Utility’s deal on rate hike approved

The Texas Public Utility Commission on Friday approved the $13 million rate hike settlement that CenterPoint Energy negotiated with cities, large power users and consumer groups.

But the three-member panel said it wants to add a provision that would ensure that measures in the settlement that haven’t been agreed to by the commission wouldn’t be binding on future commissions.

The final order is expected to be signed next week.

The settlement agreement represents just a fraction of the rate increase that CenterPoint, the regulated utility that distributes most of the electricity in the Houston area, had sought. It reduces transmission and distribution charges on most residential power bills by about 2 percent, compared with a year ago.

Customers pay for transmission and distribution in addition to what they pay for electricity. The charges are typically separate line items for customers who

don't pay bundled prices for electricity. Delivery charges can be more expensive than the actual cost of power.

Under the approved deal, Houston-area residential customers who use 1,000 kilowatt-hours of power will 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 last April, CenterPoint said. The new rates are scheduled to go into effect this April.

CenterPoint asked Texas regulators last year for a $161 million increase, which would have raised electricity bills by $2.38 a month for residential 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 repairs related to Hurricane Harvey.

The agreement also calls for CenterPoint to reduce its return on equity, or profit, to 9.4 percent. CenterPoint asked the commission to increase its return on equity to 10.4 percent from 10 percent.