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Oct 28, 2019

CenterPoint Energy files request to adjust natural gas distribution rates for Minnesota customers

The utility continues to make major investments in safety and reliability, including modernizing infrastructure to prevent leaks and comply with stricter federal regulations

MINNEAPOLIS, Oct. 28, 2019 /PRNewswire/ -- CenterPoint Energy (NYSE: CNP) today filed an application with the Minnesota Public Utilities Commission (MPUC) requesting an adjustment to distribution charges for the company's natural gas business in Minnesota.

CenterPoint Energy logo. (PRNewsFoto)

The proposed rate adjustment would support major investments in the continued safety and reliability of the approximately 14,000-mile pipeline system that serves more than 860,000 CenterPoint Energy customers in Minnesota.

Specifically, if the rate adjustment is approved, it would help cover the rising costs of infrastructure projects to replace or upgrade pipelines to prevent leaks and comply with more stringent federal pipeline regulations. It would also help cover costs related to a growing number of local road construction and other public works projects that require CenterPoint Energy to relocate pipelines and equipment. Current rates do not provide adequate revenue to cover these increased costs.

"Our customers and communities benefit from the essential investments we make to ensure the safety and reliability of our natural gas distribution system," said Brad Tutunjian, vice president of the Minnesota region for CenterPoint Energy. "For example, we are modernizing our infrastructure and replacing many existing pipelines with even more resilient materials that will maximize safety."

Tutunjian added: "About 80 percent of the homes in our Minnesota service area depend on natural gas for heat. As another winter heating season arrives, CenterPoint Energy is committed to delivering reliable, affordable clean energy that is available around the clock, even on the coldest days, to keep Minnesotans safe and warm."

With the proposed adjustment, the average residential customer bill would increase by about $4.80 per month. Currently, the average residential customer pays about $55 per month for natural gas service, with most of these costs incurred during the winter heating season.

Even with the proposed adjustment, monthly bills for the average CenterPoint Energy residential customer in Minnesota would still be nearly 35 percent lower than a decade ago, due to a decline in natural gas prices partially offset by increases in delivery rates.

Since 2013, CenterPoint Energy has invested more than $1 billion in its network of natural gas pipelines and equipment serving Minnesota customers. The company expects to invest an additional $1 billion over the next five years. These increased investments reflect an industry-wide trend, partly in response to federal pipeline regulations. If approved, the proposed new rates would result in a revenue increase of about $62 million annually, or 6.8 percent.

Major CenterPoint Energy projects in Minnesota include:

  • Inspecting, upgrading and replacing transmission and distribution pipelines as part of a comprehensive integrity program to address pipes at risk of corrosion or leaks;
  • Replacing all 43 miles of cast iron pipelines in CenterPoint Energy'sMinnesota system, a project that was completed in 2017, eliminating a pipe material that contributed to methane emissions;
  • Replacing or upgrading 479 miles of unprotected or bare steel distribution pipelines;
  • Replacing 61 miles of a high-pressure, large-diameter transmission pipeline (known as the Metro Belt Line Project), originally installed in the 1940s and 1950s;
  • Replacing nearly 15,000 copper service lines;
  • Replacing and moving outside more than 89,000 indoor residential meters, with new service lines, as a safety measure to provide direct access to shut-off valves; and
  • Deploying state-of-the-art technology to quickly and efficiently detect even the smallest leaks, which supports both safety and methane reduction.

In addition to improved safety and reliability, these investments help protect the environment and prevent greenhouse gas emissions. For example, permanent replacement of all cast iron and many bare steel pipelines and the use of advanced leak detection technology have already resulted in an 18 percent reduction in methane emissions from the company's Minnesota operations since 2013.

CenterPoint Energy's request seeks approval to change the basic and delivery charges on a customer's bill, which together make up about half of the total bill and cover the costs of distributing natural gas, including operations, maintenance, taxes and other expenses. The proposed changes would affect individual monthly bills differently, depending on natural gas use and customer type.

The request does not apply to the cost of natural gas, which makes up the other half of a typical customer bill. The wholesale price of natural gas changes monthly depending on market prices. This price is passed on directly to customers with no mark-up, and CenterPoint Energy does not profit from the sale of the natural gas.

The Public Utilities Commission will likely decide on the requested rate adjustment in late 2020 or early 2021. In the meantime, the Commission will set temporary rates on an interim basis, which would take effect on Jan. 1, 2020, and remain in place until a final decision is made. The requested interim rate increase is about 5.8 percent more than the current rate.

If the final approved rates are lower than the interim rates, CenterPoint Energy would refund customers the difference, including interest. If the final approved rates are higher than the interim rates, customers would not be charged the difference. 

Public hearings will be held early next year to provide customers and other interested parties the opportunity to comment on the rate request, followed by formal hearings at the Public Utilities Commission.

Customers with questions about the proposed change to natural gas distribution rates can call CenterPoint Energy at 612-372-4727 or toll-free 800-245-2377, or visit the company's website at CenterPointEnergy.com/RateCase.

About CenterPoint Energy
Headquartered in Houston, Texas, CenterPoint Energy, Inc. is an energy delivery company with regulated utility businesses in eight states and a competitive energy businesses footprint in nearly 40 states. Through its electric transmission & distribution, power generation and natural gas distribution businesses, the company serves more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas. CenterPoint Energy's competitive energy businesses include natural gas marketing and energy-related services; energy efficiency, sustainability and infrastructure modernization solutions; and construction and repair services for pipeline systems, primarily natural gas. The company also owns 53.8 percent of the common units representing limited partner interests in Enable Midstream Partners, LP, a publicly traded master limited partnership that owns, operates and develops strategically located natural gas and crude oil infrastructure assets. With approximately 14,000 employees and nearly $34 billion in assets, CenterPoint Energy and its predecessor companies have been in business for more than 150 years. For more information, visit CenterPointEnergy.com.

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "would," "estimate," "expect," "may," "will" or other similar words are intended to identify forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual events and results may differ materially from those expressed or implied by these forward-looking statements. Any statements in this news release regarding future events, such as future legislative and regulatory filings, actions and decisions, including the timing and impact of such actions and decisions, the amount and timing of, and expected benefits derived from, proposed investments, the impact of the proposed rate adjustments on costs of various projects, the expected impact of the proposed rate adjustments on customer bills, the performance and expected benefits of various projects, including relating to emissions reductions, expected actions in response to temporary and final approved rate changes, the projected impact to customers and any other statements that are not historical facts are forward-looking statements. Each forward-looking statement contained in this news release speaks only as of the date of this release. Factors that could affect actual results include timing and impact of future regulatory and legislative decisions, general economic conditions, effects of competition, weather variations, changes in business plans, financial market conditions and other factors discussed in CenterPoint Energy's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and other reports CenterPoint Energy or its subsidiaries may file from time to time with the Securities and Exchange Commission.

For more information, contact
Communications
Ross Corson: 612.321.4879
Media.Relations@CenterPointEnergy.com 

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SOURCE CenterPoint Energy, Inc.

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