Public Utility Commission of Texas Approves Electricity Rate Reduction for Houston-Area Customers Following Negotiations
The Public Utility Commission of Texas (PUC) has issued its final order approving a $50 million annual electricity rate reduction for CenterPoint Energy customers, a decision that will lower electricity costs for residential, commercial, and industrial customers across the Houston area. The much-anticipated approval follows extensive negotiations led by the City of Houston, alongside the Houston Coalition of Cities, other municipal coalitions, and consumer advocacy groups.
Under the settlement agreement, the rate cut will result in an average monthly savings of $0.82 for residential customers and $1.28 for small businesses, with larger industrial customers also seeing proportional reductions. The new rates will take effect in the coming months.
“The City of Houston led the charge with Houston Coalition of Cities and worked diligently with CenterPoint and other parties to reach a fair and balanced settlement,” said Tina Paez, Director of Houston’s Administration & Regulatory Affairs Department. “Our goal was to protect Houston residents from unfair rate increases following what transpired in the aftermath of Hurricane Beryl. We believe this agreement achieves that balance by lowering rates while still allowing CenterPoint to maintain and improve our area's energy infrastructure responsibly.”
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CenterPoint’s Rate Request and Negotiations
The settlement marks a major shift from CenterPoint Energy’s original request, which was filed in March 2024 and initially sought a $60 million annual revenue increase, translating to a $73 million rate hike for residential customers. However, after Hurricane Beryl caused widespread power outages in the region, CenterPoint attempted to withdraw its request before ultimately proceeding with negotiations.
In January 2025, CenterPoint and city representatives reached a settlement to reduce annual revenue by $50 million, resulting in lower electricity rates through 2029. The agreement ensures that while customer bills will decrease, CenterPoint will still have the necessary funding to maintain and strengthen Houston’s power grid.
“Our settlement agreement with these parties would reduce the amount of revenue that CenterPoint receives, and customer bills would decrease, while also addressing the significant investments we have made to strengthen our system for the benefit of our customers,” said Jason Ryan, Executive Vice President of Regulatory Services and Government Affairs at CenterPoint Energy.
Investments in Houston’s Electric Grid
The PUC-approved rate reduction comes at a time when CenterPoint is investing heavily in Houston’s energy infrastructure. Over the past decade, the company has invested $8 billion into improving the region’s electric grid, including:
- Installing 2,200 miles of new distribution lines and 100 miles of new transmission lines
- Constructing six new distribution substations and two new transmission substations
- Elevating 11 substations to improve flood resilience
- Installing 437 Intelligent Grid Switching Devices, preventing over 80 million minutes of customer outages in 2023
These investments are part of CenterPoint’s Greater Houston Resiliency Initiative, launched in August 2024, to strengthen the grid and prevent widespread power failures during extreme weather events.
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CenterPoint’s Role in the Texas Electricity Market
CenterPoint Energy serves as an electric transmission and distribution utility, meaning it does not generate or sell electricity but instead delivers power from energy providers to customers across the Greater Houston area. The company’s rates are regulated by the PUC, with formal rate cases occurring approximately every four years to ensure fair pricing and continued investment in grid reliability.
As part of a separate initiative, CenterPoint has also proposed a plan to help reduce ERCOT’s regional energy shortfall in Central Texas by temporarily relocating 15 emergency generation units to the San Antonio region for two years. If approved, this proposal would further reduce electricity bills for Houston customers while strengthening ERCOT’s overall power supply.
What’s Next for Houston Electricity Customers?
The newly approved PUC rate reduction will go into effect in the coming months, and the City of Houston has committed to closely monitoring CenterPoint’s additional rate filings, including:
- A pending request for storm-related cost recovery from recent hurricanes and weather events
- CenterPoint’s System Resiliency Plan application, which seeks additional funding for future grid enhancements
By continuing to scrutinize these filings, city leaders aim to maintain transparency and protect consumers from unnecessary cost increases.
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A Win for Houston Residents
With this PUC-approved rate reduction, Houston-area electricity customers will soon see lower bills, while CenterPoint remains on track to modernize and strengthen the region’s power grid.
For more information on electricity rates and grid investments in Houston, visit CenterPointEnergy.com/FactsMatter or the Public Utility Commission of Texas website.
Tiffany Krenek has been on the My Neighborhood News team since August 2021. She is passionate about curating and sharing content that enriches the lives of our readers in a personal, meaningful way. A loving mother and wife, Tiffany and her family live in the West Houston/Cypress region.
