Oracle proposes $10M a year to El Paso Electric for Jupiter. Bloom stays primary

WIRE · HYPERSCALERS · US · Data as at 13 Oct 2026

Oracle today published a proposed Energy Service Agreement with El Paso Electric for Project Jupiter, the AI campus in Doña Ana County, New Mexico. The utility print is $10 million a year for 10 years, paid even if usage sits below the contracted level. A separate proposal would put as much as $55 million a year of bill credits onto EPE’s New Mexico residential and small-business accounts for up to three years, from 2027. The headline on the release is “at least $155 million” of customer-offset. Bloom Energy’s fuel-cell microgrid remains the primary power source. “There is no change to our plan,” Oracle said. On the hyperscalers layer, that is the grid getting paid for the edge of a campus still meant to run off-grid.

What happened

Kelly Tomblin, El Paso Electric’s president and CEO, said EPE welcomes the chance to “facilitate Oracle’s credit.” Mahesh Thiagarajan, executive vice president of Oracle Cloud Infrastructure, said Oracle is acting “well before our data center comes online.”

Our arithmetic, not a company total. Ten years at $10 million is a $100 million floor on the ESA. Three years at the $55 million cap is a $165 million ceiling on the credits. Add the ESA floor to one year of the credit cap and you get $155 million — Oracle’s own headline. If both proposals clear at those caps, the envelope is $265 million. Treat $155 million as Oracle’s “at least”; treat $100 million and $165 million as our split of the two lines it printed.

Why cash cares

Jupiter does not invoice Oracle’s AI-cloud backlog until a hall has power a customer will accept. In the quarter to 31 August 2026 Oracle spent $28.5 billion on capital projects against minus $5.4 billion of free cash flow, with remaining performance obligations at $664 billion. New Mexico was not in the 850 MW it delivered that quarter. Clay Magouyrk told the Q1 call the New Mexico campus is about a gigawatt and is not in the previously stated FY27 revenue guide. The 13 October ESA is cash that would leave before that campus bills.

The $10 million a year cannot be read as the power bill for 2.45 GW of campus load. Oracle’s own words put the ESA on the edge of the site: construction, commissioning, backup and life safety, not the fuel-cell microgrid that is supposed to carry the racks. The utility still gets a take-or-pay cheque. Bloom still gets the campus.

That split matters because New Mexico already has a rate case on the table. El Paso Electric’s amended filing in Case 25-00082-UT asks for about $70.5 million of extra New Mexico base-rate revenue, with a proposed 26.8% average first-step increase for listed classes and a further 18.7% relative to that first step. Our arithmetic: a $55 million annual credit at the cap is about 78% of that $70.5 million ask in a single year ($55m ÷ $70.5m). It does not settle the rate case.

What a take-or-pay grid bill is

A utility builds, or keeps, kit to serve a large load. If the load never shows, or shows late, the cost of that kit can leak onto every other bill. A take-or-pay clause — pay the contracted amount whether you draw the power or not — is how the buyer keeps that leak off the residential class.

Oracle’s 13 October ESA is that clause in cash: $10 million a year for 10 years, even if usage is below contracted levels. The White House Ratepayer Protection Pledge, which Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI signed on 4 March 2026, asked the same thing: negotiate separate rate structures, and pay those rates whether they use the electricity or not. Duke Energy’s North Carolina large-load settlement bills 75% of contracted demand, used or not. Indiana’s AES/Google Monrovia order put $32.3 million of direct connection on Google and $73.8 million of network upgrades into AES’s rate base.

Jupiter is the odd one in that set. Duke and AES are pricing the campus load. Oracle is pricing a backup and construction service while Bloom is still named as primary. The 2.45 GW still sits on fuel cells, and those cells still need gas and an air permit. We already covered the trucked-gas bridge; this note is the utility bill, not that story again.

The second-order read

Who gets paid. El Paso Electric, on a $100 million-floor ESA if the filing is approved as printed. New Mexico residential and small-business customers, if the credit lands, from 2027. Bloom Energy, still, on the campus microgrid — up to 2.45 GW — because Oracle used the ESA day to say the plan has not changed.

Who pays. Oracle, in cash, before Jupiter is online. That cash sits on top of Q1’s $28.5 billion of capex and negative free cash flow.

Upstream. The Bloom cells still need a New Mexico air-quality permit and a gas supply. Energy Transfer’s rerouted pipeline is the dated fuel clock; a September report put service in February 2027, and an air-permit decision has been reported as due by 23 November 2026. A signed ESA with EPE does not move either date.

Downstream. OpenAI is the named AI customer for the campus in Oracle’s earlier Jupiter notes. A backup utility contract does not convert the $664 billion remaining-performance-obligations print.

Stuck step. Filing and approval, then gas and air. The 13 October print is a proposal. No docket number, no megawatt figure on the ESA, no tariff page. Until EPE files, the $10 million and the $55 million are offers, not rates.

Two cautions

This is not a signed, approved tariff. Oracle said more detail comes after the filing. Do not treat $10 million a year as Jupiter’s running power cost, and do not treat “at least $155 million” as cash already owed.

The $100 million, $165 million, $265 million and 78% figures are our arithmetic from Oracle’s and EPE’s stated lines. The 2.45 GW figure is the April company print, restated by today’s “no change” line — not a new capacity add.

What would change the view

• The ESA filing showing a megawatt, a tariff schedule, and a docket, or a filing that is much smaller than $10 million a year.
• The New Mexico PRC rejecting or rewriting the ESA or the credits.
• Oracle walking back Bloom as primary, or a permit denial that forces the campus onto the grid after all.
• The air permit or the Energy Transfer in-service date slipping in a way that hits Magouyrk’s “not in FY27 guidance” claim.

What to watch

• The ESA filing — date, MW, and whether the $10 million is take-or-pay as printed.
• Credit start in 2027 — tariff or rider, and for how many of the three years.
• NMED air permit — reported decision window 23 November 2026.
• Energy Transfer pipeline — reported in-service February 2027.
• Oracle Q2 FY27 results, 14 December 2026 — capex, free cash flow, New Mexico colour.

Read: Hyperscalers, What Is Cash Capex? The Cash That Leaves Before AI Hours.

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Sources: Oracle, 13 Oct 2026 ESA proposal; Oracle / Bloom, 2.45 GW microgrid, 27 Apr 2026; White House Ratepayer Protection Pledge, 4 Mar 2026; White House fact sheet, same day; NMPRC Case 25-00082-UT; What Does Oracle Do?; Oracle trucked-gas Wire; Duke 75% Wire; Indiana AES / Google Wire.

Not investment advice.