EL PASO - El Paso Electric is paying customers to use less electricity to meet a statewide mandate.

The company paid more than $1.2 million last year for cash incentive payments and administrative costs for energy-efficiency programs, said David Carpenter, El Paso Electric controller. Those costs eventually will be passed on to customers, he said.

The company's latest payment was $116,000 to the University of Texas at El Paso. The payment, made during a ceremony Thursday, was given to UTEP for replacing two 30-year-old chillers with more-energy-efficient ones for its cooling system at a cost to UTEP of $2.3 million.

The Texas Legislature established mandates for electric utilities to reduce their peak electric demand loads over several years, said Evan Evans, a company assistant vice president.

That's why last year El Paso Electric instituted the Schools and Cities Conserving Resources Program, known as Score, through CLEAResult Consulting. The Austin energy consultant has implemented the program throughout the state for utilities through consulting contracts.

El Paso Electric's Score program encompasses 12 school districts, UTEP, Texas Tech, El Paso Community College, and the city and county.

The company has paid more than $334,000 so far for Score projects. It also pays cash incentives to business and industrial customers through other energy-efficiency programs, Evans said. It also subsidized the sale of 70,000 fluorescent light bulbs for home use at area stores.

Juan Guerra, director of facility services at UTEP, said that the school is always trying to improve its energy use but that the Score cash incentives "motivate us to look for other opportunities across the campus." CLEAResult Consulting also alerts UTEP officials to new energy-saving products and helps identify additional ways to save energy, especially in new construction projects, he said.

The new chillers are expected to save UTEP $65,000 a year in electricity costs. That reduction also is expected to reduce UTEP's and El Paso Electric's peak electric demand by 772 kilowatts.

Carpenter said paying customers to reduce electric demand is something electric utilities have done for years.

"If we can pay someone to reduce demand," then the company's costs are lowered because it can buy less electricity on the market or build fewer power plants, Carpenter said.

Customers will eventually pay for the company's incentive payments. El Paso Electric plans to ask state regulators to let it recover the payments through a bill surcharge after the utility's rate freeze ends in July 2010, Carpenter said. Electric utilities in other parts of the state already are surcharging customers for such costs, he said.

El Paso Electric also has a program to reduce energy use by residential customers, but that program hasn't done much because air-conditioning contractors haven't been receptive to it, Evans said. Texas law does not permit electric utilities to sell energy-efficiency projects directly to customers, he said; it has to be done through contractors and consultants.

The company late last year began implementing energy-saving programs with cash incentives in New Mexico, Carpenter said. It plans to implement a program similar to Score in New Mexico in the future, he said.

Vic Kolenc may be reached at vkolenc@elpasotimes.com;

546-6421.

For more information: www.epelectric.com; www.clearesult.com.

Pay and save

?  El Paso Electric paid more than $1.2 million last year in cash incentives to customers who implemented energy-saving projects.

?  The company eventually will ask state regulators to let it recover costs of energy-efficiency programs from customers through a bill surcharge.

?  The utility last year began Schools and Cities Conserving Resources, or Score, to pay cash incentives to schools, colleges and municipalities for reducing peak electricity demands.

?  The energy-efficiency programs are conducted through contractors and consultants. Contractors who want more information can call 543-5809.