El Paso Electric plans to add a $143 million power generator at its Northeast El Paso power plant, add more solar power to its energy portolio, and add its first battery storage for solar power within the next four years.

The company is in negotiations with an unspecified number of companies for the power expansion, which is the result of the company's June 2017 request for power-generation proposals.

The utility received proposals for 80 projects from about 30 companies. El Paso Electric officials said the number of companies with winning proposals will not be divulged while negotiations with the companies are underway.

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Company studies have indicated the electric utility will need more power generation by 2023 to replace three aging gas-powered generating units at two El Paso power plants and to meet future customer growth, company officials reported.

The utility provides power to more than 420,000 customers in West Texas and southern New Mexico.

The proposed 226 megawatt, natural-gas generating unit at the Newman Power Station, the company's largest power plant, is to be in operation by 2023, according to current plans.

It plans to purchase an additional 200 megawatts of solar power by 2022 from plants that other companies will build and operate. It will need 50 megawatts of that power in 2022 and the remainder by 2023, officials said.

The company also plans to purchase 100 megawatts of battery storage, which would be installed in several places, said Mary Kipp, El Paso Electric chief executive officer.

Newman power unit will be paid through customers' rates

The company does not yet have an overall cost estimate for the power expansion beyond the estimated $143 million cost for the Newman generating unit, Kipp said.

The Newman generating unit will have to be paid through customers' rates, Kipp said. The company wouldn't try to get approval from regulators to increase rates to pay for the new unit until after it began operating.

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How the Newman unit's construction will be financed has yet to be determined, Kipp said. The company may need to sell new stock shares to help pay for it, she said.

Costs for the solar power would be passed on to customers through monthly fuel charges, said Dave Hawkins, vice president of power generation, system planning and dispatch. The company does not earn a profit from fuel charges.

Whether the battery storage costs would be passed to customers through fuel charges or paid through rates has yet to be determined, company officials said.

Battery storage will make solar more reliable, CEO says

Battery storage for solar power is "a proven technology, but the cost had been holding us back," Kipp said. "Finally, it's reached a point that battery storage (favorably) competes with other sources of generation."

"Battery storage is crucial to growing solar because it changes how we look at reliability" of solar power, Kipp said. Without storage, solar power can only be counted on during sunshine hours.

Utility gets 3 percent of power from solar plants

The utility currently gets around 3 percent of its power from solar plants, and Kipp said she wants to continue to grow the company's use of the environmentally friendly power.

The company gets most of its solar power from six power plants, five of those in New Mexico. Those solar plants were built for El Paso Electric, but other companies operate them and sell the power to the utility exclusively. El Paso Electric also owns and operates five very small solar plants in the El Paso area, and one in Van Horn, according to the company's website.

The company gets 49 percent of its power from the Palo Verde nuclear power plant in Arizona; almost 37 percent from its four El Paso gas-fired power plants; and almost 12 percent purchased from various sources.

Three generating units to be retired by 2023

Company studies have determined it will need 370 megawatts of additional power by 2023 to meet customer growth and to replace 196 megawatts of power from three generators that will be shut down at the Newman and Sunland Park, N.M., power plants in 2022 and 2023.

The new Newman generator, and new solar plants are expected to create 426 megawatts of power. The company also plans to look at purchasing an additional 50 to 150 megawatts of solar or wind power by 2023, possibly to replace some fuel-powered generation and to save money, George De La Torre, a company spokesman, said in an email.

Since solar is only an intermittent source of power, it can't be counted as meeting the company's peak load requirements, and that's why the company is seeking more than 370 megawatts of power generation through the proposals, De La Torre said.

El Paso Electric's last big power expansion came between March 2015 and September 2016 when it phased in four gas-fired generating units at its new, Montana Power Station at Montana Avenue and Zaragoza Road in far East El Paso County. The four units, which generate 382 megawatts of power, cost $380 million to build.

Vic Kolenc may be reached at 546-6421; vkolenc@elpasotimes.com; @vickolenc on Twitter.

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