Interim Rate Frequently Asked Questions
What is an interim rate?
State law permits CenterPoint Energy to charge Interim (temporary) rates which are in place while a general rate case is reviewed by the MPUC and other parties.
How much is the interim rate increase?
The MPUC has approved an overall interim rate increase of $47.8 million, or about 5.65 percent more than current rates.
How long will interim rates be in place?
Interim rates will be in effect during the entire time the rate case is being reviewed or approximately 10 months. Interim rates are effective for service rendered on and after October 2, 2015 and final rates will be implemented after a final decision is issued in the summer of 2016.
What happens if final rates are different than interim rates?
If final rates are lower than interim rates, we will refund customers the difference with interest. If final rates are higher than interim rates, customers will receive no additional charges for natural gas used while interim rates were in effect.
How will customers be notified of interim rates?
Customers will begin to see the interim rate adjustment as a line item on their October 2015 bills; (interim rates will be pro-rated the first month and are displayed as a single line item.) In addition, a bill message about the rate adjustment will be included on the first bill that includes interim rates and a bill insert with more detail was included in all October customer bills.
What is the next step in the rate case for customers, and how can they learn more?
Rate case information can be found on the CenterPoint Energy
. There are also details in the bill insert about how to comment on the rate case. Additionally, public hearings will be held where customers can voice their opinion about the rate case; (customers will be notified of dates, times and locations as they become available.)
What is the impact on an average customer bill?
The proposed rate changes will affect individual monthly bills differently depending on natural gas use and customer group. 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 proposed Basic Charges and Delivery Charges recover only the cost of providing utility distribution service to our customers – about 40 percent of the bill. They do not include wholesale gas costs – about 60 percent of the bill. The following table shows the effect of both the interim and proposed rate changes on monthly bills for different classes:
2015 Rate Case Filing Frequently Asked Questions
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 7,400 employees, CenterPoint Energy and its predecessor companies have been in business for more than 140 years. The utility also operates a non-regulated business in Minnesota called
Home Service Plus®. For more information, visit the website at
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.
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.
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.
Why did we file to change our rates?
CenterPoint Energy continually makes significant capital expenditures in the State of Minnesota. In accordance with natural gas pipeline safety and integrity regulation, these capital expenditures are necessary to:
- Maintain a safe and reliable system
- Respond to significant public improvement requirement on our system
- Investment in modernization of infrastructure
When was the last time CNP increased its base rates?
We last filed a rate case in 2013. The MPUC approved an increase of about 3.9 percent of annual revenues, which went into effect in December of 2014. The effect on a typical residential customer was about $2.85 per month.
Does the MPUC have to approve our filing?
No. The MPUC has an obligation to determine "just and reasonable" rates. The MPUC allows a utility company to recover costs that it deems to be reasonable and necessary in providing utility service.
Are the new rates needed to recover changes in wholesale natural gas prices?
No. The wholesale cost of natural gas is passed through to our customers with no mark-up. Currently and over the past year, natural gas prices have remained reasonably low.
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 some 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?
Average Monthly Billing program is a great tool to help you manage winter payment peaks and to even out your projected natural gas charges. The program balances out your payments and you still only pay for the amount of natural gas you use.
Where can I find out more information?
As the rate case progresses, customers will receive additional important information via bill inserts or other communication channels.
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.
BTU: British thermal unit
Cost of Gas: Covers the total costs paid to CenterPoint Energy to purchase and transport natural gas to our distribution system. The cost per therm usually varies from month to month as the prices we pay producers and suppliers change, typically increasing in the winter, when demand is high and decreasing in the summer when demand is low.
Delivery Charge: Recovers the costs not recovered through the Basic Charge, including taxes, salaries, depreciation, interest, etc.
Interim Rates: Interim rates are a temporarily approved overall percentage increase on all customer bills that are effective two months after a rate filing. These rates are collected without changes to our overall rate design. We are allowed to charge interim rates to recover the company’s higher cost of providing natural gas service while regulators use the next ear to determine the final rates to approve.
Therm: A therm is a measurement unit for natural gas and is the equivalent of 100,000 BTUs. Our average residential customer uses approximately 879 therms per year.