Title
Consideration of and action on a resolution suspending the effective date of the statement of intent of CenterPoint Energy to increase rates; approving continued participation with the Gulf Coast Coalition of Cities; and hiring legal counsel.
Body
Summary:
The City of Deer Park, Texas is a member of a coalition of political subdivisions in the Greater Houston area known as the Gulf Coast Coalition of Cities (“GCCC”). GCCC has been in existence since the early 1990s. The GCCC represents the interests of its members on gas and electric utility matters before the Public Utility Commission of Texas, the Railroad Commission of Texas, the Electric Reliability Council of Texas, and the courts. For the past 20 years, GCCC has protected the authority of municipalities over monopoly electric and natural gas providers and has defended the interests of the residential and small commercial customers within the cities. Cities are often the only consumer advocates that work to keep utility rates reasonable. The work undertaken by GCCC has saved ratepayers millions of dollars in unreasonable charges. GCCC has previously approved the hiring of Lloyd Gosselink Rochelle & Townsend, P.C. and consultants to intervene in matters related to the electric utility rate case filings, representing GCCC members’ interests.
CenterPoint Energy Houston Electric, LLC (“CenterPoint” or “Company”) filed an application on March 6, 2024 with cities retaining original jurisdiction seeking to increase system-wide transmission and distribution rates by $60 million per year. The Company asks the City to approve an increase of $17 million in retail transmission and distribution rates (an increase of about 1%) and $43 million in wholesale transmission rates (an increase of about 6.6%). According to CenterPoint, the impact on an average residential customer would be an increase of about $1.25 per month.
From the Resolution to be passed:
The City is authorized to suspend the rate change for 90 days after the date that the rate change would otherwise be effective for any legitimate purpose. Time to study and investigate the application is always a legitimate purpose. Please note that the resolution refers to the suspension period as “the maximum period allowed by law” rather than ending by a specific date. This is because the Company controls the effective date and can extend the deadline for final city action to increase the time that the City retains jurisdiction if necessary to reach settlement on the case. If the suspension period is not otherwise extended by the Company, the City must take final action on CenterPoint’s request to raise rates by April 10, 2024.
This provision authorizes the City to participate in a coalition of cities served by CenterPoint, GCCC, in order to more efficiently represent the interests of the City and their citizens.
The Company will reimburse the cities for their reasonable rate case expenses. Legal counsel and consultants approved by GCCC cities will submit monthly invoices that will be forwarded to CenterPoint for reimbursement. No individual city incurs liability for payment of rate case expenses by adopting a suspension resolution.
Attached to this item is the aforementioned resolution from Lloyd Gosselink Rochelle & Townsend, P.C.
Fiscal/Budgetary Impact:
According to CenterPoint, the impact on an average residential customer would be an increase of approx. $1.25 per month.
Recommended action
Adopt the resolution suspending the effective date of the statement of intent of CenterPoint Energy to increase rates; authorizing participation with the Gulf Coast Coalition of Cities; and hiring legal counsel.