Energy & Environment

The Extra Charge On Utility Bills For Preachers And Little Leaguers

We recently got an e-mail from a Houston man who said his electricity bills were baffling. We uncovered a long-running dispute that involves certain electricity customers that use power just every-so-often. They’re being asked to pay for a lot more than just the electricity they use.

Mehran Rahbar is a medical doctor by profession. But as an investor, he owns a small office building near Sugar Land.

“It has been vacant for over 2 years,” Rahbar told us.

Dr. Mehran Rahbar
Dr. Mehran Rahbar

Since the building is vacant, his electricity usage is almost nothing. The electricity charge in June was for $56. And for July even less, $11.36.

But the bottom line on the bills that he received weren’t for those modest amounts. June’s bill had a big extra charge added-on amounting to $232.58. July’s bill had an extra $123 tacked on.

“They explained this is to have the electricity available,” Rahbar said.

The technical term for the extra amount is “demand charge.” Basically, it’s what the utility company says you owe them for running wires and poles to your building, equipment which cost a lot no matter how little actual electricity you use. CenterPoint is the utility in Houston that maintains those wires and poles.

“It’s not that anybody disputes the cost that we’ve incurred, they just dispute who ought to pay for those costs,” said Paul Gastineau, CenterPoint’s vice president for regulation.

Who else would dispute the fairness of those demand charges? Churches, for one says Joshua Houston, an attorney with Texas Impact, a group that advocates for religious groups.

The extra charges Mehran Rahbar found on his electricity bill
The extra charges Mehran Rahbar found on his electricity bill

 “They come in on Sunday morning, they turn the air conditioners on, they turn all the lights on, they basically fire the whole facility up and then they go home,” Houston said. “It’s the small ones that get hit really hard. They can go from a utility bill in the hundreds of dollars to suddenly a utility bill in the thousands of dollars.”  

The same complaints have been heard from groups and from cities that have sports fields where the lights get turned on for a few hours a week during the season than go dark for months.

Thomas Brocato is a lawyer specializing in utility cases.

“I will tell you this has long been an issue for these seasonal customers including the city clients I do work for. It just seems unfair that you’ve got usage in one or two months or a couple times a year and you face these very high demand charges the entire year even when you’re not consuming electricity,” said Brocato.

If it sounds unfair, Texas lawmakers seemed to have agreed. In 2011, they approved legislation that would give a break to these kinds of customers with sporadic electricity usage. But according to the Public Utility Commission of Texas (PUC), the law only applies after the utility undergoes an extensive regulatory process called a rate case.

CenterPoint has not had a rate case since 2011 and has no plans for one in the foreseeable future. So for now, the utility’s Paul Gastineau says the churches and small businesses and ball fields will have to pay.

“If they don’t pay it, the rule says that we go collect that from other customers. And so other customers subsidize the type of customers you just listed,” Gastineau said.

Mehran Rahbar says as he sees it, the legislature’s remedy for this isn’t being followed, even by state regulators.

“This law is not being respected, not even by PUC. That’s something that worries me,” said Rahbar.


Dave Fehling

Dave Fehling

Director of News and Public Affairs

As Director of News and Public Affairs, Dave Fehling manages the radio news operation at Houston's NPR station. Previously, he was a reporter at the station, covering the oil & gas industry and its impact on the environment. He won top state honors for in-depth and investigative reporting as well...

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