Dive Brief:
- A coalition of Texas Gulf Coast municipalities is calling for CenterPoint Energy's rates to be cut by $150 million, saying the utility is earning in excess of the authorized return on equity.
- The Houston Chronicle reports the utility last year earned closer to 11.4% rather than the 10% authorized by the Public Utility Commission of Texas in 2011, but utility officials say the return rate is expected to fall.
- The city coalition said they also fear CenterPoint is considering a proposed rate hike, though the Chronicle reports that the utility had agreed with Houston not to initiative increases through 2016.
Dive Insight:
More than two dozen Texas cities, including Galveston, Dickinson and Sugar Land, are adopting ordinances this month that call for a reduction in CenterPoint power rates. The cities say the utility earned $46 million more than regulators allowed last year, though the company says revenues are expected to fall.
In a statement from the Gulf Coast Coalition of Cities, the group said the ordinances "have the simultaneous effect of blocking a rate hike proposed by the company."
“Electric bills in the Houston and Galveston area are already too high—consumers don’t need a rate hike. They need a rate cut,” said Julie Johnston, city administrator for Dickinson. “The analysis by our city coalition shows CenterPoint already collects more than its need. Consumers’ electric bills should be lower.”
The group said the ordinances will put the issue before the Public Utility Commission of Texas, and the cities believe that if they win their complaint then typical home electric bills could decrease by more than 5%.
The Houston Chronicle reported on the issue, noting that cities can challenge rates hikes proposed by CenterPoint, but added that the utility had previously struck an agreement with the city of Houston to not initiate rate cases through 2016. Houston is not a part of the city coalition.
