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For most, including the fledgling new City Council of El Paso, it has been a crash course in the finance, politics and social-psychology of negotiating a new rate and franchise agreement with the El Paso Electric Company.

But it is over. The Council approved the deal by a vote of 5-3.

Concerns about the agreement were numerous. They included the increse in franchise assessment for the City of El Paso which negotiates for the ratepayer. The City was getting a nice big prize...$5 million.

The issue of whether the utility company was going to be bought by a larger company and leave was at the heart of other's concens. If the new deal was so sweet it might bring out a hungry bear.

There were concerns about the lose in "profit sharing" that the ratepayer was going to get. Instead of 50% of other market profits the ratepayer was only going to get 25%. This could possibly have a huge impact on the ratepayer.

If fuel prices rise, as was indicated by the recent forcast for natural gas increasing in price by 60%, then that buffer which was secured by the 50% may not be enough at 25% to keep the ratepayer from having to pay fuel surcharges.

The Upper Valley Beacon sent letters to the City Manager and the Mayor, City Representatives et.al. and requested reasons whjy the agreement was great for the ratepayer. In fact, it was phrased as a Top Ten List. There were no takers. Thus we were unable to publish any reason why it should be approved.

On the other hand, there were numerous readers complaining about the agreement but no one could provide in writing a coherent written statement as to what was wrong with the agreement.

Still the Upper Valley Beacon and its reader were able to obtain a one week postponement. Unfortunately, none of the readres were able to come up with enough facts to warrant a public hearing.

But that time was well spent by the City Council in reviewing the agreement and making the modifications.

One of the safeguards added was an audit to verify if the ratepayer was actually paying a fair rate. This audit will be conducted by an independent firm within the next 12 months. Representatitve Susie Byrd indicated that it was essential that this "failsafe" mechanism be in place. And with rates frozen for the near future it doesn't matter that the audit won't be completed until next year.

Representative O'Rourke indicated that he had two main concerns. The first was to make sure that EPE headquarters stayed in the El Paso because of the economic impact they have in the community. The second was to make sure that the books would be audited.

Representative LIlly indicated that the idea of building a new plant in El Paso was of possible benefit. Also, buying out the utility would have been very costly. "This was the best we have going now and it can be reviewed after the audit or after five years. There was really no reason to postpone it."

There was also a provision that should EPE be bought, the City and the ratepayer would not lose, even if the headquarters were moved out of El Paso. This makes it unlikely that EPE will be bought by a larger utility.

Of course we don't know if that would be good or bad for the rate payer. But having a new plant built in El Paso and keeping the headquarters here were very important to most Representatives.

Yet, with only incentives the worse case scenario could happen anyway. After all this, the ratepayers and the City of El Paso may end up in a year or five with a costly rate case at the Public Utility Commission and EPE may have been bought out by a larger company and vacated their headquarters in El Paso.

For the time being all indications are that there will not be any real big surprises in the next 12 months.

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Editor, Upper Valley Beacon

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