April 19, 2023
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Early voting begins April 24 in El Paso, Texas, where environmentalist and climate-justice activists have placed a proposal on the ballot that could result in the city embarking on what critics see as an ill-conceived municipal takeover of the local electric company.
Both sides of ballot Proposition K, known as the El Paso Climate Charter, continued to press their respective cases to the voters ahead of the May 6 election, with a coalition of business organizations warning that moving ahead with an acquisition of El Paso Electric (EPE) would accomplish little while costing city taxpayers an inordinate amount of time and money.
“Municipalization efforts would likely be unsuccessful based on other hostile takeover attempts (around the country) that took many years and cost millions of dollars,” EPE said in a recent statement urging voters to reject Proposition K. “Cooperation between EPE and the city is the most efficient and productive path to accomplish goals of an environmentally sustainable future.”
The stance has been repeated in recent weeks by the El Paso Chamber as well as the El Paso Hispanic Chamber of Commerce, Citizens Against Government Waste, The Borderplex Alliance and the International Brotherhood of Electrical Workers (IBEW). The united front has taken the position that acquiring a piece of EPE would be an expensive endeavor that would do little to benefit the environment and could, in fact, derail the progress that EPE has been making in cutting carbon emissions. EPE said it plans to produce 715 megawatts of renewable energy by 2026, and aims to achieve 80 percent carbon-free energy by 2035.
An economic impact analysis performed for the El Paso Chamber projected a value of around $9 billion for EPE in 2030, about the time any negotiations on a buyout would take place. The acquisition cost alone plus the anticipated $40 billion negative impact on the city’s economy from the overall Climate Charter makes Proposition K a nonstarter.
“The passage of the Climate Charter, as shown by the economic impact analysis, would bring our economy to a screeching halt and roll back decades of investment – across all industries,” the chamber said in a statement.
El Paso has no shortage of sunshine, and EPE has been developing renewable generation of its own with a goal of 100 percent decarbonization by 2045. The company earlier this month cut the ribbon on a new solar farm in New Mexico that will soon provide 120 megawatts of electricity to El Paso and have battery capacity to supply power at night. The utility, founded in 1901, has already eliminated coal from its fuel mix, and also owns a stake in the Palo Verde nuclear power plant in Arizona. But most of its renewable assets are outside the city limits and provide power to around 500,000 other customers in parts of New Mexico and southern Texas.
The EPE agenda has Proposition K opponents asking why throw a wrench into the progress already being made. “Municipalization by the City of El Paso would carve out a portion of EPE’s assets to create two utilities for our service region – one utility for customers living within the El Paso city limits and another for customers living outside,” EPE said. “It is not clear how City of El Paso customers would be served since the majority of EPE’s power generation resides outside of the City and EPE has committed generation and transmission resources to serve both our Texas and New Mexico customers.”
EPE’s management also says the company isn’t for sale, and the city shouldn’t expect a sweetheart hometown deal.
Citizens Against Government Waste in Washington said the Climate Charter would go “beyond prioritizing climate change.”
“Proposition K would not only leave taxpayers on the hook for a costly acquisition battle with an unwilling seller, but also require the city to maintain and upgrade existing facilities that are already being planned for El Paso Electric,” State Legislative Affairs Associate Ryan Lanier said in a blog post earlier this month. “And with the company already planning to abandon fossil fuels, the entire purpose of the climate charter seems moot.”
The confusion and uncertainty will also spill into the overall economy. The Chamber’s analysis warned of a loss of as many as nearly 200,000 jobs in the area by 2030, primarily within EPE and various fossil-fuel producers in the area, particularly a local oil refinery that would likely see its massive water purchases from the city cut off.
“We’re afraid that this could hurt a lot of our blue-collar workers and not only the blue-collar workers,” Eddie Trevizo, president of the IBEW El Paso local told KTSM-TV. “We just feel like it could really hurt the entire working class.”
President Biden recently earned the support of the national IBEW in part by pledging to not restrict fracking, which also employs union electricians throughout Texas. The Climate Charter would bar the local water utility, El PasoWater, from selling water for fracking, although the company has stated it doesn’t currently supply water to fracking companies.
El Paso Electric also provides electricity to industries and logistical companies in three foreign trade zones in the “borderplex” area along the border between El Paso and Juarez, Mexico. Jon Barela, CEO of The Borderplex Alliance, said in a statement the potential upsets at EPE were “not only economically unrealistic, but also overly punitive on the lowest-income residents.”
The Borderplex Alliance said it strongly opposes Proposition K and urges citizens to reject the radical and extreme amendment.
The proponents of the Climate Charter have dismissed warnings of sticker shock and instead say that EPE has been highly profitable and its acquisition would actually be a bargain for the city. The environmental group Eco El Paso said in its rebuttal to the Chamber of Commerce analysis that city ownership would keep all of those profits in town rather than seeing a sizable slice kicked over to Wall Street financiers.
“Should we consider buying this wildly profitable company, regardless of a small debt payment to buy it? ABSOLUTELY!” Eco El Paso said, adding that municipal utilities in Austin and San Antonio have been thriving and generating income that goes to the city treasury “versus wealth extraction to New York like in El Paso today.”