Daily Progress, Jacksonville, TX

October 31, 2012

City denies gas rate increase

Ben Tinsley
Jacksonville Daily Progress

JACKSONVILLE —

The Jacksonville City Council on Monday unanimously denied a proposed gas rate increase from CenterPoint Energy.

The decision followed a 90-day period during which the issue was examined at length.

It had been lingering since July 2, after CenterPoint Energy Texas Gas filed a statement of intent for the increase within its East Texas-Beaumont district.

In a strongly-worded resolution denying the hike, the council concluded it is "unreasonable" and that the company has not made "the appropriate adjustments to its proposed rate."

Additionally, the council concluded reasonable efforts to resolve the issue by way of settlement have been rebuffed by CenterPoint officials, who have refused to undertake settlement talks until after the cities submit their evidence in a case before the Texas Railroad Commission.

In that case, the Austin law firm Herrera & Boyle, PLLC, is attempting to negotiate an appropriate price increase on behalf of the Alliance of CenterPoint Municipalities – a city and council coalition of which Jacksonville is a part.

Once the Railroad Commission determines a rate between the coalition and the energy company, it will go into effect for all coalition members. The commission could approve or deny a proposed increase or settle on a lesser amount.

According to the resolution, the proposed increase would have brought Jacksonville residents' bills from $12.25 up to $20.25 per month, from $16.25 to $23.75 for small commercial customers and from $35.25 to $63.75 per month for large commercial customers. The proposed increase would impact every residential and commercial gas customer in the district, including 3,165 Jacksonville residents, 504 small commercial customers and 11 large volume customers, according to the company's public notice.

"I personally feel some of the increases were exorbitant," Mayor Kenneth Melvin elaborated after the meeting. "It was 60 to 75 percent of the base rate. It was just too much. I realize they have to have capital on hand to make improvements but they shouldn't try to get it all at one time."

Alicia Dixon, a spokeswoman for CenterPoint Energy out of Houston, said the decision was the council's to make, but the matter is still not concluded.

"Cities are certainly part of the gas rate-making process in Texas, and this decision is what Jacksonville has elected to do at this point," she said. "But the decision will be made by the Railroad Commission."

Ultimately, CenterPoint is making the process much harder than it has to be, contends Alfred R. Herrera, of Austin firm Herrera & Boyle. He expressed the sentiment in an email to coalition officials earlier this month.

"It's a case that truly should be resolved via settlement, and we have made every effort to minimize rate case expenses," Herrera wrote.

City Manager Mo Raissi said CenterPoint officials could have been more reasonable about negotiating with the coalition.

"Our attorneys really tried, but CenterPoint decided to let it go to the judge," Raissi said. "We have been discussing this issue back and forth trying to determine our next step since we are on in one group – all against it.”