Audit of major US energy company CenterPoint following accusations of overcharging customers $100 million a year

HOUSTON – Major US energy provider CenterPoint Energy is under scrutiny after allegations of overcharging customers by $100 million annually. The Public Utility Commission of Texas (PUC) has authorized an audit to examine the utility’s use of taxpayer dollars.

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The PUC voted Thursday to find a third party to audit CenterPoint. Not only has the utility been accused of overcharging, they have been criticized by customers and state Lt. Gov. Dan Patrick for spending $800 million to lease 20 massive mobile generators. Fifteen of them have never been used because they are not that mobile – it takes days to move them.

PUC Chairman Thomas Gleeson emphasized that the audit will assess CenterPoint’s emergency operations and generator allocation. The audit report is expected in April.

History of Discontent

Before the devastating impact of May’s Derecho and July’s Hurricane Beryl in the Greater Houston area, CenterPoint had asked the PUC for a $60 million rate increase.

That request was met with opposition from over 40 city leaders in CenterPoint’s service area, who claimed the utility was overcharging customers by as much as $100 million a year. Through several hearings, these cities presented evidence to the PUC aimed at preventing what they claim are unnecessary costs to customers.

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Both sides presented their cases to the PUC last month. And late last week, CenterPoint agreed to move forward with the rate review, meaning they will go back to the negotiating table with cities in their service area and then come back to the PUC with what it decides is a fair rate.

In a separate request, CenterPoint is asking to raise prices by an additional $450 million to recoup the money it spent after the May Derecho.

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This means that CenterPoint is now resuming negotiations with the City Managers, where services are delivered in order to agree on a fair rate.

Once the agreement is discussed, they must return to the PUC with a final answer.

Customer complaints

CenterPoint took a big hit in customer confidence after both storms due to the record number of outages and the time it took the company to restore power.

Not only was there a chorus of complaints, there were at least three dozen deaths in Texas after Hurricane Beryl related to power outages. People died in homes without air conditioning in sweltering heat.

CenterPoint CEO Jason Wells apologized to customers last month and said he and the company were determined to do better.

Today, in response to the audit, CenterPoint said it welcomes the review and that the company is committed to being transparent and accountable.

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Here is their full statement:

CenterPoint Energy is committed to operating in full transparency and accountability, and we welcome further review of this matter. As a reminder, the Interim Generation Procurement went through an open, transparent and thorough PUCT review process. It was also the subject of another independent third-party review, which found the procurement process to be competitive. CenterPoint has also engaged PA Consulting—a third-party consulting firm with deep expertise in issues affecting utilities and other industries—to conduct a full review of CenterPoint’s Hurricane Beryl response, which we released publicly last month. As part of our commitment to improvement, CenterPoint has already implemented, or is in the process of implementing, two-thirds of the PA’s 77 recommendations. We look forward to working together to find constructive solutions and the best way forward for our clients, the Greater Houston region and the state of Texas.