Vectren Energy Delivery of Ohio (Vectren), a CenterPoint Energy
(NYSE: CNP) company, received approval today from the Public
Utilities Commission of Ohio (PUCO) authorizing its plans to adjust
charges for Vectren’s natural gas distribution business in its
17-county service area in west central Ohio. The request to
increase base rates for its natural gas delivery charges is the
first Vectren has filed in more than a decade and will cover the
ongoing costs of operating, maintaining and expanding the
approximately 5,600-mile pipeline system used to serve its 318,000
natural gas customers.
The Order approved a Stipulation and Recommendation, entered by
Vectren with the Staff of the PUCO and other parties in January
2019, with the following terms:
- A rate increase of nearly $22.7 million;
- An overall rate of return of 7.48 percent; and
- An extension of Vectren’s authorized recovery of investments to
accelerate replacement of cast iron and bare steel pipelines, with
targeted completion by 2023.
New charges will take effect on customer bills on or around
September 1. The average residential customer bill will increase by
approximately $6 per month as a result of this Order, which
includes a portion of the benefits of the decrease in the corporate
tax rate as a result of the federal tax legislation enacted in the
Tax Cuts and Jobs Act of 2017. The remaining tax benefits, still
pending before the Commission in a separate proceeding, will
decrease the average residential customer bill by approximately $4
per month once approved.
Since the last base rate adjustment in January 2009, Vectren has
invested approximately $700 million into its network of natural gas
pipelines, regulator stations and metering systems that serve the
Miami Valley. The comprehensive effort to modernize its system,
known as Vectren’s Smart Energy Future strategy, aims to continue
the focus on system safety and reliability.
“The primary driver of this filing was our infrastructure work
needed to continue safe, dependable energy delivery to existing
customers and the ability to provide service to new customers. This
approval provides for additional funding to execute
compliance-related activities associated with Federal pipeline
safety regulations,” said Richard Leger, vice president of Natural
Gas Distribution, Indiana and Ohio. "Likewise, many of the
infrastructure enhancements made over the past 10 years have been
driven by these Federal regulations, while other capital
expenditures have been focused on improving our customers’
experience when it comes to meter access and accurate billing.”
Key projects executed over the last decade include:
- Robust pipeline integrity programs to test, upgrade and, in
some cases, re-locate high-pressure, large-diameter transmission
pipelines;
- Expanding gas infrastructure to serve new customers;
- Replacing Vectren’s distribution pipelines with durable plastic
to improve system performance;
- The recent completion of automated meter reading technology on
all meters leading to greater accuracy and efficiency of meter
reading; and
- Moving indoor meters outside, which includes the installation
of new service lines, to improve access and safety.
In addition, the order provides for the continuation through
2020 of Vectren’s energy efficiency programs for residential and
commercial customers in Ohio, including rebates on high-efficiency
natural gas appliances and support for low-income home
weatherization programs. These programs will be monitored,
reviewed, and adapted as deemed appropriate through the oversight
of an existing collaborative, which includes representatives of
various stakeholders within the State. Within the order, Vectren
has committed to file with the Commission by the end of 2019 to
seek an extension of these programs beyond 2020.
The approval today only addresses Vectren’s delivery charges,
which are listed on the bill as “Distribution and Service Charges”
and represent between 40 and 45 cents of every dollar paid by
customers for their natural gas service during the winter heating
months. These charges are incurred to build, operate and maintain
the pipes, equipment, services and systems that are used to deliver
natural gas to its customers regardless of the customer’s usage.
The remaining 55 to 60 cents of each dollar represents the cost of
the gas used by customers. Vectren, however, is not a natural gas
supplier; rather the natural gas supply that its customers consume
is offered and priced by PUCO-certified suppliers through the
Choice program or Standard Choice Offer (SCO) service. In 2018, the
average residential customer paid about $55 to $60 per month for
their natural gas service, although the majority of the annual
costs for natural gas service are incurred in the winter heating
season.
Vectren delivers natural gas to approximately 318,000 customers
in all or portions of Auglaize, Butler, Champaign, Clark, Clinton,
Darke, Fayette, Greene, Highland, Logan, Madison, Miami,
Montgomery, Pickaway, Preble, Shelby and Warren counties.
About CenterPoint EnergyHeadquartered in
Houston, Texas, CenterPoint Energy, Inc. is an energy delivery
company with regulated utility businesses in eight states and a
competitive energy businesses footprint in nearly 40 states.
Through its electric transmission & distribution, power
generation and natural gas distribution businesses, the company
serves more than 7 million metered customers in Arkansas, Indiana,
Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas.
CenterPoint Energy’s competitive energy businesses include natural
gas marketing and energy-related services; energy efficiency,
sustainability and infrastructure modernization solutions; and
construction and repair services for pipeline systems, primarily
natural gas. The company also owns 53.8 percent of the common units
representing limited partner interests in Enable Midstream
Partners, LP, a publicly traded master limited partnership that
owns, operates and develops strategically located natural gas and
crude oil infrastructure assets. With approximately 14,000
employees and nearly $34 billion in assets, CenterPoint Energy and
its predecessor companies have been in business for more than 150
years. For more information, visit CenterPointEnergy.com.
Forward Looking StatementThis news release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. When used in this
news release, the words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,”
“objective,” “plan,” “potential,” “predict,” “projection,”
“should,” “target,” “will” or other similar words are intended to
identify forward-looking statements. These forward-looking
statements are based upon assumptions of management which are
believed to be reasonable at the time made and are subject to
significant risks and uncertainties. Actual events and results may
differ materially from those expressed or implied by these
forward-looking statements. Any statements in this news release
regarding future events, such as the company’s expected uses of the
newly approved natural gas delivery charges for ongoing system
operation, maintenance and expansion costs, the target completion
for the company’s cast iron and bare steel pipeline replacement,
the effective date of the newly approved charges, the average
residential customer monthly bill increases, the outcome of the
pending regulatory proceeding regarding tax benefits and their
anticipated effect on customer bills, the continuation of the
company’s energy efficiency programs, including seeking an
extension of such programs beyond 2020, and any other statements
that are not historical facts are forward-looking statements. Each
forward-looking statement contained in this news release speaks
only as of the date of this release. Factors that could affect
actual results include the timing and impact of future regulatory
and legislative decisions, effects of competition, weather
variations, changes in business plans, financial market conditions
and other factors discussed in CenterPoint Energy’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2018,
CenterPoint Energy's Quarterly Report on Form 10-Q for the quarters
ended March 31, 2019 and June 30, 2019 and other reports
CenterPoint Energy or its subsidiaries may file from time to time
with the Securities and Exchange Commission.
Media contact: Natalie Hedde, (812) 491-5105 or
natalie.hedde@centerpointenergy.comInvestor Relations: Dave Mordy,
(713) 207-6500 or david.mordy@centerpointenergy.com
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