Vote Solar Finds Proposed El Paso Electric Gas Plant Expansion Unnecessary

Las Cruces, NM — El Paso Electric has miscalculated and mismanaged its electricity resources, leading it to the false conclusion that it needs an additional gas turbine at its Newman Generating Station in El Paso, TX to meet peak demand and load growth, finds solar advocacy group Vote Solar in testimony submitted to the New Mexico Public Regulation Commission (PRC). The proposal for the sixth turbine at the facility must be approved both by the Public Utilities Commission of Texas (PUCT) and the PRC, and would cost ratepayers $160 million.

“By avoiding changes to its rate structures to lower peak summer electricity demand over multiple rate proceedings El Paso Electric is forcing unnecessary, expensive new costs on its customers,” said Rick Gilliam, Vote Solar’s Regulatory Director and author of the testimony on rate design and climate risk. “Further, the company’s own disclosures to investors acknowledge the risks of additional investment in gas infrastructure, yet their application fails to consider meeting increases in demand with affordable clean energy instead.”

A summary of the proceeding including timeline, key arguments and expert bios is available here. Vote Solar is represented by Earthjustice in this proceeding. Vote Solar’s testimonies submitted by Rick Gilliam and Grid Strategies’ Michael Goggin address four key misrepresentations in El Paso Electric’s application:

Necessity El Paso Electric’s analysis overestimated demand growth and underestimated the availability of local and imported clean energy resources.
Gas Risk El Paso Electric has not accounted for the reliability risks associated with increasing its dependence on gas generation, including simultaneous loss of multiple gas generators. In addition, there is economic risk from future increases in gas prices.
Climate Risk A major investment in fossil-fuel generation will increase EPE’s operational, financial, and regulatory risk. The Energy Transition Act and Renewable Portfolio Standard create the additional risk that the plant will be forced to close before its projected end-of-use date, resulting in a stranded asset paid for by customers.
Time-of-Use Rates El Paso Electric has failed to effectively use rate design to lower peak demand, in spite of repeated recommendations from the PRC, starting in 2006, to improve the program.