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H-E-B Opposes CenterPoint-TDU's Proposed Change From Per "Customer" Charge To Per "Meter" Monthly Flat Charges

TIEC Opposes CenterPoint-TDU's Proposal To "Zero Out" TCRF And Recover All Test-Year Transmission Costs In Base Rates

June 7, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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H-E-B and the Texas Industrial Energy Consumers (TIEC) have, in separately filed testimony, opposed various proposals from CenterPoint Energy Houston Electric, LLC ("CenterPoint") that the utility made in its new electric base rate case filing before the Public Utility Commission of Texas

See background on proposals in CenterPoint Energy Houston Electric, LLC's in's exclusive analysis of the rate case filing

Customer Charge vs. Meter Charge

As previously reported, CenterPoint Energy Houston Electric proposes to change its flat monthly charges (customer charge, metering charge) from a "per retail customer" basis to a "per meter" basis. Such charges are assessed on retail electric providers, and REPs determine how such costs are reflected in their competitive retail customer rates.

H-E-B filed testimony stating that this proposal would impact H-E-B, since, "H-E-B has multiple meters installed at its facilities."

A witness for H-E-B said that, "given the automated nature of these meters, it will not cost CenterPoint any more expense, on a per meter basis, to read these meters than it does today on a per customer basis."

As such, H-E-B's witness recommended that CenterPoint Energy Houston Electric, "maintain a per customer charge rather than a per meter charge."

"CenterPoint is seeking to recover the costs associated with multiple meters arguing that customers that require multiple meters should pay the costs for the meters used to serve them. Advanced meter technology allows CenterPoint to read its meters remotely. A per customer charge more accurately reflects the administrative costs associated with the provision of service," H-E-B's witness said

Transmission Cost Issues

TIEC opposed CenterPoint's proposal to "zero out" the Transmission Cost Recovery Factor (TCRF).

TIEC said that CenterPoint is proposing to reset its TCRF to zero and recover all test-year pro-forma wholesale transmission costs in base rates through the Transmission System Charge (TSC) for each delivery rate class.

"This proposal should be rejected because it would ignore load growth; that is, load growth allows CenterPoint to recover incremental TSC revenues, but these additional revenues would be ignored in setting CenterPoint's future TCRF charges. These incremental TSC revenues can offset higher wholesale transmission costs. Hence, CenterPoint's proposal would allow it to over-recover wholesale transmission costs. It is not in the public interest to allow a utility to over-recover wholesale transmission costs," a witness for TIEC said

"CenterPoint's proposal is also contrary to the current TCRFs of Oncor Electric Delivery (Oncor) and Texas-New Mexico Power Company (TNMP), which have set their respective TSCs to zero and recover the entirety of their wholesale transmission costs in the TCRF. This same practice is being proposed by American Electric Power (AEP) in its pending rate case," a witness for TIEC said

TIEC also took issue with a transmission-related issue in CenterPoint's Class Cost-of-Service Study (CCOSS).

A witness for TIEC said that a "flaw" in the CCOSS is that CenterPoint allocates wholesale transmission costs using each customer class's demands coincident with CenterPoint's peak summer 4CP demands, rather than the class 23 demands coincident with the ERCOT 4CP.

"In CenterPoint's last rate case and in every other contested rate case thereafter, the Commission has approved allocating wholesale transmission costs using the actual demands coincident with the ERCOT 4CPs rather than an individual utility's 4CPs. This allocation matches the way wholesale transmission costs are assigned to CenterPoint, and therefore reflects cost-causation," a witness for TIEC said

TIEC supported CenterPoint's proposal to retain the current rate design for the Transmission Service Rate. This includes the practice of billing the TSC, Distribution System Charge (DSC), and Municipal Franchise Fees (MFF) charges on a 4CP kilovolt-ampere (kVA) basis.

"Although different in design from other utilities, the current 4CP kVA charges are a long-standing practice and changing this practice solely to conform with other utility rate designs would be disruptive," TIEC said

Municipal Franchise Fees

TIEC said another "flaw" in the CCOSS relates to Municipal Franchise Fees (MFF)

"MFF should be allocated to retail delivery classes using in-city kilowatt-hour (kWh) sales, weighted to reflect the different MFF rates charged by the various cities in CenterPoint's service area. Weighting in-city kWh sales by the specific MFF rates properly reflects cost-causation because different cities charge different MFF rates, and the proportion of class kWh sales varies widely between each city. This will ensure that customers located in cities that charge below-average MFF rates are not subsidized by customers located in cities that charge above-average MFF rates," a witness for TIEC said

Docket 49421

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