More and more cities across Galveston County are passing resolutions to delay the implementation of rate increases for some electric customers this year, the first step in a process that could prove contentious, according to legal officials.
League City in late April became the latest city to pass a resolution related to the Houston branch of CenterPoint Energy, a major electric service provider for several county cities, which is requesting the state allow it to increase base rates by about $161 million for municipalities across the Houston area.
The resolution suspends the effective date of the increase for 90 days, officials said.
The resolution is the first step in examining any rate increase request — a process that is both contentious and normal when a public utility makes such a request, said Alfred Herrera, an attorney with Austin-based Herrera Law & Associates, which represents League City.
Herrera represents the Texas Coast Utilities Coalition of cities, which includes League City. But that coalition is just one of at least two reviewing CenterPoint’s request.
The Galveston City Council in April approved a resolution, similar to League City, that gives the city 90 extra days to determine whether it agrees with the proposed rate increase. Galveston is part of a second group, called the Gulf Coast Coalition of Cities, that also includes several other Galveston County municipalities.
And Friendswood could be next, said Jeff Newpher, spokesman for the city. The council should have an agenda item to pass the resolution during its next meeting.
Officials with CenterPoint Energy argue the rate increase is necessary because the company has added more than 400,000 customers since the last rate increase in 2010 and because it incurred about $64 million in Hurricane Harvey-related costs.
CenterPoint provides the wires, poles and other systems needed to get electricity from power plants to consumers. Its rate request won’t change what consumers pay for the kilowatts of electricity they use.
If approved by the state, the charges could add $2.38 a month to customers’ bills, said Alejandra Diaz, spokeswoman for CenterPoint Energy.
The company is asking cities to approve a $154 million, 7.4 percent increase in retail transmission and distribution rates and a $6.8 million, 1.8 percent hike in wholesale transmission rates, according to city documents.
But local municipalities have jurisdiction over rate increases and attorneys are in discovery on the rate increase, a process that likely will disappoint CenterPoint Energy officials, Herrera said.
“More than likely, CenterPoint will be disappointed with whatever decision the city makes, but they have the right to appeal to the Public Utility Commission,” Herrera said.
Essentially, if utility officials disagree with the city’s decision, they can bring it before the Public Utility Commission of Texas, officials said.
During CenterPoint’s last general rate case, officials requested an increase of about $110 million, but the utility commission eventually approved an increase of only about $15 million, League City officials said.