PUC Chairman Explains the Price Difference

When we aired the lastest segment on how much you’ll pay for CenterPoint’s new Smart Meters last week, I got emails from a lot of you.  

Sam Karabasz wrote this one:

“Are you guys going to let them get away with no one has a clear answer why their project requires consumers in Houston pay 52% more than the people in Dallas.  Are wage rates higher in Houston?  Are the meters that much better?  Sounds like an opportunity for an Investigative Reporter!”

Most of you agreed with Karabasz and said I let CenterPoint’s Floyd LeBlanc off too easy when he didn’t answer the question as to why Houstonians are paying almost double for the meters compared to what people are paying in the Dallas area.  

What you didn’t see in the story (there’s usually quite a bit we can’t include because of time constraints) is that LeBlanc told me that he didn’t know the in’s and out’s of Oncor’s plans (the company installing the meters in Dallas). He said he could only talk about CenterPoint. He said with the cost of the equipment, installation and support for the meters, CenterPoint came up with the amount it needed for the project and it was approved by the PUC .

That’s exactly what happened with Oncor. They did the math, told the PUC how much they needed and the PUC approved the fees Oncor wanted to pass along to its customers. 

When I called a spokesman for Oncor, they said they would also like to know why CenterPoint was charging so much more for its meters. They said if they could install them for less, then CenterPoint should be able to as well.

Karabasz, the viewer whose email I posted above, took it upon himself to write to the Chairman of the PUC Barry Smitherman.  Smitherman replied very quickly. You can read his explanation below:

Mr. Karabasz,

The price difference is due to a couple of issues.  First, the back-office costs for CenterPoint were higher than that for Oncor.  That is, the computers and systems that would actually collect and manage the data collected by the smart meters had a higher cost for CenterPoint.  The second factor is that Oncor has nearly one million more customers among which it can spread out the total costs.  Oncor has 3.2 million customers, while CenterPoint has 2.4 million customers.  With a larger customer base, Oncor can keep its per-customer costs lower.  In fact, if looking at just the meters, CenterPoint has a lower per-meter cost than Oncor.  All of the parties in the proceeding agreed to the settlement in the case, which set out the costs for consumers.  The parties included customer representatives such as the Office of Public Utility Counsel, the City of Houston, and the Gulf Coast Coalition of Cities.  These parties all evaluated the proposal from CenterPoint to ensure that the costs were as low as possible.  It should also be noted that the surcharge will be spread out over 12 years, and will only be $3.24 per month for the first two years before dropping to $3.05 per month for the remaining recovery period.  Both proceedings were done in response to state legislation which encouraged the deployment of advanced meters.  With advanced meters, customers will have the tools to better manage their electric bills by being able to monitor electric use in real time and make better informed decisions about different electric products.  Consumers will also have the chance to participate in demand response programs or purchase energy efficient products that will work with the smart meters and lower their monthly bills.

If you have any other questions about smart meters or other electric issues, please let me know.

 Sincerely,

Chairman Barry Smitherman

Public Utility Commission of Texas

(512) 936-7247

I do have to hand it to Smitherman for replying so quickly with a decent explanation. Maybe you should all call him directly when you have electric bill complaints that the PUC’s Customer Protection Division never investigates.

Check out all of our recent investigations into “Your Electric Bill.”

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6 Responses

  1. OK, so apparently there is now an ongoing project where Centerpoint is installing these Smart Meters, and everyone in this area starts seeing the new charge on our Electric Bills now. My question is, when I start getting harrassing letters from Centerpoint (which I did yesterday again) stating that my electricity will be cut off because they have had to estimate my reading and I must let them switch me to one that can be read remotely, is this the same Smart Meter that is now being installed inside the Loop? Does this mean that Centerpoint will now not require us to pay the $70 up front to have them switch our meters now because they seem to have forgotten how to read the manual meter in my locked backyard (after 15+ years of successfully reading till now)?

    Or is Centerpoint double dipping us on these charges (ongoing monthly fee for entire project, along with hitting each person changes at Centerpoint’s insistence for $70 for the immediate installation), or installing something completely different now on these individual case and then plan to come back and put the “new” Smart Meter in at a later date?

    I still fail to see how they can no longer seem to access my manual meter in my locked backyard that they were able to successfully read for the past 15+ years. Centerpoint cannot seem to explain that one either when I call for answers.

  2. Will the sale of the old meters be used to offset the cost of the new meters? Will the reduction in meter reader employees be used to offset the cost of meters?

  3. So…not only are we paying (in advance) for the physical meter to be located on our property; we are also paying for the technology and backend equipment to administer it? Why isn’t it Centerpoint’s responsibility to pay for the change to their technology (ie cost of doing business)? We are already being charged the highest electric rates in the US.

    I’m all for new technology…I just don’t think we should have to foot the bill while they suck in more profit by laying off personnel and selling the old equipment.

  4. Mike in Katy – consider yourself lucky that for 15 years meter readers have gone above and beyond the call of duty to read your meter. The PUC requires you to make your meter accessible to be read, just because you have been allowed to get away with it until now doesn’t make it wrong that they’re forcing you to fix it. And you should have to pay for the new meter, as you should have had to do it 15 years ago. If i was pulled over 10 times for speeding by the same cop, and each time given a warning, and then a new cop pulls me over and gives me a ticket, it doesn’t mean i have a right to complain about the ticket. It means i was just lucky that the first 10 times i got a warning. You do not have a legit complaint, save this space for those that do.

    Rhonda – you have to help pay for the new technology because it benefits you. Everyone kicked and screamed after Ike because of lengthy outages, yet now that something is being done that will greatly benefit reliability and outage response people are crying about a measley 3.75 monthly charge. You think that when you go to WalMart and buy groceries, that a portion of the money you are paying doesn’t go to build a new WalMart in California or to renovate a Walmart in Michigan? Retailers do this all of the time, they just aren’t forced to itemize their charges on the receipt. They also aren’t asked to justify why my grocery bill has gone up 30% in the last 18 months by investigative reporters on the news.

    And CenterPoint doesn’t “suck in” as much profit as you might think, they only see 10-15% of your electric bill.

  5. Amy

    My response to the CenterPoint rip-off is more fundamental than those I have seen on your Blog. I filed a complaint against the PUC for permitting CenterPoint to collect smart meter rental fees (cost recovery) from customers prior to customers having the benefit of an advanced meter. This was before I learned that Houston customers were being charged significantly more than Dallas area customers. On that score, I would appreciate you requesting specifications for the two meter types being purchased, the manufacturers, and the distributors from which Oncor and CenterPoint are purchasing their meters. Would you believe that my complaint was forwarded to CenterPoint for a response rather than the PUC responding? Of course, I refiled my complaint with the PUC after letting CenterPoint know that their non-responsive response was unacceptable, expecting that on a 2nd filing, I would get a response from PUC. Since PUC Chair Barry Smitherman responded so promptly to Mr. Karabasz, maybe he or one of his staff would be so gracious as to respond to my complaint, which I have copied below:

    My Complaint is: ( Please Describe. 1000 character limit ) *
    * If your description requires more than a 1000 characters, or you have attachments,
    please request in the description that we contact you for a more detailed explanation.
    https://www.puc.state.tx.us/webapp/public/apps/complaint/ComplaintForm.aspx?type=e

    Your complaint has been successfully submitted.
    Please print a copy of the completed complaint form for your records.
    Return to Consumer Home
    Date: 1/27/2009

    Complaint No: CP2009012340
    Name: Robert Ford Alt Contact: Robert Ford
    Service Address: 2380 S. MacGregor Way #134
    Houston, TX 77021 Mailing Address: 2380 S. MacGregor Way
    Phone #s: Day: (713) 313-7593 Evening: (713) 741-6265 Fax:
    Email: fordrl@tsu.edu Newsletter Subscription: Yes
    Service No: Acct No: 8-809-447-3
    Type: Provision of Service
    Company: Public Service Commission (PUC)
    Description [Company Contact: Customer HAS NOT contacted company.]

    According to an article, “Extra charge likely soon as ‘smart’ meters get OK” published in the Houston Chronicle on Dec. 18, 2008, the PUC approved a cost recovery plan presented by CenterPoint Energy to bill residential customers for advanced smart meters (ASM) in advance of meter installation. According to the article, customers will likely start seeing an additional $3.24 on their monthly bills come February, 2009. The first meters will be installed in March, with 145,000 planned for 2009 and 500,000 every year through 2013. Consequently, customers will pay to lease their current analog meter (Houston area customers currently pay $3.88 monthly) and an ASM prior to installation of the ASM for some customers. This action by the PUC is unfair and the approval of the plan should be rescinded.

    PUC – Customer Protection
    P.O. Box 13326
    Austin, TX 78711-3326
    Fax: 512-936-7003

  6. Enrique, just three words for you, please educated yourself.
    There is no way that Centerpoint is just making 10/15% profit.
    It is a ripoff and we all know it, they are transfering the cost to the customer period, we are buying but it won’t belong to us, the same with the old one, if it is mine, please leave it when Centerpoint upgrade, I’ll scrap it or keep it as a souvenir after all I paid for it.

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