The Company completed its most recent rate case in Texas in July 2010 and would not normally file another at this time in the absence of the actions by the City discussed above. The ultimate authority to set the Company's electric rates is vested in the Public Utility Commission of Texas (the "PUCT") which approved the Company's current rates in July 2010 pursuant to a unanimous settlement agreed to by the City. The Company does not believe that any decrease in rates is warranted under applicable law. When earnings for the twelve months ended June 30, 2011 are calculated on a Texas jurisdictional basis, including adjusting for normal weather conditions, the Company's analysis shows that the Company's return on equity is below the implied return in rates approved in July 2010. As a result, the Company expects to file for a rate increase with the City of El Paso in response to a show cause order. The Company believes that a rate increase is supported after reflecting in rate base the Company's $160 million investment in Phase 2 of the Newman 5 generating unit completed in April 2011. In addition, a rate filing will reflect other plant additions since June 30, 2009 (the date plant was last reflected in rates), a standard adjustment to reflect normal weather conditions and the allocation of rate base and operating costs to the Texas jurisdiction. Therefore, it is likely that the Company would file to increase rates in other Texas cities with original jurisdiction and with the PUCT at the time of any filing with the City.