FIRST AMENDMENT TO THE
                           FIRST RESTATED AND AMENDED
                      PUBLIC SERVICE COMPANY OF NEW MEXICO
                             PERFORMANCE STOCK PLAN

         THIS FIRST  AMENDMENT TO THE FIRST  RESTATED AND AMENDED PUBLIC SERVICE
COMPANY OF NEW MEXICO  PERFORMANCE STOCK PLAN (the "Plan") is made this 12th day
of August,  1997, by the Public Service  Company of New Mexico (the  "Company").
Terms used herein shall have the same meaning as in the Plan.

         WHEREAS,  the Company  desires to amend the Plan to grant the authority
to the President of the Company to make decisions  regarding Plan  participation
and to  make  adjustments  for  demotions  or  promotions  with  respect  to all
employees, except the President;

         WHEREAS,  Article X of the Plan  grants the  authority  to the Board to
amend the Plan, without shareholder  approval,  unless required by law or unless
shareholder  approval is necessary to satisfy the  conditions for exemption from
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder;
and

         WHEREAS,  counsel  for the Company has  determined  that the  following
amendment does not require shareholder approval.

         NOW THEREFORE,  consistent with its authority,  the Board hereby causes
the Company to adopt the following Plan Amendment.

         1. Section 2.6 is hereby amended in its entirety to read as follows:

         "Committee"  shall mean the Compensation and Human Resources  Committee
of the Board or any such other  committee as may be  designated  by the Board to
administer  the Plan,  the  membership of such committee not being less than two
members of the Board. All Committee members must be "Non-Employee Directors" (as
defined in Rule 16b-3) if required to meet the  conditions  for exemption of the
Awards under the Plan from Section 16(b) of the Exchange Act.

         2. Section 2.20 is hereby amended in its entirety to read as follows:

         "Participant"  shall mean any employee of the Company,  who is selected
from  time to  time  to  participate  in the  Plan.  The  President's  right  to
participate  in the Plan  shall be  determined  in the  sole  discretion  of the
Committee.  Selection of all other employees to participate in the Plan shall be
made by the President, in his or her sole discretion.



         3. A new Section 2.24A shall be added to read as follows:

         "President"  shall mean the President of the Public Service  Company of
New Mexico.

         4. Section 7.2d. is hereby amended in its entirety to read as follows:

         Adjustments  Due  to  Promotions  or  Demotions.  In  the  event  (i) a
Participant  is either  promoted  or demoted  during a calendar  year or (ii) an
employee first becomes a Participant during a calendar year, pursuant to Section
2.20,  following  the  effective  date of this Plan,  the Target  Award for such
calendar year shall be increased or decreased based upon the promotion, demotion
or  initial  participation  in the Plan.  Decisions  regarding  the  adjustments
pursuant to this Section 7.2d. for the President  shall be made by the Committee
in its sole discretion. Adjustments pursuant to this Section 7.2d. for all other
employees shall be made by the President, in his or her sole discretion.

         5. A new Section 7.2f is hereby added to read as follows:

         f. Award Approvals. All Awards shall be approved by the Board or by the
Committee.

         6. The second sentence of Section 12.2  "Compliance  with Exchange Act"
shall be amended by inserting the term ", President"  immediately after the word
"Committee."

         7.  Except as amended by this First  Amendment,  the Plan is  otherwise
unchanged.

         IN WITNESS WHEREOF,  the Company has caused this First Amendment to the
First  Restated and Amended  Public  Service  Company of New Mexico  Performance
Stock Plan to be executed as of the date and year first above written, effective
for all Performance Based Awards having a Grant Date after December 31, 1996.

                                   PUBLIC SERVICE COMPANY OF
                                   NEW MEXICO


                                   By_______________________________
                                          Benjamin F. Montoya,
                                          President and Chief Executive Officer
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