Houston Could Pay More for Power

Houston's electricity rates could go up if Centerpoint's rate increase is approved. The energy company wants to raise rates by about five percent. But as Laurie Johnson reports, the city of Houston put a hold on the request to determine if the increase is justifiable.
CenterPoint filed a request at the end of June to raise rates in the City of Houston. Spokesman Floyd LeBlanc says the company is required to apply for a rate increase this year, but the actual amount requested is up to them.

"We had three parties who could have decided that we did not have to file at this time. They did not relieve us of the responsibility to file, so we filed in accordance with the provision in a previous rate case. Everyone thought it was time to come in and take a look at our costs and our evaluation of our costs is that they have increased and an increase is justified."

The rate increase would affect CenterPoint's 760,000 Houston customers, as well as CenterPoint customers in surrounding areas. City officials estimate it would amount to an additional $50.6 million in revenue for the company annually. Houston Mayor Annise Parker says she suspended the rate increase so city experts could review it. CenterPoint is a publicly traded company and for Parker that's a concern.

"I have seen in the past where some of our utilities have come and asked for rate increases in order to maintain a certain value for shareholders. I don't consider that a reasonable rate request."

The five percent increase works out to about $5.50 a month for the average household. The City of Houston would also pay an additional $7 million for power provided to streetlights.

"This is a really tough economy for everyone. The City of Houston is cutting back, all of our major corporations are cutting back. It's an added burden to see electric bills go up on our property owners around the city of Houston and we want to make sure that they clearly justify what they're doing and that we think it's a reasonable rate request."

CenterPoint does not bill customers directly. The costs are passed on by retail electricity providers. LeBlanc says CenterPoint's rates have been frozen since 2006.

"We will be working with the City of Houston, a number of other cities, as well as the Public Utility Commission staff and a host of other intervenors to explain the case as we're presenting it, to answer their questions. There will be extensive exchange of information to get all of the questions answered and we have a burden of proof. We've got to prove that our request is justified and the city is going to examine it, the Public Utility Commission staff will examine the request and hopefully we can all find the right answer."

The city will hold two public meetings, August 17th and 24th at city hall to discuss the rate increase.

Laurie Johnson. KUHF News.
Bio photo of Laurie Johnson

Laurie Johnson

Local Host, All Things Considered

Laurie Johnson is the Houston host for All Things Considered at KUHF NPR for Houston. Before taking the anchor chair, she worked as a general assignments reporter at KUHF, starting there as an intern in 2002...