The City of El Paso has approved the settlement of El Paso Electric Co.'s pending rate case. The settlement, which calls for a $15 million reduction in base rates, is designed to encourage economic growth, primarily through rate reductions for commercial and industrial customers in Texas, according to the company.
In addition to the rate reduction, the settlement includes the establishment of a new economic development rate rider (EDR), which provides declining rate discounts over a four-year period for new and existing businesses that build new facilities and increase employment in the region.
The EDR will assist local governments' economic-development efforts to attract new businesses to the region by mitigating relocation costs borne by those businesses. It is anticipated that the EDR will provide up to $2.2 million in economic-development discounts per year, according to the company.
"Economic development is critical to the continued growth of the El Paso region and is a common goal shared by the city and the company," says Tom Shockley, El Paso Electric's interim CEO. "Over the past few years, regional growth, combined with operational efficiencies, has allowed the company to make the investments needed to serve its customers and provide reasonable returns to its shareholders."
Over the next five years, the company anticipates spending approximately $1.4 billion in plant improvements to meet growing electricity demand.
For areas outside the city of El Paso, the settlement is subject to the agreement of the other parties and final approval by the Public Utility Commission of Texas, which is expected to issue a final order in June.
