CFE curtails purchases from El Paso Electric Co.

EL PASO, Texas, July 22, 2003 — El Paso Electric Co. announced recently that the Comision Federal de Electricidad (CFE), the national electric utility of Mexico, suspended its agreement to purchase non-firm power from EPE due to reduced load requirements in Mexico as a result of mild weather conditions and system problems in Mexico.

“We value our long-term relationship with the CFE,” said Gary Hedrick, President and CEO of EPE. “We look forward to helping CFE meet its future energy requirements should the opportunity arise. The curtailment of sales to the CFE will enable us to pursue other opportunities in the economy market.”

El Paso Electric Company is a regional electric utility providing generation, transmission and distribution service to approximately 320,000 retail customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico, including wholesale customers in New Mexico, Texas and Mexico. EPE has a net installed generation capacity of approximately 1,500 MW. EPE’s common stock trades on the New York Stock Exchange under the symbol EE.