HOUSTON – The Public Utility Commission has agreed to hear CenterPoint’s arguments to dismiss a mandatory rate hearing this year. If the PUC sides with CenterPoint, dismissing the hearing would also postpone the opportunity for opposing parties to present evidence they say will show CenterPoint is overcharging customers.
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CenterPoint wants to push the hearing until June of 2025, even though state law requires a rate review by the Public Utility Commission of Texas every four years. CenterPoint’s last review was back in 2019.
The fight to keep the hearing
Back in March, CenterPoint let the PUC know it intended to ask for a rate increase at the hearing.
That was a tipping point for The Gulf Coast Coalition of Cities.
The group 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.
- September 2023: CenterPoint raised its rates by 46.5% to almost 5.46 cents a kilowatt.
- March 2023: Rates went down to 3.89 cents a kilowatt.
- April 2023: CenterPoint raised them to 4.04 cents.
- September 2024: CenterPoint raised rates to 5.79 cents a kilowatt.
Leaders of more than 40 cities in CenterPoint’s area say their data shows CenterPoint is overcharging ratepayers by more than $100 million every year.
“What were they using that extra money for? Do we know?” KPRC 2 Investigates reporter 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.”
After the May Derecho and July’s Hurricane Beryl, CenterPoint asked the PUC to dismiss the rate review altogether. They said it would allow them to focus on hardening their infrastructure before another storm.
At that point, The Gulf Coast Coalition of Cities took their case to an administrative judge who ruled in August that CenterPoint could not drop the rate review hearing. That ruling meant the utility company would have to either appeal the decision or resume negotiations with the cities challenging its rates.
RELATED: Details on PUC ruling related to CenterPoint rate increases
In early September, Houston Mayor John Whitmire sent a letter to the PUC, asking for a reduction in electric rates charged by CenterPoint Energy, at least until the formal review -- especially since the company is under investigation for system reliability issues.
“A utility should not be allowed to continue to over-earn, especially when it is under investigation for failing to maintain the reliability of its system,” Whitmire stated in the letter.
The PUC came to Houston on Oct. 5 for a public workshop where they heard from ratepayers and from Lt. Governor Dan Patrick who talked at the meeting, referencing KPRC Gage Goulding’s interview with CenterPoint CEO Jason Wells a few days before. When asked in that interview if CenterPoint is overcharging customers, Wells said, “I don’t think that we’re overcharging our customers $100 million.” Patrick demanded the PUC ask CenterPoint CEO Jason Wells to resign.
“He can’t answer a simple question. A simple question from a reporter at Channel Two saying did you overcharge your customers.”
Impact for consumers
If the PUC agrees to let CenterPoint postpone the mandatory hearing until June of 2025, critics argue it’ll cost consumers more because the alleged overcharging would continue.
Another opportunity for ratepayers to be heard is at the PUC’s next monthly meeting in Austin on Oct. 24.