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El Paso Electric earnings jump amid heat wave as demand peaks again

El Paso Electric Co.'s second-quarter 2017 net income jumped 62%, to 89 cents per share, compared to last year's second quarter, largely thanks to rates approved in 2015 and rising sales to retail customers during a recent heat wave, as the utility looks to add new resources to fill the region's growing demand for power, CFO Nathan Hirschi said on the company's Aug. 2 earnings call.

Citing a new system peak of 1,935 MW hit June 22, Hirschi said El Paso Electric now has reached a record peak in 16 of the last 17 years, with an average growth rate of nearly 3%. "Due to the growth in our service territory and the demands placed on our system, we continue to plan diligently to add generation resources to meet the needs of our service territory in a safe and reliable manner," said Hirschi on the call, filling in for absent CEO Mary Kipp.

As part of its search for new resources, the utility in June issued an all-source request for proposals for roughly 370 MW by summer 2023, with 50 MW of that by 2022. El Paso Electric has requested final bids by Oct. 4 and expects a decision in the second quarter of 2018. when asked if the utility plans to consider "self-build options," Hirschi said, "That's my understanding ... so we'll see how that goes."

El Paso Electric energized its 3-MW Texas Community Solar Project (Montana) during the second quarter, the CFO announced. "This was a significant accomplishment, as the addition of affordable large-scale solar projects to our generation mix has been an objective for several years now." Hirschi called the fully subscribed project "a clean alternative that is fair for all customers as it does not rely on inter- or intraclass subsidies."

The CFO also pointed to the 5-MW Holloman AFB Solar Project as "another example of the company's commitment to evaluate and invest in innovative ideas and technologies that benefit our communities and the environment." The project at Holloman Air Force Base, located in a part of southern New Mexico served by the utility, "will assist the Air Force in meeting its renewable and energy security goals," Hirschi said. The solar plant is scheduled for completion next year.

The utility refrained from making a full-year forecast until the Public Utility Commission of Texas issues a final order on its 2017 general rate case. After originally filing for a $42.5 million rate boost, El Paso Electric revised its request downward to $39.2 million in July. Hearings are scheduled to begin Aug. 21.