El Paso Electric (EPE) creates currents along the Rio Grande
River. The utility transmits and distributes electricity to some
404,500 customers in West Texas and southern New Mexico. More than
half of the company's sales come from its namesake city and nearby
Las Cruces, New Mexico. The firm has 2,055 MW of nuclear,
fossil-fuel, and wind-based generating capacity. EPE also
purchases power from other utilities and marketers, and sells
wholesale power in Texas and New Mexico, as well as in Mexico. Its
largest customers include military installations such as Fort Bliss
in Texas and White Sands Missile Range and Holloman Air Force
Base in New Mexico.
In 2015 about 45% of the company's energy capacity
came from nuclear power, and 34% from natural gas. Other energy
sources include purchased power (around 13%), coal (6%), and
Revenue from retail accounted for 67% of EPE's total revenue in
2015; Fuel revenue, 22%; Off-system sales, 7%; and Other, 4%.
The company operates under franchise agreements with several
cities in its service territory, including El Paso, Texas and Las
Cruces, New Mexico.
Facilities include a 16% interest in the Palo Verde Nuclear
Generating Station in Wintersburg, Arizona; a 7% interest in the
Four Corners Station in northwestern New Mexico; the Rio Grande
Power Station in Sunland Park, New Mexico; the Newman Power
Station; the Copper Power Station in El Paso; and the Hueco
Mountain Wind Ranch in Hudspeth County, Texas.
Sales and Marketing
EPE distributes electricity to retail customers principally in
El Paso, Texas, and Las Cruces, New Mexico (representing 63% and
12%, respectively, of retail revenues in 2015). Its wholesale
operations also resell to other electric utilities and power
Principal industrial, public sector, and other large retail
customers include military installations (including Fort Bliss in
Texas and White Sands Missile Range and Holloman Air Force Base in
New Mexico), oil refineries, two large universities, and steel
production and copper refining facilities.
EPE owns the transmission and distribution network within its
New Mexico and Texas retail service area and operates these
facilities under franchise agreements with various
The company distributes its products via common plants,
transmission lines, and substations. It owns four 345 kV
transmission lines in New Mexico and Arizona and three 500 kV lines
in Arizona. These lines enable EPE to deliver its energy
entitlements from its remote generation sources at Palo Verde and
Four Corners to its service area.
EPE's revenues dropped by 7.4% in 2015 to $849.9 million,
primarily due to a 20% decline in fuel revenues and a 34% decline
in Off-system sales, which offset small revenue gains in retail and
Net income decreased by 10.4% to $81.9 million, due to higher
other operating expenses, deductions related to investment and
interest income, and higher interest charges. These increases more
than offset lower fuel and purchased power expenses.
EPE's cash provided by operations was $246.7 million in 2015,
compared to $243.3 million in 2014. Cash from operations was
impacted by the timing of the recovery of fuel costs through fuel
recovery mechanisms in Texas and New Mexico and sales for a resale
customer. Net fuel recoveries resulted in increased cash from
operations in 2015.
To encourage conservation and a greener energy profile (to meet
state and federal carbon emission regulations) EPE's Renewable
Energy Program gives incentives to customers using
power generated from renewable energy sources, such as
geothermal, solar, and wind. The El Paso Solar Photovoltaic Pilot
Program pays incentives to customers who install solar
panels at their homes. Looking to the future, as west Texas
and southern New Mexico continue to grow, EPE expects to invest an
additional $1.1 billion in improving its infrastructure by 2020.
Slightly less than half of these future capital expenditures are
earmarked for additional generation capacity.
A leader in solar power generation, in 2015 the company had an
additional 8 MW of large-scale solar resources under
In 2016 EPE planned to add two additional 88 MW gas-fired
To help pay for these capital activities, EPE planned to file
rate cases in New Mexico and Texas in 2017.