370,000 CenterPoint customers to get refunds

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: May 17, 2012 - 9:39 PM

The average $3.45 adjustment is related to a suspended program of tiered natural gas rates.

CenterPoint Energy says it will give refunds to 370,000 Minnesota customers who were overcharged during a now-suspended experiment with multitier rates that was designed to conserve natural gas.

The utility said Thursday that the one-time refund will average $3.45 per customer and will appear as an adjustment, or credit, on residential and commercial bills to be mailed starting Monday.

The state Public Utilities Commission last month ordered refunds to customers whose "monthly" meter reading period exceeded 32 days. That practice subjected many customers to artificially high bills under the program, which had five escalating price tiers based on gas usage.

"We are pleased that ratepayers will not have to face another winter with tiered rates that unfairly pick winners and losers -- and that people will be getting refunds for overpayments due to extended billing cycles," said Ben Wogsland, a spokesman for the Minnesota attorney general's office, which had objected to the program as unfair.

CenterPoint suspended it last October, and says it has not proposed bringing it back. It was designed to reward customers who used less natural gas and to create a disincentive to use more than usual.

"There was an unintended consequence because of that tiered-rate structure," said Rebecca Virden, a spokeswoman for CenterPoint. "Some of our customers ... were put into the fourth- and fifth-tiered blocks that they may not have fallen into otherwise."

It is common for utilities to take more than a month to read a meter. A few days' delay poses no problem when gas is billed at a flat rate. Some customers' billing periods exceeded 40 days, the state attorney general's office said.

Virden said a notice will be printed on bills about the adjustment. It covers only extended-billing-cycle overpayments from July 1, 2010 through October 13, 2011, when the program was suspended.

The refunds, totaling $1.3 million, range from a low of 45 cents to a high of $697 for a commercial customer, the company said.

Centerpoint, which has nearly 800,000 customers in about 370 Minnesota municipalities, was the first Minnesota gas utility to experiment with tiered rates -- a concept that some conservation groups had supported.

But the attorney general's office raised concerns about its effect on customers with fixed or low incomes. They included senior citizens and people with medical conditions who are home all day or need warmer living environments, and large families, especially those with young children or with adults who stay home or work there.

"We don't see any way to fix the problems that are inherent in this type of program," Wogsland said.

David Shaffer • 612-673-7090

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