AGENDA CAPTION:
Title
Consider approval of Resolution 2026-51R, suspending the effective date proposed by CenterPoint Energy Resources Corp. d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas, South Texas Division, to increase rates under the gas reliability infrastructure program, for 45 days, in order to enable the city’s review of data and calculations that provide the basis for the rate increase application; authorizing the city’s continued participation in a coalition of cities known as the “Alliance of CenterPoint Municipalities” (“ACM”); and declaring an effective date.
Body
Meeting date: April 7, 2026
Department: City Attorney’s Office
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ALLIANCE OF CENTERPOINT MUNICIPALITIES
The City is a member of the Alliance of CenterPoint Municipalities (“ACM”). ACM was organized by a number of municipalities served by CenterPoint Energy Resources Corp. d/b/a/ CenterPoint Energy Entex and CenterPoint Energy Texas Gas, South Texas Division (“CenterPoint”) and has been represented by the law firm of Herrera Law & Associates, PLLC to assist in reviewing applications to change rates submitted by CenterPoint.
“GRIP” RATE APPLICATION
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, that is, 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, § 104.301). CenterPoint’s application if approved by the Commission will result in an increase in the monthly customer charges as shown below:
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
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Recommendation:
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.