CenterPoint Energy residential customers in Minnesota will see 5% rate hike

Minnesota utility regulators Thursday granted a 4.7% rate increase to CenterPoint Energy, nearly $24 million less than what the utility had sought.

The $38.5 million hike covers all rate classes combined — residential, commercial and industrial. The residential rate increase alone will be 5.1%, adding $2.70 per month to the typical customer's bill, the company said.

Houston-based CenterPoint is Minnesota's largest gas utility with more than 870,000 customers.

Also Thursday, the Minnesota Public Utilities Commission (PUC) unanimously rejected a controversial proposal from the city of Minneapolis — backed by CenterPoint — that would help low-income renters fund energy-efficiency measures.

In October 2019, the company asked the PUC for a $62 million, or 6.8%, rate increase across all customer classes. That proposal would have increased the average residential customer's bill by 8.7%.

CenterPoint this fall agreed to a settlement with several parties — including the Minnesota Department of Commerce and the Office of the Attorney General — to cap the increase at $38.5 million.

The PUC unanimously approved the settlement.

CenterPoint said it will take the company several months to process the refunds.

Last summer, the city of Minneapolis made a proposal within CenterPoint's rate case for a program that would help renters in the city pay for weatherproofing and other measures to conserve energy.

Eventually, CenterPoint and the city agreed to a plan that the city argues would help residents with weak credit histories afford energy-conservation improvements. Renters would effectively pay through their gas bills.

The city's proposal was backed by three prominent Minnesota clean-energy groups and Community Power, a Minneapolis-based advocacy group for localized clean power and energy efficiency.

The proposal's opponents included the state Commerce Department; the Attorney General's Office; Mid-Minnesota Legal Aid, which advocates for low-income people; and Energy Cents Coalition, an advocacy group for low-income utility customers.

PUC commissioners said they agreed with the Minneapolis proposal's goals but had concerns about its framework and how much it would cost.

"I really do think there are a lot of problems with the proposal," said Commissioner Joe Sullivan.

He said the program's goals could be accomplished faster and more easily through the state's Conservation Improvement Program (CIP), an energy-efficiency initiative administered by the Department of Commerce and funded by utility ratepayers.

Under the Minneapolis program rejected Thursday, administrative costs alone borne by CenterPoint — and ultimately ratepayers — would be millions of dollars.

According to CenterPoint, a pilot program would raise a customer's bill by $3.58 to $5.28 for one year if costs were spread among all CenterPoint ratepayers; an average customer's bill would rise from $23.94 to $35.36 if just Minneapolis ratepayers had to cover the tab.

"We don't see how the ratepayers of Minneapolis should pay for all of a project that has benefits for all CenterPoint ratepayers and the state," Kim Havey, the city's sustainability director, told the PUC.

PUC Commissioner John Tuma said the city's cost-spreading notion "makes no sense to me."