2008 ENERGY STAR Homes Market Transformation Program

Announcement

The 2008 ENERGY STAR program will open and the online database is available starting Jan. 28, 2008. All participants must register in the 2008 database. Eligible homes must have a HERS Index of 85 or lower and must be certified on or after Jan. 1, 2008.

Builders and Raters participating in Texas New Mexico Power Company's (TNMP's) ENERGY STAR program produced over 700 home certificates within our service area in 2007. TNMP encourages raters and builders to continue at their high level of program support.

Description

TNMP's ENERGY STAR program works with builders to improve the energy efficiency of new homes through the use of advanced building materials and techniques. TNMP is continuing its ENERGY STAR program in 2008 for builders and raters who are participating in the Oncor Electric Delivery Company LLC (Oncor) and CenterPoint Energy ENERGY STAR New Home programs. The approach will be very similar to the 2007 program in that only those builders and raters that have applied to, and are accepted into, Oncor's or CenterPoint's programs can participate in the TNMP program.

Eligibility

In addition to builder eligibility as established by a Oncor or CenterPoint contract, the builder or rater must produce a copy of the ENERGY STAR Certificate and TNMP must be able to certify the location of the home in TNMP's service area (for a list of eligible zip codes to participate in TNMP's ENERGY STAR Homes Program please click here). TNMP serves many communities in the northern part of the Dallas/Ft. Worth Metroplex, as well as between Houston and Galveston.

To be eligible for payment, homes must:

• Be located within TNMP's service territory
• Have a valid ENERGY STAR certificate
• Have a HERS Index of 85 or lower
• Have been certified between January 1, 2008 and December 31, 2008
• Must not have received an incentive from Oncor, CenterPoint, or any other utility
• Certificates, related spreadsheets and any online forms must have been completed and submitted by December 31, 2008.

Program Pricing

In cooperation with Oncor and CenterPoint, TNMP will provide incentives directly to the builders and raters of these homes, and will provide support to Oncor and CenterPoint for contributing to the increased demand for ENERGY STAR homes in the D/FW and Houston/Galveston regions.

Changes taking place with the ENERGY STAR program have necessitated a change in incentive levels for the 2008 program. Currently, Frontier will pay $100 to a builder, and another $25 to the rater of record, for each qualified ENERGY STAR^®.

If the home is eligible for the Energy Efficiency Federal Tax Credit, an additional payment of $50 will by paid to the builder. The builder and rater must be independent entities to qualify for the maximum payment.

The 2008 program is limited to the first 1,200 homes submitted although there is no limit on the number of homes that can be submitted for payment by any one builder. TNMP will award incentives in order or receipt. Once funds are exhausted, TNMP will close the program for the remainder of the year, and TNMP reserves the right to discontinue the program at any time. TNMP will endeavor to provide reasonable notice, in accordance with the rationale for any changes (such as PUCT orders).

Reporting

To receive your incentives, please do the following:

1. Provide the requested information for each eligible home. TNMP's data should be submitted using online reporting tool available at TNMP's website (www.tnpeefficiency.com). Look for the section captioned 2008 Market Transformation Program. All requested information must be provided.

2. For each home, a hard copy or electronic copy of its ENERGY STAR certificate must be provided. To be eligible, the ENERGY STAR certification date must be 1/1/2008 or later, and must not duplicate an incentive request previously made to TNMP, or any other electric or gas utility. All certificates should be sent to Frontier Associates for delivery within 15 days of spreadsheet submittal, but in no case later than December 31, 2008. The address is:

Margaret Marchant

Frontier Associates LLC

1515 S. Capital of Texas Hwy., Ste. 110

Austin, Texas 78746-6544

After this information has been submitted, TNMP and Frontier Associates will verify each home's eligibility and issue payment. To be eligible for payment, homes must:

• Be located within TNMP's service territory
• Have a valid ENERGY STAR certificate
• Have been certified during the 2008 program year, and
• Must not have received an incentive from Oncor, CenterPoint, or any other electric or gas utility

For more information, please contact Margaret Marchant of Frontier Associates (mmarchant@frontierassoc.com) or Tony Thompson of TNMP at 469-484-8590 or Tony.Thompson@pnmresources.com.