Title
Consider and take action on a resolution approving an amended application submitted by Centerpoint Energy Resources Corp. d/b/a Centerpoint Energy Entex (“Centerpoint”) on or about October 11, 2019 for authority to issue a refund to customers; directing Centerpoint to issue a refund; directing Centerpoint to reimburse the City of League City’s rate case expenses; finding that the meeting complies with the open meetings act; and making other findings and provisions related to the subject (City Attorney)
Background:
On or about August 1, 2019 CenterPoint Energy-Entex (“CenterPoint” or “Company”) simultaneously filed applications with the City and the Railroad Commission of Texas (the “Commission”) pursuant to Section 104.111 of the Gas Utility Regulatory Act (“GURA”). A ratemaking proceeding under GURA § 104.111 is very limited in scope and allows a gas utility to reduce its rates without the need to present a full cost of service study.
In its application CenterPoint seeks approval to issue a refund to customers in its Texas Coast Division and Houston Division in the amount of about $14.4 million, to reflect a reduction in its cost of service brought about by the federal Tax Cuts and Jobs Act of 2017 (“TCJA”). Among other things, the TCJA lowers the corporate income tax rate from 35% to 21%. Consequently, CenterPoint’s cost of business has decreased because its federal income tax expense is lower and this decreased cost of business should be reflected in lower customer bills. As you may recall, in July, 2018 CenterPoint made a similar filing to pass through to customers the reduction in its cost of service related to the decrease in the federal income tax (“FIT”) rate from 35% to 21%.
In its filing on August 1, 2019, CenterPoint sought authority to provide a refund to customers related to the impact of the TCJA on its deferred taxes, which again produced a reduction to its cost of service. CenterPoint’s August 1, 2019 filing presented a net refu...
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