Daily Progress, Jacksonville, TX

November 5, 2012

Rusk Council is second local city in a week to reject gas rate increase

Ben Tinsley
Jacksonville Daily Progress

RUSK —  The Rusk City Council unanimously decided Thursday to deny a proposed gas rate increase by CenterPoint Energy. This follows suit with the Jacksonville City Council, whose members made a similar decision earlier this week.

"We want to do everything in our power to help keep prices down for our citizens," Rusk Mayor Angela Raiborn emphasized Friday. "That's our ultimate goal."

Both Rusk and Jacksonville belong to the Alliance of CenterPoint Municipalities, a city and council coalition organized to oppose the increase in a case before the Texas Railroad Commission, which has the ultimate authority to raise rates.

In this case, the Austin law firm Herrera & Boyle, PLLC, is attempting to negotiate an appropriate price increase on behalf of this coalition. Any rate increase will have to be submitted to and approved by the Texas Railroad Commission.

Rusk Mayor Angela Raiborn said Friday she expects the alliance to succeed. Rusk City Manager Mike Murray said the requested increase has evolved, having seemed a lot more palatable than the nearly 20 percent requested when it was initially proposed by CenterPoint some months ago.

"The proposed increase is beyond unreasonable now, as far as we are concerned," Murray said.

At the Rusk City Council's July meeting, John Gensley, a representative of CenterPoint Energy, requested a $3.39 increase for the residential base rate, a change from $16.60 to $20. This is a 19.7 percent increase for the service, according to the company’s public notice.

In Rusk, the change would affect 923 residential customers, 106 small general service contractors and two large service contractors, the public notice shows.

Both Rusk and Jacksonville suspended consideration of the rate increase issue for 90 days to avoid entanglement in a legal requirement requiring a decision 35 days after CenterPoint's  paperwork was filed with the state.

Alicia Dixon, a spokeswoman for CenterPoint Energy out of Houston, said this week  — as she did with Jacksonville earlier  — that the decision was the Rusk council's to make.

But Dixon added that the matter is still far from over.

Dixon said her company's last division-wide base rate increase in the Beaumont-East Texas Division was made more than six years ago.  This affected area includes about 194,000 customers living in 106 cities and associated unincorporated areas, she said.

During this period, CenterPoint Energy has spent approximately $62 million in capital additions in our natural gas distribution system, Dixon said.

At the same time, costs for labor and benefits, materials and supplies, and other operating expenses have continued to rise and customer usage has declined, she added.

 "The ability to earn a reasonable return on our investment is critical to our ability to continue to build our system to support future economic development," Dixon said. "CenterPoint Energy anticipates the new base rates for the Beaumont-East Texas Division will become effective in the first quarter of 2013 and would generate approximately $8.6 million dollars in additional revenue on an annual basis."

The matter has been on Rusk's radar since July 2, when CenterPoint Energy Texas Gas filed a statement of intent for the increase within its East Texas-Beaumont district.

Jacksonville City Manager Mo Raissi said CenterPoint officials have refused to undertake settlement talks until after the cities affiliated with the coalition submit their evidence in the case before the Railroad Commission.

Once the 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.

The Rusk city manager and  mayor said they have not heard much on the matter from  citizens but are positive they would have heard plenty had the weighty gas rate increase been granted.  

"I think the citizens know we are doing everything in our power to keep it from happening," Raiborn said.

Bullard, on the other hand, approved its version of measure in mid-July, raising its average monthly bill by $3.91 per residential customer and $4.72 per small commercial customer.