CenterPoint Energy's request for a rate increase is "particularly harmful to residential customers," Shawn McMurray, a lawyer for the state attorney general's office, told the Arkansas Public Service Commission on Tuesday.
The attorney general is the only party to the rate request case that stands in opposition. Four other parties -- CenterPoint, the commission's general staff, Arkansas Gas Consumers Inc. and the University of Arkansas system -- have all agreed to the rate change.
The request for an additional $14.2 million a year is "too great a revenue increase," McMurray said.
Residential customers actually will see a $15.3 million increase, and various commercial customers will receive slight declines in rates.
"The stipulation is not in the public interest," McMurray said.
CenterPoint, the largest natural gas utility in Arkansas with about 408,000 customers throughout most of the state, originally sought a $35 million revenue rate increase last year.
"In all but one of [CenterPoint's] rate cases since 1987, residential customers have seen significant rate increases while business customers have seen much smaller increases or even decreases in rates," McMurray told the commission. "This stipulation would continue this trend -- increasing residential bills by 1.5 times the system average increase while other classes see lower bills."
A residential customer with a $100 monthly bill will have a bill of $109.65 if the request is approved by the commission.
Stephanie Hammons, a CenterPoint attorney, argued that a residential customer's bill under the proposed increase is more than 30 percent lower than residential bills under the company's most recent rate case about 10 years ago because of the lower cost of natural gas.
Jordan Tinsley, an attorney representing the Arkansas Gas Consumers, argued that the settlement will stimulate economic development in the state.
"The settlement will benefit all of CenterPoint's ratepayers because it will stimulate economic development and promote employment opportunities in the state of Arkansas," Tinsley said.
Analysis done by Gregory Hamilton, an economist with the University of Arkansas at Little Rock, demonstrates that the positive effect of lower industrial and commercial rates, including gains in the state's overall gross domestic product and the creation of numerous jobs, "will overwhelm any negative effect associated with the changes in residential consumption patterns," Tinsley said.
This is the third utility rate case since the Arkansas Legislature passed a bill last year that directs the Public Service Commission to consider methods of allocating costs among customer classes, said John Bethel, executive director of the commission's general staff.
The commission likely won't reach a decision in the case until September, Bethel said.
The attorney general also was the only party not to agree to rate increase request case last year brought by SourceGas Inc., a natural gas utility with about 160,000 customers in Northwest Arkansas and the northern third of the state. SourceGas since has been acquired by Black Hills Energy.
In that case, the commission eventually ordered a rate increase that was lower than the amount recommended by the settling parties.
Business on 07/13/2016