El Paso Electric officials have agreed to significantly reduce the company’s request for a rate increase, filed in June, as part of a proposed settlement approved by the El Paso City Council on Tuesday.
The settlement reduces the proposed rate increase by 68% – from $41.8 million to $13.5 million, city officials reported.
That means the average residential electric bill would go up about $2 a month instead of the $11.76 a month increase originally proposed by the utility, according to city and EPE officials.
The exact amount of the increase differs slightly from the city and EPE reports. City officials said the average residential bill would increase by about $2.20 per month. EPE officials said this would average less than $2 per month, or less than a 2% increase, over the 13.4% increase projected by EPE’s original proposal.
The settlement, reached over months of negotiations, is not yet complete, warned EPE spokesman George De La Torre. It still needs approval from 11 other stakeholders in the case, including a group of area school districts and several businesses, and then commissioners from the Texas Public Utility Commission, he said.
In past rate cases, the bylaw approved by city council has been the one accepted by all stakeholders and the PUC.
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El Paso Electric CEO Kelly Tomblin said in a statement that the company agreed to cut demand because customers “face a host of cost increases in other areas of their lives, including rising taxes, inflation and rising interest rates”.
“At EPE, we are focused on long-term economic development and understand that the best thing for our customers, our business and our community is to maintain affordability,” said Tomblin.
The $953 million the company has spent on power system upgrades since the last rate increase in 2017 was needed, Tomblin added. The rate increase is intended to recover some of these costs.
Now, shareholders of the private company will end up paying more of those costs, De La Torre said.
However, EPE continues to be a very profitable business. Last year, its profit was $146.2 million.
El Paso City Attorney Karla Nieman said in a statement that city officials are “pleased with the proposed settlement which will significantly reduce the impact on our residents.”
“The city will continue to stand up for the ratepayers of El Paso and will hold El Paso Electric accountable for any requested rate increases,” she added.
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City council members didn’t say much about the bylaw before approving it by a 5-1 vote early Tuesday night. West Side City Representative Peter Svarzbein voted against. City representatives Alexsandra Annello and Claudia Rodriguez were absent.
East-Central El Paso City Rep. Cassandra Hernandez and Svarzbein were mostly concerned that ratepayers in the El Paso area would end up paying the full $163.8 million cost of the new unit. of natural gas generation currently being added to the Newman Power Plant in the Northeast. El Paso. New Mexico regulators did not approve the project, for which ratepayers in the Las Cruces area were to pay 20% of the cost.
James Schichtl, vice president of regulatory and government affairs for EPE, assured city council members that customers in the El Paso area would not have to pay the additional 20% cost unless officials the company does not determine in the future that using all the power from the generator was the most expensive. – efficient way to serve customers in the El Paso area. The Texas PUC should also approve this change, he said. New Mexico will not be powered by the generator, he said.
Hernandez and Svarzbein were not satisfied with this response.