City fights CenterPoint rate hike
City officials in Beaumont are fighting to keep gas rates low, but their efforts may be in vain if CenterPoint Energy has its way.
In July, CenterPoint filed a request to raise gas rates in Beaumont and surrounding cities. The company is asking for $8.6 million rate hike next year. This would raise the average residential gas bill from about $12 to more than $20 per month, according to the council agenda.
“I don’t think the citizens would want to afford any increases that aren’t justified,” said City Attorney Tyrone Cooper. “It’s our position that they aren’t justified as they requested it.”
City Council denied the request at Tuesday’s Oct. 16 council meeting, saying the rate increases are an attempt by CenterPoint to recover “employee expense benefits, various tax expense and rate base issues, injuries and damages expense, other various expense and investment, unsubstantiated costs allocated from affiliate service companies, and an excessive rate of return and profit for shareholders,” according to the council agenda.
Had the council not acted before Nov. 4, the rate increases would have automatically taken effect.
Alicia Dixon, a spokesperson for CenterPoint, said the rate increases are paramount to keeping her company competitive and in the black. Having not raised rates since at least 2006, she said CenterPoint’s rate hikes are simply a matter of economics.
“It’s time to get rates in line with what it’s costing to serve our customers,” she said, adding that her company expects to litigate and raise rates as early as January 2013.
To mediate a possible compromise, the city has hired Austin-based attorney Dan Lawton of the Lawton law firm.
Lawton is representing Beaumont along with 14 other surrounding cities in CenterPoint’s service region who also want to see little or no rate increase on their residents’ gas bills.
Lawton said successfully coming to an agreement is all about compromising on a rate increase both parties can agree to.
“I might have a number in mind,” Lawton joked, “but we haven’t resolved that yet.
Lawton is taking his case before the Texas Railroad Commission in Austin and will present his evidence to the body Tuesday, Oct. 23.
Lawton has hired a team of rate consultants, experts in finance and other energy experts to come up with a more agreeable increase to Beaumont’s gas rates. If the city and CenterPoint still can’t come to a compromise at a hearing in November, it is ultimately up to the Railroad Commission to decide how much, if at all, Beaumont’s gas rates will increase.
“Nobody gets everything they want. That’s the nature of settlements,” Lawton said. “But you try to reach a compromise position, so we’ll see how this one works out.”
Lawton said if Entergy’s electric rate increases are any historical indication, gas rates in Beaumont are likely to go up. He hinted a ruling by the Railroad Commission might not be in Beaumont’s best interest.
“We’d like to settle the case, if we can, before we go to trial,” he said.