Why New Rates Are Needed
The proposed rate adjustment would support major investments in the continued safety and reliability of the approximately 14,000-mile pipeline system that serves more than 860,000 CenterPoint Energy customers in Minnesota.
Revenue from the proposed rates would help cover the rising costs of infrastructure projects to replace or upgrade pipelines to prevent leaks and comply with more stringent federal pipeline regulations. It would also help cover costs related to a growing number of local road construction and other public works projects that require us to relocate pipelines and equipment.
Current rates do not provide adequate revenue to cover the rising costs of these needed investments. If approved, the new rates would generate approximately $62 million, or 6.8%, in additional annual revenue.
Approval Process and Interim Rates
The Public Utilities Commission will likely decide on this requested rate adjustment in early 2021. Public hearings will be held in 2020 to provide customers and others the opportunity to comment on the rate request, followed by formal hearings at the Public Utilities Commission.
While the rate case is pending, the Commission sets interim (temporary) rates, which take effect on Jan. 1, 2020, and remain in place until a final decision is made. On December 5, 2019, the Commission approved an interim rate increase that is about 5.8% more than the current rate.
If the final approved rates are lower than the interim rates, we would refund customers the difference, including interest. If the final approved rates are higher than the interim rates, customers would not be charged the difference.
Your Gas Dollar
Your bill contains three basic parts: Basic Charge, Delivery Charge and Cost of Gas. The Basic Charge and Delivery Charge recover the cost of providing utility distribution service, including operations, maintenance, taxes and other expenses. These two charges make up about half of a typical bill and would be affected by the rate adjustment.
The proposed rate adjustment does
not affect the Cost of Gas charge, which makes up the other half of a typical bill. The wholesale price of natural gas changes monthly, depending on market conditions. This price is passed on directly to customers with no mark-up, and CenterPoint Energy does not profit from the sale of the natural gas.