El Paso Electric Announces New President and Chief Executive Officer

EL PASO, Texas, May 15 /PRNewswire-FirstCall/ — El Paso Electric announced today the selection of Ershel C. Redd Jr. as President and Chief Executive Officer, effective May 15, 2007. Redd succeeds Gary R. Hedrick, who has served as El Paso Electric’s President and CEO since November 5, 2001. Hedrick will remain on EPE’s Board of Directors through the end of his term in 2008.

“I look forward to joining a corporate family that’s been part of its community for more than 100 years,” said Redd. “This is an exciting time to be at El Paso Electric, particularly with the projected growth anticipated in EPE’s service territory and with the substantial challenges facing our industry today. I am committed to meeting that growth in an environmentally friendly manner, working with all of our customer-partners to ensure that their energy consumption is efficient and furthers our country’s quest for energy independence.”

“Ershel’s extensive knowledge of the energy industry will provide a great benefit to El Paso Electric in this time of anticipated growth in the El Paso/Las Cruces area,” said George Edwards, Chairman of EPE’s Board of Directors. “We want to express our gratitude and thanks to Gary Hedrick for his 30 years of service to the Company,” Edwards continued.

“His financial and regulatory experience, first as the CFO and later as President and CEO, resulted in the continued recovery and improvement of El Paso Electric’s financial integrity, created significant value for our shareholders and returned the Company to its place as an important and vital contributor to the communities it serves. We are extremely pleased that we will be able to continue utilizing his knowledge and valuable expertise.”

“I plan to build on the foundation that Gary Hedrick and his team have established,” Redd said. “I’m also looking forward to working with a dynamic group of EPE employees to ensure we sustain and improve the delivery of reliable, efficient and competitive electrical energy and energy services to our customer-partners in the communities we serve and to continue to create significant value for our shareholders.”

Redd has more than 35 years of experience in various sectors of the energy industry with an extensive background in strategic planning, business development, corporate restructuring, and commercial operations. Most recently, he served as Executive Vice President of Commercial Operations and President of the Western Region of NRG Energy Inc., a leading global developer and operator of generation facilities. Redd has also served as Vice President of Business Development and Corporate Strategy for Xcel Energy Inc., as well as in senior management roles at Energy Development Corporation, the Sid Richardson Carbon and Gasoline Company, Gulf States Oil and Refining Company, and Union Texas Petroleum.

Redd has a Bachelor of Science degree in Economics from Texas Tech University. He has also held memberships in numerous industry organizations including the Natural Gas Processors Association, Northwest Contingency Planning Task Force, the Gas Industry Standards Board and the Natural Gas Producers Forum. He also co-founded the Coalition for California Energy Market Reforms.

Redd’s involvement in community and civic organizations includes serving as Chairman of the Galveston-Houston Diocesan Development Board, member of the Galveston-Houston Diocesan Board of Education, the St. Agnes Academy and the St. Michael School Boards, the St. Agnes Academy Foundation, and served as the Mayor of the City of Hilshire Village, Texas. Redd and his wife Jan have been married for 35 years and have two grown children and a new granddaughter.

Safe Harbor

This news release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This information may involve risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (i) increased prices for fuel and purchased power and the possibility that regulators may not permit EE to pass through all such increased costs to customers; (ii) determinations by regulators that may adversely affect EE’s ability to recover previously incurred fuel costs in rates; (iii) fluctuations in off-system sales margins due to uncertainty in the economy power market and the availability of generating units; (iv) unanticipated increased costs associated with scheduled and unscheduled outages; (v) the cost of replacing steam generators for Palo Verde Unit 3 and other costs at Palo Verde; (vi) the costs of legal defense and possible judgments which may accrue as the result of ongoing litigation or any regulatory proceeding; (vii) deregulation of the electric utility industry; (viii) reduced wholesale margins; (ix) possible increased costs of compliance with environmental or other laws, regulations and policies; (x) possible income tax and interest payments as a result of audit adjustments proposed by the IRS; (xi) possible warranty obligations attributable to MiraSol Energy Services, a subsidiary of EE; (xii) a possible reduction in the reliability of our service and possible added expense in the event of a strike by, or lock out of, our union employees; and (xiv) other factors detailed by EE in its public filings with the Securities and Exchange Commission. EE’s filings are available from the Securities and Exchange Commission or may be obtained through EE’s website, http://www.epelectric.com/. Any such forward-looking statement is qualified by reference to these risks and factors. EE cautions that these risks and factors are not exclusive. EE does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of EE except as required by law.

El Paso Electric

CONTACT: media, Teresa Souza, +1-915-543-5823, or analysts, RachelleWilliams, +1-915-543-2257, both of El Paso Electric

Web site: http://www.epelectric.com/