Oklahoma Corporation Commission approves Centerpoint fuel cost recovery linked to 2021 winter storm
CenterPoint Energy was approved to recoup losses from natural gas costs incurred during a February 2021 winter storm that struck Oklahoma, but regulators with the Oklahoma Corporation Commission (OCC) stated that no fee could be added to customer who ends up terminating natural gas service.
The proposed termination fee would have punished CenterPoint customers for terminating their natural gas service in favor of a different fuel source. The decision was reached following a full audit that determined Centerpoint would not make a profit on the fuel costs to be recovered and that other requirements were being met. Even as bills increase, cost recovery will be spread out over a longer period of time, rather than billed all at once.
“While the law and the record, in this case, support the Order’s provisions to lower the monthly charge CenterPoint customers will pay because of the storm, we weren’t persuaded to impose a termination fee,” OCC Chairman Dana Murphy said.
Securitization will allow the costs to be more spread out – for up to 15 years, if necessary. This will end up pushing the average residential customer’s bills down to an estimated $4.36 per month.
“This means that the monthly impact to ratepayers will be far less than it otherwise would have been,” Murphy said. “It’s estimated that the natural gas costs owed would have cost an average residential CenterPoint customer $538.07 if billed all at once, and $44.61 if billed over 12 months.”
In February last year, the winter storm led to sub-zero temperatures that caused demand for electricity and heating fuels to skyrocket across 14 states. Heating units surged into overtime to maintain stable temperatures. Even in Oklahoma, the nation’s fourth-largest state for natural gas production according to the OCC, the temperatures were so low they froze equipment, crippling production and transportation of natural resources gas and limiting supply as a result.
The result was an unprecedented increase in natural gas prices, Murphy said.
“The Federal Energy Regulatory Commission and the Oklahoma Attorney General are investigating what happened to the market, and if something is found that could lower costs to ratepayers, that will be instituted,” Murphy said. “Today’s decision also orders the company to credit to customers any proceeds, government grants or other funding sources CenterPoint receives for the costs of the February 2021 winter weather event.”
