CenterPoint gas customers to get refunds tied to billing program

Under an order issued by the state Public Utilities Commission on Tuesday, April 3, the Houston-based utility will refund customers who paid on a billing cycle greater than 32 days and were pushed into a higher pricing tier.

The order stems from a controversial pilot program Minnesota's largest natural gas provider had in place during the 2010-11 heating season that was intended to get people to reduce their energy use. Under the program, those who used the most energy paid higher rates.

But the program had unintended consequences, and it came under fire from Attorney General Lori Swanson, who charged that some customers who were elderly or had medical conditions that required extra heat in their homes were penalized.

Based on customer complaints and the unintended consequences that surfaced, the commission voted to suspend the program in September.

CenterPoint had about 780,000 residential customers and some small-business customers who were charged under the tiered pricing system. Just how many of those will receive a refund and the average size of the refunds aren't known.

"We do not yet know exactly how much will be refunded to our customers," wrote Jeff Daugherty, CenterPoint's director of regulatory affairs, in an email. "We do plan to communicate information about the refunds to our customers via their customer bill, and we anticipate the refunds to occur in late May or early June."

By next week, the utility will know what the average refund will be, said Rebecca Virden, a CenterPoint spokeswoman. "Not all customers will fall into getting a refund either."

The attorney general's office, the Department of Commerce and a number of consumer advocacy groups, as well as CenterPoint, urged the program's suspension. The rating system took effect July 1, 2010.

"Based on data we looked at, hundreds of thousands of people were billed over the 32 days," said Ben Wogsland, spokesman for Swanson. In some cases, customers were paying bills that exceeded 40 days. With a tiered pricing model, longer billing periods lead to greater consequences and would result in customers paying higher rates.

The question of where the pilot program goes from here is up to the Public Utilities Commission.

"Even if we make new recommendations on the program, it would still not be back into play unless the Public Utilities Commission were to approve such a program," Virden said.

The attorney general's office wants the program terminated and filed its argument with the commission this week.

"We have not seen a way to work around those problems and make the program fair," Wogsland said.