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El Paso Electric Files First Texas Rate Case in 15 Years

December 09, 2009

El Paso Electric today filed its first Texas rate case in 15 years with the Public Utility Commission of Texas. The filing requests a net increase in rates of $38.4 million or 6.9 percent, including a $50.8 million increase in Texas base rates offset by a $12.3 million reduction in costs recovered through its fixed fuel factor. The requested base rate increase reflects costs related to additional power generation and infrastructure necessary to meet growing regional demand for electricity, as well as higher operating expenses required to provide reliable electric service. Additionally, the fixed fuel factor will be reduced in accordance with a 2006 rate agreement, providing customers with 90 percent of the profits from off-system sales, up from the current 25 percent. Fuel and purchased energy costs are recovered through the fixed fuel factor without any profit. Taking into account that EPE voluntarily reduced rates in 1999 by $15.4 million, the overall rate increase amounts to an increase in rates of only 4.1 percent since rates were changed in 1995.

The El Paso County/West Texas region has experienced tremendous growth over the past 15 years. Since 1995, the number of customers EPE serves has grown by more than 30 percent. “At EPE, we’re proud that we have not increased base rates in more than 15 years due to hard work and good planning by our employees. However, as this community continues to grow, the demand on our systems for reliable power does as well. EPE has an obligation to serve its customers by meeting the demand for additional power and infrastructure,” said David Stevens, El Paso Electric Chief Executive Officer. “While EPE works diligently to limit rate increases, changes in our operating costs and investments in power plants and infrastructure need to be accurately reflected in rates. This is vital to our ability to continue providing customers with the reliable electric service they’ve come to count on.”

The proposed rates for the typical residential customer using 500 kilowatt-hours per month will see their bills increase $5.77 per month or 9.6% after the base rate and fuel charges. EPE will also provide a discount to qualifying low-income customers. The typical low-income customer using 500 kilowatt-hours per month will see their bills increase $2.67 per month or 4.8%.

El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 367,000 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 1,643 MW. El Paso Electric’s common stock trades on the New York Stock Exchange under the symbol EE.

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