Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Utilities Franchise topic
No spam. Unsubscribe anytime.
Las Cruces reviews proposed 20-year El Paso Electric franchise with 1% fee increase
Summary
City officials at a Feb. 2025 work session reviewed a proposed 20-year franchise with El Paso Electric that would raise the franchise fee from 2% to 3% (a 1% pass-through), potentially adding roughly $900,000 to the city's general fund; no formal vote was taken and a first reading may be scheduled.
At a Las Cruces City Council work session in February 2025, city staff and El Paso Electric representatives reviewed a proposed 20-year franchise agreement that would raise the city's franchise fee on the utility from 2% to 3% and be subject to a statutory pass-through to customers.
The change would increase the fee by 1 percentage point; city staff said El Paso Electric collected and remitted almost $1.8 million to the city's general fund in fiscal year 2023 and estimated the additional 1% could yield about $900,000, depending on customer usage. Council did not take a formal vote on the franchise during the work session and staff said a first reading could be scheduled at a regular council meeting.
City utilities director Adrienne Whitmer summarized the agreement's background and key terms, saying the proposed franchise would run for 20 years with a review every 10 years. Whitmer explained the package grew out of a past condemnation and court-ordered settlement involving El Paso Electric and the city. "That settlement agreement was through resolution 238 approving the settlement agreement between the city of Las Cruces and El Paso Electric Company," she said, and added that an ordinance tied to the 2009 settlement had expired that year.
Whitmer also read aloud the franchise's indemnification language, describing the company's obligation: "The company shall indemnify and hold harmless the city, its governing body, officers, agents, and employees from and against any and all claims or obligation caused by acts of negligence of the company, its officers, agents, or employees, contractors, or subcontractors in connection with the installation, repair, facilities, or in any work done as authorized or required by this franchise," she said.
Councilor Flores questioned the scope and practical effect of the indemnification language; Whitmer and city legal staff said the provision is a standard municipal clause intended to make the company responsible for damages established in judgment if claims arise related to the utility's work. Henry Becker, identified as city legal, said the office would follow up with additional clarification.
Rico Gonzalez, representing El Paso Electric, said the franchise provides the company the formal authority to operate in city rights-of-way and perform work without seeking individual permits for routine tasks. "From our perspective it's a very valuable tool to getting the work done that we need to do in the long term," Gonzalez said. He told council the company would need about 30 days after passage to implement the 3% fee in its billing systems.
Councilors discussed the term and review cadence. Whitmer said the 20-year term with a 10-year review was negotiated to give both parties longer-term certainty; one councilor asked whether a seven-year review might be preferable and staff said they would take that suggestion back to the company for counsel to consider.
No ordinance or resolution was adopted at the work session. City staff and El Paso Electric said the next steps would be scheduling a formal first reading at a regular council meeting and further city-level discussion about how the additional funds would be invested. The city manager indicated staff would return for future discussions about fund allocation.
The work session concluded without formal action on the franchise. A procedural motion to adjourn the session passed on a roll-call vote.
