CenterPoint says it isn't making profit in spike in gas prices, but customers don't believe that

Saturday, February 26, 2022
CenterPoint customers frustrated with spike in natural gas prices
"They say CenterPoint doesn't make money. I don't believe that," said one customer. "I think someone is making money over this. I just hope they fix it."

HOUSTON, Texas (KTRK) -- CenterPoint customers are shocked by a recent spike in natural gas bills and one Houston energy expert said people should be prepared to see the increase in prices for months.

Mali Stewart has lived in Missouri City for nearly 14 years. Stewart said she expects her gas bill to increase in the summer and sometimes during the cold winter months. But, this month she was shocked to see that her natural gas bill more than doubled, totaling $181.11

"I was just shocked," Stewart said, "I just jumped. You know, I said, 'No way.'"

Stewart soon learned she was not alone. When she checked her neighborhood app, she found hundreds of her neighbors were experiencing the same thing, some stating their gas bill was triple more than usual.

Stewart said she lives on a fixed income and was already trying to adjust to the inflation that has impacted the cost of nearly everything.

"If it's going to go up like everything else, it's going to be difficult for me," she said.

ABC13 reached out to CenterPoint Energy and a spokesperson responded stating there are multiple factors playing a role in the increased market prices of natural gas.

Below is the statement sent to ABC13 Friday afternoon:

"We recognize that there's been concern recently about the rising market price of natural gas. We're focused on this, but it's important to put it in context. The combination of reduced natural gas production and higher demand has caused the increased market prices we are seeing. Customer natural gas bills are not only affected by price; they are also affected by weather. A mild or cold winter can make a big difference on customers' monthly heating bills - December 2021 was unusually warm; January 2022 was a cold month and more in line with normal winter weather and, therefore, contributed to higher usage.

The Gas Cost Adjustment (GCA) line that appears on every monthly natural gas bill is the cost CenterPoint Energy pays for the gas we deliver to our customers. The price we pay for natural gas in the market is the same price we charge our customers, there is no mark-up or profit for CenterPoint Energy. In February, we adjusted the GCA from $0.61363 per cubic feet of natural gas to $0.74405 per cubic feet of natural gas, per our regular biannual rate adjustment process. The price customers pay depends on their consumption and the current natural gas prices.

Regarding extraordinary costs incurred during Winter Storm Uri last February, CenterPoint Energy filed an application with the Railroad Commission of Texas on July 30, 2021 to securitize these extraordinary natural gas costs and ease the financial impact on our Texas natural gas customers from record natural gas prices during Winter Storm Uri. The Commission approved the filing this month. Therefore, the Texas Public Finance Authority will issue the customer rate-relief (CRR) bonds which we expect to happen in the second half of this year. All natural gas sales customer bills would begin to reflect the recovery of Winter Storm Uri costs upon the issuance of CRR bonds. This recovery option is designed for the company to recover its prudently incurred natural gas costs while protecting customers against unexpected increases on their monthly bills.

We encourage customers to contact us if they are having difficulty paying their CenterPoint Energy natural gas bill. Customers can also take some simple steps now that will save energy and save money on their winter heating bills."

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Stewart said she finds it hard to believe that CenterPoint or any energy company is not making a profit from the increased prices.

"They say CenterPoint doesn't make money. I don't believe that," Stewart said. "I think someone is making money over this. I just hope they fix it."

Charles McConnell, a former assistant U.S. energy secretary and energy center officer at the University of Houston, said people should brace themselves to see this spike in natural gas bills for months to come.

"When there's uncertainty in the marketplace that gets reflected in prices, forward strips and commodities," McConnell said. "Also in general, with gas especially, the whole issue of storage of gas and the availability of the gas, weather-related issues, supply-related issues, and all of that speaks to the fact that we don't have a tremendous amount of gas storage back up. It's very much like an on-demand supply system."

McConnell said he anticipates Russia invasion in Ukraine will cause another disruption to supply and impact demand.

"About one-third of Russia's gas actually flows through Ukraine and ultimately ends up in a lot of markets in Europe, Germany, Poland, France, etc.," McConnell explained. "As you see those markets now losing the supply from what used to be the former Soviet Union, now the Russia-Ukraine circumstance that will create an additional demand for gas and in situations where you see the demand increase that's a pretty good indicator that prices will go up and so sourcing that demand will ramp up over time."

SEE RELATED: What the Russia and Ukraine conflict means for Houston

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