PRESENTER: Presenter
Valeria M. Acevedo, City Attorney
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SUBJECT: Title
Approval of a resolution suspending for 45 days the effective date of the gas utility rate increase under the Gas Reliability Infrastructure Program proposed by CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas - South Texas Division; and authorizing the City’s continued participation in the Alliance of CenterPoint Municipalities.
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DEPARTMENT: City Attorney’s Office
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COUNCIL DISTRICTS IMPACTED: Districts with CenterPoint customers
BACKGROUND INFORMATION:
ALLIANCE OF CENTERPOINT MUNICIPALITIES (“ACM”)
The City is a member of the Alliance of CenterPoint Municipalities (ACM)-South Texas Division (“ACM-S. Texas”). ACM-S. Texas was organized by a number of municipalities served by CenterPoint Energy Resources Corp. and has been represented by the law firm of Herrera Law & Associates, PLLC (through Mr. Alfred R. Herrera) to assist in reviewing applications to change rates submitted by CenterPoint.
“GRIP” RATE APPLICATIONS
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 (the “Gas Reliability Infrastructure Program”).
The Supreme Court of Texas concluded that a filing made under the GRIP statute permitted gas utilities the opportunity to recover 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. The Court’s opinion has severely limited a city’s ability to perform a meaningful review of a gas-utility’s GRIP filing.
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”) (Gas Utility Regulatory Act, Sec. 104.301). CenterPoint’s application if approved by the Commission will result in an increase in the monthly customer charges as shown below:
|
Rate Schedule |
Current Customer Charge |
Proposed 2026 Interim Rate Adjustment |
Adjusted Charge |
Increase Per Bill |
|
R-2099-I-GRIP 2026; R-2099-U-GRIP 2026 Residential |
$27.86 per customer per month |
$2.47 per customer per month |
$30.33 per customer per month |
$2.47 per customer per month |
|
GSS-2099-I-GRIP 2026; GSS-2099-U-GRIP 2026 General Service Small |
$53.12 per customer per month |
$4.18 per customer per month |
$57.30 per customer per month |
$4.18 per customer per month |
|
GSLV-630-I-GRIP 2026; GSLV-630-U-GRIP 2026 General Service Large Volume |
$290.89 per customer per month |
$55.23 per customer per month |
$346.12 per customer per month |
$55.23 per customer per month |
CenterPoint’s proposed increase results in the following percentage increases in a customer’s fixed customer charge in its Houston Division:
Residential Customer: 8.7% increase in customer charge
Commercial Customer: 7.9% increase in customer charge
General Service - Large Volume: 19.0% 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, ACM’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.
ISSUE:
Action needed to suspend for 45 days the proposed rate increase by CenterPoint Energy Resources Corp., and authorize the City’s continued participation in a coalition of cities known as the “Alliance of CenterPoint Municipalities”.
FISCAL IMPACT:
No fiscal impact to the City; however, the rate increases affect customers residing in the city.
Recommendation
RECOMMENDATION:
Staff and the ACM’s Special Counsel, the law firm of Herrera Law & Associates, PLLC (through Alfred R. Herrera) recommends that the City adopt a resolution suspending CenterPoint’s proposed effective date for 45 days.