December 16, 2019 • EPE Related News
City divided over EP Electric sale
City divided over EP Electric sale
The city is running tight on time as deadlines loom to come to a final decision on the $4.3 billion sale of El Paso Electric to a private equity firm.
The city has until Feb. 9, 2020 to act on the proposed sale of El Paso Electric to JP Morgan’s Infrastructure Investments Fund. And as city attorneys negotiate terms of the deal, City Council is considering whether to call for a feasibility study and financial analysis of the sale.
There are still several items the city is trying to negotiate with the IIF, officials said, including workforce promises for El Paso Electric employees.
City Manager Tommy Gonzalez said officials are working on commitments on El Paso Electric’s headquarters, employees, reliability, customer service and solar energy.
“The most recent concerns haven’t been different from the ones we heard early on,” Gonzalez said. “We heard the community; we’ve negotiated on those terms that have been of importance.”
The sale has drawn criticism from some El Pasoans who say non-local control of the region’s only electric utility will lead to increased rates for customers, fewer options for renewable energy and no long-term guarantees for the company’s workforce.
Dozens of protesters were at last week’s meeting where City Council discussed what it would take for the city to “municipalize” the utility, essentially take control of it. There were 44 individuals signed up to speak during public comment, including several El Paso Electric employees who argued in favor of the sale.
Jon Barela, CEO of the Borderplex Alliance, said he’s against municipalization of El Paso Electric because the utility has been a good partner for nonprofits across the region and for economic development initiatives.
“We very much appreciate El Paso Electric’s continuing partnership with our organization,” Barela said at last week’s meeting. “El Paso Electric has been a reliable partner for us in meeting with these companies and explaining their reliability.”
City reps. Alexsandra Annello, Cassandra Hernandez and Peter Svarzbein expressed interest in moving forward with a feasibility study.
“I think having an independent feasibility study that lets us really understand the cost of the sale and cost of potential municipalization, it is something we owe not just this generation but the generations moving forward,” Svarzbein said.
After debating the issue, City Council took no action on whether to move forward with a feasibility study. The next day, Gonzalez and City Attorney Karla Nieman held a news conference to clarify the kind of timeline they are working under.
El Paso Electric interim CEO Adrian Rodriguez said the company is against municipalization.
“Municipalizing El Paso Electric would negatively impact the nature of our employment and our benefits to the community,” Rodriguez said in an emailed statement. “The financial health and strength of our company is also the economic strength of our region.”
There have been 256 filings with the Public Utility Commission of Texas on the El Paso Electric sale.
The city is one of several intervenors in the El Paso Electric sale. Other intervenors include some of the region’s larger industrial businesses like Marathon Oil, Freeport McMoRan and Vinton Steel.
The Rate 41 Group, which is made up of the county’s nine school districts, the Housing Authority of the City of El Paso, El Paso County, the community college district and Region 19 Education Service Center, has also intervened in the El Paso Electric case.
El Paso County Commissioner David Stout said the group is skeptical of the sale because the group was not engaged in proceedings.
“The lack of willingness to proactively negotiate with the Rate 41 Group by the buyer we feel foreshadows the opaque interactions we wish to banish from our community,” Stout said at last week’s City Council meeting.
The group, which receives a special service rate offered for public entities, has submitted filings with the PUC detailing their reasoning for opposing the sale. The Rate 41 group is asking for additional regulatory commitments and argues there are flaws with the rate credits offered by the IIF in the sale.
“It pales in comparison to the substantial benefits received by the other 12 stakeholders directly involved in the negotiations,” the group wrote in a Nov. 19 filing with the PUC.
The IBEW Local 960, the union that represents about 420 El Paso Electric employees, is also an intervenor in the sale.
Felipe Salazar, business manager of the IBEW union, said he wants more commitments for the El Paso Electric workforce, including extensions to the IIF’s offering to keep the workforce in place.
“My heart is with El Paso, Las Cruces, Hatch, Van Horn and all the areas we serve,” Salazar said. “I grew up in El Paso and my children are here. I’m trying to do the best for the employees I represent and for all the communities that El Paso Electric serves, including New Mexico.”
The city has asked the public utility commission for a 30-day postponement of the Dec. 17 deadline to file the settlement agreement and to hold hearings that were supposed to take place on Jan. 7 and 8.
The PUC on Friday denied the city its request to postpone the Dec. 17 settlement agreement filing date and the Jan. 7th and 8th hearing on the merits related to the El Paso Electric sale.
The PUC’s decision was made Friday morning at the commission’s meeting.
PUC Commissioner Arthur D’Andrea said the city could have another opportunity to request an extension after Dec. 17.
“I welcome the city’s participation but I hope they focus their minds if they really are interested in municipalization,” D’Andrea said at Friday’s meeting.
Share this Article
