El Paso Electric Garners $40M in Final Rate Order

The Public Utility Commission of Texas (PUCT) approved a final order on August 18 in El Paso Electric’s long-running rate case (Docket No. 44941). The order resolves all issues in this rate case, according to a statement from the utility.

“While we are pleased that we have come to a resolution in our rate case, we understand the current economic impacts affecting our growing community,” said El Paso Electric CEO Mary Kipp, adding, “As a member of this community for 115 years, we have been dedicated to the long-term success and well-being of our region. As we continue to see solid customer growth, we remain committed to making prudent investments to meet increasing demand. By using cost-effective technologies and making environmentally conscious decisions, we are making our power grid more dependable, safer and cleaner for future generations.”

The order provides for the following:

• An annual non-fuel base rate increase of $37 million, lower annual depreciation expense of approximately $8.5 million, a return on equity of 9.7 percent for Allowance for Funds Used During Construction (AFUDC) purposes, and including substantially all new plant in service in rate base – all as specified in the uncontested Stipulation and Agreement filed with the Commission on July 15, 2016
• An additional annual non-fuel base rate increase of $3.7 million related to Four Corners Generating Station costs, which will be collected through a surcharge terminating on July 12, 2017;
• End of the separate treatment for residential customers with solar systems;
• Company recovery of $3.1 million in rate case expenses through a separate surcharge; and
• Company recovery of revenues associated with the relation back of rates to consumption on and after January 12, 2016, through a separate surcharge.

Interim rates, associated with the annual non-fuel base rate increase of $37 million, became effective on April 1.

The additional surcharges associated with the incremental Four Corners Generating Station costs, rate case expenses, and the relation back of rates back to consumption on and after January 12, 2016, are anticipated to begin as early as October 1.

El Paso Electric has two new rate cases pending, it said, noting, “As the utility continues to meet the needs of its growing service territory with two new generating units at the Montana Power Station coming online in 2016, EPE anticipates filing new rate cases in Texas and New Mexico in early 2017.”

El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 400,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico.