Newman GS 0820

The Newman Generating Station in El Paso, Texas.

New Mexico environmental and community groups on Aug. 17 reached an agreement with El Paso Electric to withdraw their legal case challenging the utility's application for an air permit for a new, 228-MW natural gas unit at its Newman Generating Station in El Paso, Texas.

EPE, which was purchased by the JPMorgan Chase-affiliated Infrastructure Investments Fund in 2019, is the only private monopoly electric utility in Texas. It serves more than 441,000 customers in the Rio Grande Valley of Texas and New Mexico, and is subject to regulatory oversight in both states.

The settlement with the Chaparral Coalition for Community Health and the Environment, the Sierra Club, and Earthworks follows unsuccessful attempts by the El Paso City Council and the New Mexico Public Regulation Commission to block construction of the new unit, Newman 6 (see CEM No. 1621). EPE, due to the NMPRC decision, is prohibited from providing New Mexicans with power from the plant, which means Texas ratepayers alone will foot the bill for the new unit, the organizations said in a news release.

"The legal deck was stacked against us, fighting a utility like El Paso Electric," Dr. Jeanette Lara, a resident of Chaparral, New Mexico, a town that has been affected by emissions from the plant, said in the release. "The health and climate concessions we forced from EPE were because we worked hard to organize our community."

Under the agreement, EPE can move forward with its construction plans but is prohibited from ever building another fossil fuel unit at Newman and, with limited exceptions, from building any fossil fuel units at all for four years.

EPE also agreed to initiate the retirement of two existing natural gas units at Newman that were built prior to the passage of 1970's federal Clean Air Act and lack basic emissions controls. The utility agreed to reduce Newman's carbon dioxide emissions by 500,000 tons and decrease nitrogen oxide emissions there by 50 tons as part of the agreement.

EPE will also dedicate funds to fully offset emissions from the new unit, support impacted communities, and mitigate the local effects of pollution associated with the Newman plant.

"Newman Unit 6 will allow for the inevitable decommissioning of older generating units," EPE said in a statement on its website, adding that the new unit is essential to keep pace with growth. Increased development in the El Paso region has been pushing up energy demand by about 2 percent each year, the company said. EPE said Newman 6 will use natural gas more efficiently and reduce the company's water consumption by 600 million gallons annually.

The California Independent System Operator in February said EPE committed to joining its Western Energy Imbalance Market in 2023.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.