Opinion: Something’s got to give at El Paso Electric
By Sam Silerio
The only electric utility in our city, El Paso Electric (EPE), is now owned by a multibillion-dollar investment fund managed by JPMorgan Chase.
By definition, EPE is a monopoly. It also is a for-profit company, it’s not adopting renewable energy at the same pace as its peers, it’s discouraging its captive customers from installing rooftop solar systems, and it may need our help to get with the times.
President Biden has set a goal of making the U.S. carbon neutral by 2050. Carbon neutrality means achieving net-zero carbon dioxide emissions.
Some states are proactively setting similar carbon emissions goals. For example, New Mexico passed a law last year requiring all electric utilities to provide 100% of its electricity from carbon-free sources by 2045.
Many large corporations have also pledged dates by which they will reach carbon neutrality – Amazon by 2040, General Motors by 2040, Microsoft by 2030. Following suit, most electric utilities around the country have declared their own carbon neutrality.
EPE, however, has not declared any intent to reach carbon neutrality. In its most recent Corporate Sustainability Report (2019), EPE opaquely commits to reducing its carbon footprint to 40% below its 2015 levels by 2035. Sound a little confusing? For reference, in 2015, EPE still relied significantly on coal energy.
Percentage of energy portfolio from renewables
Electric utilities necessarily draw their power from a mix of sources. Most utilities in the U.S. depend on mixes including natural gas, nuclear, solar, wind, geothermal, and coal.
In order to reach carbon neutrality however, utilities must move away from fossil fuels like natural gas and coal, and toward carbon-free sources like solar and wind. While EPE is quick to boast that it is 100% coal-free as of 2016, its use of renewable energy is still among the lowest in our region.
In 2021, the Sun City’s sole electric utility gets only 5% of its total energy from renewable sources. This is drastically lower than most comparable electric utilities in Texas and New Mexico.
EPE is still doubling down on natural gas. Meanwhile, CPS Energy in San Antonio is the largest producer of solar power in Texas. Why should this be? It’s certainly not for a lack of sunshine or space out here.
Natural gas is EPE’s largest source of energy. Despite its nice name, natural gas is a finite fossil fuel. It was formed by decomposed plants and animals exposed to millions of years of subterranean
heat and pressure. Burning natural gas to generate power emits carbon dioxide, pollutes the air we breathe, and fracking for it destabilizes the earth around those extraction sites.
Fracking has even been linked to earthquakes and should not be ruled out as the cause for the one felt in El Paso last year in March. The Permian Basin is one of the most productive oil fields in the world, is host to massive fracking operations, and sits less than 200 miles away from El Paso.
JPMorgan Chase is the global leader among banks financing the development of fossil fuels like natural gas, contributing $51.3 billion in 2020 alone. EPE’s heavy reliance on natural gas provides a convenient marketplace for those same fossil fuels that JP Morgan is paying to develop.
The most direct way of reaching carbon neutrality would be for EPE to eliminate natural gas from its portfolio. However, with JP Morgan managing EPE’s new ownership (and controlling at least two seats on its board of directors), it appears less likely that EPE will be doing that anytime soon.
Despite lacking the consent of its customer-base, EPE is pushing forward with its $163 million natural gas generator at its Newman power plant just outside El Paso.
The generator has an expected lifespan of 40 years, and it wouldn’t even become operational until 2023 – meaning EPE would be burning fossil fuels in our Sun City until 2063 (well beyond New Mexico’s carbon neutrality goal of 2045 and the nation’s goal of 2050).
New Mexico’s 2045 goal is relevant here because EPE also powers Las Cruces. EPE’s new generator is opposed by city leadership in both El Paso and Las Cruces but has been coasting through the approval process with Texas regulators.
Most recently, EPE announced a plan in conjunction with Mitsubishi Power Americas to make this new generator adaptable to use hydrogen instead of natural gas. However, EPE has not given a specific timeframe (or an estimate of the additional cost) for fully upgrading its natural gas generator to 100% hydrogen. The best EPE has given us is a vague assurance that its new fossil fuel generator could be upgraded to clean energy at some nebulous point in its 40-year lifespan.
EPE no longer files quarterly earnings reports with the SEC since its $4.3 billion acquisition last summer. However, in 2019, EPE’s annual profit increased over the previous year by 46% to $123 million.
While record profit is excellent news for EPE’s ownership and shareholders, its interests must be balanced with ours – the actual people living and breathing within EPE’s service area.
Discouraging rooftop solar
El Paso is blessed with over 300 days of bright sunshine every year. This plentiful resource is rich, renewable energy available to any homeowner or business who installs a rooftop solar system. By
producing our own electricity at home, we can drastically cut down on the long-term energy costs that we are on track to pay to EPE.
When a homeowner with solar panels overproduces electricity in any given month, EPE will buy it back from them for less than 3 cents per kilowatt-hour. EPE then turns around and sells that same electricity to another homeowner for its regular rate in excess of 10 cents per kilowatt- hour.
This profitable arrangement was not enough for EPE however, because in 2017, it began charging customers with rooftop solar a minimum bill of $30 every month – even in the months where those homeowners produced a surplus of electricity in excess of their consumption.
In a tragic irony for the Sun City, EPE’s $30 fee is one of the highest minimum bills for solar customers in the nation, and it is a huge deterrent for El Pasoans considering rooftop solar power.
While EPE can provide you its justifications for the $30 minimum bill, just look to its peers and see through the excuses, to the thinly veiled profit motive. Other Texas cities’ utilities pay homeowners $2,500 to install solar panels, but EPE’s focus seems to be on protecting those record profits.
Earth Day 2021
Thursday, April 22 is Earth Day. April is Earth Month. EPE has certainly emphasized this on its social media too – encouraging us to buy smart thermostats from them in exchange for a rebate. Unfortunately, its corporate vision appears to lack any serious commitment to our planet.
Let’s do our part as a community and hold our only electric utility to a higher standard. As a helpful starting point, these three recommendations should orient El Paso Electric to our people’s vision for the future:
- Pledge to be carbon neutral by no later than 2045.
- Compete with CPS Energy to be the largest solar power producer in Texas.
- Drop the $30 minimum bill for rooftop solar customers.
Sam Silerio is the owner and operator of the solar company Sunshine City in El Paso. He is an Army veteran, UTEP alum, and Texas-licensed attorney.
Cover illustration: Rendering of El Paso Electric Co.’s proposed plans for the Newman 6 generating station near El Paso. (Courtesy El Paso Electric Co.)
Disclosure: El Paso Electric Co. is a financial supporter of El Paso Matters.