CUSTOMER UPDATE 

October 2011

Why did CNP propose to suspend the IBR program?

CNP, along with the original parties to the IBR have proposed suspending the IBR structure in order to have a thorough and thoughtful discussion and to explore potential modifications. The Minesota Public Utilities Commission (Commision) reviewed the proposal and suspended the IBR program on Sept. 28th.

Why did CNP propose the change to the IBR program before the winter season?

Due to the increased need for heat during the winter, the Parties proposed to suspend the program prior to the heating season to allow thorough and ample review of the program and determine if modifications need to be made.

Did the IBR suspension impact both residential and commercial customers?

Yes. All residential and commercial A and B customer's bills have been changed back to a flat rate cost of gas.

When did my bill return to flat rate billing?

Bills for meters read on or after Friday, October 14th, 2011 were billed at a single rate per therm.  Mailing of invoices for meters read on October 14th began on Tuesday, October 18th. 

How long will customers see a single rate billing structure instead of the 5 tiered Inverted Block Rates?

The suspension will last until at least the spring of 2012.  The Commission would need to approve any plan to reinstate the 5 tiered rate structure.

Will customers who may have been billed in the higher tiers at any point during the 16 months the IBR was in place be receiving a refund now that the IBR program is being suspended?

No.  All customers were billed based on the approved IBR pilot criteria during the past 16 months.  The program suspension will not generate a refund for higher tiered gas use or any additional charges for discounted tiered gas use.

Will the Inverted Block Rate adjustment line item remain on my bill now that the IBR structure is being suspended?

Yes.  This line item is required so that CenterPoint Energy can recover or refund any difference between the cost of gas amount paid by customers under the Inverted Block Rate structure and the company’s actual cost of gas.

What is the difference between the IBR adjustment and the Revenue Decoupling line items?

Revenue decoupling allows CNP to adjust its rates up or down for Residential and small Commercial customers once a year to make up for any shortfall or excess in sales revenue that is NOT due to changes in weather.  The purpose of Revenue Decoupling is two-fold:  1. Reduces CNP’s incentive to distribute and sell more natural gas to cover its fixed costs.  2.  Reduce its disincentive to promote energy conservation and energy efficiency.    The Inverted Block Rate Adjustment adjusts rates once every year to recover or refund any difference between the cost of gas amount paid by customers under the inverted block rate structure and the company’s actual cost of gas.  CNP does NOT make any money from the cost of gas. 

Will my Budget Plan be recalculated based on the suspension of the IBR program?

No. The bi-annual recalculation of bills of those customers enrolled in the Budget Plan will occur on the predetermined scheduled date as customary.

Will this change affect any other billing items or programs currently on my bill?

No. This change is strictly related to IBR cost of gas, or tiered rates that have been on customer's bills since July 2010. The tiered gas costs changed back to the flat rate wholesale gas cost that was in place previously. The suspension will remain at least throughout the 2011-2012 heating season to ensure Parties can complete a thorough review and thoughtful decisions may take place.