HOUSTON – Major U.S. energy provider CenterPoint Energy is under scrutiny following allegations of overcharging customers by $100 million annually. The Public Utility Commission of Texas (PUC) has approved an audit to examine the company’s spending of taxpayer dollars.
The PUC voted Thursday to find a third party to audit CenterPoint. Not only has the energy company been accused of overcharging, they’ve been criticized by customers and the state’s Lt. Governor Dan Patrick for spending $800M to lease 20 massive mobile generators. Fifteen of them have never been used because they’re not all that mobile -- they take days to move.
PUC Chairman Thomas Gleeson emphasized the audit will assess CenterPoint’s emergency operations and generator allocation. The audit report is expected by April.
History of discontent
Before the devastating impact of the May Derecho and July’s Hurricane Beryl in the Greater Houston area, CenterPoint had asked the PUC for a $60 million rate increase.
This request was met with opposition from over 40 city leaders in CenterPoint’s service area, who argued the utility was overcharging customers by as much as $100 million a year. Through numerous hearings, these cities presented evidence to the PUC, aiming to prevent what they claim are unnecessary costs for customers.
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Both sides presented their cases before the PUC last month. And late last week, CenterPoint agreed to move forward with the rate review which means they’ll go back to the negotiating table with cities in their service area and then come back to the PUC with what it decides is a fair rate.
In a separate request, CenterPoint is asking to increase rates by an additional $450 million to recover the money it spent after the May Derecho.
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This means that CenterPoint will now resume negotiations with the City Leaders, where it provides services to agree on a fair rate.
Once the agreement has been discussed, they are set to return to the PUC with a final answer.
Customer complaints
CenterPoint took a big hit in customer confidence after both storms due to the record number of outages and the time it took for the company to restore power.
Not only was there a chorus of complaints, there were at least three dozen deaths in Texas after Hurricane Beryl related to power outages. People died in homes left without air conditioning during sweltering heat.
CenterPoint CEO Jason Wells apologized last month to customers and said he and the company were determined to do better.
Today, in response to the audit, CenterPoint said they welcome the review and that the company is committed to being transparent and accountable.
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Here’s their full statement:
CenterPoint Energy is committed to working in full transparency and accountability and we welcome further review on this subject. As a reminder, the temporary generation procurement went through an open, transparent and thorough PUCT review process. It was also the subject of another third-party, independent review that found the procurement process to be competitive. CenterPoint has also engaged PA Consulting – a third-party consultancy with deep expertise in issues affecting utilities and other industries – to conduct a full review of CenterPoint’s Hurricane Beryl response, which we released publicly last month. As part of our commitment to improve, CenterPoint has already implemented, or is in the process of implementing, two-thirds of PA’s 77 recommendations. We look forward to working cooperatively to find constructive solutions and the best path forward for our customers, the Greater Houston region, and the state of Texas.
