A judge has denied CenterPoint Energy’s request to dismiss its rate review. The company must now return to the table with regulatory leaders from every city in its service area to negotiate new rates that we all pay on our electric bills. Investigative reporter Amy Davis explains why CenterPoint has been accused of overcharging all of us for years.
RELATED: Details on PUC ruling related to CenterPoint rate increases
If you actually look at your electric bill every month you will notice several different fees and charges.
Amy used her most recent bill as an example.
- Used: 3,270 kilowatts of electricity.
- Electric provider charges = $224 for the energy.
Then they added CenterPoint’s rate. Your bill might also label CenterPoint’s charges as “TDU fees” or Transmission and distribution utility fees.
- TDU charges = $136.32. (38% of the bill)
The TDU charges from CenterPoint go up and down multiple times every year.
“It’s excessive. It’s unreasonable. It’s too much,” said City of Houston Attorney Arturo Michel.
Michel says rate studies by several agencies and jurisdictions agree that CenterPoint Energy is collecting far more than they should every month.
“CenterPoint came in asking for approximately a $60 million rate increase annually,” said Michel. “Not only are they not due an increase, we are due a rate decrease.
In-depth rate reviews before the Public Utility Commission are only required every 4 years; but utility companies like CenterPoint are allowed to tweak rates in between those reviews.
The Gulf Coast Coalition of Cities says CenterPoint has raised rates more than 25 times since 2020.
“The reason for that is simple. The legislature over the last 10 or 15 years has been accommodating to the utilities who want to avoid regulatory lag. Regulatory lag is the time between when a utility spends a dollar and when they collect a dollar, and utilities would like to have zero lag,” said Thomas Brocato, attorney for the Gulf Coast Coalition of Cities.
Many CenterPoint rate changes in the past year alone
Take a look at just the last year.
In September 2023, CenterPoint raised its rates by 46.5% to almost 5.46 cents a kilowatt.
In March, rates went down to 3.89 cents a kilowatt.
One month later in April, CenterPoint raised them to 4.04 cents.
And in September 2024, CenterPoint’s already approved rate will be 5.79 cents a kilowatt.
That means 3000 kilowatts of electricity next month will cost $52.50 more than the same 3000 kilowatts you use this month.
Public filings from dozens of cities claim CenterPoint is overcharging customers by more than $100,000,000 every year.
“What were they using that extra money for? Do we know?” Amy Davis asked city attorney Arturo Michel.
“It could be their reserves. It could be returned to their shareholders. It could be a number of things,” said Michel. “And it’s also what you look at in costs. They may have spent more in areas to where the determination later is - you spent too much.”
CenterPoint asked the PUC to dismiss the rate review altogether and let them focus on hardening their infrastructure before another storm.
“Being too busy is not good cause under the law. And they have done this before. They’ve had multiple rate proceedings going on at once; and they can do it here. That’s what we’re asking for,” said Michel.
Investigator Amy Davis did reach out to CenterPoint to ask what they plan to do. They can appeal the judge’s ruling. A spokesperson sent the following response:
“We are reviewing the ruling and assessing potential next steps. In the meantime, we remain focused on completing the key resiliency actions that are part of an accelerated phase of our Greater Houston Resiliency Initiative and re-earning the trust of the customers and communities we are privileged to serve.”
Meanwhile, in about 10 days when the next rate increase takes effect, CenterPoint’s charges will be about 45% of your total electric bill.