El Paso, Texas — The Public Utility Commission of Texas (the “Commission”) approved a Final Order (the “Order”) in El Paso Electric Company’s (the “Company” or “EPE”) (NYSE: EE) rate case today. The Order resolves all issues in this rate case.
“We are pleased to have been able to work together with all parties and to reach the agreement reflected in this final order,” said Mary Kipp, President and CEO of El Paso Electric. “As always, we will continue to serve our customers safely and reliably, while finding innovative solutions for meeting the needs of our growing region.”
The Order provides, among other things, for the following: (i) an annual non-fuel base rate increase of $14.5 million; (ii) a return on equity of 9.65%; (iii) all new plant in service as filed in the Company’s rate filing package was prudent and used and useful and therefore is included in rate base; (iv) the Company to recover reasonable rate case expenses of approximately $3.4 million through a separate surcharge over a three year period; and (v) a requirement that the Company file a refund tariff if the federal statutory income tax rate, as it relates to the Company, is decreased before the Company files its next rate case. The Order also establishes baseline revenue requirements for recovery of future transmission and distribution investment costs, and includes a minimum monthly bill of $30.00 for new residential customers with distributed generation, such as private rooftop solar. Additionally, the Order allows for the annual recovery of $2.1 million of nuclear decommissioning funding and establishes annual depreciation expense that is approximately $1.9 million lower than the annual amount requested by the Company in its initial filing. Finally, the Order allows for the Company to recover revenues associated with the relation back of rates to consumption on and after July 18, 2017 through a separate surcharge.
New rates are anticipated to be implemented in January 2018. As a result of the non-fuel base rate increase, the Company’s Texas residential customers will likely see an average monthly bill increase of $3.50 and $5.00 in winter and summer months, respectively.
El Paso Electric Company is a regional electric utility providing generation, transmission and distribution service to approximately 417,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico.