EP Electric plans to increase rates to recover investments

El Paso Electric Rate Increase

EL PASO, Texas - El Paso Electric is asking the Public Utility Commission of Texas and municipal regulatory authorities to approve a $42.547 million "retail increase in base revenues" in an effort to recover investments made in the El Paso region.

The utility is proposing to eliminate "subsidies between all customer classes by bringing all customers to their full cost of service" and to create a "new customer class for private rooftop solar customers in Texas."

Under the proposed rates, "the average monthly residential bill increase in the Summer would be $9.27 and the average monthly residential bill increase in the Winter would be $7.24," the utility said. If approved, rates are anticipated to be implemented in late 2017 or early 2018.

The average monthly bill impact on "private rooftop solar" customers would be $14.09 per month, the utility said, adding "Consistent with its treatment of other rate groups, EPE is proposing to assign (solar customers) its full cost of service."

State Senator José Rodríguez, (D) El Paso, said Monday the new rate case includes solar provisions substantially similar to those in El Paso Electric's 2015 rate case. Rodríguez was "outspoken in his opposition to those provisions and has similar concerns regarding the solar provisions in the newly-announced rate case," his office announced Monday.

"I'm disappointed that El Paso Electric insists on discouraging people from installing solar on their homes. The electric company once again wants to single out solar customers by increasing their rates at least two times the amount of their non-solar neighbors," Rodríguez said in a statement emailed to ABC-7 "Solar customers will no longer be able to save on their electric bills, which was the reason they installed solar panels in the first place. Frankly, the energy bill uncertainty alone will significantly stifle solar."

Norman Gordon, outside counsel for the City of El Paso, said the city has begun to study the proposed rate increas. "I am concerned EPE is seeking $42.5 million on top of the increase that was settled last year, and I am asking our team to carefully scrutinize the amount of the increase to the residential and commercial customers, especially the increases in the proposed customer charges from $6.93 to $10.90. Once the evaluation is complete, we will direct the appropriate action," Gordon said.

A utility news release states, "since March 2015, El Paso Electric has invested approximately $444.3 million in new generation, distribution and transmission facilities and upgrades to existing local and remote generation infrastructure. Due to the completion of these major capital infrastructure investments, EPE filed a proposal today with the Public Utility Commission of Texas (PUCT), the City of El Paso and the other incorporated cities within its Texas service territory to change rates to reflect these investments in Texas."

EPE specifically cites a $151 million investment in two new generation facilities that entered service: the Montana Power Station Units 3 and 4. "The investments made are helping to meet the increased demand that is being placed on the power grid," the utility states.

"We anticipate after this rate case, if all goes well, you wouldn't see any more increase or another request for proposal for quite some time. And in our resource planning currently we don't have another power plant slated until 2023," said Eddie Gutierrez, with El Paso Electric, "We understand it's not easy to hear that things are going up, but we really are making these investments for our community which is why we want to tell people in advance of the process.

The utility's previous rate case, filed in 2015 and settled in 2016, revolved around the new Montana Power Station. EPE asked to recover $71 million when Units 1 & 2 went on-line. 

In late 2016, a proposed increase for El Paso Electric's fixed fuel charge was approved. The utility's customers in Texas experienced an average increase of $3.55 a month in their residential electricity bills.

At the time, El Paso Electric said the increase was needed as a result of an increase in demand at a time when there was a "flat production of gas and decreasing stock of gas storage."

The increase will allow the utility to recover fuel costs, but not allow it to make a profit on fuel charges, something prohibited by the Texas Utility Commission.

El Paso Electric has a program for designed for people who can't afford to have solar panels installed or their roofs don't allow for it. To learn more about the Community Solar Program, click here.


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