The Lufkin City Council postponed the rate increase proposed by CenterPoint Energy on Tuesday for 45 days until city officials can determine if the rate increase is appropriate.
In March the company applied for a rate increase to cover investment costs, which falls under the state’s Gas Reliability Infrastructure Program. The city does this yearly to ensure that the rate increase the company asks for fits with the local infrastructure improvements they made during the year.
“For residential that increase is about $1.56 a month, for general service small it’s $2.50 a month and general service large volume is $15.45 a month,” City Manager Keith Wright said. “A gas utility is allowed to request increases on it’s rates to recover a return on investments it makes between rate cases.”
The city has limited ability to exercise control on the rate increases he said, but they will do their due diligence to ensure the rates are fair. Councilman Mark Hicks clarified that the city does not decide on the gas rates.
“CenterPoint has made an investment in infrastructure here and the state allows them to recapture their investment, so we’re doing this due diligence period to review what they’ve done,” Hicks said.
“The state did approve us to improve our system to replace pipe,” Tommy Scherry, the CenterPoint area manager for Lufkin, said. “There will be a full review of this in Austin and the cities that have jurisdiction over our rates.”
In other business, the council also:
■ Conducted a public hearing and approved on the first reading of a zone change for 4604 S. First St. to commercial.
■ Approved appointments to the Main Street Advisory Board and the Animal Control Advisory Board.
■ A presentation of the Lufkin Finance Committee report.
■ Approved on second reading, budget amendments to provide funding to:
■ The Texas Department of Transportation for the sidewalk improvement project.
■ The construction of the Chlorine Contact Chamber at the Wastewater Treatment Plant.