New Mexico Public Regulation Commission Approves Rate Increase in El Paso Electric Rate Case
June 08 2016 - 2:44PM
Business Wire
On June 8, 2016, the New Mexico Public Regulation Commission
(the “NMPRC”) voted to approve an approximate $1.1 million increase
in non-fuel base rates in El Paso Electric Company’s (“EPE” or the
“Company”) (NYSE: EE) pending New Mexico rate case (Case No.
15-00127-UT). On May 11, 2015, EPE filed with the NMPRC for an
annual increase in non-fuel base rates of approximately $8.6
million or 7.1%. Subsequently, the Company reduced its requested
increase in non-fuel base rates to approximately $6.4 million. On
February 16, 2016, the Hearing Examiner assigned to the case issued
to the NMPRC a Recommended Decision proposing an annual increase in
non-fuel base rates of approximately $640 thousand and a return on
equity of 9.60%. The June 8 decision by the NMPRC deviated from the
Hearing Examiner’s Recommended Decision by lowering the return on
equity to 9.48% and providing a reduction to the rate base offset
related to the pension and other post-employment benefit liability.
EPE currently anticipates new non-fuel base rates in New Mexico
will become effective in the third quarter of 2016.
“Although we are disappointed and disagree with the outcome of
the New Mexico rate case, in particular the return on equity, we
remain committed to providing all of our customers with safe,
reliable and cost-effective energy,” said Mary Kipp, El Paso
Electric CEO. “We will continue to take the necessary steps to
ensure that the Company maintains financial strength and stability
while still meeting the growing and changing needs of our
customers."
As EPE continues to serve its growing service territory and
bring additional generating units into commercial operation, the
Company anticipates filing a new rate case in New Mexico in early
2017. The next rate case will be necessary to seek recovery of the
costs associated with new generating units, transmission and
distribution infrastructure, as well as request a fair return on
equity.
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 2,098
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) uncertainty
regarding the ultimate substance and timing of the implementation
of a regulatory order; (ii) decisions of EPE’s regulators that
could be detrimental to EPE; (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/20160608006342/en/
El Paso ElectricPublic RelationsGeorge De La Torre,
915-543-5823george.delatorre@epelectric.comorInvestor
RelationsLisa Budtke,
915-543-5947lisa.budtke@epelectric.comorRichard Gonzalez,
915-543-2236richard.gonzalez@epelectric.com
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