The Proposed Rate Adjustment
On Nov. 1, 2023, CenterPoint Energy requested approval from the Minnesota Public Utilities Commission (PUC) to increase natural gas delivery charges for customers in the state in 2024 and 2025. This proposal is known as a “rate case.”
CenterPoint Energy continues to make meaningful investments to continue to support the advancement of low and zero carbon technologies and maintain the safety and integrity of its natural gas distribution system that benefits its customers and communities. These investments include infrastructure projects to replace or upgrade existing pipelines to prevent leaks, provide safe and reliable service and comply with federal pipeline regulations.
The proposed rate adjustment would provide support for CenterPoint Energy to invest in its 14,000-mile pipeline system that serves more than 910,000 residential and business customers in Minnesota.
Additionally, this rate case would support innovations CenterPoint Energy is making to advance Minnesota’s cleaner energy future. In 2022, CenterPoint filed an innovation plan under the Natural Gas Innovation Act which would increase access to renewable energy resources and technologies. Learn more about our innovations.
Learn more about our innovations.
The requested increase is approximately 6.5 percent or $84.6 million for 2024 and an additional approximately 3.7 percent or $51.8 million for 2025. If approved, the requested increase would add approximately $5.91 to a standard monthly bill of a residential customer in 2024 and an additional $2.58 to a standard monthly bill of a residential customer in 2025.
More details about the current and proposed rates for each customer type can be found below.
Approval Process and Interim Rates
The PUC will likely decide on the requested rate case by early 2025.
The Minnesota Commerce Department, the Minnesota Attorney General’s Office, public interest groups and customers can review and comment on our rate case proposal. Public hearings will be held in 2024 to provide customers and others the opportunity to comment on the rate request, followed by formal hearings at the PUC.
An interim rate increase of approximately 5.3% will take effect on Jan. 1, 2024, while the rate case is pending. It’s expected that 2025 interim rates would be addressed in 2024, if needed, with the PUC.
If final rates are higher than interim rates, customers will not be charged for the difference during the time the customer is billed for the interim rate. The customer may be charged for the difference between a lower interim rate and a final higher rate beginning on the date that final rates are ordered by the MPUC.
Your Natural Gas Bill
Your bill contains three parts: Basic Charge, Delivery Charge and Cost of Gas. The proposed Basic Charges and Delivery Charges cover the cost of delivering natural gas service and is 40-50 percent of the bill, while the Cost of Gas is 50-60 percent of the bill.
The Cost of Gas is billed directly to customers without mark-up. This rate increase does not affect the Cost of Gas. The proposed rate changes will affect individual monthly bills differently depending on natural gas use and customer type. Bills will also vary because the wholesale cost of natural gas changes each month.
Proposed Changes in Basic Charge and Delivery Charge
Customers are billed for natural gas delivery service in two ways. The first is a monthly Basic Charge, which pays for a portion of fixed costs that do not change with the amount of natural gas used. The second is the Delivery Charge, a per therm charge which pays for the costs not recovered in the Basic Charge. The total Delivery Charge amount changes each month based on the amount of natural gas used.
In this rate case, CenterPoint Energy is asking to increase the Delivery Charge for its customers. We propose to increase the residential Delivery Charge from $0.28093 per therm to $0.36075 per therm in 2024 and $0.39558 per therm in 2025.