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EPE Files to Implement a Distribution Cost Recovery Factor in Texas

March 29, 2019

PRESS RELEASE: March 29, 2019 

El Paso Electric Files to Implement a Distribution Cost Recovery Factor in Texas

EL PASO, Texas – On March 28, 2019, El Paso Electric Company (EPE) filed with the City of El Paso, other municipalities incorporated in its Texas service territory and the Public Utility Commission of Texas (PUCT) to implement a Distribution Cost Recovery Factor (DCRF) surcharge for its Texas customers.

The DCRF allows an electric utility to timely recover costs for investments in the distribution infrastructure necessary for serving its customers. Approximately $130 million in capital investments have been made to EPE’s electric distribution infrastructure and placed in service from October 1, 2016, through December 31, 2018, that are not currently reflected in EPE’s Texas rates. These capital investments are necessary to provide safe and reliable service to over 325,000 customers across 3,000 square miles in Texas.

“Our commitment to each of our customers is the delivery of safe and reliable energy year-round,” shared EPE President and CEO Mary Kipp. “We are continually working to build and maintain our infrastructure in a responsible manner, and this process allows us to gradually and timely recover these investments.”

Through this filing, EPE is seeking approval to recover approximately $7.9 million in distribution-related costs for infrastructure serving its Texas’ customers. The proposed DCRF surcharge will result in a $1.18 per month increase for Texas residential customers with an average monthly usage of 630 kilowatt hours. If approved, the DCRF surcharge could go into effect later this year.

Offsetting Costs

As of mid-January, the Texas Relate Back Revenue Surcharge (RBRS), which was implemented as part of EPE’s most recent rate case and previously reflected as a separate line item on customer bills, has ended. Typical residential customers were seeing on average a $1.94 surcharge per month as a result. The elimination of the RBRS surcharge will help offset both the TCRF surcharge and the proposed DCRF increase.

About EPE’s Electric Distribution System

In total, EPE owns, in whole or in part, approximately 4,700 circuit miles of over and under-ground conductors. EPE’s Electric Distribution System is the system through which the utility delivers electricity to customers. The infrastructure includes poles, towers and fixtures; overhead and underground conductors and devices; transformers; and meters that serve to convert the electricity to voltage usable by the customers and deliver and measure the electricity provided.

About the Texas Relate Back Revenue Surcharge

With the PUCT approval of rates effective January 1, 2018, the RBRS collected the difference between approved rates and prior rates for the period July 18, 2017, through December 31, 2017. Texas law authorizes rates to relate back to energy usage on or after the 155th day after the case was filed.

About El Paso Electric

El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 425,600 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico. 

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