Here’s an immediate benefit of Congress’ recently passed tax reform bill I wasn’t expecting: It could mean lower monthly gas bills for 8,000-plus Kyle customers of Centerpoint Energy. That is if the City Council, as it should, says "yes" Tuesday night to a resolution on its agenda to approve a rate decrease for the gas services provided by Centerpoint.
This is particularly noteworthy because Centerpoint, citing increased costs due to the effects of Hurricane Harvey among other reasons, had asked for between a 2.8 percent and 4 percent rate increase for residential customers back on Nov. 16. Instead, pending council approval of what should be a routine item, those customers should see between a 4.1 percent and a 5.9 percent reduction. Small commercial customers will also see a reduction, but not as large a one has they would have enjoyed had Centerpoint’s Nov. 16 proposal been adopted.
Apparently fearing subjecting the city’s desire for lower rates to litigation would not be successful, Centerpoint has agreed to the revised rate structure that the council will vote to approve Tuesday. In addition, Centerpoint has agreed to "refund to ratepayers $640,158 through a one-time bill credit that it has over-collected though its Interim Rate Adjustment (IRA) clause."
According to documents filed by the city, Centerpoint was seeking to increase its annual revenue by $1.2 million, including "a 12-month surcharge (of) approximately $676,000 in extraordinary expenses it incurred related to Hurricane Harvey." In response, the city "engaged special counsel and rate consultants to review Centerpoint’s application to increase rates" and "After extensive review the city’s special counsel and rate consultants concluded that a decrease in Centerpoint’s annual revenue requirement is in order. Their review suggests that Centerpoint’s rates should be decreased by approximately $5 million instead of an increase of about $1.2 million (including the surcharge for hurricane expenses) as proposed by Centerpoint. The rate consultants’ suggested decrease is premised on numerous adjustments to Centerpoint’s cost of service, including the effect of the reduction in the corporate federal income tax rate (arising from the Tax Cut and Jobs Act of 2017 (TCJA), adjustments to its return on equity, its net invested capital (also known as its "rate base"), customer-service expenses, incentive-compensation expenses, and expenses related to pension and employee benefits."
Kyle’s Chief of Staff Jerry Hendrix told me yesterday that Centerpoint has some 7,800 residential customers in Kyle as well as 318 additional customers classified as "small commercial customers" and four labeled as "large volume commercial." Currently, the average bill for a residential customer was $40.31. Under Centerpoint’s November proposal, that would have increased to $41.42. Under the terms of the proposal the council will be asked to approve Tuesday, that bill will be $38.67 effective May 22.
The proposal to lower the gas rates is arguably the most noteworthy item on Tuesdays’ agenda that also includes two public hearings, one on a proposed zoning change that would pave the way for a small apartment complex to be located on Creekside Trail and the second on a fee-waiver request involving property on Windy Hill Road.
It’s interesting to note that the last time a zoning change was proposed for Creekside Trail it resulted in a storm of angry residents coming out to protest the request before both the Planning & Zoning Commission and the City Council. However, no one opposed this latest proposed change at Tuesday’s P&Z meeting at which the request was approved by a 6-0 vote. The difference between the two proposals is that the first request, the one that brought the storm of outrage, was for an elderly living housing project to be located at what is now the terminus of Creekside, and all the protesting residents lived between the proposed project and the only exit out of Creekside, on Highway 150. This proposed apartment complex, however, is located closer to 150 than those residences.
For the record, the city’s staff opposes the request to waive Adjacent Lane Mile Fee related to property at 2305 Windy Hill for the logical reason that it doesn’t meet the requirements for the waiver.
One final item I find fascinating and that’s something labeled "Site Development Ordinance Amendment" as part of the Executive Session discussion. I have absolutely no clue about anything discussed in executive session, but what fascinates me is that this item appears on the agenda immediately following the one at the end of which the council voted to enter into agreement negotiations with a property owner on Windy Hill who has been repeatedly thwarted by the council in his attempts to get a zoning request approved that would allow him to build an apartment complex. City Manager Scott Sellers told me after the April 3 executive session he could not give me any details of the agreement, but predicted he might be able to be more forthcoming by the next council meeting. Well, Tuesday is that next council meeting and I have to wonder if this amendment to be discussed in this executive session is that final agreement.
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