PNM reduces work force and names new COO

ALBUQUERQUE, N.M., Aug. 23, 2002 — PNM Resources recently announced a realignment of the company that will result in a workforce reduction of about 85 employees and the appointment of a new Chief Operating Officer.

“For the past six months, we’ve looked at our business top to bottom to determine the best way to maintain the long-term health and growth of our company in an ever-changing and increasingly difficult energy market,” said PNM Chairman, President and Chief Executive Officer Jeff Sterba.

PNM, like many other energy companies, has been hurt by the troubled power trading market where prices have been low and trading activity has been sluggish. In addition, the company has been implementing process improvement initiatives to reduce ongoing costs. As a result, PNM will experience a reduction in force of about 85 employees.

“Unfortunately, difficult decisions have to be made,” Sterba said. “These changes, which affect departments at all levels, are part of our ongoing process to improve our efficiency while retaining our commitment to improving service quality for our customers.”

The work force reductions are effective recently and are a result of consolidating similar functions as PNM reorganizes back into a more traditional utility structure. Among the departments being consolidated are legal, accounting, environmental services, operations and information technology.

PNM also has responded to the market conditions by redeploying resources to focus on long-term power agreements, instead of daily wholesale market activity. The company also has scaled back its generation development and construction operations but has not eliminated plans to invest in new generation.

In 2000, PNM began separating the company into business units in anticipation of a competitive electricity market in New Mexico. The delay in deregulation, which was postponed until 2007, combined with the unstable wholesale electricity market nationally and regulatory and political uncertainty caused the company to make these work force changes.

As part of the realignment, Sterba also announced recently the appointment of Roger Flynn as chief operating officer. Flynn was most recently PNM’s executive vice president in charge of the regulated retail electric and gas delivery businesses, including operations, engineering, construction and customer service. In his new role, Flynn also will be responsible for PNM’s generation portfolio, including its stake in both San Juan Generating Station, in northwestern New Mexico, and Palo Verde Nuclear Generating Station in Arizona. He also will oversee PNM’s successful wholesale marketing efforts.

Flynn joined PNM in 1994 after a career with Pacific Gas & Electric in California.

PNM Resources is an energy holding company based in Albuquerque, New Mexico. Its principal subsidiary is Public Service Company of New Mexico, which provides electric power and natural gas utility services to more than 1.3 million people 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.

SOURCE: PNM Resources

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