City Council denies, suspends rate increase requests from CenterPoint

Published 04/22/2016

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The City Council of League City unanimously denied a CenterPoint Energy request and suspended another effort to increase utility rates for League City customers. An application for CenterPoint to implement a Distribution Cost Recovery Factor (DCRF) was filed with League City and the Public Utility Commission of Texas on April 4, 2016. The company’s application for a DCRF seeks an increase in electric rates by $61 million per year. However, the City Council denied the application after careful consideration and discussion with the City’s legal counsel. City Council also authorized its legal consultants who represent a coalition of cities known as the Texas Coast Utilities Coalition to intervene on the application submitted to the Public Utility Commission of Texas. It is anticipated that the coalition will then negotiate with CenterPoint to minimize the rate increases for League City customers. “Our goal is to ensure the rates being imposed on our residents is reasonable and within the statutory limits,” said Mark Rohr, City Manager. “Council reviewed the application and felt that this request was an unreasonable increase to our residents and denied it.” CenterPoint also filed an application to increase gas rates through the Gas Reliability Infrastructure Program (GRIP) on March 31, 2016. Gas rate increases would go into effect on May 31, 2016 if approved by the Railroad Commission. The proposed gas base rates for residential customers would be approximately eight percent from $15 to $16.17 each month. The only jurisdiction the City has over GRIP applications is to suspend the effective date for a statutory period of 45 days. “Under state law, the City has the ability to exercise due diligence and ensure CenterPoint’s filings are correct through a suspension of the effective date,” said Nghiem Doan, City Attorney. “City Council exercised that ability to provide our consultants with ample time to review the application.” The City Council voted to suspend the effective date for the gas rate increase by 45 days to July 14, 2016. Consultants for the City will review CenterPoint’s GRIP application to ensure that it meets all statutory requirements during the suspension period.