El Paso Electric Files Unopposed Settlement In Texas Rate Case Docket No. 44941
EL PASO, Texas--(BUSINESS WIRE)--
El Paso Electric Company ("EPE") (NYSE: EE) filed an unopposed
settlement agreement (the "Unopposed Settlement") today for EPE's rate
case pending before the Public Utility Commission of Texas (the "PUCT").
If approved by the PUCT, the Unopposed Settlement would resolve EPE's
rate case, including the revenue requirement for Four Corners Generating
Station. The costs of serving residential customers with solar systems
will be addressed in a future proceeding.
"While we did not anticipate some of the delays that occurred following
the filing of the first proposed settlement in March, we are pleased to
have been able to reach a resolution," said Mary Kipp, El Paso Electric
CEO. "We are fortunate to live in a growing region. The Company set a
new native peak of 1,892 MW on July 14, 2016, which surpassed last
year's peak by more than five percent."
The terms of the Unopposed Settlement include: (i) 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% for AFUDC
purposes, and including substantially all new plant in service in rate
base, all as outlined in the original non-unanimous settlement; (ii) an
additional annual non-fuel base rate increase of $3.7 million related to
Four Corners Generating Station costs; (iii) removing the separate
treatment for residential customers with solar systems; and (iv)
allowing EPE to recover most of the rate case expenses up to a date
certain. The Unopposed Settlement is subject to approval by the PUCT. At
this time, EPE cannot predict when it will record the revenue and other
impacts of the Unopposed Settlement for financial reporting purposes.
Regardless of such timing, the new rates will relate back to consumption
on or after January 12, 2016.
The settlement documents were filed with Administrative Law Judges
assigned to oversee EPE's Texas rate case, who have been asked to return
the settled case to the PUCT for approval.
EPE continues to meet the needs of its growing service territory with
two generating units coming online in 2016. EPE anticipates filing new
rate cases in Texas and New Mexico in early 2017.
On August 10, 2015, EPE filed a request for an increase in non-fuel base
revenues of approximately $71.5 million with the City of El Paso, other
incorporated municipalities in its Texas service territory and the PUCT.
When EPE filed its rebuttal testimony on January 15, 2016, it modified
the requested increase to $63.3 million.
On March 29, 2016, EPE and other settling parties filed with the PUCT a
Non-Unanimous Stipulation and Agreement and motion to approve interim
rates (the "Non-Unanimous Settlement"). Four parties to the rate case
opposed the Non-Unanimous Settlement. Interim rates were approved by the
PUCT effective April 1, 2016, subject to refund or surcharge. Subsequent
to filing the Non-Unanimous Settlement, the case has been subject to
numerous procedural matters, including a May 19, 2016 ruling by the PUCT
that EPE's initial notice did not adequately contemplate the treatment
of residential customers with solar systems contained in the
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. El Paso Electric has a net
dependable generating capability of 1,990 MW.
This news release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor provisions
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. This information often involves risks and uncertainties that
could cause actual results to differ materially from such
forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to: (i) uncertainty
regarding the actions and timing of matters in EPE's Texas rate case
pending before the PUCT; (ii) EPE's inability to reach agreement with
the intervenors in EPE's Texas rate case; (iii) increased prices for
fuel and purchased power and the possibility that regulators may not
permit EPE to pass through all such increased costs to customers or to
recover previously incurred fuel costs in rates; (iv) full and timely
recovery of capital investments and operating costs through rates in
Texas and New Mexico; and (v) other factors detailed by EPE in its
public filings with the Securities and Exchange Commission. EPE's
filings are available from the Securities and Exchange Commission or may
be obtained through EPE's website, http://www.epelectric.com.
Although El Paso Electric believes that the expectations reflected in
such forward-looking statements are reasonable, no assurances can be
given that these expectations will prove to be correct. Any such
forward-looking statement is qualified by reference to these risks and
factors. EPE cautions that these risks and factors are not exclusive.
EPE does not undertake to update any forward-looking statement that may
be made from time to time by or on behalf of EPE except as required by
View source version on businesswire.com: http://www.businesswire.com/news/home/20160721006520/en/
El Paso Electric Company
Lisa Budtke, 915-543-5947
Source: El Paso Electric Company
News Provided by Acquire Media
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