CenterPoint customers face higher bills
Utility says it spent $1.25 billion more buying natural gas last week to meet high demand
CenterPoint Energy said Thursday that its customers should expect higher natural gas bills after short supplies and high demand sent natural gas prices soaring during the recent winter storm.
The utility, which has about 1.1 million gas customers in the Houston area, said it spent an additional $1.25 billion buying natural gas last week as temperatures plunged into the teens — and lower. CenterPoint executives said the company will seek a review from the state Railroad Commission, which oversees natural gas utilities, to pass the added costs on to customers.
The increases likely would come in the the third quarter, which begins in July, executives said. The amount the bills might rise has yet to be determined.
“The company is reviewing all available options to lessen the bill impact to customers,” said Alejandra Diaz, a CenterPoint spokesperson.
CenterPoint disclosed the higher natural gas costs during a call with analysts after releasing its earnings for the fourth quarter and all of 2020. The company said its fourth quarter profits rose 27 percent to $200 million from $157 million in 2019. Revenues rose slightly, to $2.05 billion from $2.02 billion in fourth quarter of 2019.
For the year, the CenterPoint said it lost $773 million in 2020, compared with $791 million profit for 2019. Annual revenue declined about 2 percent to $7.42 billion from $7.56 billion.
Natural gas spot prices surged last week as bitter cold spread across the nation, creating high demand for both heating and power generation. Railroad Commission officials said they would work with utilities to prevent customers from getting unusually high bills in coming weeks.
“Texans have gone through enough hardship during this winter storm without having to worry
about unexpected additional energy costs,” Commissioner Wayne Christian said in a statement. “Our agency will do everything in our power to ensure utilities have plenty of time to get caught up on these unexpected expenses, so consumers are not unduly burdened.”
The failure to sufficiently winterize power plants and equipment has been blamed for the recent power crisis, caused when about half of the state's generation capacity was knocked offline by the bitter cold. When asked during the earnings call about winterizing equipment, Jason Wells, CenterPoint's chief financial officer, said winterizing equipment is a challenge for an electric grid built primarily to handle searing summer temperatures and surging demand from air conditioners.
“It's going to be difficult to do because obviously by enclosing them, and insulating them and winterizing them, it means you just put more stress on it during the summer when it’s really hot,” Wells said. “So I think there are ways to do it. And companies are going to have to find ways to do it because I suspect that's one of the things that's going to come out of Austin from a regulatory standpoint.”