Dear EP Electric Customer,

You may have heard that El Paso Electric (EPE) has filed a “rate case” that may result in rate increases for certain
EPE customers. We have received many questions about what a rate case is and our reason for filing it. We hope
this information helps answer those questions.

A rate case is a regulatory proceeding during which a utility requests a review of its expenses and an adjustment to
customer rates in order to recover costs on investments that have already been made to serve customers. Unlike
other companies, we can’t raise our rates unilaterally even if our costs have gone up and even if we have spent
significant additional funds on serving our customers. To get compensated for those investments, we must make a
regulatory filing to prove those expenditures were reasonable and justified. Texas also requires every electric utility
to file a rate review with the Public Utility Commission of Texas (PUCT) every four years. For EPE, the last rate
case filed was in 2017.

Accordingly, our next rate case had to be submitted in 2021. Rate cases are lengthy processes and the submission is the first step followed by many hearings and discussions. At the center of these discussions will be whether EPE should be allowed to include the nearly $1 billion spent to upgrade our infrastructure and meet the increasing energy demands in our rates. We are confident that we made these investments to reliably generate and deliver power to your home and business and to position our region well for economic development opportunities. However, the ultimate decision on our rates will be made by our regulators. We would expect that decision to be made by early 2022.

In the last few years, we have –and we hope you have—seen the value of our investments. For example, while the
rest of Texas was without power during the recent winter freeze, we were not. When the rest of Texas was dealing
with curtailments during extreme heat, we were not. We – the customers and the Company – benefited greatly
from the investments to weatherize our equipment and develop diverse generation, among other actions. Our
responsibility to make sure you are safe and secure with the energy you need for your life and business is
something we take seriously. We work hard to surpass the level of quality and service every year.

Whatever the outcome is, we will continue to provide you the energy needs you have come to expect and deserve.
You can count on us, every day and in every type of weather, to not only deal with the challenges of today, but to
prepare for the growth of tomorrow.

Respectfully,

Kelly Tomblin

El Paso Electric, CEO