El Paso Electric: Thumbs down to city’s proposed municipalization effort
Municipalization sought by the City of El Paso, Texas, in its proposed climate charter would severely impact local taxpayers and utility services, said El Paso Electric (EPE) Monday in a statement.
“Since EPE’s private owner is not voluntarily selling EPE, the City would be forced to condemn the utility assets within the city limits through a lengthy and complex process that would incur significant costs for both EPE and the City that would be paid by the taxpayers,” the 122-year-old utility said in its statement. “The proposition does not clearly estimate any of these costs.”
EPE is a privately owned regional utility currently serving about 500,000 customers from Hatch, N.M., to Van Horn, Texas. The company on Monday denounced El Paso’s proposed climate charter, which is slated to appear as Proposition K on the May 6 ballot for voters.
According to the proposed climate charter’s policies, the City of El Paso would employ all available efforts to convert EPE to municipal ownership. A newly appointed climate director would create an annual Solar Power Generation Plan for the city that would include a feasibility analysis to describe how the city can develop internal capacity to generate energy through solar power.
The city also would employ all available methods to require that energy used within the city is generated by clean renewable energy, with the goals of requiring 80 percent clean renewable energy by 2030 and 100 percent clean renewable energy by 2045, according to the proposal.
Specifically, EPE says that proposed municipalization would carve out a portion of its assets to create two utilities for its service region – one utility for customers living within the city limits and another for customers living outside, which includes New Mexico and Texas, according to EPE’s statement.
The utility says it’s not clear how El Paso customers would be served since the majority of its power generation resides outside of the city, and EPE said it has committed generation and transmission resources to serve all of its customers in Texas and New Mexico.
“Breaking up the utility would lead to higher costs for everyone by reducing the current benefits of economies of scale and scope and inject greater uncertainty into our economic development efforts,” said EPE, which has also already started planning long-term grid modernization efforts.
Such plans include broad technological and process enhancements for more renewable generation and electrification, as well as how to meet the challenges of climate change and more extreme weather events.
In fact, EPE said it plans to make significant investments of more than $2 billion during the next few years on infrastructure improvements, including cybersecurity, smart grid, and fuel diversity, according to its statement.
In 2020, EPE said it also announced plans to achieve clean energy goals while staying focused on reliability and affordability. Yesterday, the company said that the majority of its carbon-free facilities are located outside city limits, including existing solar facilities, a new 170 megawatts of utility-scale solar with battery storage that will go online this spring, and a nuclear power plant located in Arizona.
“The proposition does not clearly state what investments the City would need to make to fill the gap if the utility was divided,” said EPE. “While we are actively supporting the goals of an environmentally sustainable future for our region, we are embedding and evaluating all possible technology and generation to achieve these goals.”
At the same time, EPE also said that it is now regulated at the local, state, and federal levels to ensure affordable and reliable power, as well as for regulators to determine what investments are prudent and how much EPE can earn.
“Oversight by the City of a small municipal utility with limited generation assets may result in increased risks to customer rates, as well as uncertainty around the provision of safe and reliable service,” said EPE.
Proposition K is too limited and fails to include a wide array of customer solutions and technologies to affordably achieve its stated goals, the utility said in opposing the proposal.
“Cooperation between EPE and the City is the most efficient and productive path to accomplish goals of an environmentally sustainable future,” EPE said.
The El Paso Chamber also opposes El Paso’s proposed climate charter and said a recently released study it commissioned shows that the proposal would cost El Paso taxpayers thousands of jobs and billions in lost revenue and earnings.
The charter has been endorsed by activist groups Ground Game Texas and Sunrise El Paso, which assisted the city in developing the proposal.
