CenterPoint’s new rate on PUC agenda

$13 million deal would lower residential bills about 2 percent

The Texas Public Utility Commission on Friday is expected to consider the $13 million rate hike settlement that CenterPoint Energy hammered out last month with cities, big power users and consumer groups.

The proposed deal is just a fraction of the increase that CenterPoint, the regulated utility that distributes most of the electricity in the Houston area, had sought. It would reduce transmission and distribution charges on most residential power bills by about 2 percent.

If the three-member PUC approves the deal, Houston-area residential customers who use 1,000 kilowatt-hours of power would pay $41.50 per month to cover the cost of transmitting electricity

through power lines and into their homes, 85 cents less than they paid in April 2019, CenterPoint said. The new rates would go into effect in April.

CenterPoint asked Texas regulators in April for a $161 million increase, which would have raised electricity bills by $2.38 a month for customers using 1,000 kWh of power. The utility said it needed the additional revenue to cover the cost of new electrical transmission lines to accommodate Houston's population growth, improve the reliability and resiliency of the electric grid, and make Hurricane Harvey related repairs.

CenterPoint also asked the commission for approval to boost its return on equity, or profit, to 10.4 percent, up from the 10 percent it is allowed to earn.

The utility ultimately agreed to settle for a 9.4 percent return after administrative law judges hearing the rate case recommended that the return be decreased after the grocery chain H-E-B complained about service reliability issues with CenterPoint.

The rate case is the first fullrate review in a decade for CenterPoint, which like other utilities must go before regulators periodically to prove they’ve made prudent investments and are entitled to an increase in revenue.

The cost of moving power from generators to customers is separate from the actual cost of electricity and becoming the most expensive part of residential bills. The transmission and distribution charges typically are separate line items on the bills of customers who don't pay bundled prices for electricity.

CenterPoint has 2.4 million customers in the Houston area.