Exhibit 10.5

                             WATER SUPPLY AGREEMENT
                       BETWEEN THE JICARILLA APACHE TRIBE
                    AND PUBLIC SERVICE COMPANY OF NEW MEXICO



         THIS AGREEMENT (the "Agreement") made this 17th day of July, 2000, is
between the JICARILLA APACHE TRIBE (the "Tribe") and PUBLIC SERVICE COMPANY OF
NEW MEXICO ("PNM") in its individual capacity and in its capacity as operating
agent of the San Juan Generating Station ("SJGS"). The Tribe and PNM are
collectively referred to as "Parties" and individually as "Party."

                              EXPLANATORY RECITALS

         PNM, as operating agent of the SJGS, is in need of a future water
supply for electric power generation, and uses related and incidental thereto,
and

         The Tribe is the owner of certain water rights pursuant to the
Jicarilla Apache Tribal Water Rights Settlement Act of October 23, 1992, 106
Stat. 2237 (the "Settlement Act"), and the Act of June 13, 1962, 76 Stat. 96
(the " NIIP/ San Juan-Chama Act"), and

         The Tribe has the right to deplete up to 25,500 acre feet per year from
the Navajo Reservoir Supply pursuant to the Settlement Act and the Contract
between the Tribe and the United States of America dated December 8, 1992 (the
"Federal Contract"), and

         The Tribe has the right to market such water pursuant to the Settlement
Act and the Federal Contract, and

         The Tribe desires to subcontract under the Federal Contract to market
water to PNM and PNM desires to purchase such water supply under the terms and
conditions of this Agreement.

         ACCORDINGLY, in consideration of the mutual covenants in this
Agreement, the Parties agree as follows:


                                       1


                                    ARTICLE 1
                               GENERAL DEFINITIONS

1.1      "Tribe" means the Jicarilla Apache Tribe. The Tribe is a federally
         recognized Indian tribe organized under the Indian Reorganization Act.

1.2      "Navajo Reservoir" or "Project" means the reservoir created by the
         impoundment of the San Juan River at the Navajo Dam as authorized by
         the Act of Congress of April 11, 1956, 70 Stat. 105, as amended.

1.3      "Navajo Reservoir Supply" means the water supply in the Navajo
         Reservoir as it is defined in the Federal Contract and delivered by the
         United States Bureau of Reclamation ("USBR").

1.4      "Notice" is proper notice provided pursuant to Article 10 of this
         Agreement.

1.5      "NEPA" means the National Environmental Policy Act.  42 U.S.C.ss.ss.
         4321 et seq.

1.6      "ESA" means the Endangered Species Act.  16 U.S.C.ss.ss.1531 et seq.

1.7      "PNM" means Public Service Company of New Mexico acting in its
         individual capacity and in its capacity as operating agent for San Juan
         Generating Station ("SJGS") and PNM's successors and assigns.

1.8      "SJGS weir" means the  diversion  structure  located in the San Juan
         River at Mile Marker  166.1,  based on the San Juan River Recovery
         Implementation Program Geomorphic Survey.

1.9      "USBR" means the United States Bureau of Reclamation.

1.10     "USBR CRSP Rate" means the calculated delivery rate ($/AF), based on a
         maximum of 16,200 acre-feet of water per annum, set by the USBR for
         Colorado River Storage Project ("CRSP") long term municipal and
         industrial contracts. The Parties understand that the USBR CRSP Rate is
         reviewed and adjusted annually in accordance with the USBR Debt Service
         Methodology used for pricing water from the CRSP as follows:

         1.10.1       That part of the Federal debt ("estimated debt") incurred
                      in developing water for consumptive uses in the CRSP
                      initial units served by this Agreement will be established
                      by USBR as of January 1, 2006.

                                       2


         1.10.2       The first annual payment will be calculated from an
                      amortization of the estimated debt, using the annuity due
                      formula, and based on a 40-year payment term at an
                      interest rate that is the annual average rate for 10-year
                      Treasury constant maturities for the year previous to the
                      year of contract execution.

         1.10.3       For each succeeding year thereafter, the estimated debt to
                      be serviced shall be recalculated in accordance with the
                      following:

                             Dn = Dn-1 -  Pn-1 +  In-1   +/- (DELTA) Cn-1

Where:
Dn            =   The recalculated total debt for water to be serviced by this
                  Agreement;
Dn-1          =   The debt to be serviced by this Agreement as it existed at the
                  beginning of the previous year;
Pn-1          =   Payments for water service made by PNM for the
                  previous year;
I n-1         =   Interest accrued for the previous year based on the annual
                  average interest rate of that year for 10-year Treasury
                  constant maturities;

+/-(DELTA)Cn-1 =  A pro rata share of any change during the previous year in
                  multipurpose costs allocated to consumptive use for the
                  consolidated CRSP.

         1.10.4       The calculated delivery rate per acre-foot for payments
                      after the first year shall then be determined in
                      accordance with the following procedure:

                      a.   Divide Dn by 16,200 acre-feet;

                      b.   Amortize the amount determined in step a., using the
                           annuity due formula, with the interest rate
                           determined as described above and for the number of
                           years equal to 40 minus the number of years the
                           contract has been in effect.

                                       3


                                    ARTICLE 2
                                TERM OF AGREEMENT

2.1      The term of this Agreement shall be from the date as of which it has
         been executed by both Parties to December 31, 2027, unless earlier
         terminated pursuant to the provisions of Article 14.

2.2      The Parties shall enter into good faith discussions no later than
         January of 2022 regarding the potential extension or renewal of this
         Agreement upon mutually agreeable terms.

                                    ARTICLE 3
                               WATER AVAILABILITY

3.1      Beginning on January 1, 2006, and continuing through December 31, 2027,
         the Tribe shall supply and deliver, through its agent USBR pursuant to
         the Federal Contract, to the SJGS weir, sufficient water from the
         Navajo Reservoir Supply to allow PNM to divert and consume up to 16,200
         acre-feet of water between January 1 and December 31 of each year.
         Provided, however, that in no calendar year will the Tribe, through its
         agent USBR, under this Agreement, release more than 16,200 acre-feet of
         water from Navajo Reservoir for all uses pursuant to this Agreement.
         Delivery of water to the SJGS weir shall be at such times as scheduled
         by PNM in coordination with the USBR, and PNM shall pay the Tribe for
         the water as provided in Article 5.

3.2      PNM shall have no holdover storage rights in Navajo Reservoir from year
         to year, and PNM hereby relinquishes claim to any annual water supply
         to which it is entitled hereunder, but has not utilized by December 31
         of each year. Any water subject to delivery hereunder not called for by
         the end of each calendar year shall become integrated with the water
         supply for all purposes of the Navajo Reservoir at that time.

3.3      PNM may, in its sole discretion, determine the timing and manner in
         which water is diverted at the SJGS weir subject to an appropriate
         permit from the New Mexico State Engineer ("State Engineer") and
         compliance with any applicable laws and regulations.


                                       4


                                    ARTICLE 4
                                    WATER USE

4.1      The water used by PNM under this Agreement shall be for the purposes of
         coal mining, irrigation of reclaimed surface mined lands, electric
         power generation and uses incidental to all of the foregoing, and other
         beneficial industrial purposes at the SJGS, unless subcontracted by PNM
         in accordance with Article 4.2.

4.2      Subject to required approvals of the Tribe and Secretary of the
         Interior or designee, PNM may dispose of water acquired under this
         Agreement to third parties in the event that the water is not needed at
         or in connection with the SJGS, provided, that if PNM receives a price
         for disposal of water to third parties in excess of the USBR CRSP rate
         then current, the Parties shall share equally the amount received in
         excess of the USBR CRSP rate, after deduction of PNM's reasonable
         direct administrative costs. PNM shall provide an accounting of such
         direct administrative costs to the Tribe.

4.3      Nothing in this Agreement shall affect PNM's right to determine the
         source or order in which PNM utilizes its permitted rights that
         constitute the water supply for SJGS and uses related and incidental
         thereto, including water purchased pursuant to this Agreement.

                                    ARTICLE 5
                                PAYMENT FOR WATER

5.1      Beginning on the execution date of this Agreement, and on January 15 of
         each year thereafter for five (5) years, PNM shall make prepayments to
         the Tribe totaling $2,033,073.00 as follows:


     Year:     2000        2001        2002        2003       2004       2005
               ----        ----        ----        ----       ----       ----

    Amount:   $65,583    $131,166    $262,332    $393,498   $524,664   $655,830


5.2      Subject to the Tribe's ability to supply and deliver, through its agent
         USBR pursuant to the Federal Contract, water during the 2006 to 2027
         term of this Agreement, and except as otherwise provided herein, PNM
         shall pay to the Tribe during each year of the Agreement the Annual
         Contract Rate times 16,200 acre-feet, less $92,412.00, to secure PNM's
         right to use up to 16,200 acre-feet each year.

                                       5


         5.2.1         The Annual Contract Rate will be established as follows:
                       On January 1, 2006, the Annual Contract Rate will be the
                       USBR CRSP Rate as of January 1, 2006. Each successive
                       year after establishment of the initial Annual Contract
                       Rate in 2006, the Annual Contract Rate will be adjusted
                       to the USBR CRSP Rate as of January 1 of each subsequent
                       year; provided, however, that any change in the Annual
                       Contract Rate for each year (whether an increase or a
                       decrease) will be limited to no more than ten percent
                       (10%) of the previous year's Annual Contract Rate.

         5.2.2         To demonstrate the application of this rate adjustment,
                       hypothetical examples of contract payments have been
                       calculated based on the Annual Contract Rate methodology
                       set out in Section 5.2.1 and are attached, for
                       illustration purposes only, as Exhibit "A."

         5.2.3         The Tribe will provide Notice to PNM of the Annual
                       Contract Rate. The Tribe shall provide such Notice to PNM
                       no later than January 10 of each year. After Notice from
                       the Tribe, the annual contract payment by PNM shall be
                       made no later than February 10 of each year and shall be
                       made by wire transfer to a financial institution
                       designated by Notice from the Tribe to PNM.

5.3      PNM will pay to the Tribe, within thirty (30) days of receipt of the
         Tribe's invoice, the Tribe's share of the Navajo Dam and Reservoir
         capital construction costs, provided by the Federal Contract to be
         $2.60 per acre-foot per annum, which is a fixed payment of $42,120
         annually during the period 2006 through 2012.

5.4      PNM will also pay the Tribe, within thirty (30) days of receipt of the
         Tribe's invoice, PNM's proportionate share of the annual costs of the
         operation and maintenance ("O&M") of Navajo Dam and Reservoir and
         associated facilities that are assigned to the Tribe by USBR through
         Section 10(a) (iii) of the Federal Contract. The Parties acknowledge
         that payment of O&M costs will be determined by USBR in accordance with
         the USBR's payment schedules and criteria. The Tribe and PNM will work
         jointly with USBR to establish PNM's actual proportionate share and the

                                       6


         terms and conditions of this O&M payment procedure. At its own expense,
         PNM may take appropriate action, by and through the Tribe, to protest,
         if necessary, any change by USBR during the term of this Agreement to
         the O & M rate or the annual O & M charges attributable to the water
         delivered under this Agreement. The Tribe agrees to cooperate fully in
         any such protest.

5.5      The payments described in this Article 5 represent the total
         consideration due for the water purchased under this Agreement. Neither
         PNM, SJGS nor its owners, affiliates and/or their successors or assigns
         shall be subject to any regulation, fees, licenses or taxation directly
         or indirectly by the Tribe as a result of the use of the water supply
         or as a result of this Agreement, except as set forth herein. Each
         Party shall bear its own administrative costs.

                                    ARTICLE 6
                 MEASUREMENT AND RESPONSIBILITY FOR DISTRIBUTION

6.1      The water furnished under this Agreement will be supplied and delivered
         by the Tribe, through its agent USBR pursuant to the Federal Contract
         at the SJGS weir and PNM agrees to make arrangements for the
         transportation of such water to place of use at PNM's own expense.

6.2      PNM will measure the quantity of water diverted from the San Juan River
         under this Agreement with a recording or totalizing flow meter such as
         a NewSonics Model CM800 or equivalent. Beginning in 2007 and for the
         duration of this Agreement, records of the previous year's diversion by
         PNM at the SJGS weir will be provided by PNM to the Tribe and USBR no
         later than January 30 of each year.

6.3      The Tribe shall not be responsible for the diversions, control,
         carriage, handling, use disposal, or distribution of water taken by PNM
         hereunder, and PNM shall hold the Tribe harmless on account of damage
         or claim of damage of any nature arising out of or connected with the
         diversion, control, carriage, handling, use, disposal, or distribution
         of such water.

                                    ARTICLE 7
                         WATER SHORTAGES AND LIMITATIONS

7.1      The delivery of water during any calendar year is conditioned upon and
         subject to the following:

                                       7



         7.1.1         Any shortages to the Navajo Reservoir Supply that are
                       determined to exist by the Secretary of the Interior (the
                       "Secretary") for any reason will be shared among Project
                       beneficiaries only pursuant to all Project
                       authorizations, the Federal Contract and any other
                       applicable laws. In no event shall any liability accrue
                       against the United States, the Tribe or any officers,
                       agents, or employees of either for any damage, direct or
                       indirect, arising from a shortage for any causes.

         7.1.2         If shortages are declared by the Secretary such that the
                       Tribe cannot supply and deliver through its agent USBR
                       pursuant to the Federal Contract in accordance with
                       Article 3.1 of this Agreement all the water contracted
                       for from the Navajo Reservoir Supply, PNM's payment will
                       be reduced in proportion to the amount of water not
                       supplied, or credited against the following year's
                       payment. Provided, that shortage calculations will be
                       based on the then current, daily demand at the SJGS weir
                       for only the period of the declared shortages. The Tribe
                       and PNM will work with USBR to obtain an accounting of
                       the accumulated shortages based on PNM diversion and
                       demand records.

7.2      This Agreement and all water delivered pursuant hereto shall be subject
         to and controlled by the Colorado River Compact, the Boulder Canyon
         Project Act, the Boulder Canyon Project Adjustment Act, the Upper
         Colorado River Basin Compact, the Mexican Water Treaty of February 3,
         1944, the Colorado River Storage Project Act, the NIIP/ San Juan-Chama
         Act, the Colorado River Basin Project Act and other applicable federal
         law. In the event deliveries to PNM are required to be curtailed under
         and by reason of any of the provisions of the foregoing, PNM agrees to
         a reduction of the amount of water delivered hereunder as the Secretary
         determines necessary to comply with said acts. In that event, PNM's
         Annual Contract Rate payment to the Tribe will be reduced in proportion
         to the amount of water not supplied, or credited against the following
         year's payment. Provided, that such calculations will be based on the
         then current, daily demand at the SJGS weir for only the period of the
         curtailment.

                                       8


                                    ARTICLE 8
                        PAYMENT CONDITIONED UPON DELIVERY

8.1      PNM's obligation to pay the Tribe is conditioned upon the delivery of
         the water at the SJGS weir, all as provided for in this Agreement.

8.2      Subject to the Tribe's ability to supply and deliver, through its agent
         USBR pursuant to the Federal Contract, the water contracted for from
         Navajo Reservoir Supply at the SJGS weir or otherwise as provided in
         this Agreement, PNM shall take all the water contracted for, or shall
         pay for the water as if taken.


                                    ARTICLE 9
                                OTHER PROVISIONS

9.0      This Agreement incorporates by reference the Federal Contract, a true
         and correct copy of which is attached as Exhibit "B."

9.1      This Agreement is subject to the requirements of NEPA and ESA. The
         Parties understand that USBR will conduct an Indian Trust Assets Review
         in compliance with NEPA, and that such review will address any
         potential concerns of the Navajo Nation and/or the Colorado Ute Tribes.

9.2      This Agreement is subject to the approval of the Secretary or his
         designee pursuant to the Federal Contract.

9.3      Notwithstanding the provisions of Article 14, if a Party is in default,
         which default continues for more than thirty (30) days after Notice,
         the Parties may seek to remedy the default under the Dispute Resolution
         provisions of this Agreement (Article 15).

9.4      The Parties agree that for the duration of this Agreement or any
         extensions thereof, the Tribe will replace the USBR as the supplier of
         the water to PNM from the Navajo Reservoir Supply for the purpose of
         providing an otherwise historic/existing depletion for the SJGS at its
         weir.

9.5      The provision of Section 9.4 shall in no way diminish future positions
         that either Party may take regarding the disposition or
         characterization of this water supply, or depletion thereof, upon
         termination of this Agreement.

                                       9


9.6      Both Parties hereby request the USBR, as the "action agency" for
         purposes of complying with Section 7 of the ESA, to state in its
         consultation document that the depletion will continue to occur by SJGS
         at its weir, but that the Tribe will be acting as the supplier of the
         water for that depletion.

9.7      This Agreement is contingent upon the issuance of a diversion permit
         for the contracted water from the State Engineer that is final and not
         appealable. All payments made pursuant to Article 5 are not subject to
         refund if the diversion permit is not issued, but all payment
         obligations will cease and this Agreement will terminate as of the date
         and in the event of a final denial of a diversion permit by the State
         Engineer.

9.8      The Tribe shall obtain all requisite approvals under the Federal
         Contract.

9.9      The Tribe shall comply with all requirements of the Federal Contract
         related to this Agreement.

9.10     The Parties shall cooperate in all required approval processes.

9.11     The Tribe represents, through a resolution, a copy of which is attached
         as Exhibit "C," that it has obtained all requisite tribal approvals and
         has delegated the requisite authority to the signatory hereof to bind
         the Tribe.

9.12     PNM represents, through the signature of its authorized representative,
         that PNM has authority to enter into this Agreement and that this
         Agreement is a binding obligation of PNM individually and as operating
         agent of SJGS.

9.13     Both Parties are relying on the advice of their own technical and legal
         experts in entering into this Agreement and there are no warranties or
         representations by either Party other than those expressly contained
         herein. Any ambiguities herein shall not be construed in favor of or
         against either Party as the drafter hereof.

                                   ARTICLE 10
                                     NOTICES

10.1     Any Notice, demand, or request authorized by this Agreement shall be
         deemed to have been given if mailed (return receipt requested), hand
         delivered, or faxed as follows:

                                       10


         To PNM:

             Corporate Secretary
             Public Service Company of New Mexico
             Alvarado Square
             Albuquerque, NM 87158

         With a copy to:

             Plant Manager
             San Juan Generating Station
             P.O. Box 227
             Waterflow, NM  87421

         To Tribe:

             President
             Jicarilla Apache Tribe
             P.O. Box 507
             Dulce, NM 87528

         With a copy to:

             Lester K.  Taylor, Esq.
             Nordhaus, Haltom, Taylor, Taradash & Frye
             500 Marquette Ave.  NW, Suite 1050
             Albuquerque, NM 87102

         To USBR:

             Regional Director
             Upper Colorado Region
             Attn:    UC-400
             125 South State Street
             Room 6107
             Salt Lake City, Utah 84138-1102

         All Notices and demands given or required to be given by a Party to the
         other Party shall be deemed to have been properly given if and when
         delivered in person, sent by facsimile (with verification of receipt)
         or three (3) business days after having been deposited with the U.S.
         Postal Service and sent by registered or certified mail, postage
         prepaid.

                                       11


         In the event either Party delivers a Notice by facsimile, as set forth
         above, such Party agrees to deposit the originals of the Notice in a
         Post Office, or mail depository maintained by the U.S. Postal Service,
         postage prepaid, and addressed as set forth above. Such deposit in the
         U.S. Mail shall not affect the deemed delivery of the Notice by
         facsimile, provided that the procedures set above are fully complied
         with.

10.2     The designation of the addressee or the address may be changed by
         Notice given in the same manner as provided above in Section 10.1.

                                   ARTICLE 11
                                   ASSIGNMENT

11.1     The provisions of this Agreement shall apply to and bind the successors
         and assigns of the Parties, but no assignment of this Agreement or of
         any right or interest hereunder shall be valid until approved in
         writing by the other Party and the Secretary or designee, which consent
         shall not be unreasonably withheld.

11.2     Notwithstanding the foregoing, PNM may, without the requirement of
         prior consent, assign this Agreement to any entity, as a result of a
         reorganization of the assets, business functions, or structure of PNM,
         which is within the resulting group of entities under common ownership
         with PNM. Any change of name by PNM shall not be considered an
         assignment.

                                   ARTICLE 12
             WATER AND AIR POLLUTION CONTROL AND WATER CONSERVATION

12.1     PNM shall comply with all applicable water and air pollution control
         laws now or hereafter in force, and shall be responsible for obtaining
         all required licenses and permits.

12.2     Prior to accepting delivery of water under this Agreement, PNM shall
         develop an effective water conservation program, which shall contain
         definite water conservation objectives, appropriate economically
         feasible water conservation measures, and time schedules for meeting
         those objectives. At subsequent three-year intervals, PNM shall submit
         a report on the results of the program to USBR and the Tribe for
         review. Based on the conclusions of the review, the Tribe, in
         cooperation with USBR, and PNM shall consult and agree to continue or
         to revise the existing water conservation program.

                                       12


                                   ARTICLE 13
                       EQUAL OPPORTUNITY AND RELATED LAWS

13.1     PNM is an Equal Opportunity employer. Executive Orders 11246, 11625,
         11701, and 11758, as amended or superseded, and all regulations issued
         thereunder, as well as all applicable laws, rules and regulations
         relating to Equal Employment Opportunity and affirmative action are
         incorporated in this Agreement by reference.

13.2     The Tribe is exempt from the provisions of Title VII of the Civil
         Rights Act of 1964 and from federal affirmative action programs
         including Executive Order No. 11246.

                                   ARTICLE 14
                   FORCE MAJEURE AND ECONOMIC IMPRACTICABILITY

14.1     Neither Party shall be considered to be in default in respect to any
         obligation hereunder, if delays in or failure of performance shall be
         due to Uncontrollable Forces. "Uncontrollable Forces" shall mean any
         cause beyond the control of the Party affected and not due to its fault
         or negligence, including, but not limited to, acts of God, flood,
         earthquake, storm, fire, lightning, epidemic, war, riot, civil
         disturbance, sabotage, strikes or other labor disturbances, or
         restraint by court or public authority, any of which such Party could
         not reasonably have been expected to avoid, and which by the exercise
         of due diligence it is unable to overcome. Neither Party shall,
         however, be relieved of liability for failure of performance if such
         failure is due to removable or remediable causes which it fails to
         remove or remedy with reasonable dispatch. Nothing contained herein,
         however, shall be construed to require either Party to prevent or
         settle a strike or other labor disturbance against its will. The Party
         whose performance hereunder is so affected shall immediately notify the
         other Party of all pertinent facts and take all reasonable steps to
         promptly and diligently prevent such causes if feasible to do so, or to
         minimize or eliminate the effect thereof without delay.

14.2     If, in PNM's sole business judgment, it becomes necessary, for any
         Business Reason, to deactivate, decommission or cease operation of all
         or a portion of SJGS, PNM may elect to be excused from performance of

                                       13


         all or a pro-rata portion (based on the proportional decrease in need
         for water at SJGS) of its obligations under this Agreement to take and
         pay for water; provided, however, that this election may be exercised
         by PNM only upon satisfaction of the following conditions:

         14.2.1       PNM must notify the Tribe in writing no later than thirty
                      (30) days after the decision has been made to deactivate,
                      decommission or cease operation of all or a portion of
                      SJGS; and

         14.2.2       PNM shall pay to the Tribe, within sixty (60) days of such
                      notification, as liquidated damages and not as a penalty,
                      a sum of money no greater than the total of all payments
                      made hereunder by PNM to the Tribe during the previous
                      twelve (12) months of the term of this Agreement or a
                      pro-rata sum if the reduced water quantity taken pursuant
                      to this Article is less than the full amount to be
                      supplied under this Agreement. The Parties agree that such
                      sum is reasonable in light of any damages the Tribe may
                      suffer as the result of such a termination for convenience
                      and that any actual damages would be difficult of
                      ascertainment.

         For purposes of this Article 14.2, the term "Business Reason" includes
         but is not limited to any one or more of the following: effects of
         judicial or regulatory orders or decrees; inability to obtain permits,
         licenses, or authorizations from governmental bodies having
         jurisdiction; lack of availability of materials, supplies, equipment or
         services required to operate SJGS or a portion thereof; fuel shortages
         or fuel price volatility; breakdown or damage to generation or
         transmission facilities; insolvency of any of the SJGS owners; or
         changes in fundamental technology impacting the economics of operating
         coal-fired generation facilities.

                                   ARTICLE 15
                               DISPUTE RESOLUTION

15.1     Disputes shall first be discussed and resolved by representatives of
         each Party having the authority, through appropriate corporate or
         tribal resolution, if necessary, to bind the Party that they represent.
         Such representatives shall use their best efforts to amicably and
         promptly resolve the dispute. Pending resolution of any dispute, the
         Parties shall continue to perform their obligations hereunder. If the

                                       14


         Parties are unable to resolve any dispute within fifteen (15) calendar
         days of the occurrence of the event or circumstances giving rise to the
         dispute, either Party may give notice to the other Party that the
         dispute is to be submitted to binding arbitration. Such notice shall
         name a proposed arbitrator. In the event that the other Party does not
         agree to the proposed arbitrator, it shall submit the name of its
         proposed arbitrator, within ten (10) calendar days of said notice, and
         if that person is not acceptable to the Party giving the original
         notice, the arbitrators proposed by each Party shall, within five (5)
         days, select a third arbitrator. All reasonable fees and costs incurred
         by the arbitrators shall be split equally by the Parties and each Party
         shall be responsible for payment of its own attorney's fees,
         preparation fees, witness and expert fees, and other costs.

         15.1.1        An arbitration hearing shall be held at a mutually agreed
                       location within thirty (30) days of the appointment of
                       the last arbitrator. At the hearing, each Party may
                       submit statements of fact or memoranda of law as desired
                       and the arbitrator(s) shall allow each Party to present
                       its case, evidence and witnesses, if any, in the presence
                       of both Parties. The arbitrator(s) shall render their
                       decision promptly after the hearing.

         15.1.2        An award of the arbitrator(s) shall be binding upon the
                       Parties. The prevailing Party shall be entitled to
                       confirmation of any award of the arbitrator(s) and to
                       judgment thereon in a court of competent jurisdiction.
                       The Tribe waives its sovereign immunity solely for the
                       purpose of the obligations of this Article, including but
                       not limited to the entry and enforcement of the
                       arbitration award. This waiver of immunity is not
                       intended, nor shall it be construed to, (a) waive the
                       Tribe's sovereign immunity for any other purpose, or (b)
                       extend to the benefit of any person other than the
                       Parties to this Agreement or their successors or assigns.
                       This waiver of immunity from suit shall not be construed
                       as an admission of liability by the Tribe as to any claim
                       for damages or as an agreement or willingness to pay any
                       amount as damages absent an arbitration determination of
                       liability, and the Tribe shall have the right to defend
                       any such claim fully on the merits.

         15.1.3        New Mexico law shall apply to the interpretation of this
                       Agreement in connection with the resolution of disputes
                       under this Article.

                                       15


                                   ARTICLE 16
                                   AMENDMENTS

         This Agreement may be amended only by written instrument executed by
the Parties with the same formalities and requisite approvals as this Agreement.




         IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed by their duly authorized representatives having the specific authority
to execute this Agreement as of the date set forth below.



PUBLIC SERVICE COMPANY OF NEW MEXICO


By:
Printed Name:
Title:
Date:




JICARILLA APACHE TRIBE


By:
Printed Name:
Title:
Date:


                                       16




APPROVED AS REQUIRED BY THE FEDERAL CONTRACT:

UNITED STATES BUREAU OF RECLAMATION, AS THE DULY AUTHORIZED DELEGATEE OF THE
SECRETARY OF THE DEPARTMENT OF THE INTERIOR OF THE UNITED STATES

By:
Printed Name:
Title:
Date:


APPROVED AS REQUIRED BY ___ U.S.C. ___ BY THE UNITED STATES BUREAU OF INDIAN
AFFAIRS

By:
Printed Name:
Title:
Date:

                                       17