The City of El Paso is urging state regulators to deny El Paso Electric’s application for a Certificate of Convenience and Necessity for the proposed McCloud Generation facility, arguing that the utility has failed to demonstrate the project is a prudent and cost-effective investment for existing customers.<\/p>\n
The City recently filed testimony with the Public Utility Commission of Texas opposing the utility’s proposal to construct the $551.8 million, 366-megawatt natural gas-fired generation facility. The plant is intended to provide power for the Wurldwide (Meta) data center during a transition period of up to five years.<\/p>\n
City officials say their opposition stems from concerns about affordability, transparency, infrastructure demands, and the potential financial impact on residential and business customers.<\/p>\n
EPE is asking to build a half-billion-dollar power plant for a single new customer without performing the analysis Texas law and regulations require,” City Attorney Karla Nieman said in a statement. “The City’s position is simple: El Paso ratepayers should not be paying for the costs or risks associated with serving a single large customer.<\/p>\n
According to testimony filed by the City and its retained expert, El Paso Electric did not conduct several key analyses that would typically be used to justify a project of this magnitude, including a long-term cost-benefit analysis, revenue requirement projections, and customer rate impact studies.<\/p>\n
The City also contends that El Paso Electric failed to pursue a competitive procurement process or evaluate alternative generation options before selecting the McCloud facility. Instead, the project was reportedly chosen at the direction of Wurldwide.<\/p>\n
Among the concerns highlighted in the filing:<\/p>\n
The utility did not seek competitive bids or fully evaluate alternative projects.No long-term analysis was conducted to assess customer costs or impacts on electric rates.The proposed facility is significantly more expensive than gas turbine alternatives identified in El Paso Electric’s own resource planning documents.The long-term need for the plant beyond 2029 remains uncertain and depends on future data center growth.Questions remain regarding the reliability and performance of the proposed technology and similar small modular gas projects.<\/p>\n
City officials also warned that current customers could be exposed to financial risks associated with the project before the facility is operational.<\/p>\n
The filing follows months of public debate surrounding the development of large-scale data center infrastructure in the region and the energy resources required to support it. While the City notes it cannot alter previously approved development agreements, officials say they are using their authority within the PUCT proceeding to advocate for greater accountability and protections for ratepayers.<\/p>\n
Nieman said the City engaged in settlement discussions and proposed measures designed to shield existing customers from project-related costs but was unable to secure the guarantees it sought from El Paso Electric.<\/p>\n
The Public Utility Commission will ultimately determine whether the utility’s application meets state requirements and whether construction of the facility is in the public interest.<\/p>\n
RECOMMENDED: Anthony approves $6.1M public safety building with police, court and emergency shelter<\/a><\/p>\n