El Paso Electric Co. and the investment fund seeking to acquire it filed an unopposed stipulation with New Mexico regulators proposing benefits that are equal "in their totality" to those proposed in Texas, as the companies look to finalize a deal.
El Paso Electric submitted a Jan. 3 filing to the New Mexico Public Regulation Commission with IIF US Holdings 2 LP, a holding company for J.P. Morgan Investment Management Inc.-advised Infrastructure Investments Fund, or IIF. The holding company announced in June 2019 plans to purchase El Paso Electric for $4.3 billion including net debt and designate the entity Sun Jupiter Holdings LLC as direct owner of El Paso Electric when the transaction closes.
The companies said they would credit $8.7 million to New Mexico customers over the course of three years, consider adding up to 30 MW of battery storage, evaluate the potential for electric vehicle and distributed generation infrastructure and commit $100 million toward economic development across El Paso Electric's service territory, according to the stipulation.
In addition, the companies would ensure that El Paso Electric follows through on the utility's five-year capital spending plan that starts Jan. 1, 2021, and meets requirements for Texas and New Mexico's clean energy provisions.
El Paso Electric, IIF US Holdings 2 and Sun Jupiter Holdings are hoping to close the transaction within the first half of 2020. The companies have faced questions from the Federal Energy Regulatory Commission, the U.S. Nuclear Regulatory Commission, state utility regulators and consumer advocates about the relationship between IIF US Holdings 2 and J.P. Morgan Chase & Co.
In the stipulation, the parties maintain that IIF US Holdings 2 is the only party involved so far and that "IIF is a private investment fund with a long-term investment horizon, but it is not a legal entity and is not a participant in the proposed transaction."
El Paso Electric, IIF US Holdings 2 and Sun Jupiter Holdings also said that the companies would not recover transaction costs from customers, nor could they borrow from J.P. Morgan or its affiliates unless El Paso Electric needed to borrow on "an arms-length basis," subject to various regulatory and company approvals.
Besides El Paso Electric and its potential new owners, parties to the unopposed stipulation include staff of the New Mexico Public Regulation Commission, the New Mexico Attorney General, the city of Las Cruces, N.M., the county of Dofia Ana, New Mexico State University, Western Resource Advocates, the Coalition for Clean Affordable Energy, the U.S. Department of Defense and all other federal agencies, and Merrie Lee Soules, who previously ran for the state's utility commission.
A hearing for the stipulation is scheduled for Jan. 16. (New Mexico Public Regulation Commission Case No. 19-00234-UT)