OUCC: CenterPoint Energy Gas Infrastructure Plans

CenterPoint Energy's natural gas bills in Indiana include a Compliance and System Improvement Adjustment (CSIA). State laws allow the utility (formerly Vectren) to seek rate changes through the CSIA every six months.

A law approved by the Indiana legislature in 2011 allows natural gas utilities to seek periodic rate increases to pay for federal mandates, particularly for costs involving pipeline safety.
A separate state law approved in 2013 allows natural gas and electric utilities to seek IURC approval of long-term infrastructure plans. If a plan is approved, then the utility may request rate increases every six months to cover the costs of projects in the plan. The law requires the IURC to consider the plans and increases within very short timeframes.

CenterPoint Indiana's natural gas utility has two service areas:

The North territory includes 48 central, south-central, and southeastern Indiana counties formerly served by Indiana Gas Co.
The South natural gas service territory includes nine southwestern Indiana counties formerly served by Southern Indiana Gas & Electric Co. (SIGECO).

The CSIA is included in each residential account as a flat monthly charge.

The utility's most recent tracker changes, approved in July 2021, set the monthly CSIA at $7.24 in the North territory and $13.67 in the South territory. They were reset to $0.00 under the utility's 2021 base rate orders.

2022-2026 Infrastructure Plan
CenterPoint Energy has received Commission approval of new five-year infrastructure plans for its North and South gas utility service areas.
- The North territory plan includes more than $1.2 billion in capital improvement projects. This total includes $800 million under the federal mandate law and $419 million in TDSIC rate recovery.
- The South territory plan includes about $279 million in capital improvement projects. This total includes $230 million under the federal mandate law and $49 million in TDSIC rate recovery.
- OUCC testimony on both plans was filed on Dec. 2, 2021 (North-Poole, North-Krieger, South-Poole, South-Krieger).
- The cases are in their final briefing stages. The OUCC filed proposed orders (North and South) for the Commission's consideration on Mar. 9, 2022.
- Commission orders (North and South) were issued on Apr. 20, 2022.

2014-2021 Infrastructure Plan

CenterPoint Energy's initial seven-year gas plans received IURC approval in August 2014.

The original North territory plan included about $647.1 million in capital improvement projects ($369.7 million under the federal mandate law and $277.4 million in TDSIC rate recovery).
The original South territory plan included approximately $216.8 million in capital improvement projects ($173.7 million under the federal mandate law and $43.1 million in TDSIC rate recovery).
Projects in both plans included main replacements and upgrades to transmission and distribution pipelines. The North territory plan also included extensions into areas that currently did not have natural gas service.
To review the case files, visit the IURC website and enter cause number 44429 (South) or 44430 (North).

The fixed monthly residential CSIA charges were approved as follows:

Date	North	South
July 2021	$7.24	$13.67
Jan. 2021	$6.34	$14.10
July 2020	$7.52	$13.24
Jan. 2020	$4,82	$12.83
July 2019	$5.18	$10.99
Jan. 2019 *	$2.52	$5.54
Sept. 2018	$6.10	$8.69
Jan. 2018	$5.37	$7.98
Aug. 2017	$4.59	$7.31
Feb. 2017	$4.20	$6.38
July 2016	$3.19	$5.30
Mar. 2016	$2.11	$4.12
Sept. 2015	$1.25	$2.67

* January 2019 reductions were due to federal tax relief and over-collections through previous trackers.

A Brief Summary of the Laws
Indiana Code 8-1-8.4 was approved by the Indiana General Assembly in 2011. It allows natural gas and electric utilities to recover federally mandated costs.
- Under the statute, a utility’s costs of complying with a number of federal mandates can be recovered through rates, including any requirement issued by the United States Department of Transportation (which has jurisdiction over interstate gas pipeline issues), Environmental Protection Agency (EPA), Department of Energy (DOE), or by the Federal Energy Regulatory Commission (FERC).
- Before recovering the costs through rates, the utility must receive IURC approval for its proposed projects. It may then recover 80 percent of the costs through incremental rate increases every six months (with the remaining 20 percent deferred until the utility’s next base rate case). The OUCC reviews these filings on behalf of ratepayer interests.
- Vectren previously recovered these costs through its Pipeline Safety Adjustment (PSA).
Indiana Code 8-1-39 allows electric and natural gas utilities to submit infrastructure improvement plans for IURC approval. A plan may cover a 5- to 7-year range. The IURC must rule within 210 days once such a request is filed.
- Once a plan receives IURC approval, the utility may request incremental rate increases every 6 months to pay for the projects. The rate adjustment is referred to as the Transmission, Distribution and Storage System Improvement Charge (TDSIC). The IURC has 120 days to rule on such a request.
- TDSIC rate increases are limited to no more than 2 percent of a utility's total retail revenues.
- The TDSIC rate mechanism (or tracker) allows the utility to recover 80 percent of the costs as they are incurred. The remaining costs are deferred until the utility's next base rate case, which must be filed before the end of the 7-year period.

CenterPoint Energy's electric infrastructure plan was approved in a separate docket.

4-21-2022