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Continued: CenterPoint's 4.9% natural gas rate hike OK’d, more coming

  • Article by: DAVID SHAFFER , Star Tribune
  • Last update: September 12, 2013 - 11:03 PM

“We believe our system is safe,” said Vortherms, who compared the stepped-up investment to preventive replacement of a water pump on a car at 100,000 miles. “It is generally cheaper and easier rather than having it go out when you are on 494.”

Over the next 10 months, CenterPoint will make its case for the requested $44 million rate increase before an administrative judge and later the PUC. If approved at that level, it would be the utility’s largest rate hike, but the PUC has pared back prior requests by 44 percent on average since 1977.

The interim rate hike will be an across-the-board increase. When the company filed the rate hike request last month, it proposed tacking much of the permanent increase on the basic charge, which is paid regardless of how much gas is used. For residential customers, the charge would increase from $8 per month to $15 per month.

One effect of that strategy is that an average residential customer’s bill would increase in the summer, when gas usage and bills usually are lower. Winter gas bills would go down, on average.

Over a year, the average residential customer would see a 6.8 percent increase to $739. By comparison, those customers paid $1,015 in 2008, when gas prices peaked, CenterPoint says.

PUC Chairwoman Beverly Jones Heydinger said Thursday that another consequence of the proposed pricing strategy is that the lowest-usage customers would pay disproportionately more.

“This is going to be a huge increase for them, approximating 20 percent,” she said.

The strategy is a sharp contrast to CenterPoint’s former tiered-rate pricing, which was designed to promote conservation by making high-use customers pay more. The experiment launched in 2010 and was dropped the following year amid complaints that it was unfair.

Commissioner Dennis O’Brien questioned the level of the interim rate hike but voted for it. State law gives regulators limited grounds to curb interim rate hikes. Customers would get refunds, with interest, if the permanent rate hike is less than the interim level.

“The economy is still struggling, certainly with job creation, and this is a burden on the working people of the state,” O’Brien said.

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  • Minnesota regulators on Thursday approved an interim 5 percent rate hike for natural gas customers of CenterPoint Energy in the state. File photo of CenterPoint headquarters in Houston.

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