1. Council Bill 09-065, Ordinance 2528 El Paso Electric Franchise Agreement

2.  Franchise Agreement:  Franchise Agreement: What is it?  Franchise Status:  Franchise Status: Expired in April 2009  Ad-Hoc Committee Meetings: ◦ Nine public meetings Jan - May 2009  Ad-Hoc & Neg. Team Actions:  Ad-Hoc & Neg. Team Actions: May 15 th & 20 th  Public Comment Meetings: ◦ 12/15/08, 3/3/09; 6/9/09, 6/22/09  Proposed Ordinance ◦ First Read - June 22; Tabled to Today (Aug 17) Background

3. Content Highlights:  Real Estate Based Fee Structure  Term (Old = 25 Yr) (New = 5+5+5 Yr)  Joint Committee Creation (CLC/EPE) ◦ Planning ◦ Plant Expansion Dialog ◦ Underground Facility Provisions  Critical Emergency Facilities Reviews  Electric Vehicle Charging Tariff Goal  Peak / Off Peak Rate Goals  Renewable Energy Goals  Energy Efficiency Goals Background

4. Council Options  Vote “Yes” and Approve the Ordinance ◦ New Terms and Conditions will be Implemented  Vote “No” and Deny the Ordinance ◦ All Prior Terms and Conditions Remain; ◦ Month to Month (Up to two years)  Vote to “Amend” the Franchise Agreement ◦ Provide Specific Alternative Direction to Staff  Vote to “Table” the Ordinance Council Action

5. End of Presentation

6. Franchise Term(s)  Initial Term with Renewal Options ◦ Five (5) years – Initial Term  First Performance Based Renewal Option (5 yrs) ◦ Exceed the Renewable Portfolio Standard by 10% or More ◦ During any Full Calendar Year During the Initial Term  Second Performance Based Renewal Option (5yrs) ◦ Exceed the Energy Efficiency Goal by 10% or More During the First Renewal Period ◦ And install Advanced Meters for 50% of the City’s Residents ◦ Advanced Meters to Defined by NMPRC Key Provisions

7. Primary Term - 5 years 1 2 3 4 5 1st Optional Term - 5 years 6 7 8 9 10 2 nd Optional Term - 5 years 11 12 13 14 15 ? ? CLC – EPE Franchise Agreement 5 Years Certain, 15 Years Possible First Extension -Awarded if EPE exceeds its Renewable Energy Portfolio Standard (RPS) by 10% or more -During any of the first 5 calendar years Second Extension -During the First Optional Term -EPE exceeds Energy Efficiency Goal by 10% or more, -AND install advanced meters for at least 50% of City residential customers’ Note: Max duration at any point is 10 yrs if performance levels are reached.

8.  Keleher & McLeod, P.A. ◦ Kurt Wihl & Richard Cole  Ad-Hoc Committee ◦ James Tester, Dan Townsend, Ron Camunez, Satish Ranade, Dean Neff, Robert Garza  City Negotiating Team ◦ Gil Jones, Nathan Small, Sharon Thomas, Terrence Moore, Robert Garza, Harry S. (Pete) Connelly, Keleher Law Firm Background - City Teams

9. Innovations  Unique Fee Methodology ◦ Right-of-way Rental Fee ◦ Replace Flat 2% Fee ◦ Annual Calculation  City Involved with Planning ◦ Integrated Resources – Renewable Energy and Demand Side Mgt ◦ Long-Term Transmission  Eliminates (Long Term) 25 Yr Franchise Term ◦ Allows Franchise to Evolve with Changes in the Industry Key Provisions

10. Enhancements  Establish Joint Committee (CLC/EPE) ◦ City Rate Payers and EPE Executives ◦ Review and Discuss Technological Advances ◦ Review and Plan for Transmission Corridors ◦ Discuss Prototype Rate Designs (w/fully disclosed data) ◦ Implement Energy Conservation Education  Plant Expansion ◦ Method to Consider Local Power Generation Facility Key Provisions

11. Improved Services  Underground Facilities ◦ Develop a Tariff Enabling More Options  Critical Emergency Facilities Reviews ◦ Improve and Enhance Reliability ◦ Within the City  Distribution System Maintenance ◦ Provides for City Input Key Provisions

12. Renewable-Energy-Efficiency  Peak / Off Peak Rates ◦ Develop Tariffs For All Customer Classes ◦ Enhanced Saving Potential Based on Time of Use  Renewable Energy Resources ◦ Pursue a Tariff for Installing RE Applications  Renewable Energy Facilities ◦ Provides for Timely Connection ◦ Recognize and Enable Qualifying Facility Credits  Electric Vehicles ◦ Provides a Tariff for Recharging Key Provisions

13. Ad-Hoc Recommendation

14. Negotiating Team Recommendation

15.  Term Extension Condition Needs to be Clarified ◦ Exceed Standards for a “Full” Calendar Year  Field Markings at No Cost to CLC ◦ Addressed by NM One-Call  Utility Notice to City Before Construction ◦ Addressed by NM One-Call  Removal of Poles and Conduit Not In Use ◦ Already in Practice  Consider Different Requirements for Property vs R-O-W ◦ Done by Easement Public Comment

16.  Co-Location of Lines Should be Considered ◦ Shared Trench Use Discouraged with Wet and Dry Utilities  Curb, Street and Sidewalk “Cut Conditions” ◦ Addressed through City Permit ◦ Patch Impact covered by Franchise Fee  Tree Removal and Replacement Requirements ◦ Covered by LCMC (Specified Varieties)  Process for Grant of Easements Outside of R-O-W ◦ Covered by LCMC  Prohibit Lines from Crossing City Property, Parks, Etc ◦ Easements Required, Evaluated on Case-By-Case Basis Public Comment

17.  Joint Development of Line Free Zones ◦ Joint Planning Committee  Dispute Resolution Provision Needed ◦ Incorporated Requirements for Systematic Escalation  Several Comments Re: ◦ Regulation of Rates and Rate Development  Several Comments Re: ◦ Context of FA with Other EPE Activities and Practices  Several Comments Re: ◦ Power Purchase Agreements – Third Party Providers Public Comment

18. 5 yr Franchise Contract 5 yr Franchise1 st Renewal Term 2nd Renewal Term 123456789101112131415 TIME (Years) Franchise Limitations Note: Max duration at any point is 10 yrs if performance ? ?

19. Street Maint. Funding Sources 2008 = $11.9 Million

20. Streets Funding Sources