Exhibit 99.1

          PNM Resources Announces Agreement to Set Five-Year Rate Path

                 Projected Cost Savings Will Offset Lower Rates

ALBUQUERQUE, N.M., October 10, 2002 - PNM, a wholly-owned subsidiary of PNM
Resources (NYSE:PNM), has entered into an agreement with the New Mexico Attorney
General, the staff of the state Public Regulation Commission (PRC), and
representatives of various customer groups to set the company's retail electric
rates in New Mexico over a five-year period.

"This settlement provides lower rates for customers, with rate and regulatory
certainty through 2007, and allows PNM to continue to pursue wholesale power
market opportunities," said PNM Resources Chairman, President and Chief
Executive Officer Jeff Sterba.

The negotiated agreement will lower PNM electric rates by 4.0 percent, or $21
million (annualized), beginning in September 2003, and freeze rates at that
level through August 2005. In September 2005 a second rate reduction of 2.5
percent from today's levels will be implemented, reducing rates by a further $14
million. Rates will be frozen at the September 2005 level until 2008. PNM
expects that lower fuel costs will largely offset the reduction in retail
electric revenues.

The agreement also resolves a number of issues surrounding the company's
wholesale power generation and marketing business. Under the terms of the
settlement, all revenues from wholesale power sales will flow to the benefit of
shareholders and the company will continue to jointly dispatch both its
regulated and non-regulated generation resources.

The agreement must be approved by the New Mexico PRC before it can take effect.
The parties have asked the commission to rule on the rate settlement agreement
by December 31, 2002. PNM Resources will take a one-time charge against earnings
of $10 million (after tax), or $0.26 per share, to reflect the write-off of
certain regulatory assets when the agreement is accepted by the PRC.

As part of the settlement, the company has agreed to join with the other parties
in urging New Mexico legislators to drop plans to open the state to retail
electric competition. "Over the past decade, PNM has supported the move toward
greater competition and customer choice," said Sterba. "But circumstances
change. Given California's experience, we now have to question whether the
potential benefits of an open retail market outweigh the risks for a state like
ours. We believe it is better to focus on a strong, competitive wholesale market
that can provide long-term benefits to New Mexico retail customers."






                            Exhibit 99.1 (Continued)

The company has scheduled a teleconference for 12:30 pm Eastern Time on Friday,
October 11, to discuss the settlement agreement. To participate, analysts,
investors, and the public may dial 1-973-317-5319. A webcast of the PNM
presentation can be accessed through the company's website, pnm.com. A replay of
the call will be available beginning at 3:00 p.m. (ET) Oct. 11 through 11:00
p.m. (ET) Oct. 17, 2002, at 1-973-709-2089 (passcode 263838).

PNM Resources is an energy holding company based in Albuquerque, New Mexico.
PNM, the principal subsidiary of PNM Resources, provides natural gas service to
441,000 gas customers and electric utility service to 378,000 customers in New
Mexico. The company also sells power on the wholesale market in the Western U.S.
PNM Resources stock is traded primarily on the NYSE under the symbol PNM.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
- --------------------------------------------------------------------------------
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 state
legislative decisions and rulings by the New Mexico Public Regulation
Commission, could affect the agreement to lower rates discussed in this news
release. Future financial results will be affected by a number of additional
factors, including weather, fuel costs, changes in supply and demand in the
market for electric power, wholesale power prices, market liquidity, the
performance of generating units and transmission system and state and federal
regulatory and legislative decisions and actions. For a detailed discussion of
the important factors affecting PNM Resources, 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, 2001, Form 10Q for the
quarter ended June 30, 2002 and Form 8-K filings with the Securities and
Exchange Commission.