CenterPoint T&D Business Files Distribution Cost Recovery Factor Application

CenterPoint Energy's Texas electric transmission and distribution business, CenterPoint Energy Houston Electric, has filed an application for a Distribution Cost Recovery Factor (DCRF) adjustment with the Public Utility Commission of Texas (PUCT) and the cities in its service area.  

DCRF is an interim rate adjustment that, if approved, permits an electric utility to adjust its rates to account for changes in distribution-invested capital between base rate proceedings. "The interim rate adjustment provides our customers with smaller adjustments in their rates over time versus a large one-time rate adjustment," said Lynnae Wilson, senior vice-president, Houston Electric.

"The greater Houston regional economy remained strong and experienced continued growth despite the challenging backdrop of a global pandemic. CenterPoint Energy continues to invest capital in our electric distribution system for system improvement, resiliency, customer load growth and intelligent grid projects to provide safe and reliable service to our customers throughout the greater Houston area," added Wilson. "An interim rate adjustment, like DCRF, allows CenterPoint Energy to recover costs for the investments necessary to maintain reliable service in between general base rate proceedings."   

This is the company's first DCRF filing since undergoing a rigorous and comprehensive base rate proceeding in 2019-2020. The filing seeks to recover more than US$ 1.6 billion in distribution capital invested since 2018, the time period reviewed in the prior base rate proceeding. This filing, therefore, covers a three-year investment period from Jan. 1, 2019, through Dec. 31, 2021. The major factors driving these investments include:

• System Improvement Projects — These projects involve the proactive rehabilitation of overhead and underground distribution system wires, poles, lightning protection, wildlife protection, and insulators to improve system reliability throughout the company's service area.
• Load Growth Projects — These projects are required to serve an increasing number of customers and increasing demand for the delivery of power and include the addition of transformers and other equipment to meet that demand. These projects improve the electrical system's reliability and resiliency for all customers by providing additional capabilities that enhance the ability to serve both an increasing number of customers and to simultaneously minimize customer outage duration when they occur.
• Intelligent Grid Projects — These projects use advances in technology and are designed to improve the company's ability to operate its electrical distribution system, including power line monitoring equipment, remote switches, and other automated equipment that locates power line outages or issues in near real time (as they occur). This improves customer outage recovery times since repair crews do not have to be dispatched to search for the source and cause of an outage, allowing repairs to be started and completed much sooner. In fact, since 2011, the use of Intelligent Grid automation has been used to re-route and restore power to customers in over 3729 outage events, saving customers more than 468 million minutes of outage time.

Also, in response to Winter Storm Uri, new legislation passed during the 2021 Texas Legislative Session allows electric utilities, like CenterPoint Energy, to lease and operate temporary emergency mobile generation facilities to help lessen outage duration to customers during certain load shed events, to aid in the restoration of electric service following weather events or other events that cause widespread power outages, as defined by the Legislature. The company's filed DCRF rate adjustment includes some of the costs for the deployment of these facilities.

The estimated residential customer impact based on a monthly usage of 1000 kWh is an US$ 2.76 increase billed to the consumer's retail electric provider. New rates are expected to go into effect by September 1.

"In addition to the investments to improve the reliability and resiliency of the distribution system, CenterPoint Energy strives to control the cost of service for our customers by improving efficiencies in our operations and maintenance practices. That focus, coupled with strong and consistent customer growth, minimizes the rate impacts of these investments," added Wilson.