Centerpoint Energy, Inc (holding Co) · NYSE:CNP
Centerpoint Energy, Inc (holding Co) — Investor Presentation (September 2022)
75 slides from Centerpoint Energy, Inc (holding Co)'s investor presentation, September 2022
Slide 1: 2023 SCO Auction CenterPoint Energy Ohio (CEOH)
2023 SCO Auction CenterPoint Energy Ohio (CEOH) Last updated 9/2022
Slide 2: Auction
@ LenterPoint Energy Auction
Slide 3: Standard Choice Offer (SCO) Phase
Standard Choice Offer (SCO) Phase • The Standard Choice Offer (SCO) Phase: • Began officially on April 1, 2010 • The annual auction period is from April 1st through March 31st • All Default Sales Service (DSS) customers that are Choice eligible will become SCO customers on the SCO Initiation Date of
Slide 4: SCO Auction
SCO Auction • CEOH’s SCO Auction is typically held annually in January. • Bidders must be qualified Competitive Retail Natural Gas (CRNG) Suppliers. • The bids during each auction will be specified as an adjustment (the “retail price adjustment”) to the NYMEX monthly settlement price and will be fix
Slide 5: SCO Auction Cont'd.
SCO Auction Cont’d. • A descending clock auction proceeds in a series of rounds: • At the beginning of each round, the Auction Manager announces the price per Mcf, and each bidder bids the number of tranches it is willing and able to supply at that price. The initial bid price as determined for ea
Slide 6: SCO Auction Cont'd.
SCO Auction Cont’d. • End of Auction Scenario 1 - Total Number of Tranches Bid Equals Exactly Total Number of Available Tranches: • At the end of the Reporting Phase of the round in which the number of tranches bid equals the number of tranches offered. • End of Auction Scenario 2 - Total Number of
Slide 7: SCO Auction, Cont'd.
SCO Auction, Cont’d. • SCO Auction Contingency Plan: • In the event that the initial SCO Auction is unsuccessful, a subsequent SCO Auction will be held. • CEOH will consult with PUCO Staff to determine what variables of the auction will change for the subsequent auction. • This subsequent auction wi
Slide 8: SCO Price
SCO Price • The SCO Price each month will be the NYMEX settlement price for such month (converted to Mcf using the standard BTU Value, as stated in the Tariff of 1.070) plus the retail price adjustment determined by the SCO Auction. It will be converted to a price per Ccf for SCO Customer billing pu
Slide 9: 2023 CEOH SCO Auction Timeline
2023 CEOH SCO Auction Timeline Key Dates • Please see CEOH website for key dates and timeline. 9
Slide 10: Default Sales Service (DSS)
Default Sales Service (DSS) • Default Sales Service (DSS) is a regulated sales service applicable to the following types of customers: • Percentage of Income Payment Plan (PIPP) customers • Choice ineligible customers • SCO Suppliers will serve a proportionate share of the DSS Customers’ volumes. •
Slide 11: Default Sales Service (DSS), Cont'd.
Default Sales Service (DSS), Cont’d. • Customers will remain on DSS until such time as: • They move and are Choice eligible upon move-in • They are disconnected more than 10 days and are Choice eligible upon move-in • Enroll with a Choice Supplier • Other than the activity listed above, CEOH does no
Slide 12: SCO Supplier Eligibility
@ CenterPoint Energy SCO Supplier Eligibility
Slide 13: SCO Supplier Eligibility Requirements
SCO Supplier Eligibility Requirements • Sign and submit Registration Form, the CEOH SCO Supplier Pooling Agreement, Non- Disclosure Agreement, a copy of your company’s PUCO Certification, and the Connectivity Profile Form by the specified timeline • Acknowledge receipt of Auction Rules and procedure
Slide 14: SCO Supplier Eligibility
SCO Supplier Eligibility • Adhere to tariff terms and conditions of the CEOH tariff • Must be Competitive Retail Natural Gas Suppliers certified by PUCO and maintain that certification • Suppliers do not have to be participants in the CEOH Choice Program in order to bid on SCO tranches • Winning bid
Slide 15: SCO Eligible Customers
SCO Eligible Customers • SCO Suppliers will be assigned to each and every premises. Customers at those premises will be enrolled in SCO if they meet the following SCO eligible criteria: Uses < 150,000 Ccf/year Is not 35 days past due and owe more than $100 Is not past due on a payment arrangem
Slide 16: Allocation of SCO Suppliers to SCO Customers' Premises
Allocation of SCO Suppliers to SCO Customers’ Premises • Each SCO Supplier will initially be allocated actual customers’ loads on a pro-rata basis in early March. • There will be differences when customer loads are actually allocated and enrolled on April 1. • The criteria variables that will be use
Slide 17: Allocation of SCO Suppliers to SCO Customers' Premises
Allocation of SCO Suppliers to SCO Customers’ Premises • SCO Suppliers winning three tranches will receive three rounds in the allocation. • An SCO Supplier will then be linked to each customers’ premises. • New customer moving into a premise will: • Be assigned to the SCO Supplier assigned to serve
Slide 18: Transportation Capacity
@ CenterPoint Energy Transportation Capacity
Slide 19: Transportation Capacity
Transportation Capacity • The CEOH then existing pipeline firm transportation capacity will be temporarily released, with recall rights, to SCO and Choice Suppliers on a pro-rata basis (Capacity Release Percentage-CRP). • The volumes and costs associated with these firm transportation capacities wil
Slide 20: Transportation Capacity, Cont'd.
Transportation Capacity, Cont’d. • The released capacity is subject to recall if: • Supplier does not perform in accordance with the applicable SCO or Choice Supplier Agreements. • Fails to comply with other relevant provisions set forth in the CEOH Tariff. • Supplier may re-release on a recallable
Slide 21: Transportation Capacity, Cont'd.
Transportation Capacity, Cont’d. • The costs of the released transportation capacity will be paid directly to the pipelines by Suppliers. • Suppliers will be notified of the released pipeline contracts, volumes and offer numbers typically by the 20th of each month for the subsequent month. • Supplie
Slide 22: Capacity Portfolio
Capacity Portfolio CENTERPOINT ENERGY OHIO INTERSTATE CAPACITY PORTFOLIO Contract Primary Primary Pipeline Svc Type Number Receipt Description Delivery Description TCO SST 99599 33/Stow Stoi/33 ANR ETS 126278 742252 Rex Shelbyville 1400988 VEDO GRP-1 30,000 dth (year round) ANR ETS 126279 742252 Rex
Slide 23: Storage Capacity
Storage Capacity • The CEOH Columbia Gas Transmission (“TCO”) storage and related firm transportation capacity will be released to each SCO Supplier and Choice Supplier on a pro-rata basis. • Suppliers that have an SCO and a Choice pool will receive capacity released jointly for the combined CRP of
Slide 24: Tri-Party Capacity Release
Tri-Party Capacity Release • CEOH-held pipeline transportation and storage capacity may be released directly to an SCO Supplier’s Designee. • The Parties must enter into the CEOH Tri-Party Capacity Release Agreement. 24
Slide 25: System Balancing
@ LenterPoint Energy System Balancing
Slide 26: System Balancing
System Balancing • SCO and Choice Suppliers, or their agents under a valid Tri-party agreement, collectively are the balancers of the CEOH system. • The TCO storage holders will receive the cash-outs, premiums, and non- compliance charges assessed to Large Transportation Pool Operators on a monthly
Slide 27: System Balancing, Cont'd.
System Balancing, Cont’d. • All SCO and Choice Suppliers will be required to enter into a TCO Agency Agreement, on a monthly basis, giving CEOH the rights to view all of Suppliers’ nominations and storage information on their CEOH released contracts. • TCO Agency Agreements will be supplied by CEOH
Slide 28: Minimum Daily TCO Storage Inventory Requirements
MINIMUM DAILY TCO STORAGE INVENTORY REQUIREMENTS 28
Slide 29: Recommended Storage Inventory Levels
System Balancing, Cont’d. • Recommended Storage Inventory Levels Columbia Gas Transmission - Recommended Operating Parameters per CEOH Storage Contract Quantity 7,648,483 Date Max SCQ % Min SCQ % Max Dth Min Dth December 15th 100% 75% 7,648,483 5,736,362 January 15th 80% 55% 6,118,786 4,206,666 Febr
Slide 30: Pipeline Delivery Point Imbalances
Pipeline Delivery Point Imbalances • Differences between the actual deliveries through the Delivery Point meters and the nominations to those meters will be managed by CEOH as shown below. • Texas Gas – Lebanon Point No OBA permitted. Imbalance volumes are allocated pro-rata to shippers on a dai
Slide 31: Pipeline Delivery Point Imbalances, Cont'd.
Pipeline Delivery Point Imbalances, Cont’d. • ANR – Derby, Red Lion, VEDO GROUP 1 (VEDO GRP-1) 140098 and Mikesell Points • OBA in place. • Imbalances are managed to minimal levels through ANR Gas Control adjusting flow. • Month-end imbalance carries month to month. • Imbalance is not cashed out. •
Slide 32: Pipeline Delivery Point Imbalances, Cont'd.
Pipeline Delivery Point Imbalances, Cont’d. • Rockies Express – Clear Creek • POA in place. • Imbalances are managed to minimal levels through REX Gas Control adjusting flow. • Imbalance < 1,000 Dths carries month to month. • Imbalance > 1,000 Dths is cashed out. 32
Slide 33: Comparable Firm Capacity
Comparable Firm Capacity • CEOH provides capacity to meet approximately 74% of its Peak Day Demand • CEOH has obtained 2,695 Dths of Firm Transport supply on TCO 33-3 to help meet demand on peak days • SCO and Choice Suppliers are required to deliver the additional peak day volumes needed • Each SCO
Slide 34: Daily Directed Quantities (DDQ's)
Daily Directed Quantities (DDQ’s) • By 9:00 a.m. Central Clock Time (CCT) each weekday, CEOH will post on its Gas Tracking System (GTS) SCO Suppliers’ Directed Delivery Quantity (DDQ) for the gas day beginning 9:00 a.m. CCT the following day. • Such SCO DDQ shall be the sum of: the Expected Demand
Slide 35: Daily Directed Quantities, Cont'd. (DDQ's)
Daily Directed Quantities, Cont’d. (DDQ’s) Example Holiday DDQ Posting Schedule (TCO non-critical days) • CEOH will post DDQ’s on the last CenterPoint business day prior to holiday through the next CenterPoint business day after the holiday. For Example: Thanksgiving - DDQ’s posted on Wednesday for
Slide 36: Forecasting
@ LenterPoint Energy Forecasting
Slide 37: Forecasting
Forecasting • CEOH uses Artificial Neural Networks (ANNs) to forecast expected demand by customer class for each Choice/SCO Supplier. Each Choice/SCO Supplier’s expected demand is calibrated to their share of Net Sales, which is also forecasted using an ANN. • Net Sales = Total CEOH Demand – Large G
Slide 38: Daily Nominations
Daily Nominations Nom ions 38
Slide 39: Daily Nominations
Daily Nominations • At the time of posting the DDQ, CEOH shall indicate the minimum, maximum or exact MMBtu quantity that shall be delivered by Supplier on each interstate pipeline or to each CEOH city-gate to meet the DDQ. • Suppliers will be required to nominate scheduled storage injections and wi
Slide 40: Daily Nominations, Cont'd.
Daily Nominations, Cont’d. • By 1:00 p.m. Central Clock Time (CCT) each day the Supplier shall nominate to the CEOH GTS EBB the quantity of gas scheduled for delivery at Company's city-gates to meet its DDQ for the following gas day. • No-notice nominations may be made to Supplier’s scheduled storag
Slide 41: City-Gate Delivery Requirements
City-Gate Delivery Requirements • The percentages are recalculated and communicated to Suppliers periodically. • Typically on a seasonal basis • Delivery requirements are subject to change due to pipeline work by CEOH or an interstate pipeline. Advance notice will be provided as soon as possible. •
Slide 42: OFO's and Provider of Last Resort
OFO’s and Provider of Last Resort 42
Slide 43: Operation Flow Order's (OFO's)
Operation Flow Order’s (OFO’s) • Company may issue an Operational Flow Order (OFO), in its reasonable discretion, as specified in this section upon determination that an action is required in order to: (1) alleviate or prevent conditions which threaten the integrity or reliability of Company’s Opera
Slide 44: OFO's Continued
OFO’s Continued • An OFO may be issued on a non-discriminatory basis to SCO Suppliers, Choice Suppliers, and Pool Operators delivering gas to Company’s city-gates, on a system- wide basis, program basis, or individual basis, when necessary, in Company’s sole judgment. • Violations of OFO requirement
Slide 45: Provider of Last Resort (POLR) Responsibilities
Provider of Last Resort (POLR) Responsibilities • SCO Supplier shall temporarily provide supply from Company-released Columbia storage capacity to cover system load requirements in the event of a SCO or Choice Supplier default or OFO event. • Defaulting SCO or Choice Suppliers are required to reimbu
Slide 46: POLR Responsibilities, Cont'd.
POLR Responsibilities, Cont’d. • Company will fill any remaining shortfall through acquiring additional temporary capacity and supply or city gate deliveries, or by coordinating the delivery of city-gate delivered volumes with non-defaulting SCO and Choice Suppliers. Non-defaulting SCO and Choice Su
Slide 47: POLR Responsibilities, Cont'd.
POLR Responsibilities, Cont’d. • If an SCO Supplier is removed or Choice Suppliers do not assume the removed SCO Supplier: • The remaining SCO Suppliers’ loads will be increased to cover the defaulted load on a pro-rata basis. Such incremental load will be limited to 50% of initial Tranches awarded.
Slide 48: Supplier Billing
@ LenterPoint Energy Supplier Billing
Slide 49: SCO Supplier Billing
SCO Supplier Billing • Supplier Charges • Rendered each month by the 25th day of the month, for the prior month’s activity. • CEOH will pay the SCO Suppliers: The total SCO dollars billed to their SCO customers for each revenue month A portion of the Default Sales Service customers’ billings bas
Slide 50: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • Supplier Monthly Charges can include the following: • Nomination Error Charge - A charge of $0.50 per Dth based upon the quantity difference between the Supplier’s daily pipeline nomination and the pipeline daily confirmed volume delivered to CEOH, for each day of dif
Slide 51: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • Storage Non-Compliance Charge – A charge $35.00 per Dth per occurrence during the term of the contract. Supplier is considered in default upon the fifth occurrence. Charges apply to any volumes greater than the CEOH-established maximums or less than the CEOH-est
Slide 52: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • Monthly Reconciliation Amount - Charge/credit as determined by the Volume Reconciliation. The price utilized for cash-outs will be the IFERC Gas Market Report First-of-the-month price for Columbia Gas Transmission Corp, Appalachia plus taxes and applicable variable co
Slide 53: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • Receivables • CEOH will purchase 100% of the of SCO and Choice Supplier receivables without discount so long as CEOH has continuing authority pursuant to Commission Entry to seek recovery for unpaid customer receivables. In the event such continuing authority is ter
Slide 54: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • Bill Detail Report • The bill detail report will be sent via e-mail and reflects the charges billed to their customers for the preceding revenue month (i.e. breakdown of receivables by customer). Suppliers will need Excel 2007 in order to receive this file. The file
Slide 55: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • Post Phase Receivables - Prior Period Adjustments • Prior period adjustments are adjustments to customers' charges for prior periods. • CEOH will attribute any post-phase prior period adjustments to Suppliers active during an auction phase for a period of one-month po
Slide 56: SCO Supplier Billing, Cont'd. Monthly Reconciliation
SCO Supplier Billing, Cont’d. Monthly Reconciliation • SCO and Choice Suppliers’ deliveries will be reconciled to their supply requirements on a monthly basis. • On a monthly basis Company will compare each Supplier’s Deliveries to the Supplier’s Pool and Allocated Requirements to determine the Supp
Slide 57: SCO Supplier Billing, Cont'd.
SCO Supplier Billing, Cont’d. • The sum of the monthly reconciliation cashout amounts, plus any applicable taxes, will be the cashout credit or charge. • Such reconciliations will be performed the second month following the end of the last month of flow in order to have sufficient time to obtain all
Slide 58: Reconciliation Calculation Example
Reconciliation Calculation Example 1 Confirmed Deliveries 2 Allocated Peaking Supply 3 Auto Balancing Activity 4 Total Supplied Lines (1+2+3) 5 Pool Usage (Billing MCF) 6 Standard BTU (1.070) 7 Pool Usage (Dth (lines 5*6) 8 Pool Requirements (line 7/-UAFG%) 9 Allocated LGT Imbalance (Deliveries minu
Slide 59: SCO Supplier Billing timeline example
SCO Supplier Billing, Cont’d. SCO Supplier billing timeline example for one SCO Phase: SCO Phase April through March **Allocation of cash-outs, SCO Supplier Bill Month premiums, and non- Receivables Month Billed *Gas Flow Month Reconciliation Month (by the 25th) compliance charges charged to Supplie
Slide 60: Customer Enrollment
@ LenterPoint Energy Customer Enrollment
Slide 61: Customer Enrollment
Customer Enrollment • SCO Customer Initial Enrollment Files • Each SCO Supplier will receive one initial file indicating the Choice eligible premises assigned to them in the following format: File name will be the Supplier code plus the date plus “SCO_Assignments.txt” For example: XYZ_20090819_S
Slide 62: Customer Enrollment
CUSTOMER ENROLLMENT Field Name • The initial customer file will include the following Supplier Code data elements listed to the right. Residential / Non-Residential Indicator Read Cycle • Please Note: Customer Number • Parsed customer name (Last, First, Middle) will be in Customer Name the initial a
Slide 63: Customer Enrollment, Cont'd.
Customer Enrollment, Cont’d. • EDI Drop transactions will not be sent to SCO Suppliers from the previous phase. • A Customer’s premise may or may not remain with the same SCO Supplier from one phase to the next. • CEOH will run the allocation process in mid to late-February for purposes of sending S
Slide 64: Customer Enrollment, Cont'd.
Customer Enrollment, Cont’d. • The customer list will be sent to an FTP site provided by CEOH. • On April 1, CEOH will enroll customers’ premises with the assigned SCO Supplier. • Suppliers will receive a new file on the same FTP site on April 1 with the actual enrollments. • Suppliers will need to
Slide 65: Customer Enrollment, Cont'd.
Customer Enrollment, Cont’d. • The initial Choice eligibility check performed in mid-February will not be rerun in April. • CEOH will send the historical usage EDI transaction file to the SCO Suppliers for the customers enrolled as of April 1. • SCO Suppliers will receive a monthly report showing th
Slide 66: Customer Enrollment, Cont'd.
Customer Enrollment, Cont’d. • The April 1st SCO enrollment file format Field Name Supplier Code • Please note: Residential / Non-Residential Indicator Read Cycle • Expected Start Date - customer is expected to start Customer Number with the SCO Supplier on this date. The majority of the Customer Na
Slide 67: Customer Enrollment, Cont'd
Customer Enrollment, Cont’d • Expected End Date - the customer is expected to end their enrollment with the SCO Supplier on this date. The majority of the dates will reflect March 31 of the following year. • If the customer has a pending Choice enrollment, this field will reflect the date they are e
Slide 68: Customer Enrollment, Cont'd.
Customer Enrollment, Cont’d. • Post April 1 enrollments, drops, changes, etc. are all processed via EDI files • Winning SCO Suppliers are required to pass EDI testing with CEOH’s EDI vendor within the timeline indicated. • EDI testing takes at approximately 6 weeks to complete • Bidders are advised
Slide 69: Migration To/From Choice
Migration To/From Choice • Choice customers who drop or are dropped by their Choice Supplier without specifying an alternative Choice Supplier and are Choice eligible will migrate to SCO Service. • If the SCO Supplier assigned to the dropping Choice customer’s premises is the same as the Choice Supp
Slide 70: Customer Drops
Customer Drops • If the customer is disconnected, the customer will be dropped from SCO when the physical disconnection of gas takes place. The Supplier will receive an EDI Drop transaction. • Customers cannot elect to drop from SCO to DSS. 70
Slide 71: Disconnect/Reconnect – Same Premise
Disconnect/Reconnect – Same Premise • Reconnected within 10 days – SCO and Choice • If customer reconnects within 10 days: The customer will reconnect with the same Supplier they were with upon disconnection be it SCO or Choice. A Reinstatement transaction will be created with the reactivation d
Slide 72: Billing of Taxes
Billing of Taxes • County Taxes on SCO Supplier supply charges: CEOH will provide the County Tax Code in the EDI Enrollment Response to the SCO Supplier. SCO Supplier will provide customer’s tax exemption percentage to CEOH via EDI Change Detail Transaction. Change Detail Transactions can only
Slide 73: Tax Exemptions
Tax Exemptions • SCO Suppliers are strongly encouraged to contact the customer to obtain their tax exemption certificates. • A tax-exempt indicator and exemption percentage must be sent to CEOH from each Supplier for newly enrolled customers with that Supplier. Customer’s tax exemption is not transf
Slide 74: Resync Reporting provided by CEOH
Resync Reporting provided by CEOH • Resync Report – Posted to Suppliers’ CEOH hosted ftp site on the first workday of the month. • This report can be used to “sync” up the enrolled customers the Supplier shows in their system, with those in CEOH’s system. 74
Slide 75: Please contact GTOperations@centerpointenergy.com with questions.
Please contact GTOperations@centerpointenergy.com with questions. Also note: The following documents may be accessed via the CenterPoint Energy hyperlink below https://midwest.centerpointenergy.com/information/transportation/oh-suppliers and Public Utility Commission of Ohio Portal via the following
CenterPoint Energy — Investor Presentation (September 2022) on 6ix