Largest natural gas utility in Arkansas files for rate increase; bills would go up 2.48 percent if approved

CenterPoint Energy, the largest natural gas utility in Arkansas with about 412,000 customers, has filed an application with the Arkansas Public Service Commission for a $9.1 million rate increase.

The increase would be about 2.48 percent for each residential customer. So a residential customer with a $100 monthly bill would have a bill of $102.48 beginning late this year if the commission approves the increase.

The filing was made under Act 725 of 2015, which allows the state's utilities to make streamlined adjustments each year to recover costs related to invested capital and expenses without filing for a full rate case.

CenterPoint is seeking the increase for several reasons, said John Bethel, executive director of the commission's general staff.

One reason is that the company's rate of return, 7 percent, is less than the rate of return it is allowed, 9.5 percent, Bethel said.

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CenterPoint also has had continued expenditures on replacing main pipelines and for services to improve reliability and safety, Bethel said.

CenterPoint also has had a decline in the number of customers and a decline in the average amount of natural gas used by customers, Bethel said.

Walter Bryant, CenterPoint's vice president of gas operations in Arkansas, said in a prepared statement that CenterPoint continues to make significant investments to ensure the utility has a "modernized, technologically advanced" system to meet the needs of customers.

Under the 2015 law, the filing allows for smaller, annual rate adjustments instead of larger adjustments made over several years, Bryant said.

Bethel's staff is beginning to review CenterPoint's filing, he said.

CenterPoint would like the higher rate to take effect on Oct. 2. So the commission will conduct a hearing and rule on the request some time before October, Bethel said.

Last year, the commission approved about a 6.7 percent rate increase for CenterPoint.

The portion of CenterPoint's monthly bill that covers the cost of natural gas accounts for about 40 percent of the bill, the utility said. The base-rate portion, which is the filing's focus, makes up the rest of the bill.

Compared with 10 years ago, CenterPoint's natural gas supply rate is down about 40 percent, said Alicia Dixon, CenterPoint's spokesman.

With more than 7,700 employees, Houston-based CenterPoint Energy and its predecessor companies have been in business for more than 140 years.

Business on 04/07/2017

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