CenterPoint Energy wants to raise customer bills by nearly $90 a month

Sarah Bowman, Indianapolis Star
·5 min read

CenterPoint Energy customers already pay the highest electric rates in the state, and now the utility wants them to pay even more — as much as an additional $90 a month for the average customer.

The southern Indiana utility filed a rate case at the state utility regulatory commission late last year, its first in nearly 15 years when it was still called Vectren. And it's a big one, according to consumer advocates.

"I’ve never seen anything like this and I’ve been looking at utility rate cases for almost a decade now," said Ben Inskeep, program director for consumer advocacy group Citizens Action Coalition. "It's truly egregious with the lack of affordability consideration for customers."

The group is calling for the Indiana Utility Regulatory Commission to dismiss CenterPoint's request. In the meantime, CAC also wants CenterPoint to freeze its non-essential spending and the IURC to order a management audit to help find ways to cut costs.

CenterPoint serves roughly 150,000 customers — including residential, business and industrial accounts — primarily in southwestern Indiana. That is the smallest number of customers among Indiana's five investor-owned utilities.

The rate increase is needed, according to CenterPoint, to modernize its infrastructure, expand its generation portfolio — mainly in the form of a new natural gas plant and pipeline — as well as provide energy and money-saving programs. The company said additional funds also are needed to comply with environmental requirements such as cleaning up coal ash storage sites. Its proposal also maintains CenterPoint's double-digit return on many of those expenditures.

"Since our last base rate case, CenterPoint Energy has worked diligently and responsibly to make prudent investments and minimize the impact to customers’ bills," a CenterPoint spokesman told IndyStar in an emailed statement.

Electricity: Indiana customers continue to face higher bills as fossil fuels plants break, costs skyrocket

CenterPoint's request would raise its annual revenues by approximately $119 million or 16.5% over the next couple years. For the average residential customer using 1,000 kilowatt hours, that proposal would hike their monthly bills from about $165 last summer to more than $250 by early 2026. Over the course of a year, those customers would be paying $1,000 more than they are currently.

Ratepayers said they've had enough.

The Indiana Utility Regulatory Commission held public hearings on the proposal in February. What was supposed to be two separate meetings — an afternoon and an evening session — turned into one as 78 people testified over the course nine hours. None of them spoke in support of the rate hike.

That is the longest hearing on an Indiana rate case in at least the last decade and also the largest number of speakers in that same timeframe, according to the Office of Utility Consumer Counselor, Indiana's consumer protection agency.

The OUCC has filed more than 2,300 other consumer comments on the rate case, the largest number in recent years. Several local officials also have spoken out against CenterPoint's request.

The utility said in its emailed responses that it values all stakeholder participation and looks forward to continuing the constructive dialogue going forward.

A CenterPoint Energy electric power plant in southern Indiana. The utility recently filed a proposal looking to increase customer bills by as much as $90 over the course of three years. Customers and advocates, however, say this is creating major affordability concerns.
A CenterPoint Energy electric power plant in southern Indiana. The utility recently filed a proposal looking to increase customer bills by as much as $90 over the course of three years. Customers and advocates, however, say this is creating major affordability concerns.

Consumer advocates agree that efforts to improve grid infrastructure, clean up coal ash and expand clean energy offerings are positive. Still, they said there needs to be oversight to ensure those expenditures are done in a way that is reasonable and affordable for ratepayers. The costs also needs to be fairly distributed across customers, Inskeep said.

CenterPoint's new proposal spreads out the increases in ways that are "really harmful to residential customers in particular," he said. "Industrial customers are essentially getting huge subsidies on the backs of residential customers."

The utility also is seeking to maintain the 10.4% return it earns on capital expenditures, which is the highest percentage of Indiana's investor-owned utilities. But CenterPoint is the smallest electric utility, meaning the higher return comes out of the pockets of fewer ratepayers.

The OUCC is recommending the return percentage be reduced to below 9%, which likely would reduce the utility's earnings by tens of millions — though it's difficult to provide an exact number without seeing CenterPoint's ledger. The consumer agency pointed out that the utility has not been forthcoming with that information, compared to other utilities during their rate cases.

Fossil fuels: CenterPoint wants to spend $900M on 2 natural gas plants that will run 10% of the time

One of the larger parts of the rate increase request comes from a controversial new natural gas plant the IURC approved in 2022. This massive plant, as well as a new pipeline to bring the gas to the facility, will cost customers as much as $1 billion. Despite the cost, CenterPoint said it expects to run the plant only a fraction of the time to help fill in gaps when electricity is needed.

"It’s too big and will be operated very infrequently and they are shifting all that cost onto customers," Inskeep said.

The utility also is seeking to have customers pay for a yearlong outage at one of its power plants that was caused by a lack of maintenance, according to advocates. And they say it is trying to shift the cost of land it has purchased next to utility sites, but is currently sitting vacant.

Advocates and the OUCC argue the utility should not be allowed to recover these costs from customers.

The Indiana consumer agency said CenterPoint's request should be dropped from nearly $120 million down to $33 million. They say that is what the evidence warrants and it accounts for the investments that have previously received IURC approval, such as the gas plant.

CenterPoint Energy, which serves Hoosiers in the southern part of the state, recently filed a proposal looking to increase customer bills by as much as $90 over the course of three years. Customers and advocates, however, say this is creating major affordability concerns.
CenterPoint Energy, which serves Hoosiers in the southern part of the state, recently filed a proposal looking to increase customer bills by as much as $90 over the course of three years. Customers and advocates, however, say this is creating major affordability concerns.

The IURC is required by law to take affordability into account when making any decisions regarding electric service ratemaking, the agency said.

CenterPoint has until next month to file its rebuttal testimony. The process of evidentiary hearings on the case will begins in April. The closing briefs are due in the summer and the Commission is expected to issue an order on the case in the fall.

Call IndyStar reporter Sarah Bowman at 317-444-6129 or email at sarah.bowman@indystar.com. Follow her on Twitter and Facebook: @IndyStarSarah. Connect with IndyStar’s environmental reporters: Join The Scrub on Facebook.

IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.

This article originally appeared on Indianapolis Star: CenterPoint wants its customers to pay $90 more each month for energy