The PUC determined that Centerpoint’s $47 million profit in 2014 was “excessive”.
Back on this past March 21, Centerpoint filed an application with the PUC to increase its TDU rates for its Houston customers, as well as those in surrounding communities. CenterPoint said it invested $689,351,015 in its transmission system between 2010 and 2015 and needed $60,596,164 to make up revenue. The utility has indeed made substantial transmission investments to improve Texas electricity, including both CREZ and Houston Import Projects. CREZ alone was expected to cost ERCOT ratepayers $3 to $5 per month for about a decade.
Yet, given that Centerpoint made an excess income of $47 million in 2014 through retail and wholesale transmission and distribution, the PUC launched an investigation into the fairness of Centerpoint’s requested increase. PUC’s investigators reported that Centerpoint’s earnings were straying over the approved return on equity (ROE) level of 10%. Wholesale ROE in 2012 hit 14.95%.
Needless to say, Houston and its metro area communities were less than pleased with the idea and filed motions to intervene and stop the increase. Texas Coalition for Affordable Power (TCAP), which also signed on to intervene, announced that it’s analysis found that Centerpoint doubled its non-bypassable charges over an 11 year period —a rate faster than inflation.
On June 15, Centerpoint, the PUC, the City of Houston and other municipalities signed an agreement that reduced the increase from $49 million in 2016 to $45 million and from $60 million in 2017 to $49 million. Split among the Houston area’s ratepayers, the increase adds up to about 56¢ for every 1,000 kWh.
These rate increases will take effect September 1, 2016 and then again next September 1, 2017.