Members of Houston City Council voted Jan. 31 to deny an application by CenterPoint Energy to amend its Distribution Cost Recovery Factor rate.

What happened

CenterPoint Energy originally filed an application with all cities in its service territory and the Public Utility Commission of Texas in December to increase its DCRF rate in 2024.

According to council's Jan. 31 agenda packet, compared to current rates, CenterPoint is requesting an $85.9 million incremental increase to its DCRF revenue requirement, which, adjusted for load growth, is $233.5 million. ​​​​​​According to the U.S. Agency for International Development, load growth is the amount of electricity it requires to operate a piece of equipment at any given moment.

According to CenterPoint Energy's proposal, the rate increase would help cover the cost of the company's ongoing investments, replace aging infrastructure and bolster the system to build resiliency.

Council members voted unanimously Jan. 31 to deny CenterPoint's application to increase the rate.

Who it affects

According to the proposal, approximately $134.2 million of the increase's total requirement is allocated to the residential class.

CenterPoint distributes its services to approximately 1 million customers in the Houston area, with an estimated 900,000 customers being residential.
  • If passed, the rate increase would result in the average resident using 1,000 kilowatt hours per month seeing a $1.52 increase to their monthly bill.
  • Put in perspective, an average customer would go from paying $2.67 per month to $4.19 per month on their DCRF charge.
This is CenterPoint's second DCRF application filed in 2023 and third filed since the company's last base rate proceeding. The Public Utility Regulatory Act allows an electric utility to request approval of a DCRF application twice a year.

Going forward

Unlike a base rate proceeding, the city of Houston does not have the option to suspend a DCRF rate request. Instead, the city has 60 days to review the application and determine if the request is reasonable.

A representative of CenterPoint Energy said the final determination of the application will be provided by the the PUCT in the coming weeks.

"CenterPoint Energy continues to invest in our electric distribution system with system improvement, load growth and intelligent grid projects. This vital work helps ensure we can provide safe and reliable service to our customers in Southeast Texas."

If the PUCT approves the application, they will also set the date the new rates will go into effect.