El Paso Electric’s pending $4.3 billion sale is expected to be completed sometime in the next three months as the sale’s last regulatory hurdle has mostly been cleared.

The Federal Energy Regulatory Commission, or FERC, has approved the sale to a JPMorgan Chase-tied investment fund with one condition that isn’t expected to pose a problem for the sale to be completed. 

Officials with El Paso Electric and the utility's buyer, Infrastructure Investments Fund, or IIF, issued a statement noting that FERC's approval "is the last regulatory approval needed to close the proposed acquisition in the first half of 2020." 

Questions and concerns about JP Morgan Chase’s ties to IIF were dismissed in the FERC order as not relevant to the federal agency’s evaluation and approval of the proposed sale.

FERC also rejected requests by Public Citizen, Democratic presidential candidate Bernie Sanders, and other members of Congress, including El Paso Congresswoman Veronica Escobar, to hold an evidentiary hearing in the El Paso Electric case to clear up questions about JPMorgan’s ties to IIF. Texas state Sen. Jose Rodriquez, D-El Paso, also has been part of the effort to get federal regulators to hold hearings.

“By ignoring the elephant in the room — the role JPMorgan plays in running IIF and, now, El Paso Electric — FERC has abdicated its responsibility under the Federal Power Act to protect El Paso Electric’s customers from affiliate abuses by IIF,” Tyson Slocum, energy program director for Public Citizen, a national consumer watchdog group, said in a statement. 

The FERC order, issued March 30, stated that "our analysis of the proposed transaction would not change even if the commission deemed JPMorgan an affiliate of IIF.

The FERC order also stated that Public Citizen and other parties in the case have not shown how IIF's affiliation with JPMorgan "would cause the proposed transaction to have an an adverse effect on competition, rates, regulation, or result in cross-subsidization." 

Slocum deemed that "categorically false" because, he said, in multiple filings with FERC, he "warned that IIF was masking JPMorgan's control over their operations" and that control "presents significant rate risk for the utility's customers."

J.P. Morgan Investment Management officials help manage IIF's portfolio of companies, which would include El Paso Electric after the sale is completed. However, JPMorgan officials tied to IIF have repeatedly denied that the global bank a legal affiliate of IIF.

Slocum has said if FERC had deemed JPMorgan a legal affiliate of IIF, that would have set off additional regulatory requirements. And those additional requirements possibly would have limited the global bank's role in wholesale power markets, he has said.

The FERC order required El Paso Electric and IIF to file a plan within 45 days to change power contracts at the Mesquite power plant in Arizona, in which an IIF company has some ownership. That's to avoid some power competition problems.

"We are working diligently to file proposed mitigation that is consistent with the order. We look forward to the expected closing in the first half of 2020, subject to the satisfaction or waiver of other customary closing conditions," IIF and EPE officials said in a statement.

Slocum said IIF will have no problem meeting FERC's one condition.

Meantime, Slocum said he plans to file a request with FERC for a rehearing in the case.  However, he conceded, that won't stop the sale because FERC has months, even years to answer the request. 

"So, the point is that me losing in this week’s order is a very big deal," Slocum said.

IIF in June 2019agreed to buy the now-publicly traded El Paso Electric for $4.3 billion, including assuming the company's $1.5 billion debt..