accounting  practices,  supervise all accounting records and the
presentation of all financial  statements and tax returns.  The Controller shall
have such other powers and duties as, from time to time, may be conferred by the
Board  of  Directors,  by  the  Executive  Committee  or by the  President.  The
Controller is authorized to appoint one or more  assistants from time to time as
the  Controller  deems  advisable,  the  assistant or assistants to serve at the
pleasure of the Controller,  and to perform the duties that are delegated by the
Controller.  The assistant or  assistants so appointed  shall not be officers of
the Company.

  Section 9. Form of Appointment.  In making any  appointments of assistants the
Secretary,  Treasurer,  and Controller  shall use the following form:

     I, (Name),  the duly elected  (Title) of Public Service Company of New
     Mexico, do hereby appoint (Name) to serve as Assistant (Title) for the
     period of (date) to (date),  unless  this  appointment  is  terminated
     earlier in  writing,  to assume or perform  all  functions  and duties
     which I might require and, in my absence or incapacity,  which I might
     lawfully do if present and not under any incapacity.

Any appointments of assistants by the Secretary, Treasurer or Controller and any
terminations  of  appointments  shall  be  maintained  in  the  records  of  the
Secretary's office.

                                   ARTICLE V.

                                    Contracts
                                    ---------

  Section 1. Unless the Board of Directors shall otherwise  specifically direct,
all  contracts,  instruments,  documents or  agreements  of the Company shall be
executed in the name of the Company by the President,  or any Vice President, or
any other employee, if approved by the President by either administrative policy
letter or  specific  written  designation.  It shall not be  necessary  that the
corporate seal be affixed to any contract.


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<PAGE>

  Section 2. No contract or other transaction  between the Company and any other
corporation  owning or holding  stock in this  Company  shall be affected by the
fact that the  directors or officers of this Company are  interested  in, or are
directors or officers of, such other corporation.  No contract or transaction of
this Company with any person or persons or firm or  association  or  corporation
(other than one owning or holding  stock in this  Company)  shall be affected by
the fact that any  director  or  officer of this  Company is a party  thereto or
interested therein, or in any way connected with such person or persons, firm or
association,  or  corporation,  provided  that at the  meeting  of the  Board of
Directors of this Company,  making,  authorizing or confirming  such contract or
transaction, there shall be present a quorum of directors not so interested, and
that such  contract  or  transaction  shall be  approved  or be  ratified by the
affirmative vote of at least three directors not so interested.

  The Board of Directors in its discretion may submit any contract,  or act, for
approval or  ratification at any annual meeting of the  stockholders,  or at any
meeting of the  stockholders  called for the purpose of considering any such act
or  contract;  and any  contract or act that shall be approved or be ratified by
the vote of the holders of a majority of the capital  stock of the Company which
is  represented  in person or by proxy at such  meeting  (provided  that  lawful
quorum of stockholders  be there  represented in person or by proxy) shall be as
valid and as binding upon the Company and upon all the stockholders as though it
had been approved or ratified by every stockholder of the Company.

                                   ARTICLE VI.

                             Negotiable Instruments
                             ----------------------

  Except as otherwise  provided by the Board of Directors,  all checks,  drafts,
bills of exchange,  promissory notes and other negotiable  instruments  shall be
signed  by the  Chairman  of the  Board,  the  President,  any  Vice  President,
Secretary or Treasurer.



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                                  ARTICLE VII.

                                  Capital Stock
                                  -------------

  Section 1.  Certificates of Stock.  All certificates of stock shall be in such
form as the Board of Directors  may approve and shall be signed by the President
or a Vice  President and by the Secretary and may be sealed with the seal of the
Company  or a  facsimile  thereof.  The  signatures  of the  President  or  Vice
President and the Secretary of the Company upon a certificate may be facsimiles.
In case any  officer  of the  Company  whose  signature,  whether  facsimile  or
otherwise,  shall have been placed upon any  certificate  shall cease to be such
officer  before any  certificate  so signed shall have been actually  issued and
delivered,  such  certificate  may  nevertheless  be issued and delivered by the
Company as though the person who had signed such  certificate  had not ceased to
be an officer.  All certificates shall be numbered for identification.  The name
of the person  owning the shares  represented  thereby with the number of shares
and the date of issue shall be entered on the Company's  books. All certificates
surrendered to the Company shall be cancelled,  and no new certificates shall be
issued until a certificate or certificates aggregating the same number of shares
of the same class shall have been  surrendered  or  cancelled;  but the Board of
Directors or Executive  Committee may make proper provision,  from time to time,
for the issue of new certificates in place of lost or destroyed certificates.

  Section 2. Transfer Agents and Registrars.  The Company shall, if and whenever
the Board of Directors shall so determine  maintain one or more transfer offices
or  agencies,  each in charge of a  transfer  agent  designated  by the Board of
Directors,  where  the  shares  of the  capital  stock of the  Company  shall be
directly transferable,  and also one or more registry offices, each in charge of
a registrar  designated  by the Board of  Directors,  where such shares of stock
shall be registered and no  certificates  for shares of the capital stock of the
Company,  in respect of which one or more transfer  agents and registrars  shall
have  been  designated,  shall  be  valid  unless  countersigned  by one of such
transfer agents and registered by one of such registrars. The Board of Directors
may also make such  additional  rules and  regulations  as it may deem expedient
concerning the issue,  transfer and  registration of certificates  for shares of
the capital stock of the Company.


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<PAGE>

  Section 3.  Transfer of Stock.  Transfers of stock shall be made only upon the
books of the Company by the holder in person or by the  holder's  attorney  upon
surrender of certificates for a like number of shares.

  Section 4. Closing of Transfer Books.  The Board of Directors shall have power
to close the transfer books of the Company for a period not exceeding fifty (50)
days  preceding  the date of any  meeting  of  stockholders  or the date for the
payment of any dividend or the date for the allotment of rights or the date when
any change or  conversion  or  exchange of capital  stock shall go into  effect;
provided,  however, that in lieu of closing the transfer books as aforesaid, the
Board of  Directors  may fix in advance a date,  not  exceeding  fifty (50) days
preceding the date of any meeting of stockholders or the date for the payment of
any dividend or the date for the allotment of rights or the date when any change
or  conversion  or exchange of capital  stock shall go into effect,  as a record
date for the determination of stockholders  entitled to notice of and to vote at
any such meeting,  or entitled to receive payment of any such dividend or to any
such  allotment  of  rights,  or to  exercise  the rights in respect of any such
change,  conversion  or exchange of capital  stock,  and in such cases only such
stockholders  as shall be  stockholders  of record on the date so fixed shall be
entitled  to such  notice of,  and to vote at such  meeting,  or to receive  the
payment of such dividend, or to receive such allotment of rights, or to exercise
such rights,  as the case may be,  notwithstanding  any transfer of any stock on
the books of the Company after any such record date fixed as aforesaid.



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<PAGE>



                                  ARTICLE VIII.

                                    Dividends
                                    ---------

  Dividends  upon the stock of the Company may be declared  from time to time by
the Board of  Directors  in its  discretion  and paid to  stockholders  from the
surplus or net profits arising from the business of the Company.

                                   ARTICLE IX.

                                      Books
                                      -----

  The books of the  Company,  except as  otherwise  provided by law, may be kept
outside  of the State of New  Mexico,  at such place or places as may be from to
time designated by the Board of Directors.

  The Directors shall,  from time to time determine  whether and to what extent,
and at what time and  places,  and under what  conditions  and  regulations  the
accounts  and the  books of the  Company,  or any of them,  shall be open to the
inspection of stockholders;  and no stockholder  shall have any right to inspect
any book or  account or  document  of the  Company  except as  conferred  by the
statutes of New Mexico, or authorized by the Directors.

                                   ARTICLE X.

                                 Corporate Seal
                                 --------------

  The  common  corporate  seal is, and until  otherwise  ordered by the Board of
Directors shall be, an impression circular in form upon paper or wax bearing the
words "Public Service Company of New Mexico, Incorporated, 1917."



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<PAGE>


  The seal shall be in the charge of the  Secretary.  If and when so directed by
the Board of Directors or by the Executive Committee a duplicate of the seal may
be kept and used by the  Treasurer  or by an  Assistant  Secretary  or Assistant
Treasurer.

                                   ARTICLE XI.

                                   Amendments
                                   ----------

  The power to alter,  amend or repeal  the  Bylaws of the  Company or adopt new
Bylaws for this Company shall be vested in the Board of Directors.





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