Exhibit 10.5 Long-Term Performance Cash Plan

INTRODUCTION

PNM Resources, Inc. (the “Company”) has adopted the PNM Resources, Inc. Long-Term Performance Cash Plan (the “Plan”). Under the Plan, the Board Governance and Human Resources Committee ¹ (the “Committee”) of the Company’s Board of Directors has the power to issue Performance Cash awards (the “Awards”) to eligible participants. The Plan sets forth the general guidelines pursuant to which Performance Cash will be awarded.

The following describes the objectives of the Program, its various elements, and how the Program is intended to function.

PROGRAM OBJECTIVES

Through grants of Awards, the Program is designed to motivate and retain participants by rewarding them for their contributions towards the Company’s achievement of superior financial performance measured by comparison to an industry index.

EFFECTIVE DATES

The Program is effective for the period from January 1, 2004 until the performance period ending December 31, 2010 or until the Committee so designates, whichever is earlier. The Committee reserves the right to adjust, amend or suspend the Program in its discretion.

ADMINISTRATION

The Program will be administered by the Committee. The Committee will have the sole authority and discretion to interpret the Program, approve Awards and perform all other duties necessary to administer the Program. The Committee’s interpretation of the Program, any Awards granted under the Program, any Agreement issued under the Program, and all decisions and determinations by the Committee with respect to the Program are final, binding, and conclusive on all parties.

ELIGIBILITY

As a general matter, all Officers of the Company and its affiliates shall participate the Program, but the Committee retains discretion to select eligible participants from among employees of the Company and its affiliates.

PROGRAM DESCRIPTION

Awards may be issued to participants when the Company’s Total Shareholder Return (TSR) is at the 40 ^th percentile or above of companies in the S&P Midcap 400 Utility Index for each Performance Period. A target award is set for each participant level (the “Target”). Participants may earn a minimum of 0% to a maximum of 200% of the Target award.

Award amounts are based on the Company’s TSR performance relative to companies in the S&P Midcap 400 Utility Index for each Performance Period. Results will be interpolated between the established targets below to reward for incremental performance. The Target Award for each award level are as follows: