El Paso Electric sale closes; new CEO is named
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- Jul 30, 2020 4:08 pm GMT
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Infrastructure Investments Fund (IIF), an investment vehicle advised by J.P. Morgan Investment Management Inc., has closed its roughly $4.3 billion acquisition of El Paso Electric.
The new Board of Directors has named Kelly Tomblin as incoming Chief Executive Officer. Tomblin has a three-decade career leading utilities both in the United States and internationally. A statement says that she has expertise in the generation, transmission and distribution sectors as well as renewable energy development, and energy services and sales. Most recently, she served as president and CEO of INTREN, a utility solutions provider. Prior to that, she was CEO of Jamaica Public Service Co.
In reviewing the proposed acquisition, the Federal Energy Regulatory Commission (FERC) earlier this year conditioned its approval on the parties filing a plan to mitigate potential adverse market effects.
In particular, FERC agreed with a base case analysis that the proposed transaction would not adversely impact competition. The FERC also considered an alternative analysis that suggested a scenario in which more economic capacity becomes available from the Mesquite Generating Station for import into the El Paso balancing authority area. The 1,248 MW gas-fired plant is 50% owned by an IIF affiliate. The FERC directed the parties to file a plan to mitigate potential market effects should that capacity become available.
Under terms of the sale, El Paso Electric will continue to operate as an independently-operated, locally-led, regulated utility. Customers will receive rate credits on their electric bills over three years, representing a $21 million credit for Texas customers and an $8.7 million credit for New Mexico customers.
In addition, El Paso Electric and IIF will dedicate $100 million to promote economic development in the utility’s service territory. Of that amount, $80 million will be allocated to Texas, to be distributed over 15 years. The remaining $20 million will be allocated to its New Mexico service area, to be distributed over 20 years.