Thanks in large part to its repeated rate increases and customer growth, profits are up for CenterPoint Energy.
That’s the word from the Houston Chronicle, which reported this week that its hometown electricity and natural gas distributor made profits of $135 million — or 31 cents per share — during the second quarter of the year. That’s compared to a $2 million loss during the same period last year, according to the newspaper.
How do those profits relate to the home consumer? “Natural gas and electricity rates for Houston customers have gone up,” the paper reported.
A rate increase for natural gas service that was recently approved by the Texas Railroad Commission will increase CenterPoint’s bills to typical Houston customers by about $1.23 per month, the newspaper reported. A separate rate increase proposed by CenterPoint’s electric utility will increase rates to those customers by about 80 cents per month, if approved by the Texas Public Utility Commission, according to the newspaper.
In a recent investigative report, the Houston Chronicle also found that monopoly utilities like CenterPoint often have hiked gas rates even while earning windfall profits off their captive customers.
“CenterPoint Energy’s gas utility earned profits that were hundreds of thousands of dollars above the cap set by state regulations in 2015. But that didn’t stop the company from asking last year — and getting — higher rates to collect even more money from its Houston-area customers,” the newspaper’s Ryan Maye Handy reported in May.
CenterPoint likewise earned profits above previously approved levels in 2013 and 2014, and both times the Railroad Commission allowed the company to raise rates “with few questions asked.”
Handy attributed those controversial rate hikes to the Gas Reliability Infrastructure Program that allows gas utilities to regularly increase residential and commercial bills, but with little regulatory oversight.
“For the company’s 1 million Houston-area customers, the result has been a steady uptick in the cost of natural gas delivery, which has cut into savings from the lowest natural gas prices in nearly two decades,” reported Handy.
You can read the Houston Chronicle report about the GRIP increases here. For more about the GRIP program, check out this ACSC report from 2010.