Compromise Reached on Centerpoint's Rate Case

The Minnesota Public Utilities Commission has reached a decision on the Centerpoint Rate Increase docket that has been underway for 9 months. The PUC did approve of a permanent rate increase for the Centerpoint’s 823,000 Minnesota customers. But the increase will be lower the 4.9 percent interim increase the PUC authorized last October. Centerpoint initially requested a 10.2 percent return on equity, but the PUC approved only a 9.6 percent rate. Read More:

CenterPoint Energy rate increase approved by: DAVID SHAFFER , Star Tribune, May 8, 2014 

The PUC was not quite as accepting of Centerpoint’s request to increase in its $8 basic charge. They agreed to only a $1.50 increase as opposed to the $7 increase (87%) originally proposed by Centerpoint. The basic charge is a regressive fee that is the same for all customers no matter how much gas they consume. Centerpoint plans to use the extra revenue flow they did win from the PUC for investment to replace aging cast iron or PCV pipelines and for new meters inside customer’s homes.

    The recent juxtaposition of bitterly cold and unusually mild winters in the past few years has led to wild swings in customer’s bills and therefore Centerpoint’s revenue. On a 2-3 vote the PUC ordered implementation of an experimental billing method to address this issue with Centerpoint’s customers. From July 2015-2018 customers will get a bill credit after a cold winter and a surcharge for a mild winter. In addition, a revenue decoupling rate structure will be given another try in order to mitigate the disincentives utilities would otherwise have against energy conservation efforts.