Broken coal plant leads CenterPoint Energy to petition for rate increase

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Published: Nov. 22, 2022 at 1:54 PM CST
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EVANSVILLE, Ind. (WFIE) - On November 16, CenterPoint initiated its quarterly Fuel Adjustment Clause (“FAC”) tracker before the Indiana Utility Regulatory Commission (IURC).

According to a press release, if approved by IURC, the average CenterPoint residential customer electric bill will increase by $13.20 for the months of February, March, and April of 2023 based on CenterPoint’s filing.

Officials say a major reason for the utility bill increase is because CenterPoint’s Culley Unit 3 coal-fired power plant broke this summer. This means CenterPoint has had to purchase expensive replacement power from the wholesale market.

According to a release, the plant broke down on June 24 2022 and has not operated since. CenterPoint stated in its filing, “The large deviation between the estimated average cost and actual average cost of fuel supplied for the reconciliation period was primarily driven by volatility in fuel costs coupled with a significant increase in purchased power from the MISO network due to the unexpected outage of Culley Unit 3…”

CenterPoint’s filing says that Culley Unit 3 will remain offline for the rest of the year as it attempts to fix the power plant.

Kerwin Olson, Executive Director for Citizens Action Coalition told 14 news that his organization doesn’t believe consumers should bear the brunt of that expense.

“It’s not rate-payers that are responsible for the plant shutting down,” said Olson. “Rate payers are continuing to pay the mortgage on the plant if you will, even if it’s not producing electricity.”

The CAC is calling on the IURC to deny CenterPoint’s request.

Meanwhile, the Office of the Utility Consumer Counselor is assessing the request to see that CenterPoint is spending prudently and that the costs are actually needed.

According to a spokesman, the law also requires CenterPoint’s rate increase to only cover costs and not contribute to additional profits.

Olson told 14 News that the CAC is skeptical of CenterPoint’s increase because it feels the company’s petition to the IURC wasn’t thorough.

“What Centerpoint filed really from our perspective is unacceptable,” Olson said. “It’s really important from our perspective that the commission have all the information.”

The OUCC is asking for consumer comments about their CenterPoint utilities to be presented before the IURC.

The deadline to submit comments is December 16, and they can be filed at this site: in.gov/oucc.

CenterPoint released a statement about the petition. It reads as follows:

In June 2022, the company’s F.B. Culley Unit 3 coal-fired power generation unit experienced an operating issue relating to its boiler feed pump turbine, and it remains out of service. Immediately following the outage at Culley, CenterPoint Energy notified the Indiana Utility Regulatory Commission (IURC). We have been transparent with this information since the outage occurred. It has been disclosed to our stakeholders through filings and public meetings, several of which the Citizens Action Coalition has been a part of and participated in with CenterPoint Energy.

For the duration of the unplanned outage, which is expected to continue into the first quarter of 2023, CenterPoint Energy will continue to meet its generation capacity needs from its other generation units, economic market purchases and power purchase agreements.

With respect to the fuel adjustment charge (FAC), CenterPoint Energy recently filed for recovery of its FAC with the IURC. The FAC is the amount the company applies to customers’ bills based on the varying price of fuel and purchased power costs. It is not a new charge, is filed quarterly with the IURC, and can fluctuate based on the cost of fuel. While the outage at F.B. Culley did partially impact our FAC, we have used credits received through energy and capacity sold to the market to help mitigate the impact to customers’ bills.