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Yetter Coleman Obtains Reversal From Texas Appeals Court In Regulatory Appeal on Behalf of CenterPoint Energy

Yetter Coleman has successfully represented CenterPoint Energy in the Third Court of Appeals in a regulatory appeal from a 2009 Public Utility Commission ruling partially denying CenterPoint a performance incentive it earned for its phenomenal success in implementing energy efficiency programs for residential and commercial customers. The court of appeals reversed, agreeing with the firm’s argument that the Commission’s actions were arbitrary and capricious.

At issue was whether CenterPoint was entitled to a performance bonus for exceeding energy efficiency goals. In 2009, the PUC denied CenterPoint $2 million of the performance bonus that CenterPoint calculated it was due under the relevant rule for exceeding energy efficiency goals during the previous year. The court of appeals held that CenterPoint is entitled to the remaining $2 million plus carrying costs on that amount. Since 2009, CenterPoint has continued to exceed energy efficiency goals.

The Public Utility Regulatory Act (PURA) establishes energy efficiency goals for Texas utilities and directs the PUC to adopt rules and procedures to facilitate meeting these goals. In response, the PUC created an energy efficiency cost recovery factor (EECRF) and established a performance bonus to reward utilities that exceeded the energy efficiency goals. Under the bonus rule, the bonus was to be calculated based on a percentage of the energy efficiency savings resulting from a utility’s spending on energy efficiency programs. Based on the formula in the rule, the $83.4 million in energy efficiency savings realized by CenterPoint’s customers in 2008 resulting from CenterPoint’s $24.3 million in expenditures on energy efficiency programs entitled CenterPoint to a bonus of $4.85 million. The PUC, however, denied $2 million of that bonus amount.

CenterPoint hired us to appeal the PUC ruling to the Travis County District Court, which affirmed.  The firm then briefed CenterPoint’s appeal to the Austin Court of Appeals, which heard oral argument in October 2011.

Chris Ward and Ryan Bates briefed the appeal in the district court and court of appeals; Mr. Bates orally argued it in the district court.