CenterPoint bungles $47M worth of refunds to customers

CenterPoint Energy, Minnesota's largest natural gas utility, bungled a recent rate-hike refund, leaving some of its customers with bounced checks or late-payment fees.

CenterPoint said it has made whole all consumers dinged by unnecessary fees except for a small amount of interest still due.

The Minnesota Public Utilities Commission (PUC) approved the interest refunds Thursday, admonishing Center­Point for the mistake.

"As far as I am concerned, you are in the doghouse," Commissioner John Tuma told CenterPoint representatives at a PUC meeting in St. Paul. Said Commissioner Matt Schuerger: "I agree about the doghouse sentiment. They have earned that spot."

CenterPoint officials were contrite Thursday about the mistake.

"The company again apologizes for these errors and the confusion that was created," Amber Lee, CenterPoint's director of regulatory affairs, told the commissioners. "We are taking steps to make sure this does not happen again."

Houston-based CenterPoint has 857,000 customers in Minnesota, around 90% of them residential ratepayers in the Twin Cities and portions of central and southern Minnesota.

CenterPoint estimates that refunds to an average residential customer were $37. But after the company actually issued the refunds, it discovered it miscalculated the sales tax due back to customers.

To fix the problem, CenterPoint on Dec. 4 reversed the interim rate refunds. But errors led to delays and in some cases the corrected refund amounts weren't applied to customers' accounts until Dec. 7, according to filings with the PUC. The result: 15,991 customers were hit with late fees.

In addition, a small number of customers enrolled in automatic bank payment programs suddenly faced charges for nonsufficient funds.

CenterPoint said it reversed 57 bounced-check fees totaling $570 and reversed the nearly 16,000 late fees, which came to $25,000. The company "applied 158 goodwill credits" for a total of $5,990 due to the mistake, according to a PUC filing.

Because of the refund delays, an additional $174,710 is still due to customers for interest — which works out to a penny or so on customers' bills, according to CenterPoint. The PUC, however, needed to approve it.

Commissioners were troubled Thursday by CenterPoint's initial response to the refund complaints. The PUC's consumer-affairs office began fielding customer complaints about the refund before the company itself notified the commission.

"When you know it, we need to know it," PUC Commissioner Dan Lipschultz told the company.

In September 2017, the PUC granted CenterPoint a 5.4% interim rate increase, which went into effect Oct. 1 of that year. Such interim rate hikes are commonly granted by the PUC, which then went to work on CenterPoint's request for a full 6.4% increase.

When the rate case was settled in May 2018, CenterPoint was awarded an increase of only $3.9 million, well below the $50 million-plus it was asking for. The reduction was largely driven by a giant federal tax cut in late 2017, which reduced the revenue needs for all of Minnesota's regulated utilities, including CenterPoint.

Essentially, CenterPoint's tax-cut windfall was rebated to its customers through the pending rate case.