PNM, other utilities to invest in New Mexico power plant

ALBUQUERQUE, N.M., March 11, 2005 (BUSINESS WIRE) — Public Service Co. of New Mexico, a subsidiary of PNM Resources, and eight other owners of the San Juan Generating Station will spend $200 million to install and operate new pollution control technology at the power plant near Farmington, N.M., officials announced.

The investment, which will significantly reduce air pollution emissions and make SJGS one of the first coal-fired power plants in the nation to voluntarily install mercury emissions reduction technology, is a result of a cooperative agreement with the New Mexico Environment Department (NMED), the Grand Canyon Trust and the Sierra Club. The agreement and investment commitment resolves a lawsuit filed in 2002 by the environmental groups for alleged violations of opacity limitations at the SJGS.

It also resolves all known pending and threatened air quality claims made by the environmental groups and NMED regarding SJGS, subject to approval by the U.S. District Court in New Mexico where the lawsuit was filed.

PNM is the operating utility of the 1,798-megawatt, four-unit power plant. Under the agreement, the co-owners of SJGS will install new technology at the plant to reduce mercury, particulate matter, nitrogen oxide (NOx) and sulfur dioxide (SO2) emissions over the next four-and-a-half years. The capital costs of the technology are estimated to be $110 million, with an additional $80 to $90 million estimated for operating and maintenance costs over the next 10 years. PNM will begin installation of the new pollution equipment no later than October 2006; the equipment will be fully operational on all four units by January 2010.

The costs of the emissions control improvements will be split among PNM and the other owners. PNM’s share of the investment will be about $94 million over the next 10 years. The capital costs have been previously reported in PNM Resources’ five-year capital plan.

“This agreement demonstrates our commitment to improving the quality of life in New Mexico, moves us aggressively forward in meeting our environmental sustainability goals, and makes San Juan a national leader in innovative environmental technologies,” said PNM Resources Chairman, President and CEO Jeff Sterba.

About PNM Resources [ ]

PNM Resources is an energy holding company based in Albuquerque, N.M. PNM, the principal subsidiary of PNM Resources, serves about 471,000 natural gas customers and 413,000 electric customers in New Mexico. The company also sells power on the wholesale market in the western United States. PNM Resources stock is traded primarily on the NYSE under the symbol PNM.

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