El Paso Electric Responds To Business Owner, He Lashes Back Again

After El Paso Electric responded to his initial letter, local business owner Stanley Jobe lashed back at the utility again.

City Rep. Cortney Niland used information from Stanley Jobe’s company, Jobe Materials to make her case that the electric company’s rates are too high.

El Paso Electric, in a letter to the city, responded by showing Jobe had made a political contribution to Niland when she ran for city council.

Jobe then wrote to El Paso Electric, and stated he now understood why other businesses feared retaliation from the electric company if they spoke up about high rates.

In response, El Paso Electric CEO David Stevens wrote “I want to reassure you that we do not retaliate against our customers.”

The letter continues: “We felt it was important to fully disclose your support for Representative Niland so that the public could properly weigh the information that she published.”

Jobe quickly wrote back last week. “You clarified for me that El Paso Electric does not want the El Paso public to focus on your rates, profits, and rate increases, but rather on the imputed bias of a city representative that has taken a strong position challenging your rates,” the business owner wrote to Stevens.

“I think Stanley made a lot of inferences and assumptions, and that’s unfortunate,” said Richard Fleager, an El Paso Electric Vice President, referring to the first letter Jobe had written the company.

Jobe had initially written to the company in response to a 10-page letter El Paso Electric had written to the city. The company said they wrote the letter because up until last week, EPE officials had been denied access to the mayor and city council outside of public meetings while the utility and the city’s hired consultant were negotiating in an effort to avoid a rate case. The company, said Fleager, was concerned they were not getting a fair hearing, especially since Niland had already been vocal about her belief that EPE ‘overcharged its customers’ before a September 13th meeting on the matter.

“They’re just trying to paint me in a negative light because I’m asking them hard questions that they can’t seem to answer,” said Niland of the company.

El Paso Electric officials have said that’s not the case. They admit their rates are some of the highest in the state, but said that’s because of the high cost of producing electricity.

“How are their fixed costs any different from other utilities in peer cities? Lubbock, Amarillo. There are other regulated utilities where they can get competitive, why can’t they,” said Niland in an interview.

Before council last week, Stevens said that unlike EPE, Lubbock and Amarillo utilities used coal to produce electricity. Also, the utility produces about 40% of its electricity at the Palo Verde nuclear power plant in Arizona.

“When you start talking about our fixed cost business, first of all, some of our generation is in Arizona, so we need to bring transmission lines from Arizona to El Paso,” said Fleager.

“I think that their fixed costs are too high, I feel like they’re running on generation that is very, very old and for that reason, they can’t be efficient. it has everything to do with their local leadership and the ability to run a company efficiently,” said Niland.

El Paso Electric has invested $160 million in a local generating plant in the last year, a factor that the company said may cause a rate increase, instead of the city-coveted rate decrease, when they fight the issue with the city before the state.

The company pays a franchise fee to the City of El Paso for using portions of public property for its transmission lines and other equipment. “The city council has about $4 million in economic development franchise fees. The money is being generated by all of our customers and if the city wants to use it to reduce electric rates,they certainly have that option,” said Fleager.

Niland said it doesn’t make sense to use money generated by EPE customers to offset the cost of other, commercial EPE customers. City Council has allocated that money for economic development, mostly for the Medical Center of the Americas, instead of funneling it back to EPE through commercial customers.