City Council To Continue Efforts To Get El Paso Electric To Lower Rates

El Paso City Council on Tuesday voted to continue the process to try to get El Paso Electric to lower its rates.

City representatives voted to delay proposed rate hikes by the regulated monopoly until early June, in an effort to investigate the company’s justifications for the increases and possibly negotiate with El Paso Electric (EPE) before the Public Utility Commission hears the case.

In late 2011, City Council voted to initiate a rate case with EPE, citing the company’s high profits and rates. City Rep. Cortney Niland, who spearheaded council’s move to take on the utility, said several of the company’s commercial customers told her high electric rates were making it difficult to keep their businesses afloat.

In response to the City’s efforts, EPE, on Feb. 1, filed a statement of intent to increase residential rates and decrease rates for large and small commercial users within city limits. The company cited increased advertising and pension expenses as reasons for the proposed rate hike. It also said plant additions and increased labor costs make a rate increase necessary.

Niland pointed out advertising expenses include charitable donations made by the company. State law allows utilities to recover 3/10ths of 1 percent of charitable donations through ratepayers.

The company is proposing charging large power, small commercial and general service customers, which includes schools, decreased rates of between 1 percent and 4.6 percent less.

The proposed rate hike would be absorbed by residential customers. The utility wants to increase a customer service charge from the current $5 to $9.95.

It also wants to eliminate a half-percent break it gives customers who install energy efficient air conditioners and charge a fee to customers who generate their own electricity, including those who have installed solar panels on their homes.

EPE also proposes metering traffic signal lights, eliminating a set rate for City Hall and the County Courthouse and eliminating Fort Bliss as a separate class. The utility also wants to impose rate case expenses on city customers only.

The company has said the rate case will cost $8.658 million. Niland said the company is in charge of 85 percent of that cost and said there must be a way for the utility not to charge ratepayers for the cost. ABC-7 could not find any company officials at the meeting Tuesday.

In its rate filing, the company is requesting a 10.6 percent return on equity, less than the 12.07 percent in the 12 months ending on Sept. 30, 2011 and the 13.62 percent in the 12 months ending on Dec. 31, 2012.