El Paso Electric (EPE) responded to stakeholder concerns surrounding its latest Integrated Resource Plan (IRP), stating that it is pursuing an RFP strategy to meet near-term goals for both utility-scale and smaller scale projects.

In the November filing, EPE told the New Mexico Public Regulation Commission (PRC) that the energy market is experiencing a “dramatic shift” following decades of relatively flat demand that has switched to sudden load growth driven mainly by large load customers such as data centers. To respond to this, EPE pointed to its RFP efforts over the past five years for new Texas and New Mexico RPS-compliant resources.

EPE added that part of its efforts to pull together an IRP is to have it followed by competitive procurement, known as the Real Cost Phase.

The utility highlighted this as it refuted some commenters on its IRP that alleged EPE’s capacity need is “entirely self-inflicted” or that EPE is proceeding with a “slow walk.”

Some of the stakeholders also stated that the IRP was a disappointment due to it not containing a firm commitment to securing substantial quantities of distributed energy resources (DERs).

Additionally, several IRP commenters also raised concerns on EPE’s near-term capacity needs and whether EPE had not adequately demonstrated how it intends to meet them.

To this, EPE said it has proactively worked to secure new resources, having submitted multiple RFPs that span 2021, 2023, and most recently this year for new Texas and New Mexico REA-compliance resources.

“The rapid, unforeseen escalation in large commercial load additions, particularly data centers, combined with unprecedented shifts in energy policy, is a national issue, not an EPE-specific issue,” the utility argued.

EPE also addressed the claim that it provided no information on efforts to secure additional supply side resources prior to 2030, which EPE said was unfounded.

“While the IRP modeling may assume a 2030 in-service date for planning purposes, nothing prevents secured resources from being operational before 2030,” EPE said.

It also added that it is “actively pursuing resources selected in previous REA RFPs,” which include the Carne and Santa Teresa projects.

“If EPE requires more renewable resources to meet the RPS, we will procure those resources,” EPE said.

Although the need for new capacity is most acute in EPE’s Texas service area, the utility said it continues to pursue resources to meet overall system needs, including in New Mexico.

“Until new, large-scale resources are secured, EPE will manage its capacity needs through a strategy of short-term energy purchases, delayed retirements, and resources identified in previous RFPS,” EPE said, adding that the resource shortfall discussed in the most recent IRP assumed that generators planned for retirement are not included in the long-term outlook.

EPE added that while comments were right in that anticipated nationwide higher electricity demand and prices could potentially make reliance on short-term energy purchases more expensive, EPE said the same market volatility, coupled with expiring federal tax credits, is also driving up the cost of long-term resource acquisitions and power purchase agreements (PPAs).

Supply-side vs demand-side

EPE also argued against assertions that its approach to short-term capacity is problematic because it ignores DERs and demand response (DR) options.

Rather, EPE said it’s IRP articulated a two-pronged strategy to integrate demand-side solutions, which includes a commitment to an RFP that will specifically include options for demand-side resources and an application for implementation of a targeted pilot program of at least 250 DER and DR-enables homes.

IRP comments from stakeholders expressed disappointment that the IRP did not commit to securing a larger quantity of DERs. EPE said that expanding DERs would be premature before confirming technical feasibility, availability, and actual cost through an RFP or pilot process first.

“The speed-to-market for different resource types will be a key factor in future competitive procurement processes, meaning resources able to meet EPE’s capacity needs sooner will be evaluated more favorably based on contractual obligations,” EPE said, adding that several stakeholders argued that DERs are not subject to the long-lead times of new supply-side resources, which the utility said is only partially true.

Large load customers

Stakeholders had also expressed concerns related to large load customers, including Project Jupiter, a recently announced large development in Doña Ana County, New Mexico. The concerns surrounded whether EPE had included this into its load forecasting, and that these customers could increase EPE’s peak load and increase rates.

However, EPE responded by saying that it does not include speculative or uncommitted large-load developments in its load forecast or resource modeling and that it only included scenarios in its IRP where projects had strong potential to move forward.

That being said, the IRP includes 80 MW of load in New Mexico associated with Project Jupiter, also known as Borderplex Digital, beginning in 2026. That 80 MW is the portion of the project which EPE has an executed agreement addressing certain network upgrades, though it is not an energy services agreement (ESA). Rather, the purpose of serving Project Jupiter with 80 MW, as EPE understands it, is not to serve actual future data center load but to serve the project’s initial needs for construction and other preparatory work.

“EPE is not currently a party to any discussions for additional generation or load requirements,” EPE said.

However, under the forecast for anticipated new large load customers, EPE has an accredited capacity need of 594 MW in 2030, increasing to 1692 MW by 2045.

Overall, EPE agreed with stakeholder comments that the IRP timeline is “exceptionally tight” and would support a longer process, though acknowledged that that could also become problematic with too much critical input. Rather, EPE said it would like to see a more detailed discussion on scope and time in context to amendments to the regulatory IRP rule.

*This story was originally published exclusively for NPM subscribers.

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