Title
Consider and take action on a resolution regarding the interim rate adjustment application of CenterPoint Energy Resources Corp. d/b/a CenterPoint Energy and CenterPoint Energy Texas Gas, Texas Coast Division, for the 12 month period ending December 31, 2025 (City Attorney)
Background:
TEXAS COAST UTILITIES COALITION - TEXAS COAST DIVISION
The City is a member of the Texas Coast Utilities Coalition (“TCUC”) of cities. TCUC was organized by a number of municipalities served by CenterPoint Energy Resources Corp. d/b/a/ CenterPoint Energy Entex and CenterPoint Energy Texas Gas, Texas Coast Division (“CenterPoint”) and has been represented by the law firm of Herrera Law & Associates, PLLC to assist in reviewing applications to change rates submitted by CenterPoint.
“GRIP” RATE APPLICATION
Under section 104.301 of the Gas Utility Regulatory Act (“GURA”), a gas utility is allowed to request increases in its rates to recover a return on investments it makes between rate cases. This section of GURA is commonly referred to as the “GRIP” statute, that is, the “Gas Reliability Infrastructure Program.”
Under a decision by the Supreme Court of Texas, the Court concluded that a filing made under the GRIP statute permitted gas utilities the opportunity to recover a return on capital expenditures made during the interim period between rate cases by applying for interim rate adjustment and that proceedings under the GRIP statute did not contemplate either adjudicative hearings or substantive review of utilities’ filings for interim rate adjustments. Instead, the Court concluded, the GRIP statute provides for a ministerial review of the utility’s filings to ensure compliance with the GRIP statute and the Railroad Commission’s rules, and that it is within the Railroad Commission’s authority to preclude cities from intervening and obtaining a hearing before the Railroad Commission.
CENTERPOINT’S “GRIP” APPLICATION
On or about February 17, 2026, CenterPoint filed for an increase in gas utility rates under the Gas Reliability Infrastructure Program (“GRIP”). CenterPoint’s application if approved by the Commission will result in an increase in the monthly customer charges as shown in the attached chart.
CenterPoint’s proposed increase results in the following percentage increases in a customer’s fixed customer charge with gas cost, in its Texas Coast Division:
Residential Customer: 11.05% increase in customer charge
Commercial Customer: 11.90% increase in customer charge
General Service - Large Volume: 12.25% increase in customer charge
REVIEW AND ACTION RECOMMENDED
Although the City’s ability to review and effectuate a change in CenterPoint’s requested increase is limited, the City should exercise due diligence with regard to rate increases of monopoly utilities who operate within its boundaries, including increases requested under the GRIP statute to ensure compliance with the requirements of that law. This includes whether CenterPoint’s current rates produce a rate of return in excess of its authorized rate of return.
To exercise its due diligence, it is necessary to suspend CenterPoint’s proposed effective date of April 18, 2026 for forty-five days, so that the City can evaluate whether the data and calculations in CenterPoint’s rate application are correctly done.
Therefore, TCUC’s Special Counsel, the law firm of Herrera Law & Associates, PLLC recommends that the City adopt a resolution suspending CenterPoint’s proposed effective date for 45 days. Assuming a proposed effective date of April 18, 2026, CenterPoint’s proposed effective date is suspended until June 2, 2026.
Attachments:
1. Proposed Resolution
2. Rate Increase Information.
FUNDING
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{ } Requires Budget Amendment to transfer from Account #______ to Account #______
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STRATEGIC PLANNING
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{x} NOT APPLICABLE