EL PASO, TX– In March of 2018, the City of El Paso and El Paso Electric (EPE), came to an agreement to increase the City of El Paso franchise fee to electric bills for residents and businesses within El Paso city limits. The one percent increase will begin October 1, 2018, and will be reflected on bills as a separate line item; however a federal tax rate reduction and a decrease in fuel costs, will offset the increase.
EPE operates under franchise agreements with several cities in its service area that enable the utility to use public rights-of-way necessary to serve its customers. These agreements provide EPE access to the electric infrastructure in city alleyways and street corridors, which provide and maintain service to customers.
A typical residential customer in El Paso using an average of 635 kilowatt hours of energy per month could see a monthly increase of approximately .90 cents. The combination of a federal tax rate reduction and a decrease in fuel costs, implemented earlier this year, will help offset the increase resulting from the City of El Paso franchise fee.
Federal Tax Credit and Fuel Factor Reduction:
In April of 2018, EPE began providing a credit to customers due to the federal tax rate reduction passed in December of 2017. As a result, a typical residential customer in Texas using an average of 635 kilowatt hours of energy per month began to see an average monthly bill decrease of $3.83, or 4.5%. Additionally, EPE filed to reduce the Texas Fuel Factor charge by approximately 29.1%, a decrease reflected in customer bills since May 2018.
City of El Paso Franchise Fee Background:
The City of El Paso franchise agreement was last changed in 2010. The agreement specified that EPE would pay to the City of El Paso, on a quarterly basis, a fee of 4% of the gross revenues EPE receives from its customers within the city limits.