March 12, 2020 • EPE Related News
Public Regulation Commission approves acquisition of El Paso Electric
Public Regulation Commission approves acquisition of El Paso Electric
LAS CRUCES - The New Mexico Public Regulation Commission unanimously approved the sale of publicly traded utility company El Paso Electric to a private investment fund at a public meeting in Las Cruces Wednesday.
The meeting, held in the Board of County Commissioners chambers at the Doña Ana County Government Center, opened with an hour's worth of public comments, during which numerous speakers criticized the acquisition while a few linked the utility's fortunes to economic development in the region.
The Infrastructure Investments Fund, or IIF, agreed last June to buy the utility. On Wednesday, PRC staff told commissioners the purchase premium would exceed the book value of the utility by $1.63 billion.
The sales terms were approved previously by the Public Utility Commission of Texas and the city of El Paso, where the utility is headquartered.
Terms of the sale include a rate credit to El Paso Electric customers in New Mexico of $8.7 million distributed in 36 monthly installments.
The IIF, held by Sun Jupiter Holdings, has been linked with officials of J.P. Morgan Chase. After denying the fund was an affiliate of the bank, by December it agreed to treat the fund in effect as an affiliate for the purposes of regulations.
Under terms approved by commissioners Wednesday, Sun Jupiter and El Paso Electric will keep an "arm's length relationship" with J.P. Morgan Chase, and other terms of the agreement maintain that EPE will remain autonomous in its management, despite J.P. Morgan making recommendations for appointments to the board that would govern the utility after the sale closes.
District 5 Commissioner Stephen Fischmann of Las Cruces remarked that "J.P. Morgan’s fingerprints are all over" the deal but that he would vote to approve the acquisition, after being assured that the PRC would retain its full authority to regulate the utility.
"Whatever our thinking about J.P. Morgan as a corporate entity and other activities that they’re involved in, as I’m looking at this issue it’s not going to be relevant to the operation of El Paso Electric," Fischmann said.
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