El Paso Electric adds solar, plans to be coal-free by 2016

El Paso Electric (EPE) said Jun 16 that it is well-positioned for the new carbon standards proposed June 2 by the Environmental Protection Agency (EPA).

EPE will be coal-free by 2016 and, in less than one year, has doubled its utility-scale solar portfolio, making this west Texas-based utility a national leader in solar development.

El Paso Electric said it welcomes the completion and commercial operations of Macho Springs, the largest solar facility in New Mexico. This 50-MW solar facility, along with an additional solar facility that will be the largest in El Paso (10 MW and completed by the end of the year) will expand total solar generation to 6% of EPE’s dedicated generation resources.

“Our west Texas and southern New Mexico region has the right kind of sun for optimal solar energy production, making this region the ‘goldilocks’ in terms of climate, humidity and heat characteristics that allow us to expand our renewable portfolio with cost-effective technologies and reliable energy resources,” said Tom Shockley, Chief Executive Officer at El Paso Electric. “With over 300 days of sunshine every year, we are in the perfect region for solar energy technologies, which in the long run reduces carbon emissions and provides cleaner air.”

EPE signed a 20-year purchase power agreement (PPA) with Macho Springs Solar LLC, owned by Southern Co. (NYSE: SO) subsidiary Southern Power and Turner Renewable Energy. The facility was built and will be operated by First Solar, a leading global provider of comprehensive photovoltaic (PV) solar systems utilizing its advanced thin-film modules. Macho Springs is located on a 597-acre site in Luna County, N.M., between Hatch and Deming.

“We continue to look for opportunities to add cost-effective solar energy technologies as the price of solar energy becomes more competitive,” added Shockley. “At the time we signed our agreement with Macho Springs, it was the cheapest price of solar in the market. Our commitment to building a portfolio that includes renewable technologies complements our local, clean burning natural gas units, helping to make overall power in our region more dependable, safer and cleaner.”

In February 2014, El Paso Electric signed a 30-year PPA with Newman Solar LLC, owned by Colorado-based juwi solar Inc. (JSI), which will build the 10-MW solar facility in Northeast El Paso, Texas. The facility is expected to go operational by the end of 2014.

El Paso Electric has decided to no longer participate in the operation of the coal-fired Four Corners plant after July 2016. EPE, which has a 7% (108 MW) interest in the plant, will continue to work with the 93% owners and the Navajo Nation to facilitate their efforts to extend the operation of the plant beyond 2016. EPE will also continue to pursue a sale of its 7% interest in the plant.

EPE needs more resources in part because, until recently, it had not added new capacity to its fleet since 1988. In addition, EPE’s local gas-fired fleet is aging, with two units having entered service in the 1950s and three units in the 1960s. Accordingly, EPE has told state regulators that it has embarked on a capacity expansion plan.

  • Step one of the plan was a new gas-fired combined cycle facility (Newman Unit 5) approved in 2008.
  • Step two was the new LMS 100 gas-fired facility (Rio Grande Unit 9) approved in 2011.
  • Step three of the plan was two gas-fired units – Montana Units 1 and 2 (88 MW each) in Texas – approved in 2012.
  • The next step is the planned, gas-fired Montana Units 3 and 4 (88 MW each).

El Paso Electric (NYSE: EE) is a regional electric utility providing generation, transmission, and distribution service to approximately 395,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico. El Paso Electric has a net dependable generating capability of 1,872 MW.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.