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State calls CenterPoint rate hike request "excessive"

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Officials with the Minnesota Department of Commerce said that CenterPoint Energy is asking for too big of a rate hike for its natural gas customers.

MPR reported that CenterPoint wants an increase in residential gas rates to pay for pipeline improvements. Company officials said the hike would increase the average residential customer's bill by about $4 a month.

The Star Tribune reported Commerce Department recommended a $21 million reduction in the $44 million request, with department officials saying the hike can be cut nearly in half while still making sure that CenterPoint can provide safe, reliable service and make necessary improvements. Commerce officials predicted the utility''s revenues will be higher than anticipated, making a larger rate increase unnecessary.

Most of CenterPoint’s 823,000 Minnesota customers already pay the 4.9 percent interim rate hike that took effect Oct. 1. In its permanent rate hike request, CenterPoint seeks to increase the monthly basic charge customers pay, from $8 to $15 per month, or 87 percent. That's high enough to trigger what the department calls “rate shock” among customers. It counters that the monthly residential charge should be raised to $9.50, or by 19 percent.

“On behalf of ratepayers, we carefully watch for unjustified rate increases and found areas in CenterPoint’s rate request that are excessive,” said Commerce Commissioner Mike Rothman in a statement.

CenterPoint spokeswoman Rebecca Virden said the company will respond to the department's position by Dec. 23.

Five public hearings on the rate request will be held around the state in the month of December. An administrative law judge will evaluate the case and make recommendations to the Minnesota Public Utilities Commission, which will make a final decision in June.

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