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Texas PUC Chairman Proposes Calling CenterPoint Energy TDU In For Rate Case

January 23, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

In a memo in advance of today's open meeting, Texas PUC Chairman DeAnn T. Walker proposes that the Commission require CenterPoint Energy Houston Electric to file a rate case with the Commission

Walker's memo results from recent federal tax cuts, and how to address such changes in utility rates

At today's open meeting, Commissioners elected to further consider the issue of any required rate case filings at the next open meeting

With regards to CEHE, Walker noted in her memo that in Project No. 46910, Year-End 2016 PUC Earnings Reports for Electric Utilities, the Commission Staff addressed the earnings of CenterPoint Energy Houston Electric and did not recommend requiring a base rate case at that time. "As discussed at the open meeting on October 26, 2017, I had concerns with the subsidization between the distribution and transmission rates for this company. However, I also had concerns with requiring a rate proceeding at that time due to the impacts of Hurricane Harvey on the expense of the utility," Walker wrote

"It is my understanding that CenterPoint Energy Houston Electric intends to file in the near-future a distribution cost recovery factor (DCRF) proceeding; therefore, the effects of the federal income tax legislation can be addressed in that proceeding for the distribution assets and rates. However, a DCRF proceeding will not address the impacts of the federal income tax legislation on the transmission rates charged by the utility. In my opinion, this will further skew the subsidization issues that affect the transmission rates charged by CenterPoint Energy Houston Electric. Although I continue to have concerns about the impacts of Hurricane Harvey on a test year, I believe that there are too many factors that show there is a need for a rate review at this time. Therefore. I recommend that the Commission require CenterPoint Energy Houston Electric to file a comprehensive rate proceeding within the next 120 days," Walker wrote

With regards to Oncor, Walker noted that while a recent Oncor rate order addressed the issue by requiring the utility to create a regulatory liability account, the regulatory liability established in such order is not as comprehensive as one being proposed by Walker, and Walker proposes modifying the regulatory liability requirements for Oncor to conform to her proposal

With regards to Texas-New Mexico Power Company, because TNMP plans to file a rate case in the very near future, Walker believes it is best to implement a deferred accounting order regarding the tax law changes, and allow TNMP to file a rate case in May as currently planned.

Given the information collected by Staff, Walker wrote that she does not believe AEP Texas should be required to file a rate case at this time, but wrote that the PUC should continue to monitor the utility's earnings

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