The Administration & Regulatory Affairs Department (ARA) recommends that City Council adopt an ordinance amending Ordinance 2023-1153 to change the date of the public hearing related to the retail gas rates of CenterPoint Energy Resources Corporation d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas (CenterPoint or Company) from January 31, 2024 to March 27, 2024.
CenterPoint provides natural gas distribution service to approximately 1.9 million customers. Of this total, CenterPoint serves approximately 437,564 Houston customers — 412,350 residential, 24,357 small commercial and 857 large volume customers. The City of Houston (City) exercises original jurisdiction over the rates, operations, and services of CenterPoint under the provisions of the Gas Utility Regulatory Act (GURA) for customers inside city limits.
On October 30, 2023, CenterPoint filed a Statement of Intent to Change Rates (Statement of Intent) with the City. CenterPoint originally requested an approximate $59 million revenue increase for service to customers in its Houston Division. On a division-wide basis, the company proposed a $37.4 million revenue increase (CenterPoint is proposing rate decreases for its South Texas and Beaumont/East Texas Divisions).
The Texas Utilities Code §104.105 requires the City to hold a hearing, if CenterPoint is requesting a major increase in rates. CenterPoint requested a total aggregate increase of approximately 3.1% including gas costs or 5.8% excluding gas costs which exceeds the 2.5% threshold for a major change, as defined in the statute. Hearings can be informal unless the City receives a complaint before the 45th day after notice of the rate increase. Because the City received, before the 45th day, a complaint from a customer whose rates will be affected by the rate proceeding, the statute requires a formal hearing. Although the hearing is not evidentiary, pursuant to Chapter 37 of the City of Houston Code of Ordinances, the hearing must take place before the City Council.
On December 20, 2024, City Council approved Ordinance No. 2023-1153 which set the date of the public hearing for January 31, 2024. This date was based on the original effective date of the rates. However, on December 19, 2023, CenterPoint filed an amendment to its rate increase application, changing the amount requested to a $60 million increase and on a division-wide basis to $38.8 million. Per CenterPoint, the amendment includes an update to actual plant additions, the flow-through impacts to investment and rates, and updates to reflect necessary corrections identified through discovery. Based on the amended filing, CenterPoint’s new effective date for the rates is January 27, 2024. Council previously approved Ordinance No. 2023-985, suspending the proposed effective date in the Statement of Intent, December 4, 2023, for 90 days. Because of the errata filing, the suspension period has also been extended to April 26, 2024 (from March 3, 2024).
Based on the extended suspension period, ARA recommends that City Council adopt an ordinance changing the hearing date from January 31, 2024 to March 27, 2024. The new March 27, 2024 hearing date allows additional time for the City experts to review the amended filing and will allow our experts to provide more information to City Council in advance of the hearing.
During the proposed hearing, ARA, CenterPoint, and any other interested parties will have an opportunity to present their respective positions. ARA anticipates presenting a proposed rate ordinance to City Council for approval April 17, 2024. Pursuant to State Law, City Council must make a final determination regarding the rate request no later than April 26, 2024. A complete copy of the Company’s filed Statement of Intent and errata are available for review in the City Secretary’s Office.
Fiscal Note:
There is no impact to the fiscal budget and no additional spending authority. Therefore, no Fiscal Note is required as stated in the Financial Policies.
Departmental Approval Authority:
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Tina Paez, Director Other Authorization
Administration & Regulatory
Affairs Department