El Paso Electric customers will see their bills rise after state regulators approved an increase Friday, though at a lower amount than the utility had requested. City officials estimate the average monthly bill could increase $13.71 – less than the nearly $23 the utility had first proposed.
El Paso Electric’s rate increase proposal in January 2025, its first in five years, would have raised monthly residential bills by 19%, which the utility said was necessary to cover costs of infrastructure improvements.
The Public Utility Commission of Texas approved the rates with “modifications,” and the written order reflecting the commission’s decision is being prepared and not yet signed and available, PUC spokesperson Ellie Breed said in an emailed response to El Paso Matters.
“While we respect the commission’s decision, we firmly stand by our original filing that sought to recover approximately $1.55 billion in infrastructure investments that we have spent to bolster reliability and growth in our Texas service area,” Kelly Tomblin, president and CEO of El Paso Electric, said in a statement Friday.
Rate cases are used to determine how much utilities can recover from their capital investments in prior years, with an allowance for profit. The Public Utility Commission historically reduces requested rates in its final decisions.
Tomblin said the utility also requested a 10.7% return on equity, or profit, but instead received an increase from 9.35% to 9.4% after four years.
She said the decision could impact the utility’s ability to further invest in infrastructure while keeping costs fair for customers.
“While we understand and care about customer affordability, we also are concerned about long-term economic development. We may find it challenging to support our Texas region’s growth when the (return on equity) remains lower than many other utilities in the state,” she said.
The exact impact on customers remains unclear due to some of the modifications from the PUC, city officials said in a news release Friday.
“We did not get everything we advocated for, but this decision secured key savings for our residents and cut back major parts of El Paso Electric’s request,” City Attorney Karla Nieman said in the release, referring to the city’s intervention in the case.
The PUC this month rejected a separate request by El Paso Electric that could have increased costs for ratepayers through a distribution cost recovery factor adjustment that would have generated an additional $20.8 million annually from Texas customers. The adjustment is a charge that allows the utility to recover upgrade and maintenance costs.
The utility is also seeking an amendment to its certificate of convenience and necessity to build a new $473 million natural gas-powered electric plant to support Meta Platforms’ future data center needs. Meta would cover the cost of the McCloud plant and have sole access to the power during a five-year “bridge period,” though it is unclear if Texas customers would have to contribute to the cost after that.
The city filed an intervention in the application for the McCloud plant in Northeast El Paso.
The city’s moves to intervene in El Paso Electric’s applications come as it tries to appeal a rate increase approved by state regulators for Texas Gas Service. The City Council on Tuesday voted to have the city attorney file a motion for a rehearing with the Railroad Commission of Texas, which regulates the utility..
“We understand the city remains engaged in the regulatory process, and we will continue to work with our regulators as needed,” Jason Cleary, a Texas Gas Service spokesman, said in an emailed statement to El Paso Matters.
The commission approved the Texas Gas Service rate hike Feb. 5, increasing residential customers’ monthly bills by about 10%, or $4, with large residential clients seeing an increase of 19%, or about $11. That amounts to about $48 to $132 more a year. The new rates apply to the current billing cycle.
Customers in other Texas regions such as the Rio Grande Valley will see decreases in their rates as the utility consolidates its three service areas across the state. The consolidation would help spread costs of repairs throughout the state if a disaster destroys infrastructure.
The El Paso Water Public Service Board last month approved the utility’s 2026-2027 budget, which included a rate increase. Customers are seeing an increase of about $10 per month on the typical residential bill, a 12% increase over last year. Customers who use less water may see potential savings.
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