Thanks to new investments in natural gas and utility-scale solar energy, El Paso Electric, a Texas utility with nearly 400,000 customers, announced this week that its electricity mix operate without coal by 2016.
EPE has doubled its utility-scale solar portfolio in less than one year. “Our west Texas and southern New Mexico region has the right kind of sun for optimal solar energy production, making this region the ‘goldilocks’ in terms of climate, humidity and heat characteristics that allow us to expand our renewable portfolio with cost-effective technologies and reliable energy resources,” said Tom Shockley, Chief Executive Officer at El Paso Electric.
The utility signed a 20-year power purchase agreement with the Macho Springs solar plant in New Mexico, a 50 megawatt (MW) facility with the capacity to power more than 18,000 homes. According to the agreement, EPE would buy solar power from Macho Springs for 5.79 cents a kilowatt-hour — less than half the 12.8 cents per kilowatt-hour average price for electricity from new coal plants, according to Bloomberg.
In February, EPE signed a 30-year power purchase agreement with Newman Solar to build a 10 MW solar facility in El Paso that is expected to come online by the end of 2014 and power an additional 3,800 homes.
Deciding it is in the best interest of its 395,000 customers, EPE plans to sell off its seven percent stake in the Four Corners coal plant, located on Navajo Nation land near Farmington, New Mexico. The plant came in at number 15 on Environment America’s list of the nation’s top 100 dirtiest power plants, emitting 13.8 million tons of carbon dioxide emissions per year.
Of course, a significant portion of EPE’s electricity is derived from natural gas and the utility came under fire last year for its proposal to build a new natural gas power plant in a low-income neighborhood. The company agreed not to expand beyond the four planned units and will establish a fund for residents to improve the energy efficiency of their homes.
“While we wish the plant was not in our neighborhood, we are very pleased with the settlement agreement, particularly EPE’s agreement not to build additional turbines and possibly install solar panels at the plant,” Ralph Carrasco, the citizens group’s executive director, said in a statement.
El Paso Energy’s announcement that it is “well-positioned” for the Environmental Protection Agency’s new regulations aimed at cutting the carbon pollution from the nation’s existing fossil fuel-fired power plants came on the same day Texas governor Rick Perry joined eight other Republican governors saying the rule will cost millions of jobs and slow economic growth. Such claims, trumpeted by the U.S. Chamber of Commerce, among others, have been widely debunked.
Texas is the top carbon emitter in the country and, as the Texas Tribune points out, “Texas officials and politicians have long refused to regulate greenhouse gases.” However, the regulations will have a less dramatic effect on Texas than on other states that rely more heavily on coal, particularly considering the state already has a diverse electricity mix. “In 2013, natural gas (41 percent) outpaced coal (37 percent) in powering the electric grid covering most of the state,” the Tribune reported, citing the Electric Reliability Council of Texas. “Meanwhile, the state’s wind sector (10 percent) is booming, thanks in large part to multibillion-dollar investments in infrastructure under Perry, while shifting economics has increased interest in Texas’ long-untapped solar power potential.”
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