An advocacy group is raising questions about CenterPoint Energy’s financial interest in a Texas-based energy company that it says made billions of dollars from natural gas price spikes following a February 2021 winter storm.
The Citizens Utility Board of Minnesota, which advocates for utility customers, released the report on Tuesday.
It questions whether CenterPoint, Minnesota’s largest natural gas utility, should be allowed to recover more than $400 million in costs associated with Winter Storm Uri from its Minnesota customers. CenterPoint also is seeking to increase its general rates.
The report says it appears that CenterPoint received $1.3 billion in proceeds from a merger involving a CenterPoint affiliate and Dallas-based Energy Transfer.
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At least one Texas utility has accused Energy Transfer of price gouging during the storm, which caused temperatures to plummet across much of the U.S. in February 2021. Demand for natural gas combined with supply disruptions caused prices to spike to historic levels.
CenterPoint and other natural gas utilities are seeking permission from Minnesota regulators to recover the costs they incurred due to the higher prices.
The state Public Utilities Commission is considering that request, which the Citizens Utility Board is challenging. Hearings are scheduled for later this week.
Meanwhile, most of CenterPoint’s Minnesota customers are paying a monthly surcharge on their natural gas bills that will continue for 63 months, said Brian Edstrom, senior regulatory advocate with the Citizens Utility Board.
In a statement, spokesperson Ross Corson said CenterPoint did not buy any natural gas from either its affiliate, Enable Midstream, or Energy Transfer during the February 2021 price spike.
CenterPoint has explored leaving its stake in Enable Midstream for the past several years to refocus its investments in its utility businesses, Corson said.
The recently completed merger and CenterPoint’s sale of its resulting ownership stake in Energy Transfer had nothing to do with the high prices that CenterPoint had to pay for natural gas last February, he said.
“CenterPoint Energy’s interests have been, are and will remain fully aligned with those of our customers when it comes to securing the most favorably priced natural gas supplies while delivering safe, reliable service,” Corson said.
Edstrom stressed that the Citizens Utility Board isn’t accusing CenterPoint of engaging in any market manipulation, price gouging or illegal activity. Rather, it’s more a case of “a tale of two economies,” he said, as many Minnesotans struggle to pay higher gas bills made even higher by the monthly surcharge.
“We've been hearing from a lot of people that are really confused and frustrated by having to pay for these costs,” he said.
Edstrom said he thinks state regulators should consider the merger when deciding whether and how much of the storm-related costs CenterPoint can recover.
“They’re passing them through to their customers, and, it seems, also benefiting from this transaction with a major gas supplier that made off very well from the storm,” he said.