CenterPoint Energy’s rate case settlement moves toward addressing some key policy concerns

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Fresh Energy and Minnesota Center for Environmental Advocacy applaud the proposed settlement that puts modernizing policies and customer needs first.

On March 14, 2022, CenterPoint Energy and intervening parties filed a stipulated settlement in the utility’s current rate case at the Minnesota Public Utilities Commission. Fresh Energy and the Minnesota Center for Environmental Advocacy (MCEA) applaud the utility’s willingness to review some of its outdated and untested policies that are contributing to higher gas bills and climate change-causing greenhouse gas emissions.

On February 7, 2022, Fresh Energy and MCEA filed testimony in the CenterPoint rate case urging the Commission to require CenterPoint to reduce its investment in new gas line extensions, consider the future of the natural gas system before undertaking a surge of spending, and incorporate the utility’s two new proposed hydrogen pilots into the regulatory frameworks being created under the Natural Gas Innovation Act. CenterPoint’s newly filed settlement includes some key aspects of Fresh Energy and MCEA’s recommendations and we applaud the utility’s proactive work toward modernizing the gas system.

“We need to scrutinize existing gas utility policies with a climate and cost focus before more investments are made into a system that’s changing before our eyes,” said Joe Dammel, Director of Gas Decarbonization at Fresh Energy. “Today, with our modern and clean electric grid powering homes and appliances, these outdated and untested policies just make less and less sense.”

“MCEA is pleased that this settlement moves away from practices that incentivize reliance on increasingly irrelevant and costly fossil fuel gas,” said Amelia Vohs, regulatory attorney for MCEA. “The climate crisis demands our electric grid be fully powered by clean energy in approximately the next decade, which will require all utilities to change how they do business. This settlement is an important step in the right direction that benefits both our climate and CenterPoint ratepayers.”

In the settlement, CenterPoint will reduce the “free footage” of main line extensions from the current 150 feet to 100 feet. Its current annual investment in new gas line extensions is roughly $20 million. Reducing this investment will take some financial burden off of existing utility customers who pay for these extensions and will lessen the financial risk for customers in the future. This change would also put CenterPoint back in step with line extension policies at other Minnesota gas utilities.

Additionally, CenterPoint has proposed no increase to the monthly base amount of $9.50 residential customers pay for gas service. Beyond that, CenterPoint has committed to filing a formal letter with settling parties in the Future of Gas Docket at the Commission urging further review of gas line extension policies and accelerated system replacement practices for all gas utilities. An Administrative Law Judge will now review the filed settlement documentation and the public engagement process in CenterPoint’s rate case underway will continue, with the public comment deadline ending April 11, 2022. File a public comment using Fresh Energy’s online tool here.

Fresh Energy and MCEA look forward to working with CenterPoint and the Commission on future discussions around Centerpoint’s accelerated replacement policies, hydrogen pilots, and more in the Future of Gas docket (#21-565).