Updates

JULY 2024 UPDATE: In May 2024, a settlement was proposed in this case, to which CAC is opposed. The settlement was agreed to only by a handful of large corporations (CenterPoint Energy, SABIC Innovative Plastics, and the CenterPoint industrial customers, which include Consolidated Grain & Barge; CountryMark Refining and Logistics, LLC; Marathon Petroleum Company; and Toyota Motor Manufacturing of Indiana, Inc.).

In July 2024, CAC filed testimony in the case urging the IURC to reject the settlement. If the IURC approves the settlement as filed, the average CenterPoint residential customer using 799 kWh would see a monthly bill increase from $154.02 to $189.05, an increase of $35.03 (22.74%).

MARCH 2024 UPDATE: CAC filed testimony in the CenterPoint Electric rate case, making numerous recommendations to the IURC intended to mitigate the impact of this obscene proposal on captive ratepayers.

CAC's recommendations include that the IURC do the following:

• Dismiss this rate case and direct CenterPoint to refile a rate case in the near future that includes appropriate consideration of ratepayer affordability.
• Direct CenterPoint to freeze or curtail non-essential spending and investments until it can present an adequate plan demonstrating a pathway toward more affordable ratepayer bills.
• Order a management audit of CenterPoint to identify additional efficiencies and opportunities to reduce costs, examine leadership decision-making processes and incentives, and identify reforms to ensure ratepayer affordability is appropriately prioritized by management and incorporated into decisions.
• Disallow a return “of” or “on” utility plant that is no longer used and useful or otherwise not in the public interest or resulting in just and reasonable rates.
• Make additional adjustments to revenue requirement to remove items such as a portion of CenterPoint management employee compensation.
• Reduce CenterPoint’s authorized Return on Equity (ROE), or profit. 

If CenterPoint gets what they want in this rate case, the average customer will see monthly electric bills increase by a shocking $47.24 (30.7%) by 2026.

The impact is even more egregious for the 22% of CenterPoint customers who are electric heating customers (Rate EH), who will see their average monthly bill increase by $63.33 by 2026.

CenterPoint proposes phasing in their desired new rates in three steps, taking place in Fall 2024, early 2025 and early 2026.

The sheer amount of this increase - nearly $50/month - is particularly disturbing because CenterPoint Electric customers have paid the highest electric bills in Indiana since 2008. 

Formerly known as Vectren, the monopoly electric utility in Southwest Indiana was purchased for $6 billion in 2019 by CenterPoint Energy, Inc., a Houston-based energy holding company with over 7 million customers in 8 states. 

In this case, Cause Number 45990, CenterPoint Electric is asking the IURC for permission to increase base rates by $118.8 million (16.02%). 

As part of this rate hike, CenterPoint also wants to force you to pay a monthly fixed charge of $23.20 before you even use any electricity – a 114% increase.

High monthly fixed charges disproportionately impact low- and fixed-income households (seniors, people with disabilities, homes with children, and other vulnerable populations), and penalize households that conserve energy and make their homes more efficient. 

Why Are CenterPoint's Electric Rates So High?

In short, CenterPoint has been spending customer money with reckless abandon, making huge investments without consideration of customer impacts, and charging customers for a much higher profit margin than Indiana's other investor-owned electric utilities. 

This is a big part of the reason behind persistently high electric bills facing communities in Southwest Indiana. Rather than investing customer money on cheaper, cleaner options like robust energy efficiency programs and renewables, CenterPoint and their predecessors dumped over $500 million into pollution control equipment for aging coal fired power plants, but then retired many of them before recovering these costs.

CenterPoint expects customers to pay the $500 million back – plus a profit – for its poor investment decisions in coal plants, including those that are not even generating any electricity for customers today.

Even as it is phasing out its coal plants, CenterPoint is now planning on making an additional $120.5 million in coal-related capital investments between 2023-2025, with customers footing the bill.

CenterPoint is demanding that customers pay off its coal plants while also paying for the new generation. For example, CenterPoint retired its coal-fired A.B. Brown power plant in October 2023. At that same site, it is now in the process of building a $334 million power plant that will use dirty fossil gas known for its price volatility. This fossil gas power plant will rarely operate and will cost an additional $27 million per year in pipeline costs. CenterPoint is also building renewable energy resources like the Posey County Solar Project that costs $429 million.

Additionally, CenterPoint Electric has been spending vast sums of customer money on its transmission and distribution system, and the IURC just rubber-stamped another $454 million in spending over the course of 2024 to 2028 in CenterPoint's Transmission, Distribution, and Storage Improvement Charge (TDSIC) tracker. CenterPoint just finished its last TDSIC plan at the end of 2023, during which time it spent $446.5 million. 

Finally, of all the investor-owned electric utilities in Indiana, CenterPoint has had the highest authorized return on equity, or profit margin, for its shareholders, for many years. CenterPoint’s profit margin is included in your rates, so the higher the profit margin for its shareholders, the higher your monthly bills. In this case, CenterPoint Electric is proposing to keep its 10.40% return on equity. In contrast, Indiana’s other four investor-owned electric utilities have an authorized return on equity below 10%.  

CenterPoint Wants Residential Customers to Subsidize Industrial Customers

In this case, CenterPoint Electric is proposing to spread out its total costs across different types of customers (residential, commercial, industrial) using a cost allocation method that forces residential customers to pay a much higher share of CenterPoint’s costs than they should, and lets big industrial customers pay much less than they should.