Albuquerque ? Western Resources of Kansas is demanding $25 million from Public Service Company of New Mexico for a failed merger last year.

Western, based in Topeka, notified PNM by letter Tuesday that it was terminating the merger agreement and was seeking a termination fee.

PNM responded Thursday that the agreement had been terminated in January. PNM refused to pay.

“It is our view that PNM terminated the agreement on January 7 and we do not believe that PNM is subject to a $25 million termination fee,” PNM spokesman Bob Hagan said.

The original agreement called for a breakup fee of $17 million to $35 million if one party called off the deal.

PNM and Western Resources dropped merger plans last December, and PNM formally terminated the $4.4 billion merger in January. Both companies filed lawsuits alleging the other had changed the terms of the contract.