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The 19 percent drop in natural gas bills that CenterPoint Energy touted less than two weeks ago will shrink to 5.5 percent if a state commission approves all of the base-rate increase that the Houston-based company requested Tuesday.

CenterPoint Energy has asked the Arkansas Public Service Commission to approve a base-rate increase of 12.2 percent. On Wednesday, the utility said that if the entire request is granted, a customer with a $100 monthly CenterPoint bill this year would see it shrink to $94.50.

On Oct. 30, CenterPoint said monthly natural gas bills would drop by 19 percent compared with last year because it is paying less for natural gas and is required to pass that savings on to customers. That means a customer's $100 monthly natural gas bill will drop to $81, starting this month.

Lower prices for natural gas are leading to lower bills. Natural gas prices on the New York Mercantile Exchange have declined by more than a third in the past 12 months.

Gas futures for December delivery fell 5.7 cents, or 2.5 percent, to settle Wednesday at $2.263 per 1 million British thermal units on the New York Mercantile Exchange. A Btu is the amount of heat required to increase the temperature of a pound of water 1 degree Fahrenheit.

It's not likely that the state commission will approve the entire 12.2 percent increase that CenterPoint is seeking, said Valerie Boyce, the commission's chief of staff.

"That is the maximum [CenterPoint] could get," Boyce said Wednesday. It is seldom that utilities get the entire rate increase requested, she said.

"If we got everything we're asking for, it still would be a [5.5 percent] decrease on a $100 [monthly] bill," said Alicia Dixon, a spokesman for CenterPoint, which has about 403,000 customers in Arkansas.

Revenue from CenterPoint's rate increase would be spent on pipelines, meters and new trucks -- everything the utility needs to get natural gas to its customers, Boyce said. Also included in base rates are salaries for employees, Dixon said.

The portion of CenterPoint's monthly bill that covers the cost of natural gas accounts for about 40 percent of the bill, the utility said. The base rate portion makes up the rest of the bill.

CenterPoint's last change in its base rate went into effect eight years ago after the company initially requested a 14 percent increase. The commission approved an increase of 4.9 percent.

The commission is required to make a final decision within 10 months of Tuesday's application, Boyce said, giving it until September to rule. CenterPoint said it expects to implement the approved rate change sometime next fall.

Until then, CenterPoint customers still will get full advantage of the 19 percent reduction in rates through this fall and winter, Dixon said.

In its rate request, CenterPoint also is proposing a formula rate plan to be used in response to a recently enacted state law.

The annual mechanism would help reduce the lag in CenterPoint's recovery of its investments and expenses, the company said. The formula would allow for smaller rate adjustments over shorter periods of time rather than large adjustments over longer periods, CenterPoint said.

SourceGas Arkansas, which has about 160,000 customers in Northwest Arkansas and the northern third of the state, filed for an increase in its base rate in April. Arkansas Oklahoma Gas, with about 45,000 customers in the Fort Smith area, is the third-largest natural gas utility in the state.

Business on 11/12/2015

Print Headline: Gas-bill savings hit 5.5% under request


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Archived Comments

  • Nucdog110
    November 12, 2015 at 9:22 a.m.

    If this was a serious newspaper and the and Mr. Smith wanted to up his game he would have included the Docket number and a reminder to his readers that comments on Center Point's request for a profit hike may be left at the Arkansas Public Service Commission's website. If they need to upgrade pipelines, etc., I'm all for it. But so they can up the pay scale of the CEO and upper management. I say give them 1% that's what I got from the Fed last year. SSN retiree's are getting zip next year.

  • Foghorn
    November 12, 2015 at 11:47 a.m.

    Their earnings report this week reported HIGHER income. HOWEVER, they took an $862M LOSS from their investment in Enable Midstream, a pipeline operator. They're counting on increased "fixed-stream revenue" (from utility customers like you and me) to make up for that, hence the rate increase. They're a publicly-traded company. When the stock price tanks, you and I pay the price so the CEO and shareholders don't have to.

  • Morebeer
    November 12, 2015 at 12:25 p.m.

    These rate requests follow this pattern. The utility knows the commission is going to slash their request, so they ask for about twice what they feel is justified. The commission cuts the request in half, so it looks like their looking out for ratepayers. Look for CenterPoint to leave the table with a 5 to 6 percent increase.