Gulf Coast Coalition of Cities Calls Upon CenterPoint to Slash Its Rates

HOUSTON--(BUSINESS WIRE)--A coalition of cities has announced it is seeking a nearly $150 million rate cut from the Houston-Galveston area electric utility, CenterPoint Energy.

“Under these fiscally irresponsible proposals, the utilities could hike rates even when profits are up, and overall expenses are down”

The cities, which include Galveston, Dickinson, Sugar Land and others, are adopting ordinances this month that call for the rate reduction. The ordinances have the simultaneous effect of blocking a rate hike proposed by the company.

“Electric bills in the Houston and Galveston area are already too high — consumers don’t need a rate hike. They need a rate cut,” said Julie Johnston, City Administrator for Dickinson. “The analysis by our city coalition shows CenterPoint already collects more than its need. Consumers’ electric bills should be lower.”

Dickinson is a member of the Gulf Coast Coalition of Cities, a group of 34 area municipalities that have banded together to protect its local citizens from unfair rates. CenterPoint recently began seeking authorization to charge more across its system, which includes the Gulf Coast Coalition and other cities.

In response to the ordinances adopted this month, the issue now goes to the Public Utility Commission of Texas, which has until January 1 to decide whether to lower CenterPoint’s rates or to increase them. If cities prevail, typical home electric bills could decrease by more than 5 percent.

CenterPoint Energy serves about 2 million electric customers in the Houston-Galveston area. The cost of maintaining the monopoly utility’s system of poles and wires is imbedded in all area electric bills — regardless of the retail electric provider selected by the consumer.

Johnston said evidence collected by the city coalition suggests CenterPoint may be seeking that extra money to offset its investment losses and to boost its earnings. The proposed rate hike would add an estimated $111 million each year to the company’s coffers.

Johnston also noted that residents in the Houston-Galveston area already pay some of the highest electric bills around. For instance, a recent survey of 21 major cities shows that electric bills in the Houston area are among the nation’s highest — higher even than electric bills in scorching hot Phoenix and Las Vegas.

Johnston also cited recent federal and state data suggesting that even the lowest-cost fixed rate deal in CenterPoint’s service territory is more expensive than just the average rates in neighboring Louisiana, Arkansas and Oklahoma.

“This new rate hike would make the bad news for consumers even worse,” she said.

Consumer Groups Also Oppose One-Way or Streamlined Ratemaking

Many cities and city coalitions also have joined with consumer groups to oppose a separate anti-consumer initiative known as “streamlined” or “one-way” ratemaking. One-way ratemaking could pile even more costs onto home electric bills across the state.

CenterPoint and other Texas utilities are pressing the issue with Texas regulators and lawmakers.

Consumer groups oppose it because one-way ratemaking would allow monopoly electric utilities to obtain rate hikes without first submitting to meaningful regulatory review. Johnston said the procedures often are described as “one-way” because they send electric rates only one way: up.

“Under these fiscally irresponsible proposals, the utilities could hike rates even when profits are up, and overall expenses are down,” said Johnston. “One-way ratemaking will encourage bloated utility spending and will harm Texas consumers. It’s unfortunate that Texas utilities continue lobbying for these anti-consumer initiatives in Austin.”

The PUC is expected to consider both CenterPoint’s proposed rate hike and separate one-way ratemaking proposals in the coming months. Utility lobbyists also are pushing one-way ratemaking at the Texas Legislature. City coalitions that oppose one-way ratemaking include the Cities Aggregation Power Project and the South Texas Aggregation Project, which together are comprised of approximately 150 municipalities and other political subdivisions throughout the state.

The Gulf Coast Coalition of Cities, a separate coalition, includes Alvin, Brazos Country, Bunker Hill Village, Clear Lake Shores, Deer Park, Dickinson, Friendswood, Fulshear, Galveston, Jersey Village, Lake Jackson, La Marque, Manvel, Missouri City, Rosenberg, Santa Fe, Seabrook, Simonton, South Houston, Spring Valley Village, Stafford, Sugar Land, Taylor Lake Village, Texas City, Village of Tiki Island, Webster, Weston Lakes, Hilshire Village, Kemah, Mont Belvieu, Morgan’s Point, Nassau Bay, Piney Point Village and Tomball.