Centerpoint, the Arkla Gas successor that is selling its natural gas operations in Arkansas and Oklahoma to Summit Utilities in a $2.15 billion deal expected to close this year, will pay $10.4 million in credits to customers under a regulatory ruling issued on Thursday.
The Arkansas Public Service Commission, which oversees public utilities in Arkansas, granted state Attorney General Leslie Rutledge’s request for ratepayer relief, agreeing that Centerpoint reaped excessive charges, essentially breaking rate-making rules. Arkansas rate formulas are subject to a 4% cap on annual changes. Thursday’s ruling marked the second straight year that Centerpoint Energy Resources Corp., doing business as CenterPoint Energy Arkansas Gas, has been ordered to grant credits after excessive charges.
“These credits will be a welcomed change for CenterPoint customers, including our most vulnerable citizens, especially in light of the challenges facing Arkansans due to COVID-19 and devastating winter storms,” Rutledge said in a news release. Her office’s Utility Rate Advocacy Division had flagged the charges collected through CenterPoint’s formula rate plan as excessive, and filed to have the overage returned to customers. They should see the credit reflected on their gas bills beginning Oct. 1, Rutledge’s office said. The credit for an average residential customer will be about $1.81 per month, depending on gas use.
In a statement, CenterPoint noted that the Public Service Commission reviews utilities' formula rate plans and in this case made adjustments based on financial information from CenterPoint Energy. "In this instance, the amount being returned to customers is directly related to lower operations and maintenance expenses accomplished by effective cost management and savings due to a merger with Vectren Corporation. The Formula Rate Plan is a mechanism that helps us return savings to customers in a timely manner."
The company said it's proud of the safe, reliable gas service it provides, as well as the new rates ordered by the commission.
Summit Utilities, based in Denver, is acquiring Centerpoint’s pipeline delivery system serving homes and businesses in Arkansas, Texarkana and Oklahoma. “Think of it as the trucks, the pipes and the equipment that make all of that work,” Summit CEO Kurt Adams told Arkansas Business earlier this month. “We’re hiring 600 current CenterPoint employees that will come over and join us.”
Adams said Summit plans to hire 150 or so other employees on top of the CenterPoint crews, after the deal closes. That’s expected before the end of the year, pending Public Service Commission approval.
At the end of last year, CenterPoint had 381,961 residential customers and 47,931 industrial customers in Arkansas.