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Saturday, April 20, 2024

Power Play

CenterPoint’s proposed electric rate increase faces opposition

CenterPoint Energy faces pushback from area residents, businesses, and elected officials as the utility pursues what it describes as a necessary increase in base electric rates.

As a public hearing on CenterPoint’s proposal approaches on Feb. 29 at Old National Events Plaza in Downtown Evansville, here are a few things to know.

What does CenterPoint want to do?

Officials for CenterPoint say the base rate increase is the first one the utility has filed with the Indiana Utility Regulatory Commission (IURC) since 2009, when the company was known as Vectren Corp. and still based in Evansville. CenterPoint Energy, which acquired Vectren in 2019, has a Houston, Texas, headquarters.

The total requested increase, which directly results from the base rate case filing, is $118.8 million. If approved, it would hit customer bills in the fourth quarter of 2024 at the earliest.

The rate hike CenterPoint is seeking would be phased in over three years. A typical residential customer would see an estimated increase of $10.07 (6.5%) in late 2024, an additional $5.85 (3.6%) in early 2025, and $12.46 (7.3%) in early 2026. In total, customers’ bills will rise 17.4 percent.

CenterPoint officials say once all phases are implemented including the full cost of service, which includes projects that would be recovered through current billing mechanisms, the expected total monthly bill will be approximately $200, based on average residential consumption of 799 kilowatt hours.

What is the proposed rate increase for?

CenterPoint says the added revenue would cover multiple priorities.

One is the “recovery” of cost to modernize the utility’s grid in Southwest Indiana with about 159,000 “smart meters,” which the utility says provide more accurate readings of customer usage and help locate and resolve power outages more quickly.

Those costs were incurred over the last seven years, but 20 percent of the total is “not yet supported by customers,” according to CenterPoint’s literature explaining the proposed increase.

CenterPoint says the revenue also would recover the cost of two natural gas combustion turbines expected to be in service in 2025, as well as projects to comply with “federally mandated environmental requirements” such as the closure of the F.B. Culley West Ash Pond in Warrick County.

Those projects are moving CenterPoint further from coal-generated power. The utility says it intends to retire 700 megawatts of aging coal operations through 2025.

CenterPoint says investments made since the last base rate increase in 2009 have benefitted customers.

The company cites a reduction in power interruptions and infrastructure upgrades that have supported Evansville Regional Airport, customer growth in Warrick County, and projects to grow jobs and electric load at Toyota Indiana.

How has the community responded?

A Facebook group called Direct Action Against CenterPoint Energy has about 14,500 members. The social media feed is full of posts showing photos of customers’ bills for gas and electric service. (CenterPoint’s current proposal under the state’s consideration raises only electric rates).

Local businesses and elected officials, too, are weighing in.

The Vanderburgh County Board of Commissioners on Feb. 20 passed a resolution calling CenterPoint’s proposed bill spike “excessive and burdensome.”

The resolution, approved by county commissioners 3-0, says the increase “could threaten the growth and expansion of Vanderburgh County by adding burdens and impediments to new residents looking to relocate, hinders business expansion by adding uncompetitive rates on local business and might deter new businesses from locating in Vanderburgh County.”

County commissioners go on to say in their resolution that CenterPoint “has had the highest authorized return on equity, or profit margin, for its shareholders, for many years. In this case, CenterPoint Electric is proposing to keep its 10.4 percent return on equity. In contrast, Indiana’s other four investor-owned electric utilities have an authorized return on equity below 10 percent.”

The Evansville City Council, in a 9-0 decision on Feb. 12, committed to hire Indianapolis, Indiana, law firm Lewis Kappes to intervene in CenterPoint’s rate case before the Indiana Utility Regulatory Commission. The City Council’s fee is not to exceed $20,000.

Lewis Kappes already represents a group of Southwest Indiana companies involved in the CenterPoint rate case.

Mayor Stephanie Terry, who took office on Jan. 1, will attend the field hearing to make sure citizen concerns about the proposed bill increase are heard, says Joe Atkinson, Terry’s communications director.

CenterPoint’s proposal is “easily the thing we get the most calls, the most questions about in the mayor’s office in first two months of her administration,” Atkinson says.

When and where is the field hearing, and how can I comment?

The hearing will include two sessions — one at 2 p.m., the other at 6 p.m. — on Feb. 29. Both are at Old National Events Plaza, 715 Locust St.

According to the Indiana Office of Utility Consumer Counselor, which represents all consumers in cases before the IURC, residents will be able to speak under oath to IURC officials at the field hearing. Oral comments will become part of the case record.

There will be no presentation by CenterPoint during the hearing, and IURC representatives will not answer questions.

“The sole purpose of a field hearing is to receive public testimony,” according to the Indiana Office of Utility Consumer Counselor website.

Emailed and written comments also become part of the case record. Those may be made by emailing uccinfo@oucc.in.gov or writing to the Indiana Office of Utility Consumer Counselor (OUCC), 115 W. Washington St., Ste. 1500 S., Indianapolis, Indiana 46204.

All emailed and written comments must be received by March 5.

Multiple city and county officials say they will attend the Feb. 29 public hearing. CenterPoint, for its part, says it is pressing on.

“CenterPoint Energy is asking the IURC to review its investments, consider the value customers have received, and approve the proposed recovery of these costs,” the utility says in a Dec. 5, 2023, news release.

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