Project Name: EHV Relay Replacement

EXHIBIT HRP-2PAGE 5 OF 5

Project Name: EHV Relay Replacement

The purpose of this project was to replace protection system relays on EPE's 345 kV systemwith newer technology microprocessor-based equipment. EPE's system was in need ofimprovements to the 345 kV protection system to improve the reliability of the system. The totalcost of this project was $1,165,073.

Project Name: T&D Lines & Substations

In the 1994 timeframe, this blanket project was utilized for the general capital construction workassociated with the installation and replacement of overhead distribution, transmission andsubstation facilities in New Mexico and Texas regardless of voltage class. Work includedresidential, commercial, service betterment, service installation, public and private lightinginstallations as well as replacement of damaged facilities. Expenditures identified in this subsetof the total included transmission capital expenditures for the installation, replacement and, ifnecessary relocation of facilities on the 69, 115 & 345 kV transmission systems. Also includedin this category is all substation related improvements / replacements for both classes ofsubstations, Distribution and Transmission, regardless of voltage classification. The total cost ofthis project was $1,110,155.

Project Name: 15500 Transmission Line Rebuild

In the winter of 1994, a very severe ice storm damaged two of EPE's transmission lines on theWest side of Mount Franklin. The 16200 had one long span crossing the mountain fail due tothe buildup of ice. This was repaired within days. The 15500 parallels the mountain on theWest side, and long segments of this line were destroyed. Since the original construction of theline, ownership of the land where the line was built and land adjacent to the line had changed.All of the line within this restricted area was rebuilt, replacing the wood pole structures withweathering tubular steel structures. The total cost of this project was $1,094,788.

900


Project Name: Jornada Substation

The substation is ideally located to serve one of the fastest developing areas of Las Cruces. Itwill provide backup to and relieve load on Picacho Substation feeders PIC-21 and PIC-22 andArroyo Substation feeders ARR-20 and ARR-22. Its construction will delay the necessity ofupgrading the transformer at Picacho Substation for several years. It will also allow the ArroyoSubstation feeders to be shortened, thus resulting in the ability to accommodate increasingfeeder loads as a result of continuing development near Arroyo Substation with no upgrades tothe substation. The cost of this project was $6,690,420.

Project Name: Las Cruces Substation Acquisition (Airport Substation)

The substation included a 20 MVA 115/23/9 kV transformer, a 115 kV breaker and associateddistribution switchgear. The Picacho-Mimbres 115 kV line was tapped in and out of AirportSubstation. The substation provided service to west Las Cruces as well as back-up service toneighboring substations during emergency situations. The cost of this project is $4,500,000.

Project Name: Milagro Substation - Three 30 MVA Distribution Transformers

The project was needed to accommodate load growth in the area and to provide for adjacentsubstation load relief. The new Milagro transformers changed the substation operating voltagefrom 69 kV to 115 kV and provided improved voltage support for area load growth. The cost of

this project is $4,436,461.

Project Name: Montwood 115/23.9 kV Substation

Installed two 33.6 MVA, 115/23.9 kV transformers, five 115 kV breakers and the construction ofthree 23.9 kV distribution feeders. The substation was built to accommodate the growing loadin east El Paso. The higher distribution voltage, 23.9 kV versus 13.8 kV, provided greaterfeeder capacity and reduced transmission losses. The cost of this project was $3,592,578.

Project Name: Las Cruces Substation

The new Las Cruces Substation includes two 60 MVA, 115-23.9 kV transformers, five 115 kVbreakers and associated distribution switchgear. The new Las Cruces Substation enabled theretirement of the existing 23.9 kV distribution equipment in the old Las Cruces Substation andalso supported new load growth in the area. The cost of this project was $3,400,671.

Project Name: Arroyo 345/115 KV Autotransformer

The addition of the new generation at Newman required a second autotransformer at ArroyoSubstation in order to prevent the occurrence of contingency violations. The cost of this project

was $3,194,170.

901


Project Name: Rio Bosque 69113.8 kV Substation - New

The new substation was built with one 30 MVA, 69/13.8 kV transformer, three 69 kV breakers ina ring bus configuration, and associated distribution equipment. Transmission service to thesubstation was provided by tapping in and out of the old Socorro-Zaragosa 69 kV line.Zaragosa substation was retired, and the load was picked up by the transformer at Rio Bosque.The purpose of this project was to accommodate industrial load growth in the AmericasIndustrial Park area and provide backup support to Americas Substation. The cost of this

project was $2,691,829.

Project Name: Montwood-Horizon 115 kV Line

Horizon Substation was upgraded to 115 kV operation, which included the addition of three115 kV breakers, a 115/14 kV (30 MVA) transformer, and an eight-mile 115 kV transmission lineusing 795 MCM ACSR conductor to Montwood Substation. The expansion of the transmissionsystem in east El Paso necessitated operating Horizon Substation at 115 kV to maintaintransmission system reliability for loads served by this substation. The cost of this project was$2,328,310.

Project Name: Montoya Substation, Third Distribution Transformer

This project added one 115 kV breaker and a115/24.9 kV, 30 MVA, third distribution transformerat the Montoya Substation. The purpose of this project was to accommodate area load growthand provide for adjacent substation load relief. The cost of this project was $2,105,491.

Project Name: Clint 69/13.8 KV Substation

A new 30 MVA, 69/13.8 KV transformer replaced the existing Clint distribution transformer. Theproject served new load growth in the lower valley and also served load previously fed by ValleySubstation. The cost of this project was $2,069,645.

Project Name: Wrangler 69/13.8 KV Substation

This project installed a 30 MVA, 69/13.8 KV transformer, 69 KV breakers and 13.8 KVdistribution equipment. The substation was built to accommodate the growing load in east ElPaso. The cost of this project was $2,052,812.

Project Name: Chaparral 115/13.8 kV Substation Expansion

The existing 12.5 MVA, 115/13.8 kV transformer was replaced with a new 30 MVA, 115/13.8 kVtransformer, and a breaker ring bus configuration was added. This project accommodated areaload growth and increased system reliability. The cost of this project was $2,032,998.

902


Project Name: Caliente 2"d Autotransformer

This project added a second 345/115 autotransformer to Caliente substation in 1995. The

purpose of this transformer was to relieve overloads that occurred on the existing Caliente345/115 autotransformer during certain single-system outages. The cost of this project was

$1,929,841.

Project Name: Arroyo 115/24.9 kV Substation Transformer Addition

In 2002, the existing 25 MVA, 115/24.9 kV transformer remained in place and a second, new30 MVA, 115/24.9 kV transformer was added to the substation. This project accommodated

area load growth. The cost of this project was $1,770,809.

Project Name: Wrangler 115/13.8 KV Substation

This project upgraded the 30 MVA, 69/13.8 KV transformer to a 50 MVA 115/13.8 KVtransformer and added four 115 KV breakers. The substation was built to accommodate thegrowing load in east El Paso. The cost of this project was $1,558,648.

Project Name: Rio Grande Auto transformer Replacement

This transformer is a 115 kV / 69 kV Autotransformer located in the Rio Grande generatingswitch yard. The project was a result of preventative maintenance testing indicating that thetransformer was reaching its end of life and exhibiting signs of failure. The cost of this projectwas $1,288,065.

Project Name: Montoya Substation, Third Distribution Transformer

The project called for the addition a 115 kV breaker and a 115/24.9 kV, 30 MVA, seconddistribution transformer. The purpose of this project was to accommodate area load growth andprovide for adjacent substation load relief. The cost of this project was $1,263,302.

Project Name: Ascarate Autotransformer Replacement

This transformer is a 115 kV / 69 kV Autotransformer located at Ascarate substation in centralEl Paso. The project was a result of preventative maintenance testing indicating that thetransformer was reaching the end of its life and exhibiting signs of failure. The cost of thisproject was $1,130,800.

903

DOCKET NO. 37690

APPLICATION OF EL PASO ELECTRICCOMPANY TO CHANGE RATES, TORECONCILE FUEL COSTS, TO ESTABLISHFORMULA-BASED FUEL FACTORS, ANDTO ESTABLISH AN ENERGY EFFICIENCYCOST RECOVERY FACTOR

§ PUBLIC UTILITY COMMISSION§§ OF TEXAS§§§

DIRECT TESTIMONY OF

DAVID TORRES

FOR

EL PASO ELECTRIC COMPANY

(REVENUE REQUIREMENT)

DECEMBER 2009

DAVID TORRESDIRECT TESTIMONY

904

EXECUTIVE SUMMARY

Mr. David Torres is a Load Forecaster under the Load Forecasting Department.

Mr. Torres prepared the energy and demand forecasts for EPE's Rate Year of July 2010

through June 2011. The purpose of his testimony is to provide historical and forecasted

data concerning sales and demand in support of EPE's rate request. In his testimony,

Mr. Torres describes EPE's retail and wholesale customers along with the regional

economy. Mr. Torres further discusses the forecast assumptions supporting the energy and

demand forecasts. EPE forecasts the native system energy to grow at a 2.6 percent annual

average rate over the next twenty years, which is consistent with recent trends and the

economic growth projections for the El Paso area.

DIRECT TESTIMONYDAVID TORRES

905

TABLE OF CONTENTS

SUBJECT PAGE

1. INTRODUCTION ....................................................................................................1

II. PURPOSE AND SUMMARY OF TESTIMONY ....................................................... 2

III. EPE CUSTOMERS AND SERVICE AREA ECONOMY .......................................... 3

IV. FORECAST METHODOLOGY AND ASSUMPTIONS ............................................8

V. FORECAST RESULTS ........................................................................................11

VI. LOSS STUDY .......................................................................................................11

VII. SUMMARY AND CONCLUSIONS ........................................................................12

EXHIBITS

DT-1 - Border Region Modeling Project - Borderplex Long-Term Economic Trends to2028

DT-2 - Short-Term Energy and Demand ForecastsDT-3 - List of Sponsored Schedules

DIRECT TESTIMONYDAVID TORRES

906

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1. INTRODUCTION

Q. PLEASE STATE YOUR NAME, BUSINESS ADDRESS AND OCCUPATION.

A. My name is David Torres. My business address is 100 North Stanton, El Paso,

Texas 79901-1341. I am employed by El Paso Electric Company (EPE or

Company) as the Load Forecaster in the Load Forecasting Department. Among its

other duties, the Load Forecasting section is responsible for performing the short

and long-range system energy and demand forecasting for planning purposes. This

group also performs system-wide loss analysis by voltage level for input into various

schedules.

Q. PLEASE SUMMARIZE YOUR EDUCATIONAL AND PROFESSIONAL

BACKGROUND.

A. I graduated from The University of Texas at El Paso in 2000 with a Bachelor of

Business Administration with a double major in Economics and Finance and in 2002

with a Master of Science in Economics. Prior to joining El Paso Electric, I worked as

the Economist for El Paso Water Utilities from 2002 to 2007. My duties included

rate analysis, financial planning, debt structuring, long-term water demand

forecasting, cost of service calculation and land structured sales, purchases and

leases.

I began working for El Paso Electric Company in 2007 as the Load

Forecaster. Among my duties is the development of the long-term energy, demand

and customer forecasts utilized for planning purposes. These forecasts are utilized

by Resource Planning and Financial Forecast departments.

Page 1 of 12 DIRECT TESTIMONYDAVID TORRES

907

1 Q. HAVE YOU EVER PROVIDED TESTIMONY IN A REGULATORY PROCEEDING?

2 A. Yes, for the Texas Fuel Factor Filing PUCT Docket No. 37086, June 2009.

3

4 II. PURPOSE AND SUMMARY OF TESTIMONY

5 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING?

6 A. The purpose of my testimony is to provide historical and forecasted data concerning

7 sales and demand in support of EPE's rate request and to sponsor certain related

8 schedules. In my testimony I summarize the structure, history, and outlook of the

9 economy of EPE's service area. I describe EPE's forecasting methodology and

10 assumptions that support the demand and energy forecasts that will be presented

11 and discussed. I also sponsor the Company's current demand and energy forecasts

12 with monthly energy requirements for EPE's proposed Rate Year - July 1, 2010

13 through June 30, 2011. The most recent Long-Term Load Forecast is dated

14 April 16, 2009.

15

16 Q. WHY IS EPE PRESENTING LOAD FORECAST TESTIMONY?

17 A. To provide information required by certain schedules in the rate filing and provide

18 information regarding the economic outlook in EPE's service area.

19

20 Q. ARE YOU SPONSORING ANY EXHIBITS IN YOUR TESTIMONY?

21 A. I am sponsoring Exhibits DT-1, DT-2 and DT-3 which are attached to this testimony.

22

23 Q. PLEASE DESCRIBE THE CONTENTS OF EACH EXHIBIT.

24 A. The contents of each exhibit are as follows:

25 • Exhibit DT-1 contains the Borderplex Long-Term Economic Trends to 2028


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publication;

• Exhibit DT-2 summarizes the energy and demand forecasts, and

• Exhibit DT-3 lists the schedules I am sponsoring and co-sponsoring in this filing.

Q. WHAT SCHEDULES DO YOU SPONSOR OR CO-SPONSOR?

A. I am sponsoring Schedules 0-7 through 0-10 and co-sponsoring Schedule H-12.5f.

The schedules I am sponsoring or co-sponsoring are listed with descriptions in

Exhibit DT-3.

III. EPE CUSTOMERS AND SERVICE AREA ECONOMY

Q. PLEASE DESCRIBE EPE'S RETAIL CUSTOMERS.

A. EPE's retail customers are located in West Texas and Southern New Mexico. The

Texas retail jurisdiction includes El Paso County and portions of Hudspeth and

Culberson Counties. The Texas retail jurisdiction accounts for approximately

77 percent of EPE's retail sales. The New Mexico retail jurisdiction includes

Dona Ana County and portions of Otero, Luna, and Sierra counties. The

New Mexico retail jurisdiction accounts for the remaining 23 percent of retail sales.

The Company's major franchises are in the Cities of El Paso, Texas and

Las Cruces, New Mexico. The El Paso and Dona Ana counties had an estimated

population in 2007 of 734,669 and 198,791, respectively. More than 90 percent of

EPE's retail sales occur in these two counties.

Q. DOES EPE HAVE ANY FIRM WHOLESALE CUSTOMERS?

A. Yes, EPE provides firm wholesale service to the Rio Grande Electric Cooperative

(RGEC) at two delivery points that are adjacent to EPE's service area: the Dell City


909

1 delivery point in Hudspeth County and the Van Horn delivery point in Jeff Davis

2 County. RGEC is a full requirements customer and, therefore, RGEC is a part of

3 EPE's native system load. Their load is 11 MW.

4

5 Q. PLEASE DESCRIBE BRIEFLY THE ECONOMIC STRUCTURE OF EPE'S

6 SERVICE AREA.

7 A. Geographically, EPE's service area extends approximately 100 miles to the

8 northwest and 120 miles to the southeast of El Paso. The majority of EPE's load is

9 distributed within the two local Metropolitan Statistical Areas (MSAs) of El Paso,

10 Texas and Las Cruces, New Mexico.

11 El Paso is mainly a transportation and distribution center that provides goods

12 and services to Southern New Mexico, West Texas, and the State of Chihuahua in

13 Mexico. Despite the national trend, El Paso has experienced recent employment

14 growth in education and health services and declines in manufacturing and

15 construction. Additionally, the government sector has seen increased employment

16 due to the military presence at Fort Bliss, Texas.

17 El Paso's manufacturing mix includes petroleum and metals refining, apparel,

18 automotive and electronic components. Much of this industrial base owes its

19 existence to the success of the maquiladora program. The maquiladora program

20 involves component parts being shipped into Mexico for assembly. The assembled

21 components re-enter the United States with a minimal duty assessed based on the

22 value-added to each product in Mexico. This concept is also commonly referred to

23 as maquiladora operations.

24 Total government employment includes the U.S. Army Air Defense Center at

25 Fort Bliss, Texas, with training responsibilities for the nation's air defense systems


910

1 worldwide (e.g., Patriot missile systems) and Germany's Air Defense training facility.

2 The Air Defense Center at Fort Bliss is expected to be moved to Fort Sill, Oklahoma

3 by the end of 2009. However, Fort Bliss is expecting to increase its troop size by

4 27,000 additional troops by 2013 due to the relocation of several combat brigades to

5 Fort Bliss. In addition, El Paso local government, which is comprised of city and

6 county workforces and local school districts, makes up 69.3% of government

7 employment.

8 The Las Cruces MSA economy is characterized by a large government

9 sector dominated by White Sands Missile Range and New Mexico State University.

10 EPE also serves Holloman Air Force Base in Otero County which is another

11 significant government entity in New Mexico. The government sector directly

12 accounts for almost 25 percent of total employment. Las Cruces also has the

13 commercial establishments necessary to serve the remaining sectors, including a

14 substantial and growing retirement community. In addition, manufacturing is a

15 comparatively small, but growing, sector in Las Cruces.

16

17 Q. WHAT IS THE OUTLOOK FOR THE SERVICE AREA ECONOMY?

18 A. The severe economic downturn and increased international border security initiatives

19 have had a dampening effect on the short-term outlook for the service area

20 economy. Over the next two years, employment growth is expected to increase very

21 slightly each year. Census data indicates that annual population growth in El Paso

22 from 1990 to 2000 was 1.5 percent on average, lower than the state population

23 growth rate of 2.3 percent, but higher than the national average of 1.3 percent.

24 Total income in El Paso was about $19.4 billion in 2007 and could reach almost

25 $22.9 billion by 2010.


911

1

2 Q. ARE THERE SIGNIFICANT ECONOMIC FACTORS RELATED TO MEXICO THAT

3 AFFECT THE EL PASO ECONOMY?

4 A. Yes, there are. The growth of the maquiladora sector in Mexico is tied to the level of

5 U.S. production. In December 1994, the Mexican government devalued the peso.

6 An immediate effect in El Paso over the following three months was a decline in

7 retail sales, which over time affected EPE's commercial customer growth and the

8 City's budget. The cheaper peso resulted in lowered labor costs in the maquiladora

9 sector. Consequently, several local manufacturing facilities eventually closed and

10 moved their operations to Mexico. Mainly, these were apparel assembly and

11 finishing jobs (e.g., sewing). Since then, the economy of El Paso has shifted its

12 concentration from apparel manufacturing to other industrial sectors in the service

13 and trade industries.

14 Another factor that impacts the service area is increasing international trade.

15 The increase in global trade resulted in the relocation of labor intensive industries in

16 Mexico being moved to Asia. Most recently, though, the maquiladora industry has

17 been impacted by the slowdown in automobile demand. Approximately, 40,000

18 maquiladora workers have lost their jobs because of the financial problems of the

19 automakers. Along with economic issues, crime in Ciudad Juarez has increased

20 substantially, which has had an adverse effect on maquiladora sector. Recently, the

21 presence of over 9,000 troops and federal police has provided some stability.

22

23 Q. WHAT ARE YOUR EXPECTATIONS FOR EPE'S MILITARY CUSTOMERS?

24 A. The estimated impact of the 2005 Base Realignment and Closure process calls for

25 the local military presence to grow steadily through 2013. The War on Terrorism


912

1 has increased the utilization of troops assigned to Fort Bliss. The relocation of

2 several units from Europe to Fort Bliss will transform the base from an institutional

3 training installation into a mounted maneuver installation. This means that Fort Bliss

4 will become a major training facility for heavy field artillery and armored vehicles.

5 Thus, Fort Bliss should continue its role as an important positive force in the service

6 area economy.

7 Similar to Fort Bliss, White Sands function is expected to be enhanced as a

8 result of the 2005 Base Realignment and Closure process. White Sands is primarily

9 known as a test and evaluation facility. The relocation of the Army Research

10 Laboratory from White Sands to Aberdeen Proving Ground, Maryland will be offset

11 with the addition of an engineering battalion of about 700 soldiers to be stationed at

12 White Sands. Overall, White Sands is expected to maintain its status as a premiere

13 test and evaluation facility while continuing to play a vital role in the service area

14 economy.

15

16 Q. WHAT IS THE PRIMARY SOURCE OF DATA THAT EPE RELIED ON FOR

17 INFORMATION REGARDING THE ECONOMIC OUTLOOK FOR THE COMPANY'S

18 SERVICE AREA?

19 A. EPE relied primarily on the report from The University of Texas at El Paso (UTEP)

20 Border Region Modeling Project published by Dr. Thomas Fullerton. The latest

21 report, the Borderplex Long Term Economic Trends to 2028 (March 2009), is

22 provided as Exhibit DT-1. This forecast provides the underlying assumptions of

23 population, income and employment that were used in developing projected

24 demand, energy, and customers presented herein.


913

1 The Borderplex Econometric Forecasting Model modifies the traditional

2 regional econometric framework for a regional economy located on an international

3 border. Typically, regional econometric modeling is concerned with business cycle

4 forecasting, policy analysis and applied research. Inputs to a regional model include

5 national historic and forecasted data, as well as regional data.

6 In addition to the UTEP data, EPE has direct contact with its large

7 customers, including Fort Bliss, White Sands, El Paso Water Utilities, and others.

8 This helps EPE evaluate the economic outlook for the region.

9

10 IV. FORECAST METHODOLOGY AND ASSUMPTIONS

11 Q. WHAT IS EPE'S BASIC APPROACH IN DEVELOPING ITS SALES FORECASTS?

12 A. Since 1979, EPE has used an econometric approach for forecasting over 80 percent

13 of its retail sales. Econometrics is the application of mathematics and statistical

14 methods to the analysis of economic data and the relationship between economic

15 variables to provide empirical estimation of those relationships. EPE's econometric

16 forecasting models relate customer usage to service area economic trends, such as

17 population, employment, and personal income to estimate future electricity sales.

18 For example, population and personal income are typical drivers of electricity sales;

19 more customers and increased income to purchase appliances will typically result in

20 higher electricity demand. The remainder of the forecast is based on EPE's

21 experience with, and information gained from, some of the Company's larger

22 customers and firm wholesale customers.

23

24 Q. DOES EPE'S FORECASTING METHODOLOGY CONFORM TO INDUSTRY

25 STANDARDS?


914

1 A. Yes, EPE's econometric methodology is used by other utilities. This is the same

2 methodology used in developing the forecasts used in EPE's most recent fuel factor

3 and surcharge cases.

4

5 Q. PLEASE EXPLAIN EPE'S METHODOLOGY USED FOR THE SALES AND

6 DEMAND FORECASTS PRESENTED IN THIS TESTIMONY.

7 A. EPE relies on the regional macroeconomic forecasts prepared by the UTEP Border

8 Region Modeling Project to support the econometric models for the energy (sales)

9 forecasts for the El Paso and Las Cruces areas. EPE develops jurisdictional

10 revenue class sales forecasts based on annual macroeconomic data and customer

11 historic and forecasted data for each respective jurisdiction. As noted above, EPE's

12 forecasts for energy requirements are functions of variables such as population,

13 income, employment and other significant inputs. The econometric sales forecasts

14 and resulting peak demand forecast were adjusted to reflect conservation and load

15 management effects not represented in the historical database. Schedule 0-9

16 includes detailed descriptions of the equations, variables, and input data for the

17 econometric models. Some of the same input data for the econometric models is

18 also presented in Schedule 0-10.

19

20 Q. ARE ALL OF EPE'S SALES ESTIMATES BASED ON A MODEL?

21 A. No. In the few cases where adequate data was not available to support statistical

22 analysis, EPE relied on non-econometric sales estimates based upon professional

23 judgment, recent experience, and load information directly from EPE's large

24 customers. EPE's projected firm wholesale sales are based on recent historical

25 levels adjusted for known future changes in contract demand.


915

1

2 Q. UP TO THIS POINT YOU HAVE DESCRIBED YOUR METHODOLOGY FOR

3 FORECASTING SALES TO THE END-USE CUSTOMER (AT THE METER). HOW

4 DO YOU DETERMINE THE MONTHLY SYSTEM ENERGY REQUIREMENT

5 (SALES AT THE SOURCE)?

6 A. EPE combines the annual retail sales, sales to RGEC and Company Use, then

7 calculates "line losses and unaccounted for energy" using a loss rate based on an

8 average of historical values. These system losses must be included with sales at

9 the meter to accurately develop the total energy requirement needed to deliver

10 electricity to EPE's customers. The annual losses are then allocated to each month

11 based on a historical seasonal pattern. Additional line losses are incurred from

12 off-system wheeling of EPE's power (Losses-to-Others). These losses are

13 estimated based on the historic averages of the system.

14

15 Q. HOW ARE YOUR PEAK DEMAND FORECASTS DEVELOPED?

16 A. EPE uses the native system load factor relationship to estimate future annual peak

17 demands. Load factor defines the relationship between energy and peak demand.

18 Load Factor = System Energy /(Peak Demand x Hours)

19 For example, the annual load factor for 2008 was:

20 Load Factor = 7,669,160 MWh /(1,524 MW x 8,784 hours) = 0.5729

21 EPE applies a three-year average load factor to "net output to lines"

22 projected energy to calculate the estimated peak demand. These values are then

23 adjusted for conservation and load management to calculate native system peak.

24 The demand from any firm contract sales and wheeling losses are also

25 accounted for to obtain overall system peak demand. The final adjustment is to


916

1 subtract interruptible load. Monthly demand is estimated by using the historical

2 relationship between monthly peak demands and the annual peak demand.

3

4 Q. WHAT ARE THE MAJOR UNDERLYING ASSUMPTIONS USED IN DEVELOPING

5 EPE'S FORECASTS?

6 A. The major underlying assumptions for the forecasts are the projections for

7 population, employment, income, and retail trade employment, which are used in the

8 sales models. These data series for EPE's service area are taken from the UTEP

9 Border Region Modeling Project reports described earlier in my testimony and are

10 included in Schedules 0-10.1 and 0-10.2.

11

12 V. FORECAST RESULTS

13 Q. PLEASE SUMMARIZE THE FORECASTS USED IN THIS FILING.

14 A. The Company's energy and demand forecast summary is provided in Exhibit DT-2.

15 Even though the forecasts reflect slower growth in the next couple of years, they

16 largely reflect normal system long term growth, much like the growth rates of the last

17 several years. The annual growth in the native (total) system energy requirement of

18 approximately 2.6 percent is reasonable given recent trends and expected economic

19 growth in EPE's service area over the long term.

20

21 VI. LOSS STUDY

22 Q. WHAT LINE LOSSES WERE USED IN THIS FILING?

23 A. The estimated system line losses from the current study as discussed by EPE

24 witness Evans, were modeled to reconcile to the total system energy based on data

25 for the 12 months ended December 31, 2008.


917

1

2 VII. SUMMARY AND CONCLUSIONS

3 Q. IS THE LOAD FORECAST REASONABLE?

4 A. EPE's econometric forecast methodology, using economic and demographic

5 explanatory variables, is an established industry standard. The econometric models

6 shown in Schedule 0-9.2, and used in the forecasts, are sound in theory and

7 statistically significant. In addition, EPE exercised sound professional judgment in

8 developing the forecasts for rate classes having insufficient data or which otherwise

9 did not lend themselves to econometric modeling. Individual forecasts for large

10 customers and firm wholesale sales were based on recent trends and known or

11 reasonably predictable changes in consumption levels.

12 The forecast for native system energy exhibits a 2.6 percent average annual

13 long term growth rate and is consistent with recent trends and the economic growth

14 projections for the El Paso area. In sum, the source data and forecast

15 methodologies yield a reasonable estimate of sales and demand for this filing.

16

17 Q. DOES THIS CONCLUDE YOUR DIRECT TESTIMONY?

18 A. Yes, it does.


918

EXHIBIT DT-1PAGE 1 OF 34

919


The U n ivers ityof Texas at El Paso

BorderplexLong-Term Economic

Trends to 2028

Business Report SR09-1

UTEP Border Region Modeling Project

Price $10

UTEP Business Report SR09-1 • March 2009 Page 1

q90

EXHIBIT DT- IPAGE 3 OF 34

This business report is a publication of the Border Region Modeling Project and the Department

of Economics & Finance at the University of Texas at El Paso. For additional Border Region

information, please visit the www. academics.utep.edu/border section of the UTEP web site.

Please send comments to Border Region Modeling Project - CB A 236, Department of Economics& Finance, 500 West University, El Paso, TX 79968-0543.

UTEP does not discriminate on the basis of race, color, national origin, sex, religion, age, or dis-ability in employment or the provision of services.

University of Texas at El PasoDiana Natalicio, President

Richard Jarvis, ProvostRoberto Osegueda, Vice Provost

College of Business AdministrationBob Nachtmann, Dean

Pat Eason, Associate DeanSteve Johnson, Associate Dean

Tim Roth, Templeton Professor of Banking & EconomicsBorder Economics & Trade


991


UTEP Border Region Econometric Modeling Project

Corporate and Institutional Sponsors:

El Paso Electric Company

Hunt Communities

Hunt Building Company

Las Palmas & Del Sol Healthcare

JP Morgan Chase Bank of El Paso

Universidad Autonoma de Ciudad Juarez

UTEP College of Business Administration

UTEP Department of Economics & Finance

UACJ Instituto de Ciencias Sociales y Administracion

Special thanks are given to the corporate and institutional sponsors of the UTEP Border RegionEconometric Modeling Project. In particular, El Paso Electric Company and The University ofTexas at El Paso have invested substantial time, effort, and financial resources in making this fore-casting project possible. Econometric research assistance for the current edition of the borderplexlong-term outlook was provided by Emmanuel Villalobos and Enedina Licerio.

Continued maintenance and expansion of the UTEP business modeling system requires ongoingfinancial support. For information on potential means for supporting this research effort, pleasecontact Border Region Modeling Project - CBA 236, Department of Economics & Finance, 500West University, El Paso, TX 79968-0543.

UTEP Business Report SR09-1 • Match 2009 Page 3

922


Borderplex Long-TermEconomic Trends to 2028

Thomas M. Fullerton, Jr. and Angel L. Molina, Jr.Department of Economics & Finance

University of Texas at El PasoEl Paso, TX 79968-0543Telephone 915-747-7747Facsimile 915-747-6282Email [email protected]

Executive Overview

Steady expansion characterizes the long-term outlookfor the borderplex regional economy. Growth in keyindicators such as output and job formation reflectsthe ongoing economic vitality of this regional market(Table 1). As demographic expansion continues in thenorthern half of the bordeplex, El Paso total population isforecast to approach the 1.0 million mark by 2028. Alsoin El Paso, real gross metropolitan product (GMP), thebroadest measure of local economic activity, is expectedto increase by more than 95 percent during the nexttwo decades to more than $35.8 billion (2000 dollars).During the same period, Las Cruces GMP is forecast todisplay a similar trend (Table 16). As a result of stron-ger job market conditions and robust income growth,El Paso commercial activity is expected to eclipse $29billion in 2028. Given this projected state of affairs, theUTEP Borderplex Econometric Model forecasts hous-ing starts to exceed 5.5 thousand units in 2028 Strongeconomic expansion should translate into considerablyhigher single-family home prices. Greater demandfor municipal water services stems from demographicexpansion and business growth in El Paso. As shownin Table 1, aggregate usage will exceed 45 billion gal-lons per year by the end of the simulation period. ForCiudad Juarez and Chihuahua City, similar increases intotal water consumption are also projected (Tables 12and 14).

El Paso Demographics

El Paso's population growth is expected to be fueledprimarily by natural increase throughout the course ofthe next two decades. As reported in Table 2, residentbirths are projected to rise from 14.8 thousand to more

than 18.6 thousand by 2028. During the same period,resident deaths are forecast to grow from approximately4.7 thousand per year to nearly 6.2 thousand per year.Net migration, the difference between in-migrants andout-migrants, is projected to remain positive throughoutthe forecast period (Table 2). Comparatively strongerjob market conditions within the region contribute tothis. Many of the new job opportunities are projectedto result from future expansion at Fort Bliss. Domesticmigration is forecast to remain negative in the long-term.However, increases in Fort Bliss troop levels will keepnet outflows substantially lower than what has previ-ously been observed in El Paso. The rate of populationoutflow from El Paso should also decrease as the gapbetween the local unemployment rate and its nationalcounterpart declines. Favorable employment opportuni-ties and structural labor market difficulties in Mexicojointly cause international migration to remain positivethroughout the period under consideration. By the end ofthe forecast period, the number of households in the SunCity is projected to eclipse 304.4 thousand, while auto-mobile registrations will exceed 918.4 thousand. Busi-ness formation should remain robust, leading to morethan 17.6 thousand companies in operation by 2028.Of those, more than 11.3 thousand will be commercialsector establishments. Under these conditions, collegeenrollments are also forecast to increase steadily.

Employment & the El Paso Labor Market

Total employment growth is forecast to continue to out-pace the rate of change for the civilian labor force in ElPaso (Table 3). As this unfolds, the unemployment rateis projected to inch downward during the next twentyyears. Future BRAC related expansions are expected tohelp erase all of the military employment losses experi-enced at Fort Bliss between 1980 and 1996. Substantialincreases in public school systems and local governmentpayrolls will be driven by the large influx of soldiers,civilian personnel, and their dependents. Strong ratesof expansion are also projected for tertiary sectors of themetropolitan labor market. Among the latter are healthcare, communications, business, education, and profes-


923

EXHIBIT DT-lPAGE 6 OF 34

sional services. As manufacturing continues to becomemore capital intensive, labor requirements across manyof its various segments will decline further. Manufactur-ing payrolls are likely to decline to approximately 20.1thousand by 2028. While less pronounced, a similarpattern is also forecast for federal government civilianpayrolls. Labor quality requirements for all sectors ofthe regional economy will continue to intensify. Giventhat, educational attainment will play a central role in

along with motor vehicle and part sales. Sales at gasolinestations are also projected to do well as increases in thenumbers of registered vehicles help offset better fuel ef-ficiency. As future commercial investments attract con-sumers from surrounding areas, sales at sporting goods,books and music stores, as well as general merchandisestores, will grow in step with other sectors. Ongoingchanges in household compositions also contribute tothe predicted increases for dining establishment sales

attracting new investment and in determining workercompensation gains over the course of the next two El Paso Residential Construction & Real Estatedecades.

El Paso Personal Income

As shown in Table 4, El Paso personal income is forecast levels of out-migration contribute to steady vto exceed $63.7 billion by 2028. Among the five largest of both single- and multi-family housing starts.income components, aging of the baby boom generationcauses retirement transfers to consistently grow mostrapidly during the simulation period. As the national re-tirement wave sweeps its way through the United States,social security contributions are also projected to growrelatively quickly during the next two decades. Wageand salary disbursements are not forecast to keep pacewith other sources of personal income. That representsthe continuation of a trend that has been observed duringthe last twenty years in El Paso and the nation as a whole.As business formation remains healthy throughout thecourse of the simulation period, proprietor incomes areexpected to grow in step with the regional economyat-large. Similarly, long-term corporate profitabilitygrowth should lead to strong percentage increases individends, interest, and rent Given the projected declinein joblessness, unemployment transfers are expected toconsistently lag behind other income categories.

El Paso Gross Commercial Activity

Upward trends in demographic and income aggregatesthroughout the borderplex cause commercial activity togrow in El Paso (Table 5). El Paso gross commercialactivity is forecast to nearly triple from $9.9 billion in2008 to more than $29.1 billion in 2028. Populationgrowth helps bolster furniture and home furnishing,electronics and supplies, and building and garden supplysales. Furniture and home furnishing sales, along withelectronics and appliance sales, also benefit from the out-looks for new residential and non-residential consiruc-tion. Improved per capita income performance leads torobust rates of growth for clothing and accessory sales

Economic and demographic expansions cause ElPaso residential construction to remain strong overthe course of the next two decades (Table 6). Lower

residential construction volumes push the metropolitanhousing stock to greater than 328 thousand units by theend of the forecast period. Good income performancetranslates into median prices for both new and existingunits that exceed $240 thousand and $230 thousand,respectively, for detached single-family structures by2028. Higher prices, larger units, and moderately highermortgage rates combine to push average El Paso housingpayments, exclusive of property taxes and insurance, tomore than $1,320 per month. In spite of the latter trend,overall affordability improves as a consequence of sus-tained income growth in future years. Not surprisingly,sales of existing homes also rise substantially as mobilityand a larger housing stock combine to increase annualresidential real estate transactions.

El Paso Air Transportation

Borderplex economic expansion, ongoing populationgrowth, and increasingly rapid business delivery prac-tices collectively boost the demand for air transporta-tion services to El Paso and the surrounding Paso delNorte region. As shown in Table 8, total passengertraffic at El Paso International Airport is projected toeclipse 5.4 million persons by 2028. At some point inthe near future, international commercial air service isexpected to return to El Paso, potentially with directflights to Mexico City. Model simulations indicate thatair-borne freight should nearly double over the courseof the period under consideration. In-bound deliveriesof inputs and final products are projected to eclipse the85.7 thousand ton mark by 2028. Out-bound freightvolumes are expected to exceed 71 thousand tons that


olumesTotal

924


year. The demand for airmail services to and from ElPaso is also projected to grow.

International Bridge Activity

As reported in Table 9, northbound bridge flows fromCiudad Juarez into El Paso are forecast to grow steadilythrough the end of the simulation period. By 2028, thetotal number of pedestrians crossing the internationalbridges should exceed 11.6 million. As a consequenceof expanding populations and car registrations on bothsides of the river, the total number of automobile cross-ings is projected to exceed 24.2 million that same year.Cargo vehicle traffic volumes are also expected to mountsteadily. By the end of the forecast period, more than14 million trucks per year are projected to clear U-S.Customs on the northern side of the river. The greatestnumbers of pedestrians are still expected to traversethe downtown Paso del Norte Bridge, while the great-est flow of automobiles should still cross the Bridge ofthe Americas. Geographic expansion to the east willlikely bolster growth in all three traffic categories at theYsleta-Zaragoza point of entry. To reduce bottlenecksand infrastructure overload at all three arteries, moreports of entry, personnel, and technology will be neededto ease the international congestion jointly faced by ElPaso and Ciudad Juarez

El Paso Hotels

By 2023, the number of hotels in operation in El PasoCounty is forecast to break the century mark. Thatexpansion translates into a capacity of more than 4.6million room nights by the end of the simulation period.While capacity rises during these years, occupancy ratesremain healthy and reach nearly 70 percent in 2028.Not surprisingly, room rates and revenues per roomalso strengthen under this scenario. As detailed in Table10, those trends translate into greater cash flows overthe course of the next two decades as total revenuesare forecast to surpass $376 million by the end of thesimulation period.

El Paso Water Consumption

Water conservation efforts in El Paso have helped protectan important resource, as well as the economic futureof the region. Aggregate consumption per customer isforecast to improve further during the forecast period

under consideration (Table 10. While lower overallper capita demand levels are expected, the growth innew hook-ups across all five broadly defined customercategories is likely to more than offset the gains fromimproved usage efficiency. By 2028, single-family resi-dential meters are expected to surpass 215.5 thousandconnections. Commercial class accounts are projectedto surpass 10.5 thousand. During the same period,not-elsewhere-classified hook-ups will eclipse the 41.5thousand mark. As this outlook unfolds, expansion ofthe El Paso Water Utilities customer grid is projectedto steadily raise system-wide capital and maintenancecosts. Model simulations indicate that total consumptionwill exceed 45 billion gallons per year by the end of theforecast period.

Ciudad Juarez Economic Activity

A comparatively strong labor market in Ciudad Juarezis expected to continue to encourage steady volumesof in-migration from central and southern regions ofMexico (Table 12). That, in combination with fairlyhigh levels of natural increase, results in a populationof more than 2.2 million residents in the southern halfof the borderlplex by 2028. Strong demographic expan-sion on the south side of the river causes connectionsto the municipal water grid in Ciudad Juarez to exceed610 thousand accounts by the end of the simulationperiod. A relatively progressive rates policy causes aportion of that growth to be offset by better consump-tion efficiencies, however, aggregate consumption stillgrows to more than 284 million cubic meters on an an-nual basis in 2028. The number of registered vehiclesis also projected to expand steadily. Total formal sectoremployment is forecast to reach nearly 773 thousandduring the final year of the outlook (Table 13). Much

of this growth will come in the form of service sectoremployment as payrolls in this category reach morethan 277 thousand. Transportation, communication, andpublic utility payrolls are also projected to increase atfairly rapid rates. Similarly, commerce payrolls advancerapidly as the metropolitan economy continues to swelland retail sales post very solid gains.

Chihuahua City Economic Activity

Brisk rates of growth are also projected for formal sectoremployment in Chihuahua City (Table 15). Total formalsector payrolls are forecast at greater than 400 thousand


925

EXHIBIT DT-IPAGE 8 OF 34

in 2028. Tertiary segments of the metropolitan economyare expected to more than double the sizes of theirrespective labor forces over the course of the next twodecades. Manufacturing payrolls expand more slowlybut still climb to more than 114 thousand workers by2028. Not surprisingly, economic expansion also leadsto increased in-migration and a population of greaterthan 1.2 million persons by the end of the forecast period(Table 14). Under these circumstances, the municipalwater grid continues to expand rapidly and reaches morethan 418 thousand hook-ups in 2028. Annual aggregatewater consumption increases to more than 123 millioncubic meters over the same interval. Given the outlookfor Chihuahua City, college enrollments and retail com-mercial activity also expand at fairly quick paces.

Las Cruces Economic Conditions

The Las Cruces metropolitan economy is also forecastto expand considerably in future years. As shown inTable 16, real GMP is projected to exceed $10.6 billionby 2028. Population is forecast to climb above 296thousand during the same period. Employment growthin the Greater Mesilla Valley labor market is expectedto benefit from strong demand for workers in variousservice-oriented sectors (Table 17). Those factors alsohelp bolster university and college enrollments in theyears to come. Given the robust long-term outlook foremployment, wage and salary disbursements accountfor a large percentage of the increases forecast forpersonal income in Dona Ana County (Table 18). Asa consequence of its status as a retirement destination,senior citizen relocations to Las Cruces cause retirementtransfers to grow at an accelerated clip, reaching morethan $3.8 billion on an annual basis by 2028. Grow-ing numbers of prosperous retirees also help propertyincomes to swell to more than $3.1 billion per year bythe final year of the outlook.

Historical and Forecast Data

Tables i through 18 summarize the numerical resultsfrom the long-term forecast simulation to 2028 usingthe UTEP Borderplex Econometric Model. Forecastsfor El Paso and Las Cruces income, employment, andEl Paso business establishments in the current editionbegin in 2007. Forecasts for all other data series beginin 2008. Readers should note that the housing "startseries for El Paso have undergone substantial revisions

for the entire 1973-2007 historical period relative towhat was published in last year's report. It should alsobe noted that all EI Paso gross commercial activityhistorical data reported now correspond with the NorthAmerican Industrial Classification System (NAICS).Formal sector payroll series for Ciudad Juarez and Chi-huahua City have undergone some important historicalrevisions since last year's report Lastly, maquiladoraindustry data for Ciudad Juarez and Chihuahua City areno longer published by the INEGI national statisticsagency in Mexico and, consequently, can no longer beincluded as part of the modeling system or reported inTables 13 and 15. At present, the model is comprisedby 215 equations covering all of the categories listedin the tables. Suggestions and requests for next year'svolume are welcome. Please send them to Border Re-gion Modeling Project - CBA 236, UTEP Departmentof Economics & Finance, 500 West University, El Paso,TX 79968-0543.


926


Table 1Major Indicators for El Paso

Table 2El Paso Demographics

Table 3El Paso Labor Force & Employment

Table 4El Paso Personal Income

Table 5El Paso Gross Commercial Activity

Table 6El Paso Residential Construction & Real Estate

Table 7El Paso Nonresidential Construction

Table 8El Paso International Airport

Table 9Northbound International Bridge Traffic

Table 10El Paso County Hotel Activity

Table 11El Paso Water Consumption

Table 12Ciudad Juarez Demographic Indicators

Table 13Ciudad Juarez Economic Indicators

Table 14Chihuahua City Demographic Indicators

Table 15Chihuahua City Economic Indicators

Table 16Las Cruces Demographics & Other Indicators

Table 17Las Cruces Employment

Table 18Las Cruces Personal Income


927


Table 1: Major Indicators for El Paso

1988 1993 1998 2003 2008 2013 2018 2023 2028

El Paso Population 568.804 634.044 671.25 696.97 744.856 803.04 866.004 931.581 999.173

%change 9.2 11.5 5.9 3.8 6.9 7.8 7.8 76 7.3

El Paso Net Migration -0.648 23S9 -4.463 -3.214 0.029 1.607 1.625 1402 1.155

El Paso Pcaonal Income 6152.9 8716.9 11399.7 146721 20493.3 27513.2 36876.6 48993.7 63723.8

%change 38.2 41.7 30.8 28.7 39.7 34.3 34 32.9 301

El Paso Labor & Proprietor Earnings 4853 6668.7 8435.6 11392-9 15671.6 20819.4 27300.2 354578 451517

% change 37.7 37.4 26.5 35.1 37.6 328 31.1 299 27.3

El Paso Real GMP 9.727 11.719 14.018 15.45 18.349 22,171 26.477 31.093 35.852

%change 121 205 19.6 10.2 18.8 209 19.4 17.4 15.3

El Paso Businesses 10503 11-695 12.409 12.355 13.198 14132 15.228 16.402 17.611

%change 8.9 119 62 -0.4 6.8 7.1 7.8 7.7 74

El Paso Total Jobs, 254.861 289.462 314.796 336.821 375.352 419.759 462.191 499.563 533.698

%change 163 13.6 8.8 7 11-4 11.8 10.1 8.1 6.8

EI Paso Jobless Rate 10.7 10.8 10.2 9.6 5.8 5.7 5.6 5.5 5.4

El Paso Housing Scans 1.837 3.059 3.458 5.162 3672 4.107 4.709 5.096 5.581

%change -74.6 665 13 49.3 -28.9 11.9 14.7 82 9.5

El Paso New House Prim 75209 85.127 89.209 100.286 131432 154.805 179.825 211.255 244.94

%change 212 13.2 4.8 124 31.1 17.8 16.2 17.5 15.9

El Paso Commercial Saks Activity UN UN UN 6824.2 9934 13056.8 172749 22608 29197.1

%changc UN UN UN UN 45.6 314 323 30.9 29.1

imemational Bridge CarTraffic 15.26 15.342 15.212 13.698 14.009 16.851 19.157 21.625 24.238

%change 11.5 0.5 -0.8 -10 2.3 20.3 13.7 12.9 . 12,1

El Paso Watcr Consomption 33.052 33-666 35.071 33.898 33.124 36.485 39.485 42.305 45.108

% change 7.9 1.9 4.2 -3.3 -23 101 8.2 7.1 6.6

Notes

1. El Paso population in thousands.

2. El Paso net migration in thousands.

3. All income and earnings data are expressed in millions of nominal dollars.

4. Real gross metropolitan product data are expressed in billions of 2000 dollars.

5- Total fil Paso busmess establishments in thousands.

6. Total El Paso employment in thousands.

7. El Paso unemployment rate in percentage team.

8 Total El Paso housing starts in thousands.

9. El Paso median new single-family house prices in thousands of nominal dollars.

10. EI Paso commercial sates aetivity reported in millions of nominal dollars.

11. Total northbound international bridge crossings are in millions of personal vehicles.

12 Total E1 Paso water consumption in billion gallons.


99R


Table 2: El Paso Demographics

1988 1993 1998 2003 2008 2013 2018 2023 2028

Population 568804 634044 671.25 696.97 744.856 803.04 866.004 931381 999.173%change 92 11.5 5.9 3.8 6.9 7.8 7-8 76 7.3

Resident Brrrhs 12.978 15 956 14.481 14.201 14.83 15.622 16615 17657 18.679%changc 17 22.9 -92 -1-9 4.4 5.3 6.4 6.3 5.8

Resident Deaths 3.005 3.609 3.834 4.362 4.672 5.023 5.396 5393 .6204%change I1.4 20.1 6.2 13.8 7.1 7,5 7.4 7.4 7.1

Net Migtatqn -0.648 2559 -4.463 -3-214 0.029 1.607 1.625 1.402 1.155

Domestic Migratan -6.622 -2.527 -8.363 -5582 438 -2.325 -2049 -2.138 -2.406International Migration 5.974 5.086 3.9 2368 4.409 3.932 3.674 3.54 3.562

Households 172.63 189.042 204.514 215288 231-775 247.49 265.173 284.32 304.424%change 92 9-5 8_2 53 73 6.8 7l 7.2 7.1

Automobile Registrations 35154 347-386 429.326 501.426 584-652 653.794 726.361 817594 918.452%change 13.6 -12 23,6 168 16.6 11.8 11.1 12.6 12.3

Civilian Labor Force 264-313 305.741 337.251 358,937 381.31 422,972 463207 497.892 529588%cthange 16 15.7 10.3 6.4 6.2 10.9 9-5 7.5 6.4

business Establishments 10503 11.685 12.409 12.355 13.198 14.132 15.228 16.402 17 611%change 89 11.3 6.2 -0.4 6.8 7.1 7-9 7.7 7-4

Commercial Sector

Esubs. UN UN UN 9_49 9.171 9.627 10219 10.767 11.357%rhange UN UN UN UN -3.4 5 6.1 54 5.5

Business Bankruptcies UN 76 94 104 l01 88 95 100 106%change UN UN 23.7 10.6 -29 -129 8 5.3 6

Personal Bankruptcies UN 1446 2259 3218 2022 2069 2239 2381 2557%clrange UN UN 56-2 425 -37.2 2.3 8.2 63 7-4

UTEP Fall Enrollment 14971 16.999 14.677 18.542 20.458 23. 18 26.1 28.8 31.621%change -1.9 115 -13.7 26.3 10.3 13.3 12.6 10.3 9.8

EPCC Fall Enrollment 15.523 19.074 19.184 23.016 24.536 27.819 31.649 35.606 39.662%change 597 22.9 0.6 20 6.6 134 13.8 12.5 11.4

Notes:

1_ Business and personal bankruptcy data reported in actual units.2. All other data are reported in thousands.


929


Table 3: El Paso Labor Force & Employment

1988 1993 1998 . 2003 2008 2013 2018 2023 2028

Civilian Labor Force 264.313 305741 337.251 358.937 381.31 422.972 463207 497.892 529.588

%change 16 15.7 10.3 6.4 6.2 109 95 75 6.4

Unemployment Rate 10.7 10.8 10.2 96 5.8 5.7 5.6 55 5.4

Total Employment 254.861 289.462 314.796 336.821 375.352 419.759 461191 499.563 533.698

%change 16.3 13.6 88 7 11.4 11.8 10.1 8.1 6.8

El Paso Construction 12636 127 17.692 19145 21.16 22.629 24.975 26.92 29.13

%change 16.1 0.5 39.3 8.2 10.5 69 10.4 7.8 8.2

Manufacturing 41.105 46.658 44.603 28.788 22.34 20.456 20.646 20.279 20.133

%change 12_3 13.5 -4.4 -35.5 -22.4 -8.4 0.9 -1.8 -0.7

Local Government 27.186 33.639 37.032 41.474 44568 49.219 53.311 57.257 61.28

%rJtange 25.8 23.7 10.1 12 75 10.4 83 7.4 7

State Govemment 3.971 5.936 7.321 7.862 8.24 8865 9.556 10.243 10929

%change -13.2 49.5 23.3 7.4 4.8 7.6 7.8 7_2 6.7

Federal Civilian Govt 9.175 9.325 8.631 8.823 10.24 10.853 1127 11.692 12-077

%change 8.9 1,6 -7.4 2.2 16.1 6 3.8 3.7 3.3

Mditary Employment 18.871 16.741 11.945 12.342 16.261 20.934 24.984 29.085 32.786

%change -16 -11.3 -28.6 3.3 31,8 28.7 19.4 16-4 12.7

Not Elsewhere Clas-

sified 141.917 164.463 187.572 218.387 252.544 286.804 317.448 344.088 367.362

%change 20.5 159 14.1 16.4 15.6 13.6 107 8.4 6.8

Notes:

1. Labor forcc data are, in thousands

2. Unemployment tate data are in pcnccntages.

3. Employment data are in thousands.

4. Not Elsewhere Classified includes conununications, se rvices, retail, financtal and other employment categortes

IfTEP Business Report SR09-1 • March 2009 Page 11

9'i0


Table 4: El Paso Personal Income

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total Personal Income 6152.9 8716-9 11399.7 14672.1 20493.3 27513.2 36876.6 48993.7 63723.8%change 38.2 41.7 30.8 28.7 39.7 34.3 34 32.9 30.1

Wages and Salaries 3745.8 5119.6 6459.7 7740.7 t0387.7 13800 18029.7 23167.3 293155%change 35.4 367 26.2 19.8 342 32.8 30.7 285 26.5

Other Labor Income 6595 905-4 961.1 1442.2 2209.1 2908.4 3762.4 4717 5861.8%change 44.4 37.3 6.2 50.1 53.2 31.7 29.4 25.4 24.3

Proprietor Incomes 447.7 643.8 1014.8 2209.9 3074.7 4111.1 5508.1 75735 9974.49ochange 49.3 43.8 576 117.8 39.1 33.7 34 375 31.7

Social Ins Cnrrbns. 2457 357.7 458.7 586.4 801.6 10825 14587 19312 24446% change 52.7 45.6 2&3 27.8 36.7 35 34.8 32.4 26.6

ResidenceAdjustmaas -235.5 -339.4 -477.6 -567 -643.3 -733.2 -821.4 -910.9 -1002-2%change 52.2 44.1 40.7 18.7 13.4 14 12 10.9 10

Dtvidends, Int., Rent 9919 1240.9 1816.8 152 8 2143.9 2964.5 4057.7 5384.9 6833-7% change 45.5 25.1 46.4 .162 40.8 383 369 32,7 26.9

RetitrmentTmnsfers 645.8 1181.9 1659.6 2314.4 3290.3 4414 6187.2 8730.9 12078.5%change 44.9 83 404 39.5 42.2 34.2 40.2 41.1 38.3

incomeMaint Transfers 126.5 297.1 410.6 573.7 821.5 1120.1 16003 2250.3 3094.1%change 65.3 134.9 38.2 39.7 412 36.4 42.9 40.6 37.5

UnemploymentTnnsfers 17 25.3 t34 21.8 10.9 10.9 11.3 11.9 12.6%change -58.8 48.9 -46,9 62.3 -50 -0.4 3.9 5.6 5.2

Notes.

I All income data an: expressed m millions of dollars.

2. Social insurance contributions are deducted from total regional income estimates-

3 Retirement transfer payments include social security and other retirement payments.

4 Income maintenance transfers include aid to families with dependent children and other payments

5 Unemployment transfer payments include unemployment tnsumnce payments to indivtduals.


931


Table 5: El Paso Gross Commercial Activity

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total UN UN UN 6824.2 9934 13056.8 17274.9 22608 29197.1

%change UN UN UN UN 45.6 31.4 323 30.9 29.1

Motor Vehicles & Parts -UN UN UN 1343.2 1496.5 19938 2690 3561.6 4625.1

%change UN UN UN UN 11.4 33.2 34.9 324 29.9

Furniture & Home Furnishings UN UN UN 149.3 203.2 262.5 342.4 4415 557.1

% change UN UN UN UN 11.4 33.2 34.9 324 29.9

Electronics & Appliances UN UN UN 226.1 294.9 399.2 542.5 729.3 966.2

% change UN UN UN UN 11.4 33.2 34.9 32.4 29.9 -

Building & Garden Supplies UN UN UN 361.2 534.5 727.7 954.9 1224.3 1550.7

%change UN UN UN UN 11.4 33.2 34.9 32.4 29.9

Food & Beverage Stores UN UN UN 725 1 813.3 874.4 933.6 993.4 10527

%change UN UN UN UN 11.4 33.2 34.9 32.4 29.9

Health & Personal Care UN UN UN 3148 457.4 6629 945.8 13315 1814.3

%changc UN UN UN UN 11.4 33.2 34.9 324 29.9

Gasoline Stations UN UN UN 552 1271 1588.5 2095.8 2694.8 3366.1

%ehange UN UN UN UN 11.4 33.2 34.9 32.4 29.9

Clothing &Acce,csoriu UN UN UN 530 699.6 909.8 1191.6 1551.2 1982.2

%change UN UN UN UN 11.4 33.2 34.9 324 29.9

Sporting Goods. Books &

Music UN UN UN 1364 189.8 256.8 342.5 452 588

% change UN UN UN UN 11.4 33.2 34.9 32.4 29_9

Gen_ Merch & Warehouse

Clubs UN UN UN 1458.7 2241.7 3046.3 4075.1 5388.6 7091.8

%ehange UN UN UN UN 11.4 33.2 34.9 32.4 29.9

Florist, Gift, Pet, & Miscel-

lancous UN UN UN 3305 708.4 940.5 1238.1 1618.1 2117.1

%change UN UN UN UN 11-4 33.2 34.9 32.4 29.9

Nonstore Retailers UN UN UN 40 79 105 137 178 232

%change UN UN UN UN 11 33 35 32 30

Food & Beverage Establish-

ments UN UN UN 657 945 1289 1786 2444 3254

%change UN UN UN 6 5 7 7 6 6

Notes.

1. All sales figures are expressed in millions of dollars.

2, All data correspond to the North American Industrial Classification System (NAICS).


932


Table 6: El Paso Residential Construction & Real Estate

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total Housing Starts 1837 3.059 3.458 5.162 3-672 4 107 4.709 5.096 5.581%changc -74.6 66.5 13 49.3 -28.9 11.9 14.7 8.2 95

Single-Family Starts 1.759 2.697 3.309 4.888 3.183 3.657 3.999 4264 4.534

% change -523 533 22-7 477 -34.9 14.9 9.3 66 6.3

Mutti-Family Starts 0.078 0.362 0.149 0.274 0.489 0.45 0711 0.831 1.046% change -978 364.1 -58.8 839 78.4 -7.9 57.9 17 25.9

Total Housing Stock 180.6 1933 210.4 2302 253.8 2725 291.3 3102 328.9% change 19 7.1 8.8 9.4 10.2 74 6.9 6.5 6

Single-FamilyStock 118.5 1311 146 165.5 186.6 2032. 220 236.7 253.2

%change 16.1 10.6 11.4 13.4 12.7 89 81 76 7

Mu1tl-Famdy Stock 62 62.3 64A 64.7 67.2 69.3 713 73.5 75-7

% change 24.9 04 3.3 0.5 3.9 3.2 2.9 3.2 3

Median New Price 75.209 . 85.127 89.209 100186 131.432 154.805 179.825 211.255 244.94

%change 212 132 48 12.4 31.1 17.8 162 17.5 15.9

Median Resale Price 59.775 71.675 78.05 92.678 I25.984 147.397 171.093 201.4I9 233.742

%change 4 199 8.9 18.7 359 17 16.1 17.7 16

Average Monthly Payment 481 480 528 540 660 796 962 1146 1325%change -15.9 -0.2 10 2.2 22.3 20.6 20-8 19.1 f57

Affordability Index 166.4 215.6 221.5 2573 228.2 235.9 247 260-6 272.8

%change 486 29.6 2.7 16.1 -113 3.4 4.7 5.5 4.7

Existing Units Sold 5.627 7.665 10.612 13161 13.176 13.677 14.727 15.958 17.181

%change 53 362 38.4 24 0.1 3.8 7.7 8.4 7.7

Notes:

1. Housing start and stock data are in thousands.

2. Affordabdity index increases as household income strengthens relative to mortgage paymems.

3 Average momhly mortgage payment is in curtent dollars

4. Existing housing units sold includes both stand-alone and multi-family units.

5. Median new and existing home prices are for stand-alone units and quoted in thousands of dollars.


933


Table 7: El Paso Nonresidential Construction

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total Nonresidential

Space 179.562 182.764 216.249 257.311 72164 46167 549414 666393 822.265

%change 64.5 1.8 18.3 19 180.5 -36 19 213 23.4

Industrial Space Permits 11.605 13.78 12.646 1.9.8 7.524 8.721 10385 13.231 16.412

%change -25.2 18.7 -82 -84.8 292.3 15.9 214 25 24

Office Space Permit

Values 7.385 7.049 12.915 15.16 30.927 25.673 29.014 36.516 44.247

%change -68.5 -4.6 83.2 17.4 104 -17 13 259 21.2

Other Commercial Space 902b5 128.678 158.018 169 274 346.703 263.072 308.863 367.746 455228

%cAange 61.6 42.6 22.8 7.1 104.8 -24.1 17.4 19.1 23-8

Miscellaneous Nonms. 70306 33258 32.67 70.959 336.487 164204 200.953 248.9 306.378

%change 390-8 -327 -18 1t7.2 374.2 -51.2 22.4 23.9 23.1

Notes:

,1. All nonresidential construction permits data are quoted in millions of dollars

2 Other commercial permits include service stations, retail stores, parking garages, warehouses. and public utilities.

3 Miscellaneous includes port facilities, recreational buildings, sports stadiums, swimming pools, and health care facilities.

UTEP Business Report SR09-1 • March 2009 : Page 15-

934


Table 8: El Paso International Airport

1988 1993 1998 2003 2008 2013 2018 2023 2028

Passenger Arrivals 13747 1716.7 1605.7 1446.7 1692.7 18874 21294 24035 2697-9%change 463 24.9 -6.5 -9.9 17 11.5 12.8 12.9 12

DomesticArrivals 1370.7 1703.6 1590.1 14417 1692.7 1874.6 2105.6 23772 26639%changc 501 24.3 -6.7 -9.3 17.4 10.7 12.3 129 121

International Arrivals 4.027 13.077 15-542 4.975 0 12.78 23.782 26289 29.012% change -84.9 224.7 18,8 -68 -100 NC 86.1 105 10.4

passengerDepanures 1406.5 17727 1635-3 1464 1726.1 1929.9 2159.9 2427.4 2722%change 50.4 26 -7.8 -10.5 179 11.8 119 12.4 12.1

Domestic Departures 14024 1757-1 1619.9 14592 1726.1 1917.5 2136.4 2401.7 2693.7%change 50.5 25.3 -7.8 -9.9 18.3 li.l 11.4 124 12.2

International Dcpar-

tutcs 4.098 15614 15.351 4.727 0 12.348 23.472 25.694 28.309% change 33.2 281 -1.7 -69.2 -100 NC 90.1 9.5 10.2

[n-Bound Freight 16.865 29.019 47.396 45.366 43996 53561 63.56 74.032 85.797%change 237.2 721 63.3 -4.3 -3 21.7 18.7 16.5 15.9

Out-Bound Freight 14.634 22.005 35.316 36.557 36.493 43.933 52,429 61.181 71.003%change 1629 50.4 60„5 3.5 -0.2 20.4 19.3 16.7 16.1

In-Botmd Mail 2.398 2.444 3.657 t.61 0.682 0608 0.665 0.766 0.877%change 3.9 1.9 497 -56 -57.6 -108 94 15,1 14.6

Out-Bound Mall 1.719 1994 1.744 0.529 0.041 0.047 007 0.104 013% chainge 25 15.4 -121 -69.7 -92.3 16.2 46.5 499 24.3

Notes:

1. EI Paso International Airport passenger data are in thousands.2. El Paso International Airport freight data are in thousand tons.3. El Paso International Airport mail data are in thousand tons.


935

EXHIBIT DT-iPAGE 18 OF 34

Table 9: Northbound International Bridge Traffic

1988 1993 1998 2003 2008 2013 2018 2023 2028

Pc Iniann,All Bridges 7.891 5906 5.204 8.899 7.914 9104 9.78 10.691 11-618

%change 741 -25.2 -11-9 71 -11.1 15 7.4 9.3 8.7

Can, AllBridges 1526 15.342 15-212 13.698 14.009 16.851 19.157 21.625 24.238

%change 115 03 -0.8 -10 2.3 20.3 13-7 129 12,1

Trucks, All Bridges 0-184 0.567 0.606 0.66 0.784 0.916 1.072 1.248 1,443

%change 44.6 208.5 7 8.8 18.9 16.8 17 16.4 156

Cordova Bridge

BOTA Pedestrians 0641 0.518 0.675 1021 0.776 0.839 0,915 0.982 1.037

%change 59 -191 30.2 51.3 -24 81 9 7.3 5.6

BOTA Personal Ve-

hicles 7,466 8.443 7.553 4.68 6.398 7.231 8.437 9-686 10 975

%change 7.1 13-1 -105 -38 36.7 13 16.7 14.8 13.3

BOTACargo Vehicles 0177 0.376 0.312 0.346 0.421 0.484 0.564 0.652 0.75

%change 50.6 112.4 -16.9 10.8 21.6 151 165 15,6 t5,1

Paso del Norte Bridge

PDN Pedestrians 6.752 5.124 4.198 7.08 6.286 7-318 7-856 8.653 9.483

% change 68.2 -24.1 -18.1 68.7 -112 16.4 7-4 10.1 9-6

PDN Persoual Vehicles 5679 4552 4.413 4.173 2478 3,744 4.144 4602 5.114

% change 16.6 -19-9 -3 -5.4 -40.6 51.1 10-7 11.1 11.1

DCLPersonal Vehicles UN UN UN 1.475 1.263 1358 1.435 1.52 1.594

%change UN UN UN UN -144 7.5 5.7 5.9 49

Ysleta Zaragoza Bridge

Ysleta Pedestrians 0498 0164 0.332 0 797 0.852 0.946 1-009 1.057 1.098

%change 3373 -47.1 25.8 1405 68 11.1 6-6 4.7 3.9

Ysleta Personal Ve-

htdes 2.114 2.347 3.246 3.37 3.39 3.986 4.566 5.201 5.897

85 change 14.4 11 38.3 3.8 0.6 17.6 14.6 13.9 13.4

Were Cargo Vehicles 0.007 0191 0.294 0314 0.364 0.432 0508 0.596 0.693

%change -291 2721.9 54 6.8 15.9 18.7 17.6 17.4 16_3

DYL Personal Vehicles UN UN UN UN 0.479 0.533 0.574 0.616 0.659

9ochange UN UN UN UN UN 11.3 7.7 7.3 69

Notes

I. All bridge data are for northbound traffic categories into the City of FA Paso.

2. Pedestrian, personal vehicle (cars, light trucks, mini-vans), and cargo vehicle data are reported in millions (errors may occur due to rounding).

3. DCL and DYL are acronyms for Stanton Dedicated Commuter Lane and Yslda Dedicated Commuter Isne, respectively.


936


Table 10: Ei Paso County Hotel Activity

1988 1993 1998 2003 2008 2013 2018 2023 2028

Hotels in Opetahen 61 64 70 74 81 89 96 103 112

%change UN 4.9 9.4 5.7 95 9.9 79 7.3 8.7

Room Nights Available 2402.9 2402.5 27016 2769.3 30539 3415.3 3794 41727 4616.8

%dunge UN 0 124 25 10.3 11.8 It 1 10 10.6

Room Nights Sold 1340 1490 1617.3 1700-6 20228 2265.6 2547 4 2858.1 3209

% change UN 112 8.5 5.2 18.9 12 12.4 12.2 12.3

Hotel Occupancy Rate 55.8 62 59-9 61.4 66-2 66-3 67.1 68.5 695

Hotel Room Price 43.34 47.58 51.34 55.97 69-1 76.19 87.52 101.04 117.26

%change UN 9.8 7_9 9 23.5 10.3 14.9 15.4 16

Actual Revenue per Room 24.17 29.51 30.74 34_37 45.77 50.55 58.77 69.21 81-5

%change UN 221 4.2 11.8 332 10.4 16.3 t7.8 17.8

Total Revenues 58.082 70.898 8304 95.179 139-775 t72.626 222959 288.794 376-275

%change - UN 22.1 17.1 14.6 46.9 23.5 29.2 29.5 30.3

Notes:

1. El Paso County hotel room night data are reported in thousands,

2, EI Paso County hotel pricing data are reported in nominal dollars.

3. Total hotel revenues am reported in million nominal dollars.

UTEP Business Report SR09-1 -March 2009 Page 18

937


Table 11: El Paso Water Consumption

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total Water Customers 124.606 138.133 155.555 176.327 197.9 217.871 236.549 254.769 272.682

9o change 14.1 109 126 13.4 122 t01 8.6 7.7 7

Smgle-FamtlyMeters 109.32 117021 127.307- 142.68 158.901 172919 187.211 201.449 215569

%change 147 7 9.8 12.1 11-4 8.8 8.3 7.6 7

Multi-Fanuly Meters 496 4.811 4.755 4.737 4.764 4.792 4.808 4.827 4.844

%dtange 3.4 -3 -12 -0.4 0.6 0.6 0.3 0.4 0.4

Commercial Business Meters 7706 7.849 8651 9.215 8.827 9.262 9652 10.067 10.504

%change 11 I 1.9 10.2 6.3 -4.2 4.9 4.2 43 " 4.3

htdustrial Business Meters 0.125 0 198 0.199 0.194 0.183 0.192 0.201 021 0.22

% change 42 58.4 0.5 -25 -5.8 5.2 46 4.4 4.6

Other Meter Connections 2495 8 254 14.643 19.501 25.226 30.707 34.677 38.217 41.545

%change 23-1 230.8 77.4 33.2 29.4 21.7 12.9 102 8.7

Total Water Consumed 33A52 33.666 35.071 33.898 33.124 36.485 39.485 42.305 45.108

%change 7.9 1.9 4.2 -3.3 -23 10.1 8.2 7.1 6.6

Sing-le-FamilyGallons 18.212 17.643 19.852 19383 17.954 19.558 21.168 22.713 24.289

%change 5.7 -31 12.5 -2.4 -7.4 8.9 8.2 73 6.9

Multi-Family Gallons 3.773 3.725 3.594 3.324 3217 3224 3.285 3328 3388

%change 38.3 -1.2 -35 -7.5 -3.2 0.2 19 1.3 1.8

Commercial Gallons Cons. 6.394 4.415 4329 4.094 3731 3.927 4.111 4-308 4517

%change 16.1 -31 -1.9 -5.4 -8.9 5.3 4.7 4.8 4.8

Industrial Gallons Consumed 0 78 3.135 0.906 0.349 0.3 0.318 0333 0.348 0364

%change 7 3018 -71.1 -614 -14.2 6.1 4.8 44 4.6

Other Water Consumption 3.894 4.748 6.39 6.748 7.922 9.457 10,587 11.608 1255

%change -12 21.9 34.6 56 17.4 19.4 11_9 9.6 8.1

Notes:

1. Water customer meter connections are reported in tbousands.

2. E1 Paso water consumption data are reported in billion gallons.

3. Other water accounts include schools, parks, churches, and government agencirs.


938


Table 12: Ciudad Juarez Demographic Indicators

1988 1993 1999 2003 2008 2013 2018 2023 2028

Ciudad Juarez Population 752.906 879,788 1159.765 1231.983 1371.576 1535251 1745.083 1975.537 2229784% change 19.3 76-9 31.8 6.2 113 11.9 13.7 13.2 12.9

Resident Births 20.031 22.419 26.113 29.015 24.551 27.253 30.567 34.194 38062%change 49 119 16.5 111 -154 11 122 11.9 11.3

Resident Deaths 4.499 3-617 5.235 6.199 7505 7.115 8.112 9.174 10.293%change 97 -19.6 447 18.4 21.1 -52 14 13.1 12.2

Net Migration 10.631 19.997 28.981 -8.249 -2615 19 434 21.24 2249 25.388

Domestic Migration 16.605 25.083 32.881 -5.881 1.794 23.366 24.914 26.03 28.949International Migration -5.974 -5.086 -3.9 -2.368 1-409 -3.932 -3.674 -334 -3.562

Ciudad Juarez Water

Meters 134.243 189.448 226.773 309.768 355.859 405 112 466.357 534.726 610.92%change 29.8 41.1 19-7 36.6 14.9 13.8 15-1 14.7 14.2

Total WaterConsumption 104.939 130.386 145.45 151-348 178.255 200.541 225.402 253.231 284.156% change 29.2 24-2 116 4.1 17.8 125 12.4 123 122

Registered Automobiles 189.156 191.345 285.683 280.71 333.941 385.544 444.042 506.993 574.794%change 41.2 12 493 -1.7 19 155 15.2 14.2 13.4

Registered Cargo Vehicles 27.945 40.002 68.736 76.772 82.76 94,02 111.77 131.834 152.941%change 61.2 43.1 71.8 117 78 13.6 18.9 18 16

UACl Enrollment 7.372 9.31 8.212 14.607 19.42 22.201 25.223 28587 32.312%change 27.1 26.3 -11.8 77.9 32.9 14.3 13.6 13.3 13

ITRCJ enrollment 3.577 5.775 5-512 4.652 4.621 4.834 5.052 5.285 5.526%change 373 61.4 -0.6 -15.6 -0.7 4.6 4.5 4.6 4.6

Notes:

1. All Ciudad Juarez population, vehicle, and college enrollment data are reported iii thousands.2. Ciudad Juarez water meter coanections are expressed in thousands.

3. Ciudad Juarez water consumption is reported in million cubic meters.4. UACJ is the acronym for Universidad Autonomade cmdad Juarez.

5. ITRCJ is the acronym for InstilumTecnologico Regional de Ciudad Juarez-


a

939


Table 13: Ciudad Juarez Economic Indicators

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total Formal Sectm-

Emp. UN 225.545 355.763 337.337 413.55 493.103 582.274 675.627 772797

%change UN UN 57.7 -5,2 226 19.2 18.1 16 14.4

Total Mfg. Employment UN 147.905 240.528 202.269 237 174 277.297 313501 347.961 380.286

%change UN UN 62.6 -159 17.3 16.9 13.1 11 9.3

Commerce Employment UN 29.543 323 37.618 46.891 55.705 66.851 78,513 90.705

%change UN UN 10 15.7 24.7 18.8 20 17.4 15.5

Regulated Industry Emp UN 5.552 7.998 9.06 11.499 14.10t 17.516 21.073 24,757

%change UN UN 44.1 13.3 269 22.6 24.2 20.3 17.5

Services & Other Emp. UN 42545 74.737 88.39 117.986 146.001 184.405 228.08 277.049

%change UN UN 75.7 183 33.5 23.7 26.3 23.7 21.5

Retail Sales Activity UN UN 104.4 t00 119.7 149.9 1805 212.4 2452

%dwtge UN UN UN -4.2 19.7 25.2 20.4 177 I54

Wholesale Activity UN UN 98.3 t00 110.8 1361 163.8 193 222.8

%change UN UN UN 1.7 10.8 22.9 20.3 17.8 15-4

Notes

I. Gudad Juarez employment data are reported in thousands.

2. Cmdad Juarez formal sectorjoba are those cuvered by the social security system in Mexico.

3. Regulated sectors include transportation, communn:auoas, and public utilities.

4. Inflation adjusted retail index and wholesale index base years are 2003 = 100.


940

EXHIBIT DT-lPAGE 23 OF 34

Table 14: Chihuahua City Demographic Indicators

1988 1993 1998 2003 2008 2013 2018 2023 2028

Chihuahua City Population 497.284 574.913 653.826 710.056 806.704 893.79 1004.757 1121.992 1246.404

%change 12,7 156 13.7 8.6 13.6 10.8 12.4 11.7 11.1

Chihuahua City Births 13.915 15.204 14.897 16.735 16.849 17.958 19,089 20.236 21.359

%change 7.9 9.3 -2 12.3 07 6.6 6.3 6 56

Chihuahua City Deaths 3.543 2.563 3 229 4.682 5.08 5381 5.702 6.035 6.384

%change 22 -27.7 26 45 8.5 5.9 6 5.8 58

Net Migration 0.443 4.29 -3.824 12.8 283 8.289 9.553 9.75 10.41

Chihuahua City Water

Meters 46.046 96548 130.564 204.707 255.697 298.229 334.228 374.21 418.353

%change UN 109.7 352 56,8 24.9 16.6 12.1 12 11.8

Total Water Consumption 44.535 56.549 58.788 66.104 76.375 88.474 99.02 110.46 123.077

%change UN 27 4 12.4 15.5 158 11.9 11.6 11_4

RegistererlAutomobites 55.024 83.138 110.766 138.785 206.283 250.271 281.013 316.749 353.219

%change 31.7 51.1 332 25.3 48.6 213 12.3 12.7 11.5

Registered Cargo Vehicles 31.765 46.621 67.551 83.961 107.495 125.655 139.488 153.716 168.362

%change 76.4 46.8 44.9 24-3 28 169 11 102 9.5

UACH Enrollment 10_649 10.313 11 954 15.255 19.643 22.42 25.039 27.821 30.768

%change 6.1 -3.2 15.9 27.6 28.8 14.1 11.7 11.1 10.6

ITRCH Number I Entoll-

meat 339 4.36 5.042 4123 4.85 5.551 6_108 6.667 7.253

%change 40.7 28.6 15.6 -18.2 17.6 14.4 10 9.2 8.8

Notes:

I Chihuahua City populatton, water,ineler, vehicle, and college enrollment data are reported in thousands.

2. Chihuahua City water consumption data are reported in million cubic meters

3 Chihuahua City inflation adjusted retail and wholesale index base years are 2003 = 100

4. UACH is the acronym for Universidad Autonoma de Chihuahua.

5. 17RCH Number I is the acronym for Instlluto Yeatologlco Regional de Chihuahua Numero I.


941


Table 15: Chihuahua City Economic Indicators

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total £omml Sector Emp. UN 136.394 162.605 175.518 206.067 247.811 296.222 346869 401.334

%change UN UN 19.2 7.9 17.4 20.3 19.5 17.1 15.7

Total Mfg Employment UN 48.302 68.805 65472 71.754 83.144 94.149 104.394 114426

96 change UN UN 42.4 -4.8 9.6 15.9 13.2 10-9 9.6

Commerce Employment UN 17.545 25 193 35.164 42.543 54.893 69247 84.564 100.993

%dtange UN UN 43.6 39.6 21 29 261 22.1 19.4

Regulated Industry Emp. UN 10272 8917 8.02 8.443 9.926 12365 14.928 17.525

%change UN UN -13.2 -10.1 53 17.6 24.6 20.7 17.4

Services & Other Emp. UN 60.275 59.69 66.862 83327 99.849 120.461 142.982 168.39

%change UN UN -1 12 24.6 19.8 20.6 18.7 178

RetailSalesActivity UN UN 96 t00 154 195 236 277 320

%change UN UN UN 4 54 27 21 IS 15

Wholesale Activity UN UN 89 100 98 121 145 170 196

%change UN UN UN 13 -2 23 21 17 15

Notes:

1. Chihuahua City employment data are reported in thousands.

2. Chihuahua City formal sector jobs are those covered by the social security system in Mexico

3. Regulated sectors include transportation, communications, and public utilities

4. Inflation adjusted retail index and wholesale index base years are 2003 = 100.


942


Table 16: Las Cruces Demographic & Other Indicators

1988 1993 1998 2003 2008 2013 2018 2023 2028

Population 130.016 153.049 172.057 182.54 202.547 222.888 246.024 270.702 296.013

%changc 20.8 17.7 12.4 6.1 11 10 104 10 9.4

IIusinessEsubhshmcnts 246 2.863 3.183 3.331 3835 4,212 4.632 5.087 5.556

%change 232 16.4 112 4.6 15-1 9.8 to 9.8 92

Business Bankruptcies UN 26 32 78 40 30 35 39 41

% change UN UN 23I 143.8 -08,7 -25 16.7 11.4 5.1

Personal Bankruptcies UN 277 643 756 465 468 533 586 656

%change UN UN t32.1 17.6 -38.5 416 13.9 9.9 11.9

NMSU Fall Enrollment 14.284 15-788 15.409 16.174 17.198 18.919 20,967 22-978 25.282

%change 105 10.5 -14 5 6.3 10 108 9.6 10

DABCCFall Enrollment 1366 3-697 4.299 5.59 8.336 9768 11323 12.988 15-106

%change UN 170.6 16.3 30 491 172 15.9 14-7 16.3

Personal Income 1447.8 2147.3 2909.6 3736.7 52,397 71684 9869.8 13407.3 t7849.2

%change 46.7 48.3 35.5 28.4 402 36.8 37-7 35-8 33.1

Labor and Proprietor Earn-

ings 9827 1400.7 1782.6 2355.4 3202.4 4325 57789 7665.3 10037.1

%change 40.1 42S 273 32.1 36 35_1 336 32.6 30.9

Real GMP 2.463 3.049 3.508 4.144 5.038 6.147 7.513 9.023 10.611

% change 12.4 23.8 15.1 18.1 21.6 22 22.2 20.1 17-6

Total Employment 5611 62.164 70 506 81.891 91.99 103.294 11498 126.812 139.401

%change 26.3 10.8 13.4 16.1 123 12.3 11.3 103 9.9

Notes:

1. The Las Cruces metropolitan economy is comprised by Dona Ana County

2. Population, college enrollment, and business establishment data am in thousands.

3 All income and earnings data are expressed in millions of dollars.

4. Labor and proprietor earnings encompass wage and salary disbursements, other labor income, and proprietor earnings.

5. Real gross metmpobun product data are expressed in billions of 2000 dollars

6. Employment data are expressed in thousands.

UTEP Business Report SR09-1 - March 2009 Page 24

943


Table 17: Las Cruces Employment

1988 1993 1998 2003 2008 2013 2018 2023 2D28

Las Cruces Total Emp- 56.11 62.164 70.506 81-891 91.99 103.294 114.98 126.812 139.401

% change 26.3 109 13.4 161 12.3 12.3 11.3 10.3 9.9

Construction Employment 3_156 3.613 4412 5.164 6.467 7.774 8.741 9.556 10364

96 change 11.2 14.5 22.1 17 25.2 20.2 12.4 93 83

ManufacNnng 3.986 2.613 3.262 3.794 3.46 3.644 3.803 3904 3985

%change 18.7 -34.4 24.8 16.3 -88 5.3 4.4 26 21

State Government 5.874 6.959 7.687 8.558 8.938 9.786 10584 11.378 12171

%chanee 18.3 18.5 10.5 11.3 4.4 9.5 8.2 7.5 7

Local Government 5309 6.596 7072 7.437 8.671 9.725 10.679 11551 12438

%change 24.3 24.2 7.2 59 15.8 12.1 9.8 8.2 7.7

Pcderal Civilian Govt. 4.266 3.891 3.607 3.506 3-683 3.876 4.062 4.246 4.439

% change -2 -&8 -73 -2.8 5.1 52 4.8 4.5 4.5

Military Employment 0773 0.812 0.661 0626 0.604 0.667 0.674 0.682 0.687

%change 23.3 5 -18.6 -53 -3.5 10.4 1 12 0.8

Not Elsewhere classified 32746 37.68 43.805 52756 60.167 67.823 76.437 85.495 95318

% change 36.4 15.1 16.3 20.4 14 12.7 12.7 11.9 11.5

Notes:

1. Emplayment data are expressed in thousands

2 Not Elsewhere classified includes communications, services, retail, financial and other employmentcategones.


944


Table 18: Las Cruces Personal Income

1988 1993 1998 2003 2008 2013 2018 2023 2028

Total personal Income 1447.8 21473 2909.6 3736.7 52397 7168.4 9869.8 13407.3 17849.2

%change 46.7 483 35.5 28.4 40.2 36.8 37.7 35.8 33.1

Wages and Salaries 716.3 980.4 1301 1747.4 2396.5 3216.5 4286.5 5646.9 73645

%change 35.2 36.9 32.7 34.3 37.1 34.2 33.3 31.7 30.4

Other Labor Income 1217 1913 219.3 316.7 474.2 640 846 1088.2 1397.2

% change 38.2 57.2 14.6 44.4 49.7 35 32.2 28.6 28.4

Proprictor Incomes 144.6 228.9 262.3 291.3 331.8 468.5 646.4 930.2 12755

%cbange 73.4 58.3 14.6 11.1 13.9 41.2 38 43.9 37.1

Social [na. Cottbus. 47.6 73.1 97.7 131.1 189.4 256.1 348.3 469.5 611.5

% change 742 535 33.6 34.2 44.5 35.2 36 34.8 30.2

Residence Adjustments 47.1 100.1 167.2 214.1 287.8 382 493.4 6334 809.7

%change 318.9 112.4 67 28.1 34.4 32.7 29.2 28.4 27.8

Dividends, lat., Rent 278.6 3747 545.8 499.5 826.2 1178.6 1709.7 2366.4 3113.5

%change 56.2 345 45.7 -8.5 65.4 42.6 45.1 38.4 31.6

RetiremenlTransfers 155.5 2711 4186 666 9374 1299.3 1887.5 2712.8 3803.4

%change 53.6 74.4 54.4 59.1 40.7 38-6 45.3 43.7 40.2

Inc Maint. Transfers 275 66.7 84 117.7 164.8 230.6 338.7 488.3 685.4

%change 65.1 142.8 26 40 40.1 39.9 46.9 44.2 40.3

UnemploymentTransfers 4.1 7.1 91 15.2 t0.4 9.1 9.8 10.5 11.5

%ohauge -253 76.2 28.1 65.7 -31.3 -12.7 7.9 7.5 8.9

Notes

I. All Las Cruces income data are expressed in milhorrs of dollars.

2. Social insurance contributions are deducted from total regional income estimates.

3. Retuement transfer payments include social security and other retirement payments.

4. Income maintenance transfers include aid to families with dependent children and other payments.

5. Unemployment transfer payments include unemployment insurance payments to individuals. •

6. The Las Cruces metropolitan economy is comprised by Dona Ana County.

UTEP Business Report SR09-1 • Match 2009 Page 26

945


The University of Texas at El PasoAnnounces

Borderplex Economic Outlook: 2008-2010UTEP is pleased to announce the 2008 edition of its primary source of border business information. Topics coveredinclude demography, employment, personal income, retail sales, residential real estate, transportation, internationalcommerce, and municipal water consumption. Forecasts are generated utilizing the 215-equation UTEP Border RegionEconometric Model developed under the auspices of a corporate research gift from El Paso Electric Company.

The authors of this publication are UTEP JP Morgan Chase Bank Professor Tom Fullerton and UTEP AssociateEconomist Angel Molina. Dr. Fullerton holds degrees from UTEP, Iowa State University, Wharton School of Financeat the University of Pennsylvania, and University of Florida. Prior experience includes positions as Economist inthe Executive Office of the Governor of Idaho, International Economist in the Latin America Service of WhartonEconometrics, and Senior Economist at the Bureau of Economic and Business Research at the University of Florida.Angel Molina holds an M.S. in Economics from UTEP and has published research on cross-border regional growth

patterns.

The border business outlook for 2008 through 2010 can be purchased for $10 per copy. Please indicate to whataddress the report(s) should be mailed (also include telephone, fax, and email address):

Send checks made out to University of Texas at El Paso for $10 to:

Border Region Modeling Project - CBA 236

UTEP Department of Economics & Finance500 West University AvenueEl Paso, TX 79968-0543

P,

Request information from 915-747-7775 or [email protected] if

payment in pesos is preferred.

Business Report SR09-1 • March 2009Page 27

946


The UTEP Border Region ModelingProject & UACJ Press

Announce the Publication of

Basic Border EconometricsThe University of Texas at El Paso Border Region Modeling Project is pleased to announce Basic BorderEconometrics, a publication from Universidad Autonoma de Ciudad Ju£rez. Editors of this new collec-tion are Martha Patricia Barraza de Anda of the Department of Economics at Universidad Autbnoma deCiudad Juarez and Tom Fullerton of the Department of Economics & Finance at the University of Texasat El Paso.

Professor Barraza is an award winning economist who has taught at several universities in Mexico and haspublished in academic research journals in Mexico, Europe, and the United States. Dr. Barraza currentlyserves as Research Provost at UACJ- Professor Fullerton has authored econometric studies published inacademic research journals of NorthAmerica, Europe, South America, Asia,Africa, andAustralia. Dr. Ful-lerton has delivered economics lectures in Canada, Colombia, Ecuador, Finland, Germany, Japan, Korea,Mexico, the United Kingdom, the United States, and Venezuela.

Border economics is a field in which many contradictory claims are often voiced, but careful empiricaldocumentation is rarely attempted. Basic Border Econometrics is a unique collection of ten separatestudies that empirically assess carefully assembled data and econometric evidence for a variety of differenttopics. Among the latter are peso fluctuations and cross-border retail impacts, border crime and boundaryenforcement, educational attainment and border income performance, pre- and post-NAFTA retail patterns,self-employed Mexican-American earnings, maquiladora employment patterns, merchandise trade flows,and Texas border business cycles.

Contributors to the book include economic researchers from the University ofTexas at El Paso, New MexicoState University, University of Texas Pan American, Texas A&M International University, El Colegio dela Frontera Norte, and the Federal Reserve Bank of Dallas. Their research interests cover a wide range offields and provide multi-faceted angles from which to examine border economic trends and issues.

A limited number of Basic Border Econometrics can be purchased for $ I0 per copy. Please contact Pro-fessor Servando Pineda of Universidad Autonoma de Ciudad Juarez at [email protected] to order copiesof the book- Additional information for placing orders is also available from Professor Martha PatriciaBarraza de Anda at [email protected].


947


Texas Western PressAnnounces the Publication of

Inflationary Studies for Latin AmericaTexas Western Press of the University of Texas at El Paso is pleased to announce Inflationary Studiesfor Latin America, a joint publication with Universidad Autonoma de Ciudad Juarez. Editors of this newcollection are CuautBmoc Calderon Villarreal of the Department of Economics at Universidad Autonomade Ciudad Juarez and Tom Fullerton of the Department of Economics and Finance at the University ofTexas at EI Paso. The forward to this book is by Abel Beltran del Rio, President and Founder of CIEMEX-WEFA.

Professor Calderon is an award winning economist who has taught and published in Mexico, France, andthe United States. Dr Calderon spent a year as a Fulbright Scholar at the University of Texas at El Paso.Professor Fullerton has published research articles in North America, Europe, Africa, South America, andAsia. The author of several econometric forecasts regarding impacts of the Brady Initiative for Debt Reliefin Latin America, Dr. Fullerton has delivered economics lectures in Canada, Colombia, Ecuador, Finland,Germany, Japan, Korea, Mexico, the United States, and Venezuela.

Inflationary Studies for Latin America can be purchased for $12.50 per copy. Please indicate to whataddress the book(s) should be mailed (please include telephone, fax, and email address):

Send checks made out to Texas Western Press for $12.50 to:

MOOBobbi Gonzales, Associate DirectorTexas Western PressHertzog Building TGXA S500 West University Avenue

WESTERNEl Paso, TX 79968-0633

Request information from [email protected] if payment in pesos is preferred.PRESS


948


The University of Texas at El Paso Technical Report Series:

TX97-1: Currency Movements and International Border Crossings

TX97-2: New Directions in Latin American Macroeconometrics

TX97-3: Multimodal Approaches to Land Use Planning

TX97-4: Empirical Models for Secondary Market Debt Prices

TX97-5: Latin American Progress Under Structural Reform

TX97-6: Functional Form for United States-Mexico Trade Equations

TX98-1: Border Region Commercial Electricity Demand

TX98-2: Currency Devaluation and Cross-Border Competition

TX98-3: Logistics Strategy and Performance in a Cross-Border Environment

TX99- 1: Inflationary Pressure Determinants in Mexico

TX99-2: Latin American Trade Elasticities

CSWHT00-1: Tariff Elimination Staging Categories and NAFTA

TX00-1: Borderplex Business Forecasting Analysis

TX01-1: Menu Prices and the Peso

TX01-2: Education and Border Income Performance

TX02-1: Regional Econometric Assessment of Borderplex Water Consumption

TX02-2: Empirical Evidence on the El Paso Property Tax Abatement Program

TX03-1: Security Measures, Public Policy, Immigration, and Trade with Mexico

TX03-2: Recent Trends in Border Economic Analysis

TX04-1: El Paso Customs District Cross-Border Trade Flows

TX04-2: Borderplex Bridge and Air Econometric Forecast Accuracy: 1998-2003

TX05-1: Short-Term Water Consumption Patterns in El Paso

TX05-2: Menu Price and Peso Interactions: 1997-2002

TX06-1: Water Transfer Policies in El Paso

TX06-2: Short-Term Water Consumption Patterns in Ciudad Jukrez

TX07-1: El Paso Retail Forecast Accuracy

TX07-2: Borderplex Population and Migration Modeling

TX08-1: Borderplex 9/11 Economic Impacts

TX08-2: El Paso Real Estate Forecast Accuracy: 1998-2003

TX09-1: Tolls, Exchange Rates, and Borderplex Bridge Traffic


949

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