El Paso Electric proposed rate increase drastically slashed under pending settlement
El Paso Electric officials have agreed to substantially lower the company’s rate increase request, filed in June, under a proposed settlement approved Tuesday by the El Paso City Council.
The settlement lowers the proposed rate increase 68% — from $41.8 million to $13.5 million, city officials reported.
That means the average residential electric bill would increase around $2 per month instead of the $11.76-per-month increase originally proposed by the utility, according to city and EPE officials.
The exact amount of the increase differs slightly from city and EPE reports. City officials said the average residential bill would increase an estimated $2.20 per month. EPE officials said it would average less than $2 per month, or less than a 2% increase, compared to the 13.4% increase under EPE’s original proposal.
The settlement, hammered out during months of negotiations, is not yet a done deal, cautioned George De La Torre, an EPE spokesperson. It still must be approved by 11 other intervenors in the case, including a group of area school districts and several companies, and then by the Public Utility Commission of Texas commissioners, he said.
In past rate cases, the settlement approved by the City Council has been the one accepted by all intervenors and the PUC.
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El Paso Electric Chief Executive Officer Kelly Tomblin said in a statement that the company agreed to lower its request because customers “are dealing with a multitude of cost increases in other areas of their lives, including increased taxes, inflation, and higher interest rates.”
“At EPE, we are focused on long-term economic development and we understand that the best thing for our customers, our company, and our community is to maintain affordability,” Tomblin said.
The $953 million the company spent on electric system improvements since the last rate increase in 2017 was necessary, Tomblin added. The rate increase is aimed at recouping some of those costs.
Now, the privately held company's shareholders will end up paying more of those costs, De La Torre said.
However, EPE continues to be a very profitable enterprise. Last year, its profit was $146.2 million.
El Paso City Attorney Karla Nieman, in a statement, said city officials are "satisfied with the proposed settlement that will drastically reduce the impact to our residents."
"The city will continue to advocate for El Paso's ratepayers and hold El Paso Electric accountable for requested rate increases," she added.
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City Council members didn't say much about the settlement before approving it by a 5-1 vote early Tuesday evening. West Side city Rep. Peter Svarzbein voted against it. City Reps. Alexsandra Annello and Claudia Rodriguez were absent.
East-Central El Paso city Rep. Cassandra Hernandez and Svarzbein were most concerned that El Paso-area ratepayers would end up paying the entire $163.8 million cost of the new, natural gas-fired generating unit currently being added to the Newman power plant in Northeast El Paso. New Mexico regulators did not approve the project, for which Las Cruces-area ratepayers were to pay 20% of the cost.
James Schichtl, EPE vice president of regulatory and government affairs, assured City Council members that El Paso-area customers would not have to pay the additional 20% cost unless company officials in the future determined using all the power from the generator was the most cost-effective way to serve El Paso-area customers. The Texas PUC also would have to approve that change, he said. New Mexico will not get power from the generator, he said.
Hernandez and Svarzbein were not satisfied with that response.
Vic Kolenc may be reached at 546-6421; vkolenc@elpasotimes.com; @vickolenc on Twitter.
This article originally appeared on El Paso Times: El Paso Electric proposed rate increase cut under pending settlement
