NMPRC / 25-00082-UT
El Paso Electric rate review
Compare the financing in EPE’s amended request with Staff’s proposal, then see what each would mean for a New Mexico residential customer.
Capital structure
Financing assumptions
EPE applies a return to $727,012,562 of New Mexico rate base. The equity share determines how much earns the rate allowed for shareholders. The balance earns EPE’s long-term borrowing cost.
Why EPE and Staff chose different financing
EPE. Richard Gonzalez updates the September 2025 balances for subsequent borrowing, an equity contribution and dividends. He argues that 55.5235% equity helps EPE finance construction and maintain its investment-grade credit. Jennifer Nelson recommends a 10.70% ROE based on estimates of what investors require and the risks of EPE’s size and generation portfolio.
Staff. Matthew Bandyk recommends retaining 51% equity and a 9.00% ROE. He challenges the use of short-term earnings forecasts as perpetual growth rates. He estimates that earnings would cover interest roughly 3.2 times under his proposal and 4.15 times under EPE’s. His cited Baa2 comparison is 2.50 to 2.99 times. Those ratios apply to his exhibits; a custom scenario would need its own earnings, interest and cash-flow forecast.
Annual return and revenue calculation
Staff’s filed revenue adjustments
Staff witness Jonah Mauldin reports a $2,735,324 reduction for the capital structure change and another $8,096,193 for the lower ROE. These are filed results. The slider estimates the financing effect with EPE’s fixed-charge factors.
| Filed comparison | Annual base rate increase |
|---|---|
| EPE amended request | $70,723,779 |
| After Staff’s two financing adjustments only | $59,892,262 |
| After all Staff adjustments | $56,151,852 |
These are base rate increases before the change in miscellaneous service revenue. Mauldin’s full case also includes adjustments to expenses and regulatory assets. Source: Mauldin direct testimony, Table JBM-1, printed p. 8, October 23, 2026.
Rate 01 · Standard residential service
Monthly residential bill impact
Compare EPE’s two proposed phases at the same monthly electricity use. Summer rates change above 600 kWh. A financing alternative changes the final-phase estimate under the allocation described below.
Enter a whole number from 0 to 100,000 kWh.
One full billing month. Includes the base charge, energy, and the fuel, renewable and metering amounts in EPE’s notice. Other riders, fees and taxes are excluded. Summer is June through September.
| Usage | Existing | EPE phase 1 | EPE phase 2 | Scenario phase 2 | Scenario vs. EPE phase 2 |
|---|
Monthly charges and residential allocation
Filing references
Sources and scenario record
Uses EPE’s August 6 amended filing, its September second-notice response, and Staff financing testimony. Both phases are proposals. The calculations compare annual allowances and modeled bills. Actual recovery depends on sales, expenses and the rates ultimately approved.