Amendment dated June 29, 2018, to the Franchise Agreement between the Company and the City of El Paso, dated July 12, 2005

WHEREAS, the City Council of the City of El Paso, Texas, (“City”) granted to El Paso Electric Company (“Company”) a franchise to operate the electric utility for transmission and distribution of electrical energy within the boundaries of the City on July 12, 2005, by Ordinance No. 16090;

WHEREAS, the City and Company amended Ordinance No. 16090 to increase the street rental charge on November 16, 2010; and

WHEREAS, the City wishes to increase the Street Rental Charge paid by the Company to the City.

Section 1, Grant, of An Ordinance Granting a Franchise to El Paso Electric Company and Waiving Application Procedures, adopted as Ordinance No. 16090, as amended by An Ordinance Amending Ordinance No. 16090, which Granted a Franchise to El Paso Electric Company, to Increase Street Rental Charge, adopted as Ordinance No. 17460 (“Franchise Ordinance”), is hereby amended to read as follows:

Subsection (b) of Section 13, Compensation, of the Franchise Ordinance, is hereby amended to read as follows:

(b) The City will increase the Street Rental Charge to be paid by the Company to the City on a quarterly basis during the remaining life of this Franchise by an additional three quarters of one percent (0.75%) effective 2010 (“Additional Fee”) and a supplemental one percent (1.0%) (“Auxiliary Fee”) for a total amount of (i) five percent (5.0%) of the gross revenues the Company receives for the generation, transmission, and distribution of electrical energy and other services within the City and (ii) five and three quarters percent (5.75%) of BPL-related gross revenues within the City of El Paso, except however for any revenues from municipal accounts to the extent that any such revenues are excepted from the Company’s Rate Schedule 94, Supplemental Franchise Fee Rider. A portion of the Street Rental Charge equal to one and three quarters of one percent (1.75%) of the gross revenues the Company receives for the generation, transmission, and distribution of electrical energy and other services, including BPL services, within the City shall be allocated by the City for promotion of economic development, including economic development incentives for new commercial customers with high electric energy needs, the attraction of companies that will make significant investments of capital and human resources in the community, solar or other renewable energy rebates or incentives, or to increase the City’s capacity in alternative energy research, development, manufacturing and generation, and for such other economic development public purposes including infrastructure as reasonably determined by the City. The portion of the Street Rental Charge allocated to economic development shall be placed in a restricted fund to be used solely for the economic development purposes described herein and cannot be commingled with existing Street Rental Charges to support or supplement general fund operations. The City will provide an annual update on the status, uses, and economic impact of the Additional Fee and the Auxiliary Fee to the City Council and the public.

The Company shall pay the Street Rental Charge to the City by electronic funds transfer or by other means of immediately available funds within forty-five (45) days of the end of each calendar quarter (the “Payment Date”). If the Street Rental Charge or any portion thereof is not paid on or before the Payment Date, the unpaid balance shall bear interest at a daily rate equivalent to the prime rate of interest as published by the Wall Street Journal for that date, plus one percent (1%) per annum from the Payment Date until the date such payment is made. If any payment shall be more than thirty (30) days late, the interest shall be paid at such prime rate plus three percent (3%) per annum.

Section 2. This ordinance shall take effect on the later of (i) May 1, 2018; and (ii) the first day of the first calendar quarter that occurs thirty (30) days following the later of (a) the date the City adopts this ordinance and the ordinance is accepted in writing by the Company; and (b) the date the tariff, in substantially the same form as appended to this ordinance as Attachment A and filed with the City, becomes final and non-appealable.

Section 3. Except as expressly amended herein, the Franchise Ordinance shall continue in full force and effect.

EL PASO ELECTRIC COMPANY

This instrument was acknowledged before me this 29th day of June , 2018, by Mary E. Kipp, President and Chief Executive Officer of El Paso Electric Company, a Texas corporation, on behalf of said corporation.

Received for filing this 29 day of June , 2018.