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Launch of CenterPoint Energy Electric Price Index Needlessly Conflates Electric Utility, Broker

November 9, 2011

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Copyright 2010-11 Energy Choice Matters

Readers of the Houston Chronicle, or its Fuel Fix blog, will have noted that CenterPoint Energy has recently launched on FuelFix and the Sunday Chronicle the "CenterPoint Energy Electric Price Index," which essentially tracks costs under fixed rate contracts of various lengths.

However, presentation of the new index, and what entity is responsible for it, was poorly handled by the Chronicle, which, in a post about the new content, needlessly referenced CenterPoint Energy's electric distribution business in Houston under CenterPoint Energy Houston Electric.

To be clear, the actual content authored by CenterPoint Energy transparently attributes each blog to the entity responsible for authorship, and does not make any reference to the distribution business. It is only the Chronicle-authored separate post about the new CenterPoint content which references the wires utility, and conflates the various businesses.

Floyd LeBlanc, Vice President of Corporate Communications for CenterPoint Energy, Inc., told Matters that, "CenterPoint Energy's posts on the Fuel Fix blog are managed and edited by the company's Corporate Communications department. That department produced the first blog, and one of the company's business units, CenterPoint Energy Services, produced the second blog."

Moreover, LeBlanc said that, "To date, CenterPoint Energy Houston Electric has not participated in the Fuel Fix blog."

However, in a post concerning the new "CenterPoint Energy Insights" on the blog, the Chronicle's Tom Fowler wrote, "Most Houstonian's know CenterPoint Energy as the company that owns the power lines and poles around the city, as well as the natural gas lines that serve homes and businesses. But starting this week CenterPoint wants to be known as something else: an objective voice on retail electric rates."

The implication is clear. The company that "owns the power lines" will now serve, through CenterPoint Energy Insights, as an "objective" voice on retail electric rates.

Except that's not the case, as CenterPoint Energy Houston Electric has not been involved in the blog to date. CenterPoint Inc. authored the first blog, and CenterPoint Energy Services (a broker and retail gas supplier, among other business lines) authored the second blog. While CenterPoint Inc. may own CenterPoint Energy Houston Electric, it is not the same company that owns the wires.

By referencing the wires business, Fowler's post essentially ascribes all the benefits of wires ownership, including customer familiarity, customer confidence, and perhaps most importantly, regulatory oversight by the PUCT, to the separate and distinct companies authoring the blog. Fowler did not return an email seeking comment.

This is important since CenterPoint Energy Services, one of the blog's authors, competes with a diverse variety of agents, brokers, and consultants in the ERCOT market to win the procurement business of customers. It is not unimaginable to see how a customer would feel more confident using a broker that they erroneously believe is linked to the regulated electric utility in procuring power, versus an unknown broker to whom the customer had no prior connection. Matters believes Fowler's posting, by referencing the wires business of CenterPoint Energy Houston Electric, could lead customers to believe that the authors of the blog (including CenterPoint Energy Services) are the same company.

In a response to Matters, LeBlanc said that it was unreasonable to make such a connection, stating that nothing in Fowler's blog discusses CenterPoint Energy Services' competitive brokering service, nor does anything in Fowler's blog suggest or imply CenterPoint Energy Services is providing a regulated service.

And to be clear, this issue is only related to Fowler's post about CenterPoint Energy Insights, and not any of the content produced or posted by CenterPoint Energy itself.

"It is our intention to be clear about our authors," LeBlanc said, noting that CenterPoint provides the blogger's full name and title with each post to make it clear exactly which CenterPoint Energy company is behind each blog posting. All of the FuelFix blog postings by the company will identify the author by name, title and business unit, LeBlanc said, "[s]o there will be no confusion as to the origination of the blog content."

Still, this doesn't change what's been written by Fowler.

Asked by Matters if CenterPoint has sought a correction or clarification to Fowler's post, LeBlanc said:

"We did, in fact, contact Tom Fowler after his original blog post to clarify that our future blog posts would include a variety of topics, not just electric pricing, and would be provided by a variety of CenterPoint Energy employees, not just Shane McLaughlin from CES [CenterPoint Energy Services]. We did not, however, ask him to 'correct' his quote that, 'Most Houstonian’s know CenterPoint Energy as the company that owns the power lines and poles around the city, as well as the natural gas lines that serve homes and businesses.' In my view, his quote is accurate. Perhaps he could have been more precise, but he was writing a blog, not testimony for a regulatory proceeding. I don't believe his blog implies that our future blogs will be coming from CEHE [CenterPoint Energy Houston Electric] or CES any more than it implies that they will all come from our natural gas utility."

While CenterPoint Energy Houston Electric has not, to date, participated in the blog, its participation would raise a number of other issues. Specifically, CenterPoint Energy Houston Electric is privy to certain proprietary or confidential market data, including ESI ID counts for retail electric providers, and any arrearages which retail electric providers may have accumulated in the payment of wires charges. Obviously, such information would be useful in any recommendation or analysis to customers regarding the retail electric market.

LeBlanc assured Matters that, if CenterPoint Energy Houston Electric ever does author a blog posting, "the electric utility's participation will not involve disclosure of confidential information regarding retail electric providers." While not specific, Matters presumes LeBlanc means that the utility will prevent both the actual disclosure of such information, as well as the use of such confidential information in informing opinions expressed in the blog.

"CenterPoint Energy Houston Electric takes seriously its obligation to safeguard such confidential information. And company employees, including relevant employees of CenterPoint Energy Services, are trained in the applicable legal and regulatory standards," LeBlanc said.

As disclosed by the Chronicle, "CenterPoint is not paying the Chronicle for the content nor is the Chronicle paying CenterPoint for the content on the blog or the weekly index."

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