Lt. Gov. Dan Patrick on Tuesday called for the Public Utility Commission (PUC) to overturn its decision allowing CenterPoint Energy to increase rates to cover the $800 million cost of massive generators that went unused during Hurricane Beryl, which left more than 2 million customers in the Houston area without power.
Patrick warned that if the PUC does not reverse its decision, the Senate would pass legislation to roll back the rate hike. “CenterPoint should fund the $800 million from their own profits,” Patrick stated. “It’s unjust for ratepayers to bear the cost of leasing generators that are ineffective in the vast majority of emergencies Texas faces.”
The utility company has been under heavy criticism for its response to Hurricane Beryl, which left over 80% of its customers without power, some for more than a week. Lawmakers are now grappling with how to hold the company accountable. On Monday, a Senate panel conducted a heated hearing with Public Utility Commission Chairman Thomas Gleeson and CenterPoint CEO Jason Wells. A similar session is scheduled in the House on Wednesday.
Ellie Breed, a spokeswoman for the PUC, acknowledged Patrick’s concerns and expressed the commission’s openness to further discussions.
The $800 million generator purchase was a focal point of Monday’s Senate hearing, with some lawmakers suggesting the decision could constitute fraud. The PUC had previously approved CenterPoint’s plan to recover the generator costs, along with a 6.5% profit margin. This decision has already led to a $1 monthly increase in the average residential customer’s bill, with rates expected to rise by an additional $3 per month in the coming years.
State Sen. Charles Schwertner, who chaired the panel, noted that the utility appeared to be profiting by approximately $30 million from the rate increase.
State Sen. Paul Bettencourt, another Houston Republican, criticized CenterPoint for selecting a generator bid that was at least 44% more expensive than a competing offer. Bettencourt accused the utility of defrauding its customers and promised to introduce legislation to rescind the rate hike.
Wells defended the decision, explaining that the competing bid did not meet the utility’s requirements, partly because it offered fewer generator units and had operating costs four times higher.
Wells emphasized that the generator purchase was part of CenterPoint’s broader investment strategy to enhance resilience following events like Winter Storm Uri. He mentioned that while the generators have not been used, there have been 115 instances where ERCOT issued tight market notices since the winter storm.
CenterPoint leased the generators after Texas lawmakers from both parties amended state law to allow utility companies to lease mobile generators. Last year, the legislature made it easier for utilities to pass the costs of these leases onto customers.
In a statement, CenterPoint maintained that the generators were “consistent” with Texas law and were intended to supplement power during load shed events like Winter Storm Uri.
“If policymakers and elected officials now believe there are better ways to address the risk of load shed, we are committed to working with them to do what’s best for our customers,” the company said.
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