EL PASO, Texas--(BUSINESS WIRE)--
El Paso Electric Company (EPE) (NYSE: EE) announced that earlier today
the City of El Paso approved in principle settlement terms for EPE's
rate case pending before the Public Utility Commission of Texas (PUCT).
Attorneys for a majority of the parties in the case have indicated they
intend to support or do not intend to oppose the proposed settlement.
Four parties in the case have indicated they intend to oppose the
settlement. If approved by the PUCT, the settlement would resolve all
issues in the case except for the contested revenue requirement issue
regarding the Four Corners Generating Station.
Key terms of the proposed settlement include: (i) an annual non-fuel
base rate increase of $37 million; (ii) the potential for an additional
base rate increase of $8 million related to Four Corners costs (as a
result of severing and separately litigating this item from the main
rate case); (iii) lower annual depreciation expense as recommended by
the City of El Paso of approximately $8.5 million; (iv) a return on
equity of 9.7% for AFUDC purposes; and (v) a determination that
substantially all new plant in service was reasonable and necessary and
therefore would be included in rate base. The proposed settlement is
subject to documentation and formal agreement by the settling parties as
well as approval by the PUCT.
Once the settling parties have agreed formally to the terms and executed
the final documentation, the settlement documents will be filed with the
PUCT for approval. It is anticipated that a brief hearing may occur
before the Administrative Law Judges on the case who would issue a
proposal for decision on the settlement for consideration by the PUCT.
"Any time the parties to a rate case can find terms that fairly reflect
their competing interests, I think it is better for everyone involved to
settle rather than face lengthy and costly litigation," said Mary Kipp,
El Paso Electric's Chief Executive Officer. "I am satisfied with the
terms of the proposed settlement and feel that the interests of our
customers, our community, our shareholders, other stakeholders and the
intervening parties have been recognized. Perhaps more importantly, I
have been pleased with the regulatory process and the way in which so
many parties have worked together to reach terms that will allow El Paso
Electric to continue to meet the needs of our growing customer base with
safe, clean, reliable and affordable electricity."
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.
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 2,055 MW.
Safe Harbor
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 (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). 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) a breakdown in settlement discussions with the parties
in EPE's Texas rate case; (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
law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160229006553/en/
El Paso Electric Company
Public Relations
Eddie
Gutierrez, 915-543-5763
eduardo.gutierrez@epelectric.com
or
Investor
Relations
Lisa Budtke, 915-543-5947
lisa.budtke@epelectric.com
or
Richard
Gonzalez, 915-543-2236
richard.gonzalez@epelectric.com
Source: El Paso Electric Company
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