CenterPoint Energy, the largest gas utility in Minnesota, this week filed for an across-the-board rate hike of 6.4 percent, or $56.5 million, money it expects to use for pipeline replacements and other projects.
CenterPoint’s proposal would lead to an increase of about $4.50 per month for the average residential customer, the company said in a filing with the Minnesota Public Utilities Commission (PUC). The current average monthly residential bill is $56.
The utility has asked the PUC for an interim rate increase of $51.2 million, or 5.8 percent, which would go into effect on or after Oct. 1. The PUC often grants interim rate increases. But if the commission’s final approved rate increase is less than the interim rate hike, customers get refunds with interest. The PUC’s final decision isn’t likely until fall 2018.
In June 2016, the PUC approved a rate increase of 3.5 percent or $27.5 million rate for CenterPoint — roughly half of what the utility had requested when it filed its last rate case in 2015. The PUC approved a 3.9 percent rate increase for CenterPoint in 2014.
CenterPoint, based in Houston, supplies gas to about 840,000 customers in Minnesota; around 90 percent of them are residential ratepayers.
The company serves a large part of the Twin Cities and portions of central and southern Minnesota. Minnesota is CenterPoint’s largest service territory outside of Texas.
CenterPoint says it needs the rate hike for capital investments, “such as our ongoing pipeline replacement programs, [which] maintain the safety and reliability of our natural gas system,” the company said in PUC filing. In particular, CenterPoint is “improving and modernizing gas pipelines and distribution mains throughout several neighborhoods in our service areas.”
Essentially, CenterPoint says it needs to more closely align rates with its own costs.
CenterPoint’s proposed rate increase would hike the basic fixed charge customers pay from $9.50 to $11 per month. It would also raise the gas delivery charge from 21 cents per therm to 25 cents. The delivery charge makes up about 40 percent of a customer’s bill.
The rate increase does not include adjustments for the cost of natural gas, which makes up 60 percent of the variable costs in a customer’s bill.