CenterPoint Energy seeks recovery following completion of 7-year natural gas pipeline modernization plan

Evansville, Ind. (Oct. 30, 2020) – CenterPoint Energy’s Indiana-based electric and gas utility, Southern Indiana Gas and Electric Co. (SIGECO), has filed a request with the Indiana Utility Regulatory Commission (IURC) for recovery of investments made within its southwestern Indiana natural gas service territory.

The filing comes at the completion of the company’s 7-year, $240 million gas modernization plan, which was filed in 2013 to comply with federal pipeline safety rules and ensures the continued safe, reliable delivery of natural gas service to its more than 113,000 southwestern Indiana customers. The gas system improvements resulted in upgrades to portions of CenterPoint Energy’s 3,200-mile network of distribution mains and transmission pipelines which serve nine counties in southwestern Indiana. The work primarily consisted of replacing bare steel and cast-iron distribution mains with new industry-grade plastic mains, as well as inspecting and upgrading natural gas transmission pipelines. This pipeline work has led to a 36% reduction in methane emissions since 2013. Since 2008, more than 300 miles of gas mains have been replaced in the company’s southwestern Indiana territory.

Using 2013 state laws focused on federal mandates and natural gas infrastructure needs, Indiana utilities submit forward-looking capital investment plans to the IURC for review and cost recovery. The statutes provide utilities the ability for gradual investment recovery as modernization progress is made; otherwise defined as 80% of total capital expenditures and lessening the effect of a larger rate increase through traditional rate recovery. The balance of recovery must be sought through a traditional rate request at the end of the 7-year plan and is a requirement of the law. With the 2013 filing and the IURC’s approval and regular review of that plan, the company is now seeking recovery of the remaining 20% of those investments.

“These infrastructure investments are vital to meeting federal mandates and ensuring the safe and reliable delivery of natural gas to our customers,” said Richard Leger, Vice President of Natural Gas Distribution, Indiana and Ohio. “While our natural gas customers will experience a base rate increase to their bills, it will be the first time in nearly 14 years we have pursued such recovery. We remain focused on maintaining affordability for our customers, as demonstrated by our commitment to expense management and continuing to offer natural gas as a cost-effective, reliable energy option due to low, stable natural gas commodity prices.”

If the IURC approves the request, the average residential southwestern Indiana gas customer could see an approximate increase of about $15 per month. This represents the balance of costs not already recovered through the duration of the previous seven years and recovery of additional investments before and outside of the company’s modernization plan related to public and system improvements required since 2006.

Also requested within this filing is the continuation of natural gas energy efficiency programs through 2025 and the income-eligible universal service program, which provides additional gas bill reductions during the months of December through May for eligible Indiana South customers.

“Since inception of the programs, Indiana South customers have saved approximately 37 million therms of natural gas, or enough energy to heat 46,000 homes for a year, which also contributed to more than 195,000 metric tons of CO2e emissions saved,” continued Leger. “Energy efficiency programs are another way we strive to give customers the opportunity to reduce their energy usage and therefore lower their bill, while also lowering emissions.”

While taking into consideration the expected bill impact for these gas infrastructure investments, bills should remain substantially lower than they were subsequent to the company’s last rate case filing due to considerably lower natural gas commodity costs. Should the current recovery request be approved, total annual bills will be about $100 lower than they were in 2007-2008 when current rates were approved. As is the case with other gas utilities, Indiana South does not profit from the cost of natural gas. The utility’s portfolio approach to gas purchases on behalf of customers is simply passed through dollar for dollar.

The filing now begins a comprehensive review by the IURC which will take several months to complete and will include a public hearing as part of the regulatory process. Should the plan be approved, new rates would go into effect during the third quarter of 2021. This filing has no impact on electric rates.

CenterPoint Energy’s Indiana South gas territory delivers natural gas to more than 113,000 customers in Daviess, Gibson, Knox, Martin, Pike, Posey, Spencer, Vanderburgh and Warrick counties.

Source: CenterPoint Energy

 

 

 

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