EL PASO, Texas--(BUSINESS WIRE)--
On May 11, 2015, El Paso Electric (NYSE: EE) filed with the New Mexico
Regulation Commission for an increase in non-fuel base rates of
approximately $8.6 million or 7.1 percent. These proposed rates will
increase, on average, residential bills by 9.0 percent.
"Several years ago, we began planning and investing to replace our less
efficient plant and equipment while providing additional resources for
our growing service territory," said Tom Shockley, El Paso Electric CEO.
"This rate case is about recovering these cost-effective investments and
ensuring that we continue to provide safe and reliable service at a
reasonable cost. We continue to see significant growth in our service
territory and with that growth we must continue to make improvements and
upgrades to El Paso Electric's infrastructure and equipment to continue
to have the most reliable and safest grid possible."
EE last filed for a non-fuel base rate increase in New Mexico in 2009.
Since that 2009 Rate Case, EE has spent approximately $1.3 billion
(total company) on utility plant in service. EE has managed its
operating costs and has provided safe and reliable service without
revised rates for over five years. EE's rates proposed in this filing
are just and reasonable and necessary to continued provision of safe and
reliable service.
The requested rate change is depicted below:
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Description (000's)
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Revenue Change
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Test Year Revenues
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Percent Change
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Non-fuel base rate deficiency
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8,592
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120,317
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7.1
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%
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Base fuel factor revenues *
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(15,393
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)
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71,458
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-21.5
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%
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* Base fuel decrease is currently flowing through to customers via the
fuel adjustment clause
The forecasted reduction in fuel and purchased power costs is recovered
in base rates through a fixed factor that applies a uniform per
kilowatt-hour (kWh) charge to all customer classes. The Fuel and
Purchased Power Cost Adjustment Clause ("FPPCAC"), recently continued in
2014, ensures that only the actual costs of fuel and purchased power
expenses are recovered from customers, and is adjusted monthly to
account for any under-collection or over-collection of EE's actual costs
on a timely basis. The reduction in the cost of fuel and purchased power
costs reflects reduced fuel prices and improvements in system heat rates
due to new generating unit additions.
The fuel and purchased power costs recovered through the base rate fixed
factor and FPPCAC do not otherwise impact EE's design of non-fuel base
rates. EE is proposing changes to its non-fuel base rate design to
reduce subsidies between classes or within classes and move towards
unity of classes paying their fair share of costs, promote cost recovery
that corresponds to cost causation, and proposes to create a separate
class for residential distributed generation customers while proposing
those customers receive the same rate structure and monthly charges as
other residential customers.
Conference Call
A conference call to discuss the 2015 New Mexico Rate Case with
investors and analysts is scheduled for 10:30 A.M. Eastern Time, on May
12, 2015. The dial-in number is 888-299-7209 with a conference ID number
of 9581572. The international dial-in number is 719-325-2454. The
conference leader will be Lisa Budtke, Assistant Treasurer. A replay
will run through May 26, 2015 with a dial-in number of 888-203-1112 and
a conference ID number of 9581572. The replay international dial-in
number is 719-457-0820. The conference call and presentation slides will
be webcast live on the Company's website found at http://www.epelectric.com.
A replay of the webcast will be available shortly after the call.
Safe Harbor
This news release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. This
information may involve 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) increased prices for fuel and purchased power
and the possibility that regulators may not permit EE to pass through
all such increased costs to customers or to recover previously incurred
fuel costs in rates; (ii) recovery of capital investments and operating
costs through rates in Texas and New Mexico; (iii) uncertainties and
instability in the general economy and the resulting impact on EE's
sales and profitability; (iv) changes in customers' demand for
electricity as a result of energy efficiency initiatives and emerging
competing services and technologies; (v) unanticipated increased costs
associated with scheduled and unscheduled outages of generating plant;
(vi) the size of our construction program and our ability to complete
construction on budget; (vii) potential delays in our construction
schedule due to legal challenges or other reasons; (viii) costs at
Palo Verde; (ix) deregulation and competition in the electric utility
industry; (x) possible increased costs of compliance with environmental
or other laws, regulations and policies; (xi) possible income tax and
interest payments as a result of audit adjustments proposed by the IRS
or state taxing authorities; (xii) uncertainties and instability in the
financial markets and the resulting impact on EE's ability to access the
capital and credit markets; (xiii) possible physical or cyber attacks,
intrusions or other catastrophic events; and (xiv) other factors
detailed by EE in its public filings with the Securities and Exchange
Commission. EE's filings are available from the Securities and Exchange
Commission or may be obtained through EE's website, http://www.epelectric.com.
Any such forward-looking statement is qualified by reference to these
risks and factors. EE cautions that these risks and factors are not
exclusive. EE does not undertake to update any forward-looking statement
that may be made from time to time by or on behalf of EE except as
required by law.

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El Paso Electric
Public Relations
Eddie Gutierrez,
915-497-3495
eduardo.gutierrez@epelectric.com
or
Investor
Relations
Lisa Budtke, 915-543-5947
lisa.budtke@epelectric.com
Source: El Paso Electric
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