CenterPoint Energy files to change natural gas distribution rates for customers in Minnesota
Capital investments drive rate change
2013-08-02T05:00:00Z

MINNEAPOLIS –August 2, 2013- CenterPoint Energy today filed an application with the Minnesota Public Utilities Commission (MPUC) to change the company’s natural gas distribution rates.  The proposed change affects two components of the residential bill. First, CenterPoint Energy is proposing to increase the monthly Basic Charge for residential customers from $8 to $15 a month and second, to decrease the Delivery Charge from the current $0.17127 per therm (which includes the $0.00490 per therm for the Gas Affordability Service Program) to $0.12943 per therm. If approved, the net impact of the new rates will increase the average residential customer’s bill by about $4 per month.

“CenterPoint Energy is working to modernize its infrastructure to ensure that our Minnesota customers continue to receive natural gas service safely and reliably,” said Joe Vortherms, division vice president of CenterPoint Energy’s regional gas operations.  “These capital expenditures, in accordance with natural gas pipeline safety and integrity regulations, are the primary driver of this rate increase.”
This filing seeks approval to change the distribution charge on a customer’s natural gas bill, which makes up about 40 percent of the total bill and covers the cost of distributing natural gas. The filing does not apply to the cost of natural gas, which is the wholesale price the company pays for natural gas, and makes up about 60 percent of the bill.  The wholesale price of natural gas changes monthly depending on market prices and is passed on directly to customers with no mark-up.

The principal reasons CenterPoint Energy is proposing to change base rates are:

  • CenterPoint Energy is making, and will continue to make, significant capital expenditures in its Minnesota service territory. In accordance with natural gas pipeline safety and integrity regulations, these capital expenditures are necessary to maintain a safe and reliable system, to respond to significant public improvement requirements on the system, and to modernize the system with technology improvements.
  • Establish rate designs that send proper price signals to customers.
  • Overall revenue recovery at a level that meets the company’s financial objectives. 

If approved, the new rates would generate approximately $44 million or 5 percent in additional revenue on an annual basis. The effect on individual monthly bills will vary depending on natural gas use.
The MPUC is generally allowed 10 months to issue a final decision on general rate filings. But customers will see the first change on bills on October 1, 2013, if approved by the MPUC, interim (temporary) rates are expected to take effect until a final decision is made.  If the final rates are lower than interim rates, CenterPoint Energy will refund customers the difference including 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.
In 2014, public hearings will be held to provide customers and other interested parties the opportunity to comment on the rate request, followed by formal hearings at the MPUC.  

Customers with questions about the proposed change to natural gas distribution rates can call CenterPoint Energy at 612-372-4727 or toll-free 800-245-2377, or visit the company’s website at CenterPointEnergy.com/RateCase.

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and competitive natural gas sales and 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 58.3 percent limited partner interest in a midstream partnership it jointly controls with OGE Energy Corp. with operations in major natural gas and liquids-rich producing areas of Oklahoma, Texas, Arkansas and Louisiana. With more than 8,700 employees, CenterPoint Energy and its predecessor companies have been in business for more than 135 years. The utility also operates a non-regulated business in Minnesota called Home Service Plus®. For more information, visit CenterPointEnergy.com.

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