CenterPoint intends to ask Texas PUC for rate increase to recoup losses from Hurricane Beryl response

AUSTIN, Texas – As CenterPoint Energy remains in the hot seat, facing scrutiny for its response to Hurricane Beryl, the CEO has promised the energy giant will do better, but Texas lawmakers are wondering how much of that weight taxpayers will have to carry going forward.

During a hearing Monday held by a special senate committee in Austin, Senator Carol Alvarado asked CenterPoint CEO Jason Wells if the energy giant had any plans to go forward before the Public Utility Commission of Texas (PUC) for a rate increase and what that would look like and how taxpayers would be affected.

In summation, Wells admitted CenterPoint would ask for a rate increase, with the Senator sharing a brief bit of that exchange on X, formerly known as Twitter.

“CenterPoint intends to increase their rates to recoup the cost of recovering from Hurricane Beryl, passing the cost on to the customer,” Alvarado said. “That dog won’t hunt.”

SEE ALSO: ‘We make no excuses:’ CenterPoint CEO sends letter to customers apologizing over Beryl response

Before the exchange shown on social media, Sen. Alvarado hoped to get a look at the bigger picture and asked Wells what CenterPoint looks for when they ask PUC for a rate increase to recoup efforts, noting they have to be “just and reasonable.”

Wells claimed the vast majority is to payback the lineworkers, vegetation management, and people who helped restore power, as well as materials used in the restoration efforts like power poles, and transformers. However, he emphasized the more than 50,000 workforce who helped restore service to over 2 million customers left in the dark for nearly a week.

Some customers, however, didn’t get their power back for more than a week and were forced to live in dangerously hot conditions inside their homes with no air conditioning, while temperatures outside soared into the 90s. Some of them lost their lives to heat illness.

What would a rate increase look like?

In pressing Wells during the hearing, Sen. Alvarado felt uneasy about even a $1 or $2 rate per customer per month “that never goes away,” and asked if the buck would stop there. That’s because CenterPoint already has a contending rate case with the PUC.

“We were required to file this rate case back in March of this year as part of our 2019 rate case for the company,” he said. “We made a commitment to file no later than the middle of March 2024 so we made it earlier this year.”

“What were you trying to recoup for?” Alvarado asked.

“This rate case covered all our capital investments that the company has made since the 2019 rate case as well as an update on our current level of operating and maintenance costs as well as a current update on the allowed return on the investment of our electric system,” Wells explained.

Is CenterPoint allowed to add additional costs?

“We basically submit the amount we spent for 2023 and use that as the basis for the request moving forward,” Wells added.

Still, Sen. Alvarado didn’t seem pleased with his response and pressed him again to ensure the rate increase would benefit the taxpayers despite having to pay extra on their electric bills.

“I just want to make sure you’re not doing less on proactive maintenance on vegetation,” Alvarado explained. “And waiting till a storm hits because you can recoup the cost once a tree hits the wire on a stem.”

“I can assure you, Senator we took proactive measures well beyond what we can recover in rates because it was the right thing to do given the impact the last several growing seasons have had on the trees in our area,” Wells said. “In the instance of the 35,000 trees we worked – that’s part of the restoration – that’s part of the cost we’d like to recover.”

That’s when the senator asked the question she shared in her video on social media: “Are you planning to go to the PUC on this storm and ask for a rate increase?”

“Yes, we are intending to file for recovery on the cost of this restoration,” Wells replied. “We have the burden of proof to prove those costs are prudent and reasonable but it is a cost – historically has been a cost that has been supported by the PUC.”

Sen. Alvarado, however, felt otherwise suggesting Wells would have to “jump through hoops” with the PUC to try and recoup the loss.

“I hope folks are really going to hone in on this and look carefully at what you’re asking for because there’s a lot of folks that are going to tune in; we’ve got a lot of our constituents [who] don’t want to pay – even if it’s a dollar or two extra a month when a lot of these costs could have been avoided.”

The hearing began at 10 a.m. Monday and the state livestreamed it, which you can find by clicking here.

Wells’ testimony comes just a week after his meeting with the PUC where he apologized to Houstonians.

“Let me begin by being very clear: our response to the impacts of Hurricane Beryl, including our communications, did not meet the high standard we expect of ourselves, let alone what the public expects of us,” Wells said.

‘Talk is cheap’: Outage victims react to CenterPoint’s apologies and promises to do better

As he did last week, Wells also announced initial action plans Monday to increase resiliency. For starters, CenterPoint has assured the public it will be introducing a new and improved online outage tracker by August 1.

“I take accountability for those areas where we fell short of our customer’s expectations, and I want to apologize for the frustration our customers and their families experienced as a result. There are no excuses. We will do better. We will improve. And we will act with a greater sense of urgency,” Wells said. “Hurricane Beryl impacted so many lives, and I want to express my condolences to the families and friends who lost loved ones.”

CenterPoint’s plan of action, which was initially announced during a hearing with the Public Utility Commission of Texas on Thursday, July 25, reflects more than 40 initial actions that the company is taking immediately and over the intermediate- and long-term, including:

• Resiliency Investments: By accelerating the adoption of the latest construction standards, retrofitting existing assets on an accelerated basis, and using predictive modeling, AI and other advanced technologies, CenterPoint will harden its distribution system and speed restoration. The company will also take action to protect its electrical assets by nearly doubling the size of its vegetation management crews and targeting higher-risk vegetation to address the number one cause of damage and outages in Hurricane Beryl.

• Best-in-Class Customer Communications: To ensure customers have the information they need when they need it, CenterPoint will launch a new and more customer-oriented outage tracker by August 1. This online tool will provide better and more complete information during storms and is designed to handle increased demand during such events.

• Strengthened Partnerships: Effective emergency preparedness and response requires close coordination with government officials. CenterPoint will hire a seasoned emergency response leader to help the company rapidly accelerate its planning capabilities and develop close community partnerships to ease the burden of storm events on more vulnerable communities.