PUCT Rules on Base Rate Case

BEAUMONT November 1, 2012 – Entergy Texas residential customers will end 2012 with an average electric bill about 5 percent lower than last year.

That’s because although the Public Utility Commission of Texas’ final ruling on the base rate case Entergy Texas filed late last year called for a small increase to residential customer bills, that increase will be more than offset by a series of credits and a fuel cost refund.

The PUCT allowed Entergy Texas a retail base rate increase of $27.7 million per year. That translates into an increase of $5.94 per month for the average 1,000 kilowatt-hour residential bill. Customers, however, won’t see this increase until next spring.

That’s because during November, when the rate increase is scheduled to go into effect, customers will also receive the first of three months of a production cost credit. The credit is called a Rough Production Cost Equalization credit and will lower bills by $13.85 in November, $12.74 in December and $10.63 in January. For example, in November 2011, the average bill was $114.31. But this year, that bill will be $108. When November and December are averaged together, monthly bills will be $5.76 less than the last two months of 2011.

But that’s not the only bill-dropping news for customers.

Entergy Texas has also filed with the PUCT to give customers a fuel refund totaling $77.9 million. That translates to a per residential customer total refund of $68. The company plans to begin the refund in January; however, the number of months over which the refund will be divided has not yet been decided by the PUCT.

Both the credits and the upcoming fuel refund reflect changes in the cost to make electricity for customers.

The credits are a result of the agreement Entergy Texas has with the other companies in the Entergy Corporation system of electric distribution companies. This includes utilities in Arkansas, Louisiana and Mississippi. The agreement calls for the cost of producing electricity to be “roughly equal” among the companies. That means if it costs more to produce power in one than in another, the Entergy utility in the state with the lower cost must make payments to customers in the higher-cost states. The credits planned for Southeast Texas reflect payment from Entergy’s Arkansas subsidiary.

The fuel refund reflects lower than anticipated costs for the fuel used to generate electricity. Regulations in Texas require Entergy Texas to set a fixed fuel factor that stays on bills for six months at a time. The factor is based on market costs for fuel at a certain point in time and determines the fuel charge that customers see on bills. The company makes no profit on fuel. Prices for fuel, however, change frequently. If the fuel factor proves to have been set too high, customers will receive a refund on their bills.

Entergy Texas provides electricity to more than 400,000 customers in 27 counties. It is a subsidiary of Entergy Corporation. Entergy is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including more than 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas.

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