Dear Neighbor,
I wanted to provide you with an important and thorough update on a recent request by CenterPoint Energy to increase consumer residential bills.
Recently, the Indiana Office of Utility Consumer Counselor (OUCC) sent a notice regarding the CenterPoint Energy Electric rate case seeking written consumer comments.
On March 1, I attended a public hearing alongside concerned residents of Vanderburgh County residents who stated their opposition to the proposed rate increase. I am thrilled that so many in our community showed up and submitted written comments to the OUCC on this issue.
CenterPoint Energy is seeking $118.8 million in additional revenue and by proposing a rate hike to residential bills in three phases. If approved, the phased approach would increase consumer residential bills by 6.5% in late 2024, 3.6% in early 2025 and 7.3% in early 2026. Gas rates are not included in this case.
The OUCC recommends a substantial reduction to bring CenterPoint’s request down to $33.2 million.
This week, the Citizens Action Coalition (CAC) filed testimony with recommendations to the Indiana Utility Regulatory Commission (IURC) to mitigate the impact this proposal would have on residents. CAC Program Director Ben Inskeep recommends the following actions:
- Dismiss this rate case and direct CenterPoint to refile a rate case in the near future that includes appropriate consideration of ratepayer affordability;
- Direct CenterPoint to freeze or curtail non-essential spending and investments until it can present an adequate plan demonstrating a pathway toward more affordable ratepayer bills;
- Order a management audit of CenterPoint to identify additional efficiencies and opportunities to reduce costs, examine leadership decision-making processes and incentives, and identify reforms to ensure ratepayer affordability is appropriately prioritized by management and incorporated into decisions;
- Disallow a return “of” or “on” utility plant that is no longer used and useful or otherwise not in the public interest or resulting in just and reasonable rates;
- Make additional adjustments to revenue requirement to remove items such as a portion of CenterPoint management employee compensation;
- Reduce CenterPoint’s authorized Return on Equity (ROE), or profit.
If the IURC refuses to dismiss the case, Justin Barnes, President of EQ Research LLC, recommends the following actions:
- The IURC should direct CenterPoint to establish a residential affordable power rider that will provide immediate, direct bill assistance to some of CenterPoint’s most vulnerable low-income households;
- The IURC should significantly reduce CenterPoint’s proposed revenue requirement including reducing its authorized return on equity from 10.4% to an ROE that the Commission determines is on the lowest end of the range it determines is reasonable;
- The IURC should deny the use of unreasonable cost allocation methodologies when setting rates which have disproportionately burdened residential customers, as detailed in the direct testimony of CAC witness Justin Barnes;
- The IURC should deny CenterPoint’s proposal to increase the monthly fixed charge, which reduces a customer’s ability to control their bill and benefit from energy efficiency, and instead assign the cost-based fixed charge recommendation supported by CAC witness Barnes;
- The IURC should modify the TDSIC tracker to remove the fixed charge component so that all TDSIC Plan costs are recovered through variable per-kWh charges for Residential (“RS”), Water Heating (“B”), and Small General Service (“SGS”) customers;
- The IURC should direct CenterPoint to analyze the creation of a separate multi-family rate class for presentation in its next base rate case, so that the lower cost to serve multi-family customers relative to single-family premises can be reflected in lower rates for these customers;
- The IURC should reduce or eliminate late payment fees, reconnection fees, and per-transaction fees, which reduce electric bill affordability primarily for customers dealing with economic hardship; and
- The IURC should deny CenterPoint’s proposal for remote disconnections, which would exacerbate residential disconnections, and implement a 12-month moratorium on residential disconnections for nonpayment.
Evidentiary hearings in the rate case are slated to begin on April 30 in Indianapolis. A resolution from the IURC is expected during the fourth quarter of 2024.
I hope you find this information helpful and I will continue to update you as information becomes available.
Sincerely,
Ryan Hatfield, District 77 State Representative
