Buried within the Climate Charter measure that is on the May 6 ballot is a provision that would ban city-owned El Paso Water from selling water to the fossil fuel industry outside of the city limits – a rule that apparently could shrink the city’s supply of electricity.
The provision banning water to fossil fuel operators is intended to conserve the arid El Paso region’s water supply, authors of the Climate Charter say. But the provision – which is one of about a dozen separate policies contained within the 2,500-word Climate Charter – would prevent El Paso Electric from purchasing water from El Paso’s water utility for at least two of its four gas-fired power plants, which require thousands of gallons of water every day to operate.
El Paso Electric uses water to cool its power plants, and also to reduce NOx, nitric oxide, pollution, which reacts in the atmosphere to form smog.
El Paso Electric’s Rio Grande plant in Sunland Park and the Montana Power Station on the far Eastside sit just outside El Paso city limits, and the two plants made up about 13 percent of El Paso Electric’s power generation in 2021, according to figures from EPE and the Public Utility Commission of Texas. EPE’s biggest sources of electricity – the gas-fired Newman Power Station in the far Northeast and the Palo Verde nuclear plant in Arizona – would be unaffected by the ban on water sales.
El Paso Electric purchased nearly 171 million gallons of water from EPWU in 2021 for the Montana and Rio Grande plants at a price of roughly $700,000, according to financial data from EPWU and El Paso Electric.
“We are very concerned with the language in the charter that would prevent our company from purchasing the water needed to run our electric generating facilities from El Paso Water. Approximately 17 percent of the water we purchase from El Paso Water goes to our Montana and Rio Grande power plants which are outside the city of El Paso,” El Paso Electric said in a statement. “Given the volume of water needed and the fact that we want to use reclaimed water, there are a limited number of other cost-effective alternatives for water sources, if any.”
The authors of the Climate Charter said the measure would prevent a potential water shortage in the El Paso region. And it would codify a ban on selling water to fossil fuel operators that may one day seek to purchase water from El Paso as sources closer to the Permian Basin oil field dry up or become too costly.
“It’s a principle. We have water scarcity, extreme drought and water uncertainty. The principle is, what do we do with the water? Do we use it for drinkable sources, for health? Or do we use it for fossil fuel profits?” said Miguel Escoto, an organizer with Sunrise El Paso, which helped write the Climate Charter.
“The Permian is the largest producer of oil and gas in the country. It is pumping out 5.5 million barrels of oil per day. And that’s going to double,” he said. Oil and gas companies in the Permian Basin “will need to look for other sources (of water), and we’re creating measures to prevent that.”
El Paso Water does not currently sell water to fossil fuel producers outside the city. The water utility said its main customers outside the city limits include Fort Bliss, El Paso County and communities outside the city such as Canutillo and Vinton.
An EPWU spokeswoman said the water utility in its most recent fiscal year billed $971,000 to customers outside the city that are considered “fossil fuel businesses,” which she said includes gas stations and power plants. EPWU said it could not break down sales to individual accounts. For reference, El Paso Water last fiscal year generated revenue of $136 million from water sales and nearly $322 million in total operating revenue.
For its part, El Paso Electric paid EPWU $4.15 million last fiscal year to purchase water, according to El Paso Water’s annual financial report. EPE said 41 percent of the water it used at its power plants in 2021 came from EPWU; the other 1.5 billion gallons it used were either reclaimed water or groundwater that El Paso Electric pumped itself.
El Paso Electric and other organizations campaigning against the Climate Charter, such as the El Paso Chamber, have said several of its provisions, including the ban on water sales, are illegal and could spur lawsuits.
“We think it’s unfortunate that the Climate Charter proponents did not answer these questions beforehand and are not considering the significant financial implications our customers would be forced to bear,” El Paso Electric said, “as well as the potential negative effects it would have on the reliability of the energy grid.”
Kelly Tomblin, the utility’s CEO, said EPE would be unable to source water another way – including by importing it or pumping additional groundwater – for the two power plants if the Climate Charter passes and EPWU halts water sales.
El Paso Electric is plugged into the Western Energy Imbalance Market that spans much of the western United States, where EPE trades electricity – either by buying or selling – with other utilities. Last year, EPE made $70 million from selling wholesale power, according to Tomblin. In 2021, about 10 percent of the electricity that EPE supplied was purchased from other utilities.
But relying on market purchases for more of its electricity could leave EPE exposed to volatile power prices, and wholesale electricity is often generated at coal- and gas-fired power plants elsewhere, Tomblin said.
“We won’t have sufficient power” if the Climate Charter passes, she said Tuesday. “We would have to buy power from a market that costs more, and that is not as clean.”
One of the assumptions underlying the policy to ban water sales to the EPE power plants is that the utility can generate all of El Paso’s electricity using wind turbines, solar farms and battery arrays, which don’t send pollutants into the air.
“They can power 100% of El Paso with renewable energy. We’re the 10th-sunniest city,” Escoto said. “You don’t need fracked gas.”
El Paso Electric is adding several large solar farms totaling over 700 megawatts of capacity to its generation portfolio by 2025; one megawatt is roughly enough to power 400 homes, according to EPE. Three of the solar arrays the utility is adding will have big lithium-ion batteries piled nearby, which aim to address the fact that the sun isn’t always shining.
At midday, when the solar panels typically are producing the most electricity, El Paso Electric could use that juice to charge up the batteries and store the power for a few hours. Then, in the evening, when power demand peaks as El Pasoans get home and crank up their air conditioning or use appliances, El Paso Electric could discharge the electricity stored in the batteries onto the grid instead of having to fire up a natural gas power plant.
El Paso Electric on Tuesday unveiled the region’s newest solar farm, a 120-megawatt installation near Chaparral owned by NextEra Energy, which will sell the power it produces to EPE. The site also has 50 megawatts of battery storage technology, which has only become viable at a large scale within the last three years, according to J.D. Rulien, a director with NextEra.
But regulators haven’t always embraced EPE’s plans to utilize batteries. Since 2019, the utility has sought authorization from the New Mexico Public Regulation Commission to build a 50-megawatt battery storage facility in Canutillo, but the New Mexico regulators have denied EPE’s permit, saying the battery is too costly and unneeded.
Meanwhile, El Paso Electric argues it must maintain its fleet of four natural gas plants – which in 2021 collectively emitted 6,600 tons of NOx and 2.7 million tons of carbon dioxide – that it can turn on within a few minutes to ensure there’s always enough electricity citywide.
To Escoto, however, the Climate Charter is trying to ensure a clean environment for the future, and preventing the sale of water to pollution-emitting natural gas power plants is one step to get there.
“If you vote Yes on Proposition K, you’re telling young people ‘I’m listening to you. I also care about the air that I breathe. I also care about the water that I drink,’” Escoto said. “If you vote no, you’re saying, ‘I don’t really care. … I can look my niece, I can look my children in the eye and say, ‘Ni modo’. That’s what you’re saying if you vote no.”
Disclosure: El Paso Electric Co. is financial supporter of El Paso Matters. Financial supporters play no role in El Paso Matters’ journalism.