EXHIBIT 10.08

PUC DOCKET NO. 32289

 

JOINT PETITION OF EL PASO

ELECTRIC COMPANY AND THE

CITY OF EL PASO FOR APPROVAL

OF FUEL-RELATED PROVISIONS

OF RATE AGREEMENT

   §
§
§
§
§   

PUBLIC UTILITY

COMMISSION

OF TEXAS

SETTLEMENT AGREEMENT BETWEEN THE STATE OF TEXAS

AND EL PASO ELECTRIC COMPANY

The State of Texas (“State”), by and through the Office of the Attorney General,
Consumer Protection and Public Health Division, Public Agency Representation
Section (“OAG”), and El Paso Electric Company (“EPE”), through its counsel,
agree to the following terms in full settlement of the above-captioned
proceeding. This settlement is a compromise of the positions either party would
take in a fully litigated proceeding, and is not intended to express either
party’s agreement with any ratemaking principle. Except as may be necessary to
carry out the terms of this settlement, this agreement of the parties may not be
used in any other proceeding as an admission or a characterization of the
position of either party.

Terms of Settlement

1. The State agrees not to oppose the 2005 Rate Agreement between City of El
Paso and EPE, and not to oppose the 2006 Stipulation among City, EPE, Border
Steel and Public Utility Commission (“PUC”) Staff. The State’s testimony and
motion for partial summary decision are to be withdrawn, and no ruling on the
State’s motion is required. The State’s notice of intent to disclose
confidential data becomes moot.

2. On March 31, 2010, EPE will present to the PUC Staff, the State (by and
through the OAG), OPC and the City of El Paso its cost and revenue data, in
accordance with the PUC’s earnings monitoring requirements, for the rate year
ending on December 31, 2009. These parties

 

1

--------------------------------------------------------------------------------

may conduct reasonable informal discovery seeking further information, and EPE
will answer all such questions with dispatch and in good faith. Within 30 days
of EPE’s initial filing of earnings monitoring data, EPE, the Staff, the State,
OPC and the City of El Paso shall decide whether a full base rate case is
necessary. If any one of these parties notifies the others, in writing, that it
wants to conduct a base rate case, the Company will file such a case in the
cities with original jurisdiction and with the PUC, on or before July 1, 2010.

3. EPE agrees that, no later than July 1, 2010, it will begin crediting 90% of
off-system sales margins to reconcilable fuel, for the benefit of customers, and
agrees to continue crediting 90% of off-system sales margins to reconcilable
fuel, at least through June 2015.

4. EPE agrees that, no later than July 1, 2010, it will begin treating its
wheeling expenses and revenues associated with non-native load in accordance
with then-existing PUC Rules and other substantive and procedural law.

5. Within 45 days of this agreement being adopted by the PUC, EPE will enter
into good faith negotiations with UTEP regarding its existing supply
contract(s).

6. EPE and the State, by and through the OAG, agree that paragraphs 3 and 4,
above, shall be incorporated in the Commission’s final Order in this proceeding
as findings of fact, solely for the purpose of memorializing that these two
parties have agreed upon these matters. Neither the Commission nor its Staff
shall be bound by EPE’s and the State’s agreement with respect to the proper
treatment of off-system sales margins. If the Commission enters an order in this
proceeding that is materially inconsistent with this Settlement Agreement, then
the State or EPE may withdraw from the Agreement. If either party withdraws
pursuant to this term, it shall not be deemed to have waived any procedural
right or taken any substantive position on any fact or

 

2

--------------------------------------------------------------------------------

issue by virtue of its entry into the Agreement or its subsequent withdrawal,
and the withdrawing party reserves the right to litigate the fuel-related
provisions of the 2005 Rate Agreement.

Dated: October 17, 2006

 

FOR EL PASO ELECTRIC COMPANY   FOR THE STATE OF TEXAS

/s/ Gary Hedrick

  GREG ABBOTT

GARY HEDRICK

President & Chief Executive Officer

El Paso Electric Company

P.O. Box 982

El Paso, TX 79960

Voice: (915) 543-4020

FAX: (915) 521-4728

  Attorney General of Texas  

 

KENT C. SULLIVAN

First Assistant Attorney General

 

 

EDWARD D. BURBACH

Deputy Attorney General for Litigation

 

 

PAUL D. CARMONA

Chief, Consumer Protection and Public Health Division

 

 

MARY T. HENDERSON

Deputy Chief, Consumer Protection and Public Health Division

 

MARION TAYLOR DREW

Public Agency Representation Section Chief

 

/s/ Bryan L. Baker

 

Bryan L. Baker

State Bar No. 00790256

Assistant Attorney General

Office of the Attorney General

P.O. Box 12548

Austin, Texas 78711

Voice: (512) 475-4237

FAX: (512) 322-9114

E-mail: bryan.baker@oag.state.tx.us

 

3