City Reps Say Latest EPE Earnings Justify Rate Case

At least two members of El Paso City Council believe Wednesday’s release of third quarter 2011 earnings for El Paso Electric further justifies the current rate case the council has filed against the utility with the Public Utility Commission.

Council members Cortney Niland and Steve Ortega think that El Pasoans are paying way too much for their electricity and claim the third quarter earnings statement from EPE is proof of that.

“Their revenue and their earnings continue to increase,” said City Representative Cortney Niland, who is not backing off when it comes to challenging El Paso Electric’s rates. “It’s important for them to document to us why we shouldn’t roll back the rates given the fact their earnings and their profitability continues to soar.”

After looking a the third quarter 2011 numbers, which show a better than 21-percent increase in earnings per share over the third-quarter of last year, going from $1.16 per share to $1.41 per share, City Representative Steve Ortega agrees.

“It further confirms the rates are high because there’s a direct correlation between the rates and their earnings,” Ortega said.

El Paso Electric officials were unavailable for comment on Wednesday. But EPE CEO David Stevens did acknowledge and justify the third-quarter earnings in a conference call with investment analysts.

“I am very pleased with our strong third quarter earnings,” Stevens told investors. “Overall, we were significantly assisted by the hotter-than-normal summer weather we experienced in our service area.”

But Niland and Ortega say they’re not buying that.

“We live in the desert. Weather is always changing. Usage is always changing,” Niland said. “But I look at price and the prices have gone up. The prices have gone up significantly.”

EPE officials say they have a large area of service and maintaining that area is what’s driving up their cost.

“We have consulted with three independent experts as it relates to utility law in particular, and all three of them have advised we are moving forward on very firm grounds,” Ortega said.

El Paso Electric has filed an appeal with the Texas Public Utility Commission to try to avoid a rate case. The company also interprets its third-quarter earnings differently than Niland and Ortega. EPE says much of the earnings increase per share is simply because fewer shares exist this year.