A recent study that warned of an economic collapse in El Paso if voters pass Proposition K was “flawed” and projected “irrational” job loss numbers, according to a report published this week by a group of researchers at an Austin-based energy consulting firm.
The El Paso Chamber hired Idaho-based Points Consulting earlier this year to produce a report estimating the economic impacts if El Paso voters adopt Proposition K – also called the Climate Charter – during the May 6 city election. Proposition K would install numerous wide-ranging policies designed to address climate change into El Paso’s city charter.
The Chamber’s study had an eye-popping conclusion: If passed, the Climate Charter would drastically shrink the supply of electricity in El Paso and force businesses to close en masse. By 2030, Proposition K would wipe out roughly half of the city’s jobs, according to the El Paso Chamber-commissioned study which the chamber stands by.
But the findings presented by Points Consulting are severely flawed, according to a new report from the consultancy IdeaSmiths.
The El Paso Chamber study’s “predictions of economic collapse stem from the assumption that El Paso would lose over 70% of their energy by 2045, which is egregious and displays a fundamental misunderstanding of how energy systems work, particularly in Texas,” according to the report by IdeaSmiths.
An El Paso Chamber political action committee and a separate Houston-based political action committee called Consumer Energy Alliance have mailed campaign flyers and sent text messages to El Paso voters ahead of the May election, which repeat the claim that the Climate Charter would kill 170,000 jobs by 2030, or about half of El Paso’s total workforce.
Andrea Hutchins, the president and CEO of the El Paso Chamber, dismissed the IdeaSmiths report, saying “it does not offer an affirmative argument in favor of the Climate Charter” and that it doesn’t factor in the impacts of other elements of Proposition K, such as one provision that would have the city examine bringing investor-owned El Paso Electric under city-ownership.
“Local proponents seem incapable of offering a clear argument for the charter except to criticize the data commissioned by the Chamber,” she said. “The repeated assertion that the EPC study is biased, rather than defending solid policy, is a clear indicator to us that K cannot be defended on its merits.”
Joshua Rhodes, one of the IdeaSmith report’s authors and a research scientist at the University of Texas at Austin, is a prominent energy researcher in Texas who helped investigate the cause of the deadly 2021 winter storm that blanketed much of the state and caused days-long blackouts. Though the report was done independently, each of the three authors of the IdeaSmith report are either members or alumni of the Webber Energy Group, an energy research outfit within the Cockrell School of Engineering at the University of Texas in Austin.
In an interview Thursday, Rhodes said IdeaSmiths initially set out to do a review of studies that show how employment could be affected as the United States as a whole moves closer to running on carbon-free electricity. The group did not take a position supporting or opposing Proposition K.
He said most analyses show the transition to zero-carbon energy would likely be an overall job creator, with the electric power industry – including jobs in transmission, distribution and hydrogen production – growing faster than the fossil fuel industry shrinks.
But when the IdeaSmiths group saw the Points Consulting study project an economic collapse in El Paso from transitioning away from fossil fuel-based energy, the group had to comment, Rhodes said.
“We just found out that they were making some assumptions that, frankly, were just unrealistic,” he said.
The El Paso Chamber’s study estimated that, because the city would be forced to shift toward renewable power like solar and wind under the Climate Charter, the city’s power supply would decline by 72% by 2045 if voters pass the measure. That’s because Points Consulting projected an abolition of fossil fuels in El Paso, which, according to the study, would require every household and business to purchase all-electric appliances, and force El Paso Electric’s power plants to shut down. The lack of electricity would force businesses to close as a result, according to Points Consulting.
But Proposition K would not abolish fossil fuels within El Paso or force residents to buy new appliances. Rhodes said the Chamber’s consultant used an accepted economic impact modeling software for its study. But a model, he said, “is only as good as the data you put in it.”
“So if you make such stark assumptions – and their main assumption being that El Paso loses 70-plus percent of their energy – then yeah, that’s going to lead to basically a societal collapse,” Rhodes said. “That’s like putting El Paso back in the 1800s.
Points Consulting said the city would lose much of its energy supply if voters pass Proposition K. That’s because the proposition does not define electricity produced at nuclear power plants such as Palo Verde in Arizona — which provides about 45 percent of El Paso’s electricity – as renewable energy, the new study says. Prop K would require the city to rely almost entirely on renewable sources such as wind and solar farms, which are intermittent; the sun isn’t always shining and the wind isn’t always blowing.
But that ignores the fact that El Paso Electric can import power from other utilities in Texas and across the western United States, the study says. And Points Consulting vastly underestimated the amount of solar generation that developers could install in El Paso by 2045 to help replace the power that El Paso Electric’s natural gas-fired turbines generate, according to IdeaSmiths.
EPE could also one day replace the natural gas that fuels its power plants with zero-carbon hydrogen instead.
“The assumption that El Paso loses most of its energy supply — and does not replace it — is fundamentally flawed from a technological, economic, and policy standpoint,” according to IdeaSmiths’ report.
The IdeaSmiths report noted that El Paso Electric has previously committed to generate entirely carbon-free power by 2045. The utility’s 2021 resource plan illustrated a path to generate 100% carbon-free energy in the El Paso area without causing a shortage of electricity or massive job losses.
“El Paso Electric’s own modeling … indicates that it is very possible to power a growing El Paso economy while vastly reducing emissions,” the IdeaSmiths report read. “The assumption that energy sources cannot be replaced, and the downstream effect being that much of the city’s businesses shut down or move, is irrational.”
El Paso Electric is opposed to Proposition K, in part because of the provision that calls to study converting EPE into a city-owned entity.
As of March 27, EPE had donated $50,000 to the El Paso Chamber’s political action committee – called El Pasoans for Prosperity – which is campaigning against the Climate Charter and has sent mailers that reference the Points Consulting study.
The Houston-based Consumer Energy Alliance, which is also campaigning against Proposition K, reported that it had received zero political contributions as of March 27. By late next week, the CEA political action committee will disclose its more recent donations.
The Consumer Energy Alliance’s members include some of the nation’s largest utilities, oil gas companies and advocacy groups, such as ExxonMobil, Centerpoint Energy and the Texas Oil and Gas Association. The CEA’s campaign materials regularly cite the Points Consulting study.
Matthew Gonzales, CEA’s Southwest executive director, said the IdeaSmith report shows that El Paso Electric has “a strong plan to provide carbon-free energy reliably and affordably to El Paso’s families and businesses.”
“Prop K proposes the same at a minimum $9 billion cost to taxpayers to buy the utility, something the report fails to mention,” Gonzales said, referring to the cost that Points Consulting estimated the city would likely have to pay to acquire El Paso Electric, although Proposition K does not mandate the city to acquire the utility. “Why pay billions more to get to the same place under Prop K, only with higher ongoing taxes and energy costs?”
Correction: An earlier version incorrectly attributed the Consumer Energy Alliance’s statement to a spokesperson rather than Matthew Gonzales, the organization’s Southwest executive director.
Disclosure: El Paso Electric Co. is financial supporter of El Paso Matters. Financial supporters play no role in El Paso Matters’ journalism.