We’ll see about this.
No longer seen at I-10 and Sawyer
State Sen. Phil King, R-Weatherford, filed legislation Tuesday that would create a process to refund Houstonians for charges associated with CenterPoint Energy’s $800 million lease of generators that went largely unused after Hurricane Beryl.
King’s North Texas district is far from CenterPoint’s Greater Houston service territory, but he is vice chair of the Senate Committee on Business and Commerce, a powerful committee tasked with utility-related issues. King has become known for championing issues favored by transmission and distribution utilities, such as his original 2021 bill allowing CenterPoint and its peers to break from two decades of precedent and lease generators in the first place.
King’s latest bill, Senate Bill 231, would underscore “the legislative intent of the original bill” by requiring generators leased by utilities to be fully mobile and available for rapid deployment in the aftermath of a storm or other emergency, according to a Tuesday statement from his office.
The proposed legislation would also require the Public Utility Commission of Texas to review generators already leased by utilities. Any lease that did not conform to the terms of SB 231 would be disallowed and its costs unable to be passed onto consumers.
The PUC has already approved requests from CenterPoint to pass along approximately $350 million of the generator lease costs to customers. This has added $2.39 to the average residential customer’s monthly electric bill.
“CenterPoint alone ignored the legislative intent for mobile generation,” King said in the statement. He also reaffirmed his position that CenterPoint should terminate its lease of the large stationary generators – an action the company has said isn’t possible.
A Houston Chronicle investigation found that CenterPoint has never used the 15 32-megawatt generators leased in 2021. These generators take days to move, even though CenterPoint repeatedly described them as “mobile” to regulators, investors and the public.
CenterPoint’s $800 million lease also includes five 5-megawatt generators that have been deployed in storm restoration efforts, including after Beryl in July. Since then, the utility has leased more than a dozen even smaller generators for use after weather events damage its poles and wires.
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King said previously that CenterPoint “deceived” him by presenting its large generators as mobile. PUC Commissioner Lori Cobos, one of four commissioners who approved CenterPoint’s generator contract, also said she was misled about the generators’ usefulness after hurricanes.
Another Chronicle investigation cast doubt on whether CenterPoint’s process of acquiring its generators was truly competitive. Lawmakers, led by King, expanded utilities’ abilities to lease generators, despite cities, industry associations and consumer groups litigating issues with CenterPoint’s contract with an obscure company in front of administrative law judges for months, the Chronicle reported.
King has authored other utility-friendly legislation. One allowed utilities to ask permission for rate hikes twice a year, instead of once a year. Another required the PUC to consider the salaries and benefits of utility employees “reasonable and necessary” if the utility produced market compensation studies. King also weighed in this year on a rate dispute on behalf of Oncor, a North Texas utility that spent $31 million on contracts with a business he co-founded, Texas Monthly reported.
King has received $65,000 in donations from CenterPoint since 2015, the third-most among Texas officials behind Gov. Greg Abbott and Patrick, according to a Chronicle database. He’s a repeat visitor to the Pond, CenterPoint’s Chambers County fishing lodge used for lobbying lawmakers, a Chronicle investigation found.
See here and here for some background. On the one hand, Sen. King has the juice to get a bill like this passed. That’s partly because, as one of the biggest toadies for corporate interests in the Lege, Sen. King would normally be one of the main opponents of a bill like this. On its surface this bill sounds good, but King’s track record makes him way too untrustworthy to just take his word for it that this is the bill we’d want to see get passed. I’d like to hear from some consumer advocates first on that score.
Speaking of which, this is good news.
CenterPoint Energy will no longer withdraw from a required review of its rates, a win for cities and consumer advocates who argued a withdrawal would deny them the opportunity to push for a rate decrease they say is justified.
The Houston-area electric utility notified the Public Utility Commission of Texas of its plans to continue settlement talks with cities and consumer representatives late Friday afternoon. Those negotiations have been paused since CenterPoint first tried to withdraw its rate case in August following scathing criticism of its Hurricane Beryl response.
CenterPoint had fought to withdraw its rate case as recently as two weeks ago. Its executives have argued for months that continuing rate case negotiations would distract the company from its ongoing efforts to improve the resiliency of its Houston-area grid and restore public trust.
But in the last few weeks, CenterPoint has had “a number of discussions with stakeholders in the process,” leading to Friday’s decision to no longer pursue a withdrawal, said Jason Ryan, the company’s executive vice president of regulatory services and government affairs, in an interview.
CenterPoint now aims to resolve rate case negotiations before it files a $5 billion proposal to strengthen its grid against extreme weather, known in the industry as a resiliency plan, Ryan said. The company previously said it would file this plan, which could add more than $3.50 to the average residential customer’s monthly bill, in January.
The Friday announcement concludes a monthslong fight over the continuation of CenterPoint’s rate case after an administrative law judge denied the company’s initial motion to withdraw in August. CenterPoint appealed the judge’s decision to the PUC, which has final say. The PUC was supposed to make a final decision on the issue at its open meeting next Thursday.
Since August, city coalitions and the Texas Consumer Association have testified that CenterPoint overcharged customers by $100 million in 2023 and that there is “overwhelming evidence” supporting a rate decrease. Those groups won allies in Lt. Gov. Dan Patrick and Houston Mayor John Whitmire, who’ve both publicly opposed CenterPoint withdrawing its rate case so the PUC can ensure it’s not overcharging.
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Sandra Haverlah, president of the Texas Consumer Association, said she welcomed the news that CenterPoint would continue with its rate case.
“The fight over rates certainly isn’t over, but this is at least for us a step in the right direction,” she said.
That filing was in March, before the derecho, which means it was before most of us were paying much attention to CenterPoint. Sandra Haverladereh mentioned it in a post-Beryl op-ed about the various shady things CenterPoint was up to. I will take her word on this, so hopefully this will lead to a bit of a break on our bills. Hopefully there will be more of this to come.