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CenterPoint-TDU Rate Settlement Would Lower Monthly Flat Charges For Small Customers

Stipulation Addresses Allocation Costs On Per-Customer Vs. Per-Meter Basis

Settlement Sets Level For Refunds To Be Provided To REPs From Tax Law Change

All Transmission Costs To Be Recovered Via TCRF, Removed From Base Rates


January 24, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

The unopposed stipulation among parties in the base rate proceeding of CenterPoint Energy Houston Electric (CenterPoint Houston or CNP), currently before the Texas PUC, would reduce the amount charged to retail electric providers under flat monthly charges, and would also set the level for a rider to refund amounts related to tax law changes.

Several key terms of the stipulation had been first reported by EnergyChoiceMatters.com on January 22. The full settlement has now been filed, with additional terms.

The stipulation provides that CenterPoint Houston will recover all existing and future transmission-related costs through its transmission cost recovery factor (TCRF) instead of through base rates.

The Distribution Cost Recovery Factor will be set to zero.

Furthermore, CenterPoint Houston will not file a DCRF proceeding during the 2020 calendar year. When updating its distribution rate base through future DCRF proceedings, CenterPoint Houston will update its distribution rate base to account for the effects of changed accumulated deferred federal income tax (ADFIT) and excess deferred income tax (EDIT) regulatory liability balances, in each proceeding requesting an update of its distribution rates.

The stipulation would continue to assess the CNP monthly flat customer charge on the basis of per Retail Customer per Month

However, the monthly flat metering charge would be revised to be charged on the basis of per Meter per Month, rather than on a per-customer basis

For customers with a single meter (putting aside any additional costs from the new per-meter allocation), the combined monthly flat charge (customer and metering) would decrease by $1.08 for residential customers, and $1.44 for Secondary Less Than Or Equal To 10 kVA customers

Under the stipulation, a new Rider UEDIT - Unprotected Excess Deferred Income Taxes Credit will refund to REPs certain excess deferred income tax amounts.

CenterPoint Houston shall refund through Rider UEDIT and its Wholesale Transmission Service tariff an unprotected excess deferred income tax (UEDIT) amount of $64,903,763, protected excess deferred income tax amount of $18,659,227, and gross up of $21,886,079 for a total UEDIT refund of $105,449,069 plus carrying costs. The refund and amortization period for UEDIT for Residential Service, Secondary Service Less Than or Equal to 10 KVA, Street Lighting Service, and Miscellaneous Lighting Service shall be approximately 30 months beginning with the effective date of the rates authorized in the rate case. The refund and amortization period for UEDIT for Secondary Service Greater Than 10 KVA, Primary Service, and Transmission Service shall be approximately 36 months beginning with the effective date of the rates authorized in the rate case

The refunds to be provided to REPs shall be as follows

Rider UEDIT
Unprotected Excess Deferred Income Taxes Credit

Class                      Refund       Time Period
Residential        ($0.000629) Per kWh   30 Months
Secondary =<10 kVA ($0.000525) Per kWh   30 Months
Secondary >10 kVA  ($0.116823) Per kVA*  36 Months
Primary            ($0.066524) Per kVA*  36 Months
Transmission       ($0.066511) Per kVA^  36 Months
Street Lighting    ($0.003967) Per kWh   30 Months
Misc. Lighting     ($0.000919) Per kWh   30 Months

* Per Billing kVA
^ Per 4CP kVA

CenterPoint Houston agrees to reimburse cities participating in the proceeding for rate case expenses incurred in all dockets subject to Docket No. 49595.

However, under the stipulation, "CenterPoint Houston agrees not to seek recovery of rate case expenses requested in Docket No. 49595, including expenses associated with this proceeding."

As a result of the stipulation, the key TDU charges that will result from the rate case are as follows for residential and small commercial customers (note: riders not impacted by the rate case such as EECRF and ADFITC are not listed)

RESIDENTIAL  
             Current   Stipulation  Change   Billing Unit
Base Rates
Customer      $1.62      $2.30      $0.68      per customer
Metering      $3.85      $2.09     ($1.76)     per meter
Transmission  $0.008439  $0.00     ($0.008439) per kWh
Distribution  $0.016489  $0.020314  $0.003825  per kWh

Riders
TCRF         $0.010490   $0.014209  $0.003719  per kWh
DCRF         $0.001145   $0.000000 ($0.001145) per kWh
UEDIT         N/A       ($0.000629)($0.000629) per kWh




SECONDARY =<10 kVA (Small) 
             Current   Stipulation   Change   Billing Unit
Base Rates
Customer      $1.61      $2.26      $0.65      per customer
Metering      $4.41      $2.32     ($2.09)     per meter
Transmission  $0.004437  $0.00     ($0.004437) per kWh
Distribution  $0.012218  $0.015504  $0.003286  per kWh

Rider
TCRF          $0.006284  $0.008421  $0.002137  per kWh
DCRF          $0.001448  $0.000000 ($0.001448) per kWh
UEDIT         N/A       ($0.000525)($0.000525) per kWh


The stipulation contains the following ring-fencing measures, among others, concerning CNP affiliates:

• CenterPoint Houston shall not pledge its assets in respect of or guaranty any debt or obligation of any of its affiliates. CenterPoint Houston shall not pledge, mortgage, hypothecate, or grant a lien upon the property of CenterPoint Houston except pursuant to an exception in effect in CenterPoint Houston’s current credit agreement, such as the first mortgage and general mortgage.

• CenterPoint Houston shall maintain its own stand-alone credit facility, and CenterPoint Houston shall not share its credit facility with any regulated or unregulated affiliate.

• No CenterPoint Houston assets may be used to secure the debt of CNP or its non- CenterPoint Houston affiliates.

• CenterPoint Houston shall not hold out its credit as being available to pay the debt of any affiliates (provided that, for the avoidance of doubt, CenterPoint Houston is not considered to be holding its credit out to pay the debt of affiliates, or in breach of any other ring-fencing measure, with respect to the $68 million of CenterPoint Houston general mortgage bonds that currently serve as collateral for certain outstanding CNP pollution control bonds).

• Without prior approval of the Commission, neither CNP nor any affiliate of CNP (excluding CenterPoint Houston) may incur, guaranty, or pledge assets in respect of any incremental new debt that is dependent on: (1) the revenues of CenterPoint Houston in more than a proportionate degree than the other revenues of CenterPoint Houston; or (2) the stock of CenterPoint Houston.

• CenterPoint Houston shall not transfer any material assets or facilities to any affiliates, other than a transfer that is on an arm’s length basis consistent with the Commission’s affiliate standards applicable to CenterPoint Houston.

• Except for its participation in an affiliate money pool, CenterPoint Houston shall not commingle its assets with those of other CNP affiliates.

• Except for its participation in an affiliate money pool, CenterPoint Houston shall not lend money to or borrow money from CNP affiliates.

Docket 49421

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