Houston
Sponsored by

Centerpoint Winter Storm Uri bonds

2,330 Views | 13 Replies | Last: 2 yr ago by chimpanzee
Martin Q. Blank
How long do you want to ignore this user?
SPECIAL NOTICE TO UTILITY CUSTOMERS

Texas Winter Storm Uri Gas Securitization

To recover the company's extraordinary natural gas costs incurred during Winter Storm Uri and provide Texas natural gas customers with rate relief, CenterPoint Energy has filed an application with the Railroad Commission of Texas to securitize the costs pursuant to H.B. 1520. H.B. 1520 allows natural gas utilities to request Commission's approval for the Texas Public Finance Authority to issue Customer Rate Relief (CRR) bonds to recover natural gas costs from Winter Storm Uri. The use of securitization financing is expected to provide the most cost effective and affordable method of recovering these costs and would benefit the company's more than 1.8 million residential and business natural gas customers in Texas. If securitization financing is approved, natural gas customer bills would begin to reflect the recovery of Winter Storm Uri costs upon the issuance of CRR bonds, which is expected in 2022.
aTm_bomb
How long do you want to ignore this user?
AG
I read this but couldn't nail down how it impacts customers. I also read the application filing and it appears this would mitigate rate hikes to customers. The alternative would be charges to customers over a 3 year period, at which they would reconcile remaining balances and perhaps apply surcharges to customers as necessary?

https://www.centerpointenergy.com/en-us/Documents/TXCoastRecoveryFiling/Application.pdf

Happy to hear smarter thoughts.
agnerd
How long do you want to ignore this user?
AG
It's not "rate relief" if we end up paying more in the long run. If this passes, we will end up paying for the gas PLUS INTEREST on the money borrowed to finance that cost. I'd prefer that they charge people the actual cost now, so that then maybe people will consider pressuring their elected representatives to fix a problem that centerpoint is trying to hide.
P.H. Dexippus
How long do you want to ignore this user?
AG
aggie_sprt
How long do you want to ignore this user?
Yep, this is a shell game.

Centerpoint needs to clearly say how much its customer's will be paying more and for how long.

It's primed to be one of those "fees" that never goes away.
Keef_barber
How long do you want to ignore this user?
LOL this on top of the recent TDU hike. Good times
JSKolache
How long do you want to ignore this user?
AG
Yep, it boils down to pay now, or pay on layaway
Bassmaster
How long do you want to ignore this user?
AG
Securitization is a very common mechanism to recover storm costs.
ATM9000
How long do you want to ignore this user?
AG
agnerd said:

It's not "rate relief" if we end up paying more in the long run. If this passes, we will end up paying for the gas PLUS INTEREST on the money borrowed to finance that cost. I'd prefer that they charge people the actual cost now, so that then maybe people will consider pressuring their elected representatives to fix a problem that centerpoint is trying to hide.


You realize when a bunch of people default on their gas bills because they can't stomach the extra $44 a month that you'll probably end up paying a hell of a lot more than the interest in the long run right?
dahouse
How long do you want to ignore this user?
AG
This is not just Centerpoint. It's ALL gas utility companies in the state. Atmos spent over $2B in gas in February due to spot prices skyrocketing.

Without the securitization, some customers, especially those with smaller utility operators, would have a gas bill for one month over $5K.

I work for a utility and we had extensive discussions about this internally regarding what the plan would be.
Cody
Fightin Texas Aggie c/o 04
dahouse
How long do you want to ignore this user?
AG
We're expecting $3-$6/month extra for customers in the state, from what we've been told by industry folks
Cody
Fightin Texas Aggie c/o 04
ATM9000
How long do you want to ignore this user?
AG
dahouse said:

We're expecting $3-$6/month extra for customers in the state, from what we've been told by industry folks

Correct… if they securitize. My point is the alternative would no doubt be more costly to you in the long run. While I agree in theory would rather pay now… a lot of residential and commercial rate payers will never be able to do that... so guess what that means? You as somebody who can pay at once will only end up paying even more for those who can't. It's not really a practical solution for the problem.
chimpanzee
How long do you want to ignore this user?
Utilities' ability to go out and get these types of bonds were the only reason they were able to acquire gas in February. The alternative would be the .gov demanding that gas marketers hand over their contracts at some fraction of their market value during the disruption and then the .gov gets to decide who gets the gas. I wouldn't trust that at all.

Doing that would also ensure that no one would GAF about ramping up production as fast as possible or releasing other volumes otherwise committed. The marketers would price in the possibility of their contracts' peak values being taken from them every single day of the year. You'll pay for it one way or the other.

There's almost nothing you can do to get the idiots of this world to plan for the future.

The demand for these bonds by investors will be through the roof, the interest rate will be really low. It's really a pretty tidy solution.
ThunderCougarFalconBird
How long do you want to ignore this user?
AG
Why not just do a ch.11 and tell the guy that sold you molecules at jacked up spot prices to pound sand?
chimpanzee
How long do you want to ignore this user?
ThunderCougarFalconBird said:

Why not just do a ch.11 and tell the guy that sold you molecules at jacked up spot prices to pound sand?
Shareholders tend to get a little skittish with that option.
Refresh
Page 1 of 1
 
×
subscribe Verify your student status
See Subscription Benefits
Trial only available to users who have never subscribed or participated in a previous trial.