31978--2/29/2008--EL_PASO_ELECTRIC_CO_/TX/

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{capital, credit, financial}
{cost, contract, operation}
{competitive, industry, competition}
{interest, director, officer}
{cost, operation, labor}
{cost, regulation, environmental}
Our Costs Could Increase or We Could Experience Reduced Revenues if There are Problems at the Palo Verde Nuclear Generating Station We May Not Be Able to Recover All of Our Fuel Expenses from Customers Equipment Failures and Other External Factors Can Adversely Affect Our Results We May Not Be Able To Recover All Costs of New Generation Competition and Deregulation Could Result in a Loss of Customers and Increased Costs Executive Officers of the Registrant Current Position and Business Experience

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