AARP vows to fight CenterPoint rate hike

The advocacy group AARP Minnesota said Friday that it is mobilizing members to oppose CenterPoint Energy's request for a 5 percent increase in natural gas rates.

The group represents people over 50 and says it has 670,000 members in Minnesota, though not all are served by CenterPoint. AARP said it sent an alert by e-mail to 34,000 members who are customers, and began collecting signatures on a petition to oppose the increase.

AARP, which launched a similar campaign against Xcel Energy's 2013 electric rate increase, said utilities represent a bigger share of overall expenditures for people over 50 compared with younger consumers.

"For people who are already sensitive to the monthly cost of living in their homes, this is a big increase," said Amy McDonough, AARP Minnesota associate director for advocacy.

CenterPoint in August proposed a $44 million rate increase for its 806,000 customers in Minneapolis and other communities statewide, citing a doubling of infrastructure investments and other factors. The increase is sought for delivering gas. Utilities don't profit from the sale of gas, and pass along to customers any wholesale price changes.

A 4.9 percent interim rate hike took effect Oct. 1 while the permanent request is reviewed by an administrative law judge who will submit findings to the state Public Utilities Commission.

One feature of CenterPoint's proposal is to increase the basic charge, which customers pay regardless of how much gas they use or conserve. It would rise for homeowners from $8 to $15 per month, though the usage-based charge would go down. It would tend to boost customers' bills in the summer, when charges tend to be low, rather than in winter.

But that proposed change — an 87 percent increase — is under attack by AARP and others. In a filing with an administrative judge, AARP said the change "would result in higher percentage rate increases for low-usage customers than for those customers that use more gas."

McDonough said the AARP supports the findings of the state Commerce Department, which last month recommended that CenterPoint's request be slashed nearly in half. The department, which analyzes utility rates, also attacked the proposed increase in the basic charge, saying it would cause "rate shock" among customers. It proposed a smaller increase.

AARP said CenterPoint's requested 10.3 percent return also is excessive — along with the compensation packages for its executives. AARP also said it agrees with the department's analysis that CenterPoint underestimated future revenues, and that the company will take in $5.1 million more in 2014 than projected, reducing the need for a rate increase.

CenterPoint said it would respond to AARP in the regulatory proceeding.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib