Photo courtesy EP Electric – City of El Paso
City of El Paso staff provided an update to the City Council and the public on the status of the El Paso Electric (EPE) rate case and its impact; the City’s position is to minimize the impact to residential ratepayers and to emphasize the importance of prioritizing our residents’ quality of life over individual organizational priorities.
“The City Council has directed staff to work with all the parties in prioritizing our residents because the City is strongly opposed to subsidizing various public entities at the expense of our residents,” said City Attorney Karla Nieman. “About 95 percent of the proposed increase by EPE is billed to the resident, which would place the largest burden on our residents while giving others a reduction, which is not reasonable.”
The eleven interveners include the Office of Public Utility Counsel, The University of Texas at El Paso, the U.S. Department of Defense (Fort Bliss), International Brotherhood of Electrical Workers, Texas Cotton Ginners’ Association, Western Refining, Vinton Steel, Freeport McMoRan, W. Silver, Walmart, and Rate 41 which includes the City of El Paso and the following entities: El Paso Community College, El Paso Housing Authority, El Paso County, County Housing Authority, Region 19 Education Service Center, Anthony ISD, Canutillo ISD, Clint ISD, El Paso ISD, Fabens ISD, San Elizario ISD, Socorro ISD, Tornillo ISD, and Ysleta ISD.
The City asked the Administrative Law Judges to engage in mediation on the EPE rate case and the request was approved. Neither UTEP nor the other Rate 41 public entities listed above, with the exception of the City of El Paso, took a position in regard to the mediation request. The City, the eleven intervenors, and EPE will now begin the mediation process at the end of February–a key topic during mediation will be allocation of the overall increase across customer classes, including its impact on residential ratepayers.
In June 2021, the City Council voted unanimously to suspend the rate increase proposed by EPE for its Texas retail customers to continue the fight on their behalf. EPE filed an application for a rate case proposing an annual net increase to its base rate of $41.8 million. Under the proposed rate increase, the typical residential customer would see a 28 percent increase or $2.29 to their base rate per month.
Since December 2021, the City has been working with El Paso Electric and the other intervenors to come to a settlement. The City has continued to engage in settlement discussions while also participating in the Public Utility Commission of Texas (PUCT) public hearing.
The main reason the City of El Paso is working to reduce the rate as much as possible is that the proposed rate increase would be in addition to the increases associated with the proposed Advanced Metering System filed on April 19, 2021; the Energy Efficiency Program filed on May 3, 2021; and the recent adjustments for fuel costs under collection made effective during the first billing cycle of May 2021 and November 1, 2021. Furthermore, EPE implemented an additional fuel surcharge on October 1, 2021, in an effort to recover an under-collection of fuel costs of nearly $45 million. Together, and once fully implemented, these rate adjustments could result in an average monthly bill increase of approximately $25.03.
In its application, EPE cites the need to recover costs associated with over $953 million in investments made into its generation, transmission, and distribution system, since its last base rate case was filed in early 2017.