Texas Electricity Companies Hint Of Rate Increases To Recover Cost Of Ike Repair Bill

September 22, 2008 9:13 a.m. EST

Houston, TX (AHN) - Gulf Coast residents may face another round of electricity rate increases to cover the cost of repairs to the state's power system wrought by Hurricane Ike.

When Hurricane Rita battered Texas in 2005, billions of dollars was spent by Entergy Texas to repair the damage, which eventually was passed on to consumers in the form of an average $3.85 per 1,000-kilowatt house rate increase monthly for the next 15 years.

It would roughly translate into an extra $700 monthly for power. Households with higher usage pay more.

When the energy industry was deregulated in 2002, CenterPoint Energy was spun off from Reliant Energy. While CenterPoint did not request for a rate increase from the Public Utility Commission of Texas to recover the cost of Rita's damage on the firm's power lines, by 2010 it may seek a rate increase as the PUC freeze order on CenterPoint will last only until 2010, the firm's spokeswoman Leticia Lowe said.

CenterPoint and Entergy have not come out with estimates on how much it will ask to recover the cost of rebuilding their power system. A rate increase normally goes through a PUC deliberation, which usually takes half a year. But if the energy firm would agree to lesser rates, the process may be hastened.

Meanwhile, it is not just power lines that were destroyed by Ike, but also wildlife refuges. According to the U.S. Fish and Wildlife Service, the Anahuac National Wildlife Refuge and two nearby refuges were destroyed by Ike's 110 mph windows and 20-foot saltwater tidal blasts. Anahuac is the last stop of migratory birds on their way to the 600-mile flight to the Gulf of Mexico. Also damaged were the service's welcome centers, offices and warehouses.

According to Desiree Sorenson-Groves, vice president for government affairs of the National Wildlife Refuge Association, Ike caused $260 million damage to refuges, upping the total damage to national refuges on account of natural disasters to $300 million.