8-KOther Events

CENTERPOINT ENERGY INC 8-K Report, Corporate Update (Dec 7, 2009)

Filed December 7, 2009For Securities:CNP

Summary

CenterPoint Energy, Inc. (CNP) filed an 8-K on December 7, 2009, detailing expected rulings from the Minnesota Public Utilities Commission (MPUC) regarding a rate increase for its natural gas subsidiary, CenterPoint Energy Resources Corp. The MPUC indicated it anticipates approving a rate increase of approximately $43 million per year, a reduction from the $59.8 million initially requested by the company. Furthermore, the approved rate of return is expected to be 8.09%, with a 10.24% return on equity. This decision will impact revenue previously collected through interim rates, as any difference between the final approved rates and the interim rates (which were $51.2 million effective January 2, 2009) will be refunded to customers. Investors should note that the MPUC also signaled support for a pilot program to decouple gas revenues from customer usage, a move that could stabilize earnings regardless of consumption levels. The formal order is anticipated in January 2010, after which parties can seek rehearing.

Key Highlights

  • 1Minnesota Public Utilities Commission (MPUC) indicates expected ruling on rate increase for Gas Operations.
  • 2Anticipated annual rate increase of approximately $43 million, lower than the $59.8 million initially requested.
  • 3Expected overall rate of return of 8.09% and return on equity of 10.24%.
  • 4Customers to receive refunds for the difference between interim rates (effective Jan 2009) and final approved rates.
  • 5MPUC to authorize a pilot program to decouple gas revenues from customer usage.
  • 6Formal MPUC order expected in January 2010.

Frequently Asked Questions

This 8-K reports on the expected rulings from the Minnesota Public Utilities Commission (MPUC) regarding a rate increase request filed by CenterPoint Energy's natural gas subsidiary, Gas Operations. The MPUC's anticipated decision was indicated on December 1, 2009, with a formal order expected in January 2010.

The MPUC anticipates approving a rate increase of approximately $43 million per year for Gas Operations. This is lower than the $59.8 million that Gas Operations had initially requested.

Yes, customers are expected to receive refunds. The MPUC approved an interim rate increase of $51.2 million in December 2008, effective January 2, 2009. The difference between the final rates approved by the MPUC and the amounts collected under these interim rates will be refunded to customers.

The MPUC's order is expected to authorize a pilot program for residential and small volume commercial customers designed to decouple gas revenues from customer usage. This initiative aims to stabilize revenue streams for the company, making them less dependent on fluctuations in natural gas consumption by customers.