City of El Paso and EPE Announce Rate Settlement.EL PASO El Paso (ĕl pă`sō), city (1990 pop. 515,342), seat of El Paso co., extreme W Tex., on the Rio Grande opposite Juárez, Mex.; inc. 1873. , Texas--(BUSINESS WIRE)--July 17, 1995--Te City of El Paso and El Paso Electric Company (EPE EPE equine pituitary extract. ) announced today that they have reached an agreement in principle which freezes base rates at present levels for 10 years. This rate settlement is conditioned upon approval of a plan of reorganization, which EPE anticipates filing in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. in Austin, Texas, some time later this year. The rate settlement, which is subject to negotiation and execution of a definitive agreement and to final approvals of the El Paso City Council, EPE's Board of Directors, and the Public Utility Commission of Texas, resolves almost 20 years of disagreements between the company and the City over the level of the company's investment in the Palo Verde Nuclear Generating Station The Palo Verde Nuclear Generating Station, a nuclear power plant located in Wintersburg, Arizona, about 45 miles (80 km) west of central Phoenix, is currently the largest nuclear generation facility in the United States, producing over 30,000 gigawatt hours of electricity annually . "This is a very positive step for the company and for the City," emphasized El Paso Mayor Larry Francis. "A 10-year rate freeze stabilizes electric rates and will be a boost for the local economy. At the same time, the company's unsecured creditors and shareholders are facing substantially lower recoveries than those proposed under the company's failed merger with Central and South West Corporation." "This settlement is good for the City, the company and its customers, and will allow the company to emerge from bankruptcy as a stand-alone company stand-alone company An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent. in early-1996," said David H. Wiggs Jr., EPE's chairman of the board and chief executive officer. "This agreement is the product of a massive amount of work and compromise by everyone involved. We are ushering in Noun 1. ushering in - the introduction of something new; "it signalled the ushering in of a new era" first appearance, introduction, debut, entry, launching, unveiling - the act of beginning something new; "they looked forward to the debut of their new product line" an era of cooperation with the City and putting behind us -- once and for all -- almost 20 years of disagreements. We are very pleased." The rate settlement contemplates a four-year extension of the company's franchise with the City of El Paso, and puts the investment and operating risk Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. of Palo Verde entirely on the company. In addition, the settlement allows EPE to keep in place bonded rates implemented in July 1994; all litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. between the city and the company will be dismissed; the company will pay the city's legal expenses; and none of the company's bankruptcy costs will be borne by customers. For the first five years of the rate freeze, the company will share with customers 25 percent of the margins earned from off-system sales. Thereafter, margins will be shared equally (50/50) with customers. The company will now work with its creditors and shareholders to develop a consensual plan of reorganization, which will be subject to bankruptcy court approval. EPE filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code on Jan. 8, 1992. El Paso Electric is an electric utility serving approximately 270,000 customers in El Paso, Texas, and an area of the Rio Grande Valley in West Texas and Southern New Mexico, and to wholesale customers located in such diverse locations as Southern California and Mexico. CONTACT: El Paso Electric Company National and regional media: Alan Lee Bunnell, corporate spokesperson, 915/543-5823 or local media: Henry Quintana Jr., supervisor of corporate communications, 915/543-5824 or financial analysts: John Droubay, treasurer, 915/543-5710 or stockbrokers and shareholders: Office of the Secretary, 800/592-1634 or 800/351-1621 |
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