CenterPoint Energy files to change electric delivery base rates for Houston-area customers
CenterPoint Energy’s electric transmission and distribution business, CenterPoint Energy Houston Electric (CEHE), recently announced that it filed a request with the Public Utility Commission of Texas (PUCT) and the cities in its service area to increase the base rate for delivery charges.
If approved in full by the PUCT, the proposed base rate increase would total approximately $161 million in adjusted current annual revenues.
The company is seeking to recover system-wide investments in the safety, reliability and resiliency of its electric grid. Growth in the Houston area has led to the addition of approximately 400,000 customers since the last change to base rates, the company said. The filing also seeks to recover approximately $64 million in costs related to Hurricane Harvey.
The company is also requesting to continue returning savings from the Tax Cuts and Jobs Act of 2017 through a separate rider which will provide approximately $97 million to customers over the next three years.
For residential customers using 1,000 kilowatt hours (kWh) per month, CEHE’s transmission and distribution charges in this case currently represent approximately 37 percent of the monthly bill that they pay to their Retail Electric Provider (REP). Changes to CEHE’s delivery rate would be included in the billing to the REP. The REP would then determine whether the changes would be passed on to their end-use customers.
If the requested increase is approved in full and the REP passed it through to the consumer, the impact to a residential customer using 1,000 kWh per month would be $2.38 per month.
The filing also requests permission to install voltage regulation battery technology, when necessary and cost effective, to connect planned renewable energy generation projects in its service territory. CEHE is also requesting an amendment to its Facilities Extension Policy to facilitate the development of public electric vehicle (EV) charging stations by decreasing the financial contribution required to extend electric service to the charging stations.
CEHE is also requesting a Return on Equity of 10.4 percent and requesting to put in place a capital structure of 50 percent equity and 50 percent long-term debt in response to its increased capital investment and the continued impact of the Tax Cuts and Jobs Act of 2017.
State law provides the PUCT with 185 days to review and decide on the filing.
“We believe that a fiscally healthy utility is good for customers, shareholders and the state of Texas,” Tracy Bridge, executive vice president and president of CenterPoint Energy’s Electric Division, said. “A competitive authorized return and more appropriate capital structure will continue to allow the company to attract low cost debt capital.”
