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Local Leaders Question El Paso Electric Rate Hike

El Paso Electric’s recent request for an increase on base electric rates has many Las Cruces residents wondering if a rate increase is truly unavoidable.

A recent proposal filed by El Paso Electric (EPE) could result in an electric rate increase of approximately $8.6 million dollars if it is approved by the New Mexico Public Regulation Commission (NMPRC). According to El Paso Electric’s website, it’s a 9 percent increase, on average, to total residential bills.

Since 2009, El Paso Electric built $1.3 billion dollars in new facilities to meet customer demand and cites the recovery costs related to those new assets as the reason for the rate increase request. Opponents point to El Paso Electric’s profits, such as the $91.4 million earned in 2014, and say the rate increase is not necessary since there are places where the company could cut costs.

Steve Fischmann, a representative of the nonprofit organization Southwest Energy Alliance and chairman of the New Mexico Fair Lending Coalition, is one such critic who doubts the need for such a substantial rate increase. He says El Paso Electric is not allocating its funds as efficiently as possible.

Fischmann thinks El Paso Electric’s charity giving is inappropriate and they should be striving to provide consumers with efficient, clean, cheap energy instead. He says we, the ratepayers, shouldn’t be turning EPE into an alternative social service agency at our own expense. He feels community relations and marketing should be scaled back to only focusing on helpful information for customers.

Fischmann agrees with the claim that El Paso Electric’s status as a for-profit, Wall Street owned business appears to greatly influence its decision to recover costs through a residential rate increase. So how does El Paso Electric compare to a non-profit, city-run utility such as the Anaheim Public utility located in Anaheim, California?

According to its website, the Anaheim Public Utility serves about 363,000 customers while EPE serves approximately 399,000. The company websites state Anaheim Electric has approximately 400 employees while El Paso Electric has approximately 1000.

New Mexico PRC commissioner Sandy Jones was asked whether or not the New Mexico Public Regulation Commission should compare employee compensation in for-profit companies, like El Paso Electric, to municipally-run companies, like Anaheim Electric when making a decision on a rate case. Coincidentally, Jones asserted that he would expect a utility company in a high cost of living area like Southern California to have much higher wages than a utility company in a lower cost of living area like this region.

But in fact….just the opposite is happening with El Paso Electric…its highest-paid employees make a lot more money. According to a representative for Anaheim Electric, the base salaries of its highest paid employees range from $173,000 to $217,000. Comparatively, Bloomberg reports the base salaries of the highest paid employees at El Paso Electric are $300,000 to $670,000.

Rocky Bacchus, owner of Las Cruces business One Hour Air Conditioning & Heating and an intervener in the rate case, feels El Paso Electric cares more about shareholders and profits than ratepayers.

El Paso Electric being a for-profit company isn’t evil in and of itself says Bacchus. He says it is wrong when the motivation for profit is directed in a way that causes a disadvantage to its customers while at the same time having a monopoly grip on them where they don’t have a choice.

If Las Cruces consumers want to get involved, Fischmann and Bacchus encourage them to call or email the PRC and the New Mexico Attorney General’s office and attend public meetings regarding the rate case. If the requested rate increase is approved, it could take up to a year for the new rates to take effect.

EPE last filed for a non-fuel base rate increase in New Mexico in 2009.

El Paso Electric did not respond to KRWG’s request for comment for this story.