UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934
Date of Report (Date of earliest events reported) October 20, 2000
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October 17, 2000
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PUBLIC SERVICE COMPANY OF NEW MEXICO
(Exact name of registrant as specified in its charter)
New Mexico 85-0019030
--------------------------- Commission ----------------------
(State or Other Jurisdiction File Number 1-6986 (I.R.S. Employer
of Incorporation) ------ Identification) Number)
Alvarado Square, Albuquerque, New Mexico 87158
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(Address of principal executive offices) (Zip Code)
(505) 241-2700
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Item 5. Other Event
The following is a press release recently issued by the Company and is being
filed herewith as a current event.
PNM Negotiates Cost-Saving Revisions to San Juan Coal Contract
Switch to underground mining expected to save company up to $500 million
ALBUQUERQUE, N.M. October 17, 2000 - PNM, Public Service Company of New Mexico
(NYSE:PNM) has negotiated an agreement with the coal supplier for San Juan
Generating Station. The revised coal contract is expected to save PNM between
$400 million and $500 million in fuel costs over the next 17 years.
Under the terms of the agreement between PNM, San Juan Coal Company and Tucson
Electric Power Company, which also owns a portion of the generating station, San
Juan Coal Co. will replace the two surface mining operations that now supply the
plant with a single underground mine located on the site of one of the existing
surface mines. Underground mining is expected to provide a higher quality coal
at a lower cost per ton.
The new mine will be developed using a highly-automated "longwall" technique,
which efficiently shears long sections from the coal seam and transports the
coal to the surface, according to Harry F. Schanning, PNM's director of fuel
supply.
"When fully operational, this will be one of the largest longwall mines in the
United States, capable of producing over 25,000 tons of coal per day," Schanning
said. "This new technology is expected to provide economies in the form of both
lower production costs and lower reclamation costs."
Besides saving on fuel costs, the cleaner-burning, less abrasive coal is
expected to reduce PNM's share of the plant's maintenance and operating expenses
by approximately $2 million per year. The plant will begin to realize some of
the benefits of the higher quality coal next year, as the existing surface mines
are phased out and the underground mine is developed. The underground mine is
scheduled to be in full production by November 2002.
"Over the past three years, PNM has invested nearly $40 million in upgrading San
Juan's pollution control systems and improving the plant's productivity," said
PNM Chairman, President and CEO Jeff Sterba. "The shift to underground mining
continues our progress in lowering generating costs to remain competitive in
today's power market."
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With a net capacity of 1,647 Megawatts, San Juan is the seventh largest
coal-fired plant in the western United States. The plant consumes nearly 7
million tons of coal a year, generating enough electricity to light about 1.8
million homes. PNM owns 46 percent of San Juan and is the operator of the plant.
PNM operates a combined electric and gas utility serving approximately 1.3
million people in New Mexico and sells power on the wholesale market. Avistar, a
wholly-owned subsidiary of PNM, operates an advanced meter servicing business in
California and Nevada, offers energy and water management solutions for
government and institutional clients in the Southwest, and is assisting
e-commerce provider AMDAX.com in launching an Internet-based energy auction
system. PNM stock is traded primarily on the NYSE under the symbol PNM.
Statements made in this news release that relate to future events are made
pursuant to the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based upon current expectations and the company
assumes no obligation to update this information. Because actual results may
differ materially from expectations, the company cautions readers not to place
undue reliance on these statements. A number of factors, including conditions
affecting mining operations and the performance of generating units and
transmission system, could cause PNM operating expenses and fuel costs to differ
from results forecast in this press release. For a detailed discussion of the
important factors affecting PNM, please see "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's Form
10-K for the year ended December 31, 1999, Form 10-Q for the quarter ended June
30, 2000 and Form 8-K filings with the Securities and Exchange Commission.
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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.
PUBLIC SERVICE COMPANY OF NEW MEXICO
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(Registrant)
Date: October 20, 2000 /s/ John R. Loyack
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John R. Loyack
Vice President, Corporate Controller
and Chief Accounting Officer
(Officer duly authorized
to sign this report)