HOUSTON, Oct. 3 /PRNewswire-FirstCall/ -- Facing a 50 percent increase in
the price of natural gas since December 2004, Reliant Energy today asked the
Public Utility Commission for permission to increase the fuel portion of
electric bills for Houston-area residential and small business customers.
This is the first time that Reliant has requested a fuel factor adjustment in
"Natural gas prices continue to increase at an unprecedented pace," said
Jim Robb, senior vice president, retail marketing. "We have been reluctant to
seek an increase because we are concerned about the impact this will have on
our customers. We have delayed this request as long as possible to keep
prices stable during the hot summer months."
To mitigate the effect of this increase and any effect that recent
hurricanes have had on natural gas markets, Reliant Energy proactively
approached the PUC with a proposal to provide a discount to all price-to-beat
customers through the end of the year, if its filing is approved by October
28. Reliant will base its fuel factor for the remainder of 2005 on natural
gas prices that were in effect prior to Hurricane Katrina, resulting in a 14
percent discount to the fuel factor, or a price of 14.7 cents per kilowatt
hour. The discount saves a typical customer approximately $13.40 per month
when compared with the price in the company's filing.
Based on the market price of natural gas in today's filing, Reliant
Energy's price would be 16.04 cents per kilowatt hour compared to the current
price of 12.88 cents per kilowatt hour, a 25 percent increase.
"The end result of this will be a price increase of about 14 percent, or
about $18 per month, for the typical residential customer," Robb said. "If
approved, the new price will go into effect at the end of October and remain
in effect through the end of the year.
"We would prefer not to raise prices at all," Robb continued. "We are
offering this discount and other solutions, like the Instant Relief Package,
because we realize our customers are faced with growing budget constraints."
Last week, Reliant launched a new program called the "Instant Relief
Package" to help Houston-area residential customers immediately lower their
electric bills. The new package combines Reliant's Simple Solutions Flex Plan
with a balanced billing feature that spreads electricity payments over 12
months. More information is available at
The increase in natural gas prices is a national trend affecting all
electricity suppliers and their customers. All of the other affiliated retail
providers in Texas have filed for at least one price increase this year. The
reason is that natural gas is the primary driver of the cost of electricity in
Texas. Reliant Energy's current fuel factor, which was set in December, is
based on a natural gas price of $7.50 per MMBtu. The price of gas in the
company's current fuel filing is $11.39 per MMBtu.
The company also offers in depth information on how to save energy on its
website, http://www.reliant.com/saveenergy . In addition, Reliant Energy
plans to introduce new products this fall designed to provide customers with
greater choice and flexibility in how they purchase electricity.
Reliant Energy, Inc. (NYSE: RRI) based in Houston, Texas, provides
electricity and energy services to retail and wholesale customers in the U.S.
The company provides a complete suite of energy products and services to
approximately 1.9 million electricity customers in primarily Texas, ranging
from residences and small businesses to large commercial, industrial and
institutional customers. Reliant also serves commercial and industrial
clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The
company has approximately 19,000 megawatts of power generation capacity in
operation, under construction or under contract in the U.S. For more
information, visit our Website at http://www.reliant.com/corporate .
This news release contains "forward-looking statements." Forward-looking
statements are statements that contain projections about future economic
performance and plans. Forward-looking statements are often identified by
words such as "anticipate," "estimate," "believe," "could," "intend," "may,"
"plan," "potential," "predict," "should," "will," "expect," "objective,"
"projection," "forecast," "goal," "guidance," "outlook," and other similar
Forward-looking statements are based on management's beliefs, assumptions
and information available to management at the time the statements are made.
Actual results may differ materially from those expressed or implied by
forward-looking statements as a result of many factors or events, including
legislative and regulatory developments, the outcome of pending lawsuits,
governmental proceedings and investigations, the effects of competition,
financial market conditions, weather conditions and other factors we discuss
in our other filings with the Securities and Exchange Commission.
Each forward-looking statement speaks only as of the date of the
particular statement, and we undertake no obligation to publicly update or
revise any forward-looking statement.
SOURCE Reliant Energy, Inc.
CONTACT: Pat Hammond, media, 1-713-497-7723, or Dennis Barber,
investors, 1-713-497-3042, both of Reliant Energy, Inc.
5774 10/03/2005 11:30 EDT http://www.prnewswire.com