By Sam Silerio
JP Morgan Chase’s private equity fund, the Infrastructure Investment Fund, bought El Paso Electric in 2020 for $4.3 billion. The IIF agreed not to sell EPE for 10 years. Those 10 years are up in 2030. What’s the plan after that? Who will lead El Paso through the imminent energy transition?
Humanity is undergoing an energy transition this century, and our nation is on a mission to move from a fossil fuel burning economy to a fully carbon-neutral one. The soft deadline for this energy transition is 2045 for many governments, corporations, and even our own EPE, which got on board with the goal earlier this year.
EPE operates in both Texas and New Mexico, but while the utility has pledged to be 100% carbon-free by 2045, all of their renewable investments have been taking place in New Mexico. In Texas, EPE has expressed its intent to build four more gas-fired power plants before 2040.
Texas and New Mexico differ greatly in their own carbon guidance from their respective legislatures and utility commissions. New Mexico’s Energy Transition Act of 2019 prohibits any utility in the state from providing energy derived from fossil fuels after 2045. This obligates EPE to actually meet its carbon-free benchmarks on the New Mexico side, whereas on the Texas side it’sl more like a New Year’s resolution.
EPE says that the four gas power plants it seeks to build in Texas are to supply electricity during peak hours at dusk when the sun isn’t shining on solar panels anymore but households use the most electricity. They say it’s cheaper to build gas power plants than it is to install battery banks to store and deploy solar energy at these same peak times.
To make matters worse, EPE also is discouraging individual property owners in Texas from installing their own batteries with higher fees for customers that install solar and batteries than any other utility in Texas or New Mexico.
As we approach the 2045 deadline, the actual value of these gas power plants that EPE plans to purchase on our behalf (and charge us for them on our bills) would plummet with the passing of foreseeable future laws such as a federal carbon tax and other policies that would punish fossil fuel activity.
Supposedly, EPE’s notorious Newman 6 gas turbine (EPE’s $200 million splurge, in Texas of course, that hasn’t even begun burning its fossil fuel yet) can be converted to run on hydrogen. But EPE has never disclosed what the additional cost to us will be to convert this turbine to a clean fuel.
If the IIF plans on leading our city through the energy transition, maybe the short-sighted, cheapest route is not the best way forward. This hyperfocus on short-term profits does make sense, however, if the IIF plans to sell EPE right before the hard work actually begins.
The IIF has already benefited from hundreds of millions of dollars in profits since acquiring EPE in 2020. They’re poised to maximize their return on investment from our electric utility, especially if they can avoid the most expensive parts of the energy transition (actually transitioning).
Can we, as a city, count on the IIF’s strategy, or are we in the middle of a pump and dump? If their plan is to sell EPE before the energy transition and leave our beloved Sun City stranded with a bunch of worthless fossil fuel assets, well that’s just bad form.
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.
Disclosure: El Paso Electric Co. has been a financial supporter of El Paso Matters. Financial supporters play no role in El Paso Matters’ journalism. The news organization’s policy on editorial independence can be found here.
