El Paso Electric Company Marketing Tour

June/July 2015

This presentation includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of

the Private Securities Litigation Reform Act of 1995. This information may involve risks and uncertainties that could cause actual

results to differ materially from such forward-looking statements. Factors that could cause or contribute to such differences include, but

are not limited to:

Increased prices for fuel and purchased power and the possibility that regulators may not permit EE to pass through all such

increased costs to customers or to recover previously incurred fuel costs in rates

Recovery of capital investments and operating costs through rates in Texas and New Mexico

Uncertainties and instability in the general economy and the resulting impact on EE’s sales and profitability

Changes in customers’ demand for electricity as a result of energy efficiency initiatives and emerging competing services and

technologies

Unanticipated increased costs associated with scheduled and unscheduled outages of generating plant

The size of our construction program and our ability to complete construction on budget

Potential delays in our construction schedule due to legal challenges or other reasons

Costs at Palo Verde

Deregulation and competition in the electric utility industry

Possible increased costs of compliance with environmental or other laws, regulations and policies

Possible income tax and interest payments as a result of audit adjustments proposed by the IRS or state taxing authorities

Uncertainties and instability in the financial markets and the resulting impact on EE’s ability to access the capital and credit

markets

Possible physical or cyber attacks, intrusions or other catastrophic events

Other factors detailed by EE in its public filings with the Securities and Exchange Commission. EE’s filings are available from the

Securities and Exchange Commission or may be obtained through EE’s website, http://www.epelectric.com

Safe Harbor Statement 2

3

EE Overview

Service

Territory

Rate Base

Growth

Environmental

Revenue

Growth

Financial

Traditional, vertically integrated electric utility serving west Texas

and southern New Mexico; rate regulated with fuel pass through

Strong long–term customer and revenue growth trends

Sizeable capital expenditures plan and resulting rate base growth

for the next several years

Financially strong utility positioned well for future dividend growth

Favorable environmental profile – low carbon footprint

4

Service Territory

Approximately 400,000 retail

customers

EPE owns 1,829 miles of

transmission lines

Clean dependable generating

capability 2,010 MW (net) –

nuclear (34%), natural gas

(60%) and limited coal (6%)

Interconnected with WECC, not ERCOT

Interconnected with Mexico

Texas jurisdiction represents ~ 78% of MWh sales &

of non-fuel base revenues

5

Residential Customer Growth

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Residential Customers at Year End

10 Year CAGR – Avg. No. Customers

EE Industry*

Usage per Customer 1.02% 0.60%

Customer Growth 1.85% 0.42%

Refrigerated air conditioning is being installed in 99% of new homes

Majority of customers within our service territory utilize evaporative coolers

Refrigerated air conditioning uses 85% less water and three times more electricity than evaporative coolers

Usage per customer impacted by increased energy efficiency and conservation initiatives

* Source EEI-2014 Statistical Yearbook

CAGR

1.85%

6

Customer & Population Growth

100,000

300,000

500,000

700,000

900,000

1,100,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EP & Dona Ana Pop 902,591 917,294 938,496 953,431 970,785 992,160 1,009,8 1,032,6 1,045,3 1,045,0 1,047,1

EE Res Customers 296,435 304,031 311,923 317,091 322,618 328,553 334,729 339,860 345,567 349,629 353,885

El Paso & Dona Ana County Population & EE Residential Customer Growth

EP & Dona Ana Pop EE Res CustomersSource: U.S. Bureau of Census and Real Estate Center at Texas A&M University

CAGR

1.50%

CAGR

1.79%

7

Economic Indicators

The Federal Reserve’s El Paso Business Cycle

Index continues to show positive growth since 2008

El Paso’s April

unemployment rate was

the lowest rate in 6 years

Single family building

permits increased by 39

percent in 1Q 2015

compared to 1Q 2014

Federal Reserve Bank of Dallas

8

Native System Peak Load Growth

Set a new Native Peak record of 1,787* MW on

June 22, 2015

1,000

1,200

1,400

1,600

1,800

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

1,376 1,428

1,508 1,524 1,571 1,616

1,714 1,688 1,750 1,766 1,787 MW

Native System Peak CAGR

2.65%

* Pending Metering Certification

9

Five Year Cash Capital

Expenditures

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E 2019E

EE Estimated Costs

Generation Transmission Distribution General

$277mm

$260mm

$203mm

$170mm

$199mm

$237mm

$202mm

$178mm $169mm

$254mm

10

Generation Addition Schedule

2015 2016 2017 2018 2019

2,010 1,990 2,078 2,078 2,078

Generating Capacity at Summer Peak (MW)

Existing Generation Generation Additions

Projected Peak

(a) MPS Unit 3 will be commercially operational

for summer peak of 2016. MPS Unit 4 will

be commercially operational in December

2016, but will not impact peak generating

capability until 2017.

11

Montana Power Station

The first two generating units at the Montana Power Station

have been completed, and began providing electricity to our

customers in late March as scheduled

Construction of the second

phase of the project includes

Units 3 & 4 and is currently

underway

Once complete, the four LMS-

100 units at MPS will add 352

MW of efficient, clean burning

natural gas power

Montana Power Station Units 1&2

12

Projected Rate Base and CWIP YE 2015

Including

MPS 1 & 2

YE 2016

Including

MPS 3 & 4

Beginning Rate Base (1)(2)

$1,633 $1,947

Plant Additions:

MPS Transmission and Substations 20 14

New Eastside Facility 41 -

Other 141 116

New Generating Units:

Montana Common Plant 53 12

Montana Unit 1 79 -

Montana Unit 2 74 -

Montana Unit 3 - 78

Montana Unit 4 - 78

Total 408 298

Depreciation Expense (90) (95)

Change in Deferred Income Taxes & Other (4) 22

Total Rate Base (3)

$1,947 $2,172

2015 2016

Ending CWIP Balances ($ in millions) $282 $178

Pro forma Rate Base Balances ($000)

(1) Excludes NM’s portion of PV Unit 3 rate base, net of ADIT, of approximately $26mm and $27mm for each pro-forma filing in 2015 and 2016, respectfully

(2) Beginning rate base is December 31, 2014 and year end balances exclude CWIP

(3) Represents a pro-forma rate base projection that is subject to change based on actual rate filings

13

Favorable Financial Positioning

Rate base anticipated to increase due to load growth, not

environmental retrofits

Continue to target a regulatory equity/debt ratio (excluding

short-term and Rio Grande Resources Trust debt) of

approximately 50%

Goal is to preserve investment grade credit ratings in order

to finance capital additions with favorable terms

14

Commitment to Credit Quality

Capital Structure

As of March 31, 2015 * (thousands)

Common Stock Equity $975,265

Long-term debt, net of RGRT 1,039,205

Total Capitalization Before RGRT $2,014,470

RGRT and RCF - LT & ST Debt 168,345

Total Capitalization After RGRT and RCF $2,182,815

* Capital structure includes current maturities and short-term

borrowings

Well positioned to finance planned

investments Investment grade credit ratings

S&P reaffirmed its BBB rating and Stable Outlook in March 2015

Moody’s reaffirmed EE’s credit rating to Baa1 in December 2014

Regulatory Capitalization** Book Capitalization

Debt

51.6%

Equity

48.4%

Debt

55.3%

Equity

44.7%

Moody's S&P

EE (unsecured) Baa1 BBB

Stable Stable

** Regulatory Capitalization excludes borrowings for NF by the Rio Grande

Resources Trust (RGRT), while book capitalization includes nuclear fuel

borrowings in the debt portion of capitalization.

15

Increasing Cash Returns

Quarterly cash dividend has increased by 34% to $0.295

per share since 2011

Dividend payout ratio remains below the peer average,

which allows for future growth

Over the next several years

anticipate growing the dividend by

4% to 6% per year

Goal is to move closer to peer

average payout ratio after major

construction period and regulatory

lag subsides

$1.00

$1.06

$1.12

$1.18

2012 2013 2014 2015Annualized Dividend Per Share

16

Diversified Energy Portfolio

and Low Carbon Footprint 2014 Energy Sources (by MWh’s)

Nuclear 47% Natural

Gas 35%

Purchased

Power 13%*

Coal

5%

*Renewable energy purchases represent 16.4% of total

purchased power

EE vs. U.S. Avg. Carbon Footprint (Short tons CO2 equivalent emissions/MWH)

2010 National

Average 0.62

2014 EE

0.31

17

Well Positioned to Meet New

Environmental Regulations EE expects minimal impacts from the Environmental Protection

Agency’s proposed guidelines to reduce carbon dioxide

emissions from existing fossil fuel-fired power plants

EE will reduce its carbon footprint by ceasing participation in the

Four Corners coal plant in July 2016 when the 50-year

participation agreement expires

EE filed “Sale and Abandonment” proceeding in TX & NM

Costs associated with future retrofits required by

environmental regulation will be avoided

Planned additions of natural gas fired plants will meet growing

customer demand as well as replace Four Corners and other

plant retirements

18

Utility Scale Renewables

The 50 MW Macho Springs Solar Facility began commercial

operation in May 2014 and is now delivering safe, dependable, and

clean power to our system

EE entered into a purchased power agreement with Newman Solar,

LLC to purchase the entire output of a 10 MW solar facility

EE’s utility scale solar facilities represented more than 5% of

dedicated generation resources

EE is placing greater emphasis on utility scale renewables, reflecting

improved cost and economics

In April 2015, EE filed for a Certificate of Convenience and Necessity

in TX and NM for a 20 MW solar facility at Fort Bliss

In June 2015, EE filed for a new 3 MW Community Solar Pilot

Program in TX, which will be constructed at MPS

Additional solar projects are expected to be constructed in Las

Cruces and at Holloman Air Force Base

19

Appendix

20

New Mexico Rate Case Filing

EE filed a general rate case on May 11, 2015 with the New

Mexico Public Regulation Commission (NMPRC)

Summary of request included: Historical test year ended December 2014

Case filed primarily to reflect new plant in service Montana Power Station (MPS) Units 1& 2, common, substation &

transmission

Eastside Operations Center

Change in non-fuel base rates Non-fuel base rate increase of $8.6mm or 7.1%

Change in base fuel rates Forecasted base fuel decrease of $15.4mm* or 21.5%

100% of forecasted fuel and purchased power collected in base rates

Fuel Adjustment Clause trues-up collection to actuals * Base fuel decrease is currently flowing through to customers via the fuel adjustment clause

21

New Mexico Rate Case Filing (cont’d)

ROE of 9.95%; Equity Ratio of 49.29%

Continuation of Palo Verde (PV) Unit 3 proxy market pricing

Average Non-Fuel

Base Change

Average Net Bill Impact

with Proposed Fuel

Residential Service 14.0% 9.0%

Partial Requirements 18.7% 9.0%

Small General Service 0.0% 0.0%

General Service 0.0% 0.0%

Irrigation Service 7.3% 4.5%

Water Pumping Service 0.0% 0.0%

Large Power Service 0.0% 0.0%

Military Research & Dev. Service 0.0% 0.0%

Street Lighting Service 26.0% 20.0%

Private Area Lighting Service 0.0% 0.0%

Seasonal Agricultural Processing 6.6% 4.5%

Outdoor Recreational Lighting 29.6% 20.0%

State University Service 5.0% 2.4%

Structural rate design

changes include:

Gradual approach to

moving customer classes

closer to the costs of

serving them

Combining similar classes

Proposing a new partial

requirement customer

class

22

Rate Base Summary

Total Rate Base*

Total Company $1,809mm

New Mexico jurisdictional $436mm

Approximately $1,281mm of plant has been added since the

last rate case

Significant plant additions to rate base include:

Palo Verde Capital Improvements – $159.0mm

Phase II of Newman Unit 5 – $164.1mm

Rio Grande Unit 9 – $94.4mm

Transmission and Distribution - $413.3mm

MPS and Eastside Operations Center - $266.4mm**

* Rate Base and plant additions exclude PV Unit 3 and 1/3 of PV common

** MPS includes Units 1 & 2, common, substation and transmission lines

23

New Mexico Rate Case Schedule

Procedural Schedule and Timeline *

General Rate Case Filing – May 11, 2015

Discovery Process - May/Sept. 2015

Deadline for Intervention – Aug. 3, 2015

Direct Testimony of NMPRC and Intervenors – Sep. 30, 2015

Rebuttal Testimony – Oct. 28, 2015

Hearing Begins – Nov. 16, 2015

New rates potentially become effective early in 2nd

quarter 2016

* Procedural schedule adopted on June 23, 2015

24

Texas Rate Case Filing

New Mexico rate case filing should not be used to estimate

the level of rate relief that will be requested in Texas

EE anticipates filing a general rate case in July or August

2015

Historical test year ended March 2015

Anticipate new rates will become effective by early 2nd

quarter 2016

25

Recent Regulatory Filings

Regulatory Filing Description Jurisdiction Docket No.

Fort Bliss Solar CCN TX 44637

Fort Bliss Solar CCN NM 15-00099-UT

Four Corners Sale NM 15-00109-UT

Four Corners Sale TX 44805

Holloman Solar CCN NM 15-00185-UT

El Paso MPS Community Solar TX 44800

Las Cruces Community Solar NM

26

Impact of Mexico Cross Border trade between El Paso and Juarez

totaled approximately $89 billion in 2014(1)

A new port of entry linking El Paso and Juarez, the

Tornillo-Guadalupe International Bridge, will add to

the capacity for cross border trade and will be one

of the largest in the nation and is expected to be operational in September 2015

Maquiladora plants employed roughly 273,000 workers in the Juarez

area as of April 2015; maquiladora employment increased 14.7% from

April 2014 to April 2015(2)

A 10 percent increase in maquiladora output leads to a 2.8 percent

increase in El Paso total employment(3)

(1) Source: Texas A&M International

(2) Source: Juarez Maquiladora Association (INDEX)

(3) Source: Mexican National Institute of Statistics and Geography and the Federal Reserve Bank of Dallas

27

Union Pacific Intermodal Rail

Construction of the $400 million Union Pacific intermodal rail yard was

completed in 2014 (one year ahead of schedule) and is projected to add

approximately 600 jobs and added $500 million to the local economy

during construction

The strategic positioning of the

Intermodal Rail Yard, located just

minutes away from maquiladora

plants in Mexico, will make the

Santa Teresa, NM / El Paso, TX

area a focal point for rail

shipments in the southwestern

United States

28

Other Local Growth Summary

El Paso’s hotel revenue and occupancy rate hit an all-time high in March of this

year

Projects associated with $473 million in Quality-of-Life bonds approved by voters in

2012 are under construction including parks, pools, museums, and libraries

The Charles Schwab Corp. plans to open a new operations center in west El Paso,

which is expected to add approximately 445 new jobs to the city by early 2015

Prudential Financial Inc. announced a new technology and call center to be located

on the City’s east side which will employ 300 people over the next several years

Schneider Electric plans to invest $7 million to expand its El Paso manufacturing

facility, adding an additional 193 full-time permanent jobs

Automatic Data Processing (ADP) plans to double its current El Paso workforce

adding 1,100 new positions by 2020

Starwood Hotels has announced plans to restore the historic O.T. Basset Tower in

downtown El Paso for its Aloft-brand hotel, a project estimated at over $10 million

29

2015 Load and Resources

2015 Total Energy Resources 2,117 MW’s

Record Native Peak 1,787 MW’s set in June 2015 *

Company Owned Generation 2,010 MW Solar Purchased

Power

107 MW

Natural Gas Nuclear Coal Wind/Solar Solar Power

Palo Verde Rio Grande Newman Copper Four Corners Renewables Solar Montana

633 MW 752 MW 276 MW 64 MW 108 MW 1 MW 107 MW 176 MW

* Pending Metering Certification

30

Shareholder Return (all data as of 12/31)

2012 – $31.91

2011 – $34.64

2010 – $27.53

2009 – $20.28

2013 – $35.11

2012 – $38.9

2011 – $113.7

2010 – $33.7

2009 – $24.1

2013 – $42.0

MARKET PRICE PER SHARE ANNUAL VALUE OF SHARE

REPURCHASES AND DIVIDENDS(1)

$80$100$120$140$160$180$200$220$240

Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2011 Dec.31, 2012 Dec. 31, 2013 Dec. 31, 2014

Total Return Comparison $100 Investment on December 31, 2009

EE EEI NYSE(1) EE Initiated a quarterly cash dividend in 2011 distributing a total of $27.2mm in addition to $86.5mm in share repurchases

2014 – $40.06 2014 – $44.6

EE $219

EEI $191

NYSE $151

31

Capital Requirements and Liquidity

Expended $73.9mm for additions to utility plant for the three months

ended March 31, 2015

Board declared quarterly cash dividend of $0.295 per share on May 28,

2015 payable on June 30, 2015

EE made $11.3mm in dividend payments for the three months ended

March 31, 2015

At March 31, 2015, EE had liquidity of $249.3mm including a cash

balance of $8mm and unused capacity under the revolving credit facility

Capital expenditures for utility plant in 2015 are anticipated to be

approximately $259.5mm

Received DOE settlement of $6.6mm related to spent nuclear fuel

storage reimbursement

May issue long-term debt in late 2015 or early 2016

32

1st Quarter Financial Results

1st Quarter 2015 net income of $3.5 million or $0.09 per

share, compared to 1st Quarter 2014 net income of $4.6

million or $0.11 per share

33

Financial Highlights

Basic EPS Description

March 31, 2014 0.11$

Changes In:

Interest on long-term debt (0.03)Increased due to $150 million of 5.0% senior notes

issued in December 2014

Gain on the sale of land in 2014 (0.02)Decreased due to sale of land in 1Q 2014 with no

comparable activity in the current quarter

Deregulated Palo Verde Unit 3 revenues (0.02)Decreased due to 35% decrease in proxy market prices

reflecting a decline in natural gas prices

Depreciation and amortization expense (0.01) Increased due to an increase in depreciable plant

Allowance for funds used during construction 0.05 Increased due to higher average construction balances

Taxes other than income taxes 0.02

Decreased due to Arizona property tax adjustment in 1Q

2014 with no comparable adjustment in the current

quarter

Retail non-fuel base revenues 0.01Increased due to colder winter weather in 1Q 2015 and

customer growth

Other (0.02)

March 31, 2015 0.09$

34

1st Quarter Retail Revenues

and Sales Non-Fuel Base

Revenues

(000's)

Percent

Change *MWH

Percent

Change *

Residential 46,940$ 3.0% 561,653 3.4%

C&I Small 31,970 (0.5%) 490,066 (0.8%)

C&I Large 8,249 (0.9%) 253,120 11.7%

Public Authorities 17,258 (2.3%) 343,093 -

Total Retail 104,417$ 0.7% 1,647,932 2.6%

Heating Degree Days (HDD's) 1,153 20.4%

Average Retail Customers 400,063 1.4%

* Percent change expressed as change from Q1 2015 over Q1 2014

35

Historical Weather Analysis

1,024

1,288 1,191

1,030

1,396

1,265 1,159

1,338

958

1,153

0

200

400

600

800

1,000

1,200

1,400

1,600

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

March YTD HDD

10-Yr HDD

Average – 1,180

36

2015 Estimated Regulatory Lag Impacts

Estimated Impact on EPS due to Regulatory Lag

for MPS T&D, Common, Units 1&2, and the East Side Distribution

Operations Center

Overall 2015 EPS Impact ($0.31 to $0.37) ($0.19)

($0.08)

($0.07)

AFUDC

Depreciation

Property Tax & O&M

Other

Note: Individual components represent mid-point of the range of estimated impact

37

Texas Renewables

Requirements EE must obtain renewables through renewable generation or

purchase of Renewable Energy Credits (REC’s). The amount is based on the ratio of EE’s Texas sales compared to total sales in the state. This number has averaged approximately 5%.

Compliance

EE primarily purchases REC’s

Cost Recovery

REC costs recovered through

base rates

EE capital investments included

in rate base

38

New Mexico Renewables

Requirements

EE is required to meet 15% of its current retail

energy sales in New Mexico via renewables;

escalates to 20% in 2020

Must be from diverse sources – at least 20% solar, 30% wind, 5% biomass and 3% renewable distributed generation

Reasonable cost threshold will limit future requirements for EE

Compliance

Purchase of wind RECs from Southwestern Public Service (SPS) through 2015

Cost Recovery

Renewable energy with RECs recovered through fuel clause; RECs without

energy deferred and recovered through base rates

39

Regulatory Overview

Name Term Ends Party

Donna L. Nelson (Chair) 08/31/2015 Republican

Kenneth W. Anderson 08/31/2017 Republican

Brandy Marty 08/31/2019 Republican

Name Term Ends Party District

Karen Montoya (Chair) 12/31/2016 Democrat 1

Patrick Lyons 12/31/2018 Republican 2

Valerie Espinoza (Vice Chair) 12/31/2016 Democrat 3

Lynda Lovejoy (Vice-Chair) 12/31/2018 Democrat 4

Sandy Jones 12/31/2018 Democrat 5

Public Utility Commission of Texas - Appointed by Governor

New Mexico Public Regulation Commission - Elected

FERC Rates are Formula Based

1

2

3

4

5

40

EE Contact Information

Nathan Hirschi Richard Gonzalez

Senior Vice President – Chief Financial Officer Supervisor Investor Relations

(915) 521-4456 (915) 543-2236

nathan.hirschi@epelectric.com richard.gonzalez@epelectric.com

John Boomer El Paso Electric Headquarters

Vice President, General Counsel Stanton Tower

(915) 543-4347 100 North Stanton

john.boomer@epelectric.com El Paso, Texas 79901

(800) 592-1634

Lisa Budtke

Assistant Treasurer

(915) 543-5947

lisa.budtke@epelectric.com