El Paso Electric Files to Revise its Fuel Factor

September 10, 2013

Due to increasing fuel costs, primarily the increase in the price of natural gas, EPE filed a petition to increase the existing Texas Fixed Fuel Factor effective October 1, 2013. 

The fuel factor charge on customer electric bills reflects fuel-related costs which EPE incurs in supplying electric power to customers.  This charge includes the costs of the fuel used to generate electricity. 

Because EPE is only permitted to recover its actual fuel-related expenses and is not allowed to earn a profit on these costs, the fuel factor is adjusted periodically to reflect current fuel prices.  When the factor results in EPE collecting more than its costs, the fuel factor is reduced, as was done in May 2012 when natural gas prices were lower. 

The natural gas market indicates that natural gas prices over the coming year will be higher than what was expected when the current fuel factor was established.  The decision to request an increase is based on the fact that EPE’s fuel costs have been increasing and are exceeding the amount that would be collected through EPE’s current fuel factor.    While the price of fuel is unpredictable, by resetting the factor now, EPE is working to avoid the need for a surcharge in the future. 

The impact to the average residential customer using 600 kWh would be approximately $1.65 monthly, for a 2.32% increase in the total bill. 

If the price of natural gas drops in the future, the fuel factor would be adjusted accordingly.