6% Senior Notes due May 15, 2035 SECURITIES RESOLUTION NO. 1 OF EL PASO ELECTRIC COMPANY

Exhibit 4.2

     The actions described below are taken by the Pricing Committee of El Paso Electric Company (the “Company”), on May 11, 2005, pursuant to delegation, in accordance with resolutions adopted by the Board of Directors of the Company on March 10, 2005, and Section 2.01 of the Indenture dated as of May 1, 2005 (the “Indenture”) between the Company and JPMorgan Chase Bank, National Association, as Trustee. Terms used herein and not defined have the same meaning given such terms in the Indenture.

     RESOLVED, that a new series of Securities is authorized as follows:

     This Securities Resolution shall be effective as of May 17, 2005.

     I, Raul A. Carrillo, Secretary of El Paso Electric Company (the “Company”), do hereby certify that the attached is a true and correct copy of Securities Resolution No. 1 duly adopted by the Pricing Committee of the Company pursuant to authorization delegated to them by the Board of Directors of the Company at a meeting called and held on March 10, 2005; and I do further certify that said resolution and delegation by the Board of Directors of the Company have not been rescinded and remain in full force and effect.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of El Paso Electric Company this 17th day of May, 2005.

     Annex A

     Limitation on Liens to Secure Debt

     So long as any Senior Notes are outstanding, the Company may not create or permit to be created, any mortgage, security interest, pledge, lien or other encumbrance (“Lien”) of or upon any Operating Property (as defined herein), whether owned at the date of the Indenture or thereafter acquired, to secure any Debt (as defined herein), without effectively securing the Senior Notes (together with, if the Company shall so determine, any of the Company’s other Debt ranking senior to, or equally with, the Senior Notes) equally and ratably with such Debt (but only so long as such Debt is so secured), subject to the following exceptions, one or more of which may apply to any particular Lien.

     The foregoing restriction will not apply to:

Also, the foregoing restriction will not apply to Liens, otherwise subject to the foregoing restrictions, to secure Debt of up to an aggregate principal amount (not including Debt secured by Liens permitted by any of the foregoing exceptions) which, immediately following the creation of such Lien, together with all other Debt so secured, does not exceed 15% of Capitalization (as defined herein).

     “Capitalization” means the total of all the following items appearing on, or included in, the Company’s consolidated balance sheet:

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     Subject to the foregoing, Capitalization shall be determined in accordance with generally accepted accounting principles applicable to the type of business in which the Company is engaged and that are approved by independent accountants regularly retained by the Company, and may be determined as of a date not more than sixty (60) days prior to the happening of an event for which such determination is being made.

     “Credit Agreement” means the Credit Agreement dated as of December 17, 2004 among the Company, JPMorgan Chase Bank, National Association, as trustee of the Rio Grande Resources Trust II, the lenders party thereto and JPMorgan Chase Bank, National Association as Administrative Agent, Collateral Agent and Issuing Bank.

     “Debt” means any of the Company’s outstanding debt for money borrowed evidenced by notes, debentures, bonds, or other securities, or guarantees of any thereof.

     “Excepted Assets” means all bills, notes and other instruments, accounts receivable, claims, credits, judgments, demands, general intangibles, licenses and privileges (except franchises and permits), emissions allowances, chooses in action, patents, patent applications, patent licenses and other patent rights, trade names, trademarks and all contracts, leases and agreements of whatsoever kind and nature, other than any of the foregoing which are by the express provisions of the Mortgage subjected or required to be subjected to the Lien of the Mortgage.

     “Governmental Authority” means any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

     “Mortgage” means the General Mortgage Indenture and Deed of Trust dated February 1, 1996 between the Company and U.S. Bank National Association, successor to State Street Bank and Trust Company, as Trustee, as amended, supplemented, substituted or replaced from time to time; provided, however, that any such substitution or replacement will provide for a Lien on substantially all of the Company’s Operating Property subject to exceptions substantially similar to those contained in the previously existing Mortgage.

     “Operating Property” means, as of any particular time, (i) all of the real, personal and mixed property which is an integral part of or is used or to be used

as an integral part of the electric generating, transmission and/or distribution operations of the Company, (ii) any undivided legal interest of the Company in any such property which is jointly owned by the Company and any other person or persons and (iii) franchises and permits owned by the Company in connection with the electric generating, transmission and/or distribution operations of the Company, including, without limitation all of such property which is acquired by the Company after the date of the issuance of the Senior Notes; provided, however, that Operating Property shall not be deemed to include Excepted Property (as defined in the Mortgage).

Annex B

Form of Senior Note

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR THE REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

El Paso Electric Company, a Texas corporation, promises to pay to Cede & Co., or registered assigns, except to the extent previously redeemed, the principal sum of $400,000,000 on May 15, 2035 (or such other amount as reflected on the Schedule of Increases or Decreases in Global Security attached hereto).

Interest Payment Dates: May 15 and November 15 of each year, commencing November 15, 2005

Record Dates: May 1 and November 1 of each year

Dated: May 17, 2005

Registrar’s Certificate
of Authentication

JPMorgan Chase Bank, National Association,

as Registrar, certifies that this is one
of the Securities, of the series herein designated,
referred to in the within-mentioned Indenture.

      All capitalized terms used but not defined herein shall have the meaning given to such terms in the Securities Resolution effective as of May 17, 2005 (the “Securities Resolution”). Other than as set forth below, the terms of the Senior Notes are as set forth in the Indenture dated as of May 1, 2005 (the “Indenture”) between the Company and JPMorgan Chase Bank, National Association, as Trustee, and the Securities Resolution.

1.       Interest.

The Company will pay interest semi-annually in arrears on May 15 and November 15 of each year commencing November 15, 2005. Interest on the Senior Notes will accrue from May 17, 2005 or from the most recent date to which interest has been paid. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The record dates for payments of interest will be the May 1 and November 1 preceding each related interest payment date.

2.       Method of Payment.

The Company will pay interest on the Senior Notes to the persons who are registered holders of Senior Notes at the close of business on the record date for the next interest payment date, except as otherwise provided in the Indenture. Holders must surrender Senior Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such amount. It may mail an interest check to a holder’s registered address. Notwithstanding the foregoing, as long as the Senior Notes are represented by a global note and held by DTC (as defined herein), or a custodian thereof, all payments of principal and interest on the Senior Notes will be made to DTC in accordance with DTC procedures.

3.       Agents.

Initially, pursuant to Section 2.03 of the Indenture, JPMorgan Chase Bank, National Association will act as Paying Agent, Transfer Agent and Registrar. The Company may change any Paying Agent, Transfer Agent or Registrar or provide for more than one such agent. The Company or any Affiliate may act in any

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such capacity. Subject to certain conditions, the Company may change the Trustee.

4.       Indenture.

The terms of the Senior Notes include those stated in the Securities Resolution, the Indenture and those made part of the Indenture by the Trust Indenture Act of 1939, as amended (the “Act”).

5.       Optional Redemption.

The Senior Notes will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, at a redemption price equal to the greater of:

• 100% of the principal amount of the Senior Notes being redeemed on the redemption date; or
  
  
• the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes being redeemed on that redemption date (not including any portion of any payments of interest accrued to the redemption date) discounted to the redemption date on a semi-annual basis at the Treasury Rate plus 25 basis points,

plus, in each case, accrued and unpaid interest thereon to the redemption date.

6.       Notice of Redemption.

Notice of redemption will be mailed at least 30, but no more than 60, days before the redemption date to each holder of Senior Notes to be redeemed at his registered address.

A notice of redemption may provide that it is subject to the occurrence of any event before the date fixed for such redemption as described in such notice (“Conditional Redemption”) and such notice of Conditional Redemption shall be of no effect unless all such conditions to the redemption have occurred before such date or have been waived by the Company.

7.       Conversion.

None.

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8.       Denominations, Form, Transfer, Exchange.

The Senior Notes initially will be in registered global form without coupons, in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”). The global note representing the Senior Notes will be deposited with, or on behalf of, DTC. Subject to any restrictions related to global notes, the transfer of Senior Notes may be registered and Senior Notes may be exchanged as provided in the Indenture. The Transfer Agent may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or the Indenture. The Senior Notes may be issued in denominations of $1,000 and whole multiples thereof.

9.       Persons Deemed Owners.

The registered holder of a Senior Note may be treated as its owner for all purposes.

10.      Amendments and Waivers.

Subject to certain exceptions, the Indenture, the Senior Notes or any coupons may be amended with the consent of the holders of a majority in principal amount of the Securities of all series affected by the amendment. Subject to certain exceptions, a default on a series may be waived with the consent of holders of a majority in principal amount of the series.

Without the consent of any holder, the Indenture or the Senior Notes may be amended, among other things, to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Company obligations to holders; to provide that specific provisions of the Indenture shall not apply to a series not previously issued; to create a series and establish its terms; to provide for a separate Trustee for one or more series; or to make any change that does not materially adversely affect the rights of any holder.

11.      Successors.

When a successor assumes all the obligations of the Company under the Senior Notes, any coupons and the Indenture, the Company will be released from those obligations.

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12.      Defeasance Prior to Redemption or Maturity.

Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the Senior Notes, any related coupons and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Senior Notes to redemption or maturity. U.S. Government Obligations means direct obligations of (i) the United States or (ii) an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed by the United States, which, in either case, have the full faith and credit of the United States pledged for payment and which are not callable at the Company’s option, or certificates representing an ownership interest in such obligations.

13.      Restrictive Covenants.

The Senior Notes will be subject to the covenants set forth in the Indenture. In addition, the Senior Notes will be subject to the covenant contained in Annex A to the Securities Resolution.

14.      Defaults.

The Senior Notes will be subject to the events of default contained in the Indenture; in addition, it will be an event of default under the Senior Notes if the Company fails to observe or perform any term, covenant, condition or agreement contained in any agreement or instrument evidencing or governing any Debt in a principal amount in excess of $10,000,000 if the effect of any such failure is to cause such Debt to become due prior to its stated maturity.

15.      No Recourse Against Others.

A director, officer, employee or stockholder, as such, of the Company or of any successor corporation shall not have any liability for any obligations of the Company under the Senior Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each holder by accepting a Senior Note waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Senior Notes.

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16.      Authentication.

The Senior Notes shall not be valid until authenticated by a manual or facsimile signature of the Registrar.

17.      Abbreviations.

Customary abbreviations may be used in the name of a holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gifts to Minors Act).

     The Company will furnish to any holder upon written request and without charge a copy of the Indenture and the Securities Resolution. Requests may be made to: El Paso Electric Company, Stanton Tower, 100 North Stanton, El Paso, TX 79901, Attention: Corporate Secretary.

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

     The initial principal amount of this Global Security is $400,000,000. The following increases or decreases in this Global Security have been made: