CONSENT AGREEMENT

Exhibit 10.2

THIS (this “Agreement”) is entered into as of August 12, 2008 among PUBLIC SERVICE COMPANY OF NEW MEXICO (the “Borrower”), the Lenders party hereto, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

R E C I T A L S

WHEREAS, the Borrower, the Lenders party thereto and the Administrative Agent are parties to that certain Credit Agreement, dated as of August 17, 2005 (as amended or modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower has informed the Lenders that it has reached an agreement to sell its natural gas operations to New Mexico Gas Company, Inc. on or around December 31, 2008, for $620,000,000 in cash as provided in the Asset Purchase Agreement by and among the Borrower, Continental Energy Systems LLC and New Mexico Gas Company, Inc. dated January 12, 2008 (such transaction, the “Natural Gas Operations Sale”); and

WHEREAS, the Borrower has requested that the Administrative Agent and Lenders consent to the Natural Gas Operations Sale.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

A G R E E M E N T

1. Consent. Notwithstanding Sections 8.1 and 8.3 of the Credit Agreement, the Required Lenders hereby consent to the Natural Gas Operations Sale and agree that the consummation of the Natural Gas Operations Sale will not create a Default or an Event of Default under Sections 8.1 or 8.3, it being understood that the aggregate value of the Natural Gas Operations Sale shall be counted in evaluating whether any future sale in calendar year 2008 meets the requirements in Section 8.3(b) of the Credit Agreement.

2. Conditions Precedent. This Agreement shall be effective upon satisfaction of the following conditions precedent:

(a) Receipt by the Administrative Agent of copies of this Agreement duly executed by the Borrower and the Required Lenders; and

(b) Payment to each Lender executing this Agreement on or prior to August 7, 2008 of a fee equal to 0.15% of such Lender’s Commitment.

3. Ratification of Credit Agreement. The term “Credit Agreement” as used in each of the Credit Documents shall hereafter mean the Credit Agreement as amended by this Agreement. Except as herein specifically agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

4. Authority/Enforceability. The Borrower represents and warrants as follows:

(a) It has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

(b) This Agreement has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Agreement.

5. Representations and Warranties. The Borrower represents and warrants to the Lenders that (a) the representations and warranties of the Borrower set forth in Section 6 of the Credit Agreement are true and correct as of the date hereof, unless they specifically refer to an earlier date, (b) no event has occurred and is continuing which constitutes a Default or an Event of Default, and (c) it has no claims, counterclaims, offsets, credits or defenses to its obligations under the Credit Documents or to the extent it has any they are hereby released in consideration of the Lenders entering into this Agreement.

6. No Conflicts. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated herein, nor performance of and compliance with the terms and provisions hereof by the Borrower will (a) violate, contravene or conflict with any provision of its respective articles or certificate of incorporation, bylaws or other organizational or governing document, (b) violate, contravene or conflict with any law, rule, regulation, order, writ, judgment, injunction, decree or permit applicable to the Borrower, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties may be bound or (d) result in or require the creation of any Lien upon or with respect to the Borrower’s properties.

7. Counterparts/Telecopy. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of executed counterparts by telecopy shall be effective as an original and shall constitute a representation that an original will be delivered if requested.

8. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.


BORROWER:	PUBLIC SERVICE COMPANY OF NEW MEXICO,
	a New Mexico corporation

	By:	/s/ Xxxxx X. Xxxx

	Name:	Xxxxx X. Xxxx
	Title:	Vice President and Treasurer

ADMINISTRATIVE AGENT:	WACHOVIA BANK, NATIONAL ASSOCIATION,
	as Administrative Agent and as Lender

	By:	/s/ Xxxxxxxxx X. Xxxxx

	Name:	Xxxxxxxxx X. Xxxxx
	Title:	Managing Director

PUBLIC SERVICE COMPANY OF NEW MEXICO


LENDERS:	UNION BANK OF CALIFORNIA, N.A.

	By:	/s/ Xxxxxx Xxxx

	Name:	Xxxxxx Xxxx
	Title:	Vice President

	BANK OF AMERICA, N.A.,

	By:	/s/ Xxxxxxx X. Xxxxx

	Name:	Xxxxxxx X. Xxxxx
	Title:	Senior Vice President

	JPMORGAN CHASE BANK, N.A.

	By:	/s/ Xxxxx X. Xxxxx

	Name:	Xxxxx X. Xxxxx
	Title:	Vice President

	CITIBANK, N.A.

	By:	/s/ Xxxx X. Xxxxx

	Name:	Xxxx Xxxxx
	Title:	Vice President

	XXXXXXX XXXXX BANK USA

	By:	/s/ Xxxxx Xxxxx

	Name:	Xxxxx Xxxxx
	Title:	First Vice President

	XXXXXX XXXXXXX BANK

	By:	/s/ Xxxxxxxxx Xxxxxxxxx

	Name:	Xxxxxxxxx Xxxxxxxxx
	Title:	Authorized Signatory

PUBLIC SERVICE COMPANY OF NEW MEXICO


UBS LOAN FINANCE LLC

By:	/s/ Xxxx X. Xxxx	/s/ Xxxxxxx X. Xxxxxx

Name:	Xxxx X. Xxxx	Xxxxxxx X. Xxxxxx
Title:	Associate Director	Director

XXXXXX BROTHERS BANK, FSB

By:	/s/ Xxxxxx X. Xxxxxx

Name:	Xxxxxx X. Xxxxxx
Title:	Authorized Signatory

XXXXXXX STREET COMMITMENT CORPORATION

By:

Name:

Title:


CREDIT SUISSE, CAYMAN ISLANDS BRANCH

By:	/s/ Xxxxx Xxxxxxxx

Name:	Xxxxx Xxxxxxxx
Title:	Director

By:	/s/ Xxxxxxx Xxxxxxxxxxx

Name:	Xxxxxxx Xxxxxxxxxxx
Title:	Vice President

XXXXX FARGO BANK, N.A.

By:	/s/ Xxxxxx Xxxxxxx

Name:	Xxxxxx Xxxxxxx
Title:	Vice President

PUBLIC SERVICE COMPANY OF NEW MEXICO


		U S BANK NATIONAL ASSOCIATION

		By:		/s/ Holland X. Xxxxxxxx

		Name:		Holland X. Xxxxxxxx
		Title:		Assistant Vice President

		HSBC BANK USA, NATIONAL ASSOCIATION

		By:		/s/ Xxxxxxxx Xxxxxxx

		Name:		Xxxxxxxx Xxxxxxx
		Title:		Vice President

		THE BANK OF NEW YORK MELLON

		By:		/s/ Xxxx X. Xxxxxx

		Name:		Xxxx X. Xxxxxx
		Title:		Vice President

		ROYAL BANK OF CANADA

		By:		/s/ Xxx X. Xxxxxxx

		Name:		Xxx X. Xxxxxxx
		Title:		Authorized Signatory

		BANK OF ALBUQUERQUE, N.A.

		By:

		Name:

		Title:


		COMPASS BANK

		By:

		Name:

		Title:

PUBLIC SERVICE COMPANY OF NEW MEXICO


BANK HAPOALIM B.M.

By:	/s/ Xxxxx X. Xxxxxxx	/s/ Xxxxxxx XxXxxxxxxx

Name:	Xxxxx X. Xxxxxxx	Xxxxxxx XxXxxxxxxx
Title:	Vice President	Senior Vice President

PUBLIC SERVICE COMPANY OF NEW MEXICO

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CONSENT AGREEMENT

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