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Eyeing Change

The big issue going forward is trying to determine the role of the utility in the future, and the timing of it.

Utility executives must grapple with increased challenges to their business model while deploying new, emerging technologies that may revolutionize their operations. To better understand how the executives perceive and deal with disruptive threats, The Energy Times recently convened a discussion with industry executives. We will present their insights, edited for style and length, in coming weeks. The series is sponsored by Oracle.

This week, we chat with Richard Turner, El Paso Electric vice president of corporate development. El Paso serves 400,000 retail and wholesale electric customers in a 10,000 square mile swath of west Texas and southern New Mexico.

Energy Times: What are the prospects for solar power?

Richard Turner

Turner: We’ve made a commitment to solar in the last four years. Today solar represents about 6 percent of our resource mix.  We’ve seen the price fall dramatically to the point where they’re now competing with some of the fossil fuels at the margin.  We also have a vibrant interconnection process with the rooftop solar of our customers. We have over 3,000 customers who have interconnected systems.  We expect that within the next few years we’ll start to see more of that.  As far as on the utility side, we have over 100 megawatts of solar in our system. We feel we’re at the forefront of the utilities in our service area as far as Texas and maybe even New Mexico. It’ll be a challenge going forward.

Energy Times: You’re in an area that has economically depressed customers. Do you see a push for community solar?

Turner: We’re currently in the process of filing for approval for community solar both in Texas and New Mexico in our service territory.  More customers will be able to participate in solar - a lot of lower income customers or customers who live in apartment buildings. We understand that there are customers who want solar, and so we’re looking for opportunities to provide that as part of the utility package.

Energy Times: How does El Paso view disruptive energy technologies?

Turner: States that have high electric rates are probably more engaged versus those areas that have lower electric rates, such as we have in El Paso.  We definitely are keeping an eye on all of these developments – not only from the disruptive technology side, but also from the regulatory side and what some states are doing with regard to trying to define what the future utility is going to look like.  We have average residential rates of 10 to 11 cents per kilowatt hour, so the economics are not there today for some of this disruptive technology.  We’re making investments in infrastructure that’s going to be around 30 years. We are trying to put some of those decisions as far out as we can until we see more of this disruptive technology and the marketplace materialize.  But it’s a balancing act because we have old infrastructure that is being retired and we have to replace it.

Energy Times: What will happen to your coal-fired generation?

Turner: Coal is less than 10 percent of our resource mix. We’ll be coal-free by the end of next year.

Energy Times: What will the utility of the future look like for El Paso?

Turner: The big issue going forward is trying to determine the role of the utility in the future, and the timing of it.  Right now the movement is really on a state-by-state basis. It’s different for everyone. You don’t want to create a lot of stranded costs in the future that you’ll have to deal with. At the same time, we are really trying to figure out the customer side of it.  Now they have access to a lot of non-traditional competitors that are offering them services.  

Read more of this series of articles:

Aligning With Customers’ Complicated Values

Utilities’ Data Fire Hose 

 

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