El Paso Electric Announces Results of Competitive Bid for New Generation

26 Dec 2018

El Paso Electric Company (the “Company” or “EPE”) (NYSE:EE) announced the selection of resource additions needed by the 2022-2023 summer peak season. The generation mix includes utility scale solar, battery storage, and natural gas. After careful evaluation of the competitive 2017 All Source Request for Proposals for Electric Power Supply and Load Management Resources (“RFP” or “All Source RFP”), the winning bids include the expected energy purchase of 200 megawatts (“MW”) of utility scale solar resources, 100 MW of battery storage, and the construction of a 226 MW natural gas combustion turbine generating unit at the Company’s Newman Power Station with an anticipated operational date of 2023 at an expected cost of $143 million. In addition, the Company expects to pursue the purchase of 50 to 150 MW of wind and solar generated power to provide for fuel diversity and energy cost savings. The selected proposals are subject to the execution of contracts following negotiations with the winning bidders, obtaining the applicable environmental and construction related permits, and obtaining necessary approvals by the Public Utility Commission of Texas and the New Mexico Public Regulation Commission.

The mix of new capacity underscores EPE’s strategic goal to remain at the forefront in advancing renewable energy and expanding its overall energy portfolio with cost-effective, diverse and competitive-based energy resources for its customers.

“These technologies provide a mix of carbon-free renewable and clean burning natural gas generation that will enable us to meet the growing need for power in our region in a safe, clean, reliable, and cost-effective manner,” said Mary Kipp, El Paso Electric President and Chief Executive Officer. “This balanced combination of resources will work with our existing energy portfolio as we move to retire aging, less efficient plants while continuing to meet our customers’ changing energy needs.”

EPE plans to provide an updated five-year capital expenditure forecast in response to the RFP during its fourth quarter 2018 earnings call. EPE also anticipates providing preliminary projections during the call regarding the potential to enhance grid technology with the addition of Advanced Metering Infrastructure (“AMI”). Legislative proposals regarding the clarification of the regulatory process to implement AMI are anticipated during the next Texas legislative session that convenes in January 2019.

On June 30, 2017, EPE issued the All Source RFP to select additional long-term, cost effective and reliable electric resources to commence operation by the 2022–2023 summer peak season. Through initial resource planning studies, EPE determined that it required additional generating capacity of approximately 50 MW by 2022 and 320 MW by 2023 for a total of 370 MW.

El Paso Electric | http://www.epelectric.com