You say you'll beat the high cost of gas by driving that spiffy plug in electric model? Not so fast, Edsel....
chron.com
July 18, 2000, 9:40PM
Power rates likely to rise
Gas price hikes may lift electricity bills by 14%
By MICHAEL DAVIS and KRISSAH WILLIAMS
Copyright 2000 Houston Chronicle
Reliant Energy HL&P is close to a deal to pass on rising natural gas prices that could increase Houston-area power bills for August by as much as 14 percent, an attorney involved with the talks said Tuesday.
The company has been in settlement talks with consumer advocates trying to work out a deal that would avoid a hearing on its request -- initially filed June 9 -- to increase the fuel rate adjustment portion of Houston-area electricity bills.
A settlement of the case is close, said Thomas Brocato, an attorney with the Office of Public Utility Counsel, which represents residents and small businesses in matters before the Public Utility Commission of Texas.
"We're pretty close to a full settlement," Brocato said. The settlement talks will resume again Thursday.
Brocato and Reliant officials did not go into specifics of the likely terms of a deal. Reliant has asked for a 14 percent fuel rate increase. Brocato only said his group is trying to cut the best deal possible for consumers.
If the commission approves the fuel rate increase at its Aug. 10 meeting as Reliant Energy HL&P hopes, the new fuel rate would show up on customers' September bills for power used in August.
The energy firm's request comes amid a heat wave that is already likely to spike summer cooling bills higher than usual.
Reliant HL&P burns coal and natural gas at its various power plants to generate electricity. It also owns a nuclear plant.
The increase in fuel costs would not be a permanent hike in customers' bills.
Reliant has the opportunity to seek a fuel rate adjustment twice a year before the PUC, in April and October.
In the current situation, Reliant has filed with the commission asking it to suspend the normal schedule and give it what amounts to emergency relief from natural gas prices that have doubled since the first of the year.
"It's a large amount, and it's been driven by the large increase in gas prices," said Brocato. "It is difficult to say whether it is unreasonable, but it is a large amount that will affect people's bills."
If fuel costs go down, the commission could reconsider the utility's fuel rates as early as October, but the current prices on the natural gas futures market show no sign of a decline ahead.
The math of the increase requested by Reliant simple: Under the fuel adjustment, a $100 bill would increase to $114.
The current fuel charge on a Reliant Energy HL&P customer is 1.9 cents per kilowatt hour and was computed during the company's last fuel rate adjustment by assuming a gas cost of $2 per thousand cubic feet. The total cost on a Reliant HL&P bill is about 10 cents per kilowatt hour.
The company is asking the PUC to allow it to raise that fuel rate charge to 2.9 cents per kilowatt hour. Although the fuel rate would increase by more than 50 percent, the overall bill would increase by about 14 percent, said Graham Painter, spokesman for Reliant Energy HL&P.
"We are seriously undercollected, and the longer we wait the more undercollected we will be," Painter said.
Under the electricity deregulation bill passed by the Legislature last year, the base rate of investor-owned utilities was frozen Sept. 1. But as Reliant's filing shows, fuel costs can still be passed on, which spotlights some of the flaws in the new law, said Janee Briesemeister, senior policy analyst with Consumers Union in Austin.
"This deregulation frenzy was predicated on low gas prices, and when gas prices go up it does not work," Briesemeister said. "In some ways these filings are a good thing because they show that there is no guarantee that prices will not keep going up."
Analysts are predicting natural gas prices will remain above $4 through next spring and possibly beyond. The benchmark natural gas contract on the New York Mercantile Exchange closed Tuesday at $4.04 per thousand cubic feet. On Jan. 3, that same contract closed at $2.17.
Some Texas power customers have already seen their bills rise because of higher fuel costs. The municipal utility that serves Austin has passed on its higher fuel costs.
In addition to Reliant Energy HL&P, other large investor-owned utilities that have asked the PUC for relief from higher fuel costs include Central Power & Light, which serves much of South Texas, and Texas-New Mexico Power Co., said Terry Hadley, spokesman for the PUC in Austin.
Hadley said residents should keep in mind that by law their power cannot be turned off for nonpayment when a heat advisory is in effect, as is the case now. |
