As Houston-area residents continue to recover from damage caused by Hurricane Beryl in June and early July, electricity provider CenterPoint Energy is preparing to appear before the Public Utility Commission of Texas (PUC) for a review of the rates the power company charges.
It's not that CenterPoint is in trouble, it's just a routine rate hearing that electricity companies face before regulators. CenterPoint had wanted to raise rates a little, so the PUC set a hearing, but then came a series of tornadoes (called a derecho) and then Hurricane Beryl, each time followed by intense criticism of the company's handling of the aftermath.
CenterPoint did get millions of its customers back online within days of the devastating storms, but the company responded to criticism by launching a PR campaign and drawing up plans aimed at modernizing Houston-area power infrastructure, but the true costs of such measures is still largely uncertain.
While it looks likely that the PUC may allow CenterPoint to raise rates a little, there's also a possibility of lowering rates a little, but in either case the enormity of the area's grid rehabilitation will requires billions of dollars, according to University of Houston Energy Fellow Ed Hirs, who told Newsradio 740 KTRH that any rate decrease could only be temporary because in the long run consumers will pay for equipment upgrades.
Inflation recently seen under the Biden administration has hit electrical systems too, and Hirs says as time goes on it continues to add to the costs of paying workers for improving power lines, raising new poles, rebuilding towers and replacing related equipment, not to mention the increasing prices of everything from transformers to insurance for company trucks.
And CenterPoint "expects to bury more power lines across the area. Apparently half of the CenterPoint distribution system is already underground, with about 20-odd thousand miles are still above ground and it's more costly to put these wires underground and that's going to be costs borne by the consumer," Hirs noted.
In fact, there's so much work to do that a budget of billions of dollars is needed, in addition to the $2.2 billion the company says it will need upgrade its system over the next under its "resiliency plan," which has come under some criticism from at least one Houston-area newspaper.
But in order to get the area's infrastructure up to modern requirements, CenterPoint will have to work on a grand scale, "and will have to do it rapidly," Hirs says.