ARTHUR
                                    ANDERSEN

                               ARTHUR ANDERSEN LLP






August 2, 1996                                 Arthur Andersen LLP
                                               Suite 400
                                               6501 Americas Parkway NE
                                               Albuquerque, NM 87110-5372
                                               (505) 889-4700


Public Service Company of New Mexico:

We are aware that  Public  Service  Company of New  Mexico has  incorporated  by
reference in its Registration  Statement No.  33-65418,  333-03303 and 333-03289
its Form 10-Q for the quarter  ended June 30,  1996,  which  includes our report
dated  August 2, 1996,  covering the  unaudited  interim  financial  information
contained therein.  Pursuant to Regulation C of the Securities Act of 1933, that
report  is not  considered  a part of the  registration  statement  prepared  or
certified  by our firm or a report  prepared or certified by our firm within the
meaning of Sections 7 and 11 of the Act.

Very truly yours,



Arthur Andersen LLP