Comments submitted to Minnesota regulators that support CenterPoint Energy’s controversial push to skew customer rebates toward gas furnaces rather than electric air source heat pumps appear to have been created and ghostwritten by a CenterPoint lobbyist – not the people who signed them, data attached to the documents show.
The comments come as the Minnesota Department of Commerce, a state agency that oversees the customer-funded rebate program, considers modifications to CenterPoint’s incentives. The Department will decide in early December whether to allow the utility to offer hefty rebates for furnaces, which critics say is out of step with state law and an improper use of customer money.
The rebates stem from the Energy Conservation and Optimization (ECO) Act, which is designed to broaden energy conservation programs and support a shift away from fossil fuels through electrification. CenterPoint, which only provides methane gas service in Minnesota, is financially motivated to keep households tethered to gas appliances. Customers switching to electric appliances may cut into utility profits, which is less of a risk for dual-fuel utilities that provide both gas and electric service.
When asked directly by the Energy and Policy Institute about the comments apparently ghostwritten by its lobbyist, a CenterPoint spokesperson admitted that the utility helps steer third-party filings.
“At times, we provide guidance and previously developed sample letters that explain how to best participate in the regulatory proceedings and to simplify what can be complex regulatory processes for those who do not regularly participate in them,” the spokesperson, Joshua Solis, said.
Solis continued: “Our education efforts with external stakeholders on CIP-23-95 [the rebates proceeding] include information on how to comment in this proceeding, but without directing the content of comments to be submitted.” Solis did not offer an explanation for why a CenterPoint lobbyist was listed as the author of multiple comments in the docket.
CenterPoint ordered to rework rebates after favoring furnaces
The apparently ghostwritten comments mark the latest twist in a regulatory process marred by CenterPoint’s misleading efforts to favor gas appliances. The utility had previously ignored state guidance to boost rebates for electric air source heat pumps – a critical, and increasingly popular, tool to decarbonize buildings.
The Minnesota Department of Commerce, which oversees the ECO Act rebates, had urged CenterPoint to include heat pump rebates aligned with those offered by Xcel Energy, a dual fuel utility whose service territory borders CenterPoint’s. But months after initially signing off on CenterPoint’s rebate plan, the Department found the utility had not actually done so.
Instead, CenterPoint bundled rebates for heat pumps and furnaces in a way that obscured the imbalance between the two. Rather than matching Xcel’s standalone incentives for electric heat pumps – at $1,600, or $2,000 for cold climate models – CenterPoint set its heat pump rebate at $500, while offering larger gas furnace rebates. The Department noted the discrepancy, and ordered CenterPoint to revise its rebate program.
CenterPoint proposal ‘not a responsible or prudent use of ratepayer dollars’
In response to a March 2024 directive by the Deputy Commissioner of the Department of Commerce, CenterPoint has proposed two approaches to modify its rebates: both would include heat pump rebates worth $1,100, approximating Xcel’s offerings per the directive. But CenterPoint is still seeking to bake in significant furnace incentives.
Under its preferred framework, CenterPoint would escalate furnace rebates according to furnace efficiency levels: starting at $200 for 92% efficient models, rising to $400 for 96% efficient models, and soaring to $1,000 for 97% efficient models. If approved by the Department, CenterPoint’s preferred furnace rebates would mark an increase over the utility’s previous ECO Act rebate plan.
The $1,000 rebate for 97% efficient furnaces is the focal point of supportive comments evidently ghostwritten by the CenterPoint lobbyist. But it’s a bad deal for customers, critics say.
“It is not a responsible or prudent use of ratepayer dollars to provide an incremental rebate increase of $600 corresponding to a 1% increase in furnace efficiency,” Caitlin Eichten of Fresh Energy, a leading voice in Minnesota decarbonization policy, wrote in comments filed last month. She added that CenterPoint’s proposed rebate allocations are “more in line with a rebate aimed at redirecting long-term investment in gas appliances than in effective energy conservation measures.”
Fresh Energy supports a second option proposed by CenterPoint that would cap furnace rebates at $600. By comparison, Xcel’s rebate program offers rebates only for furnaces that are 95% efficient or higher, at a maximum value of $400.
CenterPoint points to ghostwritten comments to persuade officials
In addition to the two comments linked to the CenterPoint lobbyist, fouradditionalletterssubmitted by heating and cooling contractors and their trade group advocated for CenterPoint’s preferred option. These letters rely on similar arguments and in some cases similar wording.
Seeking to persuade state officials to approve the heftier furnace rebates, CenterPoint praised the signatories of the apparent ghostwritten letters in an October filing of its own. In what appears to be an attempt to create an impression of organic support for the utility’s position, CenterPoint wrote that the letters provide a “unique perspective” and also thanked signatories for taking “time away from operating their businesses to participate in the regulatory process.”
CenterPoint furnace rebates already among state’s highest
In comments filed earlier this year, CEE included the following table to show the asymmetry between CenterPoint’s proposed rebates (see CenterPoint Rebate “updated” amounts) and those offered by other Minnesota gas utilities.
CenterPoint uses contractors to fight electrification
CenterPoint identifies the heating and cooling companies that submitted supportive comments as “trade allies.” This is the term for contractors that participate in a utility-run incentive program that offers them payment in exchange for each qualifying gas appliance they install.
The trade ally program is ostensibly designed to encourage the installation of high-efficiency appliances. But it appears the utility is using its trade ally program as a xxxxxx against electrification and a vehicle to push a pro-gas agenda, as several CenterPoint-aligned commenters noted that they heard about the rebate issue at “dealer meetings” with the utility in September.
When asked by the Energy and Policy Institute about its engagement with contractors on the rebate proposals, CenterPoint said that it “regularly holds meetings with trade allies to provide information about our energy efficiency programs. … Trade allies expressed interest in learning how to be engaged on docket CIP-23-95 [the rebates proceeding].”
It’s not the first time CenterPoint’s relationship to contractors has come under scrutiny in recent years. CenterPoint is the only Minnesota utility that participates in the “Builders Club” program that rewards builders who install gas appliances with points redeemable for luxury vacations, sports tickets, and other perks – even if an electric option can save energy and lower utility bills. The practice continues a decades-long tradition of the gas utility industry cultivating builders and contractors as gatekeepers in their fight against electrification.
This post has been updated to reflect that Peggy Sorum is not currently registered as a CenterPoint lobbyist, but that she still works for the utility.
