Review of El Paso Electric Company’s Amended Applications for Several Solar and Battery Storage Power Purchase Agreements
Synapse provided expert testimony and analysis to support the New Mexico Office of the Attorney General in two separate power purchase agreement dockets submitted by El Paso Electric Company (EPE). In these dockets, EPE sought approval for amendments to several solar and battery storage power purchase agreements (PPAs). Specifically, in 19-00099-UT/19-00348-UT, EPE sought approval for amendments for the contracts at the Hecate and Buena Vista projects and in 23-00093-UT, EPE sought approval for amendments for the contracts at the Carne project.
We reviewed the reasonableness of EPE’s request to increase the negotiated price in each contact, the context of the request, and the cost and risk of alternatives. We found that even at the amended price and project timelines, each of the proposed projects was still in the best interest of ratepayers. Further, we found if the amendments were not approved, ratepayers would face higher risks from market exposure, gas price volatility, and uncertainty in future project development cost and timelines. We quantified the cost of replacing the PPA energy with replacement energy. But, we also found that there was more that EPE should do in the future to protect ratepayers from price increases.
We recommended that the Commission approve EPE’s request for amendments to the Buena Vista, Hecate, and Carne projects. We also recommended a number of additional transparency, reporting and analysis requirements in the event that EPE seeks a contract amendment in the future.