Lt. Gov. Dan Patrick: Letter to Public Utility Commission of Texas

August 2, 2024

AUSTIN - Today, Lt. Gov. Dan Patrick sent a letter to the Public Utility Commission of Texas (PUC) urging them to claw back $800 million of ratepayer money from CenterPoint. Upon sending the letter, Lt. Gov. Patrick issued the following statement:

"As promised, here is the letter I sent to the PUC urging them to claw back $800 million of ratepayer money from CenterPoint. I remain committed to fighting on behalf ratepayers to ensure they do not pay for CenterPoint's mismanagement."

Here is the text of the letter Lt. Gov. Patrick sent to the PUC:

The Honorable Thomas Gleeson, Chair, Public Utility Commission of Texas
The Honorable Lori Cobos, Commissioner, Public Utility Commission of Texas
The Honorable Courtney Hjaltman, Commissioner, Public Utility Commission of Texas
The Honorable Jimmy Gotfelty, Commissioner, Public Utility Commission of Texas
The Honorable Kathleen Jackson, Commissioner, Public Utility Commission of Texas

Re: Application of CenterPoint Energy Houston Electric, LLC to Amend its Temporary Emergency Electric Energy Facilities Rider (Public Utility Commission Docket No. 54830)

Dear Commissioners,

I am writing to urge the Public Utility Commission of Texas (Commission) to conduct an immediate review of CenterPoint Energy's Temporary Emergency Electric Energy Facilities (TEEEF) Rider.

As you are aware, the Texas Legislature passed HB 2483 (87R) and HB 1500 (88R) to enable Transmission and Distribution Utilities (TDU) to lease mobile generation units for use during emergencies causing large-scale power outages, such as severe storms or hurricanes. The intent of this legislation, as well as SB 1075 (88R) as passed by the Texas Senate, was to allow TDUs to lease small mobile generators to quickly get power to critical facilities following a major emergency. This legislation was supported by CenterPoint, AEP, Oncor, and TNMP.

While several TDUs, including AEP and Oncor, followed the legislation and leased small mobile generators that have proven effective in emergency response, CenterPoint deviated from this approach, instead appearing to choose to prioritize profits over effectiveness. Rather than leasing small mobile generators as intended by the legislation, CenterPoint squandered $800 million of ratepayer funds on massive non-mobile generators while spending only .000625% of that amount on what the legislation called for and would have actually helped their customers in the aftermath of Hurricane Beryl. As a result, CenterPoint was forced to borrow small mobile units from other TDUs that had complied with the legislation while their large non-mobile generators sat idle. This not only undermined the effectiveness of their storm response but also highlighted a misuse of the allocated funds.

During the recent Senate Special Committee on Hurricane and Tropical Storm Preparedness, Recovery, and Electricity hearing, it was revealed that CenterPoint's strategy of leasing these large generators will result in at least $30 million in profits, despite providing limited to no benefit during over 99 percent of emergencies. In fact, they admitted these large generators have never been used. This is unacceptable. CenterPoint's actions represent a clear departure from the legislative intent and, most importantly, will cost ratepayers significantly.

The Commission has a duty to ensure customers only pay just and reasonable rates for transmission and distribution services. Toward that end, I urge the Commission to immediately utilize any and all authority to reconsider CenterPoint's previously approved TEEEF Rider, as well as to take action as needed to change any rates that are unjust, unreasonable, or in violation of any law.

CenterPoint either made the choice to pursue profit over protecting the customers they serve or made a bad business decision on behalf of the rate payers by pretending these units were "mobile" when they were not. Either way, the decision violated the "reasonable and necessary cost" statutory provisions, and CenterPoint should be disallowed from using ratepayer dollars to pay for these leases.

Thank you for your service to Texas and for your prompt attention to this critical issue.

Sincerely,

[Link]

Dan Patrick
Lieutenant Governor

To view Lt. Gov. Patrick's letter to the PUC online, click here.

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