1. EPE INTERNAL CODE OF CONDUCT

2. The EPE Internal Code of Conduct Policy is implemented in conjunction with the other EPE Policies which address the management of information:
Code of Ethics
EPE Employee Policy Handbook
Insider Trader Policy
Records Management Policies (Retention, Destruction, Offsite Storage and Central File)

3. EPE Accessible Utility Information Plan
The purpose of this Plan is to define EPE’s procedures for providing information to the public and how it can be accessed.
Information accessible to the public includes:
- Information used to prepare electric tariffs;
- Information used to provide electric service to
customers; and
- Information used to market, sell, or demonstrate any
electric or energy-related service or product.
Information with limited access includes:
- Competitively sensitive
- Proprietary customer information
- T&D information

4. EPE INTERNAL CODE OF CONDUCT

5. EPE Internal Code of Conduct General Facts:
Effective January 10, 2000, even though we are not in a competitive environment until August 2005 in Texas and January 2001 in New Mexico
Provisions that cannot be implemented by January 10, 2000 will be phased in ASAP
El Paso Electric will have one EPE Internal Code of Conduct that satisfies the requirements of both Texas and New Mexico
Competition exemption in Texas (August 2005) does not apply to the EPE Internal Code of Conduct

6. Purpose of the EPE Internal Code of Conduct:
Separate competitive functions from utility functions, so that the utility cannot subsidize its affiliate or provide its affiliate preferential treatment.
For now, the ESBG* is the competitive function that will be separated. In the future, other functions will become competitive and will need to be separated from the T&D company.
_______________
*ESBG is considered a “competitive affiliate” in EPE’s internal code of conduct.

7. Major Categories of the EPE Internal Code of Conduct:
Separation of EPE from its Affiliates
Transactions between EPE and its Affiliates
Safeguards Relating to Provision of Products and Services
Information Safeguards
Safeguards Relating to Joint Marketing and Advertising
Ensuring Compliance for New Affiliates

8. The EPE Internal Code of Conduct requires a variety of separations between competitive and regulated functions including:
Accounting separations (cost tracking and allocation);
Physical separation of office space;
Restrictions on information exchange; and
Restrictions on joint marketing, including the use of EPE’s logo, joint promotional activities, customer referrals and more.

9. EPE Internal Code of Conduct is primarily concerned with:
Flow of information between Regulated Entities and Competitive Affiliates
Services/Products shared or provided to an Affiliate
Prevention of the subsidization of an Affiliate

10. What information can be shared between EPE and its Competitive Affiliates?
All information that is considered public including these documents:
Press Releases
Filings with Governmental Agencies - Local, State, Federal
Annual Reports
10-K, 10-Q, 8-K Financial Reports
Public Advertising
Information Contained on EPE’s Web Site
Customer Informational Brochures, Bill Inserts

11. What services can be shared with an Affiliate?
Financial Services
Environmental Services
Financial Planning
Community Relations
Information Technology
Human Resources
Accounting Services
Corporate Support Services
Corporate Communications
Procurement
Regulatory Services
Corporate Secretary
Legal Services
Internal Audit
Lobbying

12. Allocation of Costs for Corporate Support Services (Shared Services)
Services shared will be allocated based on mechanisms established by Accounting Services
Transition costs should be charged to Designation Code “TC-001”
Managing costs is critical

13. Services Which Cannot be Shared with an Affiliate
Examples of services which cannot be shared with an Affiliate are:
Engineering
Purchasing of Electric Transmission Facilities and Service
Transmission and Distribution System Operations
Marketing

14. Transactions Between EPE and Competitive Affiliates Must Be At Arms-Length
EPE cannot provide a service (except corporate support services) or information to its Competitive Affiliate that it wouldn’t be willing to provide to any other competitive power/service supplier. That’s the Rule.

15. Ask yourself - By giving this Information/Service/Product to the ESBG, do they now have an unfair advantage?
If yes, don’t do it.
If you don’t know, contact Willie Silva at
Ext or

16. EPE cannot provide its Competitive Affiliate any special treatment:
Products and services are provided equally to each competitive power/service supplier
Any discounts, rebates, fee waivers provided to our Competitive Affiliate must be provided to other competitive power suppliers
Restricted access to proprietary customer information - customer is required to provide written approval for the release of individual information
No joint marketing or advertising
Competitive Affiliate’s use of EPE name or logo must be accompanied with the disclaimer

17. Implementation Requirements of the EPE Internal Code of Conduct:
EPE cannot share employees, facilities or other resources with our Competitive Affiliate (except corporate support services).
Separate office space for ESBG
Separate accounting for EPE and ESBG
Restricted access to computer systems
Limited credit support from EPE to ESBG

18. Compliance with the EPE Internal Code of Conduct:
Compliance with the EPE Internal Code of Conduct will be audited
Each employee will be responsible for compliance with the EPE Internal Code of Conduct
Both the Company and employee are subject to penalties for violations of the EPE Internal Code of Conduct