Get the Facts

Who is CenterPoint Energy?

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and energy services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. The company also owns a 55.4 percent limited partner interest in Enable Midstream Partners, a publicly traded master limited partnership it jointly controls with OGE Energy Corp., which owns, operates and develops natural gas and crude oil infrastructure assets. With more than 8,500 employees, CenterPoint Energy and its predecessor companies have been in business for more than 140 years. For more information, visit the website at www.CenterPointEnergy.com. The utility also operates a non-regulated business in Minnesota called Home Service Plus®. For more information, visit CenterPoint Energy.com.

What is a rate case?

A rate case is the regulatory process that public utilities (natural gas, electric and telephone) must follow to formally change their rates.  The Minnesota Public Utilities Commission (MPUC) regulates rate changes, and any proposed changes must first go through a review process before receiving a final decision by regulators.

What is the timeline for the rate implementation?

  • December 1, 2014 Final rates go into effect and interim refunds received by customers
  • July 1, 2015 Decoupling goes into effect
  • September 1, 2016 Decoupling factor appears on customer bills

Who is the Minnesota Public Utilities Commission (MPUC)?

The MPUC regulates utility service industries in Minnesota, including electricity, natural gas and telephone. It is responsible for ensuring that vendors of these services provide safe, adequate and reliable service at fair, reasonable rates. . 

How is the Commission formed?

The MPUC consists of five commissioners appointed by the governor to six-year, staggered terms. By law, no more than three commissioners can be of the same political party and at least one commissioner must reside, at the time of appointment, outside the seven-county metropolitan area. The governor designates one of these commissioners to serve as chair.

What are the approved final rates?

The MPUC approved an annual revenue increase of approximately $32.9 million, or 3.9 percent. Under the final order, the monthly Basic Charge for residential customers increases from $8.00 to $9.50, and the per therm Delivery Charge increases from $0.16637 to $0.18458.

What are distribution costs?

Distribution costs are costs related to delivering natural gas to our customers and make up approx. 30-40 percent of a customer’s bill and are recovered through the Basic Charge and the Delivery Charge. The other part of a customer’s bill (approx. 60-70 percent) is the cost of gas, which is passed through to customers on a dollar-for-dollar basis with no mark-up.  

What is a Basic Charge?

A Basic Charge partially covers the cost of those services we provide every month, regardless of how much gas a customer uses. These fixed costs include maintenance of gas service lines and regulators; gas meters; meter reading; billing; maintaining facilities; and vehicles and equipment.

What is a Delivery Charge?

A Delivery Charge recovers the costs not recovered through the Basic Charge, including taxes, salaries, depreciation, interest, etc.

Why the new Rates are needed?

We are making significant capital improvements in Minnesota in accordance with natural gas pipeline safety and integrity regulations. The expenses are necessary to:

  • Ensure that you receive natural gas service delivered safely and reliably to your homes and businesses
  • To respond to significant public improvement requirements on the system
  • To modernize the system with technology improvements

When was the last time we increased our base rates?

We last filed a rate case in 2008. The MPUC approved an increase of about 3.6 percent of annual revenues, which went into effect in July of 2010. The effect on a typical residential customer was about $1.50 per month.

How will the new rates impact customer bills?

The new rates increase the company’s revenue by $32.9 million annually – adding about $2.85 to an average residential customer’s monthly bill.

How these new rates affect individual monthly bills?

Rates vary by customer class 
Rate changes will affect individual monthly bills differently depending on the amount of natural gas used and the customer’s rate class. The effect on an average residential customer’s bill (who uses approximately 900 therms in a year) will be an increase of about $2.85 per month, or $34 per year. Bills will also vary because the wholesale cost of natural gas changes each month.

Customers’ bills contain three parts: Basic Charge, Delivery Charge and Cost of Gas, which is passed through directly to customers without mark-up. The Basic Charge and Delivery Charge recover only the cost of providing utility distribution service to our customers. They do not include wholesale gas costs – which make up about 60-70 percent of the bill.

Monthly Basic Charge: Current New
Residential $8.00 $9.50
C/I-A $12.00 $15.00
C/I-B $18.00 $21.00
C/I-C $43.00 $43.00
SVDF-A $60.00 $50.00
SVDF-B $90.00 $80.00
LVDF $600.00 $800.00
     
Delivery Charge (per therm): Current New
Residential  $0.16637 $0.18458
C/I-A $0.14680 $0.14129
C/I-B $0.14422 $0.13349
C/I-C $0.13362 $0.13969
SVDF-A $0.09941 $0.11409
SVDF-B $0.09420 $0.10697
LVDF $0.04270 $0.05034

Note: The current and new per therm delivery charges do not include the per therm charge for the
Conservation Improvement Program Adjustment Rider that is used to recover for the Conservation Improvement Program Adjustment Rider that is used to recover conservation costs not included in base rates.

Will the new rates increase my bill?

Rate changes will affect individual monthly bills differently depending on natural gas use and customer group. Customers’ bills contain three parts: A basic charge, delivery Charge and cost of gas, which is passed through directly to customers without mark-up. The Basic Charges and Delivery Charges recover the cost of providing utility distribution service to our customers. They do not include wholesale gas costs –which make up about 60-70 percent of the bill.

The final rates increase the Basic Charge for residential customers from $8.00 to $9.50 a month. The Delivery Charge for residential customers change from $0.16637 per therm to $0.18458 per therm. Basic and Delivery Charges vary by customer group. The effect on an average residential customer’s bill will be an increase of about $2.85 per month, or $34 per year. Bills will also vary because the wholesale cost of natural gas changes each month.

What are interim rates?

Interim (temporary) rates are an approved percentage increase on all customer bills that are effective two months after a rate filing. Since the final approved rates are less than the interim rates, customers will receive a refund with interest for the difference. In October 2013, we started collecting an overall annual interim rate increase of $42.9 million. These temporary rates were collected without any changes to our rate structure.
Refunds on interim rates. State law allowed CenterPoint Energy to collect interim (temporary) rates while the MPUC considered its rate case. The company began collecting interim rates of $42.9 million on Oct. 1, 2013. Since the final rate increase is less than the interim rate increase, the company will refund the difference, with interest, beginning with the December 2014 billing cycle.

A typical residential customer’s total refund will be about $11.

Where is the interim rate found on a customer’s bill?

The interim rate refund will be shown on the bills received Dec 2014/Jan 2015 under the account summary section of customers’ bills.

Why are there refunds on interim rates?

State law allows CenterPoint Energy to collect interim (temporary) rates while the MPUC considers its rate case. If final rates are lower than interim rates, CenterPoint Energy will refund customers the difference with interest. If final rates are higher than interim rates, CenterPoint Energy will not charge customers the differences for the period in which interim rates were in effect.

How do our new rates compare to those of other Minnesota companies?

Our new residential rates compare favorably to the next largest natural gas provider in Minnesota. See table for Delivery Charge rates:

Final

Final

Residential Sales Service

Monthly Basic charge

Delivery Charge
Per Therm

CenterPoint Energy

$9.50

$0.18458

Xcel Energy – Gas

$9.00

$0.185913

Greater MN Gas

$8.50

$0.44433

MERC – NNG

$8.50

$0.19754

MERC – Consolidated

$8.50

$0.19754

 

What are we doing to keep natural gas costs reasonable?

We have the expertise and the experience to buy natural gas at the lowest reasonable prices in order to provide our customers with the best energy value:

•We secured ample supplies for the upcoming heating season.
•We work with about 20 of the largest suppliers in the U.S. and Canada and buy gas on a competitively bid basis.
•We acquire natural gas and fill our storage facilities over the spring and summer to meet customers’ peak heating season requirements, and hedge or fix the costs on a portion of that portfolio.

Our supply portfolio includes contracts with varying terms, conditions and lengths.

Is natural gas still a good value for customers?

Yes! Natural gas is an excellent energy value – a clean, efficient, abundant and affordable fuel for home heating, water heating, and for providing fuel to industry. Natural gas remains your best energy value. And our Budget Plan option is the best way to keep your costs level.

Are there ways to help me manage my bill?

Yes, the Budget Plan.

Budget Plan is a great tool to help you manage winter payment peaks. The program balances out your payments so you pay more in summer than your actual bills and less in winter. You still only pay for the amount of natural gas you use and you'll enjoy the predictability of knowing your bill amount for six months at a time.

When can I enroll in Budget Plan?

You can enroll in Budget Plan at any time. To enroll online, or to view the amount of your Budget Plan payment, register or sign in for an online account. You can then enroll from your My Account page. It's easy!
Budget Plan Graph

How are Budget Plan amounts calculated?

1. Your Budget Plan payment amount is the expected cost of your natural gas for one year, divided by 12 months. It does not include other charges, such as those for the Home Service Plus® Repair Plan. Your expected cost is determined by reviewing weather, projected natural gas prices and your natural gas consumption. Each month, the difference between the Budget amount that you are billed and the actual usage is placed into a deferred balance, either as a credit or debit.

Keep in mind that even if you have a credit balance, your Budget Plan amount may increase. Rest assured you will still only pay for the amount of natural gas you use and the purpose of your adjustment is to even out your projected natural gas charges.

2. Halfway through the program year, we will review your Budget Plan payment amount and we may change the amount based on weather and the cost of natural gas from our suppliers and your deferred balance. If your amount will be changing, you will receive a notice the month before the change takes effect.

3. Before the next Budget Plan year begins, we will review your Budget Plan amount again, comparing the cost of the natural gas you used with the Budget Plan payments you have made. If your balance is greater or less than the cost of the natural gas you actually used, we will divide the difference by 12 and add it to your Budget Plan payment amount for the next 12 months. If you carried a credit balance over most of the program year, we will pay you interest.

How can my Budget Plan be discontinued?

If you would like to discontinue Budget Plan, notify CenterPoint Energy.

If you close your account or if service is turned off for non-payment or if your account becomes two months past due, your Budget Plan will be discontinued. If you de-enroll or if you are removed from the program, we will review your account and send you a bill with the difference between what you have paid on Budget Plan and the amount of natural gas you have used. If you have paid more for natural gas than you have used, we will issue you a credit. If you have an outstanding deferred balance, a deferred payment agreement may be available to qualifying customers.

Enroll in Budget Plan now. Simply register for or sign into My Account and then choose "Enroll in Budget Plan" under "More billing and payment options." Enroll today!

Are there any other changes as a result of this rate case?

Yes, the Minnesota Public Utilities Commission (MPUC) approved a 3-year full revenue decoupling pilot program that will start July 2015. CenterPoint Energy’s previous decoupling pilot program, which began in 2010, will end in January 2015.

What is decoupling?

Revenue decoupling separates the link between utility revenues and how much gas customers use. Decoupling is an accounting tool that ensures that utilities collect the amount of revenue that has been approved by the MPUC – no more and no less.

With decoupling, the MPUC establishes a fixed amount of revenue that CenterPoint Energy may earn each year and adjusts the per therm natural gas rate to ensure that CenterPoint Energy doesn’t retain more or less revenue than what was approved in its last rate case. Revenue decoupling will allow CenterPoint Energy to adjust its rates for most customers once each year to make up for any short fall or excess in sales revenue. For example, under revenue decoupling, if actual natural gas sales were higher than expected in a given year, the utility would lower rates slightly the next year to refund customers the ‘extra’ revenue from the additional usage. If gas sales were lower than utilities and regulators expected in a given year, the utility would increase rates slightly the next year to make up the difference.

The purpose of revenue decoupling is to remove the motivation for CenterPoint Energy to sell more gas and allow the company to promote energy efficiency and conservation, while also maintaining revenue required to provide safe and reliable natural gas service.

When will CenterPoint Energy be decoupled?

CenterPoint Energy’s new revenue decoupling pilot program will start with July 2015 usage and the first decoupling rate adjustment will appear on customer bills in fall 2016.

Where can I learn more about CenterPoint Energy’s decoupling pilot program?

More detailed information about decoupling will be made available on CenterPoint Energy’s website and other publications closer to when the pilot program begins. If you have questions or would like to receive information by mail please call 612-372-4727 or 1-800-245-2377.

Where can I find out more information about new rates?

More information is available @ www.centerpointenergy.com/ratecase. As the Rate case progresses, customers will receive additional important information via bill inserts or other communication channels.