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Landmark project: Customers buy less gas, company still profits
Created by Administrator Account in 12/18/2009 5:02:15 PM

A pilot project with CenterPoint Energy provides incentives for customers to use less natural gas while also making sure the company does not lose money.


Everyone, including the gas and electric companies, agree that investing in energy-efficiency is a very good idea.

However, the gas and electric companies often do it half-heartedly because energy-efficiency works, meaning the customers use less gas or electricity, cutting into the utility’s profits.

Earlier this month, the Minnesota Public Utilities Commission took the first steps to sever that historic link between profits and sales in a rate case involving CenterPoint Energy and argued by Minnesota Center for Environmental Advocacy, the Izaak Walton League of America and Energy CENTS Coalition.

The commission allowed CenterPoint to raise the rates it charges its 800,000 customers, but it also included a pilot program called an inverted block rate. Essentially, the less natural gas a customer uses, the more money he or she will save on their utility bill because they will be charged a lower rate than higher users. That, of course, provides customers with an incentive to use less gas by installing energy-efficient appliances and insulating the home.

CenterPoint will not lose money under the plan because if the company’s forecasted sales go down, the company can increase its rates slightly, keeping the profits up. However, MCEA’s attorney on the case, Beth Goodpaster, pointed out that customers should still come out ahead because the increase will not overwhelm the savings from using less gas.

Goodpaster said the agreement, if it works, will make CenterPoint and other utilities “more willing partners with environmental groups on energy-efficiency proposals.”

The three-year pilot project should also “make gas more affordable for low-income customers,” Goodpaster said.

Only residential and small commercial customers are covered under this agreement, she said.