With its response in July to Hurricane Beryl still front-and-center in Texas, Houston-based CenterPoint Energy Inc. has set in motion a plan to harden infrastructure against extreme weather and forgo some profits in an effort to become the “most admired utility in the country.”
CEO Jason Wells, in a letter to state lawmakers, laid out the strategy last week in response to the utility’s response to the Category 1 storm, which made landfall on July 8 on the upper Texas coast.
In the aftermath, CenterPoint now is under investigation by state lawmakers and the Public Utility Commission of Texas. In the wake of Beryl, thousands of customers in the nation’s fourth largest city were left in the dark, some for more than a week, as 90 degree-plus weather scorched the region.
The company plans to right the ship and regain the public’s trust, Wells said. He detailed the planned updates to CenterPoint’s Greater Houston Resiliency Initiative in a letter to Texas State Sen. Charles Schwertner and State Rep. Todd Hunter.
Schwertner chairs the Special Committee on Hurricane and Tropical Storm Preparedness, Recovery and Electricity. Hunter chairs the Committee on State Affairs.
Frustrations? Noted
Among other things, CenterPoint plans to spend $5 billion between 2026 and 2028 to reduce the likelihood of outages and damages during storms by resolving potential risks.
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“Our response to Hurricane Beryl, and the many frustrations we heard from our customers and elected officials, has inspired a company-wide call to action,” Wells wrote. “ As a company that has the privilege of serving the energy capital of the world and one of the most rapidly growing cities in our nation, we have committed ourselves to an unprecedented level of action to be the most admired utility in the country by investing in modernizing and making our grid more resilient for the future.”
As the economic impact from losing power in the Greater Houston area may exceed $1.4 billion per day, “it is evident that now is the time to make these critical resiliency investments across the region.”
In addition to a suite of actions, Wells said CenterPoint is “proposing to forego approximately $110 million in profit, which is equivalent to more than half of the profits anticipated from our lease of temporary emergency generation assets.”
The fleet, leased in 2021 for around $800 million, has mostly remained idle. Texas lawmakers had approved a plan that had allowed CenterPoint to acquire the generators and pass the costs to consumers.
CenterPoint has indicated that the 15 generators, each with 32 MW capacity, were designed for rare outages caused by a lack of power supply, such as Winter Storm Uri in February 2021, which caused deadly outages for several days.
CenterPoint still needs large generators for rare outages, Wells said. However, the utility may trade one of the 32 MW generators for 20-25 generators that each have 1 MW. The smaller generators could restore power directly to some homes and businesses following outages to equipment owned by CenterPoint.
In response to Wells' letter, Schwertner said, “I appreciate CenterPoint’s movement in becoming a better partner to their ratepayers and to Texas. However, they have yet to hit that mark.”
