CenterPoint Energy is asking state regulators to consider a gas rate hike — while simultaneously requesting commissioners fast-track a "rate stabilization plan" that would instead result in more modest increases for its Minnesota customers.
Minnesota's largest gas utility filed both proposals with the Public Utilities Commission (PUC) Monday, and provided some details of its requests on its website. It comes days after Xcel Energy asked the commission to approve a rate increase for its Minnesota electricity customers.
As part of the standard rate case petition (available here), CenterPoint is asking for a 6.5% increase, meaning an average residential natural gas customer would pay an extra $4.05 a month, the company says. This hike would generate about $67 million, covering a deficit of the same amount the company is projecting for 2022 should rates remain unchanged, according to the rate case filing.
CenterPoint, in the same filing, also asked the PUC to approve an interim rate increase of 5.1%. Essentially, customers' rates would increase by that much while the commission reviews the petition. If, at its conclusion, the PUC approves a rate increase less than 5.1%, customers would be refunded the difference they paid while the interim rate was in effect.
But CenterPoint also put forward a second proposal (available here), which it is asking the PUC to approve by the end of the year in lieu of the regular rate case procedure, which can take months to resolve.
"Although we believe our full rate request is warranted, we recognize the significant burdens experienced by many of our customers due to the pandemic and inflation, including higher energy prices," the company says on its web page detailing the proposals.
Under this "rate stabilization plan," Minnesota natural gas customers would be hit with a more modest increase of 3.9%, which is about $2.83 for the typical residential customer for all of 2022 and 2023, CenterPoint says. This would generate $39.7 million for CenterPoint, which said the new revenue would be used "for plant investment only."
CenterPoint lays out a few other conditions as part of this stabilization plan, including an extension of the cost recovery period related to the February 2021 natural gas price spike. The deep freeze in Texas and across the southern U.S. caused natural gas prices across the country to soar, with Minnesotans among those having to help pick up the bill.
Instead of customers facing a sudden bill charge of hundreds of dollars, the state allowed CenterPoint to spread out the pain, with the company adding a surcharge on all customers' monthly bills (an extra $11.66, on average) for 27 months.
CenterPoint wants to drop the surcharge to about $4,60 per customer per month, but have it remain in place for 63 months — meaning it wouldn't end until 2026.
The utility company is asking the PUC to expedite the review process and approve the stabilization proposal before Jan. 1, 2022. If that happens, CenterPoint would essentially drop its original rate case petition.
If the PUC rejects the stabilization proposal, CenterPoint says it will go ahead with the standard rate case process and pursue the 6.5% increase.
"Both the rate case and rate stabilization plan are based on the need to maintain a safe, reliable system that delivers the essential energy our customers count on every day, especially the coldest days," CenterPoint's Vice President-Minnesota Gas, Christe Singleton, said in a news release.
Despite the price pressures caused by the winter spike in demand, CenterPoint has seen its profits grow in 2021, reporting a $438 million operating income in the 2nd Quarter and $363 million in the 1st Quarter of this year.
Last week, it was revealed that Xcel Energy is seeking a hike in electricity rates of more than 20% for Minnesota's residential customers over the next three years. The utility is also expected to apply for a rate hike for its gas customers too.