Texas Operations Overview

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Texas Operations Overview Neal WalkerVice
PresidentMarket Operations
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Strategic Locations in Texas and New Mexico
208,623 Customers
48,275 Customers
Total 256,898 Customers
Lewisville 37,388 League City
23,303 Friendswood 9,573 Texas City 18,844
Alamogordo 19,136 Ruidoso 11,499 Silver
City 10,849
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Transmission System Overview
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Transmission System Overview
(Designed) Voltage Level Line
Miles
TEXAS 345kV 18 138kV 399
69kV 520 NEW MEXICO 345kV 235 115kV
143 69 kV 109
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Distribution System Details
REPs Served 42
Customers 62,607
39,090 105,573 207,270 ESI
IDs
217,603 Substations 27
75 35
137 Circuits 71
121 82
274 Distribution Miles 1,919
3,290 2,810
8,019 Customers per Mile 33
12 38 26
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Distribution System Details
Customers 30,635 17,374 48,009
Substations 4 6
10 Circuits 14 13
27 Distribution Miles 791 1,036
1,827 Customers per Mile 39
17 26
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TNMP Strategy

• TNMPs strategy is based on four cornerstone
  principles
• ? Operational excellence
• ? Customer satisfaction
• ? Financial performance
• ? Employee development

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TNMP Strategy
PNM Resources and TNMP Goals Integrated
High-Level Objectives 1. Customer Loyalty 2.
Workplace Excellence 3. Environmental
Sustainability 4. Shareholder Value 5. Community
Leadership
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Operational Excellence
Operational excellence achieved through a
constant review of key processes
? System reliability improvements ? Emergency
operations planning ? Operational asset
management ? Five-year construction plan
addressing need for expansion and maintenance of
TD network ? Tree-trimming program based upon
risk assessment of circuits
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Occupational Safety
EEI Average All Utilities¹
Key programs create safe working culture and
environment
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• Field work observation and feedback to line
  employees by management
• Zero tolerance for policy and rule violations
• Regular weekly safety meetings to reinforce and
  refresh rules and policies
• Skill-based technical training
• Selection and maintenance of appropriate
  equipment, materials, and procedures
• Continuous safety management improvement through
  root-cause analysis of incident, injury and near
  miss reviews
• Workers Comp experience modifier of 0.62

1 Source Edison Electric Institute 2003 Report
on Utility Reliability, 3-year average.
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Historical Accidents
EEI Average All Utilities¹
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1 Source Edison Electric Institute 2003 Report
on Utility Reliability, three-year average.
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Operational Excellence
EEI Average All Utilities¹
1.28
EEI Average All Utilities¹
174
PUCT Standard
1.00
PUCT Standard
79
1 Source Edison Electric Institute 2003 Report
on Utility Reliability
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Customer Satisfaction
Key Initiatives
Customer Satisfaction Index

• Continued reliability improvements
• Retail Electric Provider scorecard
• Industrial customer meetings
• JD Powers reports customer satisfaction average
  rating of 78 to 80 for southern region utilities

EEI
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Financial Performance

• Customer growth
• Load growth
• Supply chain management
• ? Single source supply contract for pole-top
  hardware
• ? Consignment contract for wooden service poles
• ? Consignment contract for transformers
• ? Single-source contract for large service
  vehicles
• Asset management
• Outsourcing

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Workforce and Labor Relations

• Non-union
• TNMP annual turnover rate is only 6
• Workforce averages 17 years of service
• TNMP has created key employee development plans
• ? Energy Technician Training Program
• Recruits from accredited Linemen schools
• ? Safe work practice training programs
• No EEOC adverse findings in past 15 years

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PNM Texas Stipulation Summary

• REP-Related Commitments
• TNMP shall host an annual REP meeting to allow
  participants to discuss the companys practices
  and policies. TNMP shall respond to all
  market-related comments within 90 days following
  the meeting.
• TNMP will use due diligence in resolving all
  ERCOT and Non-ERCOT FasTrak issues, cancel/rebill
  issues and other REP inquiries. In the event any
  of these issues cannot be resolved within 7
  business days, TNMP shall provide the requesting
  party a time schedule of resolution no later than
  the 7th business day. TNMP shall acknowledge the
  receipt of any e-mail inquiry from a REP sent to
  mprelations_at_tnpe.com by the close of the 2nd
  business day following receipt of the inquiry.

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PNM Texas Stipulation Summary

• REP-Related Commitments (cont.)
• TNMP shall respond to all letters of
  authorization requesting historical usage within
  5 business days
• By March 1, 2005, TNMP shall investigate the
  feasibility of providing REPs direct access to
  specific customer historical metering data via
  the Internet. If such access is deemed feasible,
  TNMP shall make reasonable efforts to provide
  Internet access by Oct. 1, 2005.

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Questions?