COMPLIANCE LETTER TO CONTRACTORS AND VENDORS

TO EL PASO ELECTRIC COMPANY CONTRACTORS, CONSULTANTS AND SUPPLIERS

El Paso Electric Company ("EPE") is strongly committed to conducting our Company’s business in a lawful and ethical manner. The legal and ethical standing and the good name of any business organization can be seriously damaged by the actions of one or a few of its members. We expect our contractors, consultants and suppliers (collectively, “Contractors”) to honor this same commitment and we ask that you make compliance and ethics a top priority as your work with EPE.

Also important to our success is your commitment to provide goods and services to EPE in full compliance with all applicable laws and regulations and with the highest standards of ethical business conduct.

EPE's Code of Ethics provides fundamental principles and values that EPE employees should apply in their daily work and reinforces the importance of conducting business in a lawful and ethical manner. This includes EPE's expectation that employees should refrain from any activity with Contractors that may be considered a conflict of interest.

We ask that you commit to the following principles and standards:

Failure to comply with these obligations could result in termination of your assignment and/or contract with EPE.

Additional information of our Code of Ethics is available for your review at our website (http://www.epelectric.com) under Investor Relations/Corporate Governance/Code of Ethics.

If you have any concerns regarding compliance or ethical issues or believe that any misconduct has occurred or is imminent, please disclose it immediately by contacting Wayne Soza, Vice President – Compliance and Chief Risk Officer (office: 915-543-4097) (cell: 915-222-1147).

We appreciate your efforts in making compliance and ethics a critical component in your relationship with EPE. Please ensure that any of your employees who interact with EPE understand and comply with EPE's commitment to conducting business in a lawful and ethical manner by providing a copy of this letter to them.

Sincerely,

Mary E. Kipp

Mary E. Kipp

IF AND TO THE EXTENT A PROVISION OF THIS LETTER CONFLICTS WITH AN EXECUTED AGREEMENT BETWEEN CONTRACTOR AND EPE, THEN THE PROVISION IN THE EXECUTED AGREEMENT SHALL GOVERN AND CONTROL.


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