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Home My WebLink AboutPO 7405 SUSPENDING THE RATES PROPOSED BY CENTERPOINT ENERGY RESOURCES CORP P.O. No. 7405 03/05/2026 gt ORDINANCE NO. AN ORDINANCE OF THE CITY OF PORT ARTHUR, TEXAS, SUSPENDING THE RATES PROPOSED BY CENTERPOINT ENERGY RESOURCES CORP., D/B/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS COMPANY'S GAS RELIABILITY INFRASTRUCTURE PROGRAM FILING MADE WITH THE CITY ON OR ABOUT FEBRUARY 17, 2026; FINDING THAT THE MEETING COMPLIES WITH THE OPEN MEETINGS ACT; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT, AND DECLARING AN EFFECTIVE DATE WHEREAS, on or about February 17, 2026, CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas ("CenterPoint" or "Company") filed an Annual Gas Reliability Infrastructure Program ("GRIP") adjustment with the City of Port Arthur ("City") to increase gas rates in the Houston, Texas Coast, South Texas, and Beaumont/East Texas geographic rate areas pursuant to Gas Utility Regulatory Act, TEX. UTIL. CODE ("Gas Utility Regulatory Act") § 104.301; and WHEREAS, the Company proposed an effective date of April 18, 2026, for the requested increase unless the City suspends the date for a period no longer than forty-five (45) days; and WHEREAS, the City has exclusive original jurisdiction over the rates, operations and services of a gas utility in areas in the municipality pursuant to Gas Utility Regulatory Act § 103.001; and WHEREAS, Gas Utility Regulatory Act § 104.301 requires a streamlined process for the recovery of the costs of incremental investment by a gas utility; and WHEREAS, the City's review of CenterPoint's GRIP filing is limited to a ministerial review of the filing for compliance with the statute; and WHEREAS, the City finds the need to suspend the effective date of CenterPoint's requested rate increase for 45 days beyond the Company's proposed effective date until June 2, 2026, in order to review the Company's filing for compliance with Gas Utility Regulatory Act § 104.301; and WHEREAS, the reasonableness of the Company's investment will be reviewed in CenterPoint's future base rate case where all costs included in CenterPoint's GRIP filing will be subject to refund. s.po7405 APPROVED AS TO FORM: Roxann Pais Cotroneo, JD, City Attorney APPROVED FO DMINISTRATION: Ronald Burt Manager s.po7405 THE LAWTON LAW FIRM, P.C. 12600 Hill Country Blvd.,Suite R-275 • Austin,Texas 78738 • 512/322.0019 March 5, 2026 Via E-Mail Mr. Richard G. Baker Mr. Ronald Stutes City Attorney—City of Anahuac City Attorney—City of Arp P.O. Box 10066 Wilson Law Firm Liberty, Texas 77575 909 ESE Loop 323, Suite 400 Tyler, Texas 75701 Ms. Tracey Pritchett Ms. Sharae Reed City Secretary—City of Arp City Attorney—City of Beaumont 109 W. Longview P.O. Box 3827 Arp, Texas 75750 Beaumont, Texas 77704 Mr. Kenneth R. Williams Mr. Paul Fukuda City Manager—City of Beaumont City Attorney—Bridge City P.O. Box 3827 260 Rachal Beaumont, Texas 77704 Post Office Box 846 Bridge City,Texas 77611 Mr. Lee Tipton Mr. Tommy Ramsey City Manager—City of Cleveland City Attorney—City of Cleveland 907 E. Houston Wortham Tower, Suite 600 Cleveland,Texas 77327 2727 Allen Parkway Houston,Texas 77019 Ms. Juanita Limon Mr. Leonard Schneider City Secretary—City of Cleveland City Attorney—City of Huntsville 907 E. Houston Law Offices of Leonard Schneider PLLC Cleveland, Texas 77327 2261 Northpark Dr., Suite 445 Kingwood, TX 77339 Mr. Scott Swigert Mr. Bryan Kendrick City Manager—City of Huntsville City Manager—City of Liberty 1212 Ave. M 1829 Sam Houston Huntsville, Texas 77340 Liberty, Texas 77575 1 Mr. Brandon Davis Mr. Manuel De La Rosa City Attorney—City of Liberty City Manager—City of Nederland 1517 Trinity P.O. Box 967 Liberty, Texas 77575 Nederland, Texas 77627 Mr. Richard D. Hughes Mr. Guy Goodson City Attorney—City of Nederland City Attorney—City of Orange P.O. Box 967 GERMER PLLC Nederland, Texas 77627 550 Fannin, Suite 400 Beaumont, Texas 77701 Mr. Mike Kunst Mr. Ronald Burton City Manager—City of Orange City Manager—City of Port Arthur 812 North 16th Street P.O. Box 1089 P.O. Box 520 Port Arthur, Texas 77641 Orange, Texas 77630 Ms. Roxann Cotroneo Mayor Heidi Tutor City Attorney—City of Port Arthur City of Riverside P.O. Box 1089 P.O. Box 623 Port Arthur, Texas 77641 Riverside, TX 77637 Ms. Lynn Castelloe Mr. Solomon Freimuth City Secretary—City of Riverside City Attorney—City of Silsbee P.O. Box 623 P.O. Box 186 Riverside, TX 77367 Port Neches, Texas 77651 Ms. DeeAnn Zimmerman Mr. Alex Stelly City Manager—City of Silsbee City Attorney—City of Sour Lake 105 South 3rd Street 2615 Calder Ave., Ste. 1070 Silsbee, Texas 77656 Beaumont, Texas 77702 Mr. Jack Provost City Manager—City of Sour Lake 625 Hwy 105 W Sour Lake, Texas 77659 Re: CenterPoint Energy 2026 Annual GRIP Adjustment for the Houston,Texas Coast, South Texas, and Beaumont/East Texas Geographic Rate Areas Dear Cities: On February 17, 2026, CenterPoint Energy Resources Corp., d/b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas ("CenterPoint" or "Company") filed a Gas Reliability Infrastructure Program ("GRIP") adjustment factor with each of your communities in 2 the Company's Beaumont/East Texas geographic rate area. The Company is authorized to make annual GRIP rate change requests pursuant to Texas law passed in 2003, Gas Utility Regulatory Act, TEX. UTIL. CODE § 104.301 ("GRIP Statute") also see Section 7.7101 of the Railroad Commission of Texas("Commission")Gas Services Division Rules. The GRIP Statute authorizes gas utility companies to request annual rate increases associated with year-to-year changes in incremental investment. The changes in investment are not subject to reasonableness review in the GRIP filing.Instead,all amounts collected under a GRIP filing are considered interim rates subject to review and refund in the Company's next base rate proceeding. In addition, the Texas Legislature recently passed a bill that broadens the scope of GRIP filings. House Bill 4384 (89th Legislative Session), codified as Gas Utility Regulatory Act, TEX. UTIL. CODE § 104.302, authorizes a gas utility to classify certain capital investment and tax expenditures as "regulatory assets" that are then recoverable through the GRIP mechanism. Eligible expenses include post in-service carrying costs, depreciation, and ad valorem taxes. Historically, gas utilities have not been allowed to recover these costs until they are approved by a regulatory authority, whether under the GRIP Statute or through a base rate case. The new law essentially erases this regulatory lag by allowing gas utilities to track costs from the date new plant goes into service and then to recover those costs retroactively. As with the GRIP Statute, amounts included in these regulatory assets are not subject to reasonableness review until the next base rate case and are subject to refund with interest. CenterPoint has determined that its capital investment in the Houston, Texas Coast, South Texas, and Beaumont/East Texas geographic rate areas increased by $571,202,171 in calendar year 2025. This incremental GRIP investment results in the following average monthly customer bill impact for each affected customer class: Customer Impact Summary CUSTOMER CLASS MONTHLY BILL INCREASE RESIDENTIAL $2.47 GENERAL SERVICE-SMALL VOL. $4.18 GENERAL SERVICE-LARGE VOL. $55.23 The GRIP Statute provides that the proposed GRIP rate surcharge will become effective 60 days from the date of the Company's filing or April 18,2026,unless suspended by the Cities. Cities may suspend the GRIP rate increase for an additional 45 days beyond the Company's proposed effective date of April 18, 2026,while reviewing the GRIP application. Attached to this letter is a Rate Suspension Ordinance for your consideration.This Rate Suspension Ordinance will suspend the GRIP rate effective date until June 2,2026. The review process of a GRIP filing is generally a ministerial review limited to ensuring that the GRIP filing complies with the GRIP Statute. See Atmos Energy Corp. v. Cities of Allen, 353 S.W. 3d 156 (Tex. 2011). During the suspension period, any issues related to whether the GRIP filing comports with the GRIP Statute can be reviewed so that the Cities may make a final decision on this GRIP proposal. Note that under the new statute, recovery relates back to when plant went into service, so delaying the effective date will not reduce the total amount customers 3 will pay. Nonetheless, passing the Rate Suspension Ordinance will shift the effective date to a lower-consumption time of year, which may mitigate the initial bill impact on customers. Please remember, if your City wishes to suspend the proposed rates, you must take action by passing the attached Rate Suspension Ordinance prior to April 18,2026.Otherwise, the Company's requested rates will go into effect on April 18, 2026. Please send a completed copy of the final Rate Suspension Ordinance to by email:danlawtonlawfirm@gmail.com and molly@mayhallvandervoort.com. If there are any questions or concerns,please do not hesitate to call. Sincerely, /s/Daniel J. Lawton 4